Child care costs are — no surprise to parents — astounding in the United States.
The average annual fee for full-time, center-based child care runs from $5,476 to $16,594, according to Child Care Aware’s 2014 Child Care in America report. The cost depends on where you’re located, the type of care you choose and the age of your child. But regardless of these factors, child care likely makes up a huge portion of any parent’s budget. The report shows that full-time child care expenses for infants eat up between 6.8 percent and 18.5 percent of the average married couple’s income and between 26 percent and 64.9 percent of the average single mom’s income.
And, of course, when it comes to child care, you don’t want to skimp. You want your child to have the best care available, even if that hits your pocketbook hard.
If you need full-time care, you have to be prepared to pay a good bit of money for it. But that doesn’t mean you can’t trim costs. Here’s how:
1. Start with more affordable options.
Depending on your circumstances, there are a few child care options that are more affordable. In-home child care tends to be cheaper than center-based care, though this isn’t true 100 percent of the time. Also, religious-based child care centers tend to charge less.
Larger cities are also likely to have centers geared toward affordable child care. Because they focus on quality child care for low-income families, the centers receive grants and government subsidies galore. These can allow the center to lower prices across the board, even for families who don’t qualify for income-based child care assistance.
2. Look at the base price and the benefits.
When you’re comparing two similarly priced day cares or nannies, consider other financial factors to determine the actual cost of each option. Here are a few things you may consider:
— Vacation days. Ask if the day care provider offers unpaid vacation benefits, so you don’t have to pay for child care if your kid isn’t there.
— Sick days. Most day cares will call you to pick up your child as soon as he or she pukes or spikes a fever, understandably. This can be one advantage of hiring a nanny, who will likely still care for your child when mildly ill — saving you from cashing in all your sick days when the flu makes its way around your family circle.
— Unpaid holidays. To keep income steady, some day cares charge families even when they’re closed for a holiday. Ask about the holiday schedule — paid and unpaid — upfront to see which day care gives you the most unpaid holiday time.
— Sibling discounts. If you’ve got more than one kid in day care (or even if you’re planning to add to your family soon), look for a day care that offers a sibling discount. Having multiple kids in care can translate to a huge discount.
3. Explore the scheduling options.
These days, more employers offer flexible work schedules, which can be a great way to save on child care. Work at home just one day a week, and you could save big on child care costs.
But, then again, this isn’t always the case. Sometimes day cares only offer weekly rates, or they may just offer Monday-Wednesday-Friday or Tuesday-Thursday schedules that don’t work with your work schedule. And, sometimes, the day care will charge the same or only slightly more for five days of care than for three or four days paid at a higher daily rate.
Part-time day care can also be an option if you don’t have a flexible schedule but do have family members in the area. Maybe you don’t particularly want your son or daughter one-on-one with grandma every day (or grandma just doesn’t want that much child care responsibility). You could still work out an arrangement for grandparents (or close friends or other family members) to watch your child one or two days a week, and then use day care for the other days.
4. Explore your tax savings.
Your family may be able to reap tax benefits from paying for child care. The two main options include flexible spending accounts and the Child and Dependent Care Credit.
— Flexible spending accounts. If your workplace offers an FSA for dependent care, you should take advantage of it. You can fund the account with up to $5,000 per year of pretax income. That knocks down the taxes you owe for the year and could even kick you down into the next tax bracket if you’re on the line.
— Child and Dependent Care Credit. The child care tax credit is available for up to $3,000 in qualifying child care expenses for one child and up to $6,000 for two or more children. (That’s in total, so if you put $5,000 in your FSA, you’ll only claim $1,000 on the Child and Dependent Care Credit.) It’s typically not as money-saving for families, but you can check out this calculator to see which option is best for your needs.
Paying for child care is one of the more burdensome expenses that come with parenthood. But there are ways to save on high-quality care for your children. These steps will give you a good place to begin this year.
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4 Ways to Save Money on Child Care This Year originally appeared on usnews.com
