Most parents know all too well the significant cost that comes with sending their little one to childcare. Paired with high interest rates and an ongoing cost of living crisis, it’s more important than ever to effectively manage your expenses, especially when it comes to childcare costs.
So, if you’re looking for ways to manage your budget and make childcare more affordable, we’ve pulled together a few helpful tips.
Understanding the costs behind childcare
There’s no denying that childcare is a significant expense. And while it can be easy to be quickly turned off by your provider's hourly rate or daily fees, it often helps to understand the costs that go into running a childcare facility.
From family daycare to childcare centres and everything in between, each provider is responsible for setting their own childcare fees. These fees are used to cover a range of expenses that go into providing a safe and engaging childcare environment, including:
- Staff salaries: Paying qualified educators, carers and support staff.
- Facility rent or mortgage payments: Costs associated with leasing or owning the premises.
- Utilities: Electricity, water, internet and heating or cooling expenses.
- Insurance: Coverage for liability, property damage and workers’ compensation.
- Supplies and materials: Educational materials, toys, books, arts and crafts supplies.
- Food and beverages: Providing meals, snacks and drinks for children.
- Cleaning and maintenance: Cleaning supplies, cleaning services and maintenance costs.
- Safety and compliance: Meeting regulatory requirements, including fire safety equipment and regular inspections.
- Training and professional development: Ongoing education for staff to maintain and enhance their skills.
- Technology: Software for managing enrollments, billing and communication with parents.
- Marketing and advertising: Attracting new families through campaigns or community outreach.
- Special programs or events: Costs for excursions, guest speakers or special activities.
Tips for managing childcare costs
For most families, childcare is a significant cost. That said, there are a few tweaks you can make to make it a little more manageable.
Assess your child’s needs
The first step in managing your childcare expenses is to assess your child’s needs. Regardless of whether they’re already in care or you’re exploring your options, each child has different needs, so it’s important to find a provider that caters to them.
While some children thrive in large group environments, others prefer smaller group settings. As a parent, you know your child best, so you’re often best positioned to find a provider that best suits their needs.
It can often help to write a shortlist of exactly what you’re looking for in a childcare provider. That way, you can use it as a checklist when finding a childcare facility. By taking the time to understand your child’s needs, you’ll be able to find a provider that offers the right level of care and support.
Read our blog on choosing the right childcare for a step-by-step approach to deciding on care for your child.
Research childcare options
Once you have a good understanding of your child’s needs and what it is you’re looking for in a childcare provider, you can take a look at the different options available to you. Each childcare option will have its own approach and facilities. They’ll also set their own childcare fees.
To get a rough idea of how the different types of childcare stack up in terms of cost, we’ve compared the cost of family daycare vs. other childcare options. Just keep in mind that this is a rough guide and childcare costs often change, so be sure to check in with each provider for the most accurate fees.
You can also use our childcare cost calculator to understand the average daily cost of childcare in your local area and how your suburb compares to nearby suburbs.
Once you’ve settled on your childcare provider, it can be worth asking if they offer discounts for siblings or paying fees upfront. Be sure to check if they offer reduced rates for longer-term commitments or fewer hours.
Some childcare providers also offer additional services, which are built into their fees. For example, you might decide to pack your child’s meals and snacks if allowed, as it may be cheaper than using the centre’s food service. Similarly, you might be able to provide your own supplies, like nappies or wipes, if allowed by the provider. These small adjustments could help you to save on your childcare fees.
Consider alternative working arrangements
As a working parent, returning to your regular work routine after having a baby can often be difficult. Depending on your situation, you might want to explore flexible working hours, remote work or job-sharing options to reduce the need for childcare.
Consider sharing childcare responsibilities with your partner to reduce the need for full-time care. Or if you’re lucky enough to have grandparents nearby, check in to see if they would be willing to care for your child to supplement paid childcare arrangements.
Explore financial assistance and subsidies for childcare
Childcare doesn’t come cheap, but there are several government subsidies and tax benefits that could be available to you depending on your circumstances.
The Child Care Subsidy (CCS) is the main government payment available to families to help with the cost of childcare. This payment is made directly to your childcare provider, meaning you benefit from lower childcare fees. To receive the CCS, you must meet the eligibility requirements. The amount you receive will depend on your family’s combined income and employment status. You can read more about how the CCS works here.
The government also supports low- to middle-income families with the cost of raising children through the Family Tax Benefit (FTB). This two-part payment includes:
- Part A: a payment made per child that’s based on the family’s circumstances, and
- Part B: a payment made per family that provides extra support to single parents and some couple families with one main income.
Once again, you must meet the residence rules and eligibility requirements to claim the FTB.
It’s well worth exploring the different financial supports available to you if you can save yourself a few dollars on childcare fees. Use the Care for Kids Child Care Subsidy (CCS) Calculator tool to find out what your family might pay for early childhood education and care. Use our tool to determine how much CCS your family could claim and estimate your out of pocket childcare costs.
Create a childcare budget
Once you’ve settled on a childcare provider and worked out your out of pocket childcare costs, you’ll be able to create a childcare budget. Budgeting allows you to see how much of your household income goes toward childcare costs. It’s also a great way to see where else your income is going and if there are any areas where you can cut down on your spending or reallocate it.
Track your childcare costs over time
Regularly review your childcare expenses and overall budget to ensure you're staying on track. Chances are you’ll need to adjust your budget as your childcare needs change, especially when your child starts school.
Finding a childcare arrangement that works for your family and your budget can be tricky, but it’s not impossible. Care for Kids has a range of resources for parents and tools to help you with your childcare journey. Use our childcare search tool to shortlist, compare and secure care in your local area.
