How to Kick the High Cost of Child Care
Cut nanny costs in half (without hiring Robin Williams)
(MONEY Magazine) – In most states, a year of infant or toddler care at a typical day-care center costs more than tuition at a public university--without 18 years to prep for the payment. In fact, the average family spends 7.5% of its income on child care. These strategies can make the bills more manageable.
• LEAN ON UNCLE SAM. You can claim a federal tax credit for child-care expenses on your 1040, typically worth up to $600 for one child or $1,200 for two or more. Or you can pay up to $5,000 of those expenses with pretax dollars through a flexible spending account at work, saving as much as $2,000 or more. To use either break, though, you must be able to provide a Social Security or taxpayer ID number for your caregiver.
• SHARE CARE. Sharing a full-time babysitter with another family--an increasingly common arrangement, says Pat Cascio, president of the International Nanny Association--can cut your child-care costs in half. Added benefit: Your little one gets built-in kiddie companionship.
• CONSIDER CHEAPER ALTERNATIVES. The type of care is similar, but you'll usually pay less at a nonprofit day-care center run by a church or the YMCA than at a private facility. Family day care, run out of a caregiver's home, also costs less. Want one-on-one care? Consider an au pair--an exchange student who works here for a year or two, hired through an agency like Au Pair in America (aupairinamerica.org). Typical cost: $1,100 a month, or about half as much as a home-grown nanny.
• BARTER. Ask about swapping services for a break on day-care tuition. If you're a C.P.A., offer to do the center's taxes; if you're handy, pitch in with repairs. You may not get more than 5% or 10% off the price, but hey, every little bit helps.