Nov 13, 2023

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Facing Unexpected Childcare Costs, Smart Expense Management Tips

According to the U.S. Department of Agriculture's annual "Expenditures on Children by Families" report (2020), the estimated average cost of raising a child to the age of 18 for a middle-income family was approximately $233,610. This estimate includes expenses such as housing, food, childcare, education, healthcare, clothing, and other miscellaneous costs.

Average budget for childcare expenses

It can vary significantly depending on factors such as your location, the type of childcare you choose, the age of your child, and your family's income. However, a common rule of thumb is that childcare costs should not exceed 10-20% of your household income. Here's a breakdown of what that might look like:

1. Affordable Childcare Budget (10% of Income):

  • If your household income is $60,000 per year, you would allocate $6,000 per year for childcare, which is approximately $500 per month.

2. Moderate Childcare Budget (15% of Income):

  • With a household income of $80,000 per year, you would allocate $12,000 per year for childcare, which is around $1,000 per month.

3. Slightly More Generous Budget (20% of Income):

  • If your household income is $100,000 per year, you would allocate $20,000 per year for childcare, which is about $1,667 per month.

The cost of childcare in the United States can vary widely based on factors like location, type of childcare, and the age of the child. Here is a list of average childcare costs by item, although it's important to note that these figures are general estimates and can vary significantly from one region to another:

1. Infant Care at Daycare:

  • Average Monthly Cost: $800 to $1,500 or more

2. Toddler Care at Daycare:

  • Average Monthly Cost: $700 to $1,300 or more

3. Preschool (3-5 years old) at Daycare or Preschool Program:

  • Average Monthly Cost: $500 to $1,000 or more

4. In-Home Daycare Provider:

  • Average Monthly Cost: $400 to $800 or more

5. Nanny (Full-Time):

  • Average Monthly Cost: Several thousand dollars, depending on location and experience

6. Before- and After-School Care:

  • Average Monthly Cost: $300 to $600 or more

7. Summer Camp or Summer Programs:

  • Average Weekly Cost: $200 to $400 or more

8. Private School Tuition (K-12):

  • Annual Cost: Varies widely, but can range from several thousand to tens of thousands of dollars.

9. Childcare Supplies (Diapers, Wipes, Formula, etc.):

  • Monthly Cost: Varies by the child's age, but can range from $50 to $150 or more.

10. Childcare Transportation (if applicable):

  • Monthly Cost: Varies based on transportation needs, but can range from $50 to $200 or more.

11. Educational Materials and Extracurricular Activities:

  • Varies widely depending on the activities and materials chosen, but can range from a few hundred to several thousand dollars per year.

12. Healthcare Costs (Doctor Visits, Vaccinations, etc.):

  • Varies based on insurance coverage, but childcare-related healthcare expenses can add a few hundred dollars or more to the annual budget.

Please note that these figures are rough estimates and can significantly vary depending on your location, the quality of care, and specific circumstances. It's essential to research and obtain cost estimates from childcare providers in your area to get a more accurate picture of the expenses you'll incur. Additionally, consider the age of your child and any additional services provided by the childcare provider when budgeting for childcare.

Here are 10 best financial tips for managing childcare costs

1. Create a Childcare Budget:

  • Establish a dedicated budget for childcare expenses to ensure you allocate funds specifically for this purpose.

2. Research and Compare Providers:

  • Explore different childcare providers in your area and compare their fees, services, and reputations to find the most cost-effective option that meets your needs.

3. Utilize Flexible Spending Accounts (FSAs) or Dependent Care Assistance Programs (DCAPs):

  • If offered by your employer, take advantage of these pre-tax accounts to cover childcare costs, which can result in substantial tax savings.

4. Explore Government Subsidies:

  • Investigate government assistance programs and subsidies for childcare costs. Eligibility criteria vary, so check if you qualify.

5. Tax Credits and Deductions:

  • Be aware of tax benefits such as the Child and Dependent Care Credit, which can reduce your tax liability based on eligible childcare expenses.

6. Savings and Emergency Funds:

  • Establish an emergency fund to cover unexpected childcare costs. Consider creating a dedicated savings account for childcare expenses.

7. Part-Time or Flexible Care:

  • If feasible, consider part-time or flexible care arrangements, which may be more affordable than full-time care and still meet your needs.

8. Sibling Discounts:

  • Ask about potential sibling discounts if you have multiple children in the same childcare facility.

9. Negotiate Terms:

  • If hiring a nanny or in-home caregiver, negotiate terms, hourly rates, and responsibilities to ensure you're getting the best value.

10. Financial Planning:

  • Work with a financial advisor to incorporate childcare costs into your long-term financial plan. They can provide guidance on managing these expenses in the context of your overall financial goals.


Additionally, consider Restate Homes as a resource

  • Restate Homes is perfect for expenses like childcare. Through its unique monthly disbursement feature, Restate Homes ensures that families receive a consistent stream of cash every month. This dependable income source can significantly alleviate the financial pressures families face while trying to cover ongoing childcare costs.


  • What makes Restate Homes a wise choice is the long-term financial benefit it brings. Generally, home values tend to appreciate over time. As your home's value increases, it effectively repays Restate's program without the need for you to worry about repayment. Even in the rare event of a home value depreciation at the time of maturity, Restate Homes steps in to share the loss with you, ensuring that your financial burden remains manageable.


  • By sharing in the equity appreciation of your home, Restate Homes not only offers peace of mind but also provides families with a reliable and steady income stream. This financial stability makes it easier for families to afford high-quality childcare services, giving you the freedom to invest in your child's well-being without compromising your financial security.


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