Childcare Costs - Is everyone paying this much?!?

[F0017S0]

2 Surgical subspecialists. 3 Kids. I would say we live in a MCOL-HCOL area (New england but not near Boston or NYC). Those costs are almost identical to ours. Would agree with what most others have said, just the cost of doing business.

I'm hoping to negotiate and cut costs back once kids get older. Our nanny is amazing and worth her weight in gold. But my wife and I also work very hard to be good employers. I'm hoping goodwill on both sides will lead to reasonable cost cuts once children start reaching school age and her responsibilities decrease. Hopefully she will be willing to accept pay cut for less work but a good reliable job/kind employers.

What do you do if your nanny won’t accept a reasonable cost cut? Go back onto the open market or maybe have the oldest help out with care duties (commensurate with age, of course)?

[F0017S0]

This is only one of the responsibilities and costs of having kids. Life priorities are going to change for you. Investing every hour and dime in someone else (spouse and kids) consumes everything you got. Winning the bet is fantastic. Good luck. Big choices.

The sheer magnitude of a single, early life line item of early childhood eclipses the median income for the entire country. That is mind boggling, to say the least. For OP, yes, it doesn’t really “matter” (financially) the large cost because it keeps OP and spouse in the high income jobs longer. Absolutely brutal, nevertheless…

[sealion1]

I would like to get a sense of what others on this forum think is a "reasonable" amount to pay for childcare. My wife and I live in a HCOL area and both work a lot of hours. I am a cardiac anesthesiologist that takes Q4 beeper call and Q11 in house overnight call. I also end up working late unpredictably during the week if a heart is added onto the schedule.

My wife is a partner at a big corporate law firm. She commutes downtown by train at least 3 days per week and bills a lot of hours. Its not unusual for her to hop back on her laptop once she gets home around 6pm and also on weekends. Our kids are 8, 5 and 2. Our school district only does half day kindergarten, and they seem to give the teachers a day or two off every month for a random in service/training. Even when the kids are old enough for full time school we will likely need full time help to cover summers, school holidays and whatnot.

We ruled daycare out pretty quick because they close too early for us to reliably pick the kids up. We could consider an au pair at some point but we would have to add an au pair suite to our house to meet the program requirements. They also take 10 weeks to get here, which would be very hard to cover. That left us with the full time nanny option, which we have been using for ~8 years. We have had some very good ones who have stayed >3 years and some really problematic ones that weren't reliable.

We started out paying around $20/hr in 2015....but rates have escalated in our area. Our most recent search had most candidates expecting $25-30/hr. Most of them also expect year end bonuses of 1-2 weeks salary. Given our typical 42 hours per week plus taxes (we use a nanny payroll service), this amounts to about $70k/year! It is a huge chunk of our annual spending. It makes me nauseated to think about how many brutal 24 hour calls I take every year just to pay for childcare.

We both have FIRE aspirations and would like to ramp down sooner rather than later.

How much are the rest of you spending? Any other ideas?

2 Surgical subspecialists. 3 Kids. I would say we live in a MCOL-HCOL area (New england but not near Boston or NYC). Those costs are almost identical to ours. Would agree with what most others have said, just the cost of doing business.

I'm hoping to negotiate and cut costs back once kids get older. Our nanny is amazing and worth her weight in gold. But my wife and I also work very hard to be good employers. I'm hoping goodwill on both sides will lead to reasonable cost cuts once children start reaching school age and her responsibilities decrease. Hopefully she will be willing to accept pay cut for less work but a good reliable job/kind employers.

[Tim]

This is a sobering post to read as a single, early 30's young guy. Kind of speechless just letting your posts sink in on the reality of childcare costs...

This is only one of the responsibilities and costs of having kids. Life priorities are going to change for you. Investing every hour and dime in someone else (spouse and kids) consumes everything you got. Winning the bet is fantastic. Good luck. Big choices.

[F0017S0]

HeyAnesthesia . Some folk childcare is 50%+ and could take up much of discretionary spend. Kids by far are more expensive than anything...even mortgage in many cases.

