6 Ways To Make Child Care Costs More Affordable
The cost of child care for children is getting so high these days that some might mistake their bills for college tuition. One highly regarded preschool near us costs about $15,000 a year per child, and the school day ends at 2 p.m. Many families also hire nannies, which can run from $800 to $1000 per week — sometimes more than a single parent’s paycheck. If you add up all of these costs, it all makes you wonder: How are middle-class families paying for all this — and why?
Well, maybe we do know why they are paying up. Oftentimes it’s because both parents need or want to work full-time and child care is a necessity. A mom named Rebecca Aranda actually told me that her income from her work goes almost entirely to child care — but it’s worth it for her sanity. That’s pretty expensive therapy!
Another mom Meghan Chapman says, “Child care is a huge cost. By the time my son goes to kindergarten, we will have spent roughly $120,000 on child care. It’s the reason we are hesitating to have a second child.” I might have to agree with Chapman there (and hopefully my only child will forgive me one day).
Writer Anne Miller breaks the costs down in a recent Slate.com article and explains the reason that day care costs are high is because “There’s tons of regulations around daycares like insurance, real estate requirements and salaries, and truthfully, while parents are squeezed, it’s not the fault of day cares. They’re squeezed too.”
Miller adds, “On average, day care in every state is at least equivalent, if not more than the cost of instate college tuition. But you have 18 years to save for college.”
Many moms I meet are adamant that child care expenses are worth every penny, that if you take a break from work, your career will suffer later on, and you’re not paying into your retirement fund either.
“When you do the cost-benefit analysis of paying for child care vs. losing your income if you decide to stay home, you also need to factor in the hit your career takes if you leave the workforce for an extended amount of time,” explains journalist and mom from Detroit. “There are lot of reasons to work that aren’t strictly economic.”
Personally, I’m not sure that’s all worth it. Maybe I’m naive, but I think breaks are good if you want them. I would also much rather live for today than when I’m ready to retire at 75. And I think any career can always be resurrected when you’re ready, though it might take on a new form. Many moms will disagree with me, and there’s nothing wrong with that!
New York City’s state-funded Universal Pre-K program, which pays for preschool for 4-year-olds, has been amazing for city-goers, and we can’t wait until it hits the suburbs! In Europe, preschools are completely subsidized, making life much easier on families. We need to catch up in this country and fast.
Until we get there, here are some tips from moms and experts on how to lessen the financial struggle from child care:
1. Nanny Share
Journalist and mother Erica Sandberg says, “I was so shocked that I wrote a book about it called, ‘Expecting Money: The Essential Financial Plan for New and Growing Families.’ One thing I learned (then passed on) was that nanny share-care can be a fantastic solution. Two families split the cost, add a little more and all parties benefit, which is what we did.”
2. Find A Job With A Flexible Schedule
Mom Lindsey Hunter Lopez became a freelance writer once her kids were born so she could work around school schedules. “A nanny would have cost most of my salary as a teacher or staff writer so why bother? I just stay home with my kids for free,” she says.
3. Lean on Family
Financial expert Brad Repke says, “We are fortunate in the fact that we have not had to pay for formal child care. We get a ton of support from both grandparents and luckily family is free. We do use a babysitter once in awhile, but it is reasonable. From discussions with my friends, they comment that child care is like having a second mortgage payment and I feel for them. I guess my only potential advice would be to lean on your family and friend-support network to lower the total cost.”
4. Move to an Affordable Area
Look for areas to live where child care is less expensive. Costs vary a lot depending on where you live, and some places are more favorable than others.
5. Live With Less — Temporarily
Judy Mollen Walters says, “Some people deal with it by saying, ‘Yeah, I won’t have any or very little income for these three years but it’s worth it to hold on to the job for when they enter kindergarten and the money is recouped.'”
6. Invest Wisely
Earl Knecht, who is the chief investment officer of Napa Valley Wealth Management, says that the best way to minimize child care costs is through an employer-sponsored plan like Dependent Care Flexible Spending Account (DCFSA), where you can put pre-tax dollars from your paycheck to pay for child care. If your employer doesn’t offer this program, see if they can set up one up and also ask that they contribute to it!
While finding ways to cut child care costs are good immediate solutions, some mothers I spoke to say it’s not enough. “I’m no econ expert and am strictly a stay-at-home mom at the moment, but I actually think you all need to be paid more for your jobs rather than spending less on child care,” says mom Kristen Herrera. “So the conversation is more about general wages than affordable child care. We’ve seen the trend for a long time— wages aren’t increasing at the rate costs are increasing.”
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