Childcare Costs

The US Census data for 2002 shows the average cost of childcare across all groups as $95 a week. The three main childcare expense categories are nannies, day care centers, and the traditional babysitter. For each type there is a different measure of value.

Child Care Cost: Nanny

A nanny provides the children with more one on one attention and typically a higher level of care. Nannies are also the most costly and complicated of the care options. Depending on which area you live, the ages and the amount of children you have, most nannies cost a family $300-$700 a week. In addition to this salary, some parents also offer health insurance, food, vacation and sick pay. To pay legally, the nanny is considered an employee and will need to disburse social security and income taxes. Parents can take this responsibility on themselves or hire a payroll service that specializes in domestic workers.

Child Care Cost: Day Care Centers

For simplicity, this includes both in home and out, after and before school day care centers. The cost structure is similar as the prices are determined by their overhead. Whether profit or non-profit based, childcare centers are businesses that have to manage their bookkeeping to survive. They reduce the high expense of rent, food, insurance and salaries by increasing the staff to child ratio. Therefore day care centers charge less than a nanny, but also provide reduced individual care. The typical cost of enrollment in a center is between $250-$1250 a month with higher cost-of-living urban environments at the top end of the scale. Prices are elevated for infants who require more personal care and eventually will lower as a child grows. Most childcare centers charge a daily rate and require that families pay monthly.

Child Care Cost: Babysitters

Whether you hire one for after school care or an evening out, most babysitters charge an hourly rate. This fee will vary depending on the experience and age of the babysitter you chose, but typically they charge $5-$10 and hour for one child and $7-12 for two or more. Some communities start babysitting co-ops where families take turns supervising the kids, dramatically reducing this cost.

Reducing Child Care Cost

Childcare is the second largest expense in the home budget after the mortgage and rent are paid. Reducing this cost is a priority to help balance our dollars. The government offers some assistance in tax breaks. Each year you can pick to either take a childcare tax credit or deduct the cost pretax from a flexible spending account. Either method offers a way to pay less in income taxes by deducting the cost of childcare. Babycenter offers an excellent comparison on their website to help a family decide which method to choose.

Sharing the cost of childcare with family and friends can also reduce the expense. Hire a nanny to care for your child and a neighbor’s, cutting the cost of the nanny almost in half. Start a babysitting co-op or do exchanges with other families, this is particularly nice if one parent only works part-time and has free time to watch other children.

If childcare is a necessity but the family’s budget is limited due to low income, there are assistance programs available. Child Care Aware is a nonprofit organization that provides an excellent resource for finding an assistance program and other information such as local rates and resource agencies.

Lastly, every family will have to evaluate at the birth of each child whether the cost of childcare weighed against the wage received is significant. For some families, due to day care costs and other expenditures associated with working, it can cost more to work than have one parent stay home.

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