Child care is unaffordable for the majority of U.S. families, particularly low-income and middle-class households, according to the recent Care.com 2023 Cost of Care Report, published June 13.
For the 10th year in a row, the Care.com report found child care costs are continuing to rise, with families spending an average of 27 percent of their income on child care costs alone in the last year.
Specifically, the Care.com report found 67 percent of parents surveyed are spending 20 percent or more of their annual household income on child care (up from 51 percent in 2022), and 89 percent spend 10 percent or more of their annual household income on child care (up from 72 percent in 2022).
Households with children make up 40 percent of the total U.S. population and earn an average income of $91,000. Yet of the 3,000 parents surveyed for the report, more than half, 59 percent, reported they projected to spend more than $18,000 per child on child care in 2023, which is nearly double the cost of in-state college tuition.
Specifically, the report found:
- 45 percent of families earning less than $100K annually will spend more than $18,000 on child care in 2023, amounting to 18 percent of their household income.
- 43 percent of families earning less than $75K will spend more than $18,000, amounting to 24 percent of their household income.
- 39 percent of families earning less than $50K per year will spend more than $18,000, amounting to a whopping 36 percent of their household income.
According to the U.S. Department of Health and Human Services (HHS), child care is considered affordable when it costs families no more than 7 percent of their household income. So it’s no surprise that 50 percent of parents are more concerned about the cost of child care than they were at this time last year.
“So much is discussed about the staggering college debt families incur. What does it say about our system that a year of childcare for more than half of American families is actually double the cost of in-state college tuition?” Natalie Mayslich, President, Consumer for Care.com, said.
In afford to afford child care, almost all (90 percent) of respondents made at least one change such as:
- Finding a more affordable child care provider (31 percent)
- Relying on family/friends to help with child care (27 percent)
- Moving closer to family (20 percent)
- Working multiple jobs (19 percent)
More than 70 percent of parents reported they budget for child care costs, but 58 percent reported that the cost of childcare has increased in the last year due to an increase in child care center fee increases (23 percent) as well as inflation (18 percent).
Because of the increased child care costs, one in five parents reported they expect they will spend more than their budget allows by the end of 2023. Nearly all, 87 percent, reported that exceeding their budget would impact household finances.
“America’s child care crisis is just that: a crisis for the entire country and it impacts us all, whether you have children or not,” said Tim Allen, CEO, Care.com. “Child care is claiming a disproportionate amount of household incomes, and a decade of rising child care costs should be a wakeup call that the system as we know it completely fails the vast majority of families.”
Just How Much Does Child Care Cost?
The Care.com report found the national average weekly child care costs for infants as follows:
- Weekly nanny cost: $736 (up 56 percent from $472 in 2013).
- Weekly daycare cost: $284 (up 53 percent from $186 in 2013).
- Weekly family care center cost: $229 (up 80 percent from $127 in 2013).
- Weekly babysitter cost: $179 (up 92 percent from $93 in 2013)
Where is Child Care the Least Affordable?
Washington, D.C. ranks as the most expensive state for child care across all categories (nanny, babysitter, and daycare). In addition to Washington, D.C., the top five most expensive places for child care include:
Top 5 most expensive states to hire a nanny:
- Washington, D.C.: $885 per week
- Massachusetts: $864 per week
- California: $849 per week
- Washington: $838 per week
- Connecticut: $799 per week
Top 5 most expensive states to hire a babysitter:
- Washington, D.C.: $194 per week
- Hawaii: $189 per week
- Massachusetts: $189
- Washington: $188
- California: $188
Top 5 most expensive states for daycare (infants):
- Washington, DC: $417 per week
- Massachusetts: $326
- Washington: $310
- California: $288
- Connecticut $260
Where is Child Care the Most Affordable?
