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5 Tips for Your Childcare Budget

Blog Post09/13/2017
Life Events
5 tips for your childcare budget

The American Center for Progress reports that the annual cost of child care for an infant in a child care center is higher than a year of tuition at the average four-year public college in most states. With numbers like that, it’s wise to assess your child care needs ahead of time and budget accordingly. Here are five tips to help get you started.

5 tips for your child care budget

1. Know Your Budget
You won’t know how to make room in your budget for child care until you know where your money is going now. Using a monthly budget calculator is an easy way to track your spending. To get a complete picture, log your spending for at least several months and, ideally, for a whole year. Tracking your expenses for a longer period of time allows you to get a better sense of both expected expenses, like heating in the winter, and unexpected expenses like car repairs.

5 tips for your child care budget

2. Where Can You Cut Expenses?
After taking a look at where your money is going, take a look at where you can save. The American Center for Progress found that child care costs account for up to 10% of a family’s budget, which means you’ll likely need to cut spending somewhere. For most growing families, reducing discretionary spending may be the best way to make room in your budget for child care costs. Instead of eating out, make meals at home and pack lunches for work. Rent a movie instead of going to the theater and have friends over for game nights instead of costly nights out on the town.

5 tips for your child care budget

3. What Type of Care Works Best for Your Family?
Every family is different. Some have two working parents, others have a stay-at-home parent, and some families have single or separated co-parents. Depending on your situation, your child care needs may vary greatly. Does your work give you paid maternity leave for infant care, or will you need immediate help? If your friends have children the same age, is a nanny-share a viable solution? Other options include having a relative provide care or using a babysitter, au pair service, or child care swap. Compare the pros and cons, as well as the costs, with your budget in mind. Also, remember that a portion of daycare expenses is normally tax-deductible for working parents.

5 tips for your child care budget

4. Plan Ahead
After your child is born, planning for each developmental stage will undoubtedly become part of your routine. Like your child, your childcare expenses will grow and change. Important items to budget for include medicine, formula, and baby food. Clothing becomes a real expense once an infant outgrows the onesies you were given at the baby shower. You will also notice that diapers get more expensive, as larger sizes may come fewer to a pack. Consider, too, that your family may grow in numbers – siblings and pets bring on additional costs. It’s also never too early to think about educational resources like pre-school and kindergarten, which can be expensive and may require serious saving if you opt for a private institution.


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5 tips for your child care budget

5. Get Help Where You Can
Lower-income earners may be eligible for state subsidies to help with childcare expenses. If you don’t qualify, you should ask your employer about enrolling in the Federal Flexible Benefits Plan. As with a retirement savings account, money is deducted from your paycheck every week, setting aside money for childcare using pre-tax dollars.

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