I know several people who chose daycare over a nanny even though money was no issue at all. Right or wrong, nannies have a can have a bad reputation for being unreliable, inattentive, demanding and a big hassle. The fact that nannies are completely unsupervised throughout their day really bothers some parents and they don't want to hassle with a nanny cam. In a good daycare, you have not only the teachers in the class to depend on but directors and other staff who set guidelines, supervise caregivers, ensure activities are happening etc. With the exception of the occasional once a year field, the activities at daycare are on sight. Many have really nice playgrounds and the kids have automatic playmates. With a nanny, you run the risk of the kids being driven in a car or not watched at a public park.

Personally, I preferred having a nanny but I'm more laid back. The convenience of not dealing with drop off or pick up was huge. It was also great not to miss work if the kids had a cold. With a nanny my kids actually caught more colds but recovered faster because it was no big deal for them to stay in and rest for a few days.

It can be cost effective in your situation to hire a nanny. The biggest benefit of sending your child on to daycare is the socialization skills they will acquire. However until a child is at LEAST 2 yrs old, having them spend time w/a nanny is a much better idea.

The child can stay in the comfort of their own home w/their own bed, toys, etc.
They are not exposed to many germs/illnesses and get more individual attention than an overworked daycare worker can provide.

I know lots of people with 2 kids in daycare. When kid #2 comes along, they already know the daycare staff and are comfortable with them.

They may like the programming that the daycare provides their older kid.

They may not want to disrupt their older kid's life by taking them out of daycare if the kid likes it and has friends there.

They probably like the fact that the daycare is reliable--if a daycare worker is sick, the daycare has its own contingency plans and subs.

They don't have to deal with being an employer and all that that entails.

Well, as you're seeing here - there are some reasons why people prefer daycare. We opted for a nanny because it was at least competitive with the cost of daycare (for twins in our case). Having a nanny also means we don't have to worry about drop-off/pickup routines, don't have to pack lunches and clothing every day, don't have to deal w/ teacher education days, don't have every single available germ being brought into our house, etc... Plus our kids get amazing attention, the house is kept tidy, someone else does the bulk of the kid's laundry, etc... It's a total lifesaver for me.

What I think we sacrifice with choosing a nanny over daycare is coverage when a primary caregiver is sick, socialization w/ other kids, daily routinized/designed play and education plans, and some structuring of time/naps/meals that can be helpful.

It can be. I do know people who have nannies for 40-45 hours a week and are paying around $600-$650 a week. This limits your pool of applicants but their nannies are very nice, reliable and good.

We switched to a nanny when #2 was born. Daycare would have been ~$800+ per week for 2 and we were paying $100 a week for once a week housekeeping. This would have been $46,800 per year.

We hired a nanny/housekeeper for $700 a week and dropped the housekeeping services. You need to factor in an extra 10% for taxes and incidentals which made the annual expense 40K. It was $6800 cheaper to go with a nanny. Our nanny was amazing and well qualified. It also was much better having someone do a little cleaning every day rather than the once a week cleaning too.

We did opt for a more expensive preschool because it happened to be the one that we really liked. We had really expensive year when the oldest was in half day preschool and we had a full time nanny. When our youngest turned 3, we switched to 5 day 9-3 preschool for both kids and 2 hours of aftercare. This was 32K a year plus going back to the $100 a week housekeeping services so a total of 37K a year.