Cost of Daycare

Hi All,

So I have been doing daycare for a bit now. When I speak to other providers in the area and Daycare friends that I have, I don't understand this one thing that seems to be the norm.........rates. Why does no one ever increase their rates???
One friend hasn't increased in 6 years, another in 9 years and yet another in 10 years...........not one of them.

Yet everyone else on the planet gets a raise, heck my husband is making a whopping 55% more than he was just 9 years ago.......I mean YEAH me, but am I expected to never get a raise............and why do I feel so bad about even asking for one. In every other job I have had I have received a raise almost every year........inflatio n happens, cost of housing has gone up, cost of gas, cost of groceries but I may have to stay at this salary for NINE YEARS???????

What is it about daycare that no one wants to raise their rates? Why are there so many home daycares charging less to attract clients?

Do you raise your rates? How much, how often?

Sometimes I wish we had a UNION............... .

Unfortunately daycare goes by supply and demand and as long as we are competing with others for parents then we have to do what attracts them and well money talks for sure.

Having said that I raise my rates when new families start care provided I am still in line with others in my area and to a certain extent we all seem to do the same thing. I start kids as babies and keep them till school so 2 -3 years. I keep rates for families in care the same but start new families at a new rate. They then stay at that rate as long as they are with me but new ones after them would pay more. Often it is only a dollar a day more I raise the rates but $5 a week does pretty much cover expenses because so much of my stuff is repeated or reused from year to year - toys/equipment/etc.

If you don't mind me asking,What is your daily rate currently?

I am $42.00/day in Ottawa ON. I've seen as low as $35 and as high as $70 at some centres

If you look at the CCPRN rates survey you can clearly see that the rates vary across the city and to some extent reflect socio-economic status, proximity to specific landmarks, number of daycare homes in the area etc.

I am $40 a day here in Orleans but yes around me it ranges from $35 - $42. I keep a watch on daycarebear to see what the norms are for those closest to me and use that to some extent as a guideline. In reality parents are not impressed enough with fancy programs to pay more for it. For babies and toddlers they are quite content with a cheaper price and more freeplay.

One year I didn't raise my rates but I added days off, Easter Monday & Christmas Eve Day. I figured I was giving myself a raise without raising the rates. Last year I went up $2/day for full time and $5/day for part-time because I felt it was time to pull myself in line with the competition once I had established myself with a good reputation. This year I'm not increasing rates but I will most likely raise them $1/day next year.

I think you have to be careful to look at the type of people you attract, doctors and lawyers or office and blue collar workers and think about their incomes. My clients are the downtown office workers and they don't make a fortune. I know. I used to be one of them.

As Playfelt said, my crafting supplies expenses were higher a few years ago than they were last year because I have a buildup in my craft drawers and you streamline with each passing year in so many ways to save money and time.

Daycare is expensive already, so that could be a reason why those providers don't increase their rates. It's also competitive, so providers would want to makes sure that they're in line with what others are charging.

"One friend hasn't increased in 6 years, another in 9 years and yet another in 10 years...........not one of them." This seems to bother you. If they're content with what they're charging, why do you care?

"Yet everyone else on the planet gets a raise, heck my husband is making a whopping 55% more than he was just 9 years ago.......I mean YEAH me, but am I expected to never get a raise............and why do I feel so bad about even asking for one. In every other job I have had I have received a raise almost every year........inflatio n happens, cost of housing has gone up, cost of gas, cost of groceries but I may have to stay at this salary for NINE YEARS???????" So if you feel you should be charging more, then charge more. Why are you complaining and whining about it. It's YOUR business, charge whatever the hell you want. When parents choose other providers over you, don't complain either.

"Sometimes I wish we had a UNION." Then go get a unionized job. You're self-employed, therefore you set your own rates. Obviously ppl in the workforce working for companies will get raises, you own your own business, nobody is going to just pay you more, use your discretion and charge accordingly.

Now now, Island29, if you are not a home daycare provider then you don't understand exactly how we feel. When I worked outside the home I got a raise every single year. That's the way it is for most people. However, as self-employed business owners, we home daycare providers must remain competitive but fair to stay in business.

You may find daycare is expensive but I love something that one of my daycare Dads said to me a few months ago when he was laid off work for a few months. He told me not to worry about them ever taking their daughter out of my daycare because when they budget they put their rent, food and daycare expenses at the top of the plan since those are their most important priorities.

