Overview

On top of all the planning during pregnancy, you need to plan for who will take care of your baby. This is an easy decision for some parents, and you may have the resources to have one parent stay home or a grandparent available. For other families, you need to find someone outside your family to watch your baby, like a nanny or daycare. I encourage you to think outside the box and explore all your options to find the right solution for your family. This article overviews all of your options for childcare, cost, tips, and questions to ask to select the right care provider or daycare. Plus, strategies and tools to reduce the cost of childcare.

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Planning for Childcare

Pregnancy starts a complete shift in your life that requires all kinds of planning. You start out learning about how to have a safe and healthy pregnancy. Then comes planning for the birth experience you want and your baby’s arrival. If you are working, you plan for maternity leave. On top of that, you also need to plan for who will take care of your baby. This is an easy decision for some parents, and you may have the resources to have one parent stay home or a grandparent available. For other families, you need to find someone outside your family to watch your baby, like a nanny or daycare.

Childcare Options

You have many options for childcare. I encourage you to think outside the box and explore all your options to find the right solution for your family.

Stay At Home Parent

You or your spouse may have the opportunity to stay home and take care of your child. While many see this as the cheapest option, your time and energy are not free. Ask any stay-at-home parent, and they will tell you it is the most demanding job they have ever had. One parent being home with a child also means you only have one income.

If you are not working a traditional job, it may seem easy to take care of the house, run all the errands, make all the meals, and handle all the administrative tasks for your family. In practice, caring for a newborn is a full-time job, and it can be challenging to balance that with all of the everyday tasks of managing a household. If you or your partner plans to stay home, you both need to communicate your expectations and be prepared to make adjustments as you navigate your parenting roles.

Grandparents or Other Relative

You may be able to have a grandparent or other relative care for your child. There are many benefits to this arrangement. This is inexpensive or free care. Your baby is with someone you know and trust. Plus, your family member gets to spend quality time with your child. If this is an option you are considering, make sure you communicate, so both parties know expectations and boundaries.

Cooperative

Some options can allow you to combine resources with other families. If you or your partner can care for your baby part-time, you may be able to join or create a babysitting cooperative in your community. This is a group of families who share caring for each other’s children without any monetary exchange.

Nanny or Au Pair

If you prefer to have someone care for your baby in your home, you may consider hiring a nanny. A downside is that a nanny tends to be more expensive than other options. The benefit is that your child gets more attention, and you have a lot more control. The average nanny cost in the United States is $2,776 per month. Prices can vary greatly depending on where you live, the responsibilities you ask of the nanny, and their experience level. You can check out the calculator from Care.com to get an idea of the cost of a nanny in your area.

One way to reduce the cost of a nanny is to share a nanny with another family. Although the rates will be higher for more than one child, sharing the cost with another family makes the overall price lower for you. On the same note, a nanny may make more financial sense if you have more than one child.

Another option is to become a host family for an au pair. This is a woman aged 18-26 from another country who lives with your family. An au pair assists in caring for your child in exchange for room, board, and a minimum weekly stipend. This is an opportunity for your family and your au pair to learn about each others’ cultures. The U.S. State Department sets requirements for the Au Pair Program and agencies that match families with au pairs.

Daycare

A daycare can be center-based or home-based. Center-based daycares are typically in a commercial or retail building, are required to be licensed by the state, and are run similarly to a school with a staff. Home-based daycare is in someone’s home with one or two caregivers. Home-based daycares are typically smaller and less expensive than community-based centers. You may also have community resources with more affordable options, such as at a YMCA, local churches or religious organizations, or other community centers. Daycares may offer availability for up to 12 hours per day and are typically open Monday through Friday.

The Cost of Daycare

Child Care Aware of America’s Child Care Affordability Analysis found that in 2021 childcare prices continued to outpace inflation. The average cost in the United States for full-time infant care in center-based child care was $13,085, and $9,313 for family care. The cost of child care varies a lot by state. For center-based care in the District of Columbia, you can expect to pay an average of $25,523, more than three times the average cost of $7,280 in Mississippi. For financial planning, the average monthly cost in the United States for a daycare center is about $1,100, and $800 for home-based daycare. If you only need childcare part-time or a few days per week, you may be able to reduce the cost. Daycares may also offer a reduced rate for siblings.

Finding the Right Childcare Solution

The National Household Education Survey found that 59% of children age five and younger were in at least one weekly nonparental care arrangement. Of those, 62% attended center-based care, 20% were in home-based care, and 38% were cared for by a relative. This article focuses on finding the right daycare; all the information and tips will help navigate other childcare solutions.

