Budgeting for the Costs of Childcare

Amanda Garland

When maternity/paternity leave is up, and you are ready to jump back into the workforce, you'll need to figure out what your childcare plans are. And, how to budget for them.

To properly plan for childcare costs, you'll need to consider more than just the weekly cost that your local childcare center or babysitter charges, you'll need to budget for transportation costs, initial deposits, and more.

By factoring in all of this information, you can get the full picture on what your childcare costs are and use that information to determine if there are major lifestyle changes that you need to make.

What is the Average Cost of Childcare in Your Area?

When initially searching for childcare, it is a good idea to research what the average cost of childcare in your area runs. This way, when you are calling around to daycare centers and other childcare providers, you can compare their quotes to your area's average.

If their quote is higher than the average, then perhaps they are overcharging you or they offer features/benefits that other care centers don't.

If their quote is particularly low, this could also be a red flag. Checking their reviews, business history, and more might shed some light on why they are willing to offer such low pricing.

When looking for quotes, you'll also want to take your child's age into consideration. Care for infants and toddlers that are not yet potty-trained often runs much higher.


If you selected a daycare center for your child to attend instead of a babysitter/nanny, then you may also need to budget in the costs of any deposits and/or application fees.

And keep in mind that this type of fee is often non-refundable. So, if you change your mind about using that center's services, you're out that money.


Who is taking your little one to daycare? How far a drive is it from your house?

Knowing how much money you'll be spending on gas, tolls, and vehicle maintenance is important, as these small changes could impact your overall monthly budget for travel & transportation-related expenses.


You might need to invest in a second car seat. Especially if one parent is going to be dropping the child off and the other is going to pick them up.

When your child is an infant, you may be able to use just one seat with multiple bases, but as your child gets older, and their car seat becomes too heavy to lug around.

Your daycare center may also have specific requests about what items your child can bring, which might mean you need to purchase new diaper bags, bottles, food containers, etc.

Backup Care

Do you have a backup plan for when your child gets sick?

Most daycare centers won't accept children who are sick because of the risk of spreading the contagion.

This means most parents end up taking a day or more off of work to take care of their sick child. But that is not always possible.

That is why having a backup care plan in place is a good idea. Perhaps a babysitter you know well, or a family member/neighbor who can step in at the last minute.

Sometimes this backup up care is free and sometimes it is not, so plan accordingly.

Another common reason for needing backup care is when your chosen daycare center has a waitlist. If there are no open slots, you could end up on the waitlist for weeks or years before a spot becomes available.

And you'll need a backup care plan in place for the duration of your waitlist time.

Ideas How to Save on Childcare

Check with Your Employer

A good first step to saving money on childcare is to check with your employer. Many employers are beginning to offer employees free or discounted childcare options. Some even allow the cost of childcare to be deducted directly from your check.

Age Discounts

If you can hold off on pursuing a new childcare solution until your little one is older, this could save you a significant amount of money.

Infants are the most expensive to care after, with many daycare centers dropping the price for care when your child reaches 18 months or 2 years old.

If you already have your child in daycare, you can consider switching facilities to take advantage of this age discount.

Multi-Child Discount

If you have multiple children, many daycare facilities offer a discount if you choose them to provide care for all of your children.

So even if you have a younger child or infant that has costlier care, this multi-child discount can still make it cheaper per child.


At-home care can be one of the most expensive options, but it has many upsides that daycare centers just don't offer (i.e. flexible schedule).

The average cost of a nanny is just over $19/hour. For full-time care that is over $3000/month.

The good news is, that just like with daycare centers, you can get a per child discount if you have multiple children. But what if you only have one child that needs care?

Consider a nanny share arrangement, where the nanny watches the children from two or three families.

If you have a friend or family member who is also looking at in-home care for their child, sharing the costs of one nanny can be a real budget saver.

In-Home Daycare

Similar to the idea of a nanny share, there are many individuals that offer childcare out of their own homes.

Their rates are often much cheaper than that of traditional daycare centers and the class size is usually much smaller.

The downside is that the ages of the kids will vary, meaning your one-year-old could be playing with an eight-year-old.

Also, the requirements for opening an in-home daycare can vary from state to state, so you'll want to thoroughly vet the provider before leaving your child(ren) with them.

File on Your Taxes

There are several ways that having a child can help you out come tax time. The child tax credit can reduce the amount you owe for taxes, while the child and dependent care tax credit will reimburse you for a certain percentage of your childcare expenditures.

You'll want to talk to a tax professional to ensure you are getting the full amount you are due on these credits.

Check for Subsidies

The government offers many different kinds of subsidies, financial assistance, and unique programs to help you cover the cost of childcare.

These programs often have specific income limitations or other requirements (i.e. military service).

You'll want to check with your local and state governments to see what kind of assistance you might qualify for.

Adjust Your Schedule

If you have a spouse or partner sharing the childcare responsibilities, perhaps the two of you can adjust your schedules so that you need fewer hours/days of childcare.

For instance, one of you could start and end work early while the other starts and ends late, leaving only a few hours midday where you need childcare. Or perhaps you can negotiate with your employer to work from home on certain days of the week so that you only need a day or two a week of childcare.

Just be sure to check with your care provider, as some charge just as much for partial care as they charge for full-time care.

Consider Quitting Your Job

Quitting your job to take care of your child is almost never the best solution, but it can be beneficial in certain situations.

After running the numbers on what childcare is going to cost versus your wages, if the remaining balance is extremely low or negative, it might be time to consider taking some time off work.

Just be sure to factor in the cost of benefits you might lose, like paid vacation, health insurance, 401k contributions, etc.

And, if you find you still need a little more income to make your budget work, you can always pick up a part-time job or side-hustle that is better suited to your schedule.

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A Texan and new mom, writing about things I am most passionate about; personal finance, parenting, and the events that shape Texas.

Dallas, TX

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