I'm so glad that they appreciate me enough to put me at the top of their list as one of their basic priorities, not as an annoying expense! They know that I give their child great care, nourishment, health and safety, learning opportunities and many more things, the list is endless.

Oh Island 29......I really am just a newer provider wondering why the rates in general don't increase as a whole :-) I am happy with my choice of what I charge. I had a high paying job with an increase every year.
I left that job and choose to be happy doing what I like doing. I tried centre care and that was just over minimum wage and I felt that I could provide a better environment in my own daycare making the same money with less children in care, offering more individual attention. I am well set up and hoped to do this for a long time. I have invested so much into my daycare and am very proud and content with it and the children that spend their days with me!

I truly love doing what I do. I am not whining I am just saying as a whole in so many years it seems that salaries go up and the entire cost of living goes up but we remain the same.

Of course if all I cared about was money I would go back to my previous career and make a lot more of it but to me, it is about happiness. But I wonder where I would be in 10 years if the cost of living keeps going up substantially and I can't raise rates in order to stay in line with area providers.

Not every post and question on this site is about whining and complaining Island29. And I was wondering if that same thought ever crossed other providers minds. Just making conversation I guess and putting my thoughts and feelings out there. And am I the only person in the world that wishes she made just a little bit more money..............m y guess would be probably not!

I guess that is why in todays age of technology written words tend to get taken out of context so much.

I hope you have a better day tomorrow :-)
Take Care

And I think with that I will keep my thoughts and feelings safe and to myself in the future.

Trace....Please ignore Island 29. She has only posted twice and with a post like that on this thread, is really coming off as a troll looking to pick a fight. If she is not, then she needs to hold her tongue, not you. This forum is a place for all things daycare and you have every right to question, comment and complain because that's what this online community is here for. I personally do not think you were complaining, or whining, simply questioning something that you find puzzling and frustrating. Island29 needs to learn to keep there comments respectful or keep their mouth shut. Please do not keep your thoughts on these subjects to yourself. As we all know there are diffence of opinions and we may not like all the responses but as long as people are not rude and remember to be curteous, then all will be well.

To Parents: Home daycare is not expensive. Do the math. If you leave your child with a provider 9 or 10 hours a day at an average cost of $40.00 per day which includes snacks, lunch, crafts, equipment etc. and all the care and attention that goes into looking after a young child that amounts to about $4.00 p/hr not including expenses like utilities, insurance, professional development etc.

The time we then put into our business in the evening and weekends is unpaid. The only way we make money is to fill our all our spaces with f/t children and that is a tough thing to do in most areas. So yes, we would all like to have a cost of living yearly raise, but unfortunately, we are under cut by low ball providers who just do a very basic job with your child. I know this because if they didn't, they would be operating in the red. There are also parents who shop price only. If the serious providers had the luxury of always having clients knocking at our doors enabling us to set our deserved rate, pick the best clients and get paid a decent wage for what we do then all would be well.

This industry is supply and demand and is very competitive which just adds to our stress level. Unless your company goes out of business, are you always under a threat that your income could drop by lets say 50% in a week or month?
The reason why we put up with all this is because we love what we do. We enjoy working with children and care about making sure we give them our best each day. So the next time you need to find a provider, look at the person who is offering the service. If she gives you the impression she is professional, caring, nurturing, patient and knows her business, then pay her what she is worth and don't demean our profession by nickel and diming us.

Trace, I agree with Mimi completely, this is a good topic of discussion and a good question. Don't stop posting please! This is a safe place and a good forum for us to discuss our problems. Believe me, we've had people come here before to blast us because they had bad experiences with daycare providers but we have survived and prevailed as a group. All HDCP's are NOT perfect, that's a fact. There are a lot who qualify as the babysitter variety and you and I and the other ladies on this forum are not of that inferior variety. So let's keep talking!

