The cost of three kids in daycare

The cost of daycare for three kids is crazy.

The cost of daycare for three kids is crazy.

Photo by Andi Leigh Photography – our favorite family photographer in Nashville, TN

Having three kids so close together in age was important to us. We wanted our kids to see each other as a resource as they went through school together and later in life as friends. Three kids under the age of four, though, means either I stayed home to save on the cost of childcare or we figure out a way to afford all three of them in daycare.

We’ve always believed daycare was the best place for them to learn and grow. However, the cost is considerable. The average cost of a week of childcare in our area is over $200 (this is my estimate based on my research). We chose to put them into a daycare with more resources and higher standards for their staff (each teacher has a 4 year degree and goes through extensive screening). Due to the extras, we spend over $700/week in childcare. That works out to over $36,000 of our income each year.

Given that most women make $.80 on the dollar to men and the considerable costs of childcare, it’s no wonder most women (not men, typically) will opt to exit the workforce and stay at home with their children. So, why did I choose to stay in the workforce? For us it was a combination of my own sanity and what we felt was in the best interest of our children.

First, my sanity. I love my children, of course I do. However, I’ve always known that staying at home with them all day, every day, without adult interaction would drive me insane. My happiness thrives on my ability to interact and socialize with others. Having a job also gives me a sense of purpose and contributing to my family.

After being laid off while on maternity leave, I worked for myself for about a year and a half. Though incredibly flexible, it was isolating. When given the choice to work and bring home a paycheck to cover the cost of daycare, I jumped at the chance mostly due to the advantages personally.  Reentering the workforce was as much of a personal preservation decision as it was a financial one.

As I weighed the options I came up with a list of the personal advantages of me working. They are:

  • Social Interaction
  • A feeling of satisfaction contributing to the family financially
  • The ability to save pre-tax income in a retirement account (a company benefit)

The second major reason I mentioned earlier was that we felt it was in the best interest of our children to send them to daycare. Why? I frequently ask myself why I can’t be the primary educator of our kids. The truth is, in theory, I can. I know I’m intelligent enough and I certainly would put enough effort into researching best practices. However, I’ve learned throughout my life I need external people pushing me to complete things and to be on the ball.

As a mom, I’ve found many short cuts and ways to do things on the fly. Though this is handy, it doesn’t best serve my kids. At daycare, they focus on learning things, many of which I was completely unaware my child was ready to learn. All three of my kids have come home singing the “ABC” song and “Twinkle, Twinkle” before I even knew they’d be ready to learn it. They can count in English and Spanish far before I’m aware they should. They learn to play well with other children. Most importantly, they learn to be away from mommy and daddy.

When looking at this list of advantages, it was also clear to me daycare was the best choice for our children:

  • Taught by college educated professionals in a classroom environment
  • Social interaction with children from other homes and other value systems
  • Consistent schedules
  • Exposure to material I was not aware they would be ready for

I realize, however, that sending children to daycare is not preferable for every family. These advantages applied to my family and outweighed the advantages of keeping them home with me.

According to the Department of Labor Women’s Bureau, women’s participation in the labor force is 57.7% versus men’s participation which is 70.1%. Many people have speculated that this discrepancy is due to women dropping out of the workforce to care for their children. While I can appreciate that many women are highly capable of continuing to work but choose to do this, it was not the right choice for me.

Is it the right choice for you? I don’t know.

I can tell you that I did not weigh these factors when doing our family planning. We knew we wanted them, we knew I was healthy and able to have them, so we did. We always have said we would figure out how to do it later. Though this goes against my obsessive need to plan big events (such as having a baby), it was freeing to take finances out of the equation. Due to the financial burden, our children would each have less (in terms of physical belongings and opportunities) because we chose to have more children. We were ok with that, because we felt in the long run they would actually have more in their lives because they would have each other. I don’t regret that choice at all.

When planning for your family, though, should you consider the financial aspect? I think it depends on your situation. If you believe you can afford to stay at home with your children and it is the right choice for all of you, then wonderful. However, do not feel guilty if it is NOT the right choice and you simply cannot afford to have three in daycare. In that case, certainly let the finances weigh in your decision.

For us, we knew the cost would be considerable. We knew it would stretch us. We knew we would have to sacrifice other areas because we would be paying so much in daycare. However, to us, it was completely worth it from all angles.

I mean, look at those faces, how can it not be worth every, single, penny?

My three kids with the creepy Easter Bunny at their daycare.

My three kids with the creepy Easter Bunny at their daycare.

Advertisements

“I can’t afford to save.” – How to save during tight times

This year my biggest goal for our family is to save more. With two kids and one on the way we have a number of expenses that have creeped up over the last few years. From diapers to groceries it seems that having additional little people around really digs into our budget. Finding the money to put away into a savings account has become less and less of a priority when it should be the opposite.

So what do you do when you don’t think you can afford to save?

It takes a little extra time and effort but it is possible. With the additional laughter, tantrums and stinky diapers comes unexpected trips to the doctor and $3.99 orders of macaroni and cheese at the restaurant that the toddler will inevitably refuse to eat. How is it that my husband and I used to go out for a date night and have a $20 dinner bill and now that barely feeds my kids? I think a cheap, family-friendly restaurant that delivers food instantaneously without the threat of contracting the ebola virus in the process is like the mythical unicorn of the world.

