Guide to Child Care Options: Costs & Financial Resources

Parents want the best for their children and do their best to provide safety, joy and learning at all age levels. They also want to know these needs are met when they can’t be with their children. Most parents need child care at some time, but deciding who will care for your child is complicated and personal.

From traditional to innovative, there are many different types of child care available and several factors to consider when making a choice for your family. What’s more, child care is expensive, plain and simple. This guide was created to help parents make informed decisions about child care and understand the financial implications of your decision. With a structured approach, asking the right questions and assessing your individual needs, you can find a child care provider that works for your family.

Child care is one of the top expenses for new parents, but varies considerably by location, age of the child, and child care type. Younger children require more attention and therefore cost more.

Child Care Aware of America's latest report on child care costs found the national average price is between $9,100–$9,600 a year for one child. That number does not reflect what most people pay but is an average across all states.

It's essential to look at child care costs based on age and type, particularly for children aged birth–4 years. In a child care center, the median price for an infant is $11,896 compared to $9,254 for a 4-year-old. The cost is lower for in-home child care, meaning licensed child care in a private home rather than a center.

The cost varies more when you consider location. Child Care Aware has a state by state breakdown of the annual cost of child care in the U.S. and the percent of a family's income. It found the yearly price of infant care in Michigan is $10,287. It's $16,452 a year in California, which is about 17% of a California family's median income.

There are also significant differences within individual states as well as metro areas. Child Care Aware looked at Seattle and found a dramatic difference when comparing costs inside and outside the city limits. Families inside the city paid more than $5,000 a year for a child care center and $2,000 more a year for family child care.

As you begin your child care search, you will quickly discover there are many different options available. Each has its own pros, cons and cost. It's best to consider your individual needs to find an option that fits your child and your budget. Also, many families use a combination of these child care choices and more non-traditional options. The figures below are from Child Care Aware and Care.com.

• Average Cost: $4,239 a year.
• Health and Safety Requirements and Regulations: Licensed by the state and be up to date on inspections; Background checks for staff and volunteers.
• Pros: Social development, educational activities, access to equipment for physical activity.
• Cons: Limited personalized attention, limited trust in providers.

After-school care serves older children who are spending most of the day in school. This care covers the gap between the end of the school day and the end of the workday. Because of the limited time in care and the children's age, this option is more affordable than private in-home care. Most communities offer a type of school-age care option such as recreation centers, churches and a YMCA or Boys and Girls Club.

• Average Cost: n/a.
• Health and Safety Requirements and Regulations: No regulations or oversight but you should personally require first aid and CPR training.
• Pros: Personally trusted provider, individual attention.
• Cons: No educational training, limited social development.

The cheapest option for child care is to rely on family. Most parents rely on some degree of family care during the year, but fewer rely solely on family members for regular child care. While many family members like grandparents may not ask to be paid, it’s good to have regular discussions about payment arrangements and schedules. While these conversations may be difficult with close family and friends, you should also discuss expectations surrounding education, discipline and screen time.

• Average Cost: $12–$20 per hour.
• Health and Safety Requirements and Regulations: No formal regulations, but all caregivers should have first aid and CPR training.
• Pros: Individualized attention, children stay in your home.
• Cons: No educational training, limited school preparation and educational activities.

Babysitters are typically used on a short-term basis and may not be available for a regular weekly schedule. These caregivers tend to be less experienced and younger, which makes them more affordable. Hourly rates will vary significantly by location, with midwestern states and rural areas paying much less than coastal and urban areas paying more. Consider a background check if your babysitter is an adult and will frequently be visiting.

• Average Cost: $7,500 a year.
• Health and Safety Requirements and Regulations: Licensed by the state and must be up to date on inspections; Background checks for staff; First aid training.
• Pros: Social development, access to both physical and educational activities.
• Cons: Limited personal attention, limited provider educational training.

In-home daycare is also referred to as family child care homes. These providers care for small groups of children and tend to work from their own homes. They should be licensed by the state and meet local safety requirements. Ask the provider for the staff to child ratio and confirm all adults in the home have had a recent background check.

• Average Cost: $565 a week.
• Health and Safety Requirements and Regulations: No government oversight; parents should require first aid training and a background check.
• Pros: Individual care, children say in your home, may offer additional in-home assistance.
• Cons: Education and training levels vary, limited social development.

A nanny may be a good option if you are looking for personalized, hands-on care. Unlike babysitters, a nanny will have more training and follow a more organized, long-term schedule. Educational experience and training will vary depending on your needs and affordability. When selecting and agreeing to a nanny set expectations, including time off, overtime and duties outside child care like transportation and housework.

