Child care expenses can really add up for many two-income families. In fact, many people are surprised to learn just how little a second income actually adds in terms of take home income after paying child care and other extra expenses. Fortunately, there are several creative ways to save on child care costs. For example, if your employer offers a flex spending account, you can you the cost of child care expenses with pre-tax dollars. In Utah the average cost of child care for a single child is nearly $5000 dollars per year according to USA today. If a 25 year old was in the 35% tax bracket and used a flexible spending arrangement to pay for healthcare, this decision could be worth nearly 2.75 million dollars by retirement. Use the links below to discover how you could save.
- http://www.thestreet.com/story/10359665/1/10-ways-to-reduce-child-care-costs.html discusses ten ways a family can cut its child care costs. The story also provides a link to a calculator that allows a family to quantify the benefits/costs of having a two income household.
- http://www.aupairinamerica.com/ This is a fairly creative strategy for those with larger families. Au pairs are basically nannies from foreign countries that come and live with your family. Using an Au pair can save families with lots of children big money. They usually charge by family, not by child.