Five Factors That Affect the Cost of Providing Childcare

  • August 1, 2019 /
Hand holding 5 piggy banks representing the 5 factors that drive child care costs

Childcare costs can impact a family’s choices and budget greatly. Because of its price tag, it’s no surprise that choosing the right childcare is a top priority for parents. As a Long Island preschool and daycare, we get this. No matter the age of your child(ren), you want to be sure that you’re choosing a childcare option that offers quality service and experience. The thing is, parents are also concerned with the price of childcare, for good reason. As we covered in a previous blog post, childcare expenses come down to the value each option adds to your child(ren)’s education, socialization, and overall enrichment.

There’s a lot that goes into creating a pricing structure at preschools, daycares, and childcare centers. Today, we want to focus on five of the factors that affect the cost of providing childcare. For parents of children in Long Island, we’d love to help explain these factors and why they affect our tuition and tuition across the board.

Factor One: The Staff to Child Ratio

You may not be aware that states require a certain caregiver to child ratio. For New York, a registered and licensed childcare center must strictly follow a caregiver to child ratio that starts 4:1 for babies 6 weeks – 18 months, and 5:1 for toddlers 18 months – 36 months. These ratios continue until the final ages of 10 – 12 years with a ratio of 15:1.

While the ratio does go up depending on the age of the child, with a ratio of 8:1 for five-year-olds for example, this does affect the cost of providing childcare. It is for this reason that you may notice a discrepancy between the cost of care for different ages. The reason that these ratios are necessary is for the child’s safety. Because of these ratios, as the number of children in care goes up, so does the necessary staff needed to watch them.

Factor Two: What’s Included

What types of things do you look for in childcare or a preschool? Is having updated toys and active learning games important to you? Is having multiple cribs and a full bookshelf a priority? Things like these, as well as meals, snacks, clean and well-maintained facilities, etc. do have an effect on the cost of the childcare you are choosing. By choosing a facility that offers more for your child(ren), you should expect to see these offerings be reflected in the tuition or pricing.

Factor Three: Time Provided

Another factor that comes into play when assessing what affects the cost of childcare is the time that a child spends in that care. Naturally, childcare that is part-time will cost less than childcare that is full time.  The child/staff ratios previously mentioned, staff training, full background checks and NYS wage mandates, can often cause the hourly rate for part time care to be greater than full time care. There also may be additional charges for things like early drop-off or late pick-up, depending on the center and ownership.

Because the parents of so many children have varying schedules, involving different hours of work and events where care is needed, this cost will differ based on time spent providing care.

Factor Four: The Behind the Scenes of Business

As a parent, you want a childcare option where you can feel secure knowing your child is well taken care of. As you can imagine, taking care of children can be a large liability for centers, preschools, etc. There are various types of insurance that they should and in some cases, must have as they do business. Examples of these types of insurance include liability insurance as well as damage insurance for the building and employee insurance for any injuries that should happen.

A reputable childcare facility will have taken care of these different types of insurance to equip them for any situation. It is because of the fees and policies that they incur that this is a factor behind the cost of childcare.

Factor Five: The Location

Where a childcare facility is located can have a large effect on its pricing as well. Different locations in different areas mean differing costs of rent, utilities, taxes, etc. Also, New York State requires a certain amount of square footage of space per child and also limits the number of children in care.

As parents of Long Island preschoolers know, the Long Island area is one of the more expensive places to live. In a quote from our latest blog, In Long Island, the median household income is right around $100,000. In fact, New York is ranked 4th out of all 50 states for most expensive infant care. These facts may hit close to home for Long Island parents, as this means many families may find themselves spending $20,000 or more on childcare alone.

For businesses like ours, this means investing in a good building in a good location, complete with up to date fixtures to keep children safe. Based on the location of the childcare you’re seeking out, location is a factor in how childcare is priced.

We hope that explaining these five factors help you get a clearer picture of childcare costs and what goes into creating them. As always, don’t hesitate to reach out to us with any questions you may have. We are grateful for all of the children and parents that call HabiTots their home away from home! As always, it’s our goal to give you the most value possible so that you (and your budget) feel confident in your choice.