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13 Ways to Afford the High Cost of Childcare

Are you ready for a statistic that’ll make your head spin?

One year of childcare costs close to double the average cost of in-state college tuition.1,2

So, if you feel like childcare prices are out-of-this-world expensive, you’re not going crazy—you’re right! And you’re not alone. More and more of us are trying to figure out how to afford day care because both parents work in 65% of homes that include married couples with children.3 So the need for childcare is high. If day care is part of your family’s day-to-day, let’s dig in to why it costs so much and how you can make it work for you.

How Much Is Day Care?

The average day care cost in America is $321 a week or $16,692 a year, while the average cost for in-home care (like a nanny) is $766 or $39,832 a year.4 Yikes! That cost varies from state to state, so you might be spending way less or way more. For some of you, childcare costs could add up to be the largest line item in your budget—even more than your rent or mortgage. That’s a lot, you guys. And if you’re trying to figure out how to afford childcare on a single income, you might really be feeling the stretch. But why is childcare such a huge expense in the first place?

Why Is Day Care So Expensive?

It’s no secret that day care costs are through the roof. But why? Let’s look at a few things that play into the pricing of day care centers and childcare professionals (besides inflation).

  • State labor laws: Day care centers have to hire enough adults to care for a certain number of children and maintain the health and safety of the facility. Because, well, it’s the law.
  • Location and real estate costs: Day care centers are brick-and-mortar businesses, so the business owners have to pay a building lease or mortgage as well as property taxes and maintenance fees.
  • Insurance and licensing: Day cares are licensed businesses protected by accident and liability insurance. Just like any other personal or business insurance policy, they cost money!
  • Employee training and salaries: If you want to send your kids to a quality day care, you’ll want the employees to be up-to-date on all their safety and education training. And if they’ve got top certifications for childcare, they’re also going to have higher salaries.
  • Business marketing: Just like other businesses, day cares pay to advertise their services to bring in new customers.
  • Federal aid: Many day cares received federal money the last several years as part of pandemic relief. This funding ended in September 2023, which has left a financial gap for many of them.5

Cost-Benefit: Staying Home vs. Paying Day Care Prices

If you’re planning a day care budget for two little ones, you could spend $30,000 a year or more. If both you and your spouse work full time at decent-paying jobs, you may not worry too much about that expense. But let’s say one of you makes an annual salary of $35,000. That means nearly all your take-home pay goes right back out to cover day care prices. That’s barely breaking even!

If you love what you do, working could be totally worth it. But if you’re working at a job you hate just to cover the bills, imagine what it would look like if you or your spouse stayed home to cut the day care costs. It’s a personal decision that comes down to what is best for your family and your situation.

How to Know if Day Care Is Right for Your Family

Listen, there’s no one-size-fits-all approach to balancing childcare and work. That’s why I want you to do what’s right for your family instead of keeping up with the Joneses. If it makes financial sense for one parent to stay home instead of work, embrace that in your current season. And if you and your spouse absolutely need to work but the grandparents are happy to watch the kids, that’s great too. So, how do you know if day care is a good option?


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Day care might be right for your family if the overall cost doesn’t outpace your income. Traditional day cares give kids an opportunity to socialize, play, learn new things, and explore their independence while you’re at work. And nannies or in-home childcare can provide a more personal touch with a customized schedule. Either way, you can relax knowing your kids are safe and entertained while you focus on your job.

Day care might not be right for your family if you run into budgeting or scheduling snags. For example, a full-time, live-in nanny might be more convenient for your family—but if all you can afford is an after-school program, you’ll have to make do with that option instead. Also consider if day care hours line up with your work schedule. If you work weekends, you might need to hire a nanny who can cover a flexible schedule. But remember, if the price of childcare is more than you can afford, you’ll need to find a different solution or look at how you can save money (without skimping on safety or quality care for your kids). That might look like a new job with higher pay, signing up for subsidized care, or tapping into your social circle for help. I don’t want you going into debt or losing income when you pay for childcare!

13 Ways to Save Money on Childcare

If you’ve decided paying for childcare is the best option for your family but you want to save some money, I have ideas for you. Try to keep an open mind because some of these ideas might only work if you make changes to your schedule or family routines.

1. Work from home one day a week or opt for a partial childcare schedule.

Some day care centers charge by the day instead of the week. If you can swing working from home once a week while also taking care of your kids, that could help you save a lot of money.

