8 Ways to Save on Child Care

Feeling the crunch of child care costs? Here’s how to get quality care for an affordable price.


Child care costs vary dramatically from one area of the country to another, but there's no doubt about it: Working parents spend a huge chunk of their income on child care.

The cost of center-based child care for an infant is greater than median rent payments in 22 states and the District of Columbia, according to Child Care Aware of America's 2012 report on the cost of child care. And center-based care for two children – an infant and a 4-year-old – is more expensive than the annual median rent in all 50 states and the District of Columbia.

So if you're a parent feeling the crunch of child care costs, you're certainly not alone! Of course, you don't want to skimp when it comes to care for the most precious people in your life. But with these eight money-saving tips, you can get quality child care for a more affordable price.

1. Talk to your employer about a flexible spending account. A flexible spending account doesn't directly lower your child care expenses, but it can dramatically reduce your tax liability at the end of the year. You can use this account to set aside up to $2,500 ($5,000 for married couples filing jointly or for a single head of household) per year in pre-tax income to pay for dependent care expenses. Essentially, a FSA reduces your taxable income by the amount you put into the account and then use for qualified dependent care expenses.

2. Take a tax break. If you don't have the option of a FSA, or if you spend more than $5,000 on dependent care expenses in a year, remember to take the Child and Dependent Care Tax Credit when you file your taxes. Again, this credit won't directly lower your child care expenses, but it could save you a lot of money when you file your taxes, which can offset at least some of your child care costs.

3. Judge the distance. When shopping for a babysitter, nanny or day care for your child, keep in mind the drive time (and gas mileage) you'll need to get there and back. Especially with today's gas prices, it's worth your while to estimate how much you may spend transporting your child to and from care. Keep in mind that you may be better off choosing a slightly more expensive day care closer to home or work, versus a cheaper option that's further away.

4. Ask about company discounts. If you work for a large employer, talk to your human resources department about local day cares that may have company discounts. Companies that don't have on-site day care may strike a deal for their employees with nearby centers.

5. Look into home-based and ministry day cares. Generally, home-based day cares and day care ministries are more affordable than state-licensed, day care centers or private nannies. According to Child Care Aware, the average annual cost for full-time infant care at a home day care can be thousands of dollars less than the average annual cost for comparable center-based care.

The key with home-based day cares and day care ministries, which often operate under less stringent state licensing requirements, is to check for independent accreditation. Third party accreditation from a state or national organization verifies that a child care program meets standards on everything from cleanliness to caregiver interaction.

6. Switch your schedule. If your employer offers a flexible schedule or teleworking, take advantage of the option. You might work four days, and stay home with your child one day a week. Or you could go in to work early, so you need fewer hours of child care. This kind of schedule juggling can become exhausting. But it's worth a try, especially if you know it's for a short period of time – like if your kids will start public school soon or if you or your spouse plans to become a stay-at-home parent in the next few months.

7. Barter for services. If your professional skills – such as bookkeeping, marketing, or tax preparation – might be helpful to your child care provider, ask about bartering. Some smaller providers may be glad to avoid a potentially expensive service in exchange for free child care.

8. Start a child care co-op. Part-time working parents and those who can work flexible schedules might find this the ideal solution. Consider teaming up with other parents in your area to form a child care cooperative. If, for instance, you get Tuesdays and Thursdays off while your neighbor works Mondays and Fridays, you could take turns watching each other's children when you're off work. That way, your kids get built-in playmates, and everyone gets free child care.

Abby Hayes is a freelance blogger and journalist who writes for personal finance blog The Dough Roller and contributes to Dough Roller's weekly newsletter.