Saving on the Cost of Childcare
According to Child Care Aware’s 2016 report, it costs Virginians over $12,000 per year to send a child age 9 months and under to center-based daycare facility. For an accredited daycare or preschool program, the total bumps up to nearly $15,500. The report also shows that a married family with an infant in daycare spends 12% of their income on childcare costs per child.
Perhaps the most astonishing statistic from this report is that the cost of center-based infant care is more than public, in-state college tuition.
Regardless of the age of your children or the type of care required, if one thing is for certain it’s that childcare makes up a huge part of any parent’s budget. Even if you choose home-based care to save, you’re still spending nearly a 25% of your income to send two children. You shouldn’t have to settle for affordable daycare, but you also don’t want to be forced to tap into your emergency fund when times get tough.
10 Tips for Saving on Childcare Costs
- Look outside of traditional center-based facilities. Data from Child Care Aware’s report indicates in-home daycare costs less at 10% of your income, and religious centers tend to be more affordable as well.
- Investigate scheduling options. If your facility of choice offers commitment terms other than set weekly rates, and you can work-from-home or depend on a family member once a week, your investment in childcare will drop.
- Reassess your budget and savings strategies. Cutting back in other areas can help to free up funds to pay for childcare. It might not be enough to feel more comfortable, but reevaluating your budget from time to time is a great way to reduce spending in areas that may have become secondary to your current financial scenario.
- Apply for tax credits. Households with child care expenses are eligible for the child and dependent care tax credit. This can cut up to $3,000 off your childcare costs per child. Read the fine print on income caps as this can reduce the amount you are eligible to receive.
- Focus on more than just the going rate. Some child care centers offer benefits you’d expect from your employer. Check if the center charges you for sick days, holidays or vacation days your child takes from daycare. These considerations all play into the bottom line.
- Ask about sibling discounts. It’s very likely you can receive a generous discount for sending multiple children to the same daycare center or preschool.
- Use your employer’s dependent care flexible spending account. According to benefits provider WageWorks, employees can save up to 40% on childcare depending on state and federal taxes.
- Talk to friends and neighbors. They say it takes a village, and as far as caring for and raising children, this couldn’t be more true. Many communities have babysitting co-ops where you exchange childcare hours amongst the group.
- Consider dropping to part-time. Dual income families may find that it makes more sense for the sake of their financial health for one parent to reduce their work hours, or leave their job entirely in order to stay home with their children and eliminate child care expenses.
- Factor in drive time. Per the US Census, the average commute is 25 minutes—so it’s easy to feel like your car is another family member and your checking account is 90% gas purchases. Track your travel times and how much you spend in gas. You may be surprised to realize you’d be better off sending your children somewhere closer and spending a few more dollars a month.
Keeping your kids safe and finances in check
Childcare considerations are about finding superior care as well as significant savings. You want what’s best for your child, but you also don’t want to jump through hoops, be inconvenienced or rack up debt just so you can get to work each day.
RiverTrace offers a unique Balance Program that provides members with assistance in the area of savings as well as achieving all of your financial goals like budgeting, credit management and much more.
For help charting your path, contact RiverTrace today at (804) 266-2767.