WALTHAM, Mass. — For the fourth year in a row, Care.com’s Cost of Care Survey culled in-depth insights from more than 1,000 parents nationwide about their child care spending habits, including the rising costs of babysitters, day cares, and nannies. The most stunning finding: Nearly one in three families (32 percent) report spending 20 percent or more of their annual household income on child care.
The survey also ranks child care affordability by state — with New Hampshire topping the list as the most affordable for families looking for a nanny, and North Dakota as the most affordable state for in-center day care.
Among this year’s findings:
- 40 percent of parents say child care costs have caused tension in their relationship.
- 20 percent of families say they had fewer children than they would have liked because of the high cost of child care.
- Nearly 1 in 3 parents would put themselves in debt (or even further in the hole) to pay for child care, up from 25 percent in 2016.
- 72 percent of parents budget for child care, yet 30 percent aren’t able to stay within their monthly budget.
- Nearly 2 out of 3 parents (63 percent) say that child care costs influenced their career decisions; 33 percent changed jobs; 27 percent asked for a more flexible work schedule; and 23 percent downshifted to a part-time schedule, or became a stay at home parent, to save money on child care.
- 73 percent of working parents say their job has been affected because of child care plans falling through at the last minute, with 64 percent having to use sick days and 54 percent being late to work as a result.
- 85 percent of working parents wish their employer offered child care benefits.
- 68 percent of families say the current tax deduction they receive from the Dependent Care FSA isn’t enough to have a meaningful impact on their child care costs.
In order to get a better understanding of how much child care costs, why it costs so much, and the impact of these costs on families, we’ll dig deeper into the data below.
How Much Does Child Care Cost?
Child care costs depend on a number of different factors, but the most important one to consider is the specific type of care you have. To illustrate this point, let’s look at the cost of two of the most popular child care options in the United States: day cares (also referred as “child care centers“) and nannies.
According to 2016 Care.com member data, the average cost of center-based day care for infants is about $10,468 per year, but prices can range from $6,605 to $20,209 a year. Similarly, the average cost of center-based day care for toddlers is about $9,733, but prices can range from $8,043 to $18,815 a year.
On the other hand, the average cost of a nanny who cares for one child is about $28,905, but prices can range from $27,019 to $32,677.
So, as you can see, the type of child care you have can greatly impact your child care costs. Below are the national averages of weekly child care costs in 2016, compared to the costs in 2015, 2014, and 2013. (Keep in mind that this 2017 report reflects 2016 cost data.)
National Average Weekly Rates*
|CHILD CARE TYPE||2016||2015||2014**||2013**|
|After-School Sitters (15-hours a week)||$232||$214||$197||$181|
|Family Child Care Centers||$200||$181||$140||$127|
*all rates are for one infant child, except for After School Sitter, which is not age limited.
**all 2013 and 2014 figures were based off of Child Care Aware’s national data.
A joint Care.com and New America study found that the cost of child care — along with the quality and availability of that care — can vary pretty dramatically depending on where you live. That’s because the overall costs associated with living in a particular area (e.g., the price of food, housing, public transportation) directly influence the salaries and pay rates for different jobs. It follows, then, that the cost of living in your state not only impacts how much money you need to make in order to support your family, but also determines how much money a child care provider can charge you for their services.
To illustrate this point, we looked at the data on a state-by-state basis; specifically, we compared the state median family income among households with children (according to the Kids Count Data Center) to the going rates for nannies and day care. Through this new analysis, we were able to identify the most and least affordable states for both types of child care options:
|TOP 5 MOST AFFORDABLE STATES FOR A NANNY*|
|1. New Hampshire|
|2. New Jersey|
|5. North Dakota|
|TOP 5 LEAST AFFORDABLE STATES FOR A NANNY*|
|2. New Mexico|
|4. West Virginia|
|TOP 5 MOST AFFORDABLE STATES FOR A DAY CARE*|
|1. North Dakota|
|5. New Jersey|
|TOP 5 LEAST AFFORDABLE STATES FOR A DAY CARE*|
|1. District of Columbia|
|5. New York|
*Based on the average cost of care for one child in relation to the state median family income among households with children
Cost Estimates in Your Area
Find out the cost of different full-time child care options in your area.
But this is just the tip of the iceberg. Take a look at our infographic below to find the top-level learnings we took away from our 2017 Cost of Care Survey results. We’ve also provided more detailed explanations of these findings below the infographic, along with some tips for how families can reduce their child care costs.
How Prepared Are Families for Child Care Costs?
I’m guessing that this high-ticket item doesn’t cross most of our minds when we think about what’s involved in the cost of a child. But there are at least five years before a child goes to school, and the cost of paying for child care is high — as is the price of one parent staying home. [Check out this calculator from The Center for American Progress, which calculates the annual lost income beyond direct salary when one parent leaves the workplace.]
So, what have we seen?
According to our 2017 Cost of Care Survey data, families
are actually doing more to prepare for child care costs – one of their biggest expenses – with 72 percent now budgeting for child care, an increase from 58 percent in 2014.
[RELATED: “5 Steps to Create a Child Care Budget“]
However, families still struggle with the realities of expenses. Thirty percent of parents who set up a monthly “family budget” for overall expenses (e.g. education, clothing, and extracurricular activities) are rarely or never able to stay within their family budget, and 69 percent go over by $100 or more per month.
What Extras Will Parents Pay More For?
While more than half of parents (52 percent) said that they spend too much on child care, they’re still willing to pay more for child caregivers with additional skills, education, and services.
