Economy & Jobs

Yes, Day Care Costs a Fortune! Here Are 4 Ways to Save

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Day care costs continue to rise across the country. At an average of $11,666 per year or $972 per month, they represent a whopping 23 percent of the median yearly household income for American families. The amount you pay for child care will depend on where you live, the amenities you need, and the number of days per week your child needs care. There are ways to save money on day care costs in any circumstance, however.

To get started, try these four steps:

1. Research Different Options

Whether you choose a traditional day care facility, a home-based business, nanny services, or family help, you have to understand what each option will mean both financially and logistically. If you can’t afford five-days-a-week day care, is there a time when a family member can take your child? If you find home-based care to be a more affordable alternative, are you sure the provider has a good record and people who will vouch for them?

Doing your homework is vital to maintaining your peace of mind while sticking to your budget. You can research your options by looking at sites such as Yelp and Facebook and contacting friends and family for referrals. To find the best value, call the facilities to get accurate information about tuition costs and service offerings.

2. Change Your Schedule

If you have a flexible work environment, you may want to investigate the possibility of changing your schedule. If you could spread your 40-hour week over four days instead of five, or work from home one day a week, it could save you a substantial chunk of change. Day care centers usually charge by the day, not the hour. More and more employers are allowing these options, so this is something to look into. This may help you save up to 20 percent each week by lowering the amount of days you send your children to day care.

3. Ask About Discounts

At some child care centers, you may be able to receive a sibling discount if you have more than one child. Some also offer discounts to new families. Even if you don’t see information listed, it can be a wise thing to ask about because it may help you save hundreds of dollars a month in some cases.

4. Don’t Forget About Tax Breaks

With the Child and Dependent Care Credit, you can receive a tax credit of up to $3,000 for one child and up to $6,000 if you have two or more. You can put funds toward a flexible spending account (FSA) if you have one. You can then fund your FSA with pretax income that will help you save money on taxes each year. Another good idea is to look into state subsidized options. Call your local government or department of family and child protective services to see what options may be available.

Don’t let child care costs overwhelm you. With some adjustments and savvy thinking, there are ways to save regardless of your household’s finances.

Michelle Schroeder is an award-winning personal finance blogger. She discusses student loans, budgeting, intentional living, and more, all on her personal finance website. She has appeared on Forbes, WiseBread, Huffington Post, Zillow, Business Insider, Yahoo! Finance, Lifehacker, Lifehack, The Consumerist, US News,, Learnvest,, and more. Michelle also has her Finance MBA.