Paying for child care may become a necessity if you (and a partner, if any) have a baby. Depending on your work schedules, you may only need child care a few times a week. On the other hand, you may need to hire someone to watch your children on a regular basis.
In any case, child care is often an expensive service. If you are concerned about budgeting for it, there are a few steps you can take to reduce these overall expenses.
Some options to save on child care only apply to specific families. For example, anyone who receives a steady benefits package from his or her employer can use these benefits to greatly reduce child care costs. However, even if you do not receive these benefits from your employer, there are several general tactics to lower the cost of child care for your family.
Utilize Benefits Provided by Your Employer
Certain employers in the United States provide employees with flexible spending accounts (FSA) that may be used to cover the cost of child care. However, not every employer offers this benefit, and you may need to speak with someone in your human resources department to determine whether this is an option for you.
Through an FSA, you can set aside money from each paycheck to help pay for any child care services you need for your family. The money you place into your FSA is tax-free, which can help eliminate some of the costs associated with outright paying for these services.
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It is important to note that the funds you have not used in your FSA are forfeited at the end of the year. Thus, in order to establish a good plan, you need to properly identify your monthly expenses and then work toward setting aside this amount into your FSA. If you have a partner who also has access to an FSA through his or her employer, you can utilize both accounts and increase your savings.
Learn How to Use Your Child Care Tax Credit
If you do not receive FSA benefits from your employer, utilizing a tax credit can help you save on the cost of child care each year. To use a child care tax credit, you must itemize the expenses you have incurred for child care per year, which is capped at $6,000 per family as of writing. After you have itemized your child care expenses, you can use a portion of this amount to apply the child care tax credit.
Alternatively, if you would like to use both an FSA and the child care tax credit, the amount you have in your FSA must be calculated into your itemized expenses. For instance, if you currently have $4,000 in your FSA you are only permitted to itemize $2,000 in child care expenses. The tax break you receive from doing so may not be substantial, but it can create added savings throughout the year if you are spending a large amount of money on child care for your family.
Research Local Family Child Care Centers
The child care center you select can greatly impact the amount of money you spend on this service every month. Generally, family child care centers that are offered by a licensed individual in their home cost less than standard day care centers, because the amenities at a family care center are limited.
In any case, you must research each local facility to ensure that you are selecting a licensed child care center. This is paramount in creating a safe environment for your children. Family child care centers cost less on average than other day care options and provide similar services. Overall, you may want to adjust your search to reflect the type of care you are looking for in terms of group sizes and age ranges.
More often than not, family care centers in your area offer a variety of programs for you to choose from. Take time to compare the prices for each family care center to ensure you are making the best and most affordable choice for your family.
Adjust Your Employment Schedule and Opportunities
If the cost of child care is too much for you to handle, or if you cannot find a facility that you like, you may need to adjust your employment schedule and create opportunities for you to watch your children. If you have a partner, you and he or she can work together to determine if one of you can switch from working full-time to working a part-time schedule, as this can help greatly reduce the cost of child care each month.
Another option to consider is remote work. Remote work is convenient for parents because it allows you to set your own schedule, such as dedicating your days to watching your kids while focusing on work in the evening, for instance.
Depending on the type of job you have, you may be able to request to work remotely on a permanent or semi-permanent basis. Even if your boss only agrees to you working remotely on select days, you can eliminate the need for a nanny or for a child care center on these days.
You must work with your employer to determine how often you can complete your tasks remotely, as he or she may allow you to leave early on some afternoons but not agree to give you a full day out of the office. Even if you are only able to work remotely on certain afternoons during the week, you can adjust your child care schedule to only place your child into care throughout the morning and early afternoon.
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