• Average Cost: $401 a week plus room and board.
• Health and Safety Requirements and Regulations: Follow U.S. au pair requirements, first aid and CPR training.
• Pros: Individual attention, educational development.
• Cons: Limited social development, limited indoor and outdoor equipment for physical development.

There is one significant difference between a nanny and au pair: An au pair is from another country. The U.S. State Department oversees the J-1 au pair program. It requires host families to supply room and board as well as a stipend. Care providers must hold a J-1 visa and work with an approved program. If you are considering an au pair, it's best to work with a licensed agency that understands the U.S. requirements and adheres to strict standards.

• Average Cost: $9,715 a year.
• Health and Safety Requirements and Regulations: Licensed by the state and be up to date on inspections; Background checks for staff; First aid training.
• Pros: Trained and experienced providers, child’s social development, preparation for kindergarten.
• Cons: Less individual attention, limited trust in staff members and providers.

Child care centers provide care for children of all ages in traditional commercial properties. Staff members oversee larger groups of similarly-aged children, offering group-based activities and educational opportunities. There are many different child care centers, including pre-K and faith-based programs and corporate providers. While these centers tend to have the most regulations and inspections, parents should insist on recent first aid training, background checks and low staff-to-child ratios.

While the cost of child care is high, it is not insurmountable. It's a good idea to get on a budget and take early financial steps before your child arrives if you think you might need child care in the future. You can also look for ways to cut your costs with assistance programs from employers, schools and the government. Child Care Aware reports that only 1 in 7 children who were eligible for child care subsidies received them, so you may qualify even if you don’t think you will. It's always better to ask for help with childcare.

Each state allocates money to help subsidize child care for low-income families. These subsidies enable parents to have their children cared for while earning money to provide for their families. These programs vary by state and include vouchers, fee assistance or other program names. For example, in Colorado, you can apply for the Colorado Child Care Assistance Program if you make less than $48,000 annually for a family of four. You can then find a qualified child care provider who works with the county to pay your expenses.

Head Start and Early Head Start are programs designed to prepare children for school. The program covers kids from birth to 5 years old. Eligibility is based on income and limited to the families at or below the federal government's poverty level. To find if you qualify or a program near you, you can check the U.S. Department of Health and Human Services program website.

A growing number of states now offer pre-kindergarten programs for children between 3 and 5 years old. These programs focus on preparing children for school. Depending on your state, they may offer both half-day or full-day programs. Many are low cost or free child care. Eligibility may be open to all income levels, so check availability in your state.

Military members and veterans may be eligible for Department of Defense fee assistance. This assistance is customized to each branch of service and is managed by Child Care Aware. To find out what programs are available based on your branch or agency, view the details from ChildCare.gov.

If you are of high school age and a new parent, there is child care assistance that can help you finish your education. Some schools include child care at the school or offer financial aid. Each state has its own subsidy plan for high school students. Contact your local Child Care Aware Resource and Referral agency to learn what is available for you.

Many colleges offer on-site child care programs for faculty and staff. Students may also utilize this resource. These programs typically require payment, but discounts are available. Contact your college or university to get the specific details.

Some nonprofit organizations know child care is essential to family welfare and financial stability. Many offer financial assistance to help local families find child care. Individual child care providers also have slots set aside for families who need care at a lower cost. If you are struggling to pay, ask your provider if they offer scholarships and check the Child Care Aware Resource and Referral page for available scholarships through a local nonprofit.

The U.S. government knows the cost of child care is one of the most significant expenses facing families. It offers two different types of tax credits to lower your tax liability. The first is the Child and Dependent Care Tax Credit, which is available for families who need child care in order to work or look for work. There is also the Earned Income Tax Credit, which is open to families earning a lower or middle income.

Employer-assisted dependent care is specific to individual employers. These programs allow you to put a portion of your paycheck into a savings account set up only for child care expenses. A dependent care FSA account will enable you to put $5,000 of your paycheck toward child care expenses before taxes. The FSA saves you money on your annual taxes. FSA plans require you to spend the money only on dependent care, and it must be used within the plan year.

Many employers understand the need for child care for their employees to complete their work. Some human resources departments add benefits for working parents to help them cover the cost of child care. Ask your HR department what is available. Options tend to include on-site child care, partnerships with local providers or payment assistance.

Sliding fee scales set payment based on income rather than a fixed amount. Some providers offer families a lower price if they have a lower income. This sliding scale is available from individual child care providers. Ask your provider if they offer this option, or contact a Child Care Resource and Referral agency near you to find a provider.

