This guest post is contributed by Debra Johnson, blogger and editor of live in nanny. She welcomes comments at jdebra84@gmail.com.
Childcare is no easy subject. Do you want to send your child to daycare or are you going to hire a nanny? Which is more cost effective? Which offers more benefits? All of these questions and more factors into the decision to either send your child off to daycare or bring someone into your home. So how do you know which decision is the right one? Taking a look at the costs associated with each is a good way to get started.
Daycare
1. Annual tuition: Depending on the type of daycare you pick, where it’s located, and the overall quality of the center, daycare prices can vary greatly. The costs associated with traditional daycares generally range anywhere from $300-$1,000 per month and offer a variety of different amenities.
2. Outside childcare: One problem with daycares, however, is that they are open for specific times, and if you still need childcare outside of those times then you’ll have to hire additional outside childcare.
3. Childcare for holidays/scheduled breaks: Many daycare centers are only open for the traditional school year, and are closed during regularly scheduled breaks such as spring break, summer vacation, and winter break. Unless your work also follows this schedule you will have to find alternate childcare for these breaks as well.
4. Doctor’s visits: Taking your child to a daycare usually means incurring all of the sicknesses that are making their rounds amongst kids because of the high exposure your child will have to these. It’s good to factor in additional healthcare costs ahead of time.
Nannies
1. Yearly salary: Most nannies are paid on a yearly salary, and that yearly salary can end up being more expensive than sending your child to a traditional daycare setting; however it also guarantees that your nanny will be there during the traditional school breaks and there is usually more flexibility with schedules.
2. Bonuses: You may want to give your nanny bonuses throughout the year, especially if she has done an exceptional job or has gone above and beyond and helped with household tasks or regularly come in early or stayed late during periods of time that you’ve needed extra help.
3. Taxes: Hiring a nanny means that you will become an employer and thus are usually responsible for paying the Social Security and Medicare taxes for your nanny.
4. Insurance: If you’re providing health insurance for your nanny then that’s another cost that you’ll want to take into consideration before employment. If you aren’t offering health insurance then you may want to consider paying a higher base wage for your nanny.
So daycare or nanny?
Both options, either sending your child to daycare or hiring a nanny, come with their distinct advantages and disadvantages. Daycares are usually the cheaper option initially, but high exposure to illness and additional childcare costs can end up being rather costly. On the other hand, nannies are generally more expensive, but they offer individualized care and usually have more flexible schedules.
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Day care can cost far more than $1000 per month. For instance in my area (Bellevue, WA) costs about $1500 per month at one of the KinderCare chain day cares and $1900 at a Bright Horizons.
ReplyDeleteThe biggest financial contributor the nanny-vs-daycare decision is: How many kids do you have that you need care for? As a rule of thumb, 1 kid is probably cheaper in day care, 2 kids is probably break even, and 3 kids is probably cheaper to hire your own nanny.
Of course this entire article is a bit of a false dichotomy. There are more than two options. Other options include stay at home parent, a relative caring for the child, one parent working a night shift, sharing a nanny with another family.
And of course this article is only about the financial considerations and not such things as who provides the best care for your precious offspring. That is a far harder question to answer (and many people have strong opinions on the topic).
A common misconception is that hiring a nanny is an expensive proposition and only “the rich” can afford this option. And recent news reports are contributing to this myth, as they spotlight “six-figure” nannies who are earning more than $100,000 per year.
ReplyDeleteThe truth is that most nannies don’t receive such high salaries and are actually an affordable, convenient option for many families. In fact, hiring a nanny is often more affordable than other childcare options, including daycare.
Nannies’ salaries depend on a variety of factors, including:
Their experience
Your geographic location (nannies in big cities often earn more than nannies in smaller towns)
The number of children they’re watching
The ages of the children
Their duties and responsibilities
The number of hours they’re working
Some families pay their nannies benefits, including health care and paid holidays, which add value to their base salaries. Live-in nannies also receive free room and board. But many families do not include these benefits, reducing their overall cost.
While some people still envision nannies as tending only to wealthy families, hiring a nanny is a viable, convenient option for many families - across all tax brackets. In recent years, a significant number of parents have learned - firsthand - about the benefits of hiring a nanny, including the convenience of having someone come to your home vs. bringing your children to daycare, the ability to ask your nanny to start dinner or help with housework, etc.