April 7

How To Save Money on Child Care

Posted by on April 7, 2014 at 8:00 PM

How To Save Money on Child Care

Child care or day care is one of the reasons why having children is so expensive and a reason why (other than ridiculously high rents and high mortgages) couples both have to work nowadays to support a dual income.  With child care costing upwards to $800 to $1000 on a monthly basis, per child, it is no wonder that having more children, or even considering having children at all, is something that many couples now worry about.  In fact, the high cost of child care is one reason why many women decide to limit the number of children they would ideally like to have (source: Globe and Mail).

It is estimated that raising a child from infancy to the age of 18 will cost anywhere between $170,000 and $230,000, and it is actually the early years that cost the most due to the high cost of child care (source: Canadian Living).  Although it makes sense that child care is expensive (early childhood development is of utmost importance, especially during the years between age zero to three), it still stings to have to shell out almost half to three quarters of your income to have someone else take care of your child.

Here are some tips and ideas on how you might be able to save money on child care, reducing the stress on the family budget:

Share Child Care with a Friend

I have a friend with whom this strategy worked really well for.  She was able to work part-time the year after her maternity leave through sharing child care with a mom that she met from a baby and new mom group.  She would work while her friend took care of the two children and they would swap on the other days.  This cost them nothing for child care costs.  Considering that very young children often cost more for daycare and there aren’t many daycares that accept very young children, saving $10,000 to $12,000 during the first year after maternity leave really helped them tackle bigger financial goals they had as a family.

The following year, my friend returned to work full-time and had the time beforehand to check for daycare in a more accessible location at a lower rate.  She is now very happy with the low cost of her current daycare and happy she is back at work full-time.

Extended Family 

Although I wouldn’t call it taking advantage of your extended family like this Yahoo article suggests, having your mother or father or your mother-in-law or father-in-law take care of your children can be a win-win scenario for all involved.  In many cases, your parents or parents-in-law who are retired want to be involved in your life and want to be involved in their grandchildren’s lives.  This is a great opportunity for family to practice giving and receiving care.  Your parents or parents-in-law feel like they are appreciated and helpful, and you are able to repay them monetarily or through small gifts like a manicure, trips, or other ways to show you care.  The sense of community you can build with your new family and your family of origin can be amazing.

Don’t Forget about the Tax Credit

Childcare costs can be used as a deduction from income (not as a non-refundable tax credit).  However, mostly it has to be claimed as a deduction from the parent with the lower income.  The website Taxtips.ca has a great run through of how to use and utilize the child care tax credit for your income tax return.  The basic limit of child care costs for children under the age of six years old is $7000 as per the Canada Revenue Agency.

Explore Company Discounts

Forbes suggests that there may be corporations that have nearby childcare centres where they did the dirty work and negotiated discounted rates.  It might be worth it to check with the nearby childcare centres to see if any of them are affiliated with you or your spouse’s work.  Having child care close to work makes it much easier for your lifestyle, a win-win for your employer and your family.

Bargainmoosers, how did you save money on child care and day care?

Photo credit: Government Press Office

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