For most dual income families,  childcare is often the second largest monthly expense for families (#1 is housing).  If you have two children under the age of five, you may be spending thousands each month on childcare if you both are working. Even if you have a stay at home parent, I find that budgeting for some babysitting and childcare is an important part of maintaining a healthy relationship and providing a mental break for the primary caregiver.

Since every family likely needs some form of childcare, what are the options and how do you pay for it? Below is a summary of childcare options (Pros/Cons) and estimated costs.

Options and Costs

Nanny– A nanny is a single caregiver that takes care of one or more children in your home. Most families say they pay between $15-22 per hour for the care of one child. If you need a full-time nanny, it will cost you around $2,400-$3,500 per month for 40 hours per week.


Flexibility– You can set a schedule that works best for your family.
Location– A nanny comes to your home, so no drop off required. They can help with the morning routine and with the household when kids are napping.
Health– Since your baby is at home and not exposed to other kids and their germs, he/she is less likely to be sick. Plus, even if your baby is sick your nanny is there to take care of them so you can go to work.

Cost– This is the most expensive childcare option, unless you do a nanny share (which can cut the cost in half!).
Finding the Right Fit- Finding the right person for the job is a challenge. As the boss, it is your job to make all the hiring and firing decisions, and this can be too much for some parents.

Reliability- Nannies are human too. They get sick and might not be able to come to work. That might mean you need to stay home from work or spend a fortune for a last minute sitter.

In-Home Daycare– This is usually the least expensive option because In-home daycares can keep costs low by spreading them among more kids. Most parents report paying between $60-70 per day for this option, which equates to $1,200-1,400 for full-time care.  Licensed small home daycares can have up to six children and no more than half can be infants.


Affordability– A less expensive option than a nanny. Most In-home daycares often offer less than full-time schedules or half-days that can be a great fit for a parent working part-time.
Socialization– One big bonus of this type of childcare is that your little one gets to make friends, learn from other children and get used to other adults caring for them.

Reliability– In-home daycares always show up to work since they have multiple caregivers.

Defined Schedules– Most daycares have very defined pick up times, which can be difficult if you need to work late.
More Sickness- More kids, more germs. Eventually your child will get exposed to these things, but with daycare they will be exposed sooner rather than later. Also, when your child gets sick you’ll have to stay home from work to care for him/her.

Daycare Centers–  These centers have several caregivers watching
larger groups of children in a bigger classroom-like setting. California Law states that the child to caregiver ratio be 6:1 for children under 18 months old.  The costs of daycare centers can be very high for infant care (almost as much as a nanny) but go down as your children get old and the ratio of caregivers gets higher. Average reported costs range from $1600-1900 for full-time care.

Proximity to Work– If you work in the city and want your children close to you, daycare centers are centrally located and provide early drop-offs and late pick-ups. This gives you time together in the morning and after work to reconnect.
Socialization– Just like In-home care, your children get automatic friends and most centers have enrichment programs at no extra cost (music, language, etc.).
Reliability– Again, they are always open.
Well Trained Staff– Caregivers must fulfill training requirements in education or early childhood development.

Cost– Despite having more children, many daycare centers employ more caregivers than required by law and have relatively high overhead costs. This leads to higher costs to pass onto parents.
More Sickness- Again, more kids, more germs. If your child gets sick, they cannot go to daycare and you will need to stay home or find a last minute sitter.

Now that you know your options, you need to figure out what will work best for your family and what you can afford. With my first born, I stayed home for a year and then used a wonderful In-home daycare part-time until my daughter started pre-school at 2 ½. With my son, I do a nanny share, which is not only the most convenient for me (I work at  ome) but also more affordable. Bottom line… you may need to try a few different options before you find the right fit for you.

I spend about $2,000 per month on childcare right now. It is a lot of money! But, remember it is only temporary. Eventually your children will be in a fine public school system and you can put all those childcare costs to saving for college!