New parents find out every year, it’s not enough to buy the diapers, put together the crib, set up the bursary and start saving for college. That is because costs of child card are often overlooked. A Care.com survey on child care preparedness has revealed what expectant parents need to know and probably don’t.
1. Child Care Costs Are Often Ignored
Most families may not think about the adding the cost of child care into their budget before their baby is born. Even if they do, the numbers might not be realistic to what they will spend. It was found that 75% of families interviewed said that they were “surprised or overwhelmed” by the cost of child care.
2. Ignoring These Huge Costs Is a Big Mistake
The cost of child care can be the largest family expense per year depending on your region which can determine household costs.
3. It’s Like Paying for College – Twice
The average costs of child care and average costs of in-state tuition plus fees at public colleges compared could be shocking. Child care can add up to be close to or more than college expenses.
4. Costs Vary Dramatically by Type
Care.com broke down the average nationwide costs for four types of child care. Yearly expenses for one infant:
• Family child care program: $6,604
• Day care center: $9,672
• Au pair: $18,720
• Nanny: $24,544
5. Costs Vary Widely by Location
The graphic below shows how much the average married couple’s median income is spend on infant child care a year.
Source: Childcare Aware of America
6. Care is Far, Far Cheaper Outside the City
Like other things, child care can be less expensive in rural areas than in cities. However, the difference is remarkable compared to other goods and services. In certain states, the average costs of child care can be twice as expensive if in urban areas as it is in rural ones.
7. Your Employer Wants to Help You With Child Care
"Almost two-thirds of employers found that providing child care services reduced turnover," the Childcare Partnership Project said. And a study by the Childcare Action Campaign found that U.S. companies lost $3 billion annually, "as a consequence of child care-related absences."
8. The Help Is Appreciated, but Not Necessarily Well-Used
Most parents who use employer-sponsored child care benefits say they are less stressed, and has improved their balance between work and life, according to Care.com. When it comes to Flexible Spending Accounts, not very many take advantage to help with costs.
9. Most of American Families Get Tax Breaks
Most families take advantage of some sort of tax break. FSAs allow employees to put away up to $5,000 in pre-tax dollars for child care. If your employer doesn’t offer an FSA, you can look into Child Care Tax Credit, which could help offset costs.
10. ‘Free’ Caregivers Play a Large Role
There are creative ways to reduce or eliminate the cost of child care. Some have grandparents, another relative, friends, or neighbors supervise their children. You can have your child go to a day care some days and have someone you know watch them other days. Having at least some free child care is better than none.
Learning about these facts and figures can help you better budget for child care and help to know where to look for less expensive options. For more information contact a Wealth Advisor at iWealth Global Management. You can reach us at 813-321-1572 or by email at firstname.lastname@example.org.
Source: Stoffel, Brian. "10 Surprising Facts and Figures About Child Care Costs." DailyFinance.com. N.p., 25 Aug. 2014. Web.