How to Save Money on Childcare

Modern life has significant financial implications for raising children. Parents find themselves balancing work, personal commitments, and childcare, on top of personal finances. Childcare brings potentially high costs or a reduction in disposable income. Single-parent and dual-parent households face large dilemmas when it comes to childcare. They need to ensure high-quality care for their children. However, parents need to maximize earnings and minimize expenses at the same time. In these times of increased expenses, parents are asking how to save money on childcare. This is an increasing concern around the globe, including in Canada.

Related Reading: How to Make Money on Maternity Leave in Canada

how to save money on childcare

With growing populations, the demand for reliable and affordable childcare solutions rises. The Canadian government has made significant strides in improving the childcare situation. Such as the introduction of federal and provincial initiatives, Toward $10-a-day: Early Learning and Child Care. All provinces and territories, through mutual agreement with the federal government, have agreed to work towards $10 per day childcare by 2026. This initiative also aims to increase spaces available in licensed childcare facilities. The program has been working in phases. It has already helped to reduce childcare costs nation-wide. In fact, some provinces have already hit the $10 per day target. 

Get the lowest mortgage rates and mortgage rate holds in Canada

While relief is on the way in the known future, people are still struggling. Thankfully, there are a range of strategies parents can use to save money on childcare costs. This can be done without compromising the level of care a child receives. From community resources, flexible work arrangements, family support, and government programs, there are options with how to save money on childcare. All while fostering a nurturing environment for children. Keep reading to learn more!

Related Reading: Average Cost of Living in Canada

The Cost of Childcare in Canada

Childcare in Canada has challenges and hefty financial considerations. Parents strive to provide the best for their children. Understanding the cost of childcare in Canada is important before making a choice. It allows you to find the best options. Each province and territory has different costs for childcare. Additionally, each province and territory has varying available subsidies.

The federal government has formed Early Learning and Child Care Agreements with each province and territory. These agreements aim to significantly reduce childcare fees and increase childcare availability. These initiatives largely began in 2021 and aim toward securing a national average of $10 per day for childcare by 2026. The full details of this framework can be found here: Multilateral Early Learning and Child Care Framework.

Parenthood in Canada comes with many challenges. Including childcare which comes with emotional considerations and financial realities. Understanding childcare costs is essential so you can make the best decision for you and your kids. The current average monthly cost for childcare is around $1,000 for full-time care. This is a figure that has been significantly reduced since 2021. But even so, across the country, there is a wide range of the cost.

When funding was first agreed to by the federal government, provinces had to cut childcare fees in half within the first year. Then, they had to work towards getting childcare costs under $10 per day by 2026. Saskatchewan, Manitoba, and Newfoundland have been able to reach the $10 per day goal already. Childcare costs remain high in Alberta, Ontario, and British Columbia. Here is a detailed article on the progress made by provinces and territories. It examines the cost in 37 cities across the country. Furthermore, according to Statistics Canada; $7,790 is the yearly national average paid for full-time childcare. This figure can vary greatly based on the age of the child, type of care, and location. Below are some key statistics about childcare in Canada.

Cities with the most expensive childcare

  • Richmond, British Columbia > $905 per month (2023)
  • Calgary, Alberta > $838 per month (2023)
  • Toronto, Ontario > $725 per month (2023)

Get the lowest mortgage rates and mortgage rate holds in Canada

Cities with the least expensive childcare

  • All Quebec cities – $192 per month (2023)
  • Saskatoon, Saskatchewan – Regina, Saskatchewan – Winnipeg, Manitoba – Iqaluit, Nunavut – Whitehorse, Yukon – St. John’s, Newfoundland > $217 per month (2023)
  • Fredericton, New Brunswick – Moncton, New Brunswick – Saint John, New Brunswick – $391 per month (2023)

Related Reading: Cheapest Place to Live in Canada

Why is daycare so expensive?

Soaring costs of daycare have become a pressing concern for parents. There are several factors contributing to this growing financial burden. Ultimately, providing quality care for children is expensive. Here are the key elements that raise the expense of childcare:

Need for Qualified Staff and Ongoing Training

Quality childcare requires well-trained and qualified staff. With increases in qualifications, there becomes a higher demand for competitive salaries. The need for continuous professional development, background checks, and certifications is also an additional cost to the entities offering childcare services. When costs to offer a service increase, so does the price.

Regulatory Compliance

Daycare facilities are subject to strict government regulations. This is to ensure the safety and well-being of children. Compliance with licensing requirements, safety standards, and adequate staffing ratios drive up costs.

Environmental and Developmental Resources

Providing safe and stimulating environments requires investments in suitable facilities. This includes age-appropriate play equipment, educational materials, and other resources. These overhead expenses contribute to the overall cost of daycare services.

Operational Hours and Flexibility

Many daycares offer extended hours or flexible schedules to accommodate working parents. Providing this level of flexibility incurs additional staffing and operational costs.

Related Reading: Average Cost of a Home in Canada

Is it cheaper to be a stay-at-home mom or parent?

