When I was thinking about having a baby (and during my pregnancy), childcare wasn’t one of my main concerns. Instead I spent a lot of time researching things like:
- Miscarriage rates
- My company’s maternity leave policy
- Weight gain
- Baby names
In retrospect, all that Googling was a colossal waste of time.
I should have been more concerned about figuring out what I was going to do with my baby once I went back to work. Instead, I kept telling myself, “I’ll figure it out later.”
I realize now that I was avoiding researching the issue because I was scared about the idea of leaving my child with a stranger.
But you know what else is scary? Realizing how much childcare costs, especially over the long term.
The longer you wait to look into the issue, the scarier it gets.
The sooner you think about your options, the better decision you’ll make – for your family and your wallet.
This article is a good start.
Option #1: In-home nanny
Before I had a baby, my idea of a nanny came from Lifetime movies. I assumed that all nannies lived in your house, tried to seduce your husband, and slowly tried to drive you crazy before making an attempt on your life.
In reality, nannies are more like advanced babysitters and not evil seductresses. I never understood the differences between a babysitter and nanny. According to Care.com, babysitters usually work intermittently, or for a few hours per week on a regular schedule. Their main tasks are playing with kids, feeding them, and putting them to bed.
Nannies do a lot more. “It’s a nanny’s responsibility to create daily schedules and engage in activities to ensure healthy mental, physical, and emotional growth in the children they care for,” says Care.com. “Most nannies will be tasked with preparing meals, helping with household work (dishes, laundry, etc.), driving the children to and from activities, and assisting with homework.”
When I went back to work after having my daughter, we found an in-home nanny. We went this route for a lot of reasons. First, I worked mainly at night, while my husband worked days. We only needed someone for a few hours one or two afternoons per week.
Many day cares, however, require a minimum commitment of at least three days per week. I didn’t really want to pay for more than I needed, especially considering that I didn’t need to send my daughter there for a full eight hours. (Few day cares accept kids for just half a day).
Another perk of in-home care? It’s just easier.
Having someone come into your house is a lot easier than hauling a non-walking kid around, especially in winter.
Some parents, like my friend Charisse Traband, hire nannies to mind their child while they work in another part of the house. “I wanted to be a stay-at-home mom. But I also did not want to give up my career. So I decided working from home and having a nanny would be the best of both worlds.”
Of all childcare options, in-home care is the priciest. On average, according to Payscale, an in-home nanny (who doesn’t live with you) earns $13.36 per hour, but this varies wildly by location.
In general, because the cost of living is higher in metropolitan areas, nannies get paid more there.
If you want someone trained in CPR or a nanny with a degree in child education or development, expect to pay more.
In Chicago, where I live, the going rate is $14 per hour.
How to save a few bucks
I was happy to let my former nanny bring her daughter along with her when she watched my daughter. In return, she only charged me $12/hour.
Some people give their nanny room and board—meaning she lives in your home—in return for a smaller paycheck.
But I only know one person who’s ever done this, and she didn’t enjoy the experience. Who wants to tiptoe around their own kitchen? Plus, if Lifetime has taught us anything, it’s to beware live-in nannies. (I kid.)
Something to keep in mind
Most people I know pay nannies under the table, but, technically, that’s illegal.
If you pay your nanny at least $1,800 per year, you’re supposed to withhold Social Security (6.2% of her pay) and Medicare taxes (1.45%) from her paycheck (she’s responsible for paying other taxes). If you don’t withhold these taxes, you can face penalties.
Another reason to keep things legal? You can’t claim any childcare tax benefits on your own income tax return unless you’ve withheld taxes from your nanny’s pay.
A nannyshare it just what it sounds like—two or more families share the service of one nanny.
The nanny can alternate between the families’ houses or apartments, making it easier to get out the door at least a few days per week.
It can work out great for kids, as long as they like each other. They get individualized attention from a nanny, have regular playmates, and will theoretically be exposed to fewer germs.
Like all childcare options, nanny share fees vary by region.
In general, a nanny involved in this type of arrangement might charge a dollar or two more per hour than her usual rate because she’s caring for two more children, but you’ll be splitting that cost with another family.
How to save a few bucks: If the other family has more children than you, they should pay for a larger portion of the nanny’s hourly rate.
If you always have to bring your kid or kids to the other family’s house, it could be argued you should pay a little less.
Something to keep in mind: A friend of mine and I asked her nanny if she’d be willing to nanny both of our kids, but she said no. We were both surprised but her reason totally makes sense.
She said that previous nanny shares she’d been involved with hadn’t worked out. Each set of parents had too many different rules for their kids. Some parents won’t let their kids watch TV; others don’t care. Some parents won’t let their kids eat any sugar; the other set thinks sugar and childhood go hand in hand.
Option #3: Day care
I recently stopped teaching night classes and started working during the day again, meaning my daughter needed care three days per week.
I could have tried to find another in-home nanny (the woman I had been using wasn’t free the days I needed her), but that would have gotten pricey.
More importantly, my daughter is now two, and wants to play with other kids. Or, more accurately, she needs to learn how to socialize with other kids. I decided it was time for day care.
