Will my childcare expense go down?

[hucktard]

Hey Folks, so I have two young kids, one in Preschool and one in Kindergarten. I pay about 1,900/month for childcare (preschool is $1200/month, kindergarten plus before school care is $600, other random classes are $100). Its crazy! I am trying to forecast my retirement date, and this is having a huge impact. My assumption is that once both kids are into school, my childcare expenses are going to go down dramatically. I assume total expenses are going to be more like $200-400/month for sports, classes etc. For those of you who have school age kids a little older than mine, are my assumptions actually correct? Because I have heard some people say that kids don't get any cheaper because of sports etc. However, my wife and I are pretty frugal and I just can't see us spending $900/month per kid on sports etc. Right now, we basically have to spend what we are spending on childcare (if we want to keep our jobs), but once they are in school I don't see there being $1900/month in expenses. I am really interested in hearing from people that have gone through this transition with their kids. Did your childcare expenses drastically go down? Why or why not?

[LivlongnProsper]

There are many expenses associated with children at all ages. As far as strictly childcare expenses go they should drop considerably for you depending on how long each day you still need it. It has been my experience (ages 15, 9, and 4) that younger kids have fewer activities and therefore cost less but as they get older expenses rise (piano lessons, driving school, sports, fieldtrips.....).

[2buttons]

Great minds. 

http://forum.mrmoneymustache.com/welcome-to-the-forum/children-costs-for-post-daycare-parents

[TrMama]

In our experience, yes. However, as with all expenses you have to make strategic decisions to make it happen.

We were able to go from $15,600/yr to $2400/yr when my youngest started school. However to do that we arranged for them to take the school bus back and forth to school and had MIL watch them after school until DH and I got home. This plan worked because the ride to and from school is 45min each way (non-mustachian house location for the win!) and MIL lives in our basement suite. Clearly, our plan won't work for everyone.

I also prepped the kids as much as possible when they were little. I talked up the idea of the bus and how cool it is to be home alone, taught them how to navigate our busy street safely, installed a keyless lock on the front door (no way for them to lose keys) and generally taught them how to be safe in the house alone. However, I have no idea if my kids are just savants in this area or whether my teaching was actually useful. I've been a parent long enough to know that you can't teach them everything.

You will still need some sort of childcare plan for Christmas, spring break, in service days and summer. This is why our cost may never be $0. Also, a decent chunk of the daycare money got redirected into their college funds. However, my retirement savings are still higher than when they were little, just not $15,600 greater.

[hucktard]

 Cool. Thanks for the input. After reading around a bit more, it does look like my childcare costs are going to go down substantially when the youngest hits first grade. My total childcare expenses will probably drop from ~1,900/month to more like $600.

[scantee]

Your child care costs will go down, but likely not as quickly or as much as might hope. I pay around $800/mo for after school care for my two school-age kids and while that is way less than I was paying when they were both in child care, it is still a big chunk of money and the second biggest line item in my budget. In four years the after school costs will go away but will likely be at least partially replaced by other costs like activities and higher grocery expenses. Summers are especially tough financially: this past summer I paid around $400/week for the two of them for either camp or the school district program

So yeah, kids, they're expensive! There is really no way around it and I mostly try to accept it and find other ways to cut back and keep spending under control.

[Cranky]

Yes, but...

you will need to budget for before/afterschool care, vacation days, snow days, and summers.

Bigger kids cost more for food, clothing and shoes.

Drivers Ed!

And really - when those childcare costs go down, start socking some of that money away for college. That comes up a whole lot faster than you think.

[mm1970]

Hey Folks, so I have two young kids, one in Preschool and one in Kindergarten. I pay about 1,900/month for childcare (preschool is $1200/month, kindergarten plus before school care is $600, other random classes are $100). Its crazy! I am trying to forecast my retirement date, and this is having a huge impact. My assumption is that once both kids are into school, my childcare expenses are going to go down dramatically. I assume total expenses are going to be more like $200-400/month for sports, classes etc. For those of you who have school age kids a little older than mine, are my assumptions actually correct? Because I have heard some people say that kids don't get any cheaper because of sports etc. However, my wife and I are pretty frugal and I just can't see us spending $900/month per kid on sports etc. Right now, we basically have to spend what we are spending on childcare (if we want to keep our jobs), but once they are in school I don't see there being $1900/month in expenses. I am really interested in hearing from people that have gone through this transition with their kids. Did your childcare expenses drastically go down? Why or why not?

