Parent’s Guide to Choosing Childcare during COVID-19

Point of Interest

Finding childcare after re-entering the workplace can seem hard to manage financially, but it ultimately means you choose what’s best for your family.

Guide to affordable child care when re-entering the workforce

Many new parents are concerned about child care expenses when returning to work after having a new baby.

Leaving your baby for the first time can be difficult, but finding a loving, qualified provider can ease your anxiety. Unfortunately, many of the best child care providers have long waitlists or come with a hefty price tag — or sometimes both. 

The stress of compromising on the quality of care or of figuring out how to afford a hefty child care bill can add to the concern parents face when kissing their babies goodbye and heading off to work. The lack of affordable, quality child care forces 13% of mothers with children ages 5 and under to leave their jobs to care for their children themselves.

In extenuating circumstances, like the ones faced during the coronavirus crisis, finding child care can be an even more complex topic. As states start to reopen businesses, some parents are returning to work. However, many are finding their former child care is no longer available, complicating things even further.

Finding the right child care can be challenging, but understanding the real costs of quality care, as well as learning tips for leveraging your savings to afford the best care for your new baby, will help you return to work with more confidence and less financial stress. 

The impact of COVID-19 on child care

Many child care providers are struggling to stay open in the wake of COVID-19 — due, in many cases, to the difficulties with balancing increased expenses and mandated lower enrollment. The new regulations have reduced the number of children a provider can care for, which is putting some daycares out of business. That leaves a limited number of available child care slots, making it increasingly difficult for new parents to find safe, affordable, quality child care.

As with most businesses, child care centers that are reopening post-COVID lockdowns are required to have reduced capacity, which means most providers can only have nine children for every teacher. Add to that the new sanitization regulations and necessary personal protective equipment for all staff and child care providers are looking at significantly increased expenses with drastic cuts to revenue. Increased expenses and lower enrollment can make it hard for an already struggling industry to stay alive. Without a government bailout, an estimated 4.5 million child care slots could be lost

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act currently allocates a $7 billion bailout to child care providers. If passed, the $7 billion from this act only stabilizes the child care industry for three weeks. Therefore, a $50 billion bailout has been proposed, since the child care industry needs $9.6 billion a month to keep it from shutting down ($50 billion will carry it for five months).

Finding child care amidst the COVID-19 pandemic will be challenging, with reduced child care spots and extended waitlists in most areas. To decide what type of child care will fit your family best, consider the size of the COVID-19 outbreak in your area. Be sure the provider you choose follows all the regulations set forth by the Centers for Disease Control and Prevention. Also, keep in mind, some providers are not allowing parents inside the building and have suspended all tours of the facility.

Challenges of child care 

When choosing the right provider for your family, there are a few important issues to consider: the cost of care, the quality of care, the type of care you want and the availability of that care.


In a 2016 poll among U.S. parents, the most common challenge stated in finding child care was cost. On average, child care costs about $250 per week, or $13,000 a year. Infant care costs more than college in 33 states, without the benefit of saving 18 years for it.

Determining what type of child care you want 

Choosing what type of child care best fits your family at least partly depends on your work schedule. Do you work part-time, nights, or from home? Every parent has different needs, and thankfully there are child care options to accommodate them. Working from home and finding child care may seem counterintuitive to some, but just like all members of the workforce, remote workers have professional requirements or goals that they plan to meet. According to the Bureau of Labor Statistics, in 2017, 23% of US workers did some amount of their work from home.

Attending virtual meetings and achieving your job requirements is difficult if you also have to watch over your children at the same time. Just like you can’t always predict how your child will behave, you don’t know what the workday will hold. That’s why juggling both doesn’t have to be a reality.

There are many child care options to choose from, from hiring a nanny to finding a preschool. Each option provides a different level of care and comes with its price tag. Consider each type of care’s pros and cons to help you find the best match for your family and finances.