Another plus? Day care is the most economical childcare option. (Besides Grandma babysitting for free!)
For one child, day care is so much less expensive than nannies that you may find yourself sending your child to one right way. “When it was time for me to go back to work, my mom volunteered to watch the baby two times per week and we decided to go with in-home daycare three days per week, basically because it was the cheapest option,” says my cousin, Simona Masini, a teacher. “So how much did money play into that decision? It was mostly based on money. However, that being said, we also liked the idea of our children being in a home with other kids as opposed to being in our house alone with a nanny.”
Don’t be scared about sending your kid to day care. Those horror stories you hear about are very, very rare.
When I started looking at day care places, I was overwhelmed. There are all different types – large day care centers vs. small day cares in a person’s home vs. Montessori. They each come at different prices points, and they each offer different things.
Ultimately, you need to figure out what your priorities are. If, for example, you want a center that’s met the highest national standards, look for one that is accredited by the National Association for the Education of Young Children (NAEYC). On the other hand, if you want a smaller and less school-like environment, look at home-based centers.
In my case, I didn’t want to add too many minutes onto my commute.
But the closest place also didn’t feel right. There were about 20 kids there, and my daughter is fearful of other children.
So I chose a small home day care that regularly texts me pictures of her while I’m at work, and emails me a nightly report.
Other parents have different priorities. I saw one day care that guaranteed my daughter would be bilingual by the time she entered kindergarten. That matters to a lot of parents, but for me, it wasn’t worth the extra cost.
For babies and toddlers, the average cost of full-time day care at a center is $972 a month. And that’s average. Depending on your location and the center you choose, prices could exceed $1,500 a month per child for full-time care.
Yes, you read that correctly.
Once a kid hits two, the average price drops to an average of $733 a month.
Home daycares cost less – an average of $646 a month for babies and around $600 for the over-two crowd.
Of course, costs vary wildly, based on where you live and what features the daycare offers.
Things cost more in cities, obviously.
The least expensive daycare I found in Chicago (that was legit) was $50 per full day. Another one I looked at costs $997 per month for three days per week.
The most expensive states for daycare, according to Baby Center, are:
- New York
How to save a few bucks: If you can work something out with your employer, try to work from home at least one day per week.
Most day cares don’t require kids to attend five days per week.
If you and your partner can adjust the times you need to be at work, you may only need to send your child to day care for a few hours per day.
Some day cares – but not all of them – will charge you per hour instead of per day, or have a half-day rate.
Something to Keep in Mind: Daycares usually offer lunch, snacks, and sometimes breakfast.
The bad news? Daycares aren’t babysitters you can easily cancel on.
Most daycares require you to pre-pay each week. If you have a vacation planned or your child gets sick and doesn’t go to daycare, you still need to pay for the days she misses.
Option #4: Either you or your partner quits your job
Don’t choose this option without thinking about how it will affect you in the long run.
I used to think that parents who didn’t work after having kids chose to stay home because they weren’t career-driven.
What a dummy I was!
Sure, some people stay home because they’d rather hang with their kids. After having a child, I totally get that. Kids are mesmerizing – way more rewarding than anything a job job offers.
But often, one parent stops working because the cost of childcare is simply more than (or exactly the same as, or not much less than) the paycheck he or she is bringing home—especially if more than one kid is involved.
Sometimes bringing home a salary you immediately pay someone else feels ….just stupid.
But before you give notice, just remember that kids do eventually grow up and go to school, eliminating your need to pay for year-round, full-time childcare. (There’s still those pesky afternoons and summer breaks, of course.)
This option seems free – at first.
But being a stay-at-home parent sadly doesn’t come with any benefits, like a 401(k). As Baby Center notes in their excellent synopsis of the financial and mental repercussions of staying at home to raise children, “Economists estimate that over a lifetime, staying at home could cost several hundred thousand to a million dollars, once you add up lost employment benefits. These include accrued Social Security and, depending on your job, other financial benefits such as matching 401(k) contributions or a pension.”
How to save a few bucks: While you’ll lose one main source of income, it’s easier than ever to master “the side hustle” with things like Uber and Task Rabbit.
Something to keep in mind: Financials aside, I know tons of parents who are thrilled they made the decision to say goodbye to office life.
Sure, sometimes it gets boring. And sure, you and your partner might find yourselves butting heads a little more.
But you never get back your child’s first few years of life. Plus, the less they go to day care, the less often they’ll get the flu.
Whatever route you go, think long and hard about it first.
And of course, if you live close to family, you can always ask your own mom or dad to watch your kid – for free.
But my cousin Christina notes, “If it’s free, you can’t really complain when your mom gives your kids unlimited ice cream at 9 a.m. But hey, I’ll take it.”
- Childcare will likely be your largest cost before your child enters school.
- Costs vary wildly by location and type of childcare – in home nannies vs. nanny shares vs. day care vs. becoming a stay-at-home parent.
- In-home nannies are the most expensive option.
- You’ll make the best choice the longer you allow yourself to research the issue and closely monitor your budget before making a choice.