Why Home-Based Child Care is More Affordable Than Corporate Daycare

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Posted by Rachael Tom

Some working families struggle to afford child care, with some people comparing the cost to buying a brand-new Hyundai Elantra every year

There are several reasons for rising prices, but did you know that in-home child care programs maintain lower costs than other types of daycare? Expenses tend to be higher at traditional daycare centers (where children are in a larger group at a business) than they are at home-based small group child care (where children are cared for in a care professional’s home).

Center-based vs Home-based_CostAccording to a Child Care Aware of America report, the average price of center-based daycare in the United States is $11,896 per year ($991 a month) for infants and $10,158 per year ($847 a month) for toddlers. The average home-based child care price is about $9,027 a year ($752 a month) for infants and $8,246 a year ($688 a month) for toddlers.

So what drives up the price of child care generally and what can make home-based care more affordable than traditional daycare centers?

The first factor to consider is that daycare centers have high labor costs. This doesn’t mean that the workers are overpaid: Quite the opposite is true, actually. Care providers’ wages are at the poverty level in 40 states. Because of that low pay, workers leave for better-paying jobs and that turnover means the centers have the expenses of recruiting and training new workers more often. For children, that also means having to get used to lots of new people. 

 In comparison, a licensed in-home family child care provider is everyone: the director, the administrator and the teacher, though many may have one or two assistants as well (depending on the size of the program).

Insurance — for both property and people — is another big cost for many child care businesses. And speaking of property, many daycare facilities are located close to the expensive downtown areas where many parents work. That means they’re paying high rents. This is another reason you might prefer a home-based child care provider close to your home or in another neighborhood on the way to work, where rents are lower.

Home-based child care is a more affordable option for many families because it offers: 

  • Lower turnover, which means lower staff-replacement costs and a more stable environment for children.
  • Less expensive facilities (insurance costs, rent costs, etc)(and often closer-to-home) physical locations.

If in-home small group child care sounds right for you, Carina’s child care referral service can help you search and match with a provider in your area at no cost. If you find a provider that you are interested in, don’t hesitate to message them. You can even ask for a video tour in your message. Many providers are happy to provide this to prospective families. To learn more about the benefits of using a not-for-profit child care matching service and the best questions to ask when looking for daycare, be sure to review: Cost, Safety, Location? What to Ask When Choosing Daycare.

If you have questions, send an email to childcare@carina.org. We'd love to hear from you.

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