See a real family budget: How these working parents in LA manage child care for 2 kids

July 15, 2019

Child care is necessary for every family. All parents must find a solution that fits their unique situation, and cost is often the biggest factor driving decision-making. In fact, more than 40% of families spend over 15% of household income on care. To see how different American families are juggling the cost of care, we're asking parents how they spend their money each month — and how, specifically, they budget and save for those all important child care expenses. All answers are anonymous. Our financial expert also weighs in on each family’s big-picture strategy. 

Child care wasn’t top of mind for one Danish couple when they emigrated to Southern California 11 years ago. Now that they have a 3-year-old daughter and 18-month-old son, it’s a constant concern for the husband and wife property developers. “Everyone back home laughed at me for having kids here because of the cost,” says mom. “Day care in Denmark runs about $200 a month.” 

The resourceful spirit of this couple who runs their own business carries over to their approach to child care. 

Family makeup: Two parents, 3-year-old child and 18-month-old child

Location: Los Angeles county

Parent #1:

  • Age: 41
  • Occupation: Restaurant and commercial property developer
  • Monthly gross income: $7,500

Parent #2:

  • Age: 38 
  • Occupation: Restaurant and commercial property developer
  • Monthly gross income: $7,500

Child #1 child care type: Day care

  • Full time or part time: Full time
  • Hours per week: 35

Child #2 child care type: Nanny

  • Full time or part time: Part time
  • Hours per week: 16

Percentage of income spent on child care: 16%

Here are the strategies these business owners have employed to handle child care costs and where their monthly income goes beyond that.

Strategy #1: Create a network

Without family nearby to help with child care needs, the couple learned to rely on connections made through mom groups. “It requires a lot of work because you have to do your research and go out and find these people,” she says. “But those relations are stronger than you think they are.” 

Case in point? She and a fellow mom regularly traded off watching each other’s children on weekday mornings for free. 

Strategy #2: It pays to be scrappy

Until her daughter was 6 months old, Mom worked at one of the family’s restaurants with the baby strapped to her tummy. For her son, she squeezes a five-day workweek into the two days a week that a nanny comes to watch him. “I wish I could afford more care for him,” she says. “But I can’t.” 

Strategy #3: Prepare for child care the way you would any major expense 

Soon both children will be in preschool simultaneously — which will mean the family will owe $2,700 a month for two years. In anticipation of that, Mom says, “we are trying to do some financial planning.” The trade-off will be huge: Money that could have been invested in their business will have to go to child care. 

Tips from a financial expert:

Jen Mulder, financial planner and owner of Pathway Financial Services in Los Angeles acknowledges that without family nearby, relying on full-time preschool makes sense. Of course, the downside is the out-of-pocket cost. “Having mom continue her current strategy of squeezing a five-day work week into two days, so that she can be home more with the children and lower their child care costs is unsustainable,” Mulder notes. 

Her best tip: “If they are open to not having the children in preschool full time, the couple might consider both parents adjusting their work schedules to allow them to trade off being home with the children until school begins. This will reduce their preschool costs somewhat. Alternatively, they might consider cutting back on their travel and entertainment costs for the next two years, so that they can invest more into their business.”  

Mulder also points out the monthly car loans, but says, “Once these are paid off, that will free up more of their income to be used for investments. Keeping the cars for several years after they are paid off will help the family’s financial picture improve.”

Another recommendation that could lead to retirement contributions and college savings: Work with a financial planner to create a new savings game plan for the $2,700/month currently being spent on child care once the children are in school. “Having a plan in place will ensure those dollars are allocated wisely for their long-term goals once they become available,” Mulder says.

Monthly budget


Monthly gross income

Monthly take-home



Parent #1



Parent #2








Investments (real estate)



College savings






Company match



Roth IRA



Personal savings




Total investments/ savings




Child care






Total utilities



Health, dental & vision insurance



Cell Phones






Credit cards



Car loans



Car insurance (bundled with health, dental, life)






Commuter fees/parking



Kids activities (annual zoo membership)



Cable or equivalent TV services



Student loans










Total expenses



Monthly take-home



Total investments/ savings



Total expenses



Remaining cash flow


More 2019 real cost of care interviews with families:

Read next: This is how much child care costs in 2019

Tips and stories from parents and caregivers who’ve been there.

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