My husband and I bring in $110K/year, but spend $1,400/month on day care — should one of us stay home instead?

It can cost as much as $20,000 annually in high-cost states like Massachusetts and California — with bigger monthly payments than many households pay for their mortgages. [1]

When child care takes such a hefty bite, it’s natural to wonder: Wouldn’t it be cheaper for one parent to just stay home?

Why quitting usually costs more than child care

Opting to have one parent stay home to eliminate that hefty child-care bill for the comfort of one parent staying home may seem tempting. But it could actually cost more on a number of levels.

Let’s say you and your husband each earn $55,000 — bringing in a total $110,000 a year — and you pay $17,000 a year in child care, or $1,400. Quitting your job to save that cash isn’t necessarily a deal.

Not only will your family lose $55,000 in annual income tiy otherwise would have earned, you will also take a hit in the form of your lost 401(k) contributions, work-sponsored health insurance and long-term career growth.

Even after subtracting $17,000 in child care, that job could still be contributing $30,000 to $40,000 of net benefit per year.

That’s the trap: the short-term savings from cutting child care often pale next to the long-term financial cost of leaving the workforce.

For women in particular, stepping out of the workforce for child care equates to a well-documented career penalty. It can take years to recover lost wages, with lasting effects on lifetime earnings and retirement security. [2]

If quitting isn’t the answer, how can families afford to stay afloat?

Managing the squeeze without quitting

One option is to tap into government support. Programs vary by state, but subsidies exist through federal and state initiatives to help families earning moderate incomes pay for child care.

Resources like ChildCare.gov can help parents find out what’s available in their area, from direct subsidies to tax credits. For some, this can shave thousands off the annual bill.

Budgeting creatively also matters. Some families find relief by staggering work schedules — one parent works early, the other later, reducing paid hours needed.

Others explore in-home day-care providers, nanny-shares, or cooperative childcare, which can cost significantly less than traditional centers. [3]

It’s also worth revisiting the broader family budget. If child-care costs are eating up more than 15% of your income, trimming in other areas may be the only way to balance the scales.

Cutting discretionary spending, refinancing debt, or redirecting raises and bonuses toward child care can ease the pressure without sacrificing long-term earning power.

Finally, parents should take advantage of tax breaks.

The Child and Dependent Care Credit and Dependent Care Flexible Spending Accounts (FSAs) can lower the net cost of child care, though the savings depend on your income and filing status.

Rather than quit your job, treat child care as a temporarily heavy expense. Look for subsidies and tax breaks and manage the rest of your budget with that reality in mind.