It Finally Happened: We Quit Paying for Daycare!

We Quit Paying for Daycare - picture of screaming kids

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Since each of my children were just ten weeks old, they have spent the bulk of their weekday hours at a daycare or preschool. When I was at my old job, I dropped them off around 8:00 a.m. and picked them up at 5:15. This was extremely hard on them and also hard on me, but it was even worse for our budget. When we had two kids in full-time care, our daycare costs were insane!

Still, I have always felt like paying for daycare – and working – was worth it. Whether I missed out on some milestones or not, I have never wanted to be a stay-at-home mom. Even though I hated leaving my kids, I was dying to head back to work both times. And both times, this decision cost me dearly.

With that said, the money I spent was well worth it. If I had stayed home instead of building my career, I wouldn’t be able to provide for my children the way I can today. Plus, my kids learned a lot and made tons of friends at the various centers they frequented.

Would I change anything? I think not. With any decision like this, there are trade-offs to be made. And in my eyes, I made a smart trade that will leave us better off in the long run.

Related: The Daycare Dilemma: Why I’m Not a Stay-at-Home-Mom

The Day I Quit Paying for Daycare

And now, really, the whole argument over working or “staying home” is over. As of August 1st, I have a kindergartener and a second grader!

At this point in my life, I’m so glad I worked all these years. If I hadn’t, I would probably feel pretty lost. As an added bonus, their first day at school was my first day not paying for daycare in seven years! 

It’s a bittersweet feeling for sure. On one hand, I’m sad my babies are growing up. It seems like I was changing their diapers and helping them walk just yesterday. Now, they’re off to school! On the other hand, not paying for daycare has been a dream of mine for a while. From the beginning, I’ve paid anywhere from $500 to $1,200 per month depending on our daycare situation.

So, in some ways, we just scored a $500 – $1,200 monthly raise!

What We’re Doing with Our Daycare “Raise”

We quit paying for daycare! Yay!Normally, I include our monthly daycare bill in our zero-sum budget. This month, I kept the category alive but entered a big fat zero. And, oh-my-gerd, it felt so good.

Still, my work here isn’t over! If I have learned anything, it’s that you need to have a plan for both expenses and windfalls. Here’s what we plan to do differently from here on out:

We’re resisting lifestyle inflation.

Before we started using a zero-sum budget, any “extra” money we had would disappear into thin air. We spent whatever was in our checking account and paid bills based on when they arrived in the mail. Looking back, we realize not having a written budget was the worst strategy ever! Obviously, our situation is all fixed now.

Related: How to Budget: A Step-by-Step Guide that Actually Works

Now that we’re on the straight and narrow, we use a zero-sum budget to plan our spending every month. With this type of budget, we pay ourselves a salary that covers our bills and spending needs for the entire month. So instead of blowing an extra $500 or $1,200 on who-knows-what, we’re planning our spending based on our actual needs.

Look at those cheesy grins!

We’re paying ourselves a little less.

Since we use a zero-sum budget, resisting lifestyle inflation means paying ourselves less every month. Instead of the $4,000 in bills we normally budget for, we’re creating a budget based on out post-daycare life now. In reality, that means we’re taking a little pay cut. On the flip side, however, we’re keeping more of our cash in savings every month. Over the long haul, this will leave us a lot better off!

We’re boosting the amount we contribute to our children’s 529 savings plans every month.

I have been totes-serious about paying for my kid’s college since they were born. As a result, I have saved money for each of them in a 529 plan for years. When we were poorer, I contributed just $25 per month. The last few years, however, I have saved around $5,000 a year due to our state’s generous tax credit for 529 plans.

Related: Why I Save for My Children’s College Education

Now that I’m not paying for daycare, it only seems natural to throw a little more money towards their 529 plans every month. Since I lost a huge expense, I won’t notice it much at all. Plus, saving more money now will make paying for college that much easier down the road.

