How to Save Money on Childcare (and Keep Your Kids Safe)

Kids are expensive. From constantly replacing their clothes and shoes as they grow to driving up your grocery bill during growth spurts to hobbies, sports, and birthdays – the costs add up quickly! Of all the costs associated with having a kid, childcare is one of the biggest. 

When you’re trying to build a brighter financial future for your family, one of the first things you need to know is how to save money on childcare. You’re pinching pennies everywhere else, trying your darndest to save money. For childcare, monthly costs can sometimes be as much as an entire income. 

What’s a tired working parent to do??? The good news is that you’re not up a creek without a paddle. Even if you have a kid (or kids) in childcare already, there are ways you can save. Let’s take a look at some of the best ways to save money on childcare in 2022 – whether you have kids in childcare yet or not.

Photo by Fabian Centeno on Unsplash

I have a kid (or kids) in childcare, how can I save?

When you already have a kid in childcare, most of the advice on how to save money on childcare is unhelpful. You get flooded with advice on how to pick a daycare provider, told to “just stay home”… there are even articles out there that recommend you save money by just not having kids!

Trying to lower that childcare bill can seem impossible with all this bad advice. The good news is that it isn’t impossible to save money on childcare, even if you have a provider already. Here are our top 3 tips for saving money on childcare when your kids are already there.

1: Just Ask!

Our first tip can feel overwhelming, but it’s the simplest way to save money on anything – including childcare. Start by asking your childcare provider about discounts. They may have discounts available that you aren’t taking advantage of yet. 

Here’s how you start the conversation. First, pick a time when your provider isn’t swamped with kids and their parents. (So drop-off of pick-up is out.) You may be able to schedule a meeting with them or ask if you can send an email so they can get to it when they have time.

When it’s time to talk, start by thanking them for all their hard work. After all, it’s not just anyone you’ll trust your kids with! Next, let them know that you’re trying to tighten up the budget right now. You don’t have to share why (unless you want to), just let them know you’re looking to cut costs.

Then, take the plunge! Ask if there are any discounts they offer that you don’t have applied to your account. You can also offer to trade a service in exchange for a discount. If you’re in marketing, for instance, you can offer to help them with their online presence in exchange for a dollar amount off your childcare. 

2: Grab those tax breaks

While the US ranks pretty low on the list of best countries to raise a family in, there are some government benefits to having a kid in childcare. 

One of these is a Flexible Spending Account (FSA). This is a government-based account that you can put money into, tax-free. Then you can use that money to pay for childcare. Or you can use part of your yearly tax return to pay for childcare, especially if your childcare center allows you to pay for a year in one lump sum.

One thing to be aware of when it comes to FSA vs tax return is that you’ll generally only get one or the other. If you use your FSA throughout the year, your tax return will be smaller (or you won’t get one at all). 

Finally, check to see if you qualify for assistance. All 50 states receive some federal funding for childcare, and most states also have their own funding. The requirements vary from state to state, but you could get more than half your childcare costs covered if you and your daycare meet the requirements.

3: Reach out to a non-profit

Whether you’re a single parent or parenting with a partner, there are non-profits out there to help. For example, TOOTris is dedicated to helping working parents access quality, affordable childcare no matter where they live or what their income bracket is.  

The availability of these organizations varies depending on where you live. The best way to find out what programs are open for you is simple to google “childcare non-profit near me” or “childcare assistance programs near me”.

If you’re trying to find out how to save money on childcare because of a recent life change, like illness, injury, or losing a job, you have even more options. Even if you aren’t religious, many religious organizations can provide financial help.

Photo by Camylla Battani on Unsplash

I don’t have a kid in childcare yet, how can I save money?

If you’re still expecting your little bundle of joy, congratulations! Being a parent brings with it a unique set of joys and milestones as you watch your kiddo grow. In the US, many mothers are expected to put their careers on hold to parent, but this doesn’t have to be the case!

Since you have some time to plan for how to save money on childcare, you can dig into researching your options. We’ve got 3 main things to consider when you’re trying to save money. For childcare, monthly costs can be hugely different depending on these factors, so take your time!

1: Daycare or Au Pair?

When you think of a nanny or an au pair, your first thought might be, “That’s for rich people!” The common idea of a nanny lines up with the well-to-do family from the 90s sitcom. However, the reality is very different! 

A nanny can work flexible hours, and be anyone from a high school student trying to save for college to an elderly woman with years of experience. An au pair is a young person from another country who’s working on learning the language and culture by living with you. 

Anyone can hire an au pair, but you’ll need a place for them to stay, and it helps if you speak the same language. Even if you don’t, your kids will be bilingual in no time, and you can request an au pair who has at least a basic grasp of English already.

A nanny or au pair may be more cost-effective, especially if you have multiple kids or pool the cost with another parent. The main reason that hiring a nanny or au pair can be more cost-effective is negotiation. 

You can talk to your nanny or au pair about the number of kids they’ll be looking after and how long they’ll be expected to care for them. You can find a rate that works for both of you, especially if you’re working from home part-time or full-time. 

One concern parents may have about hiring nannies is safety. The great news is that there are organizations like Care.com and AuPair.com. These companies handle the interviews and background checks so you always get someone safe and qualified.  

2: Hourly Rates or Packages?

If you decide daycare is the right option for you, it’s time to look at the rates. Most daycares will offer some kind of discount if you pay in bulk for a certain number of days per week or month. This can help you save some money, but not always.

The problem with paying upfront is that you can end up losing money if you don’t need the entire time slots you paid for. For instance, if your job switches schedules, you or your little one gets sick for several days or weeks, or your childcare options change. 

In these instances, you’ll bring your child home early, but you’ve already paid for the time. In the end, you can be torn between using up those hours or spending the extra time with your little one. For parents with consistent schedules, though, paying in a lump sum weekly or monthly can be the best option for saving money on childcare. 

3: Have you asked your village?

The old saying “it takes a village to raise a child” is showing up more and more among parents. The saying means that it takes lots of different people pitching in to raise a well-rounded child. This “village” can include family, friends, neighbors, other parents, and even co-workers. 

When it comes to figuring out how to save money on childcare, your “village” can be more valuable than anything else. Start by asking family and friends if they might be willing to help look after your kids. Even if you pay them, you’ll be paying less than you would for daycare. 

If that search turns up dry, ask other parents. Finding parents who work a different schedule can let you “swap” kids. You can care for their kids while they’re at work, and they can care for yours while you work. Or, talk to stay-at-home parents you know. Again, even if you decide to pay them, they’ll charge less than a daycare!

You can even talk with your HR department about reaching out to other parents in your workplace. You can find someone who works an opposite schedule or arrange work-from-home days so someone is always there for the kids. 

Finding help with childcare will be easier or more difficult depending on your child’s age and needs, but it never hurts to ask!

Photo by Kelly Sikkema on Unsplash

Caring for your children and you

No matter where you are on your journey as a parent, caring for children is stressful. You want to do right by them, and you want to make sure they get the very best care all day long. There are lots of ways to parent, and being a working parent is just as valid as staying at home.

When you’re looking for help, you might encounter people who try to shame you for not being a “real” parent. The truth is that all parents are doing the best they can for their kids. Whether you choose daycare, a nanny, or stay at home, the most important thing you can do for your kids is love them and help them grow.

For parenting advice, trust your gut. But for financial advice, subscribe to our newsletter. We’ll send more tips and tricks on saving money while raising kids right to your inbox. You’re doing great and we can’t wait to help you build your family a brighter financial future!