The least expensive states for child care include Mississippi (nanny), West Virginia (babysitter), and Arkansas (daycare). The top five most affordable places for child care include:
Top 5 least expensive states to hire a nanny:
- Mississippi: $579 per week
- West Virginia: $592 per week
- Alabama: $595 per week
- Iowa: $605 per week
- Kentucky $607 per week
Top 5 least expensive states to hire a babysitter:
- West Virginia: $135 per week
- Mississippi: $137 per week
- Oklahoma: $138 per week
- Louisiana: $139 per week
- Iowa: $139 per week
Top 5 least expensive states for daycare (infants):
- Arkansas: $128 per week
- Mississippi: $138 per week
- Louisiana: $144 per week
- Alabama: $145 per week
- South Dakota: $153 per week
How much have child care costs increased in the past decade?
The Care.com 2023 Cost of Care Report took a look at child care costs today compared to five and 10 years ago. To get a sense of how much rates have soared, here’s what they found:
Infant child care cost per week:
- One Child Nanny 2022:$736
- One Child Nanny 2018: $619
- One Child Nanny 2013: $472
- One Child Daycare 2022: $284
- One Child Daycare 2018: $213
- One Child Daycare 2013: $186
- One Child Family Care Center 2022: $229
- One Child Family Care Center 2018: $199
- One Child Family Care Center 2013: $127
Toddler child care cost per week:
- One Child Nanny 2022:$701
- One Child Nanny 2018: $596
- One Child Nanny 2013: $421
- One Child Daycare 2022: $268
- One Child Daycare 2018: $201
- One Child Daycare 2013: $153
- One Child Family Care Center 2022: $217
- One Child Family Care Center 2018: $201
- One Child Family Care Center 2013: $127
- Two Children Nanny 2022:$726
- Two Children Nanny 2018: $608
- Two Children Nanny 2013: $448
- Two Children Daycare 2022: $510
- Two Children Daycare 2018: $382
- Two Children Daycare 2013: $291
- Two Children Family Care Center 2022: $413
- Two Children Family Care Center 2018: $382
- Two Children Family Care Center 2013: $241
Babysitter cost per week:
- One Child After School Sitter 2022: $275
- One Child After School Sitter 2018: $244
- One Child After School Sitter 2013: $181
- Two Children After School Sitter 2022: $289
- Two Children After School Sitter 2018: $245
- Two Children After School Sitter 2013: $194
- One Child Babysitter 2022: $179
- One Child Babysitter 2018: $126
- One Child Babysitter 2013: $93
- Two Children Babysitter 2022: $176
- Two Children Babysitter 2018: $128
- Two Children Babysitter 2013: $96
It’s not just the cost of child care that makes it feel out of reach for parents, there’s also an accessibility issue, with 30 percent of parents reporting it’s harder to find child care providers this year than it has been in the past, the Care.com report found, with three in four parents estimating there are fewer than half a dozen daycare centers within a 20-minute drive of their home.
More than half of Americans live in a child care desert, where there are three or more children under 5 for every one child care spot available.
For families lucky enough to have access to a daycare center where they live, availability has become the issue for more than half of the surveyed parents:
- 64 percent report that they have been put on a waitlist for a daycare center.
- 50 percent have been on multiple waitlists.
- 49 percent had to wait more than three months for a spot to open at a daycare center.
- For rural parents, 1 in 4 reported waiting over a year to get their child into a daycare center.
To cover gaps in child care coverage, such as waiting for a spot to open at a daycare center, 4 in 10 parents (42 percent) reported relying on family for child care arrangements. These can be paid or unpaid arrangements.
For those who don’t live near family, parents reported relying on friends (37 percent) and neighbors (33 percent) to help cover gaps in child care.
A majority of parents, 68 percent, reported spending $200 or more per week on child care while on a daycare waiting list. Forty-four percent had hired a nanny, 41 percent said they had help from relatives.
Even if parents were able to find child care for their kids, the majority of parents surveyed said the type of child care they’re using is not their ideal care arrangement.
