How to Budget for the High Cost of Child Care

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Finding quality child care is one of the biggest decisions you’ll ever make as a working parent.

Notice we didn’t say finding affordable child care. Because most of the time, it isn’t. According to Child Care Aware, a year of full-time day care is actually more expensive than a year of tuition and fees at a public four-year university in 31 states.

But if you don’t have family in the area or they aren’t able to help out, you probably have no other choice. You just pay it.

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Although there’s not much you can do to save money on child care, you can adapt your budget for this ongoing expense. Rachel Cruze, author of the #1 national best-seller Smart Money Smart Kids (and a mom herself), gives parents some practical advice when it comes to choosing and paying for child care.

There are no right or wrong answers to these questions—just what’s right for your family.

1. Ask "Is It Worth It?"

If you (or your spouse) make $40,000 per year and pay $30,000 to send your two kids to day care, you need to ask, "Is it worth it after taxes?" Maybe it is. Even if it’s a wash financially, maybe you get tons of fulfillment out of your full-time career. In that case, it’s perfectly okay to keep on working.

But if you don’t necessarily love your job and you’re only netting a couple thousand dollars anyway, ask yourself another question, "Could I make more money by staying with my kids and starting an in-home business?" Or "Could I continue working part-time and use a Parent’s Day Out program twice a week?"

2. Make a Plan.

After you decide on either part-time or full-time care for your kids, you’ll need to rework your budget to accommodate this new line item. You should still have a zero-based budget once you add this expense.

If not, you may need to cut back in a few areas. Try exploring cheaper cable and cell phone options, checking out a discount grocery store, or eating out less and using your Crockpot more. There’s no perfect budgeting fix. Each family has different priorities, but everyone has categories where they could scale back if needed.

Be specific about how you’re going to fit the cost of child care into your budget, instead of cramming it on top and hoping everything works out. You’ll be a lot less stressed when you know exactly what you can afford for child care and for everything else.

3. Trust Your Gut.

There’s no one-size-fits-all budget, just like there’s no one-size-fits-all answer to your child care needs. You’ll have to decide between nannies, day care centers, in-home day cares, church programs or some combination of these. We give you permission to ignore all the well-intentioned opinions of your friends and family and to trust your gut.

It may be worth it to spend more money on a nanny because you feel better about having your kids in your own home. And that’s okay—as long as you make room in your budget. Feel confident that you’re doing what’s best for your babes. Don’t second-guess your gut!

The Bottom Line

Having kids is an expensive endeavor—from the medical bills to all the gear to the cost of quality care. Try to remember though: This costly period of your life won’t last forever. So cut back where you can and keep on smiling. Because they’re worth it, aren’t they?

While caring for kids might seem overwhelming, teaching them to be money smart doesn’t have to be. Check out the Smart Money Smart Kids Class, designed to help you teach your kids become hard-working, wise, generous adults.

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