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Two Tips to Pay for Childcare.

October 1st, 2023

Planning for the Future

Childcare is one of the biggest expense that a family has. Whether you have kids, are thinking about having kids the cost of childcare is a factor. When my husband and I decided that we were ready to start a family we had lots of conversation about how we were going to pay for childcare. We both had to work by conducting research of the daycare cost in our area, it almost had us thinking that we should delay starting a family. Luckily, I have a wonderful grandmother/granny who decided to help until our son was ready to go to preschool. Of course, we paid her (my granny doesn’t play) but compared to what we would have to pay to a day care center it was peanuts. Plus, I had the bonus of having grandma living with us and grandma loves the kitchen. Enough said.


But while having my grandma was a blessing it only kicked the can down the road. We knew the cost of preschool would be expensive and it was something we had to save up for. In my area the public has free preschool however getting full day was on a lottery system. I was told 1 in 4 get in and preference is given to family in need. Half day was not an option for us, so we had to go with the private route.


My son is currently in preschool, and I'm paying over $10,000 a year for preschool. So how can you take care of your daycare expenses without being stressed out or burdened?


1) First see if your town offers free preschool that fits your needs (full day vs. half-day). If your town only has half-day and you need full-day research the programs in your town and see if you qualify for any kind of scholarship program or any income base assistance that can help you cut down on costs. Don't be embarrassed. Don't be bashful. Don't have too much pride. There’s no shame in asking, with the money saved you could use it to open a 529 for your child, build up saving, pay off debt, etc.


Another option as well is to see if there are any organizations (nonprofits, your employer, government programs) that help families pay for childcare and apply for it. I have a family member who was in a financial situation due to COVID, and he found a government program that provided help for them to send their child to daycare. So, get the help that you need.


2) If paying out of pocket like we did, set up a payment plan. Most preschool programs have some type of platform they use to collect money from parents. After we conducted our interviews and picked the program that we liked based on our values. We spoke with the financial officer and asked what our options were. We then look at the tuition and divided it by the number of months we had to make the payment in full. This allows us to see how much we need to set aside each month. We set aside the amount needed with a little extra.


However, the second year was different. We were able to pay $5000 dollars up front and set up a payment plan for the remainder. How? We kept saving the money. We did not reallocate the funds or use it for something else while school was on summer break. This allowed us to build up a significant portion of the money needed for the coming school year. Not only that but because we were able to pay $5000 up front the monthly cost for the remainder of the school year was less than what we paid the previous year and even though my son was graduating from P4 heading to kindergarten in the public school system we kept saving the same amount of money.


Why?


Our second child was on the way, and we wanted to send him to the same preschool, so we kept saving monthly into a special saving account until he was ready to go to preschool. We paid in full each year at the beginning of the year. But let’s say you only have one child with no plans for another, you can take the money you were using for childcare and plan a new goal. Such as an extravagant family vacation, to buy a home or renovate your home, increase your savings, pay off debt or increase your contribution to your retirement. The options are endless if you dare to dream.


Because let’s be honest you were doing without the money before, so do you really need it now.


My second child is currently in P4, and we have paid tuition in full for the final year and now we are turning our attention to paying off the mortgage.



Big Tip!


A big part to being financially stable is to plan for predictable expenses such as birthdays, holidays, vacations, car maintenance and major life events. You may not have a child yet, but you know that you want to start a family. Start putting away money now for childcare, why not. It may seem or feel a little weird, but we plan for other events in our lives such as death and retirement so why not plan for a child. The same goes for weddings and a house. You may not have a prospective partner or at the point in life to buy a home, these are things that you want. So, start putting money aside. When the time comes you are all set.


Let me know know how you save for big events or milestones by leaving a comment.

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