Get an in-depth look at the rising cost of child care in 2024. Uncover cost trends and valuable cost-saving strategies for your child care needs.
Table of Contents
Key findings from the Care.com 2024 Cost of Care Report
How much does child care cost?
What’s the impact of rising child care costs on parents?
How accessible is quality child care?
How might child care impact the 2024 election?
How to save on child care costs? 6 helpful tips
Key takeaways and common questions
Child care has long been one of the largest expenses for families. In order to meet that expense, according to the Care.com 2024 Cost of Care Report, families are using both their savings and their household income. That’s just one key finding from the 11th annual report, which is based on feedback from 2,000 parents and provides a robust overview of the social and economic impact of the ever-rising cost of child care.
“Within the first five years of their child’s life, parents are being forced into a financial hole that is nearly impossible to climb out of,” says Brad Wilson, CEO of Care.com. “A healthy economy depends upon the ability for people to save and spend, but given the crushing weight of child care costs, those pillars are crumbling. The child care crisis should be a major red flag for everyone, not just parents. It is a systemic failure that will impact our nation’s economic growth, and that affects us all.”
New data on the cost of child care from the 11th annual Care.com 2024 Cost of Care Report reveals:
The U.S. Department of Health and Human Services (HHS) states that child care is considered affordable when it costs families no more than 7% of their household income. Yet, on average, according to the Care survey, respondents are spending 24% of their household income on child care (vs. 27% in the prior year), with 60% spending 20% or more and (as compared to 67% last year) and 84% spending 10% or more (compared to 89% last year).
While these numbers have dipped from last year, this year’s report tells us household income is only one way parents who responded are paying for child care; more than one-third (35%) are using their savings, too. Shouldering the costs in this manner and watching their bank accounts dwindle is leading parents to be gripped by financial stress and has a significant impact on the broader economy.
Finding and affording child care has long been a challenge for families, but the child care cliff has only exacerbated the situation, and families are already feeling the impact.
For context, the child care cliff is the term used to describe the abrupt end to pandemic-era funding that kept thousands of child care programs afloat nationwide. The $24 billion was allocated to aid child care programs in covering basic operational costs, program materials, wages and benefits. Expiration of the funding at the end of September 2023 has set the stage for a devastating loss of child care jobs and spots. In fact, The Century Foundation reports that 70,000 child care providers could be impacted and suffer consequences ranging from closures to shrinking enrollments to increased fees.
According to Care’s 2024 Cost of Care Report, a majority of parents who responded (79%) expect to be impacted in 2024 by fallout from the child care cliff. The majority (54%) of those concerned are steeling themselves to spend $600 or more per month on child care, which totals more than $7,000 in additional care costs for 2024.
Many families, 40%, have already begun to feel the effect of the cliff shelling out even more money to cover the cost of care as a result.
With fewer daycare slots to go around because of the child care cliff, parents are facing even longer waitlists than in years past. A majority (54%) of respondents have seen waitlists become longer due to the child care cliff. In general, 65% of parents who responded have spent time on a daycare center waitlist with 81% of waitlisted parents juggling multiple waitlists simultaneously and 43% waiting four months or longer.
The cost of child care and the pressure it puts on parents could be an important factor in this year’s presidential election. Almost all parents who responded (88%) say a candidate’s position on child care policy will influence their vote, and a majority of respondents (59%) say child care access and affordability policy is among the top three issues that will impact their voting decision.
Here are the average weekly child care costs including nanny costs, babysitters, daycare and family care centers broken down by age and number of children for 2024:
Here are the most and least expensive states for child care:
The ever-increasing cost of child care is putting families under tremendous pressure, impacting their finances in both the short- and long-term.
Nearly a majority of parents who responded (47%) spent more than $1,500 per month on child care expenses in 2023, and 49% plan to spend the same in 2024. This adds up to $18,000 per year. At the same time, 20% of respondents report spending more than $36,000 ($3,000 per month or more) on child care in 2023 and 23% anticipate doing so in 2024.
Child care costs near me?: Check out our child care cost calculator to estimate hourly child care costs for in-home care in your city.
