Top Tips to Save Money on Childcare

Welcome back! Casey from Nanny Parent Connection, here with our latest video. 

With expensive housing and food prices plus a volatile stock market, many families are looking for ways to cut down on their monthly expenses. 

Today, we’ve curated a special compilation of clips focused on practical ways to save money on childcare.

We’ve gathered some of our top tips from previous videos, covering everything from utilizing flexible spending accounts and opting for nanny shares to comparing the cost-effectiveness of daycare versus hiring a nanny. 

So sit back, relax, and get ready to learn some valuable strategies to reduce your childcare expenses!

Click the button below to watch and we hope you find it useful.

Click Here To Watch!

A transcript of the video can be found below: 

Welcome back, everyone! It’s Casey from Nanny Parent Connection here with our latest video, which is specifically for those of us looking for creative ways to save money on child care. 

Due to expensive housing, food, and transportation costs, many families are looking for unique ways to cut costs. 

Today, we’ve curated a special compilation of past video clips focused on practical ways to save money on child care. 

We’ve gathered some of our top tips from previous videos, covering everything from utilizing flexible spending accounts and opting for nanny shares to comparing the cost-effectiveness of daycare versus hiring a nanny. 

So, sit back, relax, and get ready to check out some great ideas on how to reduce your child care expenses.

Let’s kick things off with our first video, “Parents and Nannies: How to Save Money on Your Taxes”.

Here, we explore using the FSA or cafeteria plan, which allows you to pay your nanny with pre-tax dollars. 

“The dependent care FSA, or sometimes they call it a CFI plan, allows the family to set aside up to $5,000 per year and pay for nanny-related expenses with pre-tax dollars. This means that they won’t have any social security taxes, income taxes, or anything on their income, usually saving a couple of thousand dollars, up to $2,200 or so per year. 

If they don’t have access to that through their employer, they can take advantage of the child care tax credit, not to be confused with the child tax credit. The child care tax credit essentially says you can take up to $3,000 of expenses per child per year, with a cap of $6,000. You can itemize those expenses and then get a credit on your tax return, helping to offset some of your tax liability. 

So, those are the big things to keep in mind: tax obligations if you have a nanny who made more than $2,400 a year, and some things we can do to help ease the burden.”

Next, from “My Top Tips To Save Money on Childcare”, we have a great suggestion on utilizing mass transit instead of having your nanny drive, saving you on gas expenses.

‘Instead of having your nanny drive the kids to activities such as the zoo or aquarium, you can save money on gas and encourage your nanny to take mass transit. 

I guarantee you the kids will love riding a bus or light rail if they haven’t already, and it will save money on gas if your nanny uses your family’s car or even their own car.”

In our third video, “Save up to $25,000 a Year on Nanny Care”, we cover two key cost-saving ideas. 

First, we discuss the cost-saving benefits of opting for a nanny share.

“Why do people choose nanny shares? There are a lot of reasons, but the top three tend to be affordability, access to care, and socialization opportunities. For affordability, a nanny share will cost you about two-thirds of the cost of single-family nanny care.”

Moving on to “Can You Afford a Nanny? Working with a Nanny from A to Z” Series – Episode 2, Laura compares the cost-effectiveness of nanny care, nanny share care, child care centers, and family or friends. 

“Nanny care is the most expensive form of child care. Just slightly less expensive is your nanny share care, followed by child care in a care center or in-home daycare. Lastly, the least expensive form of care is usually a family friend or member providing care at a lesser cost or even for free.”

In “What Child Care Options Are Available to You? Working with a Nanny from A to Z” Series – Episode 1, we explore the option of becoming a stay-at-home parent to eliminate child care costs entirely. 

“Being a stay-at-home parent is another option, but it does come with a cost and a trade-off. Some parents decide it makes more sense for them to stay at home instead of paying for someone else to care for their child throughout the day.”

In our sixth video, “How Much Should I Pay My Nanny?”, we discuss child care costs based on the number of children needing care. 

