How to Save Money on Childcare

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Both of my kids are at a full-day camp this week and the house is soooo empty and quiet! They went out since 8 in the morning and won’t be back until 5 pm today. Thinking back, the kids haven’t been away while we were home for that many hours since my oldest was a full-day preschool. After all, I work at home, and paying for after-school care seems wasteful.

And let me tell you. In at least six years, I haven’t had this much time in my life. I had time to enjoy my lunch without interruptions. I had time to work with full concentration. I even had time to play without guilt. And guess what? The kids still aren’t back yet!

Look. I love my kids, but I love this temporary sanctuary too. So let’s talk about childcare cost savings today. Maybe you are like me and found a love for sending your kids to a professional so you can have more time working professionally. Maybe you are part of a dual-income household and need to work at an office so childcare is mandatory. This article is for you.

Childcare is Expensive

It should come as no surprise that many households spend up to 25% of their income on child care, and often as much as $500 or $800 a week. I live in Southern California and childcare is about $2,000 a month. I have friends in the Bay area that pay $3,000 a month, and that’s for each kid.

The worst is that you can’t always avoid the cost even in a tough economy if you are a dual-income family. Ditto for single parents. Because childcare is so expensive, it’s extremely helpful to find ways to save, such as: reconsidering your child care options, changing work schedules, and taking advantage of tax credits and other benefits. Here are practical ways you can start saving on daycare right now.

Check With Your Employer About FSAs
Employers are aware of the challenge of childcare and in the interest of keeping their employees happy and productive. Many companies are offering on-site childcare as a benefit. Even if your employer doesn’t offer childcare, there may be an option to contribute to a pre-tax flex-spending account (FSA). These accounts are similar to health care flexible spending accounts and usually allow up to $5,000 a year to be set aside for child care expenses.

There may be other childcare reimbursement options too. The key is to ask HR for help. And don’t forget about your coworkers too. Ask the ones with kids if any programs they know of can help you out financially. Don’t be embarrassed. Chances are very high that whatever concerns you have are shared by just about every parent working at your company.

Take Advantage of Government Tax Credits and Assistance Programs

The IRS allows taxpayers who meet certain criteria to claim up to $2,000 per dependent child for childcare expenses. You can’t claim any FSA funds you’ve spent since they’re already tax-free, but anything you spend beyond that can be claimed.

As part of the coronavirus relief package, the child tax credit has been increased temporarily to $3,600 for each kid under the age of 6 and $3,000 for kids from age 6 to 17 a year. Only couples making $150,000 and under will qualify for the full amount. The Biden administration even set up a website here ( just for this program and the IRS will start sending out payments automatically each month starting in July 2021.

Check into state programs for childcare too. All the state-run programs are income-based but it’s a good idea to look it up even if you make more because you never know what other programs you do qualify for.

Consider Babysitting Co-Ops or Bartering

Baby-sitting co-ops are increasing as people realize how practical and helpful they can be. Members take turns babysitting each other’s children based on availability, and since they’re exchanging babysitting for babysitting, there are little to no expenses involved. Sometimes co-ops create a fund for special activities or gas money, but this swapping of kids doesn’t cost a dime for the most part.

Another option is to talk with your current child care provider and see if you can work out an arrangement that includes exchanging your skilled services for child care. Perhaps you have experience with advertising, creating logos or websites, filing taxes, or some other service that your child care provider would just have to pay someone else for anyway. Don’t be afraid to ask or step out of your comfort zone if their requested services aren’t exactly your expertise. Complete the work quickly and professionally to make a good impression.

Family Members are There to Help

Many parents are worried about imposing too much on their relatives to provide childcare. Although it can be humbling, it doesn’t hurt to ask. Many grandparents, in particular, are retired and more than eager to spend more time with their grandchildren. My mom, for instance, is spending most of her days helping my sister with her kids in Hong Kong. I actually appreciate this, because my dad passed away last year and it gives my mom something to do and look forward to each day.

Knowing your children are with a trusted family member can be much more reassuring than leaving them with strangers. Offer some compensation, and at the very least, provide for your children’s meals and expenses while they’re with your relatives.

Consider Changing Your Work Schedule or Working From Home

Juggling work schedules can be challenging, but choosing to work different hours so you can avoid paying for child care could be worth it. If your spouse works during the day, consider a position you could work evening hours, or vice versa. It may not be the most appealing arrangement, but might only be necessary for a short time or a few years.

More and more jobs are also allowing the flexibility of working from home. If your career field is one of these, look for employment opportunities that will allow you to work from home, at least part-time. If you desire to be a stay-at-home parent, research jobs you can do from home such as online writing, accounting, web-developing, computer programming, and more. This is sort of how we’ve been managing without paying for childcare. My wife doesn’t work but I still work around the kids’ schedule to help out once in a while. At $2,000 per month per kid, the savings add up to a tidy sum.

Whatever your child care situation, look for ways you can trim some expenses and even some stress. Above all, do what’s right for your kids no matter what the cost.

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  • thara says:

    Find out about free childcare options. In order to really try to reduce my childcare costs I have now decided to make full use of the local community pool, shops and library one day a week and attend free local activities as well. On Friday mornings we focus on math and in the afternoons we go on nature walks. Mondays are our pool and shopping day. On Tuesday mornings we visit the town library to see and borrow a few different films to watch and books to read at home. In the afternoon we meet a friend for a fun classic play date. On Wednesdays we do orienteering then visit a museum that afternoon.
    Thursdays revolve around art and craft projects at home and a garden centre trip after lunch to see the cool colourful plants and flowers. Saturday is for cooking/helping maintain a garden and fun activities at home. Sunday is church day.

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