Dealing With the Costs of Childcare

by Emily Guy Birken

My son was born in late August, 2010, after a tumultuous summer which included quitting my teaching job, moving from Columbus, Ohio to Lafayette, Indiana, and buying a house. All that upheaval did make one decision much easier—I knew that I would stay home with the peanut for at least a year, since landing a new teaching job while enormously pregnant would have been difficult, to say the least. We were lucky that my husband earns enough for us to live on while I stayed home.

Since that time, I have decided to explore options that would allow me to work from home. The costs of childcare can be prohibitive and it often makes more financial sense for the lower-earning parent to stay home rather than see all of that income go to full time day care. However, even with my working from home, I still need to place our son in childcare several times a week to have the mental and physical space to concentrate. So despite being a stay-at-home-mom, I have plunged into the sometimes-frustrating world of childcare.

The Available Child Care Options

reduce child care costsThere are four traditional options for working parents: a formal child-care center; an in-home daycare center run by a family; personal in-home care by a nanny or babysitter; or the “Grandma” option—that is having family, friends or neighbors take care of your children.

Very few families have the resources to hire a nanny, and so most families will use one of the other three options, or a mix. In our case, we live far away from the closest grandparents, so having family look after our son was not an option. Since our local YMCA where we work out also has childcare, we decided to enroll our little boy in the drop-in daycare.

High Cost Child Care Options

Full time infant childcare at the Y costs $160 per week (or $8000 per year) which is on the low end of average for the nation. According to a report by the National Association of Child Care Resource & Referral Agencies (NACCRRA), “the average annual cost of full-time care for an infant in a center ranged from $4650 in Mississippi to $18,200 a year in the District of Columbia.”

Though childcare does get cheaper as your child grows older, it is still a big expense.

Options for Lower Cost Child Care

For parents who face these challenges, there are several ways to lighten the financial burden of childcare.

1. Use your employer’s Dependent Care Account. This is a type of Flexible Spending Account that allows you to save up to $5000 pre-tax dollars per year for childcare (or elder care, if you’re taking care of aging parents). There is also a Dependent Care Tax Credit for any post-tax dollars you spend on childcare.

2. Arrange for flex-time at work. A mom-friend of mine who is the breadwinner in her house while her husband is at school has worked it out that she works from Tuesday-Saturday at her job. She takes care of their 6 month old son on Mondays, he takes care of the baby Tuesdays and Thursdays when he only has evening classes, and Grandma looks after the little one on Wednesdays and Fridays. If both Mom and Dad (and assorted grandparents) arrange for staggered schedules, you may not need any daycare—or only drop-in care for a few hours here and there.

3. Use a college student as your sitter. If you are lucky enough to live in a college town, students can make for less expensive sitters. I met several college students who were happy to do occasional babysitting when I volunteered our son for a program through Purdue’s Infant Lab. My contacts through that program are responsible 20-somethings who obviously care about kids, as they are focusing their studies on infants. Some students are even looking for more than just part-time work—to help them offset the costs of college.

4. Start your own daycare. In-home family day cares are very common, and if you are already unsure how to pay for day care, this could be a way to not only stay home with your child, but also earn some money. This is not an option for the faint of heart, and there may be local or state laws you must comply with.

5. Share childcare costs with a friend or neighbor. If you and another parent go in together to hire an in-home caregiver, you can divide the costs while still reaping the benefits of individualized care.

For us, I am going to stick with the Y for now. Since our son only needs childcare for 15 or so hours a week, I am able to enjoy the benefits of both being a stay-at-home-mom, as well as get some breathing room for my work.

Photo credit: Shaggy Paul.

Published or updated October 29, 2011.
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