Final Thoughts

The fact that both of my kids are in school full-time means many different things for us as a family. First and foremost, it means my children are on their way to becoming contributing members of society! Second, it means they are no longer my little babies. Lastly, it means I shouldn’t have to pay for daycare again outside of our eight-week summer break.

Life is weird sometimes. Just when you get something figured out, everything changes. And just when you make your peace with a huge expense, it goes away for good.

At the end of the day, all any of us can do is roll with the punches and plan the best we can. And when you get a huge raise, make it count.

How have your daycare expenses changed over the years?  Did you ever get the huge “daycare raise?” If so, how did your spending habits change?

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  1. Congrats on the raise! Sort of. 🙂 How’s kindergarten going? We never had daycare costs, but once all three of our kids went to school it gave us the ability for my wife to return to work and help increase our income.

    1. It’s going really well so far….I think? To be honest, my little one is very light on the details. She says she’s doing well and she loves going every day. She’s all smiles when she gets off the bus.

  2. Looks like it’s time for another!!! 😉

    I struggle with this DAILY! Ugh!!! My girls will always be in some sort of daycare for sure, but it’s just a matter of deciding how much. Summers are killer – we pay $1300 (for two) but they only go a half day; meaning lucky me gets to work with them home in the afternoons. The school year is better as they go to an amazing church daycare for $800/month (but again, half days).

    With the third baby coming, we’ll start paying I think $1100/month during the school year and then…$1800-$2000/month in the summer for all three to go half a day. Kill me now! My oldest DOES start kindergarten in 2017 so that’ll be a nice break, but I do worry about having three in daycare every summer.

    Sorry, vent over LOL! I will admit that I do sometimes struggle with not being able to take them fun places in the mornings and hang out with them, but you are right that they learn SO SO much at daycare and make so many friends! My girls even ask to go on the weekends, so I guess I shouldn’t really feel that bad hahaha.

    Your girls are SO CUTE, btw!!!! Congrats on having them both in school!!!!

    1. We never paid more than $1,200 in a single month, and I cannot imagine. Paying $1,800 – $2,000 per month would probably kill me!
      But you do what you have to do; and daycare is only temporary, too. It’s not like it’s forever. I’m glad I paid daycare all these years because I have a career. If I hadn’t worked, I don’t know what I would be doing/thinking right now.

  3. My kids ended daycare many years ago and I also made the choice to go back to work. It was definitely like a raise when they stopped going. We diverted most of the funds to their 529 plans and it paid off beautifully! They will both end their undergrad schools (state schools) in 3 years (due to AP/community college credits) and in no debt. Goal achieved! And love your zero-based budgeting!

    1. Nice!

      That’s our plan – to pay for our kid’s college education (within reason). I have been saving in 529 plans since they were babies, and they already have five figures towards college expenses at ages 5 and 7.

  4. I would be lying if I didn’t say that daycare is making me think we’ll never be “ready” for kids. That, and the fact that my maternity leave is unpaid. I definitely understand why so many people say it’s impossible to ever feel totally financially ready. My favorite part about this is how you’ve got such a solid plan for what to do with the considerable extra money you’ve got each month now! And those girls of yours are lovely and seem to have SUCH personality!

    1. If you buy Aflac short term disability (or any shirt term disability) you can get 6 weeks equivalent of pay for your pregnancy leave. You pay for the insurance post tax so you receive 60% of 6 weeks pay tax-free. You do have to have it for 10 months before having baby though. If you have a complicated pregnancy, like go on doctor required bedrest, I think you can get more pay too– I was on bedrest but I could remote work so I didn’t try the extended disability. It was nice getting that 6 weeks of pay!

    2. Other than the FMLA period, my maternity period was unpaid too, which was a pain but manageable if you know this well ahead of time and budget for it. Our expenses in the first four months were pretty low, too, so that helped! But it sure does FEEL like you can’t ever be ready enough!

