Among the costs of raising kids, one of the biggest expenses is childcare.
In total, from birth to 17 years of age a typical middle-class family spends $38,000 on care for one child, according to the U.S. Department of Agriculture’s 2017 report. Here’s a look at the costs and value of childcare, along with strategies for managing childcare costs and a career at the same time.
Childcare Options and Costs
The prices for childcare can vary widely between different states or cities. Keep in mind that the costs below are for infants, too. Tuition and care costs for older kids is typically a bit lower, and the costs of childcare also vary by state.
Here’s a look at typical childcare options and their costs, using the most recent 2019 data from Care.com on the cost of care for one infant child.
Nanny: $565 per week
Hiring a nanny gives parents more control and flexibility with arranging childcare, since they can direct their family’s schedule and hours. But it is the most expensive option for childcare at $565 per week — about $2,450 per month in 2019, according to Care.com. You’ll also be your nanny’s employer, which could add extra administrative tasks as well as payroll taxes.
You can find ways to decrease this cost, such as a nanny share. In this case, different households hire a nanny to watch their children together and split the cost. If you have the room you can also hire an au pair, or live-in nanny, which costs $401 per week.
Childcare centers: $215 per week
Childcare centers are a lower-cost option that can also provide an enriching environment for children to learn and grow. Childcare centers charge on average $215 per week, or $930 per month, for an infant.
Slightly more affordable is an in-home care center, also called a family care center, which is a childcare option provided out of a private home, often the caregiver’s. The average cost of an infant in a family care center is $201 per week, or about $870 per month.
After school sitter: $243 per week
Unfortunately, not all parents’ work schedules align with childcare center or school hours. Many childcare centers and schools offer before or after school care for parents who need that time. Or you might need to hire an after-school babysitter to pick up and attend to your child.
An after-school sitter averages $243 per week for an infant, but options like after school care at your child’s school or care center is often much lower. For example, I paid just $63 per week for two hours of after-school care for my 6-year-old.
The True Value of Childcare
Early childhood education is shown to have big benefits for kids. The biggest and most obvious: parents with quality childcare can continue to work, earn income, and build their careers. Being able to stay in the workforce provides parents with a significant boost to lifetime earnings, especially for mothers.
Staying in the labor force preserves earning power during the years parents need childcare, as well as career momentum and wage growth. It also gives them the ability to save for retirement — along with access to valuable work-provided benefits such as 401k employer matches.
If you’re curious what the value of childcare is compared to the cost, just take a look at this childcare calculator. It suggests that if I’d stayed at home for the 8 years between becoming a mom and seeing my youngest enter kindergarten, I’d have lost $1,049,000 in earned wages, wage growth, and retirement assets and benefits. And truthfully, I think that’s an underestimation.
Strategies to Lower Childcare Costs
Still reeling from the price tag of childcare? Here are some more strategies you might try to lower your childcare costs and keep them under control.
Seek childcare assistance
There are several tools parents can use to lower their childcare costs or manage them more effectively.
- Head Start assists low-income families, foster families, or receive parents using public assistance (like TANF or SSI)
- Early intervention services can help infants and toddlers access childcare and education programs
- State childcare subsidies and assistance can cover part of the expense by paying your childcare center directly; Use this ChildCare.gov tool to find childcare assistance in your state
- Childcare providers may provide discounts, such as sliding fee scale for lower-income families, scholarships, or discounts for enrolling multiple children
- Dependent care tax credits can help offset childcare costs by reducing your taxable income, or pay for childcare with pretax dollars through a Dependent Care FSA
Stagger work schedules
Staggering work schedules with my partner has been key to managing both our careers, kids, and childcare. When our oldest was in full-time daycare, I started work a couple of hours early so I finished earlier, avoiding extra charges for after-hours care. Many parents have recently tried a more extreme version after childcare centers or schools closed due to the pandemic.
Unfortunately, staggering schedules to manage childcare is really only an option for families that include more than one caregiver. If you can pull it off, it can be a great option to limit your need for paid childcare or to cover short-term gaps in childcare.
Tap your social support system
Lastly, don’t overlook support that family members or friends can offer. Many kids’ grandparents, aunts, and uncles are happy to babysit for free to help out their parents.
You can also work out a babysitting trade with another friend who has kids. Some parents even formalize these arrangements through childcare co-ops, taking turns caring for a group of kids in exchange for free care.
Consider Your Values and Lifestyle, Too
Of course, finances and money are never the whole picture. You need to consider what you want for your family and yourself both now and in the long-term.
For me, the cost of childcare is worth it simply because I don’t want to be a stay-at-home mom. But I know many parents who yearn or choose to stay at home and care for their kids full-time, while others are more focused on their careers.
Lastly, even having child-care choices and career options is a bit of a privileged position. If you can’t afford childcare, can’t afford not to work, or both — it can feel like the decision is already made. An ideal childcare solution might, in fact, not be within your reach. But even so, you can still find a good, even if non-ideal, choice among your options.
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