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First Steps

Real Talk About
Childcare Costs

Understand the costs of childcare
and how you can save money.

First Steps

Real Talk About Childcare Costs

Understand the costs of childcare and how you can save money.

Real Talk Article Thumbnail

Economic Policy Institute reports that the average cost of providing center-based care for an infant in the U.S. is $1,230 per month. The cost in California is $1,412 a month—almost half the median income of a single mother. The federal definition of affordable childcare places costs at 7% or less of annual household income. The cost of center-based infant or toddler childcare does not meet this definition in any state, making childcare nearly prohibitive for some.

Now, thanks to passage of the American Rescue Plan Act (ARP Act) of 2021, the child care sector will receive a total of more than $50 billion in direct relief funding. This bill, based on President Biden’s historical American Rescue Plan, provides $39 billion in desperately needed child care relief funding.

Of the $39 billion included in the ARP Act, nearly $15 billion will provide expanded child care assistance through the Child Care and Development Block Grant (CCDBG) to support families and providers, including supporting the child care needs of essential workers. The remaining nearly $24 billion creates a stabilization fund for eligible child care providers.

Even with this assistance, affording childcare will be challenging. To help, some employers such as Patagonia, Apple, and Google, are stepping up to offer day-care centers for employees or to pay for backup childcare if an employee’s first option falls through. New early-childhood startups such as Vivvi offer employer-sponsored childcare. And Wonderschool, an Airbnb for daycare, helps neighborhoods launch child-care centers in peoples’ homes. But if your place of employment doesn’t offer programs like these, here are three ideas for you to consider:

1. Enlist the help of friends and family.

If you have family nearby, the easiest way to reduce childcare costs is with relative care. And although you should always offer to compensate them, the cost will likely be less than what you’d pay at a center. Another perk? A family member might be able to adjust their schedule to your needs, while a contract provider might charge additional fees.

2. Trade babysitting services.

Whether it’s with another family in the neighborhood or someone from your baby group, trading babysitting services is a cheap option that gives the other parent a break—for free. Here’s how it works: one of the other parents comes over to your house to watch your kids while you go out, and then you return the favor at another time.

3. Join or create a babysitting co-op.

A little more organized than trading one-for-one babysitting services, this option takes effort to get started and works better when more families are involved, but it's worthwhile once it is up and running. Families earn points for babysitting another family’s kids and in turn, they can spend those points on babysitting services from the group. And while you can use the services at night, depending on your child's age, it’s fun for the kids to have playdates together which sometimes means less work for the parents.

Childcare costs have the potential to absorb a large portion of a family’s budget, but with a little resourcefulness… you got this.

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