In case you didnt know, child care isnt cheap.
But many parents will tell you they wish they had started preparing for child care costs much earlier.
So what do you do?
Need an assist from your employer? Check out these17 companies with child care benefits.
Where do you start?
Is it even possible to find affordable child care?
6 Tips for Managing Child Care Costs
1.
Start Your Research Now
Obviously, your working schedule as parents will factor heavily into your child care costs.
Stay-at-home parents will spend significantly less.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help… And be aware of waiting lists.
Most places have fewer spots available for infants, so those waits can be even longer.
Once you get in, be ready for the sticker shock.
Traditionally, a daycare provider is less expensive than a nanny.
But that gap is closing,according to a 2021 survey by Care.com.
This helps save money on the hourly costs by dividing the expenses.
Some companies are ahead of the game.
According to our survey,66% of parents would consider switching jobsto a company that offered child care-related assistance.
Many workplaces now offer both a healthcare and dependent care flexible spending account.
With dependent care FSAs, you withhold a certain amount from your paycheck while also paying out of pocket.
After youve paid for child care, you file a claim, with receipts, and youre reimbursed later.
Note that educational costs like school tuition and tutoring are not eligible.
The downside to FSAs is, usually, they are use it or lose it.
Thats a tough situation to be in.
For example, you know your HVAC unit has a few years left on it.
So you put aside $300 per month in savings to pay for it.
So, for child care, lets say you expect to pay $700 per month in expenses.
That comes to $8,400 over the course of a year.
Hopefully, your choices are a little less difficult.
Thats where your opportunity cost comes into play.
With opportunity cost, youre basically asking yourself, What else could I be doing with this money?
Another lesser-known but still useful tax option is thechild and dependent care tax credit.
The percentage of expenses that qualify for the credit also increased from 35% to 50%.
To see if you qualify for the child and dependent care credit,visit the IRS website.
And almost every parent has been there.
You want to do whats best for your kid, and you will.
The reality is that child care is expensive, but you could make it more affordable.
Survey responses are weighted so thateachresponse is representative of the U.S. population.
Robert Bruce is a senior writer for The Penny Hoarder.
It sounds appealing right?
Check it out here!
