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Comparison of Childcare options and Costs
Nanny, Au pair, Daycare and Family Childcare Choices

Obtaining affordable childcare that is of high quality is a growing concern for parents nationwide.  Childcare options are a major concern for single parents – men and women alike, combined with escalating costs affords parents fewer and fewer options.  There are nearly 25 million children under six in the US of which approximately 15 million are in need of childcare due to working parents. Also, due to an increase in homes in which both parents work, the child care industry is one of the fastest growing in the US. 

This article takes a look at the more popular forms of daycare in the US including daycare, family childcare, nannies and au pairs.

Daycare (center based)
Daycare centers are typically the first thing that goes through a parent’s mind that are in need of childcare.  For single child households, this can be a good choice.  For families with two or more children or families with special needs, there are generally more cost effective options available.

A good friend that is a single parent dad with a single child states he utilized daycare for several years.  But admittedly, was not educated as to the other forms of childcare that were available at the time.  He would have given serious consideration to other forms had he known they were available.

Daycare cost can vary wildly depending upon where you are located.  The costs can range from $154 per month in Seattle to $2,200 per month in Acton, MA.  The median cost for daycare per month tends to be in the $610 range per month.  This means a family with three children will pay an average cost of over $1,800 per month in childcare alone.

(Despite the number of cons listed, do not let this stop you from placing your child in a good daycare.)

Pros

  • Generally cost effective option for single child families.
  • More socialization opportunities for your children.
  • Reliable care – even if your child’s primary worker is sick, a daycare center typically has someone that can fill in.
  • Most daycare centers are open from 10 – 12 hours per day, which is sufficient for many, but not all parents.

Cons

  • Nutritious meals are a challenge for most daycare centers.
  • Children tend to get sick much more often at a daycare due to exposure to many more children that may be sick.
  • Having a sick child means that you must have an alternate form of childcare.
  • Learning inappropriate things from other kids is a typical problem at daycare.
  • Lack of individualized care for your child.
  • Lack of flexible hours.  Day care facilities have rigid hours for opening and closing which may be problematic for many parents (especially single parents).
  • Infant childcare tends to be expensive and often have a long waiting list – several that we know of have waiting list as long as three or more years – talk about planning ahead!)
  • Most States do not regulate childcare providers between the ages of 2 – 5, while minimal training is required in a few States. 
  • The turnover of childcare workers is extremely high due to job stress, low pay and lack of benefits. 
  • The educational background of many daycare workers tends to be quite low with 45 percent of all childcare workers have a high school degree or less. 

Home Provider (Family childcare providers)
Home providers of daycares are almost twice as large in the US compared to daycare centers.  There are 119,174 center based day care centers in the US compared to 238,103 family childcare homes in the US.

A family provider is a caregiver that provides child care options in their home or in a home like setting, but it is not in your home.  They typically care for small groups of children where the children can be of mixed ages.  There is no set rule, but a family childcare provider typically cares for between 6 – 10 children of varying ages.

A family childcare provider follow most of the same pro’s and con’s as a daycare center, with some exceptions.

Pros

  • Setting is less formal than a center-based daycare with there being in general fewer children than in a formal daycare.
  • Tends to be more affordable than center-based daycare
  • Generally more flexible pickup times
  • Can be easier to arrange for infant childcare than in center-based daycare.

Cons

  • Less regulated than center-based daycare (and daycare regulation tends to be minimal in most States).
  • Most states do not regulate home-based care.
  • Most family providers don’t have any formal training in childcare (though many are parents).
  • Lack of backup childcare for times when the primary provider is sick or unavailable.
  • Home safety enforcement among family childcare providers tends to be quite lax.

Nanny
A nanny is an in-home provider that is either live-in or live-out.  A nanny tends to be on the more expensive side of in-home childcare.  A nanny’s salary can range from $350 - $1,200 per week depending on experience.  They can also receive room and board, health insurance, and paid time off of 5 to 15 days consisting of some combination of vacation and sick time off.  Additional perks may include cell phone, gym fees and mileage reimbursement for transporting the kids.

A live-in nanny may seem to become part of an extended family, but from a tax liability standpoint – this is far from being the case.  A nanny is considered a domestic employee and therefore must have taxes withheld (State and Federal) as well as Social Security, Federal unemployment tax and Medicare.  Hiring a nanny is not just “similar to hiring an employee” – you are hiring an employee and with that comes the obligation to withhold taxes. 

