Are you afraid of raising rates in family childcare, but need to make more money to make ends meet? What are you afraid of?

5 Steps to Raising Rates in Family Childcare

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Are you afraid of raising rates in family childcare, but need to make more money to make ends meet? What are you afraid of? Running a home daycare has many ins and outs. And you have to stand up for yourself and your family.

dollars and checks on a table to pay rates for family childcare

Do you think your daycare parents will be mad at you? Are you worried your childcare services aren’t worth it? Do you think your clients will all quit?

It’s understandable to be reluctant when raising rates, especially if you haven’t done it before. This is a business, not a hobby. You do it for an income. You work hard every day and you deserve a living wage for that work.

For more tips for daycare providers, click here.

If you’re looking for some amazing resources to help you run the business side of your daycare or plan activities with your kids, check these supports out:

Raising rates family childcare

Do you hate raising rates in family childcare because you have low-income families? Do you hesitate because you think they can’t afford it? Of course, it’s your business and it’s totally up to you, but if you give price breaks to families, you are really making their budget more important than yours. We, as caretakers, tend to do this, but their family is not more important than yours, are they?

I know you want to help everyone. You’re a caregiver. I know you have a soft heart. That’s how you love your babies so much. I do too, but I also need to pay my bills so I won’t be stressed to the max with cut off notices. The kids need quality food and activity supplies. I NEED to have a house and a decent car to drive. My family needs support too. So you do!

Prices rise every year on everything. My husband does not get cost of living increases at work. He’s been at his job almost 10 years and only makes a tiny fraction more than when he started. It makes it super difficult for us to live. We are already below the poverty level.

hundred dollar bill and wallet on table

You should never go more than a couple of years without raising rates. When you raise yours, it helps your provider friends by keeping the price of childcare competitive. Your rates should reflect the quality of care you provide.

If you don’t think your care is worth more money, you should try to make changes so it is. Your rates should reflect your years of service. The longer you have been in childcare, the more you should be charging. Your experience is valuable.

Adding terms in your contract that rates in family childcare will be raised regularly is a good idea. In my contract, it states rates will be raised annually. I usually do it every other year unless something comes up that I need to do it the year in between.

How to talk to parents about raising your rates in childcare

I phrase it, “I will raise my rates every year in September”. Simple and to the point. In January, I give out my days off for the year and I put the rates for that September on the same notice. This gives my families plenty of time to prepare.

You don’t need to give your families a reason for the rate increase. You just need to let them know you are doing it. I usually add at the bottom of my vacation chart, September 1, 2017, my rates will increase to $xxx dollars per week.

Simple and to the point again. It’s much easier that way than drawing it out and making a big deal about it. It’s just a fact of life. Prices go up. It’s business, not personal. If I skip an increase that year, I put: my rates will remain the same this year.

When you raise your prices 1 dollar per day, and you have 5 days in a week and 7 kids, that’s $35 extra per week. At 2 dollars per day, that’s $70 per week. If you multiply that by 52 weeks in a year, that’s an extra $3640 a year for your family. Could you afford to buy your kids more socks or enroll them in soccer, or go on a vacation?

These are things everyone else is doing. It’s okay for you to run your business in a way that helps you do that too. You’re not getting rich, that’s for sure, but keeping up with inflation sure can help your family out.

pile of daycare payment checks
  1. Figure out if you need to raise them. Have your expenses gone up in the past year? Is there something you’d like to improve in the care you give? Has it been more than a year since you raised them? Do you need more income to care for your family?
  2. Figure out how much your raise needs to be. To continue providing childcare in your home and care for the needs of your family, how much do you need to make? Is that a reasonable percentage of what you’re charging now?
  3. Decide what your new rate will be. Base that on your needs, your experience, and what you’re offering in exchange.
  4. Give proper notice so parents can plan.
  5. Stick with your decision and feel good about the value of the service you’re providing.

Childcare is a very valuable service. Parents depend on you to be there for their kids and you are. You deserve to be compensated reasonably for that. If most childcare is around $150 in your area, of course, you can’t charge $1,000 a week, but you can charge $150 or $160. Keep your rates in family childcare competitive to the cost of living and other facilities in your area.

In home childcare rates

Be professional and present your business as a business and you’ll probably find out that parents don’t mind paying for a job well done. You may have a parent get angry and leave, but if someone doesn’t want to pay you a decent wage for your work, do you really need them? I’m sure there is someone else waiting for someone awesome like you that would be glad to pay it.

I have raised my rates in family childcare multiple times over the course of 22 years and I have never once heard a complaint about it. People appreciate what I do and they know I go the extra mile to do my best. I’m not perfect, but no one is. Most people appreciate a job well done.

Daycare rate increase letter

When giving parents notice of a rate increase, don’t offer excuses or feel that you don’t deserve it. Keep your daycare rate increase letter simple and to the point. I have written a sample daycare rate increase letter you are welcome to use. The first one is in word, so you can edit it if you have word installed. The second one is a pdf you and print and fill out and then copy.

Click here to see rules you should have for your daycare and here to see what payment policies you should have in place. And if you need a side hustle for your daycare to get caught up, check this out.

If you’re thinking about opening a daycare but not sure where to start, check out how to open and operate a home daycare here.

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