Many parents experience the financial burden of child care, and 84% of parents report feeling overwhelmed by its cost in the United States, according to a new survey by Penny Hoarder. Of those surveyed, 50% said they are often overwhelmed and 34% said they sometimes feel that way.
In fact, 38% of parents reported taking on a second job to help pay for child care costs. Child care providers charge parents significantly for infant care, preschool and even after-school care.
"Working families across the country pay a significant percentage of their annual earnings to cover the price of child care," said Mario Cardona, chief of policy and practice for Child Care Aware of America, a national child care advocacy organization.
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How much does child care cost?
Costs of child care are rising, and 44% of parents report paying $1,000 or more per month in expenses, according to the Penny Hoarder survey. Half of all families surveyed reported spending at least 25% of their wages on child care, a significant increase from just 18% of their income reported in 2018.
"In the Midwest, Northeast and South, the price of full-time, center-based care for two children is the highest category of household expenses, including housing, transportation, food and health care," Cardona said. "In the West, the price of child care for two children is surpassed only by the high price of housing."
The U.S. Department of Health and Human Services benchmarks affordable childcare to 7% of parents’ income being used on co-payments. In recent testimony before the House Education and Labor Committee, experts explained that the 7% mark was set for low-income families receiving subsidiaries, in which public funding helps cover the remaining cost of child care.
Regardless of the benchmark for affordability, current high child care costs are putting a strain on parents’ budgets and forcing them to decide how to increase their household income to pay for it.
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What parents are doing to pay for child care
As parents struggle to pay for their child care costs, 84% of parents reported that they have made sacrifices in order to afford it, the survey stated:
- 38% took on a second job
- 32% sold some belongings
- 29% cut down on work hours
- 28% borrowed money from family and friends
- 26% moved to a new home
- 25% gave up their pets
Nearly 30% of parents say they've had to choose between paying for child care or making an on-time rent or mortgage payment, and 35% said they've had to choose between paying their child care or an on-time credit card bill. About 20% of parents have left the workforce because their annual income was not enough to justify the high price of child care.
If you are making sacrifices to pay for quality child care, consider taking out a cash-out refinance on your home. These funds can be used to consolidate bills and pay off high-interest debt, freeing up your monthly budget. Contact Credible to speak to a home loan expert and get all of your questions answered.
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