Bringing a child into the world is a blessing. However, children can be an expensive blessing, especially if you have a dual-income household. In our current economic climate, child care is often unaffordable; according to the 2018 Cost of Care Survey, child care is unaffordable for roughly 70 percent of American families. One in three families spends 20 percent or more of their annual household income on child care.
When you decide to start a family, there are a number of financial variables to consider. Planning ahead for child care, especially before your child is born, can make a huge difference with regards to your options. Here are a few steps to help you along your way:
- Learn about the cost of child care in your area. Choosing the best way to ensure your child’s care can leave you with several options. From daycare centers, preschools, private nannies, or simply being a stay-at-home parent, it’s important to research the costs for each child care option (including calculating any financial risks by having one parent out of the workforce) alongside your budget, income, and debt. Also, if you are looking to have one parent stay at home, check your yearly salary and compare it to the cost of child care in your area. If you break even or find that you’d lose money, staying at home might be a good option.
- Track your spending and make necessary cuts. Going from a life without children to a life with minor dependents can be a shift. Start tracking where your disposable income is going, and cut down on frivolous expenditures. Polam members can access the CardValet app, which can help you control your spending by setting limits within the app, which syncs to your debit and credit cards.
- Understand that child care circumstances can change, and be prepared for that. You may go from being a two-income household to a one-income household. You may have another child. Your salary may increase, or your current child care provider may increase their price. Whatever the case may be, it’s important to prepare not just for basic child care, but any hiccups along the way. Infant child care can be more expensive, but as your child grows older and into elementary school, you may find yourself shifting your budget from child care to activities and extracurriculars.