How to Kick the High Cost of Child Care
Cut nanny costs in half (without hiring Robin Williams)
By Janet Paskin

(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.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.