You’ve looked over your child care options, and you’re pretty sure getting a nanny is the best choice for your family. The thing is: It’s not cheap.
According to the Care.com 2024 Cost of Care survey, U.S. parents posted nanny rates for one child at an average of $766 per week — more than two times the average cost of a child care center and family care centers. The higher price tag leaves some families asking: How can I make hiring a nanny more affordable?
How much you pay for a nanny depends on a wide variety of factors, some of which can provide opportunities for negotiating lower rates or saving money elsewhere. And nanny contracts are highly customizable, so there are many ways to tailor an arrangement that works for everyone.
Here are a few ways you can save money while hiring a nanny.
1. Get in on a nanny share
One way families can save costs on nanny services is to pair up with another family and share a nanny. Nanny shares allow families to have a lot of the benefits of having a nanny — personalized, attentive, home-based child care — without having to pay full price for one.
That’s what Austin mom Darla Cameron decided to do. When she got pregnant with her first child, she was living near downtown Washington, D.C., where child care was scarce.
“Instead of scrambling to get on a waitlist right after I found out I was pregnant — which we knew might not work out — we decided to do a nanny share with our close friends who had a baby about a month after us and lived about a mile away,” Cameron says.
It’s a popular tactic, says Michelle LaRowe, lead educator at NannyTraining.com and author of “Nanny to the Rescue!,” especially for families looking to save money.
Sharing a nanny, however, doesn’t split the price of a nanny in half, she cautions. Nanny share setups are a lot more work for the nanny. They essentially have two different employers, and that can complicate things. As a result, nannies tend to charge more in nanny share setups than with individual families. But because families split the costs, it still ends up being less — about two-thirds the costs, LaRowe says — than if they had hired their own nanny.
2. Consider offering additional benefits in exchange for lower pay rates
Colorado mom Giorgianna Venetis-Colon knew sending her twins to a child care center would cost upwards of $3,000 a month — if they could even get in. Waitlists for two infants were a year and a half long, she says, so they opted for a nanny instead. She worked with her nanny to negotiate a lower rate, in exchange for additional employment benefits — in her case, more paid time off and allowing the nanny to bring her grandson to work with her.
In the end, Venetis-Colon ended up paying hundreds of dollars less than she would have paid for two spots at a traditional day care center.
3. Choose a nanny with less experience or fewer qualifications
Nannies with bachelor’s or master’s degrees or other certificates or specialized training are able to charge more for their services, LaRowe says. But nannies who don’t have a long list of degrees can still provide high-quality care. Families should ask themselves what their most important qualifications are in a nanny and determine what they are willing to pay more for, as well as what they can live without.
4. Take advantage of tax benefits
Many companies now offer employees dependent care flexible spending accounts (FSA) as part of their benefits packages. These accounts allow you to put up to $5,000 pre-tax in them. You can then use that tax-free money to pay for dependent care expenses like a nanny. A good estimate for how much you can save with this FSA is $2,000.
If you don’t have access to an FSA, you can still get tax breaks through federal child care tax credits. These credits often let you save up to $600 in child care expenses (for a single child), or $1,200 (for two or more children) on your tax return.
Either (or both) of these tax breaks could help save you hundreds — if not thousands — of dollars a year in federal income tax savings.
In the end, the amount of money you’ll save might work out to be pennies on the dollar you spend on child care, but it can help offset at least some of the costs associated with hiring a nanny, says Amy Matsui, director of income security at the National Women’s Law Center.
“Because child care is so expensive, families need all the help they can get,” she says. “The [child care] tax credit can play a role in making your money work smarter.”
Check out the nanny tax calculator to find out what tax breaks might look like for your family.
5. Adjust your schedule
If you really love a nanny but aren’t sure you can pay their requested rate, you may need to get creative on your end. If the nanny is open to fewer hours and there’s flexibility on your end, work with your partner, employer or a family member to adjust schedules so you can reduce the number of hours your nanny will be needed.
Maybe you and your partner offset your work schedules by a few hours in the morning and in the late afternoon, so one of you leaves earlier and comes home earlier while the other leaves later and comes home later. Or maybe a family member can do the few hours after school and before you arrive home from work. Arrangements like these can trim two to four hours a day off the hours you need child care.
6. Consolidate outsourcing
Another common way families work to lower costs overall is to look at what other services they may be already paying for, such as house cleaning, and asking the nanny if they are comfortable taking on some of those responsibilities for an additional fee. LaRowe says consolidating what families outsource into a single role — such as a nanny-housekeeper or simply a “household manager” — can help reduce costs overall.
This situation works best, she says, when the children’s schedules offer breaks in the day when the nanny can focus on other tasks, such as when kids go to school or take long naps.
Potential services some families outsource that could be offered to a nanny include:
- Meal prep.
- House cleaning.
- Dog walking.
- Tutoring.
- Grocery shopping.
Think outside the box to trim costs where you can. Every little bit counts.
