For parents across the country, paying for child care during the work-week can be a daunting task. During summertime, the stress and costs only increase as children are no longer in school during working hours. Often, that means parents must balance finding summer camps and summer day care that children enjoy, but don’t break the bank.
With summer rapidly approaching, it’s important for benefits managers to educate employees about the cost-saving tools available to them to decrease expenses on summer camps and other options for dependent care.
Dependent care flexible spending accounts (FSAs) allow participants to set aside up to $5,000 annually before taxes to spend on dependent care, which is often a requirement for gainfully employed adults. By setting aside money before any taxes are applied, participants can save up to 40 percent on eligible expenses. So if you put in the $5,000 maximum, the savings could be up to $2,000 for many enrollees. Based on the costs of many day camps and day care, reaching and surpassing the maximum isn’t all that hard for most people.
Popular expenses for dependent care FSAs include summer day camp, pre-school and after-school programs, nannies and babysitters. These accounts also allow participants to set aside money for elder care, like adult day care or in-home elder care. For a full list of eligible expenses, click here.
Encouraging potential participants to enroll in a dependent care FSA is a good idea anytime, but they can be especially valuable during summer months that often lead to an increase in child care costs. And for every dollar saved on summer day care, participants can put more of their hard earned paychecks towards summer’s best activities, like barbeques, ballgames or weekend trips to the beach.
American poet Raymond Duncan once famously joked that “A lot of parents pack up their troubles and send them off to summer camp.” Certainly, summer day camps remain an important rite of passage for many young children – and an absolute necessity for many working parents. Encouraging employees to enroll in an FSA is a good way to balance savings with children’s summer fun.