If cost and availability were no object, parents would be most likely to choose a nanny (37 percent) over daycare (35 percent). The only group that would continue to use daycare as their top child care arrangement were those parents who identified as single moms.
While daycare centers were their number one choice, three in four single moms (73 percent) have found themselves on a waitlist, forcing more than half (54 percent) to pay $300 a week or more to cover gaps in child care.
While being a single parent presents unique financial challenges, the Care.com report found that single moms pay a similar share of their household income on child care compared to married couples.
The report also found that single parents working hourly jobs are most likely to adjust their work schedules, taking on more or less work, in order to afford or manage child care as compared to other working parents.
- 30 percent of hourly working single moms reported taking on a second job, and 29 percent took on multiple jobs last year.
- 27 percent of hourly working single dads reported reducing hours at work while 25 percent worked multiple jobs in 2022.
Regardless if parents identified as single or married, the report found parents are struggling to find child care and it’s affecting their employment.
Nearly one in 4 parents reported last year that they were fired from their jobs due to the continuing breakdown of child care for their kids, according to a January 2023 study from ReadyNation.
Of the parents surveyed in the ReadyNation study:
- 26 percent quit their jobs because of child care problems
- 23 percent were fired because of child care problems
According to the study, the number of parents who were fired or had their pay reduced is three times as high as it was just five years ago and the rate of parents quitting has doubled since 2018.
Moms were more likely to quit or be reprimanded by their supervisor for missing work due to child care issues, the study found, while dads were more likely to be fired or demoted. The study did not collect data from nonbinary parents.
“This is not just that parents are telling us they can’t go to work. We’re hearing businesses talking about how they have workers who couldn’t return or they aren’t able to hire because they can’t find child care in their community,” said Anne Hedgepeth, chief of policy and advocacy at Child Care Aware, a leading child care advocacy organization. “These are people who want to be in the labor force, who in many cases have a job, and they are then in some way disconnected from that job and not going because of their child care responsibilities.”
6 Ways to Save On Child Care Costs
As the cost of child care continues to rise, consider these six steps to make child care expenses more affordable for your family’s budget.
1. Find the best child care for your budget
Once you’re clear on what you can afford, you can find a child care option that’s the best fit for your family. Research current rates in your area for nannies, babysitters, and daycare centers in your region.
2. Discuss child care benefits with your employer
Parents ranked child care subsidies as the top way employers can provide better child care support (29 percent), followed by on-site daycare (28 percent) and backup child care (22 percent). Research if your employer offers family care benefits. If they don’t already, consider suggesting that your employer consider this type of family care benefit.
3. Set aside pre-tax dollars to pay for child care
Talk to your workplace Human Resources department to see if a Dependent Care Account (a type of flexible spending account, or FSA) is available to you and how you can get started. With this account, you can put aside up to $5,000 in pre-tax dollars in your Dependent Care Account to pay for dependent care expenses. Keep in mind that generally, only one spouse can enroll in a Dependent Care Account. The savings you will ultimately see varies depending on what your marginal tax rate is, but a good approximation is around $2,000 in tax savings, assuming the family uses the full $5,000.
4. Make the most of child care tax credits and tax breaks
Almost all parents surveyed (83 percent) claimed either the Child Care and Dependent Tax Credit, the Child Tax Credit, or both, to offset child care costs. Among those who didn’t claim the credit, the majority reported lack of awareness was the top reason for not doing so (53 percent).
By itemizing child-care-related expenses on your federal income return, you could receive a credit on up to $600 of care-related expenses if you have one child or $1,200 of care-related expenses if you have two or more children.
5. Research child care subsidies and programs
Depending on your income, employee benefits, and other economic factors, your family might qualify for a variety of cost-cutting child care subsidies. Research what is available in your area.
6. Advocate for societal shifts
Parents surveyed agreed that there need to be big societal changes to lessen the child care burden including universal preschool, expanded tax credits, and a four-day work week.
Have you made adjustments to your budget due to higher childcare costs? Share your story and savings tips with us in the comments below!