Choosing Child Care: What New Parents Should Know

Insurance, Life Insurance
Choosing Child Care: What New Parents Should Know

Choosing child care is one of the biggest decisions you’ll make for your new baby, especially if you’d prefer strapping her to your back and taking her with you everywhere. If you’re like most parents, you’re already dreading the initial days of separation after spending so much one-on-one time with your bundle of joy. Here, the Nerds make the process a little easier by:

  • Exploring how other parents are handling child care.
  • Helping you weigh the options such as choosing a day care center or in-home nanny.
  • Giving you straightforward tips on finding the right care for your family.

In the U.S. about 70% of mothers work outside the home, according to the Pew Research Center, and the rate is even higher for fathers, making child care a necessity for many American families.

Leaving your child in the care of another may be difficult, especially in the beginning. Factoring in your values, your budget and your baby’s personal needs can help make the decision less fraught.

What are other parents doing?

According to 2011 census data, the most recent available, in any given week 61% of children under 5 are in some kind of child care arrangement, whether it’s a traditional day care setting, at home with a nanny or with a grandparent while mom and/or dad is at work.

For infants and toddlers of employed mothers, the most common arrangement is family care, in which the child is cared for by a grandparent or father, according to the census data. At last count, approximately 21% of all children under 5 are cared for by one parent while the other is working, 26% are watched over by another family member, 25% go to a child care center, nearly 8% are cared for in a child care provider’s home, and just 3% have nonfamilial in-home care, such as a nanny.

Day care or in-home nanny?

Many factors are worth pondering when comparing child care options. For this analysis, we’ll consider socialization, cost, convenience and safety to weigh the benefits of nanny care (in-home care by someone who’s not a family member) against child care outside the home (in a provider’s home or a day care center).

Day Care Benefits Day Care Drawbacks
Socialization with other children Individualized attention may be lacking
Exposure to new and different toys and environments Illness spreads easily from child to child
More budget friendly Midday naps may be more infrequent or interrupted
State regulated and licensed Hours of care are typically limited to traditional business hours
In-Home Nanny Benefits In­-Home Nanny Drawbacks
A strong bond between child and care provider Cost
Baby can nap, play and eat in his or her own space You’re responsible for payroll and “nanny taxes”
As a parent, you have more control over how your child’s time is spent Sick or vacation time for nanny could leave you in a bind
Individualized attention throughout the day No official regulation, so any vetting and screening are largely up to you

Determining a fair price

How much you’ll pay for child care varies considerably depending on where you live and the type of care you choose. Some guidelines consider 10% of family income an affordable price for care, but Americans may spend less or much more depending on a variety of factors.

For married couples who opt for a day care center, the average cost of care across the nation ranges from 7% to 19% of state median income, according to a 2013 report by Child Care Aware of America. But single parents pay far more, averaging more than 25% of their median income.

Call around to local centers and home-based care providers to get an accurate and up-to-date picture of what people are paying in your area.

If you’re considering a nanny, price considerations are a little different. According to a 2013 survey of more than 600 nannies by the International Nanny Association, the average hourly rate was about $17. Of course, nannies who double as household managers, those with advanced degrees and specialty nannies get paid more, as do nannies in areas where the cost of living is higher.

Hourly wages aren’t the only concern with a nanny. What about benefits — will you offer paid holidays and sick leave? How about health insurance? Again, speaking with a local placement agency or other families with in-home child care will help you determine a fair rate in your area.

For more information on your responsibilities as an employer of a nanny, the International Nanny Association offers a guide to payroll and taxes.

Pro tip: Check with your employer to see whether a Flexible Spending Account for child care expenses is offered. These accounts allow you to set aside pretax dollars for eligible dependent care, which could mean considerable savings throughout the year.