“Let’s start with the number of children being cared for as the baseline starting point. Care for one child will start at $23 to $27 per hour. For two children, care starts at $25 to $28 per hour. For three children, care will start at $28 to $30 per hour, and for four children, it will be $30 to $33 per hour, ending with a breakdown from minimum to maximum expenses based on different care types.Next, consider the number of years of experience you would like your care provider to have. If you require a high number of years of experience, say five-plus years, you will want to add $3 to $4 per hour on top of that baseline rate. If you only require typical nanny job duties such as washing bottles, children’s laundry, and daily tidying of any dishes or spaces used throughout the day, that would not increase your rate at all. However, if you need any household existing duties such as family laundry, family meal prep, errands, dog walking, or grocery shopping, that would merit a $3 to $4 per hour wage range increase.”

Next, in “Should I Use a Daycare or Nanny for Child Care?”, we discuss the cost-effectiveness of both options. 

“Daycare can be more cost-effective than hiring a nanny, especially for families with multiple children, as the cost is shared among families using the facility.”

In a second segment from the same video, Laura examines the cost differences between daycare and nanny services.

“Let’s talk about the cost difference between daycares and nannies. Daycares typically charge a set fee per child per month, which may vary based on location and services offered. In some states like South Dakota, Arkansas, and Mississippi, the average cost to have your child attend daycare is around $6,000 to $7,000 per year. In other states such as Washington, DC, California, and Washington, the average cost skyrockets to $17,000 to $22,000 or even more annually. Keep in mind that additional fees may apply for specialized programs or extracurricular activities.”

The third segment covers the pros of daycare and discusses their cost-effectiveness. 

“Normally, a nanny will cost much more than a daycare center, but make sure that you are comparing apples to apples. Many daycare centers offer half-day and full-day programs. If you are considering a half-day daycare program, make sure that you are comparing the cost with hiring a part-time nanny instead of a full-time nanny. The same goes for full-day programs. Ensure you are comparing the full-day daycare expense with the cost of hiring a nanny full-time. In some areas, nanny care can be two to three times more expensive than a daycare center. Daycare centers provide structured environments where children can socialize with peers under the supervision of trained professionals. While they are generally more cost-effective and offer valuable socialization opportunities, they may have limited flexibility in terms of scheduling, potential exposure to illnesses, and challenges such as staff turnover and waiting lists.”

In our next video, “How to Set Up a Nanny Share”, we explore the benefits of finding a nanny share family first, impacting overall cost. 

“Here are the pros and cons of finding a nanny share family first: you can divide and conquer tasks together, each network to cast a wide net, weigh in on the nanny candidate, and share the cost from the onset, including any cost associated with an agency-style search.”

From “Nanny Bringing Their Own Child”, we look at how nannies might offer discounts when they bring their own children along. 

“Nannies might even slightly discount their own rates as a courtesy for being allowed to bring their own child along. Disclaimer: not all nannies do this. If anything, a nanny bringing their own child along will tell you they are working even harder in this kind of arrangement, and as a result, some do not discount their rate.”

Lastly, in “What Is a Mother’s Helper?”, we highlight how these helpers, often younger and less experienced, charge less than experienced nannies, providing significant savings for parents. 

“Mother’s helpers are often young adults, like students or recent graduates, who are new to child care and looking for experience. They usually work part-time and are perfect for providing that extra set of hands when you need it most. One of the biggest benefits of mother’s helpers is cost. Depending on your location, you can find mother’s helpers that charge anywhere from $10 to $24 per hour.”

In a second clip from the same video, we discuss the affordability of mother’s helpers compared to nannies. 

“Affordability is a key benefit, as mother’s helpers are typically less experienced than professional nannies, their rates are usually more affordable. This makes it a cost-effective option for many families.”

That wraps up today’s video! I hope you found these tips valuable and that your family can apply some of these ideas to save on your child care expenses. 

Don’t forget to like, subscribe, and hit the notification bell to stay updated with more money-saving tips. 

Thanks for watching, and see you next time!