Childcare costs have a way of eating up a huge chunk of the family budget. If you are working, you will need childcare, but at the same time, with rising rents and mortgage interest rates that are going up as well, it is not surprising that more and more parents are looking for ways to cut back.
You still want the very best care for your children while you have to go to work, but at the same time, you also need to meet your other financial obligations. Is there are way to do both? Here are some tips to save money on child care costs.
Child Care Maybe Tax Deductible
Check with your human resources department to see if you can participate in a dependant care account. Many companies now offer this attractive benefit, which permits you to put a certain amount of money aside each month on a pre-tax basis. Yes, this is still money coming out of your own paycheck, but Uncle Sam will not levy any tax on it! Depending how much money you put aside, the savings most certainly add up! When your childcare bill is due, withdraw the money from the account and use it to pay the provider directly. Make sure, however, that you know exactly how much money your will need. Whatever you do not use at the end of the year is forfeited in many cases.
Talk to Grandparents and Trusted Friends
If you can get by with only having part-time day care, you will be able to cut down your spending significantly! Maybe grandma and grandpa can watch your child on Mondays and Wednesdays, or maybe a trusted friend is willing to keep your child at home on Fridays. Either way, this is one or two fewer days that you need to pay for childcare, and the savings add up quickly.
Form a Babysitting Co-op
Perhaps you can talk to the parents of your child’s friends and see how they are doing, and maybe you can find some who are just as eager to tighten the belt as you are. By forming the co-op, you can spread around the childcare and every mom or dad can take a turn on a day off. Of course, if you all work the same hours, this will not work. Additionally, if the designated mom or dad gets sick, you will need to come up with an alternate plan.
Hire a College Student to Nanny for you and Share Her
Find one or two parents who are willing to pay toward hiring this student and then have her watch your children and the children of the other parents who are paying. This will allow the kids to become close friends, offers many of the same benefits as you would realize if you were to hire a nanny for your child alone, and will give you the flexibility you need to save some money.
Pay your Taxes and Claim your Childcare Credit
It is amazing how many parents forget to take the credit each year for their child’s daycare expenses. Make sure that you have someone help you file your taxes if you are not sure how to go about receiving this credit.
If you are working shift work, perhaps you could barter for childcare with another co-worker who is on a different shift. If your kids are already friends, then it will become more like a play date and less like childcare to begin with. Just make sure that the both of you clearly define who provides the childcare on what days and during which hours.
If you are just now going back to work, try to find some work that has hours opposite your spouse’s work-schedule. While this is not exactly a great way for a personal relationship to grow and flourish, it will save you a lot of money on childcare, and if this is the difference between making it or going under, then perhaps it is worthwhile for a time.
As you can see, there are a number of helpful ways to save money on childcare. While one size most certainly does not fit all, there are probably quite a few suggestions that will work for you in your situation.