Loan for Childcare


Hey everyone,
I’m a parent of a 1 year old daughter here in Charlotte, NC. I’m currently struggling to save due to the high cost of childcare. As many parents, we want to provide our baby girl with the best early childhood education. We are currently sending her to a daycare that is $295 a week. Which isn’t the most expensive but isn’t the cheapest either. Needless to say this bill (close to $1200 a month) is killing my budget.

My question to all of you is: Has anyone taken a loan out to pay for childcare? I know this may sound stupid but I think if a car is worth a loan then why not quality childcare.

My thought behind this is our budget would be a lot less stressful if we had an additional $200-$400 extra a month. If we stretch the payment of daycare from 5 years to 10 years that would benefit us tremendously.

I’m open to debate this topic.


Many on here would argue that a car loan is a really bad idea…pay cash. I never would have considered taking out a loan for child care. I think it would be far less stressful if you found a way to cut out as much from your budget rather than having a loan looming over your head. Do you have a spouse/partner where you could work opposing shifts so no daycare is required?


I agree with @Joe_5700 on the loan.

Another thing to look at are dependent care FSA. they are like medical FSA where you can pull up to 5k pre-tax money off your annual paycheck to be used for child or dependant parents care.


Thank you for your responses. I am opposed to debt as well. We are both driving cars that have been paid off. We are both in a position where our careers are starting to take off so we are trying not to leave the companies we are currently with.

Daycare has great benefits that we value and would like to keep her there. She is growing socially so much! She spent the first year with my father (#FREE!!!)

May I ask if you are willing to take student loans for education? Wouldn’t it be similar? The costs are very similar in some scenarios.


Yep I am participating in that. However, childcare for us is $12k a year. So it’s a little funky on how we are paying it.


What can you cut out of your current budget? Do you have cable TV? Memberships you can cancel? Eat more at home? If it were me, I would be stocking shelves at the grocery store on nights and weekends before ever taking out a loan for daycare.


Just to give some feedback on my budget below are our numbers:
Wife and I both work Monday - Friday 8am - 5pm. She is an accountant. I’m in banking. Both make around $51k a year each

Monthly Joint Bring home: $4700
Mortgage and HOA - $1400
Daycare - $1200
Utilities - (Energy/Water/Internet etc.) $520
Auto Insurance - $80
Student Loan - $350
Groceries/toiletries/diapers - $500
Gas - $200
TV - $120 (Will be cut on the 17th of February)
And we would like to tithe a full 10%. Right now we only do $200 a month.


Check this article out.


I personally would not take out a loan for daycare. For us, it just wouldn’t make sense. I left full-time work 8 years ago because state budget cuts ended funding for my teaching position at the university when I was 7 months pregnant with #2. We decided to have #3 fairly quickly, 2 years 9 days later, to get the most benefit out of me being home since we knew we wanted to have a third. When I return to work in the Fall semester I’ll pick up right where I left off salary wise. While I’ve been at home I’ve been able to adjunct a semester every other year when the department has had a need and keep myself fresh in their minds for when a full-time position is available when I’m ready to return.

Would it be possible for one, or both on different days, of you to work from home a few days a week? Then you could do part-time daycare so you little one gets some of the benefits of being there and y’all get some cost relief?


I really like that suggestion. However, unfortunately we are not able to work from home yet. Hopefully that will change in the near future. On the other hand I find it difficult to work and give the attention a toddler needs. But then again, I’m the Dad and we all know mom’s are better :smile:


The energy bills interest me. You’d be shocked on how much you’d save by switching to CFL/led bulbs.

Also it maybe worth looking into cheaper internet options. CenturyLink DSL gives us 12mbps for $34 per month


This seems to imply that child-rearing costs are over once daycare is over, but it isn’t true. There are sports leagues, uniforms, braces… it will always be something. Hopefully it won’t always cost as much as daycare, but taking out a loan for daycare will limit your options later on and you might be tempted to repeat the pattern indefinitely.


