8 ways to stretch child care dollars

By U.S. News & World Report

As back-to-school season ramps up, the phenomenon known as the "sitter shuffle" begins.

"All the parents send their kids back to school and college students come back to college cities, so everybody's child care arrangements get thrown up in the air," says Genevieve Thiers, the founder of Sittercity, which matches up parents with caregivers. Parents who start looking for care early in August are the ones most likely to find the kind they want, she says.

This year may be especially competitive: With the recession forcing some former stay-at-home parents back to work, Thiers has seen a 150% increase in parents looking for help.

It's not all bad news for parents; the recession has also made the child care market more competitive, so, in some cases, prices have fallen. To increase your chances of finding affordable child care, consider these eight strategies:

Use the Web instead of a nanny service. Nanny agencies, which families use to help them find full-time caregivers, can cost a couple of thousand dollars upfront. But Web sites such as Sittercity provide a similar service at a fraction of the cost. (Membership to Sittercity starts at about $40.) While nanny agencies often screen potential sitters on behalf of parents, Sittercity verifies sitters' identities and does a background check for violent crimes or sex offenses and then encourages parents to check references and interview potential candidates themselves. "It puts the parents in the driver's seat," says Thiers. "They're the ones to screen the person coming into their home."

Team up with another family. Nanny-shares, where two families pool their resources and hire a single caregiver, can cut parents' costs in half. But Lisa McLellan, a professional child care provider and the founder of BabySittingWorld.com, says parents need to make sure both families share attitudes toward television viewing, diet, discipline and homework for the arrangements to work. She adds that some parents run into trouble when one family decides they no longer need the nanny, leaving the remaining family to pay the entire salary (or rush to find a different family to pair up with).

Form a baby-sitting co-op. A co-op is usually formed by a group of six or more parents who take care of each other's children on a rotating basis. They earn points for their caregiving hours, which they then use to "buy" child care hours for their own children, McLellan explains. "It works well for people who work part-time hours, and it's a wonderful alternative to paying hourly for an occasional baby sitter," she says. On a more informal basis, two parents can simply trade caregiving hours with each other for a few hours a week. "If one parent has more children than the other, they can work it out with points like a baby-sitting co-op so that neither parent feels cheated," McLellan suggests.

• Pay the nanny tax, if you owe it

Seek out family day cares. In contrast to traditional day-care facilities, family-run day cares are usually operated out of the provider's home, where she often cares for her own children at the same time. It's usually far less expensive than traditional day care.

Take advantage of increased competition. Because of the recession, more recent college grads, and some laid-off employers, are turning to caregiving as a way of earning a living. As a result, prices have come down a bit. Thiers estimates hourly rates have fallen around $1 to $1.50 since the recession began. Parents can look up the average rate in their area using Sittercity's cost calculator.

Video: 5 best deals for students

Find a "hybrid" provider. The recession has inspired many caregivers to double up on their duties, offering housekeeping services and even French lessons, says Thiers. "Eight years ago, the average caregiver was 19 and in college. Today, the average age is 28. The younger ones are saying, 'How can I compete with older caregivers?'" Their answer is often to provide more forms of assistance to busy parents.

Turn to your parents for help. When Nan Mooney, the author of "(Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class," had her first child, she moved from New York to Seattle to live with her parents, which enabled her mother to help her with child care. Such intergenerational arrangements are increasingly common, she says, and can help parents manage costs while giving grandparents and grandchildren a chance to get to know each other better.

• Facebook users: Become a fan of MSN Money

Hire an au pair. Au pairs, or foreign nationals who live with families while caring for children up to 45 hours a week, are usually much cheaper than day care or nannies, largely because they are also receiving room and board. But the program, which is regulated by the State Department, also comes with some drawbacks: Au pairs can't stay with a family for more than a year, which means young children have to face frequent changes in their care providers, and it can be difficult to check references in advance. Only experienced au pairs with more than 200 hours of experience are allowed to care for children under the age of 2.

This article was reported by Kimberly Palmer for U.S. News & World Report.

Published Sept. 9, 2009