Even when full time school, there's dropoffs and staggered pickups and after school commits. The list never ends and the nanny becomes the house manager. We kept ours into middle school so she could keep working and doing that until spouse want we to be SAHM.

Once the kids are in middle school (maybe high school at the latest) they should be able to get themselves to and from school mostly on their own (at least that's what happened with me: bike in late middle school, public transit early high school, drive late high school)? So hopefully the cost of a nanny/child care will be completely gone in a few years (depending on how old the kids are right now)...

[F0017S0]

Hahaha this made me laugh out loud!! Even my fur baby costs at least this much. Doggy daycare while I'm at work plus boarding when I’m traveling costs 10-12K per year Thankfully I don't need to save for college - and she passed puppy preschool with flying colors

These inflationary pressures just seem to mutate at random across the economy...

[eyecandy]

While your arrangement is demonstrably better, $11k is still a lot of money (at least for me, that’s about 10% of my pay). Still pretty sobering nonetheless…

Hahaha this made me laugh out loud!! Even my fur baby costs at least this much. Doggy daycare while I'm at work plus boarding when I’m traveling costs 10-12K per year Thankfully I don't need to save for college - and she passed puppy preschool with flying colors

[wideopenspaces]

Thank you for all of the responses! It has been interesting to see what other options people have chosen and what they cost. It seems like daycare is a moderately more affordable option for those with more consistent hours.

In response to some comments others have made:
1- My wife and I both like what we do, but we do wish we could do it less. Unfortunately, there is no obvious “scale back” option for either of us. I would likely need to go work at a surgery center or go part time to make a dent in my hours, and that would mean I couldn’t do my favorite cases anymore (hearts). My wife has worked really hard to become a partner and take on more leadership roles in her cases, so she may also have to give up a fundamental part of her job to ramp down.

As it stands, we might be better off staying the course, saving aggressively and becoming financially independent sooner rather than later. Once we have that foundation more options will be on the table.

2- Several people have said something along the lines of “well they make a lot of money so it’s just the cost of doing business.” Fair point and that is how we view this expense most of the time.

As a long time WCI reader, I think I was just shocked when I realized how much of our annual spending goes to childcare. It seems to be an underemphasized obstacle to achieving financial independence. It’s right up there with a mortgage. I won’t go into a bunch of financial details but for us it accounts for about 30-35% of annual spending, and a whopping 55-60% of non-mortgage spending.

It sounds like we need to stick with the nannies for now. Hopefully we can find an alternative when the kids are all in full time school.

Your spending sounds right to me. Outside of travel we spend:
4k nanny
4.5k on two mortgages
5.5k everything else

Having kids makes reaching FI a lot more difficult for sure, you are not wrong about that. I think that the decision about cutting back or continuing with the expensive but convenient option vs more frugal but less convenient aftercare/camps decision will become more obvious as time goes on. And you can change it up along the way. We've done every arrangement possible in the 14 years of having kids- we just do what works best for us in the moment.

[StarTrekDoc]

HeyAnesthesia . Some folk childcare is 50%+ and could take up much of discretionary spend. Kids by far are more expensive than anything...even mortgage in many cases.

Even when full time school, there's dropoffs and staggered pickups and after school commits. The list never ends and the nanny becomes the house manager. We kept ours into middle school so she could keep working and doing that until spouse want we to be SAHM.

[HeyAnesthesia]

Thank you for all of the responses! It has been interesting to see what other options people have chosen and what they cost. It seems like daycare is a moderately more affordable option for those with more consistent hours.

In response to some comments others have made:
1- My wife and I both like what we do, but we do wish we could do it less. Unfortunately, there is no obvious “scale back” option for either of us. I would likely need to go work at a surgery center or go part time to make a dent in my hours, and that would mean I couldn’t do my favorite cases anymore (hearts). My wife has worked really hard to become a partner and take on more leadership roles in her cases, so she may also have to give up a fundamental part of her job to ramp down.