A nanny offers full-time or part-time care for your child in your home. Some nannies live in your home with you, and others do not. What makes a nanny an excellent choice is that they can better meet your scheduling needs and are available to work long, odd hours. Plus, most nannies also offer additional household services, such as light housekeeping, running errands and driving children to their daily activities. A nanny costs an average of $19 an hour, but you will also need to factor in the cost of payroll taxes, since a nanny is considered an employee.

Nannies often do not have the training that day care providers have, although you can find some who are certified in CPR and have taken child development classes. They also tend to focus less on educational activities and social development than a day-care center would. On the other hand, a nanny can give your child more one-on-one attention while creating a stronger caregiver attachment.

When hiring a nanny, look for someone patient with children and reliable. Other good factors to consider are education and experience. Nannies are not regulated, but you do want to see evidence that the nanny takes the role of child care provider very seriously.


Daycare is a common choice for parents because it offers full-time or part-time care during regular business hours. Most daycares accept children from six weeks old to around ten years old, or when the child is old enough to be home alone legally.

There are two types of daycares: in-home family daycares and daycare centers. In-home daycare is child care offered in the provider’s home. The average cost for in-home daycare is around $159 a week, or $7,627 a year.

Daycare centers often resemble a preschool setting, and cost around $248 a week for an infant — or about $11,896 a year.

There are a few things to consider when choosing between an in-home family daycare and a daycare center. Daycare centers tend to be more structured, with a focus on education and social development. However, some in-home family daycares can also have a similar structure and focus, depending on the provider. In-home family daycare providers can give your child more individualized attention than a daycare center can, simply because there are often fewer children.

There are several things to consider when choosing a daycare. Once you check off the basics, such as safety, environment and quality of care, it is important to get a feel for the culture. Does it feel warm and welcoming to you? Are the children happily engaged? Do the providers truly seem to enjoy interacting with the children? Use questions like these to guide your research as you explore daycare options near you.


Preschool is generally for three to four-year-olds. Hours vary; some provide care for just a couple of days a week, and some provide care for the full week. You can find half-day and full-day programs. Preschool settings are highly structured, with a focus on education and socialization.

Some preschools are free, depending on the setting. Otherwise, preschool fees are similar to daycare centers, averaging around $4,460 to $13,158 per year, or $93 a week to $275 a week.

Early childhood education programs

Early childhood programs promote school readiness of children from birth to five years old. They are generally for lower-income families, and you can find them located within child care centers, public school settings, and sometimes in home-care settings.. These programs are free to those who are eligible.

Child care availability 

The majority of families use child care centers because they are the most widely available choice and the quality of care is pretty good for what you pay. In a 2016 poll amongst parents, daycare centers rated second in quality of care, just behind relative care. Because of this, day care centers fill up very quickly.

Day care centers can typically only care for three to four infants and three to six toddlers for every trained adult. This limits how many new babies centers can take on. The waitlists are long and move slowly, as children need to age out before space becomes available.

If you are pregnant or trying to get pregnant, you need to start searching for daycare now. The faster you get on a waitlist, the better chances you have of landing child care.

It’s also good to note a lot of centers require a holding fee or a deposit. It may or may not be refundable, but some places may apply it to the first month of care. The fee will vary, costing anywhere from $100 up to half the cost of filling the spot.

Location of child care 

Another obstacle to overcome when choosing child care is the location of that care. Finding child care that’s located in close proximity to your home or work is ideal, especially in cases where you may need to get there quickly, like when a child becomes sick.

You may also want to consider the overall setting of where your child receives their care. For example, a daycare located in a residential setting versus an urban setting can provide different types of benefits and opportunities, depending on what’s important to you and your family.

Costs of child care 

Child care puts a financial strain on a lot of young families. In fact, 31% of parents report child care has posed a financial burden and four in 10 parents say child care is not affordable.

The U.S. government defines “affordable” child care as consuming no more than 7% of a family’s income. Yet, the average family spends 10% of their income on child care, with nearly half of all American families spending 15% or more.

