It's not a secret that raising kids is expensive. But child care costs have reached a level where they're driving many parents out of the workforce.
Nearly half of U.S. families now spend 15% or more of their household income on child care, according to Care.com, with two-thirds of parents saying they're spending more on child care now than they did the previous year.
It currently costs $211 a week, on average, to enroll an infant in a day care center. The average weekly cost for a nanny, meanwhile, is a whopping $596.
Even parents with school-aged children -- those who only need coverage for a few hours a day to work -- are feeling the strain. The average cost of an after-school sitter is now $244 a week.
These costs aren't just eating into families' budgets; they're hurting their careers. A good 26% of parents have switched from full-time work to part-time to save money on child care, slashing their household income in the process. And 25% of moms have left the workforce altogether.
If you're struggling to afford child care, there are a few things you can do to ease the burden ever so slightly. Otherwise, you might soon find yourself putting in your two weeks' notice.
Making child care more manageable
Childcare may be an unavoidable expense for many families, but there are a few things you can do to better grapple with those costs. First, set up a solid household budget so that you're able to see just how much you can afford to spend. It may be the case that you need to cut back in other non-essential expense categories, like leisure and activities, to pay for child care, which is most certainly a necessity if your goal is to keep your job.
At the same time, look at opening a dependent care FSA (flexible spending account). These accounts let you contribute up to $5,000 a year in pre-tax dollars to pay for qualified child care expenses. If you max out your account each year, that's $5,000 of earnings the IRS can't tax you on, and while that won't lower the cost of paying for child care, it'll lower your tax bill.
Now you should know that dependent care FSAs work on a use-it-or-lose-it basis. If you put $5,000 into your account but only rack up $4,000 in eligible child care costs, you'll forfeit the remaining $1,000. But given the figures above, most families who need full-time care have no problem running up a $5,000 tab, especially when there are multiple children involved. And in case you're wondering, summer camp is a valid expense for FSA purposes, as it's many families' only option when school isn't in session.
It's unfortunate that child care has become such a burden for a large number of U.S. families. If you're one of them, budget strategically and aim to pay for some of your expenses in a tax-advantaged fashion. And also, talk to your employer about flexible work options. A little leeway could help you reduce your expenses and pocket a touch more of your hard-earned wages.
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