Costs for child care are higher than ever, forcing many families to spend almost a quarter of their annual income on child care expenses, according to a 2024 survey from the care provider platform Care.com. The same survey found that day care costs an average of $321 a week nationally.
If you're wondering how you'll foot the bill, consider these eight ways to pay for day care.
1. Get Quotes From Multiple Day Care Providers
Your first step in coming up with a plan to pay for day care should be to review care options and prices in your area. You'll want to weigh options based not only on price, but on other factors such as the care center's teaching philosophy, hours and what's included in tuition.
Be sure you're comparing all of a day care's costs, including tuition and fees, to get an apples-to-apples comparison. For example, if one day care provides meals and another requires parents to pack them, factor that in.
You can start your research by using online search databases, including GreatSchool.org and Care.com. These sites will present you with a list of providers based on your criteria, such as proximity to your home, hours and your child's age group. Once you've found local matches, do some more research by navigating to individual day care sites. Look for information on their staff, mission, accreditations and how to join.
It's a good idea to cast a wide net during your initial search and narrow down your options into a short list of top picks. Beyond searching online, tapping into your personal network could yield recommendations from other parents.
2. Revamp Your Budget
Do a deep dive into your household's budget to see where your money is going. The more in advance you review your budget, the better. Not only is a budget audit key to understanding how day care tuition will fit into your spending plan, but it could also give you an opportunity to look for places to scale back spending.
If you're able to cut costs now, putting any extra funds toward a day care sinking fund could help you alleviate some financial pressure once you're faced with covering the monthly bill.
Find High-Yield Savings Accounts
3. Ask Your Employer About Benefits
Many companies offer a dependent care flexible spending account (FSA). You can use an FSA to set aside up to $5,000 in pretax dollars toward qualifying care expenses, including day care. Paying for $5,000 of your child care expenses tax-free helps you lower your taxable income for the year.
If you aren't sure what child care benefits you or your partner's employer provides, reach out to your HR department. Beyond FSAs, some employers also offer assistance in the form of onsite day care and day care subsidies, for example. If your employer doesn't currently offer any child care benefits, ask if they would consider doing so in the future.
4. Look Into Government Subsidies
Child care subsidies are a benefit intended to make care affordable for low- to moderate-income families. They work by covering a portion of the cost of day care, often requiring parents to make a copayment.
Eligibility requirements for care subsidies or vouchers vary between states. To check requirements in your state, visit ChildCare.gov and use the Find Child Care search tool at the top of the screen. On the same site, you can also review other financial assistance programs for families in your state, including help with groceries or health insurance.
Learn more: Government Programs for Low-Income Families
5. Take Advantage of Tax Credits
Offset the costs of day care by claiming any credits you qualify for. The child and dependent care credit can lower your tax bill by as much as $600 for one child, or $1,200 for two children. As a huge benefit, the credit is partially refundable. That means that if it lowers your taxes below what you owe, you could receive the difference as a tax refund check.
Learn more: What New Parents Need to Know About Filing Taxes
6. Know About Options for Military Families
Operation: Military Child Care, or OMCC, is a stipend active-duty military members and their families can use to reduce the monthly cost of community child care. Eligibility for assistance typically requires that you don't have access to on-base care, either due to distance or waitlists.
There are OMCC-eligible child care options for every U.S. state, according to the program's website. You can visit ChildCareAware.org to check requirements and find eligible local day cares.
7. Ask Loved Ones for Help
If you have the option to lean on friends and family for help with child care, doing so could help you fill in gaps or create an affordable arrangement. Beyond the benefit of affordability, you may feel at ease knowing your child is with someone you already know and trust. Relatives or other loved ones may also be able to provide you with flexible care if you work irregular hours.
If you decide to go this route, you and your loved one may want to consider writing out an agreement for how and when they'll watch your child, plus what activities and meal times will look like while they're in your loved one's care. Be sure to also establish your end of the deal, including how much you'll pay and when and how you'll manage pick-up and drop-off times.
8. Tap Into Your Savings
Tapping into savings to pay for day care isn't uncommon. In fact, 35% of respondents in Care.com's survey reported using savings to pay for child care.
When in a pinch, relying on savings may be unavoidable. Ideally, avoid dipping into your emergency fund, which can place even more stress on your budget if a financial crisis occurs. If you do need to tap into emergency savings, try to come up with a strategy to replenish the funds as soon as you can.
Piece Together Your Care Plan
Coming up with a care plan that works for your family and fits into your budget may require you to get creative, combining multiple options for an affordable arrangement. In-home day cares can provide a more affordable option than day care centers in some cases. Other alternatives could include child care co-ops or swaps, babysitting exchanges, nanny shares or relying on family for care.
Starting your search with the resources available in your state can be a good first step. Beyond that, knowing what resources are available through your employer and what government subsidies you might qualify for can help you fill in gaps.