My rates have always increased by $1/day each year, which is on par with what larger daycare facilities do. At least, the facility I was in touch with did that and they said that was their understanding of other locations as well. I recently moved from a rural location to a townhouse in a highly populated area that is overflowing with providers. One provider who contacted me looking for my overflow said everyone in this area charges $40/day. My rates are $45/day and I have a waiting list. BUT, I target a specific clientele and have a 'theme' (for lack of a better term). It took some research and aggressive advertising....and maybe a little more sacrificing than most are comfortable with, but it's been worth it in my case. My philosophy has a very strong lean to nature, conservation and cultural/lifestyle diversity which is implemented daily through meals, activities and circles. I'm also "available' to parents in my off hours if they need to text regarding advice, behaviours, etc. Parents seem to dig it and I'm drawing clients that actually appreciate me and tell me so on a near daily basis. One couple recently took me out to dinner. The wife actually brings me coffee from Tim's every morning and even gave me a gift card to Winners (my mothership) after she got her Mother's Day gift her son made at daycare. One mother teared up when she saw the Father's Day gifts drying in the sun (flip flops with the kids' foot prints and names in fabric paint). Another family left me a very tear jerking letter and gift card to my fav restaurant when they moved. I am astonished at the amazing parents on my roster! I continue to interview frequently for my waiting list so I think price shouldn't mean much. Parents who appreciate you won't mind paying a little more. There's a lot of give and take from both sides, but, in my opinion, it pays off in spades. Don't listen to people who say daycare is too expensive!!!! We all know that it isn't! We offer an invaluable service that many people don't want to do. It's hard work and we earn every nickel of it. I have changed the way I do business and taken a risk in changing the way I do things and upping my rates drastically. Obviously there are oodles of people out there who really, really appreciate our roles in their children's lives. I'm extremely fortunate to have found 6 clients (2 are part time) who truly understand that. In my old location, I was becoming very disenchanted with this job as some of my clients were complaining and it was sooooo frustrating! Now, I'm actually able to cherry pick clients (again for lack of a better term) and have a group whom I adore! For the first time in years (12 to be exact) I'm exactly where I want to be, have a client base that I WANT and look forward to each work day. This is a great job when you have clients who recognize what they've got. Sod all the others.....in my humble opinion :)

Good luck and raise your rates! We have to make a living too :)

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Originally Posted by Island29

Daycare is expensive already, so that could be a reason why those providers don't increase their rates.

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Daycare isn't expensive - KIDS ARE! Why should a provider live on less than minimum wage because she cares for someone ELSE'S kids?

Daycare is one of those expenses parents need to think about BEFORE they have kids and worked their budget accordingly.

To answer the OP's question............

I am in year 11 of this biz. I started way back then at $30 a day. Now I charge $42 a day. So, basically, I raise my rates every year by one dollar per day.

The average salaried employee earns an increase of between 3-5% per year. So, let's say you are charging $40 a day. A 3% increase on $40 is actually $1.20. Most providers would round that down to a dollar.

But, yes, you are RIGHT that our increases have historically not met the annual increases in pay of other industries or professions. Because, as I stated above, that 20 cents we are losing per day by rounding down adds up. AND, it is also the low end of raises - 3% as opposed to 5% regardless of how great our performance is. If I charged an additional 5% on that $40 fee that would be an additional $2 per DAY. That equals an additional $10 per week, or, $520 per year per child. And, sadly, because parents think "daycare is expensive" as opposed to the truth - that CHILDREN are expensive - most will bolt and find alternate, cheaper care. Sad, but true.

Daycare is THE least understood and least valued job out there. And the irony of that is that we are paid less than pretty much any industry for the amount of responsibility we have and the hours we put in but we are also expected to just take it and be happy about it - never complain, never want more. Least valued job on the planet.

Along the lines of what Judy was saying. I have found the best time to increase my fees if I want to add more than a dollar ie went from $35 to $37 one year and then from $37 to $40 where I am now was based on raises given to the Federal public service which is probably the biggest employer here in Ottawa obviously. My husband being military gets a raise in conjunction with any federal decisions which again is a big employer in the area.

If you live in an area where companies are saying economy is bad and we can't give a raise this year then your parents aren't going to feel as good about a raise in daycare either.

I also play it by ear sometimes by who I have in care. Even when I was looking at raising my rates I interviewed a family where both husband and wife were working minimum wage jobs and I gave them the $35 a day rate instead of the new $37 rate. I then put off my rate increase to the January space I needed to interview for.

For sure you need to take a lot of factors into consideration to remain competitive. The lower your rates the more likely you are to attract clientele looking for a deal and they also tend to be more demanding - ie give them something once and they expect more and more deals. The higher your rates the more likely you are to have a space to fill waiting for the right client to come along. Which is why most of us check the ads - daycare bear is great is for this and set our rates somewhere in keeping with the majority so we are being judged on our space, location, program offered and not on price.

I raise my rates for new clients. So if one client leave and another one comes in, that client pays more. This way there is always a steady increase in my pay.

