Workplace Benefits That Help Parents Save: Childcare, Flex Spending, and Health Insurance

As a Financial Advisor and a dad who's navigated the ups and downs of raising kids (while trying to keep a budget intact), I’ve spent quite a bit of time researching workplace benefits that can help save some serious cash. As iIt turns out your,  workplace may offer more than just coffee and a paycheck! In this article, I’m taking you on a little tour of some common work perks, like Childcare Discounts, Flex Spending Accounts, and how adding your kids to your health insurance impacts your wallet. Ready? Let’s dive in!

Childcare Discounts: The Hidden Gem

Ever feel like daycare costs are draining your bank account faster than your kids drain their juice boxes? You’re not alone. But here’s the thing—some employers offer discounts at specific childcare centers, which can take a nice chunk off your weekly bill.

I’ve seen discounts of up to 10% off.! So, if you’re shelling out the national average of $221 a week for one child, you could save about $22.10 per week, or roughly $88.40 a month. That’s over $1,000 a year! With multiple kids, those savings multiply like the laundry piles at home. Totally worth looking into, right?

Dependent Care Flex Spending Accounts (DCFSA): Pre-Tax Power!

Now, let’s talk about Flex Spending Accounts (FSAs), which are like your secret weapon for saving. Specifically, a Dependent Care Flex Spending Account (DCFSA) lets you put aside money, pre-tax, to cover qualified childcare and dependent care expenses. So, instead of letting Uncle Sam take a bigger bite out of your paycheck, you’re keeping more of your cash to spend on the kiddos.

Here’s the magic: If you’re in the 22% federal tax bracket, every $1,000 you spend from your DCFSA saves you $220 in federal income taxes. That’s not pocket change!

There are a few rules—you have to care for someone who lives in your home for at least 8 hours a day and who can’t care for themselves. And yes, there’s a cap on how much you can defer ($5,000 for single or married filing jointly, $2,500 if you file separately as of 11/1/2024). But overall, it’s an awesome tool for saving on something you’re already paying for.

Adding Kids to Your Health Insurance: Yes, It Costs More

Ah, the most popular question in the parenting world—does adding a child to your health insurance make your premium go up? Spoiler alert: Yes, it does.

Here’s the good news though—it’s a one-time increase when you add your child. So, whether you’re adding one or multiple kids, your premium goes up once and then stays steady. But heads up: You have to add your newborn to your insurance plan within 60 days of their birth (or adoption), so don’t let the sleep deprivation make you miss that deadline!

Pro tip: Reach out to your health insurance provider in advance and ask how much your premium will increase. That way, you can start adjusting your budget now instead of being blindsided later. Trust me, future- you will be thankful.

Final Thoughts: Get That Money Back in Your Pocket!

Raising kids is a joyful (and expensive) ride, but with a little planning, you can make it a lot less stressful on the financial side. Between childcare discounts, a Dependent Care Flex Spending Account, and getting a handle on health insurance premiums, there are plenty of ways to keep more of your hard-earned money where it belongs—in your pocket!

So, take a deep breath, check out your workplace benefits, and enjoy this exciting chapter of life. And hey, if you need help along the way, I’m always here to lend a hand. After all, we financial advisors love a good plan!