Rhode Island mom Renee Welch’s three-year old daughter has attended the same daycare center since she was six weeks old. But with rates set to rise soon by almost $200 per month for full-time care, Welch is considering her options.
“My mom offered for a long time to help out with watching Sierra, but I didn’t take her up on it because I was worried she would burn out taking care of a baby. Now that Sierra’s three, I feel like I have more choices…like going with a less expensive preschool program and having my mom pick up the other hours. I hate to leave the center we’ve used, but their rates are going up and my salary isn’t.”
Sound familiar? If you’re among the many parents crunching the numbers trying to make daycare costs fit the family budget, a new report from the US Census Bureau reveals something you probably already know: childcare rates are going up.
The report, “Who’s Minding the Kids,” found that families with an employed mother and children under 15 paid $143 weekly on average for child care in 2011, compared with $84 (in 2011 dollars) in 1985. In other words, daycare rates have almost doubled since the days when you may have been the one dropped off for care.
There doesn’t seem to be a drop in rates coming anytime soon, either. Another report, compiled in 2012 by Child Care Aware of America, further reveals that in 35 states, the average annual cost for center-based care for an infant is now higher than a year’s tuition at an in-state public college.
Where you live seems to matter a lot when it comes to how much you’re going to pay. According to Child Care Aware of America, daycare costs tend to be least expensive in Mississippi, where parents pay an average of $3,911 per year (about $71/week), and highest in Massachusetts, where the average yearly cost is $14,980 ($272/week). Overall, however, in 19 states and Washington D.C., the average cost of infant care now tops $10,000.
These statistics may help explain why the Census Bureau report notes an increasing number of parents “opting out” of center-based care or even going without any kind of paid childcare provider. According to “Who’s Minding the Kids,” the proportion of families that reported using paid child care at all dipped from 42 percent in 1997 to 32 percent in 2011.
This doesn’t surprise Welch, who has seen the size of her daughter’s class shrink over the past few years. “This was a center that had a waiting list in 2010, but no more. Almost every parent I know has some patchwork quilt of daycare—some center days, some grandparent or neighbor time, maybe an in-home provider for a few days a week—just to come up with something that won’t break the bank.”
To solve her own dilemma, Welch says her daughter will attend a preschool program five mornings a week, with her mom on duty to watch her for the rest of the day until Welch gets off work. She estimates that this will save her about $600 per month. Don’t have a doting grandma on standby? Here are some other tips that can work to reduce daycare costs:
Get a Company Discount: According to Judy Dutton at LearnVest.com, some employers may negotiate discounts with nearby child care centers. Ask your human resources department whether any discounts currently exists or whether they would be willing to negotiate with a center in the area. If you can gather together a list of names of other interested co-worker parents, this might help get the ball rolling.
Explore Shared Child Care: Have you heard of a nanny share? In this money-savvy arrangement, two families pay in toward the cost of one nanny, with care typically rotating between the families’ homes. Of course, the nanny will need to agree to this cost-splitting measure, so be prepared to possibly do some negotiating on the fee and terms. Another option, as your child grows older, is to explore preschool co-ops that offer lower tuition costs in exchange for parent work hours.
Seek Out Nonprofit Centers: A local YMCA, church, synagogue, or other community group may offer child care services that cost far less than private centers. Another bonus: if you are a member of the group (i.e., you have a family YMCA membership), you may be entitled to a further discount off the advertised rate.
Barter: Have a good or service that might be of interest to daycare provider? This technique may not work with a center, but an in-home provider may be willing to accept something you have of value in exchange for a discounted rate. Maybe you are a teacher and could offer to tutor the provider’s child, or if you own a time share in Florida, you could offer use of the vacation home. To keep things above board, just get it in writing, and be aware of the tax implications (a bartered good is typically still considered income).
As for Welch, she’s happy to finally have a way to save some money of childcare. “To think that I’ve paid over $35,000 in daycare for the past three years really takes my breath away. All I can say is that I’m counting down the days to kindergarten…no more tuition, and our school has free before and after care. It’s going to feel like winning the lottery!”
How are you budgeting for daycare costs?