Two years ago with an infant and a two year old in full time daycare our expenses were insane! We were paying nearly $2,000 a month. Luckily our school district has a free preschool program which we started at age three so our costs dropped significantly.
Now I have my two year old at a great daycare center which costs $245 a week. And my 4 year old is in pre-k so I pay $400 a month for after-care. My total monthly childcare costs are currently $1380. (Side note: we were at another cheaper daycare center for a while and trust me we're so much happier paying a little more to know our kiddos are in great hands.)
So it's a lot. It's funny because I frequently hear people encouraging couples to have more kids regardless of financial concerns, saying "oh, you'll figure it out!" Please. Even if I were to figure out squeezing another $250 car seat plus two years of diapers into my budget I'm confident another $1,000 would not just fall from the sky.
But just this week I got a note saying it's almost time to register my eldest for kindergarten! I can't even believe it. In just eight short months our child care costs should go down! Assuming we will pay $400 a month for my youngest child's aftercare and $220 a month at an aftercare program at the elementary school our costs will be just $620 a month, a savings of $760 a month!
Before the passage of the Tax Bill we put $5000 into a Dependent Care account like we've done for the past several years, but that money doesn't even total half of our annual child care expenses. Now I see, however, that we are able to save up to $10,000 pre-tax money in a 529 and
First, I need to figure out what my total 2018 child care expenses will be, anticipating the awesome savings come September.
January - June - $1,380 a month = $8,200
July - August - $1,780 a month = $3,560
September - December - $620 a month = $2,480
Total 2018 Child Care Expenses (projected) = $14,240.
Okay, time to open
Edit: I was wrong and you can't use a 529 to pay for daycare. You can use it to pay for private school but that doesn't apply to us. I know only a few people still read this blog but I didn't want to give out bad information!