Evaluating outside child care

If you opt for a family day care or child care center, you should begin looking at local options before your baby arrives. Many facilities have waiting lists and rigorous application processes — especially in larger cities where the market is competitive — and you don’t want to be caught without arrangements just weeks away from your return to work. Follow these steps:

  1. Make a short list, prioritizing facilities and providers that you’ve heard good things about. Recommendations from other parents can be especially valuable in your search for good care.
  2. Arrange to tour three to five facilities, taking care not to show up at naptime, as there won’t be much activity to see. As you tour, pay attention to such things as cleanliness, whether the children are engaging with one another, whether the staff is engaging with the children and whether everyone looks happy to be there.
  3. Ask whatever questions come to mind. Some important ones:
  • What is the adult-to-child ratio?
  • How many children are in the room where your child will be?
  • What are the training and hiring standards for caregivers?
  • What is the staff turnover rate?
  • Are all providers licensed in CPR and first aid?
  • How does the facility ensure security, and what is the protocol for child pickup?
  • Is there a waiting list and if so, how long is it?
  • How much is the application fee and tuition?
  • What hours and days is the center open?
  1. Take notes on what you did and didn’t like at each facility and compare your findings.
  2. Check to see whether your state operates an online database of licensed child care operations. If so, there’s a good chance you can view any licensing issues, investigations and violations associated with all licensed facilities. This map from Child Care Aware can help you locate the proper agency in your state.
  3. Before making a final decision, drop in at least once at a different time from when you toured. You want to make sure you have an accurate picture of how the day care operates when visits aren’t expected.

Evaluating in-home child care

Interviewing a nanny may be far more intensive than distinguishing among child care centers. After all, this provider will be in your home and will be the only one spending time with your child when you’re out.

Although you can find nannies advertised on community bulletin boards and even Craigslist, the Nerds recommend you contact an agency or a local training program or get a referral from a friend or family member about potential candidates.

Pro tip: If your preference is for a nanny, but the costs are too steep, consider a nanny share program, growing in popularity across the U.S. Nanny sharing is when two or more families share the services of a single in-home provider. You pay a fraction of the cost of a full-time dedicated nanny.

Agencies are accustomed to helping place the right nannies with families depending on their specific needs; they’re also likely to run considerable background checks, including criminal histories, driving records, employment histories and even credit screenings so you don’t have to. These agencies come at a cost, however. The International Nanny Association says fees for placing a nanny can range from $800 to $8,000. The good news: Many of them include a guarantee of some sort in case the placement doesn’t work out.

Placement agencies and online child care listings aren’t the same thing. Make sure if you’re perusing a website that you know what has and has not been vetted by the company. If the website takes no additional steps to ensure the validity of their nannies’ backgrounds, you’ll need to take on that responsibility yourself.

In any case, you’ll want to interview your nanny candidates in depth, ascertaining:

  • Their previous nanny experience and what ended their relationships with prior families.
  • Any medical, specialty and additional training they might have.
  • Their educational background.
  • What they enjoyed and didn’t like about previous nanny jobs.
  • Their scheduling flexibility.
  • Their willingness to take on household management duties.
  • Whether there are things they’re not willing to do while working.
  • How they foresee their time with your child being spent.
  • Whether they’re legally authorized to work in the United States.
  • Whether they’re able to keep up with the physical demands of a growing child.

There are certain questions you can’t ask potential employees, including about their sexual orientation, race, religious views, marital or pregnancy status, disability or age.

A nanny has the potential to become part of your family, so once you’ve gotten all the technical questions out of the way, make sure you click. Ask candidates about their interests, get a sense of their personality and be transparent about any quirks, special needs or conflicts that could crop up.

Start early for peace of mind

Finding the right child care solution for your baby can be stressful and heart-rending. Begin evaluating your options as early as possible so you’re confident in your choice when it comes time to go back to work. Bolster your decision making by reaching out for input from other parents in your community, your circle of friends and online social networks, and trust that although no one can care for your baby exactly like you would, there are many competent and trustworthy providers out there.

Elizabeth Renter is a staff writer at NerdWallet, a personal finance website. Email: elizabeth@nerdwallet.com. Twitter: @ElizabethRenter.