This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Unheard-of Financial Plan Every Would-Be Parent Needs to Hear About

NEW YORK ( TheStreet) -- Child care is one of the largest expenses related to raising a child today. Parents needing day care can expect to pay about $4,600 per year in Mississippi to nearly $15,000 per year in Massachusetts.

Most expectant parents, however, don't have a clear idea when it comes to planning for child care. Unlike a 529 plan, where money is set aside for future college costs, a solid child-care plan is largely unheard of.

Although no tax-advantaged plan has yet been designed to encourage saving for future day care or nanny costs, would-be parents should be able to create a good child-care plan on their own in three steps:

Step 1: Decide early what type of care the child will receive.

Joseph Clark, managing partner at the Financial Enhancement Group, believes it's important to answer these questions well in advance: Will the child be put in a day-care center or a family child-care home? Will the child need a nanny?

"Would-be parents should figure out their monthly child-care costs and put that in a savings account or reduce their spending by that amount to see if they can absorb the financial pressure," says Clark.

A recent report from Child Care Aware of America breaks down the costs of full-time child care in every state. It includes average fees for both child-care centers and family child-care homes.

In New York, for example, the average cost for infant care in a day-care center is about $14,000 per year or $1,167 per month. In this case, Clark says, the couple should set aside an amount to cover the first six months of care, or around $7,000.


If would-be parents choose to have their child cared for by a nanny, they should be prepared to shell out an average of $831 per week in New York City, according to data from the 2012 International Nanny Association Salary and Benefits Survey.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
AAPL $132.55 0.88%
FB $81.12 0.80%
GOOG $541.89 -0.11%
TSLA $245.96 0.14%
YHOO $43.64 -0.08%

Markets

DOW 18,255.17 -30.57 -0.17%
S&P 500 2,128.10 -2.72 -0.13%
NASDAQ 5,093.8960 +3.1020 0.06%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs