10 Ways to Reduce Childcare Costs

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The United States is notorious for having high-priced childcare. Parents are always looking for ways to cut costs without cutting back on the standards and safety of a good daycare.

Fortunately, there are a few ways to reduce childcare costs that will keep you from worrying about the overall quality.

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Ways to Reduce Childcare Costs

These 10 tips and tricks may not work for everyone.

However, you’re likely to find at least a few you can apply to your situation. Even if you only save a few dollars each month, it will add up over time.

1. Research Childcare Prices

The first, not to mention most logical, thing to do is to research childcare prices in your area. Research all childcare prices. Don’t just look at corporate daycares.

Talk to church daycares, in-home daycares, babysitters, and even nannies. What you might think is out-of-reach could be the perfect solution.

I was surprised to learn that many of my mom-friends hired nannies. I thought nannies were only for the elite and not the middle-class crowd that I call home. I quickly learned this isn’t the case.

In families that have multiple children, a nanny can be far cheaper than a daycare. Many nannies provide additional services, like house cleaning and running errands. This saves even more time and money.

In-home daycares tend to be less expensive than corporate daycare solutions. They may not follow the strictest procedures, but they may have other benefits. Make sure you price all of these options before settling on one.

Related: How to Find a Good and Affordable Daycare

2. Get Familiar With the FSA

A Flexible Spending Account, or FSA, is a good way for you to save money during the year. It is simple and to set up and easy to use.

The basics of an FSA is that your employer sponsors the account and you can opt to enroll. You can place as much as $2,750 per parent into an account that is removed from your paycheck prior to being taxed. You then use that money, either through a check or debit card, to pay daycare bills.

There are two big downsides to using an FSA. The first is that the amount of funds are limited. Even if you and your spouse both put in the maximum amount allowed, you probably will only be able to pay for three to four months of daycare per year with the FSA.

The second is that employers must sponsor the plan. Self-employed individuals don’t have access to an FSA. The same is true for people whose employers simply don’t provide that benefit.

Pro Tip
Taxes and government programs change regularly so make sure you speak to your professional tax guy for up to date information and for how best to handle childcare taxes and any tax laws for your situation.

3. Discounting Isn’t Just for Black Friday

Childcare discounts do exist. In fact, they’re not even that uncommon.

Many daycares offer reduced prices for families that have multiple children. They know the cost is a burden to you. It is also beneficial for them to have siblings at their facility.

Daycares may offer sliding scale fees based on your income. This may be made apparent through their literature or website, but sometimes it is not advertised. When asking about prices, don’t be shy about asking whether you can take advantage of any discounts.

Discounting may apply to you based on your employment or military status. Many daycares offer discounts for veterans and military families.

Some provide discounting for teachers or first responders. A daycare may have a partnership with certain places of business. It is worthwhile to ask about any of these options.

Find Affordable Childcare Solutions

If you’re looking for a nanny, babysitter, or daycare this service can connect you to qualified childcare providers who have been pre-vetted.

4. Turn To a Friend

Do you know a stay-at-home parent? They may be looking for some extra money and would be a perfect childcare provider.

Offering childcare is an excellent way for moms and dads to make extra income while also being there for their own children. It is also a sure way for you to save money while also knowing your child will receive care from someone you trust.

You may even decide to turn to multiple friends who can watch your child on varying days of the week. Does your next door neighbor have a couple of days available?

Maybe a friend from church can watch your child on the other three. It’s not necessarily ideal to have multiple childcare providers but it can be an enormous cost-saving.

One issue I had, when I was pregnant with my oldest, was that I didn’t know any other moms. I didn’t have those kinds of relationships as I was the first among my friends to start having children.

This is where getting to know other parents might come in handy. Join a parent group and you might find someone who will be your next childcare provider!

5. Curb Other Expenses

It is a mistake to think the only expense is the daycare bill. You will have to pay for snacks, extra clothing and other supplies to keep at daycare. Most daycares refuse cloth diapers, which means you will have to supply disposable diapers until your child is potty trained.

Are you nursing? You will need to invest in a breast pump and storage bottles or bags. Not nursing? You will be supplying the daycare with formula every week.

These expenses add up more than you might realize. You may be able to curb them somewhat by making some tough choices. Look for daycares that don’t mind changing cloth diapers to save on disposable ones.

Keep close track of clothing and toys to make sure you’re not constantly replacing items that have been lost. Consider nursing, which is healthier and must less expensive than formula. You may be able to rent a breast pump rather than buy one.

Don’t forget the cost of driving to daycare. You may spend an unnecessary amount of time and money driving to a daycare that isn’t conveniently located. Take that into consideration when you are shopping for childcare providers.

