Your child is priceless...
But paying for good child care can be a struggle. In fact, child care is probably the second largest expense in your budget after rent or mortgage payments.
By following these steps to child care budgeting, you may be able to reduce child care costs or get some help paying child care bills.
Five Steps to Healthy Child Care Budgeting:
Start thinking about child care options and cost as far in advance as you can. No matter what type of care you are considering-a child care center, care in someone’s home, or care for an infant, toddler, preschooler or school age child-finding the right child care option or help with child care expenses can take some time.
Call the Experts
Begin the search by calling your local experts – your Child Care Resources & Referral agency (CCR&R). CCR&Rs can give you the facts about child care. They can also provide a list of child care options and available financial assistance in your area.
Be a Smart Consumer
When you are at work, you want to know that your child is getting the kind of high-quality care that all children need to be health, happy and ready for school.
The Check It Out checklist in this brochure helps you evaluate the value of the child are you are buying for your family. You can use this checklist in a child care center, a family child care home (care in someone’s home), or for an in-home provider who comes to your home.
The money you pay goes toward the caregivers’ salary and on-going education and training so they can meet your child’s needs., Your child care fees also help purchase food, toys, equipment, supplies, and pays for insurance, rent or mortgage and other necessary expenses.
Once you have evaluated your options and decided on a child care setting, be an involved and informed consumer. Visit often and participate in events at your child’s program. This sends a strong message to your child and your child’s provider that you think what your child is doing and learning is important.
Find Out What Kind of Help May Be Available
The following child care assistance programs help families with the high cost of child care. Each type of child care financial assistance has different qualifications, so work with your local CCR&R and your employer's human resources department to make sure you get all the facts.
State Child Care Subsidies
Child care subsidies are available in every state to help families with the cost of child care. Usually, child care subsidies are available for working families earning low-incomes, receiving TANF, or in some cases enrolled in school. If eligible, you will pay part of the cost while the rest is paid directly to you selected child care provider.
Local government, United Way agencies, or other community or faith-based organizations sometimes provider child care scholarships.
Your employer may provide child care scholarships, discounts to certain programs or on-site child care at reduced rates. Colleges or universities may also have programs to help with child care costs.
Child Care Program Assistance
Your child care provider may offer scholarships, discounts or a sliding fee scale.
Pre-Kindergarten (Pre-K) Programs
Many states offer free or low cost prekindergarten programs for 3- and 4 year-old children. Eligibility requirements vary by state, but the goal of all prekindergarten programs is to make sure that children are prepared for kindergarten. Public schools and other child care settings off prekindergarten programs during school hours.
Head Start and Early Head Start
Head Start and Early Head Start are federally- and sometimes state-funded full- or part-day programs that provide free early education and other services to help meet the health and school readiness needs of children in income eligible families.
Federal Earned Income Tax Credit (EITC)
You may be able to lower your taxes and even get money back if you qualify for the EITC. To qualify, you must be working full- or part-time and make less than a certain amount based on family size. You do not have to owe any taxes to get a refund using EITC.
Federal Child Tax Credit (CTC)
If you have a dependent child under age 17, you may be eligible for the Child Tax Credit, which can be worth hundreds of dollars per child. The income eligibility for the CTC, is much higher than for the Earned Income Tax Credit, but you still do not have to owe any taxes to use the Child Tax Credit.
Federal Child and Dependent Care Tax Credit
If you have a child under the age of 13, pay for child care and owe federal income taxes, you may be eligible for this tax credit.
State Earned Income and Dependent Care Tax Credits
Many states offer their own earned Income or Child and Dependent Care tax credits. These credits are similar to the federal ones. In some states, you do not have to owe any taxes to get the State Child and Dependent Care credit. You can get both federal and state Earned Income and Child and Dependent Care credits.
Dependent Care Assistance Programs (DCAPs)
Your employer may offer a Dependent Care Assistance Program, which allows you to have up to $5,000 a year deducted from your paycheck on a pre-tax basis. The money is placed in a special account to be used for child care tuition reimbursement. You should never put more money in this account than you will actually spend because you will lose unspent funds at the end of the year. You cannot claim any money you put in a DCAP for the Child and Dependent Care Tax Credit.
Consider All Options
Think about what your family needs and take a close look at your budget. Are there alternatives to paying full-time child care? Is it possible or desirable to work fewer hours? If you are in a two-parent household, can you work at different times and share some hours of child care? Could you share child care expenses with another family?
The most important thing is that your family and child care healthy and happy. By planning, getting the facts and using all available resources-especially your local CCR&R – you are off to a good start in making the best choice for your family.
Visit ChildCareAware.org or call 1-800-424-2246 for more information on financial assistance and other child care and parenting resources.
Click here to view a checklist of helpful questions when considering child care!