How to Budget for Child Care

Starting a family can be an exciting period in your life, but the financial stress can put a major damper on this joyful time. Luckily, parents can easily learn how to budget for child care. This small time investment can lead to less stress over bills and more fun with your growing family! Learn more about how to balance your budget, and if you need a little extra cash, contact CashMax for our personal loan services.

How Much Does Child Care Cost?

Brace yourself! American families spend nearly 20 percent of their annual income on child care. That averages to $18,000 every single year! Given the high cost of child care, it's no surprise that a little budgeting can go a long way. Shop around your area and get in contact with different services. From day care centers to au pair agencies, price points can vary quite a bit. Do your research before starting your budget, and don't forget to consider child care tax breaks and flexible spending programs.

How Do I Start my Budget?

Take inventory of all your essentials. Things like mortgage payments, utilities, and child care receive top priority within your budget. But, it's also worth your time to look back on your spending habits from previous years. Do you love to travel? Are you a shopaholic? Cutting a few luxuries can free up a lot of extra money.

Also, reoccurring charges can add up. Set a goal to bring your own lunches and coffee to work, or buy groceries in bulk to take advantage of the discount. You can also cancel memberships and subscriptions to rarely used services. You might be surprised how much you can save every month with just a few lifestyle adjustments.

How Do I Allow for Flexibility?

Your budget is a working document, so there is always space to adjust as needed. As you follow your budget, take note of where your extra money is going. Are you still sneaking in those extra trips to the coffee shop, or did you under-budget your grocery costs? You may need to revise your figures. Though you still need to prioritize the essentials, discretionary spending is much more adaptable.

What if Something Unexpected Happens?

Life can be hectic, so it's a good idea to factor in an emergency fund when planning your budget. This chunk of change can prevent catastrophe when dealing with sudden injuries, job losses, and other unexpected scenarios. However, you may also want to adjust your budget for positive events, like promotions and raises. Extra money in your budget can create more room for afterschool baseball practice, violin lessons, and vacations with the family!