Daycare is a big expense for families. Typically, home daycare costs less than center-based care. It's also very expensive to provide daycare.

Home Daycare Costs

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Daycare is a big expense for families. Typically, home daycare costs less than center-based care. It’s also very expensive to provide daycare. Most childcare facilities, home or center based don’t make much profit. It’s not a lucrative business. And running a home daycare is a hard job too.

Woman adding up receipts on a calculator

You have to juggle the temperaments of all the kids, see everything, hear everything, deal with a million different kinds of parents. You’re the cook, that janitor, the opener, the closer, the teacher, and more. No matter what you do or how hard you try, sometimes kids will get hurt and there will ALWAYS be parents who aren’t happy.

Sometimes there are even families, parents or kids, who aren’t a good fit for your program. That doesn’t mean there is anything wrong with the daycare or the families. Everyone doesn’t get along with everyone. That’s not how people work.

There are so many expenses involved in providing childcare. There are start-up expenses, materials, THE FOOD, and so much more. Daycare costs are high, and it’s a big percentage of the family’s income, but it’s not because providers are getting rich.

Most home daycare providers don’t even make minimum wage after expenses. I bring in a good amount of money every year, but my profit is usually around $10,000 a year. I do it because I love it, but that $4 an hour isn’t fancy money.

Prices for daycare

The daycare costs you pay are dependent on where you live and what you’re looking for. Do you want someone who specializes in infants? That will make your daycare costs a little higher. Are you looking for a preschool setting? That costs the provider more to provide, so she has to pass some of those expenses on to you.

money laid out on a table with change on top

Is the daycare licensed? In Oklahoma, we have to be for even one child. So if you find someone who isn’t, they may charge less, but they also aren’t bound to any safety rules or training. And they may get closed down without notice since they are breaking the law. The expenses involved in getting licensed are many as well.

One in three families in the United States spends 20% or more of their household income on daycare. Most people are shocked at the cost of childcare. And quality childcare is not always as easy to find.

It’s a commitment to have a child. It’s not the daycare provider’s fault that you need it or that it costs her a lot to provide it. She’s trying to help people and I promise she’s not getting rich.

Over the years, so many people have commented to me that I make a lot of money. I find it comical, but I guess people don’t really see the cost that goes into doing it. It’s hard to see things as they are unless you’ve experienced it for yourself. And when you pay for daycare, you are paying a lot. I get that.

calculator on a table top

The daycare will usually provide all the food and supplies needed for the child’s day except for diapers and wipes. The formula may be required for babies as well.

You are paying for safety training and other education, experience, meals, supplies, activities, hugs and snuggles, and all the best that the provider can give your child. Many times I hear people compare daycare costs to being more expensive than college tuition. But college tuition doesn’t cover a minimum of 10 hours a day of hands-on care of the student.

A daycare provider gives love and support, guidance and discipline, early learning and so much more than is seen by anyone else. She gives her home, her life, her family, and her heart to the kids she cares for.

I end up loving the whole family of the kids I provide care for. And I can’t imagine anything that is more important than what I have spent the past 25 years doing.

Child care costs by state

Every state has their own average for childcare costs. Different states also have different costs of living, so that makes sense.

The most expensive state to pay for daycare is Massachusetts, followed by California. Daycare for a child in Massachusetts costs over $20,000 a year. Oklahoma is the 11th least expensive state at just over $8,500 a year on average for the care of one child.

The least expensive state’s childcare is Mississippi at an average of $5400 a year. The average price with all states included is a little over $11,000 a year for the care of a child.

The definition of affordable childcare is less than 7% of a family’s annual income. I don’t think that’s available for most families in the US.

But there is so much involved in childcare. You have the long hours, the multiple job duties (sometimes all at once), and the amount of responsibility involved. It’s a phyiscally hard job and a mentally and emotionally hard job. It’s definitely not for the weak.

How much should I charge for in home daycare

If you are thinking about starting a home daycare, there are many things to consider when setting your rates.

  • What are the median rates in your area? You can call your licensing agency or resource and referral to find out.
  • What do you need to make to support your family?
  • How many hours are you going to work?
  • Are you going to do full time or part time care?
  • What kind of services do you plan to provide?
  • Will you specialize in something that costs more money to provide?
  • What are your weekly expenses going to be for food, supplies, and more?

To map out if home daycare is a viable business for you, check out this home daycare business plan and how to start a home daycare business.

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