Lower-income families spend a much higher percentage of their income on child care. Young adults starting their families often fall into this category because young adults are often just starting their careers, so they are not making as much as their older counterparts. These young parents are often also paying off college debt and buying houses when they start their families, so money gets tight.

Infant care costs more than older children because of the higher level of care required. Understandably, the more children you have in care, the higher the cost becomes, although some providers will offer a sliding fee or a discount for additional children.

A big challenge many parents find themselves facing is minimums. For example, parents often have to pay a set price, whether their child is there or not. If a child is sick at home or not in care that day, parents still pay.

The cost of child care continuously goes up, too, which adds to the problem. Two-thirds of parents say they are spending more on child care currently than they did the previous year. In fact, the cost of child care has consistently increased almost every year since 2014.

This chart depicts the average weekly cost year over year of child care at a daycare center:

YoY Childcare Costs
Note: These are average weekly daycare rates
YearAverage cost of childcare

Child care costs by state

Of course, child care costs vary by state. Child care in some states costs significantly more than others. Child care costs $5,436 a year in the least expensive states and can cost up to $24,243 a year in the most expensive states.

Wondering how much you should set aside for child care? Take a look at a few of the average child care costs in select states across the U.S.:

  • Michigan: $10,861/year or $209/week
  • Minnesota: $16,087/year or $309/week
  • Mississippi: $5,436/year or $105/week
  • New Jersey: $12,988/ year or $250/week
  • South Dakota: $6,511/year or $125/week
  • Washington: $14,554/year or $280/week
  • Washington, D.C.: $24,243/year or $466/week

How to pay for child care

There are many ways to cover child care expenses, such as saving accounts, tax credits, flexible spending accounts and grants or subsidies. Learn more to discover which options might be right for you.

Start saving now 

When anticipating child care costs, the best thing to do is to start putting money aside now. The sooner you get started, the more financially prepared you’ll be when it’s time to head back to work. Here are a few tips to get you started:

  • Pay off your credit cards and other unsecured loans. This will give you more money to tuck away.
  • Set up your checking account to automatically transfer funds into your savings account each month. Some employers can directly deduct a predetermined amount from your paycheck and deposit it into your savings account as well.
  • Set aside any unexpected income. This might include gifts, overtime pay and reimbursements.
  • Sell what you aren’t using and tuck that money away.
  • Stop auto-renewals for subscriptions and instead set up an automatic transfer to your savings account.
  • Check into new plans or rates for your cell phone and other services, especially if you’ve been on the same plan for awhile.
  • Sign up for an online savings account. These accounts offer higher interest rates and are easy to use.

Becky Olson, a personal banker at Security State Bank, suggests, “If you get taxes back, put that into a savings account and pull from that for your daycare bill. Then it’s not all coming out of your pocket.”

Create a budget and stick to it 

When learning to save, creating and following a budget is a must. When you know exactly where your money is going, it empowers you to make better choices for your family.

Whether you’re newly pregnant or brand new parent, follow these steps to start creating a family budget:

  1. Add up your income. Be sure to include all regular income sources, not just your salary. This might include income from a side hustle, reimbursements and overtime. Only count the consistent income, and earmark anything else as unexpected income.
  2. Calculate your expenses. Be sure to use your actual expenses, not what you anticipate them to be. Your budget needs to be realistic or it won’t work for you. It often helps to track your expenses for a month or two before creating a budget.
  3. Set goals. Once you know your income, expenses and bottom line, you can create savings and debt-reduction goals.
  4. Create a plan. Figure out what expenses you can lower or cut out entirely and then put that extra money into savings or use to pay down your debt. Also, brainstorm additional ways you may be able to earn extra income.
  5. Track your progress. It’s important to monitor your spending and track your progress toward your goals. Write down every expense during the month and make adjustments to your plan as needed.
  6. Keep it realistic. Everyone has to have fun once in a while! Be sure your budget offers opportunities to live a little and to celebrate your progress.

