The Great Childcare Debate: Nanny or Daycare?

By Published On: August 9, 2022Categories: Kids & Money6.8 min read

When you let people know that you’re expecting a baby, the first thing they always say is “Congrats!” This is often followed by, “Will you keep working after the baby’s born?”

For me, the answer was a resounding “Yes!” But this well-intentioned question did spark a more important discussion for my family: Would we send our baby to daycare or hire a nanny?

Thankfully, the pregnancy gave us plenty of time to ask friends about their childcare experiences and conduct our own research. This is how we discovered that childcare is an important part of a family’s financial plan. It’s a decision that goes well beyond budgeting. It affects your lifestyle, careers, and future plans.

With the help of my co-worker Claudia, who’s a former full-time nanny and now a Client Experience Specialist here at CornerCap, I created a list of potential pros and cons of nannies vs. daycare.

We hope this piece offers a broader perspective on childcare to help you make an educated decision that helps your family life appreciate as your career does, as well.

Financial Perspective on Hiring a Nanny

For some, nannying may seem like a more “elite” or even “safer” option than the group supervision provided by daycare. Either way, it’s challenging for parents to hand their infant over to someone outside immediate family.

Following are a few pros and cons of hiring a nanny, as it relates to your financial plan and overall lifestyle:


  • More Control Over Your Parenting Style. With a nanny, you can implement the rules that you want your child to follow and stick to your preferred schedule.
  • Help with Chores.While your baby naps, the nanny can do laundry or load the dishwasher. This extra hand may allow busy parents to spare the separate expense of a housekeeper.
  • Reliable Support Right at Home. COVID has caused frequent daycare closures that can leave parents scrambling for last-minute childcare. A nanny who works with you one-on-one can feel more COVID-safe and provide greater dependability.
  • Private Care. Having a person who gives your child their full attention gives your little one a sense of security, allows them to learn and mature at their own pace. If this is the type of personalized experience that you find valuable, a nanny can help you create the environment where you think your child will thrive.


  • Long Hiring Process. Finding the right nanny entails time-consuming candidate interviews. It could also involve a trial-and-error period that takes away from your family’s stability. And if your nanny leaves, you must start this process all over again.
  • Higher Cost. Nannies are more expensive than daycare. On top of their salary or hourly wages, keep in mind that you may also need to cover the costs of extra activities, gas, mileage, plus your nanny’s meals while they’re out with your child. This can create budgeting challenges since the costs could fluctuate every month.
  • No Sick Coverage. Just like kids get sick, nannies do too. But when your nanny is under the weather or needs a personal day, you may have to figure out alternative childcare. This could affect your work, cause your child to miss their activities, or create scheduling difficulties for you. When your child goes to daycare, there’s usually someone who can cover for teachers who are sick or out for the day.
  • Employer Responsibilities. By hiring a full-time nanny, you become their employer. This involves bookkeeping, taxes, and other legal liabilities. You will also need to manage their vacation and sick time, as well as provide regular feedback on their work. For some busy parents, this incremental management responsibility can become a burden.

A Financial Perspective on Daycare

Daycare is a great option for many families across the country. But, like all planning decisions, it’s a balance between the positive aspects and the drawbacks.

Here are some of the pros and cons that could help you decide if daycare is right for you and your baby:


  • Socialization for Babies and Parents. Daycares give babies and toddlers the opportunity to interact with kids of other genders, ethnicities, and backgrounds. This can help your child develop personal and communication skills that they will carry throughout their lives. It also provides opportunities for parents to meet other families with children around the same age. These friendships can help you through the challenges of parenting and expand your network.
  • Advanced Learning Skills. Daycare can offer a more enriched learning experience. With a full staff, more resources, and other children to learn from, your child can gain access to a broader array of developmentally appropriate activities. For parents who value early education, daycare can be a better investment.
  • Structured Environment. The skills and exposure to a specific curriculum is more structured at daycare. The schedule and organization that daycare provides helps provide a balance in babies’ lives and gives you a chance to plan around those routines. When you and your child know what to expect, it’s easier to manage your activities and prioritize the important events in your lives.
  • Lower Cost. With a flat fee and lower monthly prices, daycare is a more affordable option for parents. It makes budgeting more convenient, especially when you’re a new parent trying to figure out the new expenses of having a baby.


  • Less Flexibility. Although some day cares offer part-time attendance and may be able to accommodate the schedules of divorced parents, there is still a set start and end schedule. If you need to work late or travel without your little one, you’ll need to find a babysitter or ask family or friends for help.
  • Exposure to Illness. No matter how clean your daycare is, your child is bound to catch something from one of their classmates. After all, they share toys and space with a group of young children who are still developing their immune system. Since it’s impossible to plan for illness, this can lead to your missing work when your baby gets sick or scrambling to find alternatives if your child’s daycare is closed due to a COVID exposure.
  • Child-to-Caretaker Ratio. Even if your child is in a small group setting, their caretaker won’t be able to provide constant individualized attention. For parents who have safety concerns or wish to raise their child in a more controlled environment, daycare cannot provide that level of customized care.
  • Long Waitlists. It’s very common for daycares to have a long waitlist. Many parents sign up before their child is even born. But what happens if your daycare turns out to be a bad match? You may be left without childcare or need a nanny for an extended period of time while you wait for a spot to open up elsewhere. This could throw off your family budget and affect your work schedule.

Making a Decision

There is no right or wrong answer to childcare. It’s all about what works for you and what will help your family life appreciate. Just like with other financial planning decisions, the way to determine if a nanny or daycare is right for you is by running the analysis on your time, money, and lifestyle. This structured process will help you determine which choice fits your long-term goals.

After many long conversations and weighing all the options, my husband and I opted for daycare. In case you’re wondering, we’ve had our ups and downs with the experience. But so have our friends who chose to hire a nanny! Overall, it’s been an incredibly positive experience in that our child has made friendships early in life, is thriving developmentally, enjoys rich and diverse educational opportunities – and we’ve made some wonderful new friends from the parent circle, as well.

If you need help calculating the real costs of childcare and determining how these play into your overall financial plan, our team of wealth advisors is here to help you navigate the decision – whether financially or by being a sounding board as you weigh the pros and cons.

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