Many parents misjudge bite of child care costs
Posted: April 19, 2017 at 1:50 a.m.
Some expectant parents may forget to prepare for what will likely be their biggest expense when the baby arrives: child care.
When asked how much they think it costs to raise a baby, 54 percent of people planning to have children in the next three years say they expect to spend less than $5,000 a year, according to a recent survey by the personal finance website NerdWallet.
That would be barely enough to cover the cost of day care in most states.
On average, child-care costs for one infant can range from more than $5,000 a year to more than $20,000, depending on the state, according to Child Care Aware of America, a nonprofit group that advocates for inexpensive child care.
Some parents-to-be may be focusing too much on other costs for their new child. The majority of expectant parents say clothes, a car seat and a crib would be their biggest spending priorities in the first year of raising a child, according to the NerdWallet survey. Only 30 percent listed child care as a spending priority.
For many young parents, the bill for child care can be overwhelming. In 17 states and Washington, millennial parents earning the median income would need to spend at least half of their pay to send an infant to a day-care center, according to a March report from Child Care Aware of America.
"It's the biggest expense, maybe bigger than housing for some people," says Elise Gould, senior economist at the Economic Policy Institute, a liberal think tank.
While there are state and federal programs available to help parents pay for child care, there are strict income requirements and often long waiting lists, Gould says.
For some parents, the sticker shock can lead to tough choices about whether both parents should continue to work, says Michelle McCready, chief of policy at Child Care Aware of America.
Others are able to make ends meet by relying on family, sharing a nanny with other parents or applying for assistance.
Family on 04/19/2017