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Q: How do I Plan Ahead for Child Care Costs?

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A: With the increase in the number of two-income households over the past few decades, more families are in need of child care during the work week. Having a baby is expensive enough, with the costs of basics like formula, baby food and diapers. When you add in the cost for child care services, you realize how much having a baby affects your cash flow situation. This makes planning for it even more important.

Your child care costs will depend on multiple factors, including the part of the country in which you live, if you are in an urban or rural area, the kind of service you want from the provider and whether you prefer a day care center or an in-home setting. A typical range for day care services can be between $100 and $400 per week, per child. Infants require a lower staff-to-child ratio so the cost of infant care is typically greater than it would be for toddlers.

 Some child care providers may have additional services that could increase your child care costs including supply fees, staff training charges and even paying for staff vacation time and holidays when the center is closed. When that happens, there can be an added cost to find a back-up day care.

 For many families, child care costs are the second-largest monthly expense in their budget, trailing only the home mortgage. So how does a young couple plan ahead for such a shock to the family finances? Here are some ideas:

 1.     Eliminate extra debt so your budget can absorb the cost for day care when it’s time for parents to go back to work. You’ll be in a better position if you are free from things like credit card balances and student loans.

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