If you’ve got kids, by now you’re probably pretty familiar with how expensive it can be to raise them! It’s estimated that the cost of raising a child to the age of 18 runs the average American family almost $250,000. The biggest expense? Child care.

 

Of course, this varies greatly by location and lots of other factors too. It’s no surprise that a swanky daycare center in Manhattan will require deeper pockets than an in-home provider in Mississippi. But what else causes price variations in child care costs, and exactly how much does daycare cost? In this article, we’ll explore those questions and more, and we’ll also offer you some helpful ways you could save money on daycare costs.

How Much Does Daycare Cost?

Let’s take a look at the different types of daycare available to working parents today.

Full-time nanny

In most places, having a full-time nanny is the most expensive daycare option. A full-time nanny is someone who comes into your home for at least 40 hours a week to take care of your kids. Aside from childcare, many nannies also prepare meals and do light housework. Often, they are licensed and have completed nanny certification courses along with safety course like First Aid and CPR. Like all types of child care, the average cost of a nanny varies widely.

 

Location is the largest variable simply due to cost of living, but factors like years of experience, tasks you’d like your nanny to perform, and how many kids you have will also factor in when thinking about how much to pay your nanny. Below are

examples of typical nanny pay in several US cities.

 

Full-time Nanny Rates (per hour), courtesy of payscale.com:

 

  • New York City – $17.82
  • Washington, DC – $18.57
  • Miami – $13.76
  • Chicago – $15.17
  • Dallas – $12.52
  • Atlanta – $14.44

Part-time nanny or nanny share

If you work part-time or have a flexible work schedule, you may find yourself only needing childcare a few days each week, or at odd hours outside of the standard work day. In a case like this, you might employ a nanny part-time. While rates are similar to those of a full-time nanny, you’ll pay less overall since you’ll be using the nanny for fewer hours. Similarly, a nanny share allows you to share a nanny (whether part-time or full-time) with another family, thus reducing your overall cost.

 

Considering combining a nanny with a family member or another friend’s children – everyone gets a reduced cost and your child gets to be with kids that you already know. For example, an in-home nanny might charge $18 for a single child, but only $14 each for two children. So if your sister drops her baby at your house every day for nanny-share, you’re saving $160 a week, which is $8,320 a year.

 

children in daycare

Daycare center

Located in cities and towns across America, daycare centers are probably the most popular childcare option for working parents. They provide parents with peace of mind through the rigorous standards they have to maintain in order to operate, and often provide perks like cameras that allow parents to view a live-stream of their child’s day. Daycare centers often employ several care providers, and typically keep infants and babies in separate rooms than older children. Most daycare centers take children from six weeks old through elementary school age, with infant care rates ringing in substantially higher than the cost of care for toddlers and older children. According to Fatherly.com, below are some average costs of centers (prices are monthly and assume care for an infant and a toddler).

Daycare Center Rates (per month), courtesy of Business Broker Network:

 

  • California – $1,683
  • Minnesota – $1,792
  • South Carolina – $896
  • Washington, DC – $2,792
  • New York – $2,009
  • Arizona – $1,348

In-home Daycare

Many parents opt to use an in-home daycare. This type of setting provides the one-on-one feel of a nanny with the convenience of a daycare center. Child care providers in home daycares are licensed by the state in which they reside, and have taken appropriate safety certifications. They offer a small setting, usually between 2 and 8 kids. Home daycare rates are subject to the same variations as other types of childcare, but in general, they tend to be less expensive than daycare centers and nannies. That said, a home daycare with just one or two children can be near the price of the other options.

Ways to save on daycare

According to a study from the University of New Hampshire, an astounding one in four families in the United States spends more than 10% of their annual income on childcare. Considering most financial guidance states that one’s mortgage shouldn’t exceed 20%, it’s clear to see that the high cost of childcare is taking a toll on parents across the country, not just in the most expensive states. How to deal? There are some ways to reduce the burden of daycare. They may not have a major impact, but when it comes to your finances, every little bit helps!

 

  • Tax credits. Take advantage of tax credits like the dependent care credit. These can give you a larger refund come tax time, or allow you to put less of your income toward taxes during the year.
  • Employer perks. Use your flex spending account to offset daycare tuition while reducing your taxable income.
  • Plan ahead. Start looking at daycare options early in your pregnancy to ensure you’re able to find the best daycare for your budget.
  • Change your schedule. If possible, alternate work shifts with your partner, work part-time, or ask your employer if you can work from home one day each week.
  • Shop around. Especially if you live in a large city that tends to have high daycare rates, it’s possible that different parts of town offer substantially different rates. So take the time to shop around instead of assuming they all charge similar prices.

 

Whatever you end up choosing, it’s best to start looking early. In-demand daycare centers can have very long waiting lists. Some will give siblings priority, so if this is your first child, start touring possible child care options as soon as you can. Some people even get on waiting lists while they’re still pregnant. But if you’re feeling behind, don’t worry. Remember that whatever you choose doesn’t have to be a permanent solution, and you can always make adjustments later depending on your situation.