How Much Does the Average Family Spend on Childcare?

Paying for childcare in the United States is an expensive endeavor for many families. The median cost of full-day care for one child ranges from $6,552 to $15,600 in 2022, depending on the state and county. These daycare costs make up 8.9% to 16% of a family’s median income.

Part-time daycare for children can be costly and difficult for families to afford too, making up 8.1% to 9.4% of median family income and costing from $5,943 up to $9,211.

Key Takeaways

• Median childcare costs for one child reach up to $15,600 as of 2022, with some jurisdictions ranging even higher.
• Actual childcare costs vary by location, population size, and whether the care is provided in a daycare center or someone’s home.
• There are several tax credits and government programs to help low-income families afford childcare.
• Home-based daycare, daycare scholarships, and sibling discounts can also help lower childcare prices.

Childcare Prices Vary Across the U.S.

Childcare prices are impacted by several factors, including the child’s age, the time of day the care is provided, and whether that care is based in a home or a childcare center. Infant care is more expensive than care for older children, and full-day care is more expensive than after-school care.

Population density is also a factor: Urban areas tend to have higher childcare costs. You’ll generally find the least expensive childcare prices in home-based programs in small counties. The most expensive programs are daycare centers that provide infant care in densely populated urban counties.

The Economic Policy Institute has compiled data on childcare costs by state. Washington, D.C. has the most expensive infant care at $20,667 per year. Mississippi has the most affordable infant care, at $6,868 per year.

How to Save Money on Childcare

While childcare isn’t cheap, there are ways to lower the bill. Here are some strategies to reduce your costs.

Government and Tax Credits

States receive funding from the federal government to help families with low incomes pay for childcare. ChildCare.gov provides information on financial assistance programs in each state.

Some states offer state-funded pre-K for children between the ages of three and five. Other states may offer financial assistance for low-income working parents. There are also childcare assistance programs specifically for military families.

If you paid someone to care for your child so you could work or look for work, you may be eligible for the Child and Dependent Care credit. Claiming this credit may reduce your federal income tax. The credit is based on your income and a percentage of the expenses you paid for childcare.

Community Assistance

There are other sources of assistance besides the government. Here are some alternatives:

• Churches and community programs. A local church or community center may have the affordable childcare you’ve been trying to find.

“Look into the childcare programs run by local rec centers, YMCAs, and churches. These programs are oftentimes more affordable than private daycares and preschools, and sometimes even free,” said Jing Zheng, founder and financial planner at Neat Financial Planning.  

• Try a co-op. If you are willing and able to pitch in and help with your child’s care, a co-op may be right for you.

“Co-ops are also worth exploring, where parents take turns watching the kids. They are usually cheaper too because of the parents’ involvement,” Zheng said. “If you have the time and flexibility to participate, it helps to build your village as well.”

• Employer-sponsored childcare. If you are fortunate enough to work for a company that provides on-site childcare, you’ll want to enroll your child. If there is no childcare from your employer, be sure to ask your employer about subsidies for childcare costs.

“Many employers offer full-time on-site childcare and/or provide subsidies to their employees for childcare,” says Setu Shah, founder and chief executive officer of Financial Doula, a coaching and education platform for new parents. “Working for a large employer that can afford this expense could save you thousands of dollars!”

Important

In 38 U.S. states, as well as the District of Columbia, the average cost of childcare is higher than the cost of a year’s college tuition.

Other Ways to Save

Here are some other ways to reduce your childcare bill:

• Comparison shop. Check out the childcare programs near you. Ideally, you want a daycare program that is nearby with a more affordable price. Make note of what’s included in each program and compare qualifications and costs.
• Look for a home-based daycare. Home-based daycare programs tend to be less expensive than daycare centers. So check out home-based daycare programs near you, and you may save some money on childcare costs. Just be sure to check out their background and qualifications.
• Try a NannyShare. Get together with another family and share a single nanny for all your children. It beats the cost of paying for a nanny on your own. “The families decide together the number of hours needed by the nanny and the location of care,” said Shah.
• Offer to pay for a full year of tuition upfront. If you have the cash, ask to pay the full annual tuition for daycare upfront in exchange for a reduction of up to 25% in fees, Shah recommends.
• Ask about daycare scholarships. Reach out to the childcare provider about scholarships or assistance with fees. If you don’t ask, your family may be missing out on a discount.
• Request a sibling discount. If you have more than one child needing care, ask childcare providers if they give discounts for enrolling siblings. They could lower weekly or monthly fees or waive registration and other fees.
• Reach out to family and friends. Ask friends and relatives, such as retired grandparents, to care for your children while you are at work. “This is a great option because your children could be in the hands of someone you truly trust,” Shah said.

The Bottom Line

Childcare is expensive, but there are several ways a cost-conscious family can stay within their budget. Home-based care tends to be cheaper than formal care centers, and many employers offer childcare assistance. There are also community programs, churches, and government aid.

You can also tap your family and friends; some families choose to pool their resources and share a nanny. The best childcare provider may be someone you already know.