Like many businesses, child care providers will offer a variety of discounts. When reviewing providers, ask about any discounts they offer. Most provide a break for siblings, allowing you to pay a lower price when you have more than one child enrolled.

The coronavirus pandemic significantly impacted everyone's lives. This impact includes dramatically affecting child care safety, cost and availability. The Centers for Disease Control notified all child care programs they should have a plan to protect staff, children and families no matter the level of transmission in their community. State restrictions and regulations limit your options, so review the latest COVID-19 and child care information from your state.

Safety should come first as you consider child care options during the pandemic. This decision is difficult for every parent, and you should make a decision based on your individual situation and needs. The CDC created a school decision-making tool for parents to help you understand your family's risk, education options and how to prepare for a safe return.

Working from home is not an option for many parents, and we need outside child care. The CDC is providing guidance for child care programs to open safely, including screening children upon arrival, implementing social distancing strategies and requiring masks for older children. Face coverings, including masks, should not be put on babies and children under the age of two because of the danger of suffocation. As a parent, it's best to know and understand these guidelines so you can do your best to ensure your provider is following all the necessary safety precautions.

If you use in-home child care such as a nanny, neighbor or family, you are responsible for implementing and setting your home's safety standards. Familiarize yourself with the CDC's guidance for childcare and implement the strategies you can. Ask your child care provider to isolate themselves, limiting interactions with others outside of your household. You may also need to require a daily temperature check and ask them to wear a mask in your home. According to health experts, asking a grandparent to continue child care responsibilities may put their health at risk.

If you can work from home and your children are older, remote learning options may be available. These school-run programs vary by district. Each district is doing its best to balance safety and reopening, offering in-person lessons, remote or hybrid options. Remote learning is not ideal but provides the security of staying home and limiting your contact with the virus. It is more comfortable with older children who understand technology and can manage their time.

There are many alternative sources of child care available beyond the traditional centers, nannies and family members. Not all of these options are available across the country and to all income levels but are worth exploring as you research the choices near you.

Coworking spaces are gaining in popularity, and one new benefit they may offer is child care. For example, the Detroit Parent Collective is a co-working space for families. It offers a part-play, part-classroom setting for kids as parents work in the same building.

The YMCA is known as a community resource center, and its resources include child care. YMCAs across the country offer both full-day and partial-day child care. It also provides in-home caregivers opportunities to connect and promote education and socialization kids may not receive otherwise.

Camps are a great way for children to embrace new hobbies and meet new friends. There are a variety of day camp options, including sports-themed, STEAM-based and creative-focused. Are you looking for a good day camp for your child? Ask fellow parents for their recommendations or even the local librarian.

While not common, a few high schools offer a unique opportunity for both preschoolers and high schoolers. Little Dukes preschool, operated out of York High School in New York, is one example. The preschool teachers are high school students enrolled in child development and looking to follow a career in early childhood. It's both affordable and instructive.

Many parents are in the same stressful position of trying to find child care for their children. One of your best resources may be your neighborhood. If there are three of four kids in the community around the same age, it might be time to start your own collective. Can you watch the kids one day, another parent the next? Or can you all pitch in for a nanny to care for all four kids two days a week for a discounted price? Work together to find a schedule that fits for the neighborhood.

Sometimes there is no child care comparable to the care of a grandparent. While not everyone is lucky enough to have that option, there are grandparents available. The Bethlehem Intergenerational Center offers both senior and child care. The older generation serves as a resource to assist in child care alongside professionals, benefiting both generations.

The process of deciding on child care can be overwhelming and stressful. MoneyGeek asked for advice from professionals to answer common questions. MoneyGeek reached out to an early childhood development professional and a financial advisor for advice on balancing the necessity of quality child care with affordability.

The best way to find help paying for child care is to look for resources near you. Each state has a website dedicated to finding quality child care and paying for it. Find the link to your state to begin your search for affordable child care.

Centers for Disease Control and Prevention: As parents make difficult decisions amid the coronavirus pandemic, the CDC has resources to make safe decisions about their child care options.

Child Care Aware: With research, experience and resources, this agency provides the most help in discovering child care options and affordability. It oversees an annual report on the cost of child care in the U.S. and complies with many of the resources available to families looking for assistance paying for child care.

ChildCare.Gov: This is a federally run website to provide information on choosing quality child care and a database to state-run child care financing options.

Harvard Center on the Developing Child: This guide lays out the importance of early childhood development and how to support children and families during this critical stage.