One of the biggest expenses a parent can incur is the cost of childcare. In some regions, it can be a family’s largest monthly expense, accounting for more than 30 percent of the total family budget, according to a 2015 report from the Economic Policy Institute. The good news is that you’re not stuck simply paying the going rate for a traditional daycare or preschool. Here’s how to design your own discount:
1. Work your work options. Some employers will exclude as much as $5,000 from your taxable wages for childcare expenses, and some will even contribute money to pay for childcare, so check with your company to see if that’s something you should be taking advantage of. It’s basically free money, so go get it, girl!
2. Take the childcare tax credit. If you’re eligible, this can be a HUGE help in cutting down your overall daycare/preschool/nanny bill. As opposed to a tax deduction, which reduces the amount of money you’re taxed on, the childcare tax credit is an actual credit, which means it reduces how much tax you actually owe. In some cases, this can be as much as $1,000 per kid. Do a little research to see if you’re eligible and if taking the credit will get you more money than taking the childcare deduction.
3. Kid swap. If you don’t need regular or full-time daycare or preschool but still need some childfree time now and then, consider trading playdate hours with another family in your position. Sending your kid off to spend a morning or afternoon with a friend is a big help for you but also a fun time for the kiddos. Everybody wins!
4. More kids, more savings. Whatever you’re paying to have your kids enrolled in -- daycare, preschool, swimming lessons, summer camp -- check to see if you can score a multi-child discount. Even though you’re paying more overall for several kids instead of one, knowing you’re paying less per kid can take some of the sting out of the bill, and voila, you now have some extra time to yourself.
5. Share a nanny. You might also be able to work a multi-kid discount if you team up for a nanny share with a friend (or a local mom who will become a friend). One nanny + two (or more) kids = savings for you!
6. Consider flex time. If you work, talk to your employer about flex options that might, for instance, allow you to work from home during naptime or maybe work longer hours four days a week and then take Fridays off. Be creative, but also be realistic about what work (if any) you can get done with kids at home; if you can’t keep up your end of the bargain, you may lose the privilege.
7. Hire a babysitter. A college kid with a flexible daytime schedule, or even a grandmotherly-type neighbor, can be a great, affordable option as “mother’s helper” -- someone who can supervise your child and assist with simple household tasks while you’re in the next room answering emails.
How does your family save on childcare expenses?
For more money-saving strategies during your baby’s first year, check out Allstate’s tips and tools for new parents.
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