If it’s one thing the majority of Americans struggle with on a regular basis, it’s childcare costs. In fact, 70% of families say childcare simply isn’t affordable for them, according to a survey from Care.com. There are several reasons for this.
If you’ve been reading our previous blogs, then you know debt is sky high! Americans can barely afford healthcare and savings, much less childcare or other expenditures. It’s even tougher when the economy takes a hit, jobs become scarce, and families end up making less overall.
The reality is, when that happens, the inability to afford childcare will force a parent to stay home with their kids rather than finding work to help contribute to the budget. When that happens, it can cause a lot of strain, as money problems are currently the #1 cause of divorce.
Thanks to these reasons, a lot of couples are waiting even longer to have kids, pushing it off indefinitely until it becomes more affordable for them. In this current economic climate, it’s unaffordable to pay the bills, take care of debt, and save money without BOTH working a full-time job.
To the couples already with kids or thinking about having kids and struggling to get by, they’ll need to figure out new ways to budget to accommodate childcare costs along with saving for other needed expenses. Here are 4 strategies you can try to do just that:
1) Budget for a Baby Beforehand
Before you have kids, life may seem simpler and budgeting isn’t much of a priority. In fact, 68% of families say they didn’t start budgeting until their first child. They didn’t realize or anticipate exactly how expensive things would be until the time came to start paying for their new bundle of joy.
You really need to sit down and determine what you can afford before you even start thinking about a baby, not after. Add up all your bills and see what you have left over for the month. If you’re not sure you make enough, you’ll have to see what you can consider cutting back on for the sake of the child.
2) Look at the Different Options You Have and Compare
Whether you’re looking to have a child, or already have one and are budgeting for the first time, you should have a good idea of what you can spend. Compare that to the type of care you need by doing research on your options.
Do you just need a sitter for after school? A daycare center during the day? Can you afford to hire a nanny? Each option has differing costs. Either way, expect to pay anywhere from $200/week to $600/week for childcare service.
3) Don’t Forget to Incorporate Tax Breaks
The government wants to help families be able to afford childcare, so they offer tax breaks that can add up to over $3,000 per year. There are also flexible spending accounts where they can save up to $5,000 to pay for whatever childcare option they choose. All you have to do to receive this tax break is to fill out an application when doing the rest of your taxes.
4) Ask Your Employer What They Offer
A lot of employers offer a variety of childcare services to help their employees, from offering their own daycare service, to helping their workers pay for their own. You may even have the ability to take advantage of flexible work arrangements that allow you to work from home as needed.
Childcare is a major obstacle for any working parent, but as long as you do your best to budget and find a service within your budget, it’s very doable. This is especially true if you’re able to tap into government and/or employer assistance.