6. Don’t Be Afraid of Waitlists

My son was on a waitlist for our chosen daycare for three years. We knew we would have to find an alternative for him in the meantime, but we put our name on the list as soon as we could.

We learned our lesson from that experience. As soon as I was pregnant with my daughter, before she even had a name, she had a spot on a waitlist.

The most popular daycares are often those that are the most affordable. They also have the lengthiest waits. Put your name down on the waitlist as soon as you can. If necessary, and if it isn’t a financial burden, put your name on multiple waitlists.

Don’t be afraid to add your name to a waitlist that is already long. Even if a daycare tells you they have a one or two year wait, when a spot opens up it could be yours.

Find Affordable Childcare Solutions

If you’re looking for a nanny, babysitter, or daycare this service can connect you to qualified childcare providers who have been pre-vetted.

7. Ask for Help

You are not alone. There is someone in your life who is willing to help you, even if all they can provide is an ear to listen and a shoulder for you to lean on.

Tell friends and family members about your difficulty with paying for childcare. You may find help in unexpected places.

Asking for help doesn’t just mean financial assistance. Your family and friends might know of a childcare option that you hadn’t considered. They may know individuals who are interested in starting an in-home daycare. They might even be interested in watching your child.

Along with family and friends, religious institutions are good places to go to ask for help. They may offer financial assistance to members. They may even have childcare options of their own.

8. Use Family Leave to Your Advantage

Maternity leave was my saving grace when my first child was born. The Family and Medical Leave Act requires employers to allow new parents to take up to 12 weeks of unpaid time off after a child is born.

Thanks to infertility, I had many years to plan for this. I accrued enough vacation days that I had every day of leave paid plus an additional week of vacation.

If your employer doesn’t offer paid leave, try saving vacation days and sick days so you are able to provide care to your child soon after birth.

There is more.

Your partner can also take advantage of FMLA. The act allows a parent to take up to 12 weeks off from work at any point during the child’s first year of birth. Theoretically, you and your partner could provide care for six months without having to worry about newborn daycare.

One drawback of FMLA is that only one parent can take the time off if both you and your spouse work together. This was the case with my husband and me.

Though we didn’t both get to take the time off, we were happy with the fact that I didn’t have to give up a paycheck to focus on being a new mom for three months.

9. It May be Time to Change Jobs

Changing employment is not an easy thing to do at any time. It is even more difficult to change careers when there are so many other new life changes happening. Still, if you aren’t getting the support you need from your current employer, it could be wise to look elsewhere.

That is exactly what I did after my son was born. I went back to work after maternity leave, and then lobbied my employer to allow me to work from home.

He said no, so I went on the job hunt.

I would be lying if I said it was easy, but I would also be lying if I said it wasn’t worth the hard work and effort. I still had to find daycare to watch my children part-time while I worked from home, but the cost for an abbreviated schedule was manageable.

Working from home might not be ideal for you, but you still might look at a job change to help with childcare costs. Look for employers that offer on-site childcare or who have co-op programs.

Don’t be afraid to tell your current boss that you are looking for a new job that meets your needs as a parent. They might be willing to make some changes to keep you.

10. Continue Shopping Around

Your child may already be in daycare. That doesn’t mean you have to continue using the same daycare provider until your children are in school.

Keep looking at daycares and keep studying cost. If you find a childcare solution that is less expensive, don’t fret about moving your child to a new space.

A word of caution: Make sure you honor any contracts you have signed. Most daycares have agreements that parents have to sign prior to using their services.

Yours will have likely had a minimum number of weeks or months you must pay regardless of services rendered. You probably also agreed to give a pre-specified amount of notice before leaving.

It can be hard moving a child, especially when they have built bonds with peers and caregivers.

Remember children tend to be more emotionally mature when they have early relationships. Moving them to a new environment may be helping them to adapt to social situations in the future.

Final Thoughts

What are some of the ways you have found to save money on childcare? Let us know in the comments!

Frequently Asked Questions

  1. How can I reduce my childcare costs?

    To reduce your childcare expenses compare local daycare and childcare prices. Also seek help from friends and families maybe one of them would be willing to watch your kids for free or at reduced prices.

  2. What do you do when daycare is too expensive?

    See if you have any friends or family members that would be willing to watch your kids for free or at reduced prices. Also make sure you check for any government or facility aid or scholarships.

  3. Why does childcare cost so much?

    It’s because childcare remains a very labor-intensive operation. A lot of your cost is actually going to labor. This is before factoring in any facility costs, and profit on top of it.

  4. Can you take out a loan for daycare?

    You can take out a loan for daycare, but this should be avoided. If nothing else this is not a long-term option because ultimately that money will have to be paid back with interest.

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