budget, Divorce, Parenting, Uncategorized

Saving Money on Childcare

Kiddos are amazing but expensive. Being a single parent and working full time, its hard to keep up with the rising costs of childcare. Let’s be honest here, it can leave you feeling broke. It’s a catch 22, we want our kids in great hands, but we also don’t want to spend the equivalent of a monthly mortgage payment each month on care. Here are a few options I have researched that may help you with childcare costs.

1. What is the budget? How much can you realistically afford for childcare each month? Make sure you have enough for a roof over your head and the necessities and start looking at the options. Is it really necessary for the kids to go to a private daycare? Is your ex willing to split costs of childcare? Can you modify the custody agreement in regards to childcare costs? Are there ways to pay for childcare pre-tax, so you can get some of the money back during tax season? Which leads me to…

2. Take advantage of your work FSA. There is a type of FSA at your work that covers dependent care. You can set aside up to $5,000 per year tax free for childcare. This type of FSA covers expenses for daycare, preschool, and some summer camps. It is important that you only set aside the amount you truly need that year. Any left over funds in this account will be forfeited at the end of the year. Keep good records as well, since you need to submit reimbursement requirements to get the money back.

3. Apply for the Child Care Tax Credit. If your job doesn’t offer a FSA for dependent care, you can take advantage of the child care tax credit. With this tax credit, you can itemize up to $3,000 in expenses per child per year, up to $6,000 annual cap per family. Once you’ve itemized the expenses, you can take a percentage of that and apply the tax credit. Find out more here.

You can use a FSA and a tax credit, however, any FSA money is applied to the tax credit cap first. For example, if you use $5,000 from a FSA, you can itemize only $1,000 for the child care tax credit.

4. Talk to HR. More and more employers are starting to notice how childcare problems are affecting their employees. Some businesses offer child care reimbursements for working parents. Talk to your HR, it never hurts to ask and see what is available.

5. Find family childcare. A family childcare center takes place at the caregiver’s home, and while the facilities may not be as fancy as a stand alone childcare facility, the money you can save can be pretty significant. Just make sure the facility you choose is state licensed so that you get the safest care possible.

I used a family child care center when my son was very young. He enjoyed the small group of kids and had a cozy home environment that didn’t feel cold and sterile.

6. Use onsite childcare. If your company offers onsite childcare, it can save you money and be super convenient. One healthcare system I worked for had onsite daycare, and they deducted the cost of the childcare out of my paycheck automatically which helped keep track of expenses for taxes.

7. Shift your schedule. Ok, if you are a single parent, not receiving enough in child/spousal support each month to implement this wont apply to you. But, if you can afford to work part time, you only have to cover child care costs for part of the week.

If a part time work schedule is not an option, talk to your employer about a flexible schedule. Can you telecommute, or work extra hours a few days a week?

In co-parenting, if you and your ex live within the same area, you may be able to alternate childcare depending on your work schedules.

8. Arrange a childcare swap. If you live in a neighborhood you can trust, try swapping childcare with your neighbors. For example, one parent can watch the kids and then switch to have another parent watch the kids for a date night, etc.

9. Hire a teen for after school care. If you get off at work around 6pm but the kids get out of school at 3pm, have a teen you can trust pick up the kids after school. That teen can watch the kids until you come home. Make sure that the teen is someone you know, is CPR certified and has reliable transportation.

10. Ask your family for help. It takes a village to raise a child. If you are blessed to live near family, ask them if they will be willing to look after the kiddos while you work. Be open and flexible when asking. Some family members may do this for free or you can offer some money for the services. While I was attending night classes at a local college, my father watched my son for the cost of gas money and food.

11. Explore non-profit options. Your local church, YMCA or community center may have childcare programs that are affordable. Non-profit childcare facilities are able to receive state and federal grants, this allows the centers to accommodate those who cant afford care at a for profit facility. Also, many local programs offers free voluntary pre-K programs to kids ages 4 and 5.

12. Childcare and development fund. Each state has a child assistance program, funded by the federal government. This is for low-income parents or primary caregivers who have children under the age of 13, who need childcare due to work or school obligations, but cannot afford it. For more information click here.

13. Side Hustles. Find a way to supplement your income for child care costs. Sell on eBay or Amazon. Flip items in Facebook marketplace, or whatever you can do for extra cash. Remember to be creative. Think outside the box. If you love social medical and connecting with others, try network marketing.

All in all, everyone’s childcare situation is different. What may work for one parent, may not work for another. Be flexible, this will help you find the best care options for your child.

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