How to save on child care

These ideas will allow you to save money on day care, babysitting and caregiver costs, making child care affordable.

Get the support of your family and friends

You can reduce child care costs by having relatives help you. Although you should always offer to reimburse them, relative care will probably be less expensive than the costs you would pay at a center for child care or for a nanny.

Another perk? Flexibility. Flexible. To avoid any misunderstandings or hurt feelings, ensure you are on the same page about care (like parenting philosophies and work hours), discuss problems as they arise, offer compensation and share safety tips, even if they refuse to pay.

Services for babysitting in trade

You can trade babysitting services for free with any other family or baby group member. The concept is easy: One parent visits your house and watches your kids, ideally while they’re asleep. You then return the favor by returning the favor at a later time.

You can join or start a babysitting group

A babysitting group is simply a group or parents who work together to jointly care for their children. The co-op is organized differently to simply trade one-for-one babysitting service. It usually operates during pre-determined hours, days and times of the week. Although it takes more effort to get this option up and running (the work of finding other families is yours, but there are great places to start), it is worth it once it is.

Split a nanny or babysitter with another family

You can find a nanny to share your time at all the baby group events and meet-and-greets. The upside? This is a win-win situation for both the parents and the kids.

Take into consideration a home day care or family child-care option

A family daycare is where a provider provides care in a private setting for children. It can often be more affordable than full-time nannies, daycare centers or full-time nannies. Home day cares must adhere to strict licensing requirements in order to operate, just like commercial daycare centers.

Providers of in-home daycare should take the same safety precautions that you would take at home. This includes guards on windows, gates and cribs with fluff-free bedding. The house should be clean and safe, with a tidy kitchen and bathroom, and an enclosed space for playing outside.

Take a look at the corporate daycare options available at your workplace

Although you may not know it, many office complexes offer on-site childcare and discounts. Ask your human resources department about any discounts that they offer employees for child care centers near you. Some workplaces offer subsidies to help pay for caregiving costs.

Ask your HR representative to discuss additional benefits and reimbursements

If you don’t know, ask your HR Manager about any perks or reimbursements offered by the company.

Benefits such as adoption assistance, pretax transportation plans, and gym memberships (some even offering child care) can all help to reduce costs. They might have negotiated a reduced rate with a agency that places nannies.

Look into a Dependent Care Flexible Spending Account (DCFSA)

Find out if your employer offers flexible spending accounts (FSA) for child-care. This allows you to take pretax dollars from your paycheck and use it to pay child care costs.

Similar to a FSA health care for medical expenses, this account allows you pre-tax income to help pay dependent care costs. It will reduce your tax liability as the funds are taken directly from your paycheck, before taxes. The maximum household contribution is $5,000 annually in 2022.

Take advantage of these tax breaks

You can check if you are eligible for the Child and Dependent Care Credit by doing your taxes. The percentage of which you are eligible will depend on how much income you have. Your income will determine the percentage of credit you are eligible for.

It may not seem like much but a tax credit could reduce your tax liability, and even lead to a refund.

You can’t typically use both the DCFSA as well as the Child and Dependent Care Credit, although there are some exceptions. Talk to your tax advisor if you are unsure which one makes more sense for you.

For assistance, apply

Low-income families can receive financial assistance from most states for child care. Based on your family’s size and income, you typically pay a portion of child care costs. The state program pays the remainder.

Child Care Aware of America’s database contains information about available programs and resources in each state. Apply as soon as possible as these programs have long wait lists.

How to save on child care