Is Day Care Putting You Into Debt?

When you have your first child, you quickly realize how much it can cost, with day care being one of the biggest expenses. Parents are looking for ways to help reduce the cost of childcare, and are willing to try even unconventional methods like using reward credit cards.

Is day care putting you into debt? What can you do about it?

The Skyrocketing Costs Of Childcare

A 2019 survey by found that nearly half of all respondents spent at least 15% of their total income on childcare. That same survey found that the average day care costs $211 a week, and 70% of all families cannot afford childcare. These rising costs are causing many to either have fewer children or wait longer to start their family.

Tax Breaks

Families might be struggling with finding a way to pay for childcare, but there are certain ways to combat it.

Depending on your filing status and income, you might be eligible for tax breaks when it comes to childcare. Your monthly payments to the day care might be deductible, and you should talk to a tax pro who can help you. Reach out to someone from a company like Turbo Tax by Intuit INTU 1.56% to see what money you can get back or save on childcare.

Alternative Work Schedules

This likely won’t work for everyone, but some parents are able to work alternative shifts to cut back on childcare costs. Perhaps the mom can work flexibly from 6 a.m. to 2 p.m., while the dad can start working in the afternoon, evening or overnight. While this might not be sustainable long term, it can be a good way to cut down on day care costs.

Nanny Share

If you have nearby friends or neighbors that also have young kids, you might want to consider nanny share. While this won’t cut your costs in half most likely, it will help defray some of the expenses. Most nannies get paid more based on the number of children they are watching, but it still can help you cut down on the costs.

Reward Credit Cards

Check with your provider to see if you can pay for your day care with a rewards credit card, like the Capital One COF 1.7% Venture Rewards Credit Card.

Before paying for day care with a rewards credit card, here are a few things to investigate:

  • Does your day care accept credit cards?
  • Does it cost extra to pay by credit card? If there is a service fee, it likely won’t be worth it to pay via credit card because your rewards and cash-back benefits will be lost
  • Can you pay off the balance every month? If you will carry a balance on your card, adding your day care costs might cause more tension and further financial stress. However, if you can pay it off in full each month, it can be a great way to earn extra rewards.

If day care is putting you in debt, try these alternative ways of paying for childcare that won’t make you go broke.