Oct 10, 2024
For many families, child care is becoming one of the largest household expenses. As fees increase, parents are struggling to make difficult decisions to ensure their children receive quality and affordable child care.
A LendingTree study found that families who pay for child care spend an average of 18.6% of their income on it.
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One mother recently found herself confronting this financial reality after being put on early leave due to a high-risk pregnancy. She and her ex-husband previously split the costs of before and after-school care for their daughter, balancing these expenses as they both juggled demanding schedules.
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Now, with a new baby on the way and no longer needing child care, she decided to cut costs. She informed her ex-husband that she would stop contributing to the expenses, but he didn’t agree with the decision.
“He said she is just as much my child and I’m still responsible for the half even if I’m not using it on my days but I disagree,” the mother wrote on Reddit.
While fellow Redditors supported the mother’s decision to stop paying half of the costs, the core issue remained: child care expenses can place a financial strain on families with dual-income parents.
The economic costs of childcare
For many working parents, child care costs are unavoidable. With 50/50 custody of their kindergarten-aged daughter, they both rely on daycare services to accommodate their work schedules.
“Since her father and I both used the services an equal amount (we share 50/50 custody) we split the cost in half,” the user wrote.
Yet, high costs for child care are becoming more than just a household expense — they represent a growing economic burden rippling throughout the workforce. LendingTree chief credit analyst Matt Schulz explained how costly and inaccessible child care options force many parents to reduce their working hours or leave the workforce altogether.
According to the U.S. Bureau of Labor Statistics, finding care for children forced an estimated 100,000 Americans to stay home from work each month. That is the equivalent of $122 billion annually in lost earnings, productivity and revenue.
Addressing these economic impacts through more affordable child care options could help both families and the economy thrive.
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Cost-friendly alternatives
As more companies recognize the importance of supporting working parents, employee retention and satisfaction through child-care benefits are more in demand. A poll by First Five Years Fund revealed that 89% of voters expect candidates to propose policies to help parents afford child care ahead of the November 2024 election.
The conversation extends beyond finding immediate solutions; it’s about planning for long-term sustainability. That was a consistent theme in replies to the mother’s Reddit post.
“You need to be thinking longer term here,” a user named VTMaid wrote. “What's the plan after your baby is born? Do you expect to return to work after maternity leave? What is the plan then for both of the kids?”
Those questions reflected the ongoing battle parents face when they lack access to affordable child care. UPS recently tested the waters with a pilot program in which nearly 80% of eligible frontline workers utilized the new daycare services, resulting in more than 120 fewer unplanned absences and a drop in turnover rate from 31% to just 4%.
However, not all companies can offer on-site child care. However, many are providing flexible spending accounts (FSAs), which let employees set aside up to $5,000 in pre-tax dollars for child care expenses in 2024.
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Victoria Vesovski is a Toronto-based staff reporter at Moneywise covering personal finance, lifestyle and trending news. She holds degrees from the University of Toronto and New York University, and her work has appeared on platforms including Yahoo Finance, MSN Money and Apple News.
