Rising child care expenses are causing financial strain for most working families, with two-thirds of parents allocating 20% or more of their annual household income for child care, a significant increase from previous years. The Cost of Care report, based on a survey by the family care management platform Care, highlights the escalating burden of child care costs.
The findings underscore that families are currently spending an average of 27% of their household income on child care, translating to over $18,000 per child for 59% of surveyed parents. Such costs exceed the affordability threshold recommended by the U.S. Department of Health and Human Services, which suggests child care should not exceed 7% of household income.
Factors driving the surging costs include inflation, fee hikes at child care centers, and shifts in parents’ work circumstances. The study reveals that nearly 9 in 10 parents are allocating 10% or more of their annual income to child care, reflecting a stark rise from 72% in 2022. A majority of parents believe there are fewer than six daycare centers within a 20-minute drive from their home.
With changes in work hours, roles, and locations, parents are seeking flexible child care options, with 45% utilizing care during nontraditional hours. To manage the escalating expenses, families are exploring cost-saving measures, including seeking affordable providers, relying on family support, adjusting work schedules, and tapping into child care subsidies and tax benefits.
The report calls for intervention to offer working parents flexible benefit options that can effectively support their families’ caregiving needs, acknowledging the pressing impact of child care costs on career decisions and overall well-being.
