Ever dreamed of owning your very own shiny Lamborghini? Turns out that by the time you are finished raising your child and he or she reaches the age of majority, you will have expended almost enough money to afford one.
According to the U.S. Department of Agriculture, the cost of raising a child for 18 years is $241,080, and that’s not including college. Unless you’re a stay-at-home parent, child care will more than likely be a part of the equation — in some cases a very significant one.
Fortunately, there are ways to save on child care so you won’t break the bank.
1. Plan ahead
If you have a solid idea of when you’ll need care, don’t wait until the last minute to commence your search. The high-quality, cost-efficient providers usually fill their spaces first, so secure your spot before the rush.
2. Check online databases
For a small membership fee, you can join websites such as Sittercity and Care.com that will enable you to query a database of local child care providers that are most suitable for you. What’s even more beneficial is that all providers are screened, so you can retrieve a copy of their background check before moving forward.
3. Use private care
Are day care centers in your area too expensive for your budget? Try soliciting referrals from trusted friends and relatives about people who run in-home facilities. They are usually much more affordable and offer a smaller child-to-caregiver ratio. Says U.S. News & World Report:
In contrast to traditional day care facilities, family-run day cares are usually operated out of the provider’s home, where she often cares for her own children at the same time. It’s usually far less expensive than the traditional route.
4. Take advantage of employer-sponsored child care
On-site facilities at your place of employment may be another option. Employees are typically offered an incentive to enroll their kids, and they can also save money on gasoline and feel comfortable knowing that their children are just a few minutes away.
5. Review employee benefits
Inquire at the human resources department of your employer to find out if any dependent care programs or discounts are offered. An example is Bank of America’s arrangement with Bright Horizons through the Backup Care Advantage program. Qualified employees are offered a set number of days annually of backup care at a discounted rate, and a small percentage off with select providers.
6. Split the duties
Establish or join a baby-sitting co-op in your neighborhood. But remember that you must give your time in order to receive, so you’ll have to carefully consider if this type of arrangement is right for you.
Lisa McLellan, a professional child care provider and founder of BabySittingWorld.com, told U.S. News:
It works well for people who work part-time hours, and it’s a wonderful alternative to paying hourly for an occasional baby sitter. On a more informal basis, two parents can simply trade caregiving hours with each other for a few hours a week. If one parent has more children than the other, they can work it out with points like a baby-sitting co-op so that neither parent feels cheated.
7. Hire a student
Do you need someone to watch your children for a few hours until you arrive home from work? Try out a high school or college student to get the job done. This is the perfect way to keep your children occupied without spending a ton of money.
8. Explore income-based programs
9. Share a nanny
It may be cheaper for several families to share in the cost of a nanny. Then the kids would gather with the nanny every day. Just be sure to get everything in writing and agree to the terms and conditions beforehand. Care.com offers a helpful list of things you should consider to determine if a nanny share is right for you.
10. Ask relatives
Part-time care is an option if you have a reliable relative who can pick up the slack a few days a week. Grandparents and other retired family members may be the perfect candidates for the role.
11. Ditch the workforce
In some cases, the costs of child care may outweigh the benefits of working. “The cost of taking care of one’s children outside the home is now so high that many women cannot be assured of both working and making a decent income after taxes and child care costs,” says The New York Times.
To help make a decision, Parents.com offers a Stay at Home Calculator.
12. Fund a flexible spending account
You can contribute up to $2,500 ($5,000 for couples) per year in pretax income to a dependent care FSA offered by your workplace, which will lower your tax liability at the end of the year. The funds can be used for day care, preschool and summer day camp. But be sure you use it so you won’t lose it.
13. Use federal and state tax credits
Savings on child care may also be available to you through both the state and federal government. Says NerdWallet:
The federal Child and Dependent Care Credit will reimburse 25 to 35 percent of your child care expenses incurred in order for you to work or look for work. The credit pays out up to $3,000 a year for a single child, or $6,000 a year for two or more. Child care expenses, in this case, include day camps as well as baby sitting. Further, 24 states offer additional dependent care credits.
Regardless of which option you take, safety is a top priority that should not be compromised.
Do you have any additional cost-cutting strategies? Let us know in the comments below or on our Facebook page.