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Financial Planning for Families: Childcare Costs, Part 2

As discussed last week, sometimes childcare simply costs too much. Based on their earnings, impoverished families can’t pay for someone to care for a child. And middle-class parents find they have little left over or are in debt each month after they have covered housing, transportation, and food costs because daycare fees tipped the scales on the delicate economic balance they had achieved before having children.

So what are parents to do? Many articles we found include examples of two-parent families, while mentioning that single parents struggle even more. In a previous post, we wrote, “Stay-at-home Moms: Prevent Loss of Income with Financial Planning” but of course that advice really encompasses all parents.

Some parents feel trapped and aren’t sure how they can improve their situation. It is up to you figure out what will help you provide for the present and save for the future. A Fee-Only financial planner can help you examine your finances and map out a more stable financial future.

Save and Spend Carefully. This advice applies to all adults, of course. You cannot only save some of your earnings; you can also look for ways to spend less money on the things you need and the things you want. If possible, try to set aside pre-tax dollars for childcare using a flexible spending account or dependent care flex plan.

Try Alternative/Flexible Work and Childcare Arrangements. If working a 9 to 5 schedule with your child in daycare during that time is the only feasible option for you, then make the best of it. But if you would prefer and can make other arrangements, by all means, do so. If your employer is willing, you can save on childcare by telecommuting on certain days. Others find co-work spaces that allow them to bring their children. You can also look for flexibility in childcare arrangements such as sharing a nanny with another family, joining a childcare co-op, or getting a teenage neighbor to help after school so you don’t need to pay for Aftercare.