Juggling Child Care Costs During a Recession

When my Mommy friends and I first met three years ago we'd talk about nap schedules, discipline techniques and potty training. Now parenting has taken a back seat to commiserating about the recession and how we're all struggling to get by.

Maybe it's because I live in New York and so many of my friends work in finance or media, but I feel like I know more than my fair share of people who have lost their jobs over the past year. And while there are plenty of experts doling out advice on how to prepare for a layoff -- such as saving six months salary in an emergency fund -- there's no magic bullet for how to get by once the pink slip arrives. All you can do is cut back on expenses and network like crazy.

Families with small children, like mine, face an added challenge. We need to pay for child care in order to work. But after getting laid off from a job, an easy way to save money is to pull our kids from day care or let the babysitter go. But if we dismiss our caregivers, we may not have the time or ability to look for new jobs.

I faced this dilemma myself. Back in January I was laid off from a job I had for more than 10 years. I had to decide if I was going to keep my three year old in full time day care (which I had already paid for), or keep her home with me and try to get my money back for the remaining part of the year. My husband and I decided we would have the most financial flexibility if we kept her enrolled so I could look for work. That decision now allows me to write this blog for MoneyWatch.com and pick up other freelance assignments.

Some of my friends have made different decisions that they believe give them more financial options:

Let the Nanny Go
A friend of mine from childhood was laid off in March, a week before her maternity leave ended. She had already hired a full time babysitter when she got the news. Since she can't predict when she'll find a new job she felt she had to let her sitter go. Fortunately, her parents live nearby. She plans to lean on her mother and ask her to watch the baby when she has a job interview.

Keep the Younger Child at Home
One of the parents from my daughter's day care center lost his job back in February. At the moment, the family plans to keep their older child in school since they feel he benefits from being around other kids. But to save money they are keeping their younger child home, a trend the school's admission director says she's seeing from many of the families.

Find a Preschool Alternative
Then there's my friend who I met while I was on maternity leave. With her husband out of work the family is considering moving out of New York City to a cheaper suburb. Although she's planning on keeping her au pair -- since they're hoping Dad will find a job soon -- she decided not to send in a preschool deposit for next year since she doesn't know where she'll be living. Even if she does end up staying in New York, she may consider starting a preschool coop and volunteering her time in exchange for a significantly cheaper tuition bill.

There is no absolute right or wrong way to handle the child care dilemma. Just try to find a solution that balances your short term need to save money with your longer term goal of finding a new job.

Child-care image by Army.mil, Flickr