Care.com Survey Finds One in Three Families Spend 20% or More of Household Income on Child Care

07/17/2018

Child care is unaffordable for more than seven in 10 American families, and nearly one in five families is spending at least a quarter of annual household income on child care

WALTHAM, MA (July 17, 2018) – According to the Care.com 2018 Cost of Care Survey, 33% of families now spend 20% or more of their annual household income on child care. Seven in 10 families report paying rates higher than the U.S. Department of Health and Human Services’ definition of affordable care, while nearly one in five families spends a quarter or more of their household income on child care. And 60% say child care costs have increased in the past year, leading to many families adopting budgeting tactics such as reducing date nights and cutting back on cable. In fact, the fifth annual survey from Care.com (NYSE: CRCM; www.care.com), the world’s largest online destination for finding and managing family care, found that the average weekly rate for a nanny has risen over $100 since 2013. In a year that saw the U.S. fertility rate hit a record low, the survey shows that one in three families (33%) say the cost of child care influenced their family planning, in that they either waited longer to have children or had fewer children than they would have liked because of child care costs.

2018 COST OF CARE AROUND THE COUNTRY 

Annual Child Care Costs: Care.com found that 33% of families spend 20% or more of their household income on child care; 19% of families spend 25% or more; and a whopping 71% spend at least 10% of annual income. The U.S. Department of Health and Human Services defines affordable child care as costing up to 7% of household income.

*National Average Weekly Rates:

 

2017

2016

2015

2014

2013

Nanny

$580

$565

$557

$477

$472

After-School Sitter

$242

$232

$214

$197

$181

Child Care Center

$211

$211

$196

$188

$186

Family Care Center

$195

$200

$181

$140

$127

Au Pair

$390

$367

$360

$360

$360


*all rates are for one infant child, except for After-School Sitter, which is not age limited.

**Top Five Most Affordable States to Hire a Nanny:

1. Maryland

2. New Jersey

3. Connecticut

4. New Hampshire

5. North Dakota

 

**Top Five Least Affordable States to Hire a Nanny:

1. Mississippi

2. New Mexico

3. Arkansas

4. Alabama

5. Louisiana

 

**Top Five Most Affordable States to Use a Child Care Center:

1. North Dakota

2. Utah

3. Wyoming

4. Delