Managing Your Child Care Expenses

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Managing Your Child Care Expenses

According a the 2021 Cost of Care survey, weekly childcare rates for care of single child range from $612 for a nanny down to $300 for a family care center. In between, parents can expect to pay $244 for after-school care and $340 for a child care center.

Analyzing Your Needs

Costs for childcare will vary across the country. Areas that feature higher cost-of-living will also often have higher prices for childcare. The reverse is often true. The fact remains that childcare costs are significant expenses for families seeking quality care for their children while at work.

Explore the costs of daycares in your area in combination with the services they provide to the families they serve. Decide which facilities meet your needs and manage to address your concerns for the safety of your child and quality of care. Find the price that meets your needs best.

FSAs and Tax Credits

Flexible spending accounts, FSAs, like a dependent care account allows a single parent to set aside up to $2,850 tax-free each year to pay for childcare, or $5,700 for a married couple. While it will not cover all the costs of childcare for the year, it can help.

Additionally, child tax credits allow you to deduct up to $3,000 per year per child – up to $6,000 per family for childcare expenses. One thing you should note, though, is that while you can use both the FSA and a tax credit, FSA funds are applied first and count toward the tax credit.

Getting More Mileage from Your Child Care Dollars

  • Compare costs to find the best combination of service and care.
  • Review your budget to accommodate childcare expenses.
  • Analyze the potential of working from home or staying at home vs. childcare prices.
  • Explore options outside of traditional childcare facilities.

Small steps like these can yield significant results for your childcare budget and your efforts to manage childcare expenses.

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