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When inflation rises, so do childcare costs. If you’re a single parent, you may be hoping to get a little financial relief this coming tax season through deductions or credits. But as both child tax credits have been reduced recently, you may not get as much as you expected.

If you’re like me, you might end up paying the IRS instead of getting a refund from Uncle Sam. To make your money go further in 2023, you may want to reconsider some of your recurring child-related expenses. Here are some strategies for cost reductionaccording to experts in the field of finance.

Caring for children

Many of the increased tax credits and deductions that parents enjoyed during the height of the pandemic are returning to their original limits. As a result, parents should be prepared to get less this year, says Alton Bell II, chief accountant and founder of Bell Tax Accountants & Advisors in Chicago.

“I would prepare for the shock of a lower tax refund because the dependent care credits have changed significantly,” he says.

In 2021, the Child and Dependent Care Credit increased to make childcare more affordable for working parents. It has been raised to a maximum of $4,000 for one qualifying individual and $8,000 for two or more qualifying individuals and is potentially refundable. In 2022, the amount drops again to a maximum of $1,050 for one qualifying person and $2,100 for two or more. In addition, the child tax credit will return to $2,000 for children of all ages in the 2022 tax year. In 2021, it increases to $3,600 for children under the age of 6 and $3,000 for children between the ages of 6 and 17.

With these cuts in mind, I thought it would be a good idea to give up childcare for my 5 year old son this year. My living room might look like the scene of a volcanic eruption more often than not, but I’ll be saving $200 a month. If you telecommute and can keep your baby home for a few extra hours during the day, consider doing this trial run.

Additionally, you can contribute to a dependent care flexible savings account, which allows pre-tax dollars to be used to pay for child care. Bell suggests maxing out that account for the year and also using an employer FSA match if your company offers one.

You can contribute $5,000 per family to a 2023 Dependent Care FSA, or $2,500 if you’re married filing separately.


If your snack cabinet is empty for three to five business days because your kids have bottomless bellies, you may be looking for ways to lower your grocery bill. This can especially be the case if you are feeling the effects of rising food costs due to inflation.

One of the saving strategies is to plan your shopping in advance to avoid buying things you don’t need. Dominique Broadway, personal finance expert and founder of Finances Demystified in Miami, Florida, switched from going to the store to grocery delivery services to know exactly how much she’s spending.

Broadway also recommends staging the same groceries in the carts of different delivery service providers so that you can compare the difference in price.

“You’d be surprised, the difference can be quite big — sometimes a 40, 50 buck difference just because of shipping and markup. It really adds up over time,” she says.

Health care

Premiums can become a noticeable expense if you pay them monthly. Adding co-pays every time you visit the doctor increases your out-of-pocket costs even more.

If you have a relatively healthy child and can say the same about yourself, consider whether a health savings account could save you money. HSAs can be used to pay for health care expenses. The limit for HSAs in 2023 is $3,850 for individuals and $7,750 for families. Contributions are made in pre-tax dollars and are also tax-free. You must have a high-deductible health insurance plan to contribute to an HSA. Health plans with high deductibles sometimes have lower premiums, which results in some people saving money. Keep in mind that with these plans, you may pay a higher deductible before your insurance starts sharing your health care costs with you.

I decided to test it in 2022. Since my son and I went to the doctor several times that year, my out-of-pocket expenses were about $700. The cherry on top is that I have $1,500 left thanks to my employer’s contributions to my HSA account. Now I can carry that money over to the new year.


By the end of 2022, I had so many toys in my house that my son and I gave away half of them. This year I’m cutting costs by making better use of it free classes.

Broadway says that often parents buy things for their children only to realize that what they really value are experiences.

“I bought an activity set for $3 at Target and have had hours of fun and play with my kids with something like that, rather than just buying them a bunch of toys,” she says. “I think that alone is a great way to cut costs and build a better relationship with my kids and make more memories with them.”

Speaking of experiences, there is a trampoline park near our house that offers endless play for $20 a month. It seems more cost effective to take my son there than to buy extra trucks and backhoes that I will end up tripping over.

If any of these strategies lead to savings this year, Broadway suggests putting the money into a custodial account for future child-related expenses and to help your children grow richer.

“Take that money and invest it for your children — let it work for you and for them.”

This article was written by NerdWallet and originally published by The Associated Press.

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Elizabeth Ayula writes for NerdWallet. Email:

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