You’ve probably heard the expression, “It costs money to make money.” That saying easily applies to child care costs. In order to go out and earn an income, you need to hire someone to care for your kids during business hours. The problem is that child care costs continue to rise.
According to a recent report from Child Care Aware of America, the increasing cost of child care is becoming a hardship for families. For example, according to the report, in 2011, the average annual cost of full-time child care for an infant ranged from about $4,600 in Mississippi to nearly $15,000 in Massachusetts, while the average annual cost of full-time care for a 4-year-old ranged from about $3,900 in Mississippi to nearly $11,700 in Massachusetts.
In fact, the report says, in 35 states and the District of Columbia, the average annual cost for center-based care for an infant was higher than a year’s in-state tuition and related fees at a four-year public college. In New York state infant cares averages $14,009; tuition averages $6,213.
So what can you do to reign in your child care costs?
Pay through your flexible care spending account
If you cover your child care costs with money from your employer’s dependent care flexible spending account, you’ll use pre-tax dollars, explains U.S. News and World Report. Thus, you’ll reduce your tax liability (which means you’ll save money).
Share child care with another family
LearnVest suggests exploring the viability of a “nanny share” – going in on the cost of a nanny with one or more families. In fact, for slightly older kids, the site recommends looking into forming a preschool co-op.
Get a tax break
The I.R.S. offers a Child and Dependent Care Credit to working parents which can reduce taxable income, according to LearnVest. According to the site, you may be able to deduct 20 to 35 percent of your child care costs per child, with a cap of $3,000 per child and $6,000 for more than one child.
Stagger parents’ work shifts
If you and your spouse can work out the logistics, consider staggering work schedules so at least one parent stays home with the children while the other works, then switch, suggests MoneyNing.
Work for an employer offering child care
Consider working for a company with an in-house childcare center. Google and The U.S. Department of Defense both offer such facilities, according to Ollie M. Smith, Interim Executive Director of Child Care Aware of America, in U.S. News and World Report. In fact, Smith notes, the Department of Defense hosts over 200,000 kids weekly.
Another option: Consult your human resource department to see if your employer has negotiated an employee discount for nearby child care centers. Some corporations offer this perk, according to Learnvest.
If you have a family member nearby (a retired parent, perhaps?), he or she might just make the ideal nanny, points out MoneyNing. Depending on how much this person is willing to help you out, you may have an ideal child caretaker for little or no money. Just like the old days.
Have you tried to save on child care costs? Which methods have you looked into?