THERE’S NO SECOND HOME, BUT THIS FEELS LIKE A SECOND MORTGAGE
My son just started daycare. We were incredibly fortunate to have my mother-in-law watch Mason for the first year of his life. There are so many advantages to this: lots of love, one-on-one care, flexibility and undivided attention. But let’s be honest, one of the biggest benefits was the moolah I didn’t have to dish out over the past 12 months. Source: NLG
And then he turned one and our hourglass ran up. My husband and I had decided that M would start daycare after the candle of his first birthday cake was blown out so that he could reap the benefits of social interaction. We couldn’t believe how fast the first year flew by (not sure my mother-in-law feels the same way after spending 2,860 hours with my strong-willed son, but I digress).
So we ripped the band aid off. No more dinners out, no more weekend getaways, no more new shoes for mom, all of our disposable income is now being diverted to childcare. And it’s scary.
So many Americans know what this feels like. It’s a cost that nearly parallels a mortgage payment for many working families across the nation. But for the majority, we are not splitting our time between a primary residence and our vacation home; we’re working our tails off and paying for our kiddos to go to daycare while we do this.
And while we can’t do a whole lot about the actual cost, there are some things that parents can do to help lessen its sting.
1. Start shopping, for daycare facilities that is, the minute you find out you’re expecting. This gives you time to weigh your options, find what fits your needs and budget, and then get on the list. The last thing you want to do is scramble a month before your due date to find out the only daycare center you can get into is 30 minutes in the opposite direction and twice your budget.
2. Start saving. Why wait until your bundle of joy is born to start paying for childcare. I know this sounds like a lot of fun but it really is worth it. Trust me, you want to build a cushion of savings that you can tap into. It will come in handy around high spending times throughout the year, too. Think holidays, birthdays and vacations. You will thank yourself, I promise.
3. When you’re ready to disclose the news at work, talk to your H.R. department. There might be a dependent savings account that you can use to save as much as $5,000 to pay for childcare. These accounts are great for a couple of reasons: they work by pulling the money from your paycheck before you even see it so it becomes easier to save all while reducing your tax bill. Just make sure to sign up for it during open enrollment – don’t miss your window like I did.
4. Did you know that in addition to all of those sweet coos and smiles your munchkin might also be giving you some tax benefits? It’s certainly worth looking into. It’s called a Child and Dependent Care Credit and could offer up a tax credit of as much as $3,000 per child or $6,000 for two.
5. Does your place of employment offer any partnerships or subsidies towards local daycare providers? Mine does and it’s such a nice perk. Plus, I get to walk down and have lunch with baby M a few times a week.
Even a subsidy of $20 per week will save you $1,040 annually. Again, worth looking into.
6. Have you explored the nanny-route? Yes, they can be even more expensive, but not if you share one with a neighbor, or nearby friend or family member. And they might offer up even more flexibility and benefits than a center would. Think of it as a package deal. The right nanny might be willing to help with cleaning, grocery shopping and meal-prep, which helps make the weekly bill a bit more palatable.
7. Do you have flexibility with your work schedule? Will your employer let you work four 10-hour days? If the answer is yes then it might be worth finding a daycare that allows you to enroll part-time (not all do).
If your daycare charges $45 per day, and you drop down to four days a week from five, you’re talking about an annual savings of $2,340.
8. Food. This is one that often gets overlooked when it comes to selecting the right daycare. Some provide food, which is factored into the overall cost, and some don’t. If your kiddo is anything like my mini chow-hound, you’ll appreciate a provider that supplies the nosh.
There you have it: eight fabulous nuggets of info for lessening the financial burden of childcare.
Oh, one last bonus. Just like my first mortgage, I try to view my “second mortgage” as an investment. I’m investing in my son’s development, while I also invest in my career. It’s all about perspective.
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