I just increase by $2.50 per day. Two clients are leaving and two come in that makes about a $1300 difference. I've also talked to other daycares in the area. We all raise our rates at the same time to around the same fee. This way we are never undercutting each other and he choice is made based on our different personalities and the way we run you daycare.

For the first 4 years (after a year working for an agency) I kept my rate at $42/day (same fee agencies charge to parents). Some months ago I increased my fee to $45 after I found daycare bear and saw some providers were charging that. About 3 months ago I increased my fee to $50 for new families since one of the enrolled moms told me I was very affordable and another person inquiring told me she was willing to pay $65 if I had a license. My now $50 doesn't look to bother new families and since I posted what I charge in daycare bear I have seen some providers in this area starting to charge $50 as well. For now I am happy with what I charge since I have the shortest business hours around. Most people that contact me need care outside those hours. I still have one spot available, but I guess I'll have to wait until I found the family that needs my hours.

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Originally Posted by Trace of Angels

And I think with that I will keep my thoughts and feelings safe and to myself in the future.

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Trace of Angels,
I think you brought up some really common ideas for many of us! Where I'am located, the normal range is $25 to $30. It's a more rural area (but most have well paying jobs), groceries are crazy expensive, there is a home daycare on every corner and to make matters worse there is one lady who is out to under cut the rest of us! She works around the clock, over her legal numbers and only charges $20/day!! How she stays afloat and doesn't burn out I have no idea? In order to make the $30/day you have to be able to do extra curricular, pre school, pick ups with some awesome field trips thrown in there for good measure! When I've had to advertise in the past, that was always the first question..."how much do you charge?" So my only reply was with all the awesome things I include in my price! Often they go looking for the cheapest deal. Thank goodness I haven't had to advertise for a few years, now I stay full through word of mouth!

I too wonder why daycare fees aren't raised more often. However, if it is too much than for some families it wouldn't make sense to work because they would just be giving their paycheque to their dcp. I also feel that if hdc's charge too much more parents will just go to centre daycares or be put on the lists and then leave hdc's when a centre has an open spot.

I don't understand why some ppl(no one in particular btw) expect one parent to pay their entire hourly wage though. For me, I am allowed 4 children and I charge $30 a day and am open for 9.5 hours. (usually only work 8-9 though, yay!!) That means I make $12.63 an hour. Here minimum wage is being raised to $10.45 so my wage is not terrible......defini tely could be better but if parents are only making minimum wage themselves it's hard to expect them to pay a huge dc bill.

Don't forget that part of that $30 a day is not income. Your income is based on the amount left after you deduct your daycare costs for food, crafts, supplies, toys, upkeep of daycare space, etc. But yes when we actually do look at the numbers our income really isn't bad at all because on top of what we make those with their own kids have to factor in the fact they get free childcare so if they went out to work they would have to pay that fee and take home the rest.

Yes, sorry playfelt I forgot to mention that the $12.63 is not an accurate hourly wage after you deduct your costs. However, I buy almost all my toys second-hand or have them given to me, I use coupons for groceries and only buy whats on sale(this also helps to have variety in my meals) and I buy art supplies in bulk or at the dollar stores. I also shop in the states a fair bit which saves me money. We also get to write a good chunck of stuff off that we wouldn't be able too if I didn't have a hdc. There are definitely pros and cons to me having a hdc instead of an outside job but I actually make more money now than I did when I worked in a centre daycare even after deducting costs.

If I gave myself Easter Monday and Christmas Eve day....parents wouldn't pay for it....it's not a stat holiday....so the "raise" would be where?????

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Originally Posted by sandylynn

If I gave myself Easter Monday and Christmas Eve day....parents wouldn't pay for it....it's not a stat holiday....so the "raise" would be where?????

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I added Easter Monday and Christmas Eve as paid days last year and no one complained. Remember it is your business, if it is in your contract and parents don`t like it, then they don`t have to sign on. I also have 5 paid personal days in my contract.

While it is true you can put anything you want in your contract if you are in an area where there is stiff competition for children it will be something parents use as a negative when comparing daycares. For that reason providers in some areas do have to forego some of the perks that providers in other areas can enjoy.

I'm full but I don't know if I would be if I closed and charged for stats or personal days. I, however do charge my full-timers for stats since they get a better rate than the part-timers.

I think we should increase our rates to keep up with inflation and our increasing wisdom and experience as child care providers! Good discussion!