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10 ways to cut ridiculously high child care costs

Share a nanny, start a co-op, and weigh the costs and benefits of staying home, plus seven more ways to make child care more manageable.

By MSN Money Partner Dec 17, 2013 2:35PM

This post comes from Marilyn Lewis at partner site Money Talks News.

Money Talks News on MSN MoneyIf you have two children -- an infant and a 4-year-old -- in child care, chances are it's costing you more than your rent, says a report (.pdf file) from Child Care Aware of America.

Portrait of Little Girl © Radius Images, Radius Images, Getty ImagesChild care is actually more expensive than college on average in about two-thirds of the U.S. The report says:

In 2012, the average annual cost of full-time care for an infant in center-based care ranged from $4,863 in Mississippi to $16,430 in Massachusetts. For an infant in a family child care home, the average cost ranged from $3,930 in Mississippi to $11,046 in New York.

For a 4-year-old, the average annual cost of care in a child care center ranged from $4,312 in Mississippi to $12,355 in New York.

That's awful, right? How can parents save for college while they're also paying college-sized bills for preschoolers and after-school care?

Here are 10 ways to shrink your child care bills:

1. Find the right employer

Some employers will help with your costs. When you're job hunting or switching, include child care benefits in your decision. Some companies negotiate a discount with child care providers; others help pay your costs.

A number of employers have on-site child care programs that let you stay in close touch with your children while you work. On-site care saves money and time spent driving to and from outside child care.

Some employers help establish child care cooperatives. The website of nonprofit Parent Cooperative Preschools International says:

By establishing on-site facilities as cooperatives, businesses may provide space, initial financing and assistance to child care programs, but are able to leave operation and ownership to the employees who use the center. The U.S. Senate and the World Bank are among numerous organizations which have established child care cooperatives owned and operated by their employees.

2. Start your own co-op

Reduce child care costs to zero by joining or starting a cooperative of parents who baby-sit for each other. San Diego Family Magazine explains:

Organized baby-sitting co-ops usually consist of a group of moms who use a system of hours, points, tokens or tickets that are redeemable for baby-sitting services. The members of each co-op decide which medium of exchange works best for them; usually no cash is involved.

The magazine has tips for finding a co-op and for starting one yourself.

Parent Cooperative Preschools International offers a state-by-state directory  to help parents find local co-ops.

3. Consider staying home

Another online tool called "Stay at home or return to work?" leads parents through a thorough assessment of pros and cons, financial and otherwise, of keeping one parent at home with the children.

U.S. News & World Report also offers "7 Financial Steps to Become a Stay-at-Home Parent" to help you make the decision and figure out a budget.

4. Look at nonprofits

Nonprofit organizations can offer less expensive services because they don't have to turn a profit. "Your local YMCA, JCC, or church may offer child care services that cost far less than you’d pay at a private business," says Forbes.

Child Care Aware helps parents find free or reduced-cost care. Put your ZIP code into the child care finder on the right of this page to find a nearby agency for local referrals for quality care. Also, use the state-by-state map to learn about state regulations, inspections, criminal background checks, licensing and other related information.

5. Telecommute, even a little

If your company allows telecommuting, use the option to shave a day or two off your child care bill. If not, see what you can negotiate with your employer. Start with MarketWatch's 10 tips for having that conversation.

When you're job-switching, look for employers that allow telecommuting or negotiate it as part of the hiring deal.

6. Share a nanny

A nanny sounds pretty high-end, but it may work for you if you share the cost with another family. Legal publisher Nolo lays out the issues to consider, legal and nonlegal.

7. Take it off your taxes

  • Flexible spending accounts. You can pay for child care with pretax savings if your employer offers a flexible savings account. You can contribute up to $2,500 a year ($5,000 for a couple) to the account to spend on eligible expenses, child care among them. Says U.S. News & World Report, "Essentially, an FSA reduces your taxable income by the amount you put into the account and then use for qualified dependent care expenses."
  • The Child and Dependent Care Tax Credit. If the cost of caring for dependents, including children, adds up to more than $5,000 a year, you're eligible for this tax credit. A tax credit lets you subtract the amount of the credit from the taxes you owe. The IRS provides details, including this:
This credit can be worth up to 35% of your qualifying costs for care, depending upon your income. When figuring the amount of your credit, you can claim up to $3,000 of your total costs if you have one qualifying individual. If you have two or more qualifying individuals you can claim up to $6,000 of your costs.
  • Use a state tax credit. NerdWallet says that in 24 states you can claim additional dependent care credits on state income taxes. Find what's available in your state with an online search for "dependent care tax credit" and the state’s name.

