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Managing Your Child Care Expenses

Plan for the Growth of Your Family

Most people preparing for their first baby are shocked and even dismayed to learn just how high childcare costs can be. According to’s 2021 Cost of Care survey, weekly childcare rates for the care of a single child range from $612 for a nanny down to $300 for a family care center. In between, parents can expect to pay $244 for after-school care and $340 for a child care center.

Analyzing Your Needs

Costs for childcare will vary significantly across the country. Areas that feature a higher cost of living will also often have higher prices for childcare. The reverse is often true. The fact remains that childcare costs are significant expenses for families seeking quality care for their children while at work.

Families with more than one child feel the pinch a little harder, especially if both children are under the age of four. That can be one of the most frustrating aspects of being a parent. You want the best life possible for your child and understand that often requires two incomes to provide. However, you want your child to have the best possible care as well. That takes money, too.

Explore the costs of daycares in the area combined with the services they provide to the families they serve. Decide which facilities meet your needs and manage to address your concerns for your child’s safety and quality of care. Then, find the price that meets your needs best and does not add to other monthly budgets or commuting expenses.

FSAs and Tax Credits

Flexible spending accounts, FSAs, like a dependent care account, allow a single parent to set aside $2,850 tax-free each year to pay for childcare or $5,700 for a married couple. While it will not cover all the costs, by any stretch, of childcare for the year, it can help ease the sting.

Additionally, child tax credits allow you to deduct up to $3,000 per year per child – up to $6,000 per family for childcare expenses. One thing you should note, though, is that while you can use both the FSA and a tax credit, FSA funds are applied first and count toward the tax credit.

Making it More Affordable

While we all recognize that nature often has a way of bringing us plenty of surprises, the best first step is to plan the growth of your family. Have childcare costs in mind well ahead of getting your new bundle of joy into the world. That is especially the case when considering second or third children. Some things you can do that will help with these expenses include:

  • Learn to clip and use coupons for other household expenses.
  • Shop clothing at consignment boutiques. Especially for baby clothes.
  • Eliminate unnecessary expenses (cable television, expensive mobile phone plans, and time-consuming and costly gym memberships).
  • Try to find a job closer to home or consider moving closer to work. You will not only reduce commuting expenses but also minimize time away from your child.
  • Analyze the potential of working from home or staying at home vs. childcare prices. You may even manage to take some additional online classes during this time for career advancement. Once your child goes to school, you can return to the workforce.
  • Explore other options for childcare, like a family member, friend of the family who stays at home, or alternating work schedules with a spouse to reduce or eliminate the need for childcare services.
  • Start a daycare in the home. Then it is always “bring the baby to work day” for you, and you can contribute to the household income in the process.

Steps like these can go a long way toward helping you manage the costs of raising your child in those first crucial years.

Getting More Mileage from Your Child Care Dollars

  • Compare costs to find the best combination of service and care.
  • Find other ways to cut costs to accommodate childcare expenses.
  • Consider working from home or shifting schedules with your spouse to reduce or eliminate the need for childcare outside the home.
  • Explore options outside of traditional childcare facilities.

Small steps like these can yield significant results for your childcare budget and your efforts to manage childcare expenses.

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