Effective Ways to Save Money on Childcare
Childcare is a major concern for working parents as sending children to daycare is expensive. Save And most parents tend to trim down their other expenses in order to give their children the best of best. If you and your spouse are a working parent and looking to send your child to a good daycare, which is under your budget,
we’ve some tips that will help you choose the best (and perhaps the most affordable) daycare for your child. Taking responsibility of children is not easy and childcare will be expensive, but then there are some smart tricks that you can try to save your money without compromising on the quality of childcare service for your child.
After knowing the budget, be creative and use these helpful tips on how to afford daycare.
1. Start Looking Early for Childcare
The best childcare options are in high demand, so start looking early and seize the day (or the daycare). Most childcare work on first come first serve basis and have better plans for early bookers. So start exploring early and finalise the childcare in advance rather than waiting for the last minute.
2. Explore Your Options
While selecting a daycare for your child, look for as many options as you can. Consider your needs and budget. There are many daycare options such as in-home daycare, nanny-share, part-time babysitter or community childcare centres, etc. Choose the option which perfectly fits your childcare needs.
3. Research Your Area
The childcare costs differ from one area to another. In some localities, the cost of living is higher, so the childcare facilities also cost more. In some areas, nannies cost more than in-home childcare. So you must do thorough research in your area and other areas, and compare the different childcare costs before finalising one for your child.
4. Look for Stay-at-Home Mothers
Every locality has a few stay-at-home moms, who don’t mind taking care of an additional child along with their own children. They can be in your neighbourhood, so check with fellow parents. As they are not a licensed childcare provider, they may charge fewer rates. As parents, you can be sure of good care and not worry about your child if you come home late from work.
5. Find a Home-Based Daycare
Home-based or family childcare centres are daycare centres where the caregivers operate from their home. These home-based daycare centres are not very fancy and have a small number of children, so the care given is more at a lower cost. Just be sure to choose the facility which has a license.
6. Check for Flexible Spending Account (FSA)
Some employers have the facility of a Flexible Spending Account (FSA) for its employees. This enables the employee to set aside a certain tax-free amount from their paycheque for childcare. The FSA covers various expenses such as daycare, summer day camps, and preschool. This amount might not be enough to cover full-time daycare expenses but as it is tax-free, it provides a big help in the overall expense.
7. Avail the Childcare Tax Credit
In case your employer doesn’t have the facility of Flexible Spending Account (FSA), you can apply for the child and dependent care tax credit (CDCTC). CDCTC is helpful in claiming a percentage of your child care expenses as a tax benefit, which can help reduce your childcare expense. One can even apply for a tax credit if availing FSA. In such scenario FSA money is first applied to tax credit slab.
8. Structure the Payroll of Your Caregiver Strategically
There are many benefits which a family can give to their child-caregiver which come under non-taxable compensation forms. These benefits are counted in their pay that has Medicare, Social security or income tax withheld.
9. Enquire About Employers Benefits for Childcare
Many companies have special benefits for working parents towards childcare. Talk to your company’s HR to know about the schemes your company has for child care. Apart from a dependent care account, the employer offers other benefits such as child care reimbursement or discounts with local childcare providers.
10. Take Benefit of On-Site Child Care
Several companies have the facility of on-site child daycare. It’s best to use this facility as they are more affordable than outside childcare centres and your child can always be near to you. You can check up on them whenever you get free time.