Ok, back to how we accomplish this task of saving for these unexpected increases in our expenditures. Your biggest tool in this task will be strict budgeting. Your second biggest tool will be levelized billing options. Third, you will have to menu plan. Ok, let’s go through these one by one.

Budgeting:

Sure, we all know what this is. How much money do I have? What bills do I owe? Whatever is left is what I use for gas, food and entertainment…. right? Ok, if it was this simple we could all do it pretty quickly. The bottom line is that you are missing the most important part of budgeting. SAVING.

Many times in a financial article or class you will hear the phrase “pay yourself first”. Financial planners and advisors love this phrase. It refers to the thought or practice of taking the money out for YOU first and living off the rest. So if you were working a full-time job where you had the opportunity to put money into a 401k, that money comes out pre-tax. Meaning you never even see that money in your bank account. This is one way to pay yourself first.

Another way to pay yourself first is to set aside a set amount each month before you have the chance to spend it. This is the part most of us suck at. You see the money in your account and then it gets moved and all of a sudden it was taken from you. You want to run after it and say “wait!! I need you!!!!!” This is almost always followed by the feeling that if you need that money you can always get it back. Here is where most of us fail. We run out of money, we transfer a little back from our savings account to cover an expense promising ourselves to repay this bridge loan… you know where this is going.

Here’s where you need to modify your way of thinking about this. Saving should be a bill. It should be gone once you move it out of your checking account. Never to be recovered. Well, ok SOMEDAY you will access it. Just not today.

How do you change this mindset? First, I think the best way to save is to put the money in an account at another bank. We use Capital One 360 accounts for our primary savings. The reason for this is to prevent me from staring at the money. Honestly I forget about it most days. You can set up automatic transfers into this account on a regular basis. I would suggest starting small. $50 after each paycheck will be enough to get you going. After a few months, you up the amount slightly. Pretty soon you’ll be putting money aside without missing it.

Levelized Billing:

Another big key to saving is to be able to predict your expenses each month. Levelized billing is a great tool that almost every utility company will offer if you ask. Our utility companies required us to have up to a year in history of paying our bills on time before they would allow us to set it up. Since we live in the South our electricity bills are significantly higher in the summer versus the fall and winter. It is so nice to be able to pay an amount each month and not wince every time I opened the bill.

Menu Plan:

Ok you may be doubting me on this one. I get it. Menu Planning is a pain in the financially responsible ass. I hate doing it. Each week I procrastinate doing it. It takes too much of my energy and requires too much effort. However, if I don’t menu plan, I end up spending TWICE what I would. Also, my cupboards end up being clogged with crap. And to make that all even worse, I still have no idea each night what I’m going to make so I end up ordering out.

Menu Planning while such a pain, is financially worth it. First, eating in is much cheaper. Second, I can lay out meals and utilize ingredients over and over. For example I can plan a roast chicken on Sunday and utilize the leftovers to make chicken salad for lunch later in the week, thus reducing waste. Third, menu planning keeps you on track with dietary goals, etc. Mainly this just means that my kids won’t have to eat macaroni and cheese more than twice a week.

Try this for two months. If you can’t find any extra pennies then it is probably time to revisit your expenses and look for areas where you are wasting money (ie: subscriptions you don’t use, etc.).

If you don’t want to try this you could always just start a jug. You know I love the jug.

**Capital One 360 is the savings account we use. Formerly ING Direct. I was not compensated in any way to promote them. I just really like them and have had a good experience.**

Knocked up: Cutting the cost of maternity clothes

Once upon a time there was a pregnant woman. She soon realized she couldn’t wear her “fat” jeans for long and had to buy real maternity clothes. She went to the store and bought an entire new wardrobe and spent a ridiculous amount of money. She then went home, poor. Sound familiar?

When I became pregnant with our first child I was pretty excited about having the belly. I wanted to wear cute maternity clothes and I hoped like crazy that I would be one of those cute pregnant women who only carried in her belly and not in her a$$. (I was neither… face and arms, bleh). Here’s a shot of me a few days before I gave birth to baby number two.

Notice the shirt barely covers me. Sigh.

I went from a Medium size to an Extra Large and almost a Double Extra Large within 6 months. What I didn’t realize was how many clothes I would go through over that 9 months. I know you all know where this is going so I will get there, fast.

It is nice to buy something for yourself to celebrate this moment in your life, but it shouldn’t be a strain on your household finances. Kids already add enough to the household budget, plus all the expenses of preparing for the child and paying for the medical bills associated. Maternity clothes is one thing for which I can offer a solution.

My sister was pregnant before me, and before her so were many of her friends. They simply saved their maternity clothes, put them into a trash bag and every time someone was pregnant, the trash bag migrated to their house. I would always purchase a few things of my own during my pregnancies and at the end, I would deposit those into the trash bag for someone else to enjoy. For at least 6 women I am aware of, the burden of purchasing everything new was relieved. With my second child I only purchased 5 new items! (most of those were late in the pregnancy when nothing would fit because I was having “giganta-baby”.)

Here are a few ideas to help reduce the cost of maternity clothes during one of the most exciting and expensive times in your life: Continue reading