Grants, subsidies and programs 

Because child care is so expensive, and because making it easier for parents to return to work boosts the nation’s economy, there are several programs and services available to help alleviate some of the financial strain.

Government subsidies 

Government subsidies assist low-income families, usually in the form of a sliding fee scale. This means you pay a portion of your bill, depending on your income, and the child care subsidy covers the rest. To apply, contact your county social services, your local community action agency or your local Child care Resource and Referral agency.

Other subsidy options 

Some child care centers also offer a sliding fee scale or a scholarship for low-income families who cannot afford the regular rates. When investigating child care centers, be sure to ask about available subsidies.

Many larger companies also offer a child care subsidy or have an established network of child care providers that they endorse. Employees who use these providers receive a discount on their child care.

Don’t be afraid to check with your human resources department to see if your company offers a subsidy or discount. “Your employer has a vested interest in accommodating you for everything that you bring to the table,” advises Frankie Fegurgur, COO for United Educators Financial Association. “Even if they don’t currently have a program, you could be the one to help them through the process.”

Local scholarships 

Local nonprofits may also offer child care scholarships to families based on need. Contact your local Child Care Resource and Referral Agency to find out more.

Dependent Care Flexible Spending Accounts

A Dependent Care Flexible Spending Account (DC FSA) is sponsored through your employer. It uses pretax dollars to pay for child care expenses and can be a good option for families.

If you have a Dependent Care FSA, you can contribute part of your paycheck to your account before employers take taxes out, making these contributions tax-free and lowering your taxable income. You then submit a claim to receive reimbursements from your FSA account for the out-of-pocket expenses you incurred for child care that month. Although the claims process can be cumbersome, it’s a worthwhile process that offers savings on overall child care costs.

Keep in mind there are limits on how much you can contribute annually to your Dependent Care FSA account. Married couples filing jointly can contribute up to $5,000 combined and single parents can contribute up to $2,500.

The biggest thing to keep in mind when considering a DC FSA is that your employer owns it. If you quit your job before using all of the money in your account, your employer gets to keep that money. If the year ends and you haven’t spent all of the money in your account, your employer gets to keep what is left.

With that said, it’s hard to estimate how much to contribute to your account, and you don’t get to change it once you’ve set the amount. Child care expenses can vary depending on holidays, vacations and illnesses, so it’s hard to know upfront exactly how many days your child will need care and what your expenses will be. The best approach is to plan ahead and make a conservative estimate on how much to contribute each year.

It’s also worth noting that you may not be able to take advantage of both a Dependent Care FSA and the Child and Dependent Care Tax Credit. There are some restrictions on this. If you’ve maxed the $5,000 cap for your Dependent Care FSA and your child care expenses hit the maximum of $6,000 for the child care tax credit, you may be able to use both. The Child and Dependent Care Tax Credit would only apply to the extra $1,000 you had in child care expenses that were not reimbursable through your DC FSA.

It’s best to discuss whether a Dependent Care FSA is right for your family with your human resources manager or a financial advisor before deciding.

Tax credits 

The IRS offers a variety of tax breaks for working parents who need to pay for child care.

Child and Dependent Care Tax Credit 

This tax credit allows you to itemize up to $3,000 in child care expenses per child, with a maximum of $6,000. Again, you cannot use both the Dependent Care FSA and the Child and Dependent Care Credit unless you’ve maxed out your DC FSA and still have eligible expenses under the Child and Dependent Care Credit.

Child Tax Credit 

You become eligible for the Child Tax Credit as soon as your baby is born. The maximum amount of the credit is $2,000 for each dependent child that qualifies. You are eligible for this credit every year until your child turns 18.

Earned Income Tax Credit 

This credit is available to lower-income earners. This credit can be just a few hundred dollars or up to several thousand, depending on how many children you have and what your filing status is.