Pros

  • A nanny’s hours tends to be flexible – especially if they are live-in.
  • A nanny provides much more personalized care for your children compared to daycare.
  • A nanny can remain with a family for many years thus providing for consistent care as opposed to the high turnover that is likely to be experience in a day care or the two-year restriction that comes with the au pair profession.
  • A nanny is typically dedicated to one family.
  • Very convenient for parents that work long or unpredictable hours (such as a nurse, fire fighter or policeman)

Cons

  • Having a nanny is among the most expensive childcare options.
  • Having a nanny affords limited socialization opportunities with other children.
  • Background checks are not mandatory for being a nanny.
  • A nanny does not have to complete any verified training such as CPR or first aid. This may be critical when it comes to dealing with children with special needs.
  • Having a nanny requires you to calculate and pay payroll taxes.
  • Live out nannies receive overtime after 40 hours worked per week. In some states the overtime requirement applies to live-in nannies as well.
  • A nanny works in an un-supervised manner with no manager to advise or guide her with issues that she may encounter throughout her employment.
  • Having a nanny means that you must find alternate childcare when the nanny is sick or out on paid time off.
  • A nanny may charge per child, therefore the rates for more than one child are usually higher than the rates for one child.

Part-time Nanny
A part time nanny is generally the same as having a full-time nanny.  The differences are:

  • Part-time nannies command a greater rate ($12 - $25 per hour)
  • A part-time nanny typically has a minimum number of hours guaranteed per week, whether they are worked or not.
  • A part-time nanny is almost always live-out.

For detailed information regarding nanny pay see: http://www.4nannies.com/info/salary.cfm.

Au pair
The US Au pair program is regulated by the US State Department.  There are twelve agencies currently legally authorized to place an au pair in homes in the US – the firm that you are dealing with must either be one of these firms or affiliated with one of these firms.  Because the weekly stipend paid to the au pair is regulated by the State Department, there really shouldn’t be much variance in cost on a weekly basis in this regards.  There may, however, be a big difference when you factor in the program costs that the respective agencies charge. 

Typically, there will be up front program fees that will have to be paid regardless of which agency you go with.  This program fee may be part of the overall weekly fee that is paid to the agency.  These fees cover things such as administrative costs, health insurance, travel insurance and other miscellaneous fees.  After these fees are considered, the typical au pair agency does not make that much of a profit.

The US au pair program places typically young women between the ages of 18 – 26 that are from foreign countries, in US homes to care for children for between one and two years.  (The second year is an extension year that is usually approved by the State Department.)  The au pair provides up to 45 hours per week of childcare for $195.75 per week.  The au pair must be given 1 ½ days off per week and one full weekend per month.  They also must be provided with two weeks paid vacation and $500 toward the cost of 6 educational credits for their first year of service.

Having an au pair really makes sense under the following scenarios:

  • More than one child (or twins).
  • Pre-school age children
  • Children under six
  • Single working parent
  • Households with two working parents.

Pros

  • Au pairs are not considered as employees, but as an extension to the family.  There is no employer/employee relationship so there is no need to worry about payroll taxes.
  • Many au pairs are skilled in taking care of children with special needs. (Be sure to verify that your potential au pair is aware of the special needs.)
  • An au pair can assist with light housekeeping chores.
  • Having an au pair can be a very cost effective option compared to a nanny.

Cons

  • Due to US State Department regulations an au pair can only be with a family a maximum of two years.  This can be quite disruptive for families seeking to establish continuity in care for their children.
  • Because au pairs tend to be quite young, many times they may have conflicts with their personal desires, for example not wanting to work weekends.
  • Au pairs tend to get homesick perhaps due to their young age.

10 Guidelines to choosing care for your children

  1. The child worker you choose for your child should genuinely love working with children.

  2. The child worker should be an effective communicator, capable of communicating well with you and your child.

  3. The child worker’s hours should be flexible enough to match with your schedule.

  4. The child worker should be able to engage your children in activities regardless of the child’s age.

  5. The child worker doesn’t need to be a nutritionist but should have basic nutrition common sense.  For example, the child worker should know that Coca Cola and doughnuts for breakfast is not a nutritious meal.

  6. Be sure to check the experience background of the childcare worker.  While it is not necessary that they be degreed in any particular area, it is important that they have a background dealing with children.

  7. Are you prepared for someone to live in your home to care for your children?  If not, an au pair or nanny is not for you.

  8. If you are considering a childcare option where you need to leave your child in another facility, be certain that the facility is up-to-date on all safety checks

  9. Monitor your child’s attitude after the first couple days of care to make sure they have adjusted well to their care.

  10.  A criminal background check for your childcare worker is an unfortunate must.  Looks can be very deceiving and you can’t afford to take any risks where your child is concerned.

Resources

  • Center for Child Care Workforce, http://www.ccw.org
  • National Association of Child Care and Resource & Referral Agencies http://www.naccrra.org
  • The Parent’s Guide to Childcare, Allison Lee, How to Books, © 2008 (Heavy UK Bias)


 
   
   
   
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