How to Save Money on Child Care
With child care costs rising, some parents may be feeling the strain of their budgets a bit more these days. However, with some resourceful planning, these costs can be easily reduced. To make your child care dollars stretch further, check out the following economical options.
Turn to Your Inner Circle
Yes, grandma and grandpa hold a special place in our hearts and in our children’s lives. So if they can help out a day or two per week or month, what better babysitters could there be? However, if your child’s grandparents don’t live in your area or your schedules are not compatible, an aunt or an uncle might jump at the opportunity to help out. Good friends and trusted neighbors are other possibilities to help curb your child care costs.
Band Together and Benefit
If you can’t find someone in your inner circle to provide some welcome daycare relief, you might want to consider banding together. For instance, a group of parents facing the same need for child care could take turns watching each other’s kids.
Babysitters and Nannies Apply Here
High schoolers, college students and retirees are often good resources for child care. Their schedules are often flexible at the times you need them, and they are willing to supplement their income with an odd job or two. Nannies may offer more involvement in your child’s life but are often salaried and more cost prohibitive. However, when the expense is shared between families, a nanny may prove to be a more stable and economical choice.
In-Home Day Care
Based out of the provider’s home, in-home daycare centers are usually more affordable alternatives to standalone facilities. Check your state’s guidelines for licensing, training and quality standards.
Change Your Schedule
If it’s okay with your employer, try adjusting your schedule so you can provide some child care hours yourself. If your employer has a policy for working from home, see if working full-time or even some part-time hours will work for you. For another option, consider using your vacation time to strategically cover a day or two a month for your child care.
Dependent Care Flex Spending Account
If your employer offers a dependent care flex spending account (FSA), you are eligible for a discount on your child care costs. With this type of account, you can contribute pre-tax dollars through your employer (who may add to the account as well) that can be applied toward child care expenses. Currently, parents who file jointly can deduct up to $5000 for their annual daycare expenditures. However, there’s one caveat: if you don’t use your funds by the end of the year, you will lose them.
Child and Dependent Care Tax Credit
Another child care savings option is to claim the child and dependent care tax credit for your children under the age of 13. If your household qualifies, the credit is worth up to 35% of your annual child care expenses with a limit of $3000 for one child and $6000 for two or more children. (Please note that in most cases you can’t use the dependent care flex spending account and the tax care credit together.) For a solution that’s right for you, consult your tax advisor. And for mortgage loan options, a refinance or a pre-approval that are right for you, contact the experts at New American Funding right now.