7 Ways To Save Big On Childcare

Holly Flanders started her New York City–based consultancy, Choice Parenting, to help parents find quality childcare; doing it on a budget is a priority for many of her clients. One of them, a local teacher, came to her while hiring a full-time nanny whose pay required almost her entire salary. But Flanders had a smart solution: Share the nanny with another family and split the cost. “The savings for that mom were more than $9,000 a year,” says Flanders. “Plus, the kids had a built-in playdate.”

The cost of childcare is among the biggest early-on expenses parents incur. In some areas of the country, it can account for more than 30 percent of the total family budget, according to the Economic Policy Institute (EPI). Not surprisingly, data shows that families across the economic spectrum are struggling with these costs.

But by employing these expert-approved strategies, it’s possible to find safe, healthy environments for young ones—and save some money in the process.

Do a Nanny-Share with Another Family

This arrangement allows both families to pay a lower rate for childcare than they would hiring a nanny on their own, says Flanders. It’s also mutually beneficial for nannies, since they can typically make 15–20 percent more with sharing gigs.

Consider an Au Pair

If you have an extra bedroom in your home, you could host an au pair from another country: In exchange for room and board and an affordable weekly stipend (starting around $200), au pairs can provide up to 45 hours a week of childcare for their host families.

Use a Flexible Spending Account

Check to see if your employer offers a Dependent Care Assistance Program (DCAP), which allows you to shield up to $5,000 of income from taxes to help pay for childcare, suggests Helen Blank, director of childcare and early learning at the National Women’s Law Center in Washington, D.C.

Take Advantage of Tax Breaks

Regardless of income level, all families are eligible for a tax credit of at least 20 percent on childcare expenses of $3,000 for one child or $6,000 for two or more, Blank notes. In addition, about half of U.S. states offer a tax credit for childcare expenses, though these often have eligibility requirements based on income. Check with your accountant to learn more about your state’s participation.

Look into Local Pre-K Programs

According to the EPI, many public school districts offer free prekindergarten programs at local elementary schools for kids 3–5 years old. These half- or full-day programs may be handled on a lottery basis if there aren’t enough spaces.

Stagger Your Work Hours with Your Partner

Consider whether one of you could work from 7 a.m. to 3 p.m. and the other from 9 a.m. to 6 p.m., suggests Flanders, to shorten the hours that your child needs care. You might also look into whether one of you could work a compressed workweek (full-time hours in fewer than five days).

Swap Childcare Favors with Friends

Watch a friend’s little one in exchange for your friend watching your child; or consider starting a babysitting co-op with other families.

Finding the right caretaker for your child is important. Having the right auto insurance policy for your family is also important. Visit for a free quote today.

Looking for more ways you could save? Try one of these frugal family getaways.

By Stacey Colino