My preschool is $1200 a month.
After school for the 5th grader is $900 a year ($5 a day)
Summer camp is $150-$250 a week, average of about $200.

Extracurriculars - I think that baseball is $300 a year.  For the big kid.

So, when little guy starts kindergarten:
Before kinder: $1210/mo x 12 = $14520/yr
Kinder after school program (more expensive than 1st-6th): $400/mo x 9 months + $250 (the half months) + $800/month x 2 months (summer camp) (I'm assuming vacation will decrease summer camp cost) = $5450.
Baseball: $300
After school enrichment classes: $300

Savings: $8470.

I did find this to be mostly true, by the way.  Older son didn't do too much extra.  Music is free through the school, after school care for 1st and later is cheap. He waited until 4th for baseball, and so isn't good enough to be on the traveling team.

[boarder42]

Just a note but how do "pretty frugal " and 3100 per month on childcare find their way into the sane sentence.

That's like saying look I'm pretty frugal but I eat caviar for lunch everyday.

Imo a pretty frugal person wouldn't ever spend close to 40k to take care of 2 kids. And this coming from an ultra high income couple that make almost 200k

And you're pretty frugal and going to continue to spend 900 a month on sports. You realize the outside is free right. There isn't a charge to walk out your door breathe air and play catch

This is fucking nuts.

[2buttons]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

[boarder42]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

And what's your income

Follow up

Why do you live there

[obstinate]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

Hrm. Palo Alto, CA here. $1,600/mo.

[2buttons]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

And what's your income

Follow up

Why do you live there

Last year household cleared 430k gross and on track to do just a smidge more this year.

Because burbs are cheaper than in the city.

[Kyle Schuant]

Compulsory expenses drop, optional expenses rise.

You are not obliged to pay anything at all for sports, music, tutoring or whatever. You may decide that some amount of these will be useful for the child.

[mm1970]

Just a note but how do "pretty frugal " and 3100 per month on childcare find their way into the sane sentence.

That's like saying look I'm pretty frugal but I eat caviar for lunch everyday.

Imo a pretty frugal person wouldn't ever spend close to 40k to take care of 2 kids. And this coming from an ultra high income couple that make almost 200k

And you're pretty frugal and going to continue to spend 900 a month on sports. You realize the outside is free right. There isn't a charge to walk out your door breathe air and play catch

This is fucking nuts.

This is going to depend entirely on where you live.

Some people are frugal, but have standards for child care. (It's a sliding scale.)

Some people are frugal, but have the "ivy league preschool syndrome".

Location matters.  Boston, for example, is well known for the craziness of child care.

Assuming child care is compulsory (you  need it), there will be a sliding scale.  There's a "floor" (you can't go below it), and a "comfortable floor" (you don't want to go below it).

Around here, the "floor" is probably $150 a week for one child, and that will be a home daycare that is not licensed where the caregiver does not speak English.  My floor is a bit higher than that.
At about $225 a week you have a large licensed childcare (8-12 children, 2 caregivers) where the caregivers are professionals but not necessarily educated.  The kids will play and have fun, but aren't going to learn their letters or anything like that.  (Whether or not you need that depends on the kindergarten requirements.)
At about $300 a week you are getting a smaller licensed childcare with a degreed professional, or for a toddler and up, a licensed preschool with teachers with bachelor's or associate's degrees.
At about $400 a week you can get private Montessori education, but the school day is 8:30 to 2:30, and that cost does not include summer or after school care.
At about $800 - 1000 a week, you can have a nanny (not live-in), and if you have multiple children, that might be less expensive.

So for preschool, for example, the "floor" is $850 a month (I have not found any below that, and $850 is a Christian preschool run by a church), and the "peak" is Montessori (actually, I'm sure the peak is some other private school that is so beyond my ability to pay that I have never looked it up).  Montessori is $19,655 - which includes extended care for the school year, 6 weeks of summer camp with extended care.  BUT, you will still have 4 more weeks of summer/ spring break camp to pay for, because there are 3 weeks in the summer that they are closed and they take 2 weeks off for spring break.

Of course, again, location dependent.  I wouldn't pay that much for 2 kids, but I have other options.  There are areas in this country where there really aren't any licensed options below that amount.

[Captain FIRE]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

Yep.  I've been looking into this and it's $27k for the place near my home, $26k for in my building (with the building discount) but they have no spaces available and take 20.5 days off per year, and 38k for other places near work.  $27k ($2250/month) is starting to appear like a bargain at the moment.

