If you are a new parent, you were probably shocked at the cost of childcare. If you’re expecting or in the planning stages, childcare needs to be a major priority in your planning. Because of the cost of some of these daycare programs, it is going to be natural to consider alternative options such as a relative keeping your child while you work or, for two-income families, one parent stepping back to part-time or stopping work altogether to stay at home with the child.
Our oldest child just turned five, and our youngest will be 9 months old in less than two weeks. We obviously have not been able to see everything come full circle yet, and won’t be able to give a fully formed opinion for a number of years, but we did decide to invest in daycare with a structured curriculum basically from birth. We considered all of the options, but decided daycare was the way we wanted to go for a few important reasons:
- Socialization – We wanted to be sure our children grew up being comfortable around other people. Humans are social creatures by nature, and stunted social maturity can impact a child’s ability to make friends, contribute in group activities, and have a sense of belonging. There are lots of ways outside of daycare that a child can be social, but this setting ensures regular interaction with a diverse group of peers and it was an important consideration for us.
- Education – My wife and I are both relatively intelligent people, and we do our very best to teach our children what we can, but we’re not trained educators. A structured curriculum that has been thoroughly researched ensures that the child stays on a logical progression. I’m sure there are some great home school programs out there to help with this, but to match the resources available at the daycare center would take a significant investment, and even if we were able to do that, our children would not be hearing different points of view and learning to form their own. Perspective is important, and we can only give our own, so it was important to us to provide additional perspectives as our kids grew up.
- Mental Health – This really applied to both us as parents and our children. The relationship between two people can become extremely unhealthy when there is too high a degree of dependency for too long. If one parent, for example, was with their child nearly all the time, it would be difficult for the child to learn to do things independently. It would also be difficult for the parent to have their own identity outside of just caring for the child. Over time, this creates major stress points for both parties. It was important for my wife and I to both be able to continue to pursue our own goals and have our own identities that were not 100% wrapped up in our children while allowing our children to become their own people and have their own identities as well. For this to happen, we felt that they needed to learn to be comfortable with us and without us, in the right environment with the right support.
From the time a child is born to the time they turn 5, the brain develops more than any other period in their life by a very significant amount. At birth, the baby’s brain is about 25% of the size of a fully grown adult brain, it doubles in size within that first year of life, and by age 5 it is nearly fully grown at about 90% the size of an adult brain.1 With that much development happening that early in life, it stands to reason that a child could be given a tremendous advantage for the rest of their life with great early childhood education.
According to research done by Professor James Heckman in his paper Quantifying the Life-cycle Benefits of a Prototypical Early Childhood Program, birth-to-five programs can deliver a 13% compounded annual return on investment, or a societal cost/benefit ratio of $6.30 per $1 invested.2 When we had our daughter, we knew that we wanted to be able to send her to college if she decides to pursue higher education after high school, and we knew that we did not want her to be saddled with student loan debts as we have been throughout the first decade of our marriage, so we opened a 529(c) college savings account for her before she was 1. I’ll write more about that topic in a future post, and I’m very glad that we did it. I’m also happy with the timing of that investment. Having said that, if I were forced to choose between investing a lump sum to save for her college or daycare with a structured curriculum, I would unequivocally choose the daycare.
My daughter will begin Kindergarten this Fall. My wife and I have struggled a great deal trying to decide between public and private school. We are blessed to both have good jobs, and could make the money part of private school work, but it would be very uncomfortable. We would have to adjust our lifestyle significantly, and even after those adjustments, it would stretch our budget. We toured several private schools in our area, and one stood out significantly to us compared to the others. It was, of course, the most expensive of the group. Both of us are products of public schools, and we are very pleased with our experiences as a whole. The biggest concern we have is that, because of the excellent education she has received during her first five years, she will be over-prepared for Kindergarten, and it will not challenge her at all. If that happens, we worry that she could struggle to develop good study habits and might lose interest in school, as it won’t push her.
