Should You Take Out a Personal Loan to Help Cover Childcare Expenses?

It's a tough call to make.

If you're struggling with the ever-rising cost of childcare, you're not alone. Care.com reports that in 2021, the average cost to put a single dependent in a childcare center was $226 a week. Ouch.

Even if you have school-aged children, you might still fall into the trap of incurring sky-high childcare costs due to having to pay for camp during the summer, when school isn't in session. And if you're tired of raiding your savings account to pay for childcare, then you may be considering paying for it with a personal loan.

Personal loans can be a reasonably affordable option when it comes to borrowing money. But whether it pays to take one out to pay for childcare is a different story.

It takes money to make money

There are certain costs many of us incur in the course of holding down a job. For some of us, it's commuting. For others, it's maintaining a business wardrobe. And for you, it might be childcare. 

But if you've reached the point where you're contemplating taking out a personal loan to pay for childcare, then it may be time to rethink your work situation. 

Let's say childcare is costing you $2,000 a month because you have more than one child who needs full-time care. Meanwhile, let's say you bring home $2,500 a month in your paycheck. All told, you're netting $500, and you might need that money to stay afloat and keep up with your bills. But there may be a way to earn $500 -- or more -- without having to bear such expensive childcare costs.

For one thing, if you're married or live with someone, you could try working part-time during the hours when your partner is home. That way, they can watch the kids and you can work without having to pay for care. 

Another option may be to find a job that allows you to work remotely. Doing so may not negate the need for childcare, but you might be able to reduce the amount you spend on it. 

Also, certain skills might lend to lucrative freelance work that takes less time than the hours you're currently working now. That could help you cut down on childcare costs, too.

Let's say you're a web designer and work 40 hours a week for an employer. If that situation is only netting you $500 a month after you account for childcare costs, you may want to see if you can find an independent gig that will pay you $2,000 a month for, say, 20 hours of weekly work. Then, if you're able to only spend $1,000 a month on childcare, you'll net $1,000 a month. And remember, if you're efficient at what you do, you may find that you're able to accomplish more by venturing out independently and not having to waste time in meetings. 

Don't resign yourself to childcare debt

Many parents struggle to cover their childcare costs. If you're at the point where you think you need a loan to help pay those expenses, perhaps a change is in order. And if you adjust your work schedule, you may find that it not only saves you money, but lends to a better quality of life on a whole.