Child Care

Look for financial aid – there may be places where you can dig up additional funds – and it all helps. First, look at tax breaks. Check if your company offers a Dependent Care Account, this is a kind of Flexible Spending Account that helps you put aside up to $5000 pre-tax dollars for dependents, which could significantly reduce you tax bill. And when you spend after-tax money on the care of dependents, you can claim it in the Dependent Care Tax Credit on your tax return. That translates into 20% to 30% of up to $3000 in expenses for one-child – double that for two. You could save $600 - $1200.

Also be sure to check if your employer offers discounts through partnerships, or special deals with certain child care providers. To help offset costs for employees, larger companies will often have arrangements with local centres.

Contact the local kindergarten to see if they offer half-days for younger children. Get more involved with the child care centre in your area by volunteering or making other contributions that might help.

Consider ‘child care pooling’ with other parents. Share a caregiver and split the costs between you. Or consider hiring a family member – you may feel more at ease leaving your kids with their Grandma everyday if you have a formal compensation arrangement. It can afford you great peace of mind.

Hire a student from the local college – someone you know – for regular, less expensive childcare. Or consider hiring an Au Pair, who is often a student, but from another country. There are great web-resources for researching this option. Despite fairly big up-front costs, it will end up setting you back about half what a nanny would.

Or you could try to be more flexible with your time. Moms and Dads need to look at ways they can rearrange their schedules to take more responsibility for child care. Couples may be able to significantly reduce costs if they both negotiate more practical schedules.

If none of the options seems viable, it might be worth making the decision that someone stays home. Carefully consider the possibility, and financial impact, of the second-income partner giving up work. Remember the arrangement doesn’t have to be permanent, and these days there are a lot more options open to the stay-at-home parent: working from home, starting a small business etc. Be open and flexible about your arrangements and you will find something that works.