Licensing

Daycare licensing requirements vary by state. Most states exempt some childcare providers from licensing requirements if they only care for relatives, a small number of children, or only operate a few hours per day. States may offer different types of licenses based on the size and setting of the care. If licensing is required, a provider must meet minimum standards and renew their license periodically. Licensing regulations cover many topics, including the child-to-staff ratio, maximum group size, supervision, building safety, immunization requirements, hygiene, nutrition, and training requirements. The National Database of Child Care Licensing Regulations allows you to search state regulations and verify that a facility is licensed by your state. You should know whether a daycare is licensed. If they are not, they should be able to tell you why they are legally exempt.

Accreditation

Regardless of whether a childcare provider is required to be licensed by the state, they can choose to become accredited by a third-party organization. Accreditation standards often exceed state minimum licensing requirements. Standards are in-depth, relating to all aspects of running a high-quality daycare. There are requirements for staff qualification through education, experience, and training. Standards are set for environments to be child-friendly and developmentally appropriate. Safety standards are required for all indoor and outdoor spaces. Daycares must follow procedures to ensure the health and safety of children and staff. These in-depth requirements also include an in-person visit and inspection, require continuing education, maintaining regular reporting, and annual reporting to renew accreditation.

Several national organizations offer accreditation for daycares and early learning programs.

National Association for the Education of Young Children

National Association for Family Childcare

National Association for Early Learning Leaders

National Early Childhood Program Accreditation

Accreditation is an added layer of due diligence that shows a childcare provider is going above and beyond what is legally required.

Identify Your Priorities

The first step is to identify your priorities. The obvious top priorities are location, cost, and availability. You need a solution that is relatively close to your home or work that you can afford and that offers availability in alignment with your schedule. Other criteria may be important to you, like whether a program offers religious content and learning activities. You may want specific qualifications from staff or providers. If it is important for you to have other children around the same age, that could be a consideration. You may also have criteria that disqualify an option, like poor online reviews or a friend or family member who had a negative experience with a particular provider.

Find Your Options

The next step is to find all of your possible options. You can locate potential daycares through online searches. You can ask friends, family, or your pediatrician for recommendations. Online community groups may also be a good resource for recommendations. ChildCare.gov has an online tool to help you find child care in your area.

I recommend making a list and making notes on the daycares you are exploring. Having one place to keep notes, whether in a note app on your phone or in an Excel spreadsheet, can help you keep track of different options.

Make a List of Questions

Once you find your options, you should have a list of questions to discover the right daycare. While exploring your options, you will eliminate those that don’t feel right for your family. Here are some questions you may consider or things to look for when evaluating daycares. You will need to tailor your questions to the type of daycare you are evaluating and your child’s age. Keep in mind that although you may be looking for an immediate daycare, ideally, this is a long-term solution. You may not be concerned about some things now that could be more important later on.

The Basics

What is the cost? Is there an application fee or additional charges for supplies? Do they offer discounts for paying in advance, siblings, military, etc.?

What are the available hours? What holidays do they observe?

Is the daycare licensed? Are they accredited by a third party?

How many children attend the daycare? What is the child-to-staff ratio? The smaller the ratio, the better.

What is the immunization policy?

Do they have availability? If there is a waitlist, how long is it?

Philosophy

What is the general philosophy of the program? Make sure it aligns with your parenting philosophy.

Do they follow a particular curriculum? (For example, some daycares may be Montessori-inspired.)

Is the daycare a faith-based organization? How do they incorporate religion?

Ask how they handle challenging behaviors. How do they support children when they are upset?

Does the daycare promote parent participation? Can parents drop in and visit?

What is their policy on screen time?

Staff

What are the qualifications and experience of the staff? Do they have experience with children the same age as your child?

How long have employees worked there? It can be a red flag if there is a high staff turnover.

Have all staff gone through background checks?

Is staff trained in first aid and CPR?

For a home daycare, are there older children or adults present throughout the day?

Daily Operations

What is the daily schedule? Will they accommodate your baby’s schedule for naps and feeding?

What are the procedures for preparing bottles or breastmilk storage for children under age one?

Does the daycare provide snacks and meals if your child is eating solid foods?

If your child has allergies, can the daycare ensure they will not be exposed to certain foods?

Once your child is mobile, how often will they be in cribs, swings, or highchairs, compared to having access to freely move around?

Do children have access to the outdoors?