Oy, I feel your pain. Daycare is expensive and I agree what you are paying isn’t bad, as that is about what we paid 10+ yrs ago.

On the up side, as she gets older, daycares tend to charge less (ie: when out of diapers). With your current jobs, sounds like you’ll be bringing home more money in the future as well.

I’d love to see MMM break this all down. But, besides looking at utility cutbacks, maybe there is a way you can bring in extra money by doing some consulting on the side or your wife do some small biz bookkeeping outside of work?

But honestly, it sounds like you have your mind made up and just want someone to say it’s okay.


That is a very interesting point of view and a great point. I can definitely see that happening with some people. However, some of those things are optional. Daycare, for us (not everyone), is not.

I would ask others to consider the alternatives, and my thought process on this is what about those people who may be in a tighter situation than my wife and I. With more student loans or a car payment. Would you rather send your child to a lesser quality daycare if you had the option to take a loan out to send him/her to a top of the line daycare?


Oh no. I’m not taking a loan out. We are fortunate enough to where it is not mandatory. But I have friends who are not in as good a situation. But yea definitely taking on some extra side hustles in the immediate future lol.


Since I don’t have kids of my own I should probably stop here.
It’s so much easier to give advice from the sidelines. :wink:


Hey all opinions are welcome! I value all points of view as they may lead to brilliant ideas! And your so right. Costs never drop completely. But mannnnn, when we stopped paying for formula I did a huge HAPPY DANCE!!!


The water heater, furnace and AC are the biggest energy users. Try lowering your thermostat to 65 in the winter and raise it to 79 in the summer as well as knocking the water heater down a notch. Your energy costs are really high and your grocery/toiletry expenses are really low. My electric, water and gas bill never exceeds $250/month for all combined and this is in a 3500sq foot home.


Oh totally forgot my main point too! Oops. May want to look into bill averaging. All utilities I’ve ever had offer this.

They just take your last year of usage and change your bill to make every month the same price. Some recalculate 2x a year to make sure your are paying the right amount


We were in a tight situation. We had $156,000 in student loan debt and a car loan ($318/mo). In 2008 my husband’s salary was $35,000 a year. Between my part-time job the first 5 months of the year, the seasonal grading of standardized testing I did and 3/4 time teaching position I had that fall I brought in another $12,000. For us rather than me looking for a new job when budget cuts ended mine it made more financial sense for me to stay at home to care for the children and find ways to keep costs low.

If I were in that situation you described rather than take on a loan for daycare I would look into where we could cut back to live off of one full-time salary. The parent who doesn’t work full-time could get a part-time job either working from home or an evening/weekend job. Income based student loan payments would reduce that cost some to help until there’s either more income either because the full-time worker earns more, the at home parent has found an income source or the child is school aged and the at home parent can return to work.

The parent who stays at home most of the time would have more time do money saving things. When we were just a family of 3 solid food eaters and a nursing baby I was spending $300/mo to feed us mostly organic food. I had the time to look for sales and make most everything from scratch. Although you don’t have to be an at home parent to cook from scratch. I was a single Mom until the oldest was 8. While I was in graduate school I went to school full-time and worked part-time. I was able to feed the two of us and my Mom who lived with us at the time on $125-150 a month from Aug 2005 to Aug 2007 using the same strategies.

We adjusted our energy usage. In the hot steamy summer months. We set the AC at 85 degrees. When we were out of the house the AC was shut off. It doesn’t save energy to cool a place that no one is in. In the cold winter, we kept the heater set at 62 to 65 degrees and wore layers. If we were going to be out for most of the day we’d set the heat to 50 degrees and turn it up when we got home. We used only CFLs, although now we use only LEDs, We washed everything in cold and hung clothes to dry on drying racks indoor due to allergies.Made sure the water heater was set to 120 degrees.

The social interaction that children and the stay at home parent needs could be met by attending, or hosting so you don’t have travel expenses. Library reading times, parks and walks could also help with social interaction. The at home parent could start a home daycare to get the social interactions for the little one, some extra money and gives some tax write-offs for the home business.