The Wall Street Journal Financial Guidebook for New Parents
By Stacey L. Bradford
What often causes working parents the most stress? It's not the long hours at the office or trying to balance attending school events with important meetings. For many mothers and fathers, it's finding affordable, reliable and loving child care.
In just the two short years that I've needed child care for my daughter, I've had my share of difficulties. My worst experience was with her first day care center, when at eighteen months, my little* girl started at what I thought was a creative and loving facility. Instead, I quickly learned that it was packing in as many kids as it could fit into a room, breaking New York City's child care laws that specify the maximum number of children allowed in any given class for her age group. When I complained to the director. I received a "Dear Parent" letter that said my daughter was no longer welcome at the school, effective immediately. I was then left scrambling for a babysitter so I could go to work the following Monday.
My story may sound a bit extreme, but I would challenge you to find any working parent who doesn't have a child care war story worth sharing. Even the best babysitters occasionally have their own family issues that keep them at home-perhaps a sick child-and can leave you without coverage on a day when you simply can't work from home.
While no child care situation is perfect, every family can find the best solution for their needs and their budget, with full-time babysitters, an pairs and day care being the three most popular options. When you get it right, you'll be so thrilled to know that someone you trust is looking after your little one, leaving you the peace of mind to focus on your job. Despite my initial experience, my daughter is now thriving in a wonderful day care center that's within our budget, and I never have to worry about her safety.
Time to Talk Dollars
It's no secret dial child care is expensive, but some care options are pricier than others, and costs will wiry somewhat based upon where you live. For instance, while full-time babysitters are the most expensive option in New York City, in Iowa hiring a full-time caregiver to watch your child may be cheaper than sending your kid lo a formal day care center.
In this chapter, I'll try to give you some price ranges for what you can expect for different types of care, but ultimately you will need to do your own research to find out exactly how much your local options will set you back, while weighing the pros and cons of each. This breakdown will get you started with a general cost overview.
Getting Personal: The Babysitter Option
Cost: $30,000 plus a year. Full-time babysitters tend to be most prevalent in urban areas and their surrounding suburbs. The average cost of a caregiver ranges from $10 to $15 an hour for one child, and increases by 15 percent to 20 percent when you add a sibling. (Don't be surprised if you spend more than $30,000 per year caring for one child.) Should you employ an agency to help you find the right caregiver, you can expect to pay a few more thousand dollars in placement fees, according to the International Nanny Association. However, if you have more than one child, a babysitter may start to look like a more affordable option, since day care, by comparison, generally charges twice as much for two siblings.
Hidden costs: $6,000 a year or more. Many families choose to provide a babysitter with a cell phone, a stipend toward transportation (many New Yorkers buy their caregivers a monthly train pass worth around $80), two weeks' paid vacation and a Christmas bonus worth two weeks of salary. Once your toddler starts preschool (which is often only a few hours per week), you may still have to pay the caregiver full-time to keep him other (even for the hours your little darling spends in class). II you don't pay up, your babysitter may quit and find another family willing to pay her full-time wages.
Cheaper alternatives. Sharing a babysitter with another family might be an option. Or pay a stay-at-home mom lo watch your child.
A Cultural Exchange: The Pair
Cost: $18,000 plus. An alternative way to get one-on-one care is to hire an au pair, a young adult from another country who moves in with your family and cares for your children for one to two years. According to Cultural Care Au Pair, an agency that places an pairs, hosting one of their caregivers in your home will cost you nearly $18,000 a year ($340 a week). This price includes all the fees charged by the agency and a $195.75 (for 2000) weekly stipend that you pay directly to the au pair.
Hidden costs: minimum of $1,200, but could be considerably more. As with a nanny, you will likely end up providing your au pair with a cell phone. If you need her lo drive your kids around lawn, you'll also need to add her name to your auto insurance (which could cost between $500 and $1,200 depending on w here you live) and pay for gas. You may even end up buying an additional car to accommodate the extra driver in the household. And don't forget, it's your responsibility to provide room and board. The bigger her appetite, the more you'll pay!
Cheaper alternatives. If you live near a college, find a student whose schedule works with your child care needs and who is willing to watch your kids in exchange for room and hoard or invite Grandma to come live with you for free in exchange for child care or engage other family for help.
Care with Class: Day Care Facilities
Cost: $4,000-$22,000 a year. According to the National Association of Child Care Resource and Referral Agencies, the average cost for an infant in full-time day care ranges from $4,388 to $14,647 a year, based on a 2007 survey. But don't be surprised if the centers near you are even higher, particularly in large urban areas. Unlike babysitters, where adding a child means you pay less per kid, with day care, adding a sibling means your costs almost double, as day care centers typically provide parents with only a small discount for multiple children. Quality facilities, however, double as all-day preschools and you won't have to pay extra for the educational component.