How to Save Money on Child Care Costs

How to Save Money on Child Care Costs
Written by Irina Vasilescu

When you were still single and going out for dinner, you may not have minded the price of the grade-A steak that you will order off the menu. But once you start raising kids, the equivalent of such a pricey dish might be what you need to pay for child care.

The cost of raising a child will get even more expensive over the years, so how can you save money during the entire process? That is what we will find more about here.

How Much Do Parents Spend on Child Care?

First, let’s take a look at how much parents actually spend on child care. Here’s a quick list of related facts and figures:

  • According to a report published by the US Department of Agriculture, it will cost about $241,000 for a middle-income couple to raise a child born last year for 18 years. This figure is a 3% increase from 2011 and does not yet include the money to send children to college.
  • The cost of child care is more than the national average for families in the urban Northeast, amounting to $446,000.
  • Based from a report by Child Care Aware of America, the cost of child care has increased twice as much since 2000. The overall amount could be more than your rent.
  • In about two-thirds of the US, child care is more expensive than college.

If you’re a working mom, you might consider quitting work to care for your child full time. But what if another child comes along? And how can you save up for the future child care expenses if the income in the household will be significantly reduced?

No matter which way you look at it, it still makes more financial sense to have both parents working to stabilize the income within the household. The downside is that you would need to spend a lot of money on child care services.

Is there an upside to all this? Fortunately, there are ways that you can cut back on child care expenses, which we will learn more about in the following section.

Ways to Save Money on Child Care Costs

Your child’s safety and well-being should be your primary concerns when deciding how to go about their care. Short of considering quitting work in order to fully care for your child, what are the budget-friendly options for child care that will still ensure their safety and well-being?

Take a look at the following tips on how you can save money on child care costs:

1. Determine what your child care options are in the first place

There are actually a good number of options on how you can provide care for your child while you are working and this includes the following:

  • Care from a Relative

    If both parents are working or if you are a single mom, one of the options that you can choose from in providing care for your child is by having a relative do it for you. Let’s say that you are a married couple and you just had your first child. You are still in that stage in your family life when you are establishing your finances so the new mom cannot afford to quit working.

    She, however, has a retired mother who is more than willing to stay at home to care for her grandchild. By going for this option, you will definitely be saving a lot of money on child care costs.

    Another plus point is that you can go to work, confident that your child is in the care of your mom who truly loves and will not do anything to harm your son or daughter. Furthermore, the emotional bond between grandmother-grandkid will last for a lifetime.

    Just remember that no matter how convenient this setup might seem, there are downsides to it as well. If you and your mom have conflicts on how the child should be raised – in simple things like the baby’s sleeping habits, feeding schedule, etc. – you might have a hard time correcting how she is bringing up your child.

    It would also be more difficult for you to set up boundaries because you are working with your own parent or a close relative in raising the baby. More importantly, if the arrangement for child care from a relative does not work out, it may haunt your relationship for a long time.

  • In-house Child Care

    Your second option is to hire a nanny or a babysitter to care for your child while you are away. Depending on your working hours, you could hire a nanny on a full-time or part-time basis. There are a couple of downsides to in-house child care that you should be aware of. First, no one will supervise your nanny while you are at work.

    Second, if you will only hire one nanny, you are entirely dependent on her availability. If she gets sick or is not available for one reason or another, you will be left hanging with no one to care for your baby. The good news is that you can implement rules on what the feeding and sleeping schedule of your child should be.

  • Au Pairs

    There are several agencies in the US which match families with au pairs who host them while providing inexpensive care for the child. It is quite difficult to find the right fit, however, so make sure that you go through the process carefully when opting for this type of child care.

  • Day Care Center

    In a day care center, there are teachers who care for children in groups. The most important advantage of this is that your child gets to be in a socialized setting, and more than one adult is looking after them at an instant.

    There are also day care centers which offer preschool curriculums with activities for young children to do, so they will get a good head start on school.

  • Family Child Care

    Finally, there are family day care or child care centers which would have your child at the center of a home setting, but with other children. This is typically the least expensive option and the setup is homier than a day care center.

There are pros and cons to choosing any of these child care options, so study each one carefully and decide which one would benefit your family more.

2. Adjust your work schedules

Unless you’re a single working mom, you would have to work with your spouse or partner for child care schedules. One of you can work at night while the other can work in the morning to eliminate the costs of child care altogether.

Or, you can make your schedules alter slightly so that one can take several hours of turn caring for the child. As soon as the other parent gets home, he or she can swap duties taking care of the baby. When doing this, just make sure to also allot time for the two of you as parents to bond, so that child care will not take precedence over your romantic relationship.

3.  Telecommute, or work from home

The more hours that you get to spend at home, the better. Why not look into the option of telecommuting, or working completely from home? By doing so, you can totally eliminate or significantly cut back on the costs of child care.

If you are working from home, you can simply hire a neighbor’s 10 or 11-year-old daughter to keep your child occupied while you are getting some real work done.

Of course, you will still be close by so you would not have to completely hand over the task of caring of your own kid to the neighbor’s child – but you can still be earning at the same time. Telecommuting is spending a portion of your work hours at home, so you can spend more time with your child and cut back on child care costs.

4. Know what the available tax breaks are

If you think that only unemployed parents can take advantage of tax breaks for child care, think again. In fact, the opposite is true. You do need to be employed in order to take advantage of tax breaks. These are programs implemented by the government to give working parents the aid that they need to provide proper care for their child without breaking the bank.

Check out the IRS programs for parents or the Child and Dependent Care Tax Credit when you file your taxes.

5. Check on the child care options provided by your employer

Whether you’re switching companies or applying for a new job, make sure that your employer is offering child care benefits. Most employers look into the option of offering child care service discounts or full payments as part of their employees’ benefits package.

6. Switch babysitting services with a a relative

You should know of a neighbor, friend, relative or colleague at work who also has a child to care for. This makes for the perfect setup when you would like to switch babysitting services, or barter services without having to exchange money.

If you have a couple friend who wants to go on a date night, offer your child sitting services – and they should be more than willing to offer the same service for you if you are the one who is in need of temporary child care help.

As you can see, there are many ways for you to save money on child care costs. By following these tips, you can care for your child and do chores or work at the same time, without having to spend a lot on professional child care services.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • The above information on how to save money on child care is very helpful. Not just for one type of family but for different types of families. The article is detailed and educational. From married couples to single mothers, from stay at home moms to working moms, it gives options.

  • This is really good information for saving money on child care costs. My sister has a five year old and she just started kindergarten this year. These are tips that I will be sending to her. I was watching my niece the past few years for certain time periods while my sister and her husband were at work. It was great for them because I was a free babysitter, and I could hang out with my niece while I worked on my studies. Since I graduated university, they are looking for cheaper alternatives to expensive child care.

  • Thanks for this article! I’m aware of a few relatives that are not taking advantage of the tax breaks that come with having a child. My mother and I have told them numerous times, but they just don’t seem to get it. Oh well, it’s their loss. I have a few cousins that are also taken care of by au pairs until their parents are off work, and I think it’s great. I visit them sometimes and they’re always really nice to me.

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