How Much Money You Save on Childcare By Living Near Your In-Laws

Between free babysitting and part-time daycare, it makes a ton of financial sense to live close to home.

My wife and I don’t live near family. College led us away from home and jobs kept us from moving back. Even now that we have a 3-year-old and would love for her to be near grandparents, cousins, aunts, and uncles, moving isn’t an easy option. Our daughter’s closest grandparents live more than 1,000-miles away; the other set is clear across the country. The nearest relatives are a three-hour drive.

Some might argue that’s a good thing ⏤ you can never live too far from family, they joke. And while we know plenty of couples in similar straits, it turns out we are not the norm. According to a report by the New York Times, the average American lives only 18 miles from home; one-in-five live within a few hours drive of mom and dad or their siblings. For those who are parents, they are clearly on to something.

While not true in every case, having family close by often means enjoying built-in babysitting or discounted daycare. And it’s hard not to be a little envious of our friends whose parents ⏤ either one or both sets ⏤ live locally, especially when you consider the average family spends around $10,000 a year on child care. I met a grandmother in the park recently who was watching four of her nine grandkids while they’re parents were off doing other things ⏤ who knows what ⏤ for seven hours on a Saturday. I was blown away. I still am. The thought of having an entire weekend day of free care while you get things done around the house or run errands or finish a project is mind-boggling to me. My wife and I are lucky to hire a sitter or have a friend watch our daughter for the occasional date night.

But it got me thinking: How much money can you realistically save on babysitting and childcare by living near your parents or in-laws. And I say ‘realistically,’ because it’s unlikely that you’d use your parents or adult siblings every time you need a babysitter. Nor would most parents ask mom or dad to watch their kids every day of the week in lieu of putting them in a daycare center, unless it was a financial necessity. Based on the frequency I see a lot of parents turn to their family for ad hoc babysitting, though, I decided to crunch some numbers using data from several recent studies on the cost of childcare. I kept things simple and only calculated care for one toddler. This is what I came up with:

Babysitting

Let’s start with the easy one, babysitting. According to two extensive surveys last year from Care.com and UrbanSitter.com ⏤ both apps that help parents find child care ⏤ the average cost of a babysitter in the United States runs between $13.97 per hour and $15.20 per hour for one child ($17.34 for two, $19.57 for three). Like the cost of most child care these days, those rates are up 26 percent since 2010. Of the larger cities, San Francisco had the highest hourly rate at $17.34/hour for one child ($19.79 for two) while Denver was the lowest at $12.22 per hour ($13.89 for two).

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According to the surveys, one-third of parents hire a sitter weekly while 48 percent spend more than $1,000 a year on babysitting, although many spend upwards of $3,000. I assumed that if you have free babysitting in mom or dad right down the street, you’re easily in that 33 percent ⏤ if not using them a lot more. So I did two calculations:

  • The first was based on a once-a-week date night. At $15 an hour, a three-hour dinner and a movie cost $45. Do that 50 times a year and you’re spending $2,250.
  • The second includes weekly date night plus random drop-offs to run errands, attend meetings, etc. For that, I took the $2,250 and added in an additional 5 hours a month at $15 an hour, for a grand total of $3,225.

Daycare

According to Child Care Aware’s Parents and the High Cost of Child Care 2017 report, the average American family pays $11,053 a year to keep an infant in a daycare center. That number drops to $8,909 for toddlers and $8,670 for preschoolers but still averages $9,544 a year across the board ⏤ it’s no wonder so many parents debate quitting their job to stay home with a kid. Care.com’s annual 2017 Cost of Child Care Survey revealed similar numbers, finding the average weekly cost of daycare to be around $211 for one child.

Obviously, if you have very spry (and generous parents) who can hang with toddlers all day ⏤ you can save this entire amount by living near home. No calculator necessary. But that’s not usually how it works. Mom and Dad didn’t get you and your siblings out of the house only to go back to being full-time parents in their 60s or 70s. The more realistic scenario I see when retired grandparents live nearby is that they tend to watch the kids about two days a week ⏤ which means the kids do about three days a week in some sort of daycare.

So, how much can you save paring daycare back from five to three days a week? Easy enough to figure out. Using Care.com’s $211 per week rate, you’re paying $42.20 per day. Three days of care equals $126.60 per week or a savings of $84.40 from a full week’s bill. Do that for an entire year, and you’re banking $4,388.

Total Savings

Of course, not every grandparent can or wants to spend their retired days chasing around kids — some physically can’t. And how much parents can actually utilize kin care is dependent on everything from the health of your relatives, to how well you get along, to how good they actually are with your children. Some grandparents still don’t know what the hell they’re doing.

Naturally, every family is different and, as such, it’s impossible to calculate every savings scenario. That said, if we add the $3,225 from babysitting to the $4,388 for part-time daycare, we’re looking at a total savings of at least $7,613 over the course of a year, or $38,065 over the five years until your kids enter kindergarten. I don’t know your in-laws personally ⏤ and there are a lot of pros and cons to living close to parents when raising a family ⏤ but that’s a solid chunk of change. And one I might argue that’s well worth any dig your father-in-law can make about your golf game or favorite football team.