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One thing I didn't know when I first started researching daycare is there are two kinds of fees. The fixed fee (or rate) is what we pay for baseline daycare services. The extra fees can vary greatly from one daycare to the next. Here’s what you need to know to save as much as possible on daycare!
Average daycare rates nationwide
Experts state daycare rates nationwide depend on these four factors:
- What part of the country you live in (due to cost of living).
- What type of daycare you choose.
- How many children you place in daycare and their ages.
- How many hours your child/ren spend in daycare per week.
- Center daycare: Average $972 (range $380-$1,564)
- Home daycare: Average $650 (range $300 – $1,000)
- Nanny: Average $2,600 (range $2,167-$3,033)
- Preschool: Average $736 (range $372-$1,100)
- Relative care: Free or paid hourly at your state's minimum wage.
- Parent care: Here, one parent stays home and the cost is the lost salary.
Typical extra fees & discounts
Here’s a typical menu of extra fees/discounts.
Most common fees:
- Place holding fee. If you pre-register your child in advance, you may be charged a non-refundable "holding fee" to reserve your child's space.
- Initial registration fee (typically one-time per child). This is typically a nonrefundable administrative fee. AVERAGE: $10-$200.
- Re-registration fee. If you withdraw and then re-enroll your child. AVERAGE: $25-$50.
- Early drop-off and late pick-up fee. This fee applies if you need to drop your child off early or you are late picking your child up. AVERAGE: by-minute fee of $1-$10.
- Meal/snack fee. If meals and snacks are not included with tuition, you may have the option to pack food for your child or pay a fee to have this provided. AVERAGE: Varies by type; average <$1 per snack and $2-$4 per meal.
- Late payment/NSF fee. This fee applies if you are late with your scheduled payments or your payment does not go through. AVERAGE: $20-$50
- Activity/supplies fee(s). Some daycares charge a flat extra fee, others charge by the activity. AVERAGE: $10-$30
- Camera/video fees. This newer fee offers parents the option to tune in to a live camera video feed during the day to watch their children at the daycare.
- Failure to sign your child in/out or safe arrival call fee. If the daycare cannot verify your child's whereabouts due to your failure to notify. AVERAGE: $5-$10 per incident or call.
- Extra clothes/diapers/wipes fee. If your child needs more than what is supplied with the flat rate or more than what you send. AVERAGE: $1-$5 per item.
- Special needs. These fees can range from potty training to special meals.
Most common discounts:
- Extra child discount. You get a discount for each extra child you enroll. AVERAGE: 10-25%.
- Annual payment in advance. You get a discount for paying your full year's tuition in advance. AVERAGE: 10%.
Review all rates & fees in advance
Finding savings on daycare all hinges on two simple factors.
- Reading your contract in detail before you sign.
- Negotiating anything you can before you sign.
What to do:
- Read the contract and highlight any areas where discounts or negotiation options appear.
- Make a list that details everything included in your flat-rate fee as you understand it, and review the list before signing to verify.
- Make a list of questions about discounts (e.g., multiple child, annual payment, providing your own meals/supplies, opting out of special activities).
- Daycare often costs families more than a year of college tuition annually! So (even if it seems improbable or impossible) take time to calculate where your family saves most: if you pay for daycare or stay home yourself.
7 Strategies to save on daycare
Now it’s time to negotiate and save! If you do not feel comfortable negotiating, you may want to bring an experienced parent-friend or your partner with you (or send your partner to negotiate instead!).
1. Raid your own stockpile to provide extras for your child.
Your couponing/stockpiling skills can give you extra savings leverage. Stockpile snacks/meals/supplies/extras and create a special "Daycare" stockpile shelf.
2. Set alerts in your phone for penalty-based important times/dates.
If you set alerts when it’s time to pay, you can check your account and never pay NSF/late payment fees. If you set "sign in" or "safe call" alerts, you will never pay these penalties either.
3. Ask about discounts for early/full payment—even if it’s not advertised.
Daycares survive based on annual enrollment projections. So the daycare may find it worthwhile to offer you a discount if you offer to pay for the year up front!
4. Do your own research to find deals on educational materials, supplies, and activities.
If you can find a lower price, tell your daycare provider! This may lower the cost for every parent.
5. Price-compare similar special activities before opting out.
Some parents report special activities (such as dance/language classes) are more expensive at a non-daycare facility, so they are actually getting a deal on the extra enrichment.
6. Ask your employer if you can open a "childcare flexible spending account."
Similar to a healthcare FSA, this account allows you to set aside pre-tax dollars for childcare (often up to $5,000 annually).
7. Don't forget about the IRS "child and dependent care tax credit!"
Provided you can meet the requirements, this IRS tax credit can give your family's bottom line a real boost at tax time!