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Most people preparing for their first baby are shocked and even dismayed to learn just how high childcare costs can be. According to Care.com’s 2023 Cost of Care survey, weekly childcare rates for the care of a single child range from $736 for a nanny down to $229 for a family care center. In between, parents can expect to pay $275 for after-school sitter and $284 for a daycare center.
Analyzing Your Needs
Costs for childcare will vary significantly across the country. Areas that feature a higher cost of living will also often have higher prices for childcare. The reverse is often true. The fact remains that childcare costs are significant expenses for families seeking quality care for their children while at work.
Families with more than one child feel the pinch a little harder, especially if both children are under the age of four. That can be one of the most frustrating aspects of being a parent. You want the best life possible for your child and understand that often requires two incomes to provide. However, you want your child to have the best possible care as well. That takes money, too.
Explore the costs of daycares in the area combined with the services they provide to the families they serve. Decide which facilities meet your needs and manage to address your concerns for your child’s safety and quality of care. Then, find the price that meets your needs best and does not add to other monthly budgets or commuting expenses.
FSAs and Tax Credits
Flexible spending accounts, FSAs, like a dependent care account, allow a single parent to set aside $3,200 tax-free each year to pay for childcare or $6,400 for a married couple. While it will not cover all the costs, by any stretch, of childcare for the year, it can help ease the sting.
Additionally, child tax credits allow you to deduct up to $2,000 per year per child – up to $4,000 per family for childcare expenses. One thing you should note, though, is that while you can use both the FSA and a tax credit, FSA funds are applied first and count toward the tax credit.
Making it More Affordable
While we all recognize that nature often has a way of bringing us plenty of surprises, the best first step is to plan the growth of your family. Have childcare costs in mind well ahead of getting your new bundle of joy into the world. That is especially the case when considering second or third children. Some things you can do that will help with these expenses include:
Steps like these can go a long way toward helping you manage the costs of raising your child in those first crucial years.
Getting More Mileage from Your Child Care Dollars
Small steps like these can yield significant results for your childcare budget and your efforts to manage childcare expenses.