The leading reasons for child care costs increasing:
“With the majority of families in America being dual income, there is widespread demand for child care and not enough supply to meet it,” says Bryan Jamele, head of government affairs and public policy for Care.com. “Following the child care cliff, the situation has gotten even worse as many daycare centers have had to close, shrinking availability even further. If this seems familiar, it’s because it is. The imbalance of supply and demand existed pre-pandemic, got worse during and because of the pandemic, and is now at its most extreme due to the child care cliff.”
It’s no surprise that 37% of respondents cite the cost of child care among their top three financial stressors. The unaffordability of child care has also led to various serious downstream economic effects:
Not only is an eyebrow-raising amount of income going towards child care, but many parents are also spending their hard-earned savings to shoulder the cost. More than one-third (35%) of parents who responded report tapping into this source, on average spending up to nearly half of their savings (42%) on child care and 25% using more than two-thirds of their savings. When asked how long their savings could hold out, a staggering 68% of respondents said that they have only six months or less until their savings are depleted.
More than one-third of parents who responded (34%) say they’ve turned to family and friends to help manage the cost of child care while almost all (91%) of respondents — or their partner/spouse — had to make at least one major change to their work, life or finances to afford child care last year, such as:
Given the connection between work and care — parents need child care to go to work and need work to pay for care — it stands to reason that parents are looking to their employers for help. The following are ways in which respondents say employers can help reduce their child care expenses:
Because the child care cliff has already caused some daycares to close and others to reduce the number of children they can take, families are struggling now more than ever to find quality child care. In fact, according to the Cost of Care survey which was conducted just two months after the cliff, 43% of respondents said that it was already harder to find child care providers compared to previous years.
The child care desert issue, in which the demand for daycare slots exceeds the number of slots available, has existed for years, but it’s only growing more dire with daycare waitlists getting even longer — and parents having to pay more while they wait. More than half (62%) of respondents sitting on waitlists say centers have closed while they waited and 54% have experienced waitlist extensions due to the child care cliff. As a result of being lost in waitlist limbo, more than half of waitlisted parents (59%) are shelling out an additional $200 or more a week on care … on top of pre-existing expenses.
As they navigate care shortages and increased costs, parents are cobbling together an array of solutions or a patchwork quilt of care. Many respondents — 34% — lean on relatives or friends for support as part or all of their child care arrangements. These arrangements may be paid or unpaid.
Beyond tapping their inner circle of family and friends for help with care, a growing number of parents used a wider variety of child care arrangements in 2023, as compared to the prior year:
Facing the fallout of the child care cliff has put the child care crisis in sharp focus for parents nationwide and, with a lack of government action to reinstate funding, they plan to take these issues to the polls in November. A whopping 88% of parents who responded say a candidate’s position on child care policy will influence their vote, and even before stepping into the voting booth, they expect the candidates to outline their plans to fix the country’s child care system. In fact, nearly all parents who responded (91%) say it is important for them to hear the presidential candidates discuss child care during the 2024 presidential debates. And when asked to choose their foremost topic to be addressed during the debates, child care was the No. 2 choice behind the economy.
“This is clearly a top priority for American parents and working families across the country as they decide who will get their vote in the upcoming election,” says Jamele.
Parents making their priorities known can lead to real change. “It’s time for parents to join together and use their collective voice,” says Jamele. “This will be critical in 2024. Unlike so many other issues which get labeled as Democrat or Republican, red or blue state, child care is truly bipartisan. Why? Because legislators have one constituency in common, and that’s parents. By speaking up and showing their voting power, parents are going to demand that our policymakers and those running for office in 2024 take the issue of child care and caregiving seriously.”
If you’re wondering how you can save on child care costs in 2024, consider these steps to make child care expenses a little more manageable.
The first step: Research current cost in your area. Care.com has free interactive tools you can use to identify the starting average costs of nanny and babysitter rates and nanny taxes in your region. It’s important to factor in the number and ages of your children and the scope of the job, as those variables will impact how much you pay. Once you’re clear on what you can expect to spend on child care — as well as what you can afford — you can steer toward the child care option that’s the best fit for your family.
