Being a mom is hard enough, but when you add the soaring costs of childcare, it can feel downright impossible these days. Childcare costs are now one of the largest monthly expenses throughout the country, surpassing even the cost of housing in some regions. The average cost of infant care in the United States is now over $10,000 per year, an increase of nearly 70% since 1985, and that's just for one child.
As daycare expenses continue to rise, it's important for moms to know about available resources that could make things a bit easier for you and your family. By taking advantage of programs like pre-tax spending accounts, local daycare or babysitting co-operatives, and available subsidies, you might be able to offset some of that financial burden.
If you're struggling to find affordable childcare options in your area, check with your school, employer, local government, or mom groups for additional tips. To help, we've put together this guide highlighting the most widely accessible programs and resources.
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Put Your Pre-Tax Dollars to Good Use
A dependent care flexible spending account (DCFSA) is a special type of account that lets you put aside pre-tax funds for qualified childcare expenses. On average, a DCFSA can help you save up to 30% on childcare costs. If your employer offers a DCFSA and your children are under thirteen, you may want to take advantage of this employee benefit.
A DCFSA can pay for eligible expenses, including childcare, before and after-school programs, and summer day camp. The money you contribute to your DCFSA is deducted from your paycheck before taxes are taken out, so you're getting the most out of your hard-earned dollars. The funds set aside also help reduce your taxable income resulting in less due come tax time.
Not only does a DCFSA offer tax savings, but it also helps significantly with budgeting for childcare expenses since your designated contribution is automatically deducted from your paycheck.
Consider Nanny Shares or Babysitting Co-operatives
Another great way to save on childcare costs is to team up with other families in your community who are in the same boat as you are. You can do this by joining local mommy groups or even creating your own nanny share or babysitting co-operative.
A nanny share is when multiple families with similar schedules hire the same nanny to look after their kids. This is an excellent way to lower childcare costs since you'll be sharing the cost of the nanny with another family. Ask around your neighborhood to find a nanny share near you or speak to other moms who might be interested in starting one.
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Babysitting co-ops are a similar concept, but no money exchanges hands. Instead, families pool their resources to provide quality childcare for one another. Each co-op member agrees to babysit for a set number of hours each week. In return, you also receive childcare from another member when needed.
To find a babysitting co-op, nanny share, or daycare near you, speak to other moms in your area or search local mom Facebook groups. Ask neighbors, friends, and family for recommendations, search local parenting forums, or use online resources like Childcare Aware.
See if You're Eligible for the Child & Dependent Care Tax Credit
The Child and Dependent Care Tax Credit is available to working parents paying for childcare who don't exceed income caps (currently at $400,000 for joint fillers and half that for single parents). This credit reduces the amount of taxes owed up to $2,000. Sure, it won't cover your total childcare costs, but every bit helps.
With this credit, you can claim most types of childcare services if doing so will allow you or your spouse to continue working, going to school, or job searching. The services covered include babysitting, daycare center tuition, after-school programs, day camp, and more. Expenses related to special needs children, such as physical therapy, speech therapy, or other prescribed care may also qualify.
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Generally, you cannot claim this credit if you are already contributing to a dependent care flexible spending account. However, if you have more than one child, you might be able to claim the tax credit for one child while using the DCFSA deductions for the others. Since every family is different, it's best to consult with your accountant to maximize savings.
Check if Your State, Employer, or School Offers Subsidies
Many local governments offer subsidies to help families reduce their childcare costs. Check out the National Conference of State Legislatures' database to review government subsidy programs available in your state. Your job might also offer subsidies, on-site childcare, or even reduced nanny agency rates. Talk to your HR department to find out if employer-sponsored childcare programs are available to you.
If you are a freelancer or can set your own work location, look into co-working spaces that offer on-site childcare. Students who need help paying for childcare should visit the financial aid office at their university. It never hurts to ask and find out what is available. You might be surprised by the assistance your state, employer, or school can provide.
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Lean on Nearby Family & Friends
Having family members who live nearby and can babysit is a mutually beneficial solution. You get the childcare help you need, and they get quality time with their grandkids or nieces and nephews. It's a win-win! Trusted friends can also help when you are in a bind, but try not to ask the same person too often.
Another idea is to barter services with some friendly neighbors also struggling to keep up with rising costs. Offer to trade services like dog sitting or lawn mowing in exchange for some babysitting hours.
Inquire with Local Nonprofits & Community Groups
Several community organizations provide low-cost childcare services. Local nonprofits and community groups are usually more than happy to help families in need, so reach out and see which ones are available in your area.
The Jewish Community Center (JCC) and YMCA provide affordable childcare services for families. Some provide these services on a sliding scale fee based on your household income, making it more affordable than traditional daycare. If none of these options are available, see if other community groups like the Boys & Girls Clubs of America offer childcare or after-school programs in your area.
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Get Creative with Scheduling
If your workplace is strict regarding office hours, it doesn't mean you have to hit pause on your career. There are many ways to get creative with your schedule to align with your needs while still meeting your employer's work expectations. Speak to your supervisor or HR about the possibility of a staggered work schedule that better allows for childcare coverage between you and your partner. Another option is to ask for flex time or a designated work-from-home day per week.
It may sound like a big leap, but sometimes interviewing with other companies can give you the confidence you need to demand more in your current role. Or, if you are ready for a professional change, you might find a new opportunity that significantly improves your circumstances. More employers than ever are offering remote roles or compressed four-day work weeks.
Compare job benefits and take savings into account beyond salary. Working remotely can help stretch your budget since you'll be significantly reducing transportation and after-school costs. Plus, any subsidized childcare benefits equals more money in your pocket.
Reach Out to Your Local University
Put together a list of local colleges and reach out to their career development offices. Those offices can put you in touch with students majoring in early childhood education or nursing programs who are looking for work.
You could even reach out directly to the head of those departments if the employment office isn't able to assist. Then set up meetings or interviews with any interested students who seem like a good fit. With some luck, you'll find someone trustworthy and responsible who meets the criteria you're looking for.
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Ask Providers for a Discounted Rate
Pricing isn't always set in stone. Some daycares and preschools offer discounts for sibling enrollment, first-responders, service members, or government personnel. If you are part of a union, check what they might offer. Or call the childcare center and try to negotiate directly.
Sometimes paying half or full-year costs upfront could yield some overall savings. Your local daycare might also offer specials throughout the year, so be sure to ask the director about any current or upcoming promotions.
Adjust Your Budget
Review your expenses and cut out any costs that are adding up but not necessary. Think unused gym memberships or a streaming channel you barely have a chance to watch. Keep an eye out for promotions and renegotiate fees.
If you have any debt, consider consolidating it at a lower rate and coming up with a plan to pay it off sooner before interest rates increase again. Making these small changes will leave you with more funds available to put toward childcare.
Take advantage of discounted or free activities in your community too. Check out your local library or city's parks and recreation department for upcoming family-friendly events in your area.
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