  5. We’re just starting to pay for daycare. Fortunately, my older one will be in 4 next year and here in NYC, there is universal pre-k which is free. Would just have to pay for a few hours of after school. My wife has considered staying home, but we’re undecided. I think it would definitely be easier if she had a job with more flexibility in hours and in location. That’s definitely what I crave at my job as well. I could do most of my work at home, but instead I’m forced to make the hour long commute there to work.

    1. Hopefully that will change someday? It seems like more and more employers are warming up to the idea of some of their employees telecommuting.

  6. Great for you! But I still wonder why people bother to have children if they do not want to take care of them.

    1. I don’t know!

      Perhaps you should ask someone who doesn’t want to take care of their kids.

      1. I suggest you re read your own article.

        1. Oh, please. I wish you could see just how “neglected” my children are.

          We are with our children every moment we aren’t working. We rarely even get a babysitter. My children are smart, funny, athletic, and loved. They want for nothing, and I have sacrificed greatly to give them the future they deserve.

          This isn’t 1926. It’s perfectly okay for both men and women to have jobs. In fact, some would say it’s necessary in today’s economy.

          Deciding whether to work or stay home is a personal decision. Each family needs to make that decision for themselves. If you stayed home with your kids, that was your choice. I’m sure you don’t regret it, either. My mother was a SAHM and I’m pretty sure she doesn’t regret a thing. The right answer is different for everyone.

    2. Do you have kids? Do you take care of them and not work?

  7. I kind of know the feeling, as we didn’t have daycare but had costs for preschool that we will no longer have now that our youngest will be entering kindergarten.

    1. Yes. Same here, actually, at least for the last year. My daughter youngest child was in preschool for this past year, but the budget his was similar to daycare.

  8. Your quote is: “I have never wanted to be a stay-at-home mom”. Then, you proceed to have 2 lovely children.

    You also state they have been in daycare since they were 10 weeks old. For seven years.

    Now, you are so happy that they won’t cost you as much money, since they are in school.

    Sorry, but everyone makes choices. Your choices are your own. Clearly you are not a welfare mom with limited choices which would result in the necessity of working to provide a shelter and food.

    You simply preferred to advance your career and put your children into the hands of other people.

    The argument that your making more money is better for them in the long run is a false premise. Plus, now you are crowing about saving $5 k per year for tax sheltered college expenses.

    By the way….did you get federal tax credits for child care expenses for the last 7 years? Of course you did.


    1. Of course I’m not a welfare mom with limited choices. What difference does it make? Even some low-income women work for their own reasons.

      Here’s my question: Do you feel the same disdain for my husband’s choices? After all, he has also worked this entire time. In fact, he worked much more strenuous hours than I ever did since he was a funeral director. Do you apply the same judgment to his situation? Should he have also stayed home for the last seven years? Does he deserve the same criticism?

      Sorry babe, but it’s 2016. Women have been in the workforce for decades now. Sometimes its by choice, but not always. Some women prefer to work, and yes, advance their careers. I know dozens of smart, educated women (and men) who enjoy fabulous careers and use daycare services to make it work. It’s not for everyone, but everyone should do what’s right for them.

      This is the honest truth: I have no regrets. You can project your feelings onto me all you want, but it doesn’t change a thing. And yes, now that my kids are in school full-time anyway, I am SO GLAD I worked all this time. Everything has turned our wonderfully, including my children.

      And no, I don’t regret saving money for my children’s college education. I don’t want them to start their adult lives with debt, so I feel that’s the responsible thing to do.

      To answer your question:

      No, I actually did not take the child care tax credit. We have used two separate in-home daycares and I paid in cash both times. Both women seemed to prefer it that way, and it was fine. Not that this makes any difference, but……

      1. We got federal tax credits! I’ve also been super productive for the economy and I’ve helped hundreds of students learn statistics and economics on top of that. And my kids are amazeballs. Also my husband saves lives with his work.

        And now we pay even more in taxes because we earn so much money that we’ve jumped two tax brackets. You’re welcome!

    2. Wow Chris. You’re totally right. Being a SAHM actually does mean you love your kids more. Oh, and saving for college is a really terrible thing.