Parents who responded would like employers to offer support in the form of on-site daycare (30%), child care subsidies (28%), flexible spending accounts or FSAs (22%) and backup child care (21%). Find out if your employer already offers family care benefits that you’re unaware of. And if they don’t, ask for them.
Talk to your workplace Human Resources department to see if a Dependent Care Account (a type of 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. (Generally, only one spouse can enroll.)
The savings you will ultimately see varies depending on what your marginal tax rate is. A good approximation is around $2,000 in tax savings, assuming the family uses the full $5,000.
If you’re hiring an in-home child care provider, you must pay them legally, or “on the books,” in order to claim the Child and Dependent Care Tax Credit (CDCTC). More than half of parents surveyed plan to claim either the CDCTC (60%) or the Child Tax Credit (CTC) (56%) on their federal income tax return this year. Among those who didn’t claim the credit, the majority reported lack of awareness was the top reason for not doing so (44%).
For the CDCTC, itemizing child-care-related expenses on your federal income return could lead to receiving 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.
You can also use the CTC to claim a tax credit of up to $2,000 per qualifying dependent under 17 years old. If you don’t owe taxes or end up owing less tax than the amount of the CTC, $1,600 of the credit is potentially refundable through the Additional Child Tax Credit (ACTC) for tax year 2023. There is also a current proposal in Congress that, if passed, would raise this amount to $1,800 in tax year 2023, $1,900 in tax year 2024, and $2,000 in tax year 2025. Although this credit is not limited to care-related expenses, it can be used as another resource to help offset the high cost of care.
Depending on your income, employee benefits and other factors, your family might qualify for a variety of cost-cutting child care subsidies. We’ve rounded up various programs, resources and other options that could reduce how much you’re paying for care.
Parents are gearing up to be especially vocal during this election year with 88% of parents who responded saying a political candidate’s positions on child care access and affordability will influence their vote, and 59% of respondents saying child care access and affordability policy is a top 3 priority impacting their 2024 voting decision. Use your voice.
The overwhelming majority of parents who responded (70%) report that child care was more expensive last year. Today, families are spending, on average, 24% of their household income on child care expenses. And nearly half (47%) of respondents say they are spending more than $18,000 total annually. Additionally, more than one-third (35%) of respondents report tapping into savings to help pay for child care, spending on average up to nearly half of their savings (42%) on child care and 25% using more than two-thirds of their savings. More than three-quarters of respondents (79%) also anticipate being impacted by fallout from the child care cliff, or the abrupt end to pandemic-era funding that has kept thousands of child care programs afloat nationwide. As child care takes a devastating toll on families’ finances and the U.S. heads into a presidential election year, the crisis is coming to a head on the political stage: A whopping 91% of parents who responded said that it is important for them to hear child care discussed during the 2024 presidential debates.
The average cost per week for a nanny is $766, which is up 4% from $736 in 2022.
The average daycare cost per week is $321, which is up 13% from $284 in 2022.
The average babysitter cost per week is $192, which is up 7% from $179 in 2022.
Several factors are contributing to the increasing cost of child care. These include the child care cliff, inflation, fee increases at child care centers, due to the cliff, and changes in parents’ work situations.
There are several strategies parents can consider to save money on child care costs. These include researching the best child care options for their budget, discussing child care benefits with their employer, using pre-tax dollars to pay for child care through a Dependent Care Account, taking advantage of child care tax credits and breaks and looking into child care subsidies and programs.
This sample of 2000 U.S. adults was surveyed between November 9, 2023 and November 12, 2023. All respondents are parents of children 14 years or younger and currently pay for professional child care, confirmed by both consumer-matched data and self-confirmation. DKC Analytics conducted and analyzed this survey with a sample procured using the Pollfish survey delivery platform, which delivers online surveys globally through mobile apps and the mobile web along with the desktop web. Response completion rate was 75%, and only fully completed responses were considered valid. No post-stratification has been applied to the results.
Weekly rates for nanny, babysitter, after-school sitter, daycare center, and family care center are based on 2023 advertised rates by families posting jobs for caregivers on Care.com.
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Get an in-depth look at the rising cost of child care in 2024. Uncover cost trends and valuable cost-saving strategies for your child care needs.