Finding affordable childcare services often is a deciding factor in whether a woman keeps her baby. On average, parents spend $750 per child per month for childcare, according to the Economic Policy Institute. Costs can vary by state, but childcare easily is the biggest expense most families face. The ever-increasing costs of childcare can be especially daunting for single mothers, who already may struggle to make ends meet with one income. Dual-income households also require the support of reliable childcare services.
Why does childcare cost so much?
Blaming the cost of childcare on staff wages is not logical since most daycare workers make about $12 per hour or less in the U.S. Some childcare centers offer benefits to their employees. Childcare centers that are federally funded like Head Start, or that are affiliated with larger organizations (churches, universities), are the most likely to offer benefits like healthcare and paid time off.
The more likely culprit for higher childcare costs is the number of state and federal regulations to which the industry is subjected. For instance, some states require low caretaker-to-child ratios, which means childcare facilities must hire more staff to meet those mandates. High turnover rates among staff also drive up costs since employers must not only pay to conduct a job search but for any training new employees need during the onboarding process.
Tips for lowering childcare costs
One of the best things you can do soon after you find out you are pregnant is to start exploring childcare options. Starting early means you have time to secure an affordable and reliable option before others are in the game.
Here are some other things you can do to lower your childcare costs:
- Set a budget. Once you know your budget, you can decide whether in-home daycare centers, part-time sitters, or a nanny share would work best for your situation.
- Talk to your employer. Some employers offer a Dependent Care Account (DCA). A type of Flexible Spending Account, it allows you to set aside up to $5,000 tax-free each year to pay for childcare services. There is a downside to a DCA. Any amount left over at the end of the fiscal year is forfeited. This means you must budget carefully to make sure you spend every cent in the account, so you are not losing income. You must keep receipts and other accounting records and submit them to the DCA for reimbursement.
- Use your childcare tax credit. If you itemize your taxes, you can claim up to $3,000 per child, per tax year for all childcare-related expenses. There is a $6,000 annual cap per family. While it is possible to use a DCA and childcare tax credits, any DCA money is applied to the tax cap first.
- Explore non-profit options. Nonprofit organizations like the YMCA and local churches may offer affordable childcare alternatives in your community. Some of these organizations, like the YMCA, base your childcare tuition on your income. They can afford to do this because they may receive state or federal funding to help operate their childcare center, which allows them to offset costs.
Community referrals for childcare services
The costs associated with daycare should never be the reason a mother chooses to keep her baby. At Care Net, we believe in providing ongoing support to families who choose life. While we do not offer childcare services through our organization, our team is skilled in helping you to locate affordable and reliable childcare options. Need assistance paying for childcare? We can help with that, too. Care Net has an available list of funding resources to which we can refer our clients. Contact us today to schedule your free consultation.