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The Care.com Cost of Child Care Survey: 2016 Report

The Care.com 2016 Cost of Care Survey revealed what your different child care options mean for your wallet and how you can save money.

The Care.com Cost of Child Care Survey: 2016 Report
Image via Stocksy.com

What did you think about when you decided you wanted children?

  • Am I ready, emotionally?
  • Do we have enough space?
  • How much will it change our lives: travel, weekends, friendships?
  • Will I be a good mom/dad?
  • Can I afford it?

Cost is always on our minds, and it was even highlighted throughout 2016's presidential debates. But how many of us really realize that, on top of all the gear, food and clothes, child care is likely to consume more than 10% of our household income?! And cost us as much as putting a roof over our heads? (Yes, annual costs of housing and child care are about the same these days.)

That’s right. In the Care.com 2016 Cost of Care survey, 54% of families said they spend more than 10% of their household income on child care -- and 1 in 5 said they spend a quarter of their income or more.

 

How Much Does Child Care Cost?

Below are the national averages of weekly child care costs in 2015, compared to the costs in 2014 and 2013. (Keep in mind that this 2016 report reflects 2015 care cost data.)

Data Year

2015

2014

2013

After-School Sitter (15-hours a week)

$214.05

$196.80

180.60

Au Pair

$360

$360

$360

Child Care Center*

$196

$188

$186

Family Child Care Center*

$181

$140

$127

Nanny

$556.80

$477

$472

*for one child

Why have child care center prices gone up? It’s important to note that while Care.com did use Child Care Aware’s national data for 2014 and 2013 figures, the company also had enough of its own data from child care and family child care services to account for the 2015 figures, as seen in this 2016 report.

And why has the cost of a nanny increased so much? As a company, we recently joined the Fair Care movement, which strongly discourages families and caregivers from paying and accepting anything less than minimum wage. In turn, this may have impacted the national hourly rate for a babysitter, which is now $15.02.

 

Why Does Child Care Cost so Much?

It’s possible that families are willing to pay more for higher quality care. According to the Care.com survey, the top child care center and school amenities that families would pay extra money for are:

  • Variety in classes (e.g. yoga)
  • Video camera capabilities to check in on their child
  • Better communication technologies at these facilities

Families say they’d be willing to pay nannies, babysitters and au pairs more if they:

  • Are multilingual and can teach their children another language
  • Are CPR/First Aid certified
  • Can cook organic meals and snacks for their child.

29% of families say they’d even pay their caregivers more per week if they are tech-savvy and can teach their children about technology.

 

How Is the Cost of Care Affecting Families?

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? 21% of respondents say they’ve waited to have children specifically because of child care costs. This statistic increases to 26% for millennial parents. And 1 in 4 have put themselves in debt -- or further debt -- to pay for child care.

It’s no surprise then that savings suffer, given that the top three things families are doing to pay for child care include saving less money, completely stopping saving money and saving less for retirement. But don’t expect many regrets here. Although 49% of families feel they spend too much on child care, they’re still willing to pay more for quality care. And 80% of the families surveyed feel their child care plan is worth the money.

We also found that more parents (74%) are budgeting for child care costs -- 92% of them even started budgeting while they were pregnant! And yet, 66% are still surprised by how much child care actually costs.

The trend of families budgeting for child care has increased by 16% since Care.com originally asked this question back in 2014. (And back then, 58% said they budgeted for child care.) But 1/3 of families admit that they never stay within their budget.

[RELATED: "5 Steps to Create a Child Care Budget"]

 

“Where Is All My Money Going?!”

3 out of 5 families ask themselves this question when it comes to how much they spend on their children. 21% think they spend $30,000 or more per year on each child for everything, while 71% don’t know at all.

The answer? It’s going toward everything else beyond child care, such as everyday essentials and enrichment activities. These things add up…quickly.

