How Parents Find Creative Solutions to the Child Care Affordability Crisis

Over half of American households spend more than 20% of their income on child care costs.

Sam Becker Contributor
Sam Becker is a freelance writer whose work has appeared in and on CNBC, Fortune, USA Today, Business Insider, and more. Sam is also the author of the growing finance and strategy-focused newsletter, "Not Pretty, Not Rich."
Sam Becker
7 min read
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Brutal. That's how Brandon Thompson sums up the child care situation for his family. 

Brandon Douglas/CNET

Thompson and his wife, Kate, both work during the day, and his hours are often long -- from 7 a.m. to 7 p.m. The Thompsons' nearly 2-year-old daughter is too young to go to school, and when it came time to figure out an affordable plan for child care, they struggled to find an answer within their budget. "In Chicago, the average day care charges $1,500 per month," said Kate Thompson. 

For now, their daughter spends Mondays with Kate's parents. From Tuesday to Thursday, the Thompsons split the cost of a nanny with another couple to save money. On Fridays, Kate works from home and watches their daughter. "So far, it's working pretty well -- as long as nobody puts a bunch of meetings on my calendar," Kate said.

Still, the bill is steep. All told, the Thompsons pay just over $1,000 per month for their part-time nanny, who earns $22 per hour, plus benefits. 

With inflation squeezing household budgets, more parents are forced to think outside the box to find child care options. On average, families pay anywhere from $226 per week for day care to $694 per week for an in-home nanny, according to a 2022 Cost of Care survey from Care.com. Such high costs mean over half of American households spend more than 20% of their income on child care costs. The US Department of Health and Human Services considers child care affordable when it's 7% or less than a family's income. 

The financial strain is even harder for lower-income and Black and Latino families, and tougher for single parents and those with more than one child. Economically disadvantaged parents have to spend over one-quarter of their annual income to afford center-based care. It's no wonder that four out of 10 parents in the US have gone into debt due to the cost of child care.

Kate Thompson

Kate Thompson

The system isn't working for anyone, explained Sam Abbott, a senior policy analyst at the Washington Center for Equitable Growth who focuses on family economic security. "It's unaffordable for parents, providers are scraping by, and workers and educators are not making any money at the lowest wages in the economy," Abbott said. 

With a child care system fraying at both ends, parents are making tough sacrifices and coming up with creative solutions to be able to raise their kids while still making an income. While some people, like the Thompsons, pool together with other families to afford in-home nannies, others take on second jobs or side hustles, move to cheaper areas or rely on family for free child care. Many parents also find themselves cutting back on essentials and other things like clothing, food, dining out, family leisure activities, vacations and travel. In the most extreme scenario, some families are forced to consider cutting back work hours, switching to shift-work or leaving the workforce altogether. 

The child care crisis is real 

The lack of affordable and accessible child care in this country isn't new, but it's worsened since the pandemic, when the sector faced sharp job losses and closures of almost 16,000 child care centers. In September, there were 102,400 fewer child care jobs across the country than in February 2020, according to data from the Center for the Study of Child Care Employment. Over the last couple of years, the total number of child care providers saw a 9% drop

Sam Abbott

Policy analyst Sam Abbott on child care in the US: "It's unaffordable for parents, providers are scraping by, and workers and educators are not making any money at the lowest wages in the economy."

Fewer options for parents have also led to higher costs in most areas, though prices vary wildly state to state. For example, while the average annual price of a full-time child care center for a toddler costs more than $24,000 in Washington, DC, it comes out to roughly $6,800 in Arkansas, according to a calculator made by the nonprofit Economic Policy Institute. States like California and New York have some of the least affordable child care options, costing nearly half the median income for a single-parent family, according to a 2021 report from Child Care Aware of America. The same data reveals that in most regions of the US, annual child care costs for an infant are more expensive than housing, and usually exceed the cost of in-state public tuition at a four-year college.

There are a lot of factors that determine child care costs, said Abbott, and there isn't an easy fix. Most of the revenue for child care centers goes toward paying staff members, Abbot said, though the average child care worker earns a pittance – a mean hourly wage of $13.31. Given the major staffing shortage in child care, this creates a catch-22.

