Eric Meola—Getty Images
By Jackie Zimmermann
December 8, 2014

New parents may live in fear of what they’ll pay for their child to attend college—but a nearer-term expense may have an even bigger impact on their wallets, a new survey finds.

Child Care Aware of America’s 2014 report on child care costs found that, in 30 states plus Washington, D.C., the average annual cost of enrolling an infant in a center-based daycare program is more than a year’s worth of tuition and fees at a public college in that state.

If that’s not daunting enough, the report released Thursday also notes that infant center-based child care costs twice as much as the average amount families across the country spend on food, and exceeds transportation costs in almost every region in the United States. And for those with two kids, child care costs in 23 states and D.C. exceed the average housing costs for homeowners with a mortgage.

The report notes that the average cost for child care varies widely according to state. But if you live in the Northeast ($22,513), Midwest ($17,258) or South ($15,409), expect childcare to be the highest single household expense on your budget. Though still expensive in the West ($17,941), childcare there comes in second behind housing.

When the costs were compared to median income for a married couple, New York topped the list for least affordable center-based care across three different age groups: infant care (16% of income), four year olds (13%) and before/after school care for school-aged kids (12%).

Most parents aren’t prepared for these costs, a separate study from released this April found. Three quarters of families surveyed in that poll were surprised or overwhelmed by the costs of childcare, and 42% don’t budget for it.

So what can a parent or parent-to-be do to get ready for this overwhelming expense? We reached out to Donna Levin, co-founder of, and Carmen Rita Wong, financial contributor for, for tips.

Start Budgeting Early

The moment you know you’re expecting is the time to start saving and budgeting, Levin said.

But before you can do that, you’ll need to determine the type of care that best suits your family’s needs and resources. Options range from family-based daycare in someone’s home on the cheapest end ($127 a week on average, according to to nannies ($472 a week). Online resources can help you navigate the pros and cons.

Another option that parents-to-be often consider is having one person cut back his or her work hours or take time off. That may save on childcare expenses in the short term, but you need to consider the ramifications in the long-term, warns Wong. Working parents have to weigh the opportunity cost of leaving the workforce—e.g. how much knowledge will you lose? How much potential income growth will you lose? How tough will it be to break back in?

Take Advantage of Tax Breaks

Depending on your circumstances, you might qualify for the Child and Dependent Care Tax Credit. The total credit can be up to 35% of up to $3,000 in qualifying expenses paid to care for a child under 13 while you’re working (or $6,000 for two children), but the exact amount is based on adjusted gross income.

“Many folks land on the cusp of qualifying year after year,” Wong says. “It’s important to realize just how close you are as you may be able to find deductions that can get you under the limit and save you more.”

Also check in with your HR department to see if your company offers a dependent-care flexible spending account. This allows you to set aside up to $5,000 pretax toward qualifying expenses like daycare, preschool and some summer day camps.

(While you’re at it, see if they offer any other child care help, says Levin. “A lot of great employers are providing child care subsidies or discounts to childcare centers.”)

Share in Care

They say it takes a village to raise a child—and as a mom, Wong can attest to the money-saving benefits of establishing a strong social network in your local area. “Though you may save $1,000 a year with all the tax credits, you can save another $1,000 by utilizing neighborhood networks,” she says.

You might be able to find a parenting group in your area on platforms like The Big Tent Network and Meetup. Such sites allow moms and dads to find play dates or learning opportunities, and also let parents establish relationships that can become helpful when looking for child care resources.

Nanny shares are one good example. With this kind of arrangement, multiple families pay for one nanny, therefore reducing the cost of care. Often, nannies will watch the kids at the same time, but families can also establish schedules that are based around each family’s individual need.

Additionally, establishing a connection with parent group is a great resource if the nanny gets sick or is unavailable.

When parents can say, “If you watch my kids while I do errands, I’ll watch yours after school,” it can be really beneficial for all parties involved, Levin says. Kids also love it, because in the long run “they’re just one big play date.”

Read next: 4 Costly Money Mistakes You’re Making With Your Kids

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