      As somebody who actually knows my wife, let me go ahead and correct you. Being a SAHM doesn’t make you a great mom just like being a working mom doesn’t make you a bad mom. Putting others down to justify your own choices is not a good look. But go ahead and keep telling yourself whatever you need to hear.

  9. Sorry. I still don’t understand why someone would have two children, send them to “daycare” for 7 years……and then boast about how much money they are saving.

    1. Well, this entire blog is about money and the various financial decisions families make. So you shouldn’t be surprised to read a post about some aspect of our budget. In this case, the big budget change we’re having is no daycare.

    2. I know, right?!? Solid money management is really something to be ashamed of.

  10. *eyeroll* Having good childcare so that Mom can work too means that you don’t care about the kids, but Dad gets a complete free pass, because naturally only Dad “has” to work? How narrow-minded.

    Anyway, we’re not only not getting the daycare raise yet but our daycare “tax” just went up twice in 2 months! We’re at $2000/month now, with ONE kid. Yay! I’m glad that I budgeted more than that during pregnancy and have a huge buffer of childcare costs saved for a rainy day. And I’m glad we always kept daycare on the front burner as the eventual day to day routine. The kiddo adores the daycare, often running off to play without looking back at me at dropoff, because they have so many more (and messier!) activities there and supervised interaction with the other kids that’s wonderful for their socialization. Ze loves us of course but the allure of a whole playroom where ze can hug babies AND play with toys? Too too appealing.

    At home with me, JuggerBaby got to go on walks and play outside a lot but zir social interaction with other kids was much more limited to when the other kids were available and for a highly social kid like JuggerBaby, that’s just sad. We did both daycare and home care with me simultaneously and it was clear that ze benefited a lot more by going to daycare. Add to that, my health means that on bad flare-up days, ze didn’t get as much fun and activity as we normally do. With daycare, their ability to keep it coming trumps any single person’s health. So I might grumble a little about the cost (because holy moly!) but honestly, this makes it possible for PiC and I to have and adore our child at all times we’re not at work. When ze gets older, the costs will come down some more, and I’m sure that the day ze starts kindergarten will be so bittersweet. It’s already hard seeing how fast ze is growing!

    1. It’s 1956 up in here. Didn’t you get the memo?

      I’m about to make some homemade dinner rolls and iron my husband’s clothes to celebrate all this backwards thinking. Want to join me?

      In all seriousness, I hear ya on the pros and cons. Both decisions have benefits and drawbacks. We all do what keeps us happy and sane.

  11. Really? Your response is “sorry babe, it’s 2016”? Women have been in the workforce for hundreds of years. I am not putting anyone down. I am commenting on the notion that letting kids grow up for 7 years in “daycare” and then celebrating their movement into “school” (with commensurate financial savings) is not something to celebrate.

    1. Oh, you are totally putting me down. Don’t kid yourself.

      Thanks for sharing your opinion. It has been noted. As always, I’ll continue writing about whatever I want. You can’t please everyone.

    2. Emily KERN says:

      You seem like a really sad case I’m happy for this family Holly you and your family deserve to celebrate not having to pay childcare and putting that extra money towards your kids college funds I think it’s great and don’t listen to this sad case right obviously this person can not relate and there’s always gonna be negative Nancy’s that are miserable with their own lives in this world that will try to bring someone down ignore this jerk.

  12. I won\’t miss Silicon Valley. Our first just turned 2 so daycare went down $100 to $1100/month. On the flip side, it will be that much better when we get the daycare raise once they start school!

    Although once the baby is a little older, and lower maintenance, we may consider part time daycare to reduce the cost. Time will tell.

    1. $1,100 doesn’t sound so bad for Silicon Valley! But yeah, you will get a huge raise once your child hits school!

  13. We went from daycare to private school to daycare for a second kid. DC1 will be in public school next year but we will still be paying for after school care. We are back to paying daycare $700/mo after $1400/mo last year in an upscale urban area, but me being on full pay instead of half pay kind of swamps that.

