The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
When planning for a baby, there are a number of costs that parents will take into consideration before their bundle of joy arrives. Child care is often the most expensive line item.
Yet access to reliable child care is essential for many families who rely on this support in order to be able to work full-time jobs, attend school and increase their own wealth. This need was highlighted during the height of the pandemic when parents, predominantly mothers, began to leave the workforce in droves as schools, daycares and child care centers shut down or transitioned to a remote model. Many women are still recovering from the financial impact.
Despite the need for child care, it appears that cost will continue to rise for families all over the country. According to the latest Care.com Cost of Care Survey, the cost of child care is higher for families in 2022. Over half of the parents surveyed report spending more than 20 percent of their household income on child care, and 72 percent of parents report spending 10 percent or more. This is up from 70 percent, according to Care.com data from 2019, the most recent year that mirrors parents’ options today.
The cost of child care in various settings
The amount you can expect to pay for child care will vary greatly depending on the setting. Some parents might prefer to keep their child at home with a nanny, others may want to take their child to a daycare center. Some parents may not need full-time care and opt for an after-school care program that gives them the extra time they need to get through their work day.
Here’s a look at the average cost of child care depending on the type of care you seek. These figures are based on the 2021 costs for infant children (with the exception of after-school care costs):
|Number of children||Average cost – child care center||Average cost – nanny/sitter||Average cost – home child care (family care)||Average cost – after-school|
It’s also important to note that the amount you pay will also change depending on your child’s age. The amount you pay for child care will vary depending on how many children you have, as well as their ages. In most cases, you can expect to pay more for a delicate infant who requires more hands-on attention than you would for an elementary-aged child who is more independent. With such a wide range of costs, it’s important to weigh your options and determine which environment will best meet you and your family’s needs.
Child care/daycare centers
|Often more affordable than a private nanny||Often a lengthy waiting list|
|Reliable care and regular hours||Caregivers caring for multiple children at the same time|
|Opportunity for children to socialize with other children in the same age group||Exposure to more illnesses in a group setting|
|Staff members often trained in early childhood education||Often strict pick-up and drop-off times that may not work with your work schedule|
|Daycare centers are licensed and regulated, ensuring ample supervision and quality care||Typically closed during major holidays|
Home/ family care
|Usually less expensive than other child care options||Can be unreliable if the caretaker gets sick or takes time off|
|Often a more comforting and nurturing environment||Your child may be exposed to more illnesses in a group setting|
|Typically smaller groups of children||Potential lack of formal childhood education background among home daycare providers|
|Opportunity for children to socialize with other children in the same age group||Fewer licensing requirements|
|Often more flexible pick-up and drop-off times||Many closed for holidays and vacations|
|More personalized care for your child||Typically the most expensive child care option|
|No need to commute to a daycare center||Zero supervision|
|Flexible hours||Need for planned activities so your child can socialize with others in their age group|
|A setting more familiar to your child||Can be unreliable if your nanny becomes sick, goes on vacation or quits unexpectedly|
|Child care available if your child gets sick||Can involve a great deal of legal paperwork|
After school care
|Defined curriculums and planned enrichment activities for your children||Only open during the school year|
|Often an affordable option||Possibly overwhelming number of hours for your child to spend at school|
|Boosts social skills||Interrupts unstructured play time|
|Licensed and regulated||Can blur lines for parents and make it harder to establish a hard stop time at work|
|On school property, meaning you can skip a commute||May not be an option for all of your children if they vary in age|
The most (and least) affordable states for childcare
Several factors will impact how much you can cover in terms of child care costs, including your family makeup. Here’s a look at the five most affordable and least affordable states for child care, as well as the percentage of your annual income that you can expect to pay for child care whether you’re a single parent or if both you and your spouse will contribute to these costs.
|State||Average annual child care costs||Percentage of a single parent’s income||Percentage of a couple’s income|
|State||Average annual child care costs||Percentage of a single parent’s income||Percentage of a married couple’s income|
The state of child care today
Child care costs have been on the rise for decades, but the pandemic certainly made matters worse for many families. Nearly 9,000 daycares closed in 37 states between December 2019 and March 2021, according to findings from a new 2022 survey by ChildCare Aware. This increase in closures, paired with a rise in popularity of remote learning models, forced many families to rethink their priorities. In many households, one of the parents or family members assumed child care responsibilities.
Most recently, inflation has also contributed to these rising costs. In fact, a recent report found that child care costs are outpacing inflation by more than 3 percent. This, paired with higher costs for everyday goods like groceries, gas and housing, is making child care significantly less accessible, particularly for lower-earning families.
How parents and guardians are managing the costs
For many parents, coping with rising costs has been a challenge. Many have considered alternative options and made bigger lifestyle changes to make ends meet. According to the Care.com survey, 31 percent of parents say they have considered taking on a second job. Of those surveyed, 26 percent say they will reduce their work hours. A quarter of these parents are changing jobs, and more than 20 percent say they plan to leave the workforce altogether.
If you’re looking for a starting point to help you determine how much you can expect to pay for child care in your area, Care.com and CostofChildCare.org both provide useful calculators that can crunch the numbers for you based on your preferences and needs.
6 ways to lower the costs of child care
If you’re struggling to meet your child care costs, there are a number of ways you can reduce that financial burden.
- Reach out to your employer: Some employers offer child care assistance as an added benefit for their employees. Revisit your employee benefits package, or contact your HR representative to see if this is an option for you.
- See if you qualify for a tax break: Per the IRS, you may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work. This could help offset care costs for this year or next.
- Check your flexible-spending account: FSA’s are sometimes part of an employee’s benefits package and can be used to offset child care expenses. You or your spouse can fund a dependent care flex spending account (DCFSA or FSA) and use those funds to reimburse your daycare costs.
- Ask about a sibling discount: Many child care providers will offer a discount for a second or third child. Taking all of your little ones to the same daycare or sitter will help you cut down on your commute and could score you a discount.
- Consider using a credit card: If you’re in a pinch, a credit card could help you cover the cost of child care, but this should be done cautiously. Aim to make at least the minimum payment each month, and pay your balance in full if possible. Also, remember to take advantage of your credit card rewards.
- Coordinate a nanny share with other parents: Sharing one care provider may be less costly than hiring a private nanny to watch over your children. Ask friends, family or neighbors if they’re open to splitting the costs of a shared nanny.
Child care costs can put a significant financial strain on a family — especially for today’s parents who are up against a staggering inflation rate and are still battling the economic aftermath of the pandemic. The exact amount you can expect to pay will vary greatly depending on your location, how many children you have, how old your children are, the kind of care you seek and more. Still, there are plenty of ways you can reduce the cost of child care and make it manageable for you and your wallet.