One of the biggest financial challenges working couples face is the cost of child care. If you have a dual-income family, the first step is to sit down and run the numbers to make sure it makes financial sense for both parents to work. Most couples assume that two incomes greatly increase their overall take-home pay, but this is not always the case. Many are surprised how little a second income contributes to the household finances, when factors such as taxes, child care, commuting, business attire and other business-related expenses are taken into account. A $40,000 annual salary sounds great, but that can easily be whittled down to less than $5,000 a year in take-home pay when all the work-related expenses are taken into consideration. You can use this calculator to see where you stand. On the flip side, you also need to anticipate and calculate future income loss. A stay-at-home parent who plans to re-enter the work force once the kids get older will sacrifice many years of raises and promotions, and may find it much more difficult to find a job. Since everyone's circumstances are different, you need to look at the important aspects in your life and run the numbers to decide if that second income is worth it. If, after careful consideration, a second income is part of your plans, there are a number of steps that you can take to reduce the costs of child care: 1. Flexible spending accounts: If either of a couple's employers allows money to be placed into a child care flexible spending account , it's worthwhile to take advantage of and set aside the appropriate amount to cover day care expenses. The Internal Revenue Service created the accounts to allow you to set aside money for child care with pretax dollars. That creates an instant savings -- equal to the rate you are being taxed on the second income -- for child care costs. 2. Child care discounts: Many companies now set up special partnerships with local day care facilities to make services available to employees at a discount. This can often cut the cost of child care by 20% or more, depending on the arrangement your company has made with the provider. Contact your personnel office to see if they have such an arrangement -- and if they don't, encourage them to make one.