In fact, a majority of parents said that they’d be willing to pay more for nannies and au pairs who have:
- An early education degree (72 percent);
- Certification in CPR or First Aid (67 percent);
- Multilingual skills and the ability to teach their children other languages (64 percent);
- A college degree (58 percent); and,
- Organic cooking skills (54 percent)
At day cares and preschools, parents would pay more for:
- A lower student/teacher ratio (77 percent);
- More variety in classes (70 percent);
- A video camera to check in on children (69 percent);
- A driver or concierge to pick up and drop off their children (68 percent);
- Better technology to communicate with families (60 percent); and
- Organic food (53 percent)
Overall, How Much Do Parents Spend on Their Children?
From child care and education to clothing and extracurricular activities, 30 percent of parents say they spend $25,000 or more annually on each child. More than half of parents (59 percent) don’t know how much they spend on their children each year; however, this is an improvement from 2016, where 71 percent said they were unaware of overall spend.
What’s the Emotional and Financial Toll of Child Care Costs?
Approximately 1 in 3 parents (32 percent) would put themselves in debt — or further in debt — to pay for child care, an increase from 25 percent in 2016. Forty percent say child care costs cause tension in their relationship with their partner.
[RELATED: “10 Marriage Problems All New Parents Face“]
Believe it or not, but the cost of child care is also influencing family planning decisions. One in 5 families (20 percent) said that they had fewer children than they would have liked because of the cost of child care, and 17 percent say they waited longer to have children.
[RELATED: “Should You Have Another Child?“]
Despite all this, 81 percent still feel their current child care plan is worth the money.
How Does Child Care Influence Career Decisions?
Prior to having children, approximately 3 out of 4 people (76 percent) said that they didn’t think child care costs would influence their career decisions. Yet, nearly 2 out of 3 parents (63 percent) stated that child care costs did indeed influence their career.
- 33 percent changed jobs to increase take-home pay;
- 27 percent asked for a more flexible work schedule; and
- 23 percent downshifting to a part-time schedule or becoming a stay-at-home parent to save money on child care. Approximately 1 in 4 parents (26 percent) who decided to downshift to part-time work or leave the workforce entirely walked away from annual incomes of $50,000 or more.
In hindsight, approximately 1 in 5 parents (21 percent) said that they wouldn’t have made the same career decisions.
Can Employers Help Working Parents and Their Companies?
Nearly half of working parents (44 percent) say their employer seems to care about their child care needs, yet the need for employer support is real.
[RELATED: “6 Ways Companies Make Employees Feel Cared About“]
An overwhelming majority of working parents (85 percent) wish their employer offered child care benefits, such as discounted child care and access to back up child care. This type of support would be meaningful for both parents and employers, as nearly 3 in 4 working parents (73 percent) say their job has been affected because their child care plans fell through last-minute. The use of a sick day (64 percent) and being late to work (54 percent) were the top two ways their job was affected.
[RELATED: “8 Things Working Parents Wish Their Boss Would Say“]
“It’s clear from the Care.com 2017 Cost of Care Survey that working parents continue to struggle balancing care and work,” said Ben Robinson, Global VP of Sales & Account Management for Care@Work, Care.com’s enterprise solution for helping companies support their working families. “It’s important that companies today address their workforce’s parental responsibilities and offer family care benefits, especially if they want to compete for and retain the best talent. Fifty-two percent of parents surveyed feel that workplaces should provide benefits to support working families. Whether it’s a flexible work arrangement or subsidized back up child care, these benefits should reflect the way today’s parents work.”
[RELATED: “7 Ways Companies Can Help Working Moms“]
What Can Parents Do to Reduce the Cost of Child Care?
There are a number of ways that families can mitigate their child care costs. Beyond lifestyle changes, here are three big ways that families can save money on child care:
- Do the Research
To get a sense of how much they can afford to spend on child care, parents can find free, interactive tools to discover local nanny rates and nanny tax calculators.
Working parents should also ask their HR department about any child care benefits they may offer, such as backup child care through Care.com’s Care@Work program. This program offers employees of participating companies access to child care either at home or at a nearby child care facility. Anything helps!
- Take Advantage of Tax Benefits
Many employers offer their employees a Dependent Care Flexible Spending Account (FSA), which is one way families can save thousands of dollars each year on child care. (However, it turns out that one in three parents aren’t aware of this cost-cutting tactic.)
- Connect With Their Community
Tapping into local support via online community platforms like the Care.com Community for advice and free activities is a start. Joining online parent forums is a great way to find local deals, share coupon codes and even potentially swap gently-used kids’ items.
[RELATED: “10 Money-Saving Hacks for Parents“]
How Do Parents Feel About the Country’s Cost of Care?
Even having budgets and contributing to Dependent Care FSAs, families feel they need more help. More than 2 out of 3 families (68 percent) say the tax deduction received from a Dependent Care FSA isn’t enough to have a meaningful impact.
Fifty-three percent say American culture doesn’t do enough to support working parents when it comes to the cost of care, and 47 percent say they wish the United States subsidized child care costs as some other countries do.
As families look to Congress to make changes in this area, the top two words that best describe how parents feel about how much they spend on their children each year are “necessary” and “stretched.”
Care.com’s 2017 Cost of Care Survey Methodology
The Cost of Care Survey is an annual survey to measure the relative cost of care in the U.S. and how care impacts families’ budgets and employment. The Care.com 2017 Cost of Care Survey captured responses from more than 1,100 parents in the United States during the month of May 2017. Respondents were recruited from Care.com.
Weekly rates for child care costs are based on Care.com 2016 member data, with the exception of au pair rates, which are based on data from Cultural Care Au Pair, Au Pair in America, and Au Pair Care. Affordability rankings are calculated based on the average cost of care for one child in relation to the U.S. Census Bureau’s 2015 American Community Survey that includes both married and single parent households with children.