As it stands, we might be better off staying the course, saving aggressively and becoming financially independent sooner rather than later. Once we have that foundation more options will be on the table.

2- Several people have said something along the lines of “well they make a lot of money so it’s just the cost of doing business.” Fair point and that is how we view this expense most of the time.

As a long time WCI reader, I think I was just shocked when I realized how much of our annual spending goes to childcare. It seems to be an underemphasized obstacle to achieving financial independence. It’s right up there with a mortgage. I won’t go into a bunch of financial details but for us it accounts for about 30-35% of annual spending, and a whopping 55-60% of non-mortgage spending.

It sounds like we need to stick with the nannies for now. Hopefully we can find an alternative when the kids are all in full time school.

[MPMD]

agree with others
cost of doing business for OP
not an area to try to economize
you need reliability, dedication, and flexibility, i'd be happy to pay that bill
have a nearly full time nanny, could probably juuuuuuust about squeak by w/o one (academic EM + PP gas) but we'd end up in tight spots that would just be extremely painful.
frankly i don't want to come home after a night shift and stay up for 3 hours doing breakfast and getting kids ready for school.
we value sleep, time to exercise, and general wellness

[cards67]

$70k/yr doesn't seem all that unreasonable for a professional to look after your child. I know some who have done a nanny share, splitting costs between 2 families.

[invenio]

We always had a live in nanny. When our kids were young, my spouse was an attorney and I was a busy physician. Yes, it was expensive in this HCOL area, but well worth it to have help available at all hours.

These days, the nannies for the grandchildren get paid $160-$200 per day, depending on the skill level. One nanny is a peds nurse from a foreign country who drives, will run errands, and makes notes with I's and O's and q4h vitals when the baby is sick. She charges $200 per day and is well worth it.

Well worth it in my opinion. I don't have children but if I did, childcare is not what I would skimp on. Do you really want the cheapest option to take care of your most important thing in your life?

Everything is expensive these days,... and much more so if you want quality. If you want a good plumber you are going to pay handsomely,... or you can get "some guy from craigslist" to the job for a 1/3rd of the price and pray.

[JWeb]

I would like to get a sense of what others on this forum think is a "reasonable" amount to pay for childcare. My wife and I live in a HCOL area and both work a lot of hours. I am a cardiac anesthesiologist that takes Q4 beeper call and Q11 in house overnight call. I also end up working late unpredictably during the week if a heart is added onto the schedule.

My wife is a partner at a big corporate law firm. She commutes downtown by train at least 3 days per week and bills a lot of hours. Its not unusual for her to hop back on her laptop once she gets home around 6pm and also on weekends. Our kids are 8, 5 and 2. Our school district only does half day kindergarten, and they seem to give the teachers a day or two off every month for a random in service/training. Even when the kids are old enough for full time school we will likely need full time help to cover summers, school holidays and whatnot.

We ruled daycare out pretty quick because they close too early for us to reliably pick the kids up. We could consider an au pair at some point but we would have to add an au pair suite to our house to meet the program requirements. They also take 10 weeks to get here, which would be very hard to cover. That left us with the full time nanny option, which we have been using for ~8 years. We have had some very good ones who have stayed >3 years and some really problematic ones that weren't reliable.

We started out paying around $20/hr in 2015....but rates have escalated in our area. Our most recent search had most candidates expecting $25-30/hr. Most of them also expect year end bonuses of 1-2 weeks salary. Given our typical 42 hours per week plus taxes (we use a nanny payroll service), this amounts to about $70k/year! It is a huge chunk of our annual spending. It makes me nauseated to think about how many brutal 24 hour calls I take every year just to pay for childcare.

We both have FIRE aspirations and would like to ramp down sooner rather than later.

How much are the rest of you spending? Any other ideas?

You both work very hard, irregular hours. So if your nanny is reliable and good, then she's probably worth far more than $70k.

One of the benefits/perks of having high paying jobs AND following the WCI principles is that you don't have to care/worry about spending that much on childcare because you don't "need" that money.

[GorillaDO]

Going rates in my area are 25-30/hr.