What updates can you expect to receive and when? You can always get updates when you drop off or pick up your child. Some centers may send parents daily, weekly, or monthly updates or recaps of feeding, diapering, and other activity. Do they send you pictures of your child?

Safety

How do they ensure safe sleeping procedures?

Is everything babyproofed?

Do they supervised children at all times?

Do they separate infants from older children?

What sanitization or cleaning protocols do they have for food prep areas, diaper changing stations, toys, equipment, etc.?

What is the policy for sick children?

Gathering Information and Answering Questions

You can use several online resources to find answers to your questions. Check the daycare’s website and read through online reviews. Eventually, you will need to get on the phone to ask additional questions or schedule an in-person visit. You can request a copy of the parent handbook. This document should outline all of the policies and procedures of the daycare. You may also ask for references that you can contact.

Schedule an In-Person Visit

Once you have narrowed down your options, the last step in your evaluation process is an in-person visit. Seeing the daycare in person and observing the environment and how the staff interacts with children is critical for getting a feel for whether a daycare is the right fit. You should know quickly whether a daycare center is a positive and safe environment when you walk in the door. Interacting with caregivers or staff in person tells you much more than you can learn online or over the phone. Many daycares limited visits during COVID-19, and at the time of this article, daycares should welcome you in person.

Waitlists

Many parents report having difficulty finding childcare. The first reason is cost, and the second is the lack of open spots. Many daycares are at capacity and have a long waitlist. If you would like to get an idea of whether daycares in your area have availability, call a few in your area and ask if there are openings and how long their waitlist is. Many parents will start searching for a daycare when they are pregnant to ensure they apply early and can get a spot for their child when they need childcare. The same goes for preschool; you will need to plan if you have a particular preschool you would like your child to attend.

Most daycares will require an application fee to be on the waitlist. If you are in a position to pay multiple application fees, you may consider joining more than one waitlist. If you know other families who have children in a daycare you are interested in, it never hurts to ask them to put in a good word for you. You may also consider periodically checking in to see whether spots have opened up and where your name is on the waitlist. If you are nearing the date, need childcare, and do not have a placement, you may need to consider a temporary backup plan.

Reducing the Cost of Childcare

The U.S. Department of Health and Human Services recommends that child care should cost no more than 7% of a household’s income. In reality, the cost of childcare will exceed 7% of many families’ incomes, especially for single parents.

Childcare can be very expensive. There are some ways you may be able to reduce your cost. If you, your partner, or a family member can care for your child part-time, you can reduce your daycare expenses. You may get a discount if you pay for care in advance or if you or your partner are active military. There may be lower-cost daycare options through your employer or community organizations like a YMCA or a church. Some states also offer programs that subsidize the cost of childcare. There are also some strategies to save on your taxes for childcare expenses.

Child and Dependent Care Credit

If you are paying for childcare, you may be eligible for the child and dependent care tax credit. A credit can reduce the amount of tax you owe or increase your tax refund. These differ from deductions that reduce the amount of your income before you calculate the tax you owe.

In 2022 the maximum credit is $1,050 for one child or $2,100 for two or more children. This is calculated as up to 35% of $3,000 of qualifying expenses for one child or up to $6,000 for two or more children. Unfortunately, most parents will pay well above these limits and can only receive a credit for a portion of childcare expenses. Eligibility varies depending on your earned income, and the tax credit is reduced at certain income levels. You can read more info on the IRS website.

Dependent Care Flexible Spending Account 

A dependent care flexible spending account is an employer-sponsored pre-tax benefit account to pay for eligible childcare expenses. This can include a daycare, a nanny, or au pair. For 2022, the dependent care FSA limit returns to $5,000 per household.

You estimate your dependent care costs for the year. If you plan to put your child in daycare full-time, you will likely be paying more than the contribution limit. You divide the total by the number of pay periods you have, and those funds come out of your check pre-tax. You can expect about $208 deducted from each paycheck if you max out the account and your employer pays you twice a month. When you incur an eligible expense, like monthly tuition for daycare, you submit that to your human resources department or whoever manages the FSA plan, and they reimburse you. This account saves you money because you do not pay taxes on this amount.

Unlike a health care flexible spending account, you can only be reimbursed up to the amount you have contributed. If you elect $5,000 and only spend $2,000, you lose that extra $3,000 at the end of the plan year. Please consult your employer or a tax professional with any questions about a dependent care flexible spending account.

Finding the Right Solution

I encourage you to think outside the box and explore all your options to find the right solution for your family. It may take time to explore options, make phone calls, conduct interviews, or visit in person to find the right solution. Due to limited availability, it never hurts to start this process early.

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