Even paying for activities when they are older, I'd be hard pressed to see how expenses couldn't go down.

[boarder42]

Some of us live in HCOL areas. I live in the cheaper burbs and pay 666.80 a week. Yup that's almost 35k a year.

Yep.  I've been looking into this and it's $27k for the place near my home, $26k for in my building (with the building discount) but they have no spaces available and take 20.5 days off per year, and 38k for other places near work.  $27k ($2250/month) is starting to appear like a bargain at the moment.

Even paying for activities when they are older, I'd be hard pressed to see how expenses couldn't go down.

yeah if i go to the daycare at my company an infant is 20k or i can go to a well referred in home licensed daycare in my neighborhood for 10k

[hucktard]

Just a note but how do "pretty frugal " and 3100 per month on childcare find their way into the sane sentence.

That's like saying look I'm pretty frugal but I eat caviar for lunch everyday.

Imo a pretty frugal person wouldn't ever spend close to 40k to take care of 2 kids. And this coming from an ultra high income couple that make almost 200k

And you're pretty frugal and going to continue to spend 900 a month on sports. You realize the outside is free right. There isn't a charge to walk out your door breathe air and play catch

This is fucking nuts.

Chill out dude/dudette, put down the espresso and read my post again. We don't spend $3,100/month on childcare. Where did you get that number from? We spend $1,900/month for two kids, and I admitted that is crazy! Also, its not like we have much of a choice. There is one childcare location that is within biking distance of my house/work. If I decided to take my kid to a cheaper place I could save maybe $150/month but then I would have to drive every day, instead of taking my kid by bike trailer, and they would get a lower quality of care. While $1200/month is outrageous it is the best option we have. Also, since you seem to be reading impaired, I stated that I DIDN'T think we would continue to spend $900/kid/month on sports etc. In spite of our crazy childcare costs we manage to save over 50% of our income right now, and neither one of us makes over 6 figures. Once our crazy childcare costs go down we should be saving 60-70%. So I think calling ourselves frugal is accurate. If you are going to be an asshole, at least be correct.

[Kyle Schuant]

$1,900 a month, is it worth it? I mean, the one in the couple who earns the least at work, how much is that? If for example yours is the last at say $4,000 a month, then your profit from working is actually $2,100.

Now consider: is there a part-time job or home business you could run that would earn $2,100 or more? And consider the cost of commuting, etc, too. So maybe you'd only need to earn $1,800 a month to break even - if you took the kids out, looked after them yourself, and got a part-time or home business job.

We took the kids out of childcare and I turned my work into an at-home business. My income on paper dropped a wee bit, but the lowered spending on childcare, commute, lunches out etc dropped much more than that. So overall we're better off.

But either way, what I said earlier still applies: there's no limit to what you can spend on kids, but most of it's optional, and there are usually cheaper options, for example a private school at $20k pa will not get better results than a state school plus $5k pa of tutoring, so that's $15k pa saved while getting the same end result. And do the kids need to do piano AND track AND dancing AND... blah blah.

[hucktard]

Kyle, we decided it's worth it for my wife and I to work. My wife makes less than me, but she still makes about $60K as a teacher. We live within a mile of our jobs. My wife also doesn't want to be a stay at home mom, and she doesn't want to screw up her pension and her career by taking a couple of years off. If this childcare expense was going to last forever, it would probably change our decision. It really doesn't make sense for her to stay home with the kids at this point because they will both be in school in a couple years. Paying 1900/mo in childcare sucks but it's something we decided we are stuck with for a couple of years.

[Kyle Schuant]

I can understand simply not wanting to be stuck at home, and to do something more intellectually challenging. But I would note that if you are following this site's methods, the pension should be a non-issue - you're providing your own retirement income, anything else is just a bonus.

[MsPeacock]

Yes, your childcare costs will go down. Other costs, like clothing and sports will go up, but not as much as your savings in childcare. Before/after school care is much cheaper than full time childcare. Unless you get a ssportastically gifted child and desire to sign them up for private coaching and travel teams,  activities won't be that costly. There are always community rec teams (e.g. Baseball here is $125 for the season and include the uniform).

There are costs to dropping out of the work force to raise kids. My lost income for staying home for 5 years was $500k+, and I was very lucky to get hired back at my same level. However, my progression past that I think suffered from years out of my field.