  • 34% of families spend $1,000 and up on extracurricular activities
  • 34% spend $1,000 and up on clothing
  • 1 in 5 spend $2,000 or more on summer camp tuition
  • 44% spend between $500 and $1,999 on diapers alone each year
  • 52% say they’re likely to spend more money due to the ease of technology and apps like Amazon Prime, Uber Family and Instacart

With all this spending going on, 55% haven’t done anything to try to save for child care, and 74% would be willing to change their lifestyle to decrease these costs.

[RELATED: "Community Question: What Are Your Budget Tips for Paying for Child Care?"]

 

How Child Care Affects Job Growth

  • 2 out of 3 working parents (67%) state that child care costs have influenced their career decisions. This statistic increases to 72% among millennial parents
  • Respondents believe that the top three ways child care affects their careers are when they ask for flexible work schedules to save on child care, change jobs to increase pay, and switch from full-time to part-time in order to also save money
  • 43% of parents feel they have to work harder to make more money to cover child care
  • 34% even worry about job security and the cost of care’s impact on their families’ financial futures
  • 85% wish that their employers would offer child care benefits
  • 74% believe their jobs have been impacted because their child care plans have fallen through. This resulted in having to use a sick day (78%), falling behind on work (37%) and even losing a day’s pay (28%)

 

What Sort of Help Do Families Want?

The presidential election is just around the corner and child care has been a hot topic. Half of the families surveyed say they wish the U.S. would take the lead from other countries and start to subsidize child care. In fact, this was the most common sentiment respondents provided when asked how child care costs make them feel. And it doesn’t stop there: 16% would even go so far as to say that they wish they could move to a country that subsidizes child care.

Beyond lifestyle changes, here are four ways families can save money on child care:

  1. Do the Research
    The first thing families need to do when they start thinking about having a baby is to budget for it. Parents can also use free interactive tools to determine local nanny rates, and nanny tax calculators to get a sense of how much they can afford to spend on child care.

    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!
     
  2. Connect With Their Community
    Tapping into local support via online community platforms like Care.com Groups 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.
     
  3. Take Advantage of Tax Benefits
    Many employers offer their employees a Flexible Spending Account (FSA), which is one way families can save thousands of dollars each year on child care. (However, 63% of families are unaware of this – and only 50% of working parents with access to FSA programs actually set aside money for them.) For those families who don’t have access to an FSA, the Child Care Tax Credit is available and can easily save them up to $1,200 per year.
     
  4. Pledge to Vote!
    It’s an election year, so if we want to make a change, it’s important to know where candidates stand on the issues of child care. And, of course, we need to vote.

    See where each candidate stands on child care
    Pledge to vote with Care.com and MomsRising

 

Sources for Care.com's 2016 Cost of Child Care Survey

Here are the internal and external sources we looked at to compile our information on the 2016 cost of child care.

Internal

  • Care.com 2016 Cost of Care Survey of nearly 900 parents
  • Care.com 2015 member data on nanny, babysitter, and after-school child care rates
  • Care.com HomePay
  • Care.com Care@Work Better Benefits Survey

External

  • Child Care Aware, Child Care Aware, Parents and the High Cost of Child Care: 2015 Report
  • Cultural Care Au PairAu Pair in America Au Pair Care
  • U.S. Census Bureau, American Community Survey, 2011-2013 three-year estimates.
  • NACCRRA’s January 2015 survey of Child Care Resource and Referral State Networks. Some states used the latest state market rate survey.
  • Center for American Progress, Hidden Costs of Child Care System, andThere Are Significant Business Costs to Replacing Employees
  • U.S. Department of Health & Human Services: Mean Age of Mothers is on the Rise: United States, 2000–2014 (January 2016)
  • Bureau of Labor Statistics Report 1058 (November 2015)

 

Other Care.com Cost of Child Care Surveys

 

What’s your child care story? How has your family been affected by the cost of care? Share your stories with us in the comments below

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