How New Parents Can Budget for Child Care

by Constance Brinkley-Badgett


Related Articles

Must-Have Baby Gear for the Frugal Family

The Benefits of Breastfeeding

Make Your Own Baby Food

Having a new baby on the way is an incredibly joyous time for most families, but it can also be stressful. After all, babies require a lot of care. They need to be fed and changed and then there are the diapers, clothes, bedding, car seats, toys, and healthcare. It can be overwhelming, both emotionally and financially.

Add to that the tremendous childcare expense. The average annual cost for child care in the United States is higher than the average cost of in-state college tuition, and it can feel downright impossible, especially if your finances are already tight.

Fortunately, there are some things you can do to budget for child care. We talked to Katie Bugbee, senior managing editor of Care.com, a website dedicated to helping families and caregivers connect in a reliable and easy way. She shared some ideas on how to start saving at every stage.

"Obviously, the earlier people can start saving the better," Bugbee said. "When you have babies on the brain is a good time to start cutting back. As much as you want to celebrate the last few years without kids and enjoy them, you should also really make sure that you have enough money moving forward to live as comfortably as possible with the additional expenses."

Before Baby Comes

There are a multitude of things you can do to save money before you have a baby on the way, from cutting back on your daily $3 coffee to skipping that new outfit for work and even buying used items instead of new.

You can also save money by using a cash-back credit card for your everyday purchases. Some of the best cash-back cards can help you earn rewards on pretty much everything you buy. Of course, most of these cards require you have good credit. If you don't, it's good to keep in mind that there are credit cards for bad credit and some (like the Discover it Secured card or the Capital One Secured MasterCard) even offer cash back rewards. Even better, they'll help you build and improve your credit if managed properly. You can see what your credit situation is by reviewing your free credit report snapshot from Credit.com, which updates monthly.

Of course, you can also save in larger ways. Instead of moving into a bigger, nicer apartment or house, you should stay where you are for now. That way, you keep your housing budget reigned in while you put more money into savings for your new baby.

If you have the cash flow, set up a savings account especially for baby and consider skipping that fabulous week long vacation to St. Lucia and opt instead for a long weekend visiting friends.

When Baby Is On the Way

When you know your baby is on the way, it's time to really get busy with the saving, especially if you didn't so earlier. One option is to see if your employer offers flexible spending accounts that cover child care. If so, it could be worth setting up and reaping the tax benefits it will provide. You can also ask if there's a child care subsidy available or if there is in-office child care.

Now is also a good time to talk to your accountant or financial adviser about how best to plan for your new family addition. Are there additional tax breaks to consider?

How New Parents Can Budget for Child Care

You might also want to begin researching child care options in your neighborhood. There's a lot to consider, and your financial situation will likely dictate what choices you make. Will you want at-home care? If so, a nanny share can be a great way to cut your costs. Will you opt for a family day care center instead? Are there any in your neighborhood that offer a sliding pay scale that fits your financial situation?

"Going and getting the best care for the most affordable option is what you need to charge yourself with," Bugbee said. "I strongly recommend using message boards for that, because you probably don't even know half the daycare or nanny options in your area."

She suggested trying out sites like Bigtent.com to find child care options near your home. These are closed groups that will want to verify you live in the area, but once that hurdle is out of the way, they can be incredibly helpful, Bugbee said.

You may also want to consider Facebook groups for parents, which can also be very helpful in finding affordable child care services through people who have already used them, she said.

Find the perfect caregiver for your little ones.

When Baby Arrives & Every Day After

Now is the time to start looking for ways to save money on baby gear itself.

"The only new things you really need are cribs and car seats," Bugbee said, adding that pretty much everything else can be bought used. Be sure to check for recalls on used products, however, as well as expiration dates where applicable. The money you save can be used toward child care.

Bugbee also suggested using Amazon Mom to help save money on things like diapers, sippy cups, bottles, and more. And remember that cash-back rewards credit card we mentioned earlier? Putting it to use on essential purchases can help you save even more.

At the end of the day, you want what is best for your child. Saving money wherever you can will help you provide a better life for your child now and in the future. And teaching your child to do the same can help him/her be financially secure even when you aren't around.


Take the Next Step:

  • Babies are little. The costs to raise them can be too! Visit the The Dollar Stretcher Guide to Raising Baby on a Budget for more baby savings.
  • Give baby a good financial start on life: Compare savings and money market account rates and open an account for them today.
  • It's tough raising kids today! You need every time and money saving idea you can find. That's why you'll want to get our free weekly Dollar Stretcher for Parents newsletter. You'll find great ideas designed just for parents that will help your family 'live better...for less'! Subscribers get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE.

Share your thoughts about this article with the editor.

Stay Connected with TDS









It's tough raising kids today!

Dollar Stretcher for Parents is a weekly newsletter designed just for parents that will help save your family both time and money.


Little Luxuries
Subscribe

And get a copy
of our ebook
Little Luxuries:
130 Ways to Live Better...For Less
for FREE!



Your Email:



View the TDS Privacy Policy.

Get Out of Debt