How Can You Save Money in the Presence of Rising Day Care Costs?

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The following post is by MPFJ staff writer, Shondell of Call Me What You Want Even Cheap. At her site, she blogs about her recent car loan, mortgage pay off, and a whole bunch more. Check out her blog right here!

kids and money, cost of raising a child, daycare costs, saving money, financial planning, family,
Many people have been deeply impacted by the economic downturn. With rising inflation and high levels of unemployment, parents are facing quite a few hurdles when it comes to managing day to day finances. For parents with young children, the struggle is even worse since child care costs have been rising sharply over the last few years.

According to a study by the National Association of Child Care Resource and Referral Agencies (NACCRRA), it has been reported that the cost of child care today exceeds that of sending a child to college across many states in the US.

It has been estimated that the average cost for day care in the U.S is around $11,666 per year ($972 a month). The cost of day care does vary depending on several factors such as location (urban vs. rural), the reputation of the day care, the number of days a child attends day care, as well as the number of children being cared for. Day care costs are typically higher in urban cities versus rural cities. The highest costs have been recorded in places such as New York, Washington, Colorado, California and Wisconsin where day care expenses for infants and toddlers is known to be well over $10,000 per year. On the other hand, the lowest prices for day care for infants and toddlers were recorded in Kentucky ($6,500), South Carolina ($5,800) and Mississippi ($4,650).

These steep prices make it extremely difficult for a lot of families to pay for day care. While the current rates for child care are becoming unaffordable to many, it is not feasible for many families to go without it since many households need both spouses to work to make ends meet.

Below are a few tips that can help to reduce day care costs:

Pick the right kind of day care

Many parents send their children to very expensive day cares, with hopes that their child will be safer or learn more. There are a lot of day cares out there that are more affordable and can most likely provide what you’re looking for if you do your research. Ask friends, family, and colleagues at work if they know of any good daycares. You can then pick a few and check them out personally before deciding on one.

Baby sitting co-operative

This is a fast developing practice in a lot of urban households where parents in a particular neighborhood get together and look after each other’s children. Every time you look after a baby of your neighbors, you get the required number of hours credited in to your co-op account. Then you can later trade when you leave your child at the care of another parent while at work. This can be a very effective way to cut costs.

Tax credit for child care

There are tax credits that assist employed families to pay for their child care expenses. Federal tax credits can help you save up to 35 per cent in child care costs. If you qualify, you can claim $3000 for one dependent and $6000 for two dependents.

Ask family members to help

If you live close to family you could ask for their help once in a while to look after your child. Parents or grandparents especially can be a great source to ask if they would like to baby sit. I have many friends who save thousands on daycare because their parents are retired and taking care of their children during the day. One of my friend’s parents even cooks dinner every day for them to take home. Another option can be to invite family members over to your place for a month during the summer so they can help you take care of your child when you’re at work.

Coordinate with your spouse

Prioritize work in such a way that either you or your spouse can watch your child in shifts. You can coordinate your schedules so one person is always home with your child. For example, one parent can take the day shift while the other works the night shift. Another option is for your child to go to day care part time instead of full time. One parent could work Monday to Friday and the other parent could try to get a shift where they work from Wednesday to Sunday. This would mean the child would only go to day care three days a week instead of five; this can significantly cut down on day care costs, especially if you have more than one child.

Work from home

This in the long run, can turn out to be a viable option for a lot of parents. It may be hard to work while they are up, but while they are sleeping or watching TV, you can try to get work done then. There are several jobs out there that will allow you to work from home, sometimes you just have to ask. You never know, they might just say yes.

How about you all? Does your child go to day care? If so, how much does it costs? If not, what alternative do you use?

Share your experiences by commenting below!


  1. moneybeagle says:

    My wife stays at home with ours simply because what she was making would have ended up going all towards day care had we gone that route.
    My recent post Even If Open Enrollment Hasn’t Started Yet, You Should Still Start Planning

  2. Thomas S. Moore says:

    When my first child was in daycare his mom and I worked opposite shifts at work to cut the cost. At the time it was about $900 to go to Montessori. Now my wife and I are having our first and between her mom and mine we are going to save on the first months of daycare and she is looking to work from home for a couple of days. The really good places here run about $1500 if you want them to learn something.
    My recent post She Drives a Benz – I Drive a Honda

  3. evencheap says:

    That's great that you have help. You'll save a ton of money.
    My recent post Would You Be A Human Guinea Pig For Money?

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