Strategy 100 of 107 · new for the five-year plan
Free early childhood programs instead of paid daycare
What it is
Head Start and Early Head Start are free for eligible families with children up to age 5; many states also offer free pre-K.
Steps
- Head Start and Early Head Start are free for eligible families with children up to age 5; many states also offer free pre-K.
- Apply early; spaces fill.
- Send the daycare cost no longer paid to principal.
Repeat: Each school year.
Measure: Monthly childcare cost saved.
Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Income rules and waiting lists.
- Hours may not match work schedules.
Who it fits
Married couples, Newlyweds, Single, No high school diploma, No college degree, Average household
Needs
Has children under 19 (or under 5 for Head Start); Limited income
How predictable
Depends on people or program rules (tenants, family, IRS records, lenders)
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (married couples). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: head Start and Early Head Start are free for eligible families with children up to age 5; many states also offer free pre-K.
Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sources and more information
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
- CFPB: Submit a complaint about a lender or servicer consumerfinance.gov
Related strategies
- 99. Children's coverage through CHIP or Medicaid
- 101. Get out of required flood insurance with a FEMA map amendment
- 98. Lower health premiums with a marketplace premium tax credit
- 102. Wind-mitigation and FORTIFIED roof discounts
- 97. A nonprofit credit counselor's plan to cut card rates
- 103. Cancel add-on products you don't need