    So I dunno. We don’t have anything earmarked. I don’t know what we will do with our excess. DC1 already has ~90k in his 529 and he is 9 years old. DC2 is also on track.

    1. Wow, 90K! That’s amazing.

      We have nothing close to that, but we didn’t start ramping up our college savings until the last 2-3 years. Before that, it was just $25 per month. But still, it all adds up!

      Before and after-school care in my area is ridiculous (about the price of full-time daycare), so we are trying to get by without it. On normal days, my kids get off the bus at 3:40 so I send them upstairs to watch a move until at least 4:30. But they have abbreviated school days every other Wednesday (they get home at like 2:00), then there are school breaks, teacher work days, etc. Their schedules are more complicated than mine is!

      1. The Wednesday thing threw us for a loop last year in paradise. Nothing like that this year, and the after school program fills in weird half days! It is less than $500/semester, which seems worth it to me.

  14. P.s. I bet my kids are way more amazing than Chris’s. Just sayin’. (Not because I work but because my kids’ parents aren’t small minded.)

    1. Well, that’s a given. =)

      Not to mention the fact that they’ll have more opportunity in life because their parents saved for higher education. Perhaps they’ll graduate college debt-free even, and start their adult lives without the burden of debt so many of today’s young people face.

      1. And my daughter won’t be burdened with guilt when/if she pursues a career. Because people like Chris don’t want women to not work, they just want them to feel guilty about doing it. What patriarchical bs.

  15. I can relate. Our twins just started kindergarten and our $1000 “raise” will be a huge boost to our debt snowball ??

    1. Dang! That’s awesome. I don’t know how much debt you have, but adding an extra $1,000 to your snowball each month should speed up the process quite a bit. Good for you!

  16. Man, congratulations on your kids making it to kindergarten! Exciting times ahead for them and for you 🙂 The nice increase in income with daycare expenses gone should be really nice. They are going to have big fat checks for their college!

  17. We don’t have kids yet, but I get so excited when I read/hear about people’s 529 plans that I want to start saving for my future kids’ future college needs *right now*! Haha, then I remember to apply that kind of enthusiasm to my own saving/debt payoff should remain priority 1 for me, for now. I guess sometimes I just want to spice things up in my same-old-same-old budget.

    1. I know what you mean! I was excited about it, too. I couldn’t wait for each of my children’s social security number to be assigned so I could open their official 529 accounts.

  18. congratulations on your kids making it to kindergarten! Exciting times ahead for them and for you ?

  19. That’s great you can plan for the kids’ future with this “windfall.” We have also eliminated a major expense within the last two months via debt payoff, and are doing a little home improvement (while has already earned rent money) and investing for retirement more.

  20. This is an amazing day for you all!! It’s such a huge expense and when it goes away you feel like you are on cloud 9! I am soooo excited for you guys.

    I have two kids as well and my youngest started 2nd grade today. Exciting day! I have been done paying any childcare expenses for a couple of years now. The crazy thing is I feel like I would want more kids IF I didn’t have to pay for childcare. It’s steadily rising and if you want quality care you are going to pay more.

    Side note: It looks like I will be moving to your neck of the woods within the next 6-9 months.

  21. Holly,
    I have to chime here…when I had my two oldest kids I had to work but was so grateful to have them. With my baby(now 7) I got to stay home.

    I am sure you are aware, it is much harder to be SAHM. Some like me are not really equipped for it. I LOVE my kids and I know that I am a great mom but this 1950’s style harsh critisim of other women has got to end.

    1. You’re right. Being a SAHM is not an easy job. Some people aren’t equipped for it at all.

  22. Being in the child care business for over 25 years, I have found that there are a few families who do need to bring their kids even when on vacation because of routine being such a huge part of the behavioral plan for their child. Not following the routine for some kids makes for a horrible life for that child, as well as anyone around them. It then can take up to 3 weeks to get back on track. Sometimes, for some extraordinary families, there is no day off.

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