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If the cost of daycare is upending your personal finances in a big way, you’re not alone. Care.com data shows that in 2023, the average weekly cost of daycare for an infant was $321. Ouch.
If you’re drowning in daycare bills, you may be inclined to move your child to a different center with fewer amenities. But do you really have it in you to make that switch? As a parent, it’s natural to want the best care possible for your child. So moving to a lower-cost facility may not sit well, despite the potential savings involved.
The good news, though, is that you may have options for saving money on child care without having to skimp on quality. Here are a few to explore.
1. Arrange your work schedule to allow for fewer daycare days
Some people’s work hours have the potential to be more flexible than others. If you have a great relationship with your manager and a proven track record of meeting deadlines, ask for some leeway.
You never know if your boss might be amenable to having you work a Wednesday through Sunday schedule instead of Monday through Friday. If you’re able to go from needing five days of daycare a week to only three, the savings could be huge.
Of course, this suggestion assumes that you have a partner or willing adult to care for your child on Saturday and Sunday while you put in your time at work. If not, then this advice may not work for you. But if you have a co-parent who works a traditional Monday-to-Friday schedule, then this idea might work quite well.
2. Sign up for a dependent care FSA
You may be familiar with a flexible spending account, or FSA, in the context of setting money aside for healthcare costs. But there’s another version of the FSA that applies to child care expenses: a dependent care FSA. And while contributing to one of these accounts won’t lower your daycare costs directly, you can reap some tax savings when paying for the care you need.
This year, dependent care FSA limits are $2,500 for married couples filing separately or $5,000 for singles and couples filing jointly. If you put $5,000 into a dependent care FSA this year and then tap that account to pay your daycare expenses, you’ll shield $5,000 of your earnings from taxes.
Your specific savings there will hinge on the tax bracket you fall into. But if you’re in the 22% bracket, a $5,000 dependent care FSA contribution could result in $1,100 of savings for you.
3. See if a nanny share makes more financial sense
It’s understandable that you may not want to move your child to a second-rate daycare center to save some money. You want your child to have the best care possible.
One of the reasons some daycare centers charge so much money is that they maintain small caregiver-to-infant ratios, such as one caregiver for every four children. But you may be able to get an even more favorable ratio — and spend less money — by looking into a nanny share.
Care.com puts the average weekly cost of a nanny at $766. That’s more than double the average weekly cost of daycare for infants, which, as a reminder, is $321. But what if you were to find two other parents in your neighborhood who also need infant care and split the cost of a nanny? In that case, if you’re charged $766 a week, your share is roughly $255, which may be less than what your daycare center is charging you. Plus, you might still end up in a situation where your child gets the attention you want them to have.
Usually, with a nanny share, a nanny watches a small group of children at once. It’s common to rotate homes with one of these arrangements, either by assigning preset days or using a cycle that works for you.
So for example, let’s say three of you in the same neighborhood are sharing a nanny. On Monday, your nanny-sharing parents might drop their kids off at your home before work, where your nanny arrives to watch everyone. On Tuesday, you might drive your child to a different house for the same setup, and so forth.
It’s natural to want only the best possible care for your child. Use these tips to lower your costs without having to skimp on the quality of care your child receives.
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