PARENTS are making tough choices as the cost of childcare surges.
Inflation has caused the price of childcare to skyrocket across the country leaving parents strapped for cash.
Over half of the parents that participated in a survey with global poverty-fighting organization Cooperative for Assistance and Relief Everywhere (CARE), said more than 20% of their household income is being spent on childcare.
The U.S. Department of Health and Human Services (HHS) considers childcare affordable when it costs no more than 7% of the household income.
Amid the pandemic, the cost of nannies rose about 20% while babysitting and daycare costs are up by 5% to 15%.
Additionally, 43% of families said it’s harder to find childcare in general.
More than half the parents said they planned to spend $10,000 on childcare this year alone, which is more than the average annual college tuition.
Parents have attributed the increase in costs to inflation and childcare centers taking fewer children.
To keep up with the cost, families have cut back on vacations, going out to eat and leisure activities.
Many have also considered getting second jobs or quitting their job to stay at home with the children.
These rises in cost are affecting the next generation already.
The survey also found that 35% of parents say they’re less likely to have more children, with 43% listing the cost of childcare as a reason why.
However, there are ways to save money and continue with childcare.
Set your budget and research
Decide how much you can afford to spend on childcare and then look at which childcare options fit that.
Knowing if you can afford a nanny or daycare will make the search easier.
Talk to your employer
Ask your employer if they offer family care benefits.
If they don’t, it’s worth suggesting them.
Employers have been losing staff due to the rising cost of childcare, so many of them may be willing to work out a plan if it means retaining employees.
Sign up for a flexible spending account
You can set aside pre-tax dollars for childcare with a Dependent Care Account.
This is a type of flexible spending arrangement (FSA) that allows you to put aside up to $5,000 in pre-tax dollars of your income to pay for dependent care expenses.
Tax breaks and credits
Take advantage of tax breaks and credits.
Itemizing care-related expenses on your federal income return will result in a Child and Dependent Care Tax Credit on up to $600 of care-related expenses if you have one child.
It will be worth $1,200 of care-related expenses if you have two or more children.
And the child tax credit is set to revert to $2,000 in 2022.
But keep in mind that you need to meet certain income requirements to be eligible for both.
Many people are eligible for care subsidies but don’t know it.
Depending on things factors including your income and employee benefits, you could receive multiple subsidies to help cut the cost of childcare.
The Sun broke down inflation and everything that is changing because of it.
This comes as discussions continue around a possible gas-tax holiday.