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Affordable Child Care Options for Working Parents

In recent years, one of the hardest parts of becoming a parent is financial. The cost of child care, one report says, is one of the biggest items on a family’s monthly budget. With the national average cost falling between $9,000 and $9,600 annually, the expense of child care comes in higher than the average costs associated with housing, food, and transportation. According to a report by the Child Care Aware, the average cost of child care is more than that of a four-year public tuition in 28 states.

That means if you’re in a household of two working parents, it’s important to understand your affordable child care options and other ways to keep costs low.


Government assistance

To help parents out, some government agencies have taken steps to address the high price of child care. Each state, for example, receives federal funds to help subsidize child care and other forms of financial assistance for low-income families. You should also take the time to look into whether you and your child meet the requirements for Head Start and Early Head Start, a program launched in 1965 by the United States Department of Health and Human Services that provides early childhood education and parent services. Also, more and more states are acknowledging the importance of early childhood education and offering free public kindergarten and pre-kindergarten, so you should research whether that is something your state offers.

Take advantage of tax credits

One thing to keep in mind when planning for your child care arrangements is that, while expensive, there are tax benefits associated with going this route. The Child & Dependent Care Credit is meant to help reduce the cost of child care for many families with working parents or those caring for a relative who can’t care for themself. Before counting on this money, though, it’s important that you understand what types of care qualifies, how the credit is calculated, and that it will require you to pay for child care upfront.

In March, President Biden signed the American Rescue Plan Act into law. The ARP will mount a national vaccination program, deliver immediate relief to working families, and support struggling communities. The sweeping pandemic relief package includes $39 billion in child care relief funding: $15 billion in emergency funding for the Child Care and Development Block Grant (CCDBG) program and $24 billion for a child care stabilization fund. This will increase the limits for the Child & Dependent Care Credit. While the cap was previously $3,000 for one and $6,000 for more than one qualifying child, the limit is now $8,000 and $16,000 respectively. The act also bumps up the child tax credit from $2,000 per qualifying child to $3,000 per qualifying child ($3,600 for children under age 6). In the big picture, these are both important financial factors to keep in mind that can end up saving you a decent amount of money.

Consider homeschooling or in-home childcare

One option to consider in your attempts to keep your costs and anxiety low is to go with a child care option that is based in your own home. With this option, you can become your child’s caretaker, a move that will amount to a flexible and fulfilling career, or become a director of a homeschool and hire someone else to do the teaching in your home. To many, this became an appealing option during the pandemic, and there are a number of resources to help you get started with a business plan. You may end up learning that you like the control and freedom of this new endeavor. You are your child’s parent, after all, and you know that your home is a safe place, so why not take matters into your own hand? At first, this might seem like a big undertaking, but there are a number of ways to keep costs down by going this route.