8. Use the Family and Medical Leave Act

The Family and Medical Leave Act lets you use 12 weeks of unpaid leave, with your job protected, in any 12-month period. Covered reasons include a child's birth or adoption or the care of a child with a serious illness.

Unfortunately, not all workers are eligible. Your employer must have at least 50 employees and meet other standards. The Department of Labor tells who is eligible here and, on a separate page, explains how to keep records and claim expenses under the act.

9. Get help for military families

Military families may be able to get help paying child care fees. Child Care Aware points  you to what's available for members of each branch of the military.

10. Turn to your family

Family is the time-honored child care system. If you are lucky enough to have parents or other relatives nearby whom you trust, by all means do what you can to enlist their help.

More on Money Talks News:

Dec 21, 2013 1:28PM
Who sits around and comes up with this garbage. Nothing in this article is of any use. Nor is it anything that people struggling with daycare costs have not thought about already.
Dec 17, 2013 5:25PM
If you have 2 children in daycare, in many instances, you'd be better off if one parent quit their job and stayed home with them, especially if they can find a way to earn a part-time income from home.
Dec 21, 2013 5:02AM
11) Work opposite shifts...we did for 15 years and never spent a dime in day care..and as a bonus we raised our own kids(shocking!)
Dec 21, 2013 10:35AM
11. don't make a baby if you can't afford it
Jan 8, 2014 2:09PM
It's not always as easy as "If you can't afford them don't have them." I was told I could NOT have them and a miracle happened. We weren't planning just happened. Maybe a couple planned for 1 and found out they were having triplets? My point is, don't be so harsh because you don't know what is going on in someone else's life.
Dec 21, 2013 11:49AM
The plain fact is that we should be happy that people who are working are having kids and encouraging them to do so. The alternative is that people without jobs have kids and we pay for everything with our tax dollars. Having kids is not only for those who would not struggle to pay for them here and there. Otherwise NO ONE would have kids, and we can all look forward to becoming Japan where the elderly out number the young, which is economically unfavorable. 
Jan 8, 2014 2:21PM
This article is meaningless to half the people who have children in daycare. Turn to military? Sorry, not in the service...turn to your family, sorry they live in another state...stay home? Really, cause I don't have bills just like my husband...Find the right employer, am I supposed to quit my job and look for one that will pay for daycare? This is more for people who are thinking about going back to work that have kids and need daycare for them. Yeah, daycare costs me well over $2500 a year, so the fleixble spending is kind of pointless. And the nonprofits places in my area, such as the YMCA, is actually the most expensive daycare.
Dec 21, 2013 11:52PM
My mom always said that she already raised her kids, now it's your turn. I've seen too many parents take advantage of number 10.

The parents love to spit them out, but when it comes to taking care of em... it isn't gonna happen. 

Don't agree with number 10 at all. You had em, you take care of em!
Dec 21, 2013 5:31PM
Really, work from home? How are you supposed to concentrate and get your work done if you are focusing on taking care of your child? If they are home during the day they are most likely young enough that they need a lot of supervision (unless you plop them in front of the TV or it's nap time). I know people that work from home and when they are home working they are not taking care of their kids- they have someone else (like a nanny) taking care of them.

Also, expenses change with the kids age. A coworker started off having a nanny, it was the most cost effective. Then she switched to daycare for her youngest and the after school care program at her kids' school when that became the most cost effective.
Dec 21, 2013 12:10PM
Child caregiver ratios are for safety reasons.   Supervising too many kids has led to deaths
Jan 8, 2014 1:52PM

I always get upset with parents that complain about the "high cost" of childcare.  As a childcare center director in an affluent area, the cost breaks down, on the average, to $5 per hour, if you have your child enrolled 9 hours per day (the average number of hours our students spend in our center per day). What can you even buy with $5 these days?    All of our teachers are highly qualified and professional and still make well below a public teacher's salary and they work year round with very few holidays off.  Keep in mind that childcare centers must also pay for liability insurance which comes at a steep price and supply children with quality equipment that must be maintained and replenished often.  Some centers offer benefits, which keep good staffing place for the good of the center.  Turnover is the worst thing a center can experience.    So, parents before you complain about the high cost, consider it a high quality investment in your child's early learning years if you choose a good center.  Trust me, there will be other costs when your child outgrows his/her childcare sports teams, cheerleading competitions, and tutoring so your child can maintain good grades just to name a few.  No one ever seems to complain about the "ridiculously high cost" of those things.  If you are looking for cheaper childcare, you will get what you pay for...low quality care! 

