Finding the right child care option for your family and your budget can feel like a Catch-22. You want the best for your kid — a friendly, well-qualified caregiver who will meet all your child’s needs.
But the best of anything is expensive, and you don’t want to be working so much just to afford child care that you never have time to see your kid.
This is where good budgeting comes in handy.
You need the reality of your financial situation to match up with the costs you’ll have to pay. Whether you’re early in your pregnancy or nearing the end of maternity leave, here’s what you need to have in mind when setting your child care budget.
Establish What You Can Afford for Your Child Care Budget
Child care can take up a significant chunk of parents’ budgets. Last year, The Penny Hoarder surveyed over 1,200 adults and found half spent at least 15% of their income on child care.
Unless you regularly have hundreds of dollars in surplus at the end of every month, finding the funds to pay for day care will require making changes.
Pull out your budget — or if you don’t regularly budget, pull out bank statements and receipts from the past few months and calculate the average of what you spend in each category. Now go through your expenditures and see where you can make cuts.
What nonessentials can you cut? See where you can reduce spending on dining out, entertainment, clothing and personal care.
Using the cash envelope system can help you stick to your spending limits. Once the cash in your envelopes is gone, no more spending until the next pay day.
Your essential spending isn’t off the hook either. Implement money-saving grocery shopping tips. Opt for a cheaper cell phone plan. Are you able to move to a more affordable home or downgrade to a less expensive car?
Another place you’ll want to analyze in your budget is what you’re spending to reach your financial goals. While it’s certainly prudent to pay more than the minimum on your debt and to exceed your employer’s 401(k) match, now might be time to focus on your most immediate financial challenge.
Of course, cutting your spending isn’t the only way to find room in your budget. Increasing your income is always a plus. Could you or your partner ask for a raise or secure a better-paying job? Are you able to pick up a side gig?
If you can find a way to increase your income without increasing the need for more hours of child care, you’ll be ahead of the game.
Research Child Care Costs In Your Area
Next, you need to get familiar with how much child care costs where you live.
Try not to be intimidated by the scary claims that child care costs more than housing or college tuition. Yes, that can be true, but child care generally comes in a wide range of options at various price points.
Licensed caregivers who operate day cares out of their homes usually charge less than a formal child care center. Enrolling your little one in a center typically costs less than hiring a full-time nanny.
According to Care.com’s Cost of Care survey, parents in 2018 spent an average of $199 a week on in-home care, $213 a week for child care centers and $596 a week to have a nanny. However, costs vary greatly by region. What you pay can also depend on your child’s age. The younger your child is, the more expensive care generally will be.
After deciding what type of care you prefer, start researching options in your area. Get recommendations from people you know. Check sites like Care.com, ChildCare.gov and Child Care Aware of America. Search Facebook and Nextdoor for local providers and parenting groups.
Local parenting publications may have information or advertisements about child care centers. Your school system might operate a program for preschoolers or at least have some insight about which preschools their kindergartners are coming from.
When you’re vetting child care providers, you’ll want to ask a ton of questions to determine if they’d be a good fit. Cost isn’t the only important factor.
However, when asking about the rates, make sure to ask about registration fees, if meals or snacks are included and if there are any additional costs like supplies or field trips. Ask about the price of wrap-around care if standard hours don’t cover your typical work day. Consider the transportation costs involved in getting your child to and from child care.
Don’t forget to inquire about availability. It doesn’t matter that an option is perfect and affordable if families have to be on a waiting list for years.
Figure Out a Plan that Works for Your Family
Finding child care isn’t always as easy as determining how much you can spend and finding a place that fits your budget. Sometimes there just isn’t enough money to stretch.
Depending on your income and family size, your family might qualify for child care assistance via programs like Head Start, a government subsidy or financial aid through nonprofits like the YMCA or the United Way.
Some employers offer benefits for working parents, such as tuition discounts at day care centers or dependent care flexible spending accounts. Other companies allow employees to work remotely or bring their baby to the office.
Some parents in a pinch work out informal caregiving arrangements with grandparents or another family member. Plenty of parents find they have to make tough sacrifices, like quitting their jobs, working less hours or working schedules opposite of their partner so one parent is always home.
Child care costs can have a huge impact on your budget — and your life — but at least it’s only a temporary aspect of raising a child. You’ll hit some financial relief once your kid starts kindergarten. Then you can switch your focus to saving money for college!
Nicole Dow is a senior writer at The Penny Hoarder.