Some parents crunch the numbers and determine that being a stay-at-home parent is better. At times, this can also be the most cost-effective solution. Other times, it can be a consideration in how you would like your child to develop.

Many parents who stay at home may prefer to be the primary caregiver of their children. Cost is not the only factor parents consider when they decide to be stay-at-home parents. However, cost is a major consideration too. To determine if it is cheaper to be a stay-at-home parent, parents must consider the income they could be earning versus the cost of childcare and other living expenses.

Stay-at-home parents often forego earning any additional income. This allows them to be present with their child and participate in their development. Ultimately, raising children is a full-time job. It allows very limited opportunities to earn money in a classic 9 to 5 world in the same way. Although, some stay-at-home parents may work freelance or remotely to make ends meet. It is just as much a lifestyle choice as it is a parental and monetary choice.

Taking time to raise children may allow them time to fulfill household management tasks too. Tasks like cleaning, cooking, grocery shopping, and any sort of child pick-up or drop-off. If parents are paying for these services so they can work, there is a cost saving to consider by staying at home instead.

Here’s some additional information to consider:

  • A parent may earn $40,000 per year working 9 to 5.
  • Childcare costs may be $7,790 per year. 
  • This represents a potential net income of $32,210 per year.
  • Additional considerations may be:
    • Commute time and costs
    • Whether there is an additional income source or a way to make money remotely/freelance
    • Whether time away from work would impact career progression
    • If there are multiple children
    • If any children are in extracurricular activities and have increased scheduling demands

Related Reading: Back to School Shopping: What do your kids really need?

How to Save Money on Childcare

Navigating childcare costs can be a challenge for many parents. However, with strategic planning and resourcefulness, it’s possible to save money. This can be done without compromising the quality of care for your child. Saving money on childcare requires careful consideration. You must explore available options, and creative solutions, and develop open communication with childcare providers and other parents. By combining these strategies, you can create a childcare plan that meets your child’s needs. You can also avoid excessive strain on your finances.

Related Reading: Does Your Debt Die with You in Canada?

Here are some tips to help you save on childcare expenses:

Explore Government Subsidies

Research and apply for government childcare subsidies or assistance programs. Contacting your city or provincial government can connect you with needed aid. Often, there are many programs geared to income level. Ensure you explore these.

Claim Childcare Fees on Taxes

Parents can and should claim all childcare related fees on there taxes. For more information read, claiming child care expenses in Canada.

Related Reading: Tax Credit vs Tax Deduction in Canada

Utilize Family and Friends

Consider informal childcare arrangements with family members or friends. You never know who may be willing to assist. This can be a cost-effective and reliable option. Just ensure schedules are created and aligned. 

Flexible Work Arrangements

Negotiate flexible work hours or explore remote work options. Having more control over your work schedule can allow you to earn an income while caring for children. It could reduce the need for full-time childcare and instead relying on more affordable part-time options.

Share Care with Other Parents

Collaborate with other parents to create a shared childcare arrangement. This could involve alternating days or weeks, watching each others’ children. This would reduce the overall cost for each family. It would also allow all children the social development they require.

Community Resources

Investigate community resources. Local community centers, churches, or non-profit organizations may offer affordable or subsidized childcare programs. These resources may also offer drop-in programs or extracurricular activities.

In-Home Daycares

Explore in-home daycare options. These can be more cost-effective than larger childcare centers. Ensure that the provider is licensed and meets safety standards. Children deserve high-standard in-home daycares.

Negotiate Rates

If you choose a formal childcare center, don’t hesitate to negotiate rates. They are used to financial hardships and the need to discuss child and family needs. Especially consider negotiations if you have more than one child attending. Some childcare centers also lock in lower prices for fixed long-term arrangements.

Look for Discounts and Promotions

Some childcare providers may offer discounts for early payments. They may offer referral incentives or promotions during specific times of the year. Stay informed about opportunities to save money at your current childcare facility.

Related Reading: Tips On How To Save Money

Cutting Childcare Costs

Cutting childcare costs is important to families around the world and in Canada. It’s a significant financial burden, demanding resourcefulness. Community, family, and friends’ support is invaluable. You can create shared schedules that include joint “playtime”. Exploring alternative work arrangements and hours is crucial for balancing responsibilities. A look at household income helps assess the viability of one parent staying home. This would reduce external childcare costs.

Adaptable working arrangements are needed, and many employers recognize their value. How to save money on childcare involves tapping into community support, exploring alternative work arrangements, and conducting a thorough financial assessment. This will create solutions that align with the dynamic needs of your modern family.

Read More: 10 Cheap Things to do this Summer in Canada

You’re in the right place for financial advice.

Getting started is easy, fast and free. Match to your perfect advisor now.

Get 12 Smart Questions Everyone Should Ask Their Financial Advisor

Download these questions plus more with the Advisorsavvy community newsletter – subscribe now and enjoy a wealth of knowledge.

Subscribe now and get 12 Smart Questions Everyone Should Ask Their Financial Advisor