Whether it goes straight to your spam box or you find it shoved in your toddler’s backpack, in between her leftover lunch and her stuffed animal, the dreaded letter…due to an increase in operating costs, we are planning to increase tuition.
It’s the daycare price hike, and chances are, if you have a child enrolled in daycare, you’ve experienced it. But do you have to pay it?
That depends. After all, daycare is already a huge expense. While the US Department of Health and Human Services recommends childcare cost no more than 7% of a household’s income, studies have shown that families pay far more than that.
In fact, one study from ChildCare Aware America found that a single-income family may spend over 25% of its household income on childcare.
Even a relatively minor price hike can throw your budget completely off-kilter. Here are some tips on how to deal with the dreaded cost increase.
Sometimes, the best way to deal with an increase in fees is to let the director know the strain it has on your budget.
“I scheduled an appointment with the director, and explained that we truly could not afford the rate increase, which would have been an additional $200 per month,” says Kristin, mom of a two year old and a 5-month-old.
“I told her I would have to leave and look somewhere else.” Kristin scouted other daycares in the area, and found that one a little farther away had a lower price.
“I was pretty serious about pulling my children out. I didn’t want to threaten, but I also needed her to know that I needed my daughters to be somewhere we could afford.”
The daycare director relented, and Kristin continued paying the same fees.
Daycare centers are businesses, and daycare directors know that social media reviews count for a lot.
“I told my daycare director that I would be writing a Yelp review about how unhappy I was with the lack of transparency in financial matters. All of a sudden, she became much more willing to negotiate with us,” says Jen, mom of a three year old.
Annabelle had a similar experience. “I saw the daycare center being discussed on a lot of local mom groups I’m part of. I let the director know people were unhappy with the rate hikes and were discussing it on social media.
Through the conversation, the director realized that the rate hike wasn’t worth the potential customers that were being turned off by those discussions. The hike was reversed the next day.”
Sometimes, a rate hike is inevitable. If you feel you cannot or do not want to pay the hike, consider asking the daycare center how you can help out to keep your rates from changing.
That’s what Whitney, mom to a one-year-old, did. “I’m a writer, and I felt they could really update their website, as well as capitalize on social media. I volunteered to take over their social media accounts and redo the copy on their website in exchange for a rate reduction. It worked.”
Dave, the dad of a 3 year old, had dealt with a price hike at the previous daycare center his daughter had attended. Because of that, he specifically asked about future price increases when touring new daycare centers.
“I felt that was the best time to bargain, as I knew they wanted my business. I asked if they could confirm in writing that our rate would stay the same for the calendar year, which they were able to do.
Not having to worry about whether or not we would unexpectedly be hit with a major rate increase gave us the ability to accurately budget and gave us peace of mind.”
When it comes to negotiating prices, the more parents involved, the better, says Ben, dad of a 4 year old.
“We started a WhatsApp group among parents, discussing everything from teachers to rate hikes. Having that conversation between us made us much more informed consumers. I often wouldn’t see these parents during pick up or drop off since we were all so busy, but being able to communicate was essential in really knowing what was going on and helped us demand transparency from our daycare.”
On that note, other parents can be a valuable resource in creating strategies to help cover care. For example, Ben realized that three other parents were paying for extended care until 6:30 pm, which still left families scrambling to make it to pick up time.
“We decided to set up an informal aftercare situation where one parent would sign out three kids and bring them to a nearby park until other parents got there. It just gave a little extra wiggle room and helped parents avoid the $5 a minute (yes, really!) late fee.”
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Anna Davies is a writer specializing in personal finance who’s written for Refinery29, Cosmo, Elle, Glamour, the New York Post, Conde Nast Traveler and others. When she’s not working, she loves going on adventures and traveling with her 2-year-old daughter.
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