Add another category to the list of rising costs for Americans--groceries, gas, energy, healthcare, car insurance, etc. Child care is now eating up a larger portion of household budgets, forcing some parents to stay out of the workforce or cut back on other vital needs. The U.S. Labor Department says the annual cost of child care can take up to 15% to 20% of income for a median family...the federal benchmark for child care affordability is 7% of income. "This is just another example of the pressure the average American family is experiencing with higher inflation costs," says Bill Dendy, financial planner with Raymond James. "Everything costs more, and the cost of labor has gone up because the people we're hiring have higher costs."
According to Care.com, the average weekly cost of daycare for one toddler is around $300, with that amount double for two or more young kids. For some parents, the cost of child care now rivals what they would spend on college. That has led to difficult choices for some households. "A lot of people are giving up and saying maybe we just have one worker in the house, but for some people that's not even a choice if there's only one parent in the home," says Dendy.
The increase in parents choosing not to work has contributed to the labor shortage, but Dendy says some households have found a way to turn it into a positive. "We've seen those who say I'm not going to be in the workforce, I will stay home and care for my child, and I can care for another child or two," he tells KTRH. "So I've seen people create small child-care businesses that have spawned up."
The lesson for all parents is raising children is expensive, and growing more so by the day. "Daycare is about $300 a week, family care is about $230 per week, the cost of a babysitter is now about $192 a week, and then you add the cost of private school," says Dendy. "Before a child gets to college, estimates are we spend about a quarter of a million dollars per child, just in child-rearing."
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