How to Save on Childcare Expenses
For most families with children under school age, the high price tag of childcare is daunting. Many people have even decided to delay having children or forego having children altogether partially because of the high cost of childcare (among other reasons, of course).
In 2024, the average cost of daycare for an infant per week was $321 per child. The average cost of daycare for a toddler per week was $293 per child. These numbers will vary a bit depending on where you live but you can count on it being more or less correct. Personally, my husband and I pay $360 per week for our toddler to attend full-time daycare in Central Florida. Since she is now over 2, that number will soon go down to $330 per week.
When our baby was born, my husband and I were extremely fortunate to have a small village to rely on to take care of our baby since I had to return to work after only 6 weeks (which is absolutely criminal, but that’s a topic for another day). My mom and sister were able to care for her two days per week each and my husband was able to work from home on Fridays to take care of the baby. This worked for us for a long time. Close to Bebe’s first birthday, we decided to bring my mother-in-law into the equation as well. She lives an hour and a half away, so each Sunday we would pick her up, she would stay with us to care for our daughter on Mondays and Tuesdays, and then we would drop her off on Tuesday evening. This worked for us for about six months until she started having health issues that prevented her from continuing to care for our daughter.
In total, we received (mostly) free childcare from our family members for a year and a half. Then, in the middle of last year, we had to make a tough decision that would allow us to not have to rely on our family members so much: we decided we needed to bite the bullet and enroll Bebe in daycare. My husband was all about it and had even suggested it a few times in the past but I had wanted to hold off for as long as possible. My husband and I were doing just fine financially, but I wanted to keep it that way. Knowing without a doubt that daycare would cost 4 figures per month, I wasn’t crazy about the idea of losing all that disposable income.
Some of you may be wondering, “If you didn’t want to go back to work initially, and you didn’t want to enroll your baby in daycare, then why not just stay home?” When you’re a married mother with a stable husband, this question tends to come up once in a while. And truthfully, I love the idea of staying with my baby full-time. However, I fear the long-term effects may not be so positive.
First, I fear that the time lost in the workforce may make it harder for me to rejoin later on. Being able to work is important to me because if something happens to my husband (such as divorce or death), then I know me and Bebe will be just fine.
Second, my husband and I each make more money than daycare costs, so we still have more money while paying for daycare than we would have if one of us wasn’t working at all.
Lastly, I knew that Bebe would be able to learn more and have more fun if she was in a structured environment such as daycare. And I was right - her speech has taken off and she likes to play with her friends at daycare. Depriving her of that social time seems cruel at this point since she doesn’t have any siblings her age at home.
All that being said, there are ways to save on childcare expenses without sacrificing your career and financial independence.
Take advantage of a flexible work schedule, if your employer allows it. This could mean working different hours or working more days from home to care for your child. The more days you keep your child out of daycare, the less you will pay. My daughter’s daycare offers three tiers - full-time (5 days per week), 3 days, and 2 days. The difference between 2 and 5 days is about $600 per month.
Take advantage of willing family members who want to help. This doesn’t mean you should demand that your loved ones care for your child while you work. It simply means that if you have a close, trustworthy family member willing to take care of your child and they have the time to do so, let them do it. You shouldn’t ever feel guilty for accepting help. For some, however, family dynamics can be complicated and less than ideal. If this is the case for you, then it’s a good idea to have a backup plan.
Barter childcare. In some communities, families exchange childcare services. You take care of their kids one day, and they return the favor.
Look for subsidies or assistance. Depending on your income, you may qualify for subsidies, tax credits, or some other kind of assistance. In the U.S., the Child and Dependent Care Credit offers tax relief for working parents.
Consider a nanny share. Many put their children in daycare because they cannot afford a nanny or because they want their children to socialize as much as possible. With nanny share, the idea is that you and another family split the cost of one nanny without foregoing the social aspect of a daycare facility.
Choose a less expensive care option. Easier said than done, but here are some options:
In-home daycare: Home-based daycare centers often have lower rates compared to larger daycare facilities.
Group daycare: Sometimes small group daycare or a playgroup is a more affordable option.
Au pairs: If you're open to it, an au pair can be a cost-effective childcare solution. They stay with your family while offering affordable care in exchange for room and board and a stipend.
Take advantage of Flexible Spending Accounts (FSA). Some employers offer dependent care FSAs, which let you use pre-tax dollars to pay for childcare. This can save you up to 30% depending on your tax bracket.
Plan for sibling discounts. Some daycare centers offer sibling discounts, so if you have more than one child in daycare, ask if you can save a percentage on the second child.
Tax credits. In the U.S., you may be eligible for the Child and Dependent Care Tax Credit, which helps offset the costs of childcare. This can be claimed when filing your taxes for care provided to children under 13.
Look into scholarships or sliding scale fees. Some non-profits or community programs offer sliding scale fees based on income or even offer scholarships for lower-income families. Look for local options in your area.
Consider Early Childhood Education (ECE) programs. Some public schools offer free or subsidized early education programs. Check for local preschools or Pre-K programs that might reduce the need for traditional daycare.
If you’re in search of a new job/career path, look for one that offers daycare services on-site. For example, some hospitals offer daycare services to their employees to retain staff.
XOXO, Alexis.