How to Save for Baby's Future

3 Ways to Save on Child Care

If the old adage "you get what you pay for" is true, then you probably don't want to cut corners when it comes to paying for your child's daily care. That said, there are ways to keep costs down, while ensuring your cutie is in the right hands.

Open a dependent-care flexible spending account. If your company offers this option, you can have up to $5,000 a year deducted from your paycheck and stashed into the account, tax-free, to use for most child-care expenses.

Share a nanny. Many families pool their resources and hire one nanny to keep watch over a few children at a time. "It's a great way to save, and it also allows our daughter to socialize," says Kathryn Goulding, of San Francisco, mom of 13-month-old Jocelyn. "She adores the big kids she spends time with and is learning patience and flexibility. Plus, as a first-time mom, I knew the other parents had high standards and similar values, so I could really trust the nanny."

Investigate in-home day care. "A smaller day care run out of someone's house is often less expensive then a larger facility," says Jennefer Walsh, president of Walsh Financial Solutions. "Most counties will offer free referral services so you can find a licensed provider you're comfortable with."

Originally published in the April 2011 issue of American Baby magazine.