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How to Calculate the Costs and Benefits of Nannies, Au Pairs, and Daycares

Every family needs to figure out childcare, but not all childcare options are for every family. Here's how to consider if a nanny, au pair, or daycare is right for yours.

Finding regular childcare is a task most families are going to have to complete at some point. Daycare seems to be the default in America – perhaps because more businesses are offering on-site daycare as a workplace benefit – but a nanny or an au pair may be a better match for a specific family situation (or budget). Each option has its benefits and drawbacks, but it’s an unfortunate reality that the biggest limit to choices will be the cost.

RELATED: The 50 Thoughts a Nanny Never Says Out Loud

“Childcare costs are often the 2nd largest family expense,” says Elizabeth Malson, president of the Amslee Institute, a licensed online technical school with a childcare curriculum specifically designed for childcare professionals. “The salary you can afford to pay is one of the most important elements of finding great help.”

Daycare Centers

This often the first thought for most parents. It includes both private-residence family childcare and more commercial (and more regulated) daycare centers.

Daycare centers have a larger staff and more children than in-home providers like nannies or au pairs; this gives children many socializing opportunities to help them develop emotional intelligence and language skills. This varies from center to center, so parents will need to do some comparison shopping. But many state regulations require childcare centers to have a certain number of early childhood education (ECE) units.

On the other hand, some centers may have minimum age restrictions. And though having a professional staff means that they can provide care even when one of their employees are out sick, it also means they are less flexible about their rules and hours. And introducing a baby or toddler to a new environment – one without their parents – can be pretty rough.

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Cost for daycare varies widely by state, but it’s going to be expensive. A flex spending account can help defray some of the cost.


Most nannies aren’t vaguely magical miracle workers or no-nonsense reality TV stars; they are professional caregivers who work in the home, under contract, with a consistent schedule. “Responsibilities include preparing meals and supervising activities for the children, but also include scheduling outings and providing additional support such as transporting children to and from school, from school to clubs, sports practices, play-dates, and other activities,” says Malson.

Kids get more personalized, one-on-one care, and since they don’t have to be rushed due to a parent’s schedule or immersed in a new environment, their care is a little more relaxing – for parent and child. However, they do not get as many socialization opportunities as they would in daycare.

While there are training programs and state requirements for daycare workers and teachers, no qualifications are required for nannies. That’s why it’s important to find a good one. “Great nannies have invested in education and have at least two to three years of paid childcare experience,” explains Malson. “At a minimum, nannies should have current CPR and First Aid certifications, which are affordable and available online.”

According to the 2017 International Nanny Association survey, the average hourly rate is USD $19.14. That’s $861.30 for a 45-hour week. Again, that can vary by state, community, agency, and qualifications of the nanny. Elite nannies often have a college degree in early childhood education; this can create a salary requirement that includes student loan repayment.

Au Pairs

“Au pairs are part of a one-year culture exchange program where a host family in the United States provides room, board, a weekly salary, and a class,” explains Malson. “In exchange, an au pair provides childcare as well as household duties pertaining to the children.”

Au pairs really offer similar benefits kind of benefits that a nanny would provide, along with a kind of explicit cultural education. Au pairs are expected to generally act as a member of the household. That includes taking on a share of light household chores and 45 hours of childcare.

Most au pairs have to return to their home country after one or two years. If a child hasn’t started school yet, this can be a difficult goodbye, particularly since the au pair lives with the family.

Although they appear to be closely associated with social-climbing wealthy families – at least according to Sex in the City and The Unbreakable Kimmy Schmidt – au pairs are surprisingly affordable.

“Au pair costs are different as they often require an upfront investment with an au pair agency and travel costs in addition to a weekly stipend,” says Malson. “The U.S. State Department requires minimum stipends based on the type of program, the most common of which requires a weekly stipend of $195.75.”

How to Calculate the Costs and Benefits of Nannies, Au Pairs and Daycares

  • Childcare is expensive – it’s often the second-highest cost that families bear.
  • Daycare Center Pros – with their large staff, daycare centers don’t call in sick, and a large number of children give kids plenty of socializing opportunities. They are also regulated more closely.
  • Daycare Center Cons – their schedules and rules can be inflexible. Kids get less one-one attention, and dropping off a baby in a new environment can be emotionally distressing.
  • Nanny Pros – kids get plenty of one-on-one attention, and having the care in the home can make kids more comfortable.
  • Nanny Cons – nannies aren’t regulated the way daycare workers are, and well-trained, well-educated nannies can cost a premium. And kids get fewer socialization opportunities at home.
  • Au Pair Pros – au pairs live in the home, contribute (reasonably) to household chores, and become temporary hip international older siblings.
  • Au Pair Cons – the programs end after one or two years, which can lead to some difficult goodbyes for little kids.