Tips to help manage the costly burden of childcare

It’s no secret that the cost of childcare is a growing concern for many parents and soon-to-be parents. In fact, in 38 states and Washington, D.C., childcare has become more expensive than public college tuition. Depending on where you live, the average cost for an infant ranges anywhere from $572 per month (the average in Mississippi) for childcare to $2,363 per month (the average in Washington, D.C.).* This can be a significant percentage of a household’s monthly income.  

If you’re a parent or thinking about becoming one, you may be wondering how you can afford all the costs that come with having a child. Here are some tips to help make the cost of childcare more affordable.

Understand your childcare options 

Paid caregiving

There are many types of paid caregiving, and the best fit and affordability varies by family. One of the most common options is a day care center. Another option is a family childcare home, in which a provider, oftentimes a parent themselves, cares for children in their private home. States have different laws and regulations when it comes to caregiving facilities, so you may want to understand the differences in licensing/regulations for each. 

Another option is having an in-home babysitter or nanny, in which a care provider looks after your child in your home. Some people also nanny share, where two families hire a nanny to watch after their children. The cost for a nanny can vary widely depending on location and experience, but it can become a more affordable option if you're nanny sharing or have multiple children needing childcare. 

Stay-at-home parent 

If paid caregiving is too cost-prohibitive, you may want to consider having a parent take a step back from work (either partially or fully). While it's still more common for women to take this step back, an increasing number of dads are becoming full-time caregivers. Regardless of who takes on the responsibilities, be aware that if you go this route, you’ll want to account for any loss of income and benefits in your budget.

Family/friend caregiving 

Having a relative or trusted friend care for your child can be a cost-effective alternative to paid or self-provided childcare. However, their availability or willingness may be limited, and you may have to look elsewhere. If they are available and willing, be sure to talk to them about if they expect reimbursement for their time or resources.

While this option can be a wonderful opportunity for your child to build and strengthen relationships with loved ones, there is no obligation for your relative or friend to continue caregiving should their availability or circumstances change. If you decide to go this route, it may be a good idea to have a backup plan in case plans change. 

Combination 

It’s common for parents to use a combination of these options to fit their unique needs and preferences. For instance, your child could go to daycare for half the day, and your parent or in-law takes your child for the rest of the day. This type of combination can help reduce the overall cost of childcare by relying on family for part-time help. Take some time to explore every option available to you to find the combination that works for you, your child and your budget.

Planning for childcare costs

Start early 

If you plan to use paid caregiving, particularly day care, look into options as early as possible. Many areas of the country have a shortage of childcare options, resulting in long wait-lists and high tuition. However, the earlier you start looking for childcare, the more options you may have and the more likely you will be able to find one that fits your budget and family’s preferences. 

Get thrifty and review your budget 

Childcare isn’t the only child-related expense that has been on the rise, and other child-related costs can compete for room in your budget. However, while the cost of new clothing and toys has increased, used items are still a great cost-effective option and can be relatively easy to find in good condition since many items for young kids are only needed for a short amount of time. You can ask friends or relatives for clothes or toys that their children have outgrown or visit a secondhand shop for gently used items. You can even join a “buy nothing” Facebook group in which people in your area give away items they no longer need for free. 

But because kids are expensive no matter how thrifty you are, it’s also a good idea to spend some time on your budget. If you don’t already have one, now is the time to make it, and if you do, you may want to review it for areas where you can cut back. You may also find there are natural areas where you’re spending less (e.g., you may not travel as much in the early years).  

Utilize employer benefits

Some employers offer a dependent care flexible spending account (DCFSA) to help cover costs with pretax funds. Similar to a health savings account (HSA), a DCFSA is a pretax benefit account that can be used to pay for eligible childcare services, such as summer camp, day care, preschool or after-school programs. Contact your employer’s human resources department to see if you can take advantage of this type of account. In 2025, the maximum contribution for a DCFSA is up to $5,000, and the maximum contribution for 2026 will be up to $7,500.

How Edward Jones can help

Your Edward Jones financial advisor can help identify strategies to help financially support your growing family while helping keep your other goals on track.