Dec 21, 2013 12:45PM
The person that wrote something about raising the child/teacher ratio must be cuckoo.  Yes, that was 20 years ago when the ratio was much larger and believe me, all I could do was survive in my classroom and hope my children didn't go home with bite marks, missing teeth, bloody scrapes and bruises (not kidding).  Now we have a manageable ratio and we're able to enjoy numerous developmentally appropriate activities and actually teach children.  Instead of finding the cheap way out as the article wants you to believe, I'm for raising day care tuition and giving parents an employee or govt. provided stipend to help pay for it.  All in all, most parents pay appr. $3 per hour for day care.  That's extremely cheap if you ask me.  What are the teachers earning?  Barely over minimum wage and I work in a non-profit. If a day care is making a profit, it is not a fit place to put children.  As far as the school systems taking over day care centers, that opens a whole other can of worms.  I can't see the govt. running our centers because they don't always know what's best for children (no child left behind ring any bells?).  I can just picture giving my toddlers test after test to make sure they are making the mark and that I'm doing my job.  HA!
Dec 21, 2013 9:51AM
My three girls had 2 kids,that's all they thought they could afford,they wanted more but knew they wanted their children to have a"not going without life".  The people that have to support their children get 2 and the people that don't have to support their children get as many as they want.
Dec 18, 2013 1:00AM

"Turn to your all means" is great for those wishing to take advantage of others.  If you can't afford to pay for child care, you should not have children!

Dec 21, 2013 11:07PM
I have a daycare and charge $100.00 a week for 1 child and 125.00 for 2..Do you think that is to high???
Dec 21, 2013 10:38PM
Some towns have resources that help you pay for day care costs based on your income.  But as a side note, just because a day care is "cheap" doesn't mean that's the right one for your child.  Do your research and make sure your baby is taken care of by passionate and warm teachers.
Jan 8, 2014 1:59PM
Yeah, dump the kids on your relatives like my family did because taking care of your own kids is "boring".  Great advice.
Jan 8, 2014 2:34PM

Republicans want to demolish Head Start and other programs that help young children (and provide a form of day care) for struggling families.  The "if you can't afford it" people are probably the same ones who picket abortion clinics.  Instead of the next cruise missile, battleship or other USELESS military hardware, keep a school open (there are plenty closing) and provide low cost day care.  European models are available.  Pre school education and the staff to provide it i,s in the big picture, far more worthy than the next deployment to a country we have no business being in. 

This is actually fairly easy to solve, and as I said several European countries offer models.  Community colleges(cheap) around the country could offer day care education courses, much like they offer medical courses.  A two year degree in day care could offer minor medical courses, pre-school education theory, basic child psychology and the like.  Voila, a competent staff, with the bonus of providing employment for people who can't or don't want to complete a 4 year degree.

Utilize existing schools or build modest extensions to existing schools.  You could also provide "after school" day care for shift workers, thus eliminating 'latch key' children. 

We need to take care of our children and all you anti-abortionists can get on the band wagon and focus on something that is really worthwhile.

When a mother (or father) stays home with children beyond the infant stage, she doesn't pay taxesor do much to stimulate the economy. 

Like the 'affordable health care act', we seriously need to start considering the 'affordable day care act" and invest in our children and our society. 

Jan 8, 2014 3:02PM
Two asinine responses to address:
1. "Don't breed" - Yes, please don't breed...specifically those who suggested that option.  I'd like to have your genetic make-up removed from the human genome.  Thanks.

2.  "Either you raise them yourself, or don't have kids" - Another great idea, right?  Sure, then get rid of public education, too.  If you are going to have kids - YOU must teach them, as well.  After all, "raising" your kid involves educating your child.  Good luck with that one!
Jan 8, 2014 2:46PM

I am a college graduate. I have a Masters Degree and successfully employed for 3 years with the state as  a Counselor. I am only 27 years old not to mention I have what some  may call a great CAREER. I am employed using the degree I obtained, however I do have two children. My children are both under the age of ten. One of them 7 and  the other 3 years old. I pay $180.00 a week for childcare. This includes $125 a week for my 3 year old and $55 a week just for after school care for my 7 year old. I pay a  monthly amount of $720.00 in child care expenses. I hate the high cost of childcare and I pay more a year in childcare than I do for student loans, car note, or nearly the same amount for my mortgage. I too believe childcare is rather ridiculous. My 7 year old attends childcare from 3:30pm- 5:20pm M-F and they charge $55 a week. I even have to pay if he does not attend due to a school break or holiday. If I decide to take annual leave ( which in my case is paid time off to attempt to reduce the cost when I do not need the childcare) I still have to pay to secure his spot. A lot of these childcare facilities are just ripping ppl off and the can care two cent about our children. Each child are fed crappy meals, thrown outside to play on equipment, cartoons, and the staff under paid so  they don't care. The daycares are all about a buck and I have seen prices far worse than what I pay.

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