2. Consider being a stay-at-home parent.

If you live in a dual-income household but find that day care prices are just too much to stomach, an affordable childcare option could be becoming a stay-at-home parent. And remember, this doesn’t only apply to moms. In fact, an estimated 18% of stay-at-home parents in America today are dads.6

3. Let family pitch in.

If you have family members nearby who are willing to help, take them up on their offer. Grandparents would probably love the extra quality time and cuddles. Plus, you get the bonus of knowing your child is in great hands and getting quality care from people who love them.

4. Space your kids a few years apart so you only pay for childcare for one kid at a time.

No, this isn’t totally in your control. But if you’re in the family planning stage, it could make sense to try to space your kids a few years apart so you’re only paying for childcare for one kid at a time (while the other is in school).

5. Find seasonal day care options or scholarships.

If you only need affordable childcare during certain seasons, look at local summer camps through the YMCA or other community centers. You can also contact the day care facility you’re interested in to see if they offer any type of grants or scholarship options. It never hurts to ask!

6. Ask your employer about changing your work schedule.

If both you and your spouse want to focus on your careers but don’t want to send your child to day care, getting creative with your work schedules could be a great option! Maybe Mom is a teacher and works 6 a.m. to 3 p.m. If Dad is a police officer and has the flexibility to choose his shift, maybe he can work from 4 p.m. to midnight. Of course, this might not work for your family’s situation, especially over the long term, but it’s a great short-term option if your work schedule is flexible.

7. Look into a Dependent Care Flexible Spending Account (DCFSA).

A DCFSA is a pre-tax benefit that parents can use to pay for dependent care services, like day care, preschool and summer day camps.7 If you’re eligible for this kind of tax-advantaged account, what are you waiting for? Go save some money. Just note: Like a normal FSA, whatever money you contribute to a DCFSA must be used within the plan year. (If you don’t use it, you lose it. Yikes!)

8. See if you qualify for the Child and Dependent Care Credit.

If you have a qualifying child under 13 years old and pay for childcare so you can work or find work, you might be eligible for this tax credit. Contact a trusted tax pro if you want more information on that.

9. Check out the Childcare and Development Fund (CCDF) for low-income families and caregivers.

The CCDF helps low-income families cover childcare so parents can work or get professional training and education.8

10. Look into military childcare assistance.

Active-duty service members can apply for childcare assistance if there’s no childcare provided on base.9

11. Take advantage of your workplace day care.

Do you have on-site day care at your office? Praise-hands emoji! Many companies have started opening on-site day care centers for their employees and charging cheaper rates than you would normally find around town. And you could even play with your little one on your lunch break—how amazing would that be?

12. Try a nanny share.

Can’t afford a nanny? Try connecting with another family you know and sharing the cost of a nanny. You’ll save money, and your kids will already know their playmates. That’s a win-win.

13. Start your own in-home day care.

If you decide to stay at home to watch your own child, why not start a side business and provide great in-home care for other families who are also in need? You’ll be able to spend time with your child while making extra cash. Not too shabby!

If you’re still looking for ways to save on day care prices, here are a few more tips: Day care prices change based on your child’s age. So, even though you’re looking for ways to save on childcare for your newborn right now, those expenses will likely drop when they’re a toddler. Also, some day cares will give you a discount if you have more than one child. And you should check with your (or your spouse’s) workplace—they might offer a company discount to day cares near the office.

How to Budget for Childcare

So, the big question here is: Is it possible to save money on childcare? It’s worth a try! At the end of the day, remember: You won’t have to pay high day care prices for the rest of your life. This is just a season, and it will pass. Before you know it, your kids will be in school (cue all the tears!). You might even feel like you got a raise when you don’t have to shell out money for childcare each month!

And hey, if you want to learn how to budget better for every stage of life, check out the EveryDollar app. You can try it for free and tell your money exactly where to go—and that includes budgeting for childcare. Check it out today! 

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Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, host of The Rachel Cruze Show, and co-host of Smart Money Happy Hour. Rachel writes and speaks on personal finance, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches millions of weekly listeners with her personal finance advice. She’s appeared on Good Morning America and Fox News and been featured in TIME, REAL SIMPLE and Women’s Health, among others. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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