"We're in a dilemma," Abbott said. "Because so much of a provider's cost is salaries, you can't raise salaries to attract talent without raising costs." But, he explained, the costs for most families are already too high.

Families find solutions to care for kids

Even a modest increase in child care expenses would hurt families that are already at their financial limit. Brandi McNett, who lives in Spokane, Washington, with her husband and two children, says she pays $700 per month to send her 4-year-old to a private day care. If the provider raised the price to $900, they probably couldn't make it work. When she first shopped around for options, most centers were at least $1,400 per month, double what she pays now. "There's no way I could afford that," she said.

Like the Thompsons, the McNetts have tried different ways to solve their child care dilemma. Since their older child goes to a home-run day care center nearby, their 2-year-old spends the day with McNett's in-laws. Once their oldest starts school, they'll be able to afford to move the younger one into child care.

The McNett family

Brandi McNett and her family

The McNett family

McNett herself previously worked in a day care center as an assistant teacher, so she knows, inside and out, the issues plaguing the child care system. She and her husband have considered moving to a lower cost-of-living area -- specifically to North Carolina, where her husband, who works for a railroad company, could possibly transfer. This line of thinking isn't unusual. Over 25% of parents surveyed by The Penny Hoarder earlier this year reported having moved to a different home to better afford child care. 

Government help and creative child care workarounds

Despite the continuous financial strain child care costs continue to place on families, policymakers have made little headway on the problem over the years, according to David Blau, professor of economics at Ohio State University, who's studied the issue for decades.

Blau explained that though government resources in the form of stipends and vouchers exist, access to them depends on where you live, and they're often very difficult to get for the people who need them most. And some federal, state and local programs for low-income parents, like the Child Care and Development Fund, simply don't go far enough. "There are subsidies available, but navigating it is a nightmare," said Blau. 

The bigger problem is that the approach to providing child care services to working families has been based on the market, akin to the private health care system, as opposed to a top-down solution from the federal or state government. Blau called this a "very uniquely American issue." For example, he noted that in many European countries, there's a different social and political agreement, whereby the population pays higher taxes in exchange for guaranteed access to health care and child care. Expanding that safety net might be the best shot at implementing a cost-effective and efficient system in the US, Blau said. 

David Blau

Economics professor David Blau: "There are subsidies available, but navigating it is a nightmare."

In the meantime, there are family tax credits to help lessen the cost burden. The Child and Dependent Care Tax Credit, for instance, offers up to $1,000 in credits for qualifying child care costs. And some employers offer child care benefits. If you have access to a dependent care Flexible Spending Account, you can contribute pretax dollars to use toward child care, for instance. 

But these credits and programs often aren't enough to offset the rising costs parents are facing. "In the end, families with young children are either cobbling together what they can from relatives or just deciding that one of the parents won't work at all," said Blau. 

The decision by a parent to shift jobs or leave the workforce to take care of children has larger societal implications outside of a single household. In most cases, the stay-at-home parent is a woman, which has long-lasting effects on labor force participation. Studies show that women who pause their careers for child care responsibilities find it more difficult to reenter the workforce later in life. 

Farnoosh Torabi, So Money podcast host and CNET editor-at-large, has learned over the years some creative ways to lower child care costs. If you're a lower-income family, she suggests asking about scholarships or financial aid, since some preschool or aftercare programs offer scholarships but may not advertise them.

Signing up for community or school Facebook groups can also help connect you with other parents in your area who may also be struggling with finding affordable child care, said Torabi. She suggests posting in these groups to see if there are other parents who want to share responsibilites. For instance, if you work very early in the morning, you may find another parent who's able to watch your child before school, and in exchange you can help watch their child in the evenings or on weekends. "These groups welcome this sort of problem-solving," Torabi said.

YMCAs are also great potential resources for families, said Torabi, because these programs are national, often highly subsidized and more affordable than aftercare and in-home child care options.

Ultimately, American parents are relying on an array of Band-Aid solutions to help care for the next generation and make ends meet. But these systems are fragile. If there's even a slight shift in cost or access, the entire construct can come toppling down.

You can find a comprehensive list of child care programs, resources and credits at Child Care Aware.