With pay cuts and layoffs hitting more families, many parents are pulling out their kids out of play groups in favor of a more traditional (and cost effective) child care option: their own family.

A bettyconfidential.com survey of more than a hundred parents in October indicated that more than one in ten were taking their children out of day care to save money. A National Association of Child Care Resource and Referral Agencies (NACCRRA) poll in August showed that 40 percent of respondents who live close to their grandchildren regularly babysit.

The High Cost of Childcare
The savings from switching can add up. For example, day care for children under five in central New Jersey costs an average of $1,600 per child per month. That is why Monica Ahuja Sethi, a New Jersey mom, turned to her parents and in-laws to care for her two children, Ananya, 4 and Aarav, 2.

“Having my parents take care of my kids is not just less stressful, but also helps me cut down on my day care expenses. It’s a win-win situation,” says Sethi, who had been paying $700 a month for her daughter Ananya’s day care.

“Then, it was just my daughter," says Sethi. "Now with my son, I would have to pay through my nose for both of them—at least $2,500 to $3,000—and with the economy being the way it is, it is simply unaffordable.” 

Like Sethi’s parents, most grandparents do not expect to get paid for their services.

Grandparents Might Be Willing to Barter
In NACCRRA focus groups around the country, many grandparents surveyed say they are glad to have their children run errands for them in return for their child care services.

“Most grandparents get paid a fair amount in kind and they are happy about it,” says NACCRRA executive director, Linda Smith.

Smith, herself a grandmother of three who babysits her grandchildren regularly, says that the reasons for grandparents taking care of their grandchildren are mostly economic. “Many grandparents have rescheduled their own plans to accommodate child care needs of their grandchildren, either because their children can’t afford it or have been laid off,” she says. She also says it's beneficial if the grandparents make some money, especially if they do not have another job—though more often than not, they just want to help out their children.

One grandmother who gets paid for her services is Marian Garrigan, 54, from Oak Park, Ill. A former Morgan Stanley (MS) employee, she was laid off two years ago and since then has looked after her grandsons—Dan, 3 and Tom, six months. Her daughter Elizabeth, a school teacher, lives nearby and that makes the arrangement even better.

“In these economically trying times, more mothers have to work to help make ends meet,” says Garrigan.

Besides being more attuned to the needs of her grandkids, Garrigan feels that it is an enriching experience for both the child and the grandparent. “I would encourage other grandparents to take care of their grandkids. If you can take them to the library, class or playground, it gives you a great sense of community," says Garrigan. "You see things through a child’s eyes, again.”

Garrigan gets paid less than $10 an hour for her services, but she says her family is more important than money. “It definitely cuts costs for my daughter and also gives me income to sustain my expenses," says Garrigan.  "But you cannot put a price to being part of your grandchild’s upbringing and see them take their first step.”