In a private school setting, we could ensure she has a more challenging curriculum and a lower student-to-teacher ratio so that she could get more personal attention as needed. These are the reasons we have been considering it. Ultimately, though, we feel like the benefits of going to public school outweigh the benefits of the private school, at least for now, so that’s the route we are going for this first year. We believe that in a public school setting, she’ll experience more diversity and have a more realistic worldview. Everyone is different, and we want her to grow up respecting and understanding those differences. We will talk to her teachers frequently to get feedback on how she’s doing in class and ask for advice on ways to push her and keep her engaged if we or the teacher feel like she’s losing interest.
To circle back to the topic at hand, though, because of her structured daycare program from the time she was 2-3 months old until today, she is far ahead of where most kids her age will be. In addition to having a general baseline of knowledge, she is used to a structured day of learning, and understands how to pay attention when needed, operate on a daily schedule, work independently or in groups, and there will be no issues with separation anxiety during the school day. This means she’ll be more prepared to listen and absorb lessons in class, and this head start will continue to pay dividends throughout her entire school journey.
Assuming we remain disciplined as parents in reinforcing good behaviors and identifying and correcting bad ones, and she continues to remain dialed in, it’s likely that she will do well throughout her schooling. It is likely she will have good grades, and it is also likely that she will want to participate in extracurricular activities, which we will encourage and support. All of these factors make it more likely that she will receive scholarship offers should she want to pursue college, which will mean that part of her education could cost us much less than if we had chosen not to invest so heavily in her early education.
If this all comes to pass, we’ll hopefully be able to pay the additional 10% tax penalty for using the 529(c) money for something other than college, because college will have been paid for another way, and we could help our daughter in another way, by adding to her investment account, getting her a vehicle, down payment on a house, or something of that nature. We’re planning to be able to provide support either way, but trying to create a strong foundation for a lifetime love of learning.
For disadvantaged families, it may seem impossible to pay for the types of early education programs I’m talking about here. Finding a way to make it work, though, could break a cycle of poverty for generations to come. Here are a few ideas:
- State or Federal Government Assistance – Most states offer some form of child care payment assistance. In Tennessee where my wife and I live, there is a Smart Steps program that can lower the weekly out-of-pocket payment for one child to as little as $4, depending on income and other factors.
- Scholarships and Sponsorships – There are many non-profit organizations out there that offer partial or full scholarships or sponsorships for early education programs.
- Dependent Care Spending Account – Many workplaces offer a dependent care spending account as a benefit for full-time employees, but it is a federal program that anyone can enroll in during open enrollment season. It allows you to save a certain amount per year ($2500 per year if filing individually or $5000 per year if married filing jointly as of 2021) pre-tax for eligible dependent care expenses. Depending on your tax bracket, this could result in savings of $500-1850 per year for something that you were going to pay for anyway.
- Tax Credits – While this is not necessarily directly aimed at early education specifically, if you’re looking for ways to pay for this, earmarking the tax credits you receive for your children to help pay these expenses is a great idea. The current administration just expanded that tax credit, at least for the time being, and is going to begin sending out monthly payments in July of 2021 of up to $300 per month, per child unless you opt-out of the monthly payments and choose a lump sum at tax time instead.
- Get Creative – I’m not necessarily advocating taking a loan to pay for daycare, especially if it’s going to put you in a really bad place each month, but if you’re planning to borrow money to pay for college, I’d argue that investing it on the front end with early education rather than the back end is the sharper move. It will have a lower overall out-of-pocket cost and is likely to have a much higher ROI.
After you decide that you’re going to invest in early education, I recommend contacting several places. Ask about their curriculum, their student-to-teacher ratio, how they will share progress reports, tuition, and availability. Use that information to help narrow down to the place that works best for you and your family.
In our experience, at least in our area, all of the curriculum-based daycare facilities have a very long waitlist, especially for infants. Some schools have a waitlist well over a year for infants, which means people are on it before they’re even pregnant! Be sure to plan ahead here, or be prepared to wait your turn. If you’re on a waitlist, call regularly. Sometimes there are unexpected openings and calling at the right time can make all the difference!
Do you have any experience with early education? What are your thoughts? I’d love to hear from you in the comments below!