When you’re a working parent with a new baby on the way, you may need to start considering the different ways you can save money on child care.
Believe it or not, infant care can run anywhere from $900 – $3,000 each month.
Costs can vary by state and quality of care but when you think about it, even the minimum amount for infant care costs as much as rent or mortgage.
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Along with other home and personal expenses, you’ll be looking at a big chunk of money that leaves your bank account on a monthly basis.
However, the first thing you want to do before you consider child care options is, to explore and define your ideal care for your child.
Is the person, place, or center licensed? Do they meet state or federal regulations? What is the child to teacher ratio? Is the location nearby or far? What are their payment options? What are their philosophies?
Moreover, you want to consider the different types of child care.
Perhaps you want an in-home day care instead of a day center facility? Would a nanny be a better option or would you rather have your parents or grandparents babysit?
Regardless of how you choose the type of care you want, finances will always play a role in the decision-making.
Let’s learn about the 13 different ways you can cut costs on child care before you reach a resolution.
1. Family In-home Day Care
Day care centers are often more costly than family in-home day cares, which means that you may want to consider an in-home day care for your child if you are looking for a budget-friendly option.
According to the Center for American Progress, the average cost for a center-based infant child care is $1,230 and the average cost for family home child care is $800.
The cost of care mostly goes to salaries and benefits, which means that day care center costs are higher because they hire more staff members and they have a bigger capacity.
In contrast, family child care homes hold less capacity and typically hire less staff members (only the owner and his or her assistant).
To find your local in-home child care (or child care center), here are a few places to start with:
- Child Care Resource and Referral agency (provided by Child Care Aware of America)
- Local child care by state (provided by Child Care Aware of America)
2. Adjust Your Schedule
One of the most important things to consider is your work schedule, along with your spouse’s.
If you and your spouse are currently working the same shift, perhaps one or the other can change his or her work schedule.
In my experience, my husband and I have had to adjust our work schedules to maximize the amount of time that we have just so that one of us can care for our daughter at home while the other is at work.
I would work day shift; meanwhile, my husband would work a different shift.
If adjusting your schedules is unfeasible, there are other ways you can cut costs on child care.
3. Employee Perks
If you’re lucky enough, your employer may offer employee perks or discounts for child learning centers.
For example, you may receive a 10% discount on child care costs if you take your children to an eligible day care center.
Make sure you contact your employer’s Human Resource department for additional details or simply ask your supervisor.
4. Dependent Care Flexible Spending Account (DCFSA)
Minimizing your tax expenses as much as you can is the best way to go and this is exactly what you can do if your employer provides a dependent care flexible spending account.
A dependent care flexible spending account is a pre-tax spending account designated for eligible expenses for the care of children, elders, or disabled family members.
You contribute money from your gross pay each paycheck and may use it to pay the provider. In some cases, if you happen to pay out of pocket, you can also get reimbursed as long as you keep any receipts or documentation.
5. Family Care
If you live near family, such as parents or grandparents, you can also ask if they can help babysit during work hours.
Family child care is one of the best affordable options that can help you save costs on child care. Most often, parents or grandparents are likely to babysit your children because of their love and relationship with you.
Not only can you ask parents or grandparents, you can also consider siblings who are willing to pitch in.
The question you may have is – how much should you pay family to babysit?
This is something you can discuss with your family member(s) or you can use this interactive tool to help you find a good pay rate to start with.
6. Sibling Discount
If you’re taking more than one child to day care, chances are, you may be able to snag yourself a sibling discount that can help lower the costs.
For example, your provider may provide a 10% discount at the time of enrollment but restrictions may apply.
Make sure you ask the provider for additional details.
7. Take Time Off
After reviewing your family’s financial position, you can also decide if it is best to just take time off.
Unfortunately, when you take time off, you are cutting your family off a paycheck but if your current pay is only enough to cover child care costs, then it may be something worth considering.
In addition, time off will allow you to build a stronger relationship with your child (or children) over time.
You can use this opportunity to fulfill as many family goals as much as possible.
8. Child Care Tax Credit
As tax season comes up, make sure you take advantage of the child care tax credit.
You can claim the child care tax credit when you pay for any expenses related to the care of your children (under age 13). Unlike a tax deduction, a tax credit directly decreases the tax you owe, which can help lower your tax liability.
If you qualify for the child care tax credit, make sure you fill out the form 2441.
9. Part-Time Employment
Perhaps taking time off from work is not ideal due to financial reasons.
Instead, you can create a balance between work and child care by working part-time. This allows you to earn a paycheck while cutting costs on child care.
The only downside to this is that most part-time jobs do not receive full-time employee benefits. Benefits include health insurance, vacation, disability insurance, employer retirement plans, etc…
Part-time opportunities are most present in retail stores, customer service jobs, and restaurants or food services.
10. Work from Home
In this digital age, we are beginning to see a growing trend of jobs that allow you to work from home.
Working from home can be an alternative that can help you save on child care costs. You can physically be home with your children and tend to their needs.
However, this is easier said than done.
Depending on your job, working from home may also pose a concern. If your job requires you to frequently schedule and attend meetings, being home with kids can be challenging but if your job requires less customer interaction or meetings, then it will work out perfectly.
Common work from home jobs include data entry, schedulers, virtual assistants, freelancers, consultants, web developers, medical coders, and more.
11. Military Assistance Program
If you are a member of the military, you may be eligible for the military assistance program offered by Child Care Aware of America.
The military assistance program is available to members of the United States Army, Navy, Air Force, Marines, and National Geospatial-Intelligence Agency (NGA), who are on Active Duty and are looking for child care options that may not be available on site.
Subsidy amounts are based on the Total Family Income (TFI) and monthly payments are made to the selected provider.
Online profiles and applications must be filled out for approval.
For details on each program, select the links below:
12. Pay with a Credit Card
If your care provider accepts credit card payments, other than cash or check, then you can earn cashback or points by using a credit card for payments.
This will be an ideal option ONLY if you have a healthy habit of paying off credit card balances before you accrue any interest.
However, if you frequently spend your credit card and pay off balances a few months after, this may be a bad choice that can affect you in the long run.
When using a credit card, strive for one with high cashback or points. You can compare multiple cards before selecting one or compare the best rewards credit cards here.
13. Government Subsidies
Government subsidies can also help you cut costs on child care expenses.
The Child Care and Development Fund provides assistance to low-income families who needs child care while working or attending school. In order to be eligible, family members must be a parent or primary care giver to children under 13 years of age.
Check to see if you are eligible by using this eligibility tool.
As for state subsidies, find your local State and Territorial Child Care Subsidy agencies using this link. You can view your state’s agency contact information and find additional details through the provided website.
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