Don’t let pre-school or babysitting costs cause you to nurse debt later.
6 Ways to Save Money on Child Care
For the going rate of child care each year, you could buy yourself a new car.
In November, The Atlantic reported that the average American could buy a brand new Hyundai Elantra every year for what it costs to take care of their kids.  Obviously, your children are much more valuable than a car. But the comparison illustrates just how expensive child care has become.
Seventy percent of U.S. families pay rates that the government defines as “unaffordable,” says a survey from Care.com.  Nearly half of these families spend 15 percent or more of their household income on babysitting, nannies, after-school programs and pre-school costs.
But you don’t have to stay home or babysit the kids to save money. Click or swipe through to read six strategies that can help you cut the costs of child care.
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1. Compare prices by using online babysitter rate or nanny tax calculators
To budget and ensure you’ve found the most affordable option for your child care needs, you’ll need to do a little research and number-crunching.
Start with a calculator to determine how much a caregiver like a nanny  or a babysitter  will cost based on average pay for these positions and the number of hours you need them. You can gauge pay rates by the hour, week, month or year to gain a better understanding of your different child care options. Also factor in other key elements such as how many children you have to see how these facts change the expense.
For example, a babysitter just starting out may be an affordable option compared to a live-in nanny with many years of experience. Also, some caregivers may offer a discount for multiple children.
2. See if your employer offers a flexible spending account (FSA)
If you have a traditional job with benefits, there’s a good chance that your employer offers a flexible spending account (FSA).  The account can allocate thousands of dollars per year, depending on how many children you have. You can then deduct that amount from your taxable income and use it for child care costs.
The money in the FSA can help reimburse you for your child care costs too. Those permitted costs include summer day camp, before- and after-school care, babysitters, nannies, preschool and nursery school.
You can lose the money in the account if you don’t use it by the end of the year, so you’ll need to plan ahead how you allocate the money into your FSA.
3. Leverage tax breaks and credits
Tax credits provide welcome relief from the cost of child care but you’ll have to wait for tax season to get the relief. While some credits may not be dedicated to child care costs, they can still help you by reducing overall expenses.
Options include the child and dependent care tax credit, which is based on a percentage of adjusted gross income. The credit cannot be more than $3,000 for one child or $6,000 for two or more children. It is known as a nonrefundable credit, which means it can lower your tax bill to $0 but it won’t result in a refund.
The child tax credit is worth up to $2,000 per child. It may not be as valuable a tax break for those making a higher amount of adjusted gross income. There’s also the earned income tax credit for certain middle to low-income families, while a larger credit may be available for bigger families.
Don’t forget to research what your state may offer in terms of tax credits or breaks, in addition to federal credits.
4. Explore child care subsidies and programs
Childcare.gov provides a wealth of information about available subsidies and financial assistance from the government.  States receive funds from the federal government to provide child care subsidies. Other assistance includes Head Start and Early Head Start programs as well as state-funded pre-kindergarten.
Certain groups can also get additional child care assistance. For example, Child Care Aware of America helps those in the military. High school students with children can also get help with child care. Also, there are special child care assistance programs for Native Americans, Alaska Native families, and Native Hawaiian families.
Another option is the Child Care and Development Block Grant. The federal government offers these grants to states to provide for child care subsidies or vouchers to low-income families. While the level of financial assistance varies by state, it does offer some cost relief for child care.
5. Join a babysitting cooperative
Enlisting the help of other parents can be an ideal way to lower child care costs for yourself and other parents. The concept of a cooperative involves trading babysitting services. You can work with other trustworthy parents in your local community and trade caring for each other’s children. Use a website like Sit4Sit.com to help you track the time you spend here. 
Whether you have a cooperative already or are looking to start one, this online system makes it easy to manage. Parents can also start preschool cooperatives, which offer more than just babysitting.
Besides parent cooperatives, you might also consider employer-assisted cooperative childcare, which can be used for on-site childcare or a facility close to the worksite. 
The center operates in a similar way to the parent childcare cooperative but involves financial and labor assistance from an employer.
6. Host an au pair
If you need live-in child care, the cost can quickly skyrocket. However, you can lower those costs by considering the services of a live-in assistant through an au pair agency.
An au pair is an international caregiver who wants to live in another country for a certain period of time, in exchange for providing basic child-care services. The arrangement typically involves some stipend payment as well as food and accommodations in exchange for full-time child care.
Many of the au pair agencies also offer discounts if you have multiple children or you are in the military. Other au pair arrangements can be offset by employer assistance or the aforementioned tax credits.
Published by Debt.com, LLC