A tax credit for your nanny 

You are eligible for a tax credit if you hire a nanny as well. This deduction is up to 35% of what it cost to hire your nanny, with a $3,000 cap for one child or a $6,000 cap if you have two or more children.

Military assistance 

The federal government also offers child care subsidies to its military families. Each military branch has its own eligibility requirements, so contact child care Aware to learn more.

Financial advice if you can’t afford child care 

If you cannot afford child care, you are not alone. About 70% of families with young children are paying child care rates higher than what the government deems affordable. Even with tax credits and subsidies, some families still find quality, affordable child care to be out of reach.

To make ends meet, many families have gotten creative with how they handle their child care situation.

Part-time jobs and side hustles 

Side hustles are becoming very common. In a recent survey, 24% of respondents admitted to taking an extra job to pay for child care costs associated with their full-time employment. Side hustles can include anything from running an Airbnb and doing freelance work to moonlighting as a waitress.

There are many pros and cons to taking on a side hustle, but the biggest concern is that you may spend even more time away from your child. Even if you find something that allows you to work from home, you will be pulled away from your child to get your work done. On the plus side, side hustles expose you to new skills and can ease some of your financial burdens.

Relying on relatives for care 

About 24% of parents who cannot afford child care turn to family members for help. The nice thing about using a relative for child care is that your child is already familiar with the caregiver and the environment. Using a relative is cost-effective and your child will likely get sick less because they’re not exposed to other kids in a day care setting. However, it can be tricky to navigate disagreements on how to care for your baby or tensions around payment when the care is being provided by a loved one.

Nanny share 

The number of searches on for nanny shares increased by 45% in 2018. A nanny share is when two or more families share one nanny, including the cost of the nanny. The benefits of this arrangement include high-quality, attentive care at lower prices. However, nanny shares require enormous flexibility and communication between families, as they have to work together on scheduling and day-to-day operations.

To find a nanny share opportunity, Frankie Fegurgur, a financial planner who often helps moms afford the return to work, suggests looking at “preschool announcement boards, college boards and social media groups and blogs.”

Job share 

Job sharing is when two people each work part-time to fill one full-time position. This helps with child care if you find yourself in a situation where only part-time child care is available. Job sharing works well for parents because they can cover for each other when family emergencies arise. However, job sharing can be challenging as well, because you share your career, income and personal life with another person.

Remote work 

Working from home has been on the rise over the past decade, making it a smart option for parents with young children. Many employers offer full and part-time remote work with the opportunity to work from home when children are ill.

Many women are adopting the role of “mompreneur” as well, starting their own online businesses and offering a variety of services, from personal coaching to virtual assistant work. Working from home offers incredible flexibility, and child care is not often needed. However, it is very hard to balance work life and home life when the two merge into one.

D’Anne Johnson, the Head Start Director at a community action agency, said you should “be creative with your work choices — if you aren’t super passionate about your work, look for options for employment that allow for some flexibility. Consider opening your own daycare. Communities [in our area] are struggling to find enough providers.”

Child care co-ops 

To save money on child care, many families form child care co-ops. This is where a group of families share the responsibility of providing child care. Each family takes a turn providing the care, and all care is provided free of charge. Parents love the arrangement because it is flexible and it allows them to get to know the other families. However, it can be easy to put in more hours than you get out of the co-op, and some kids require a higher level of care than others.

The bottom line 

During such a stressful time of a young parent’s life, it’s easy to lose sight of what really matters.

Maureen Hams, the community services director of a community action agency that also houses the child care Aware program, said, “Child care can be seen as such a burden, but it can also be seen as an investment in your child and your future. Making the child care payment is not always easy and can be a challenge for many parents and guardians. But think about it as a short-term investment in your child and your family. Quality child care keeps children safe and healthy and helps children develop the skills they will need for success.”

If you want to go back to work, figuring out how to pay for child care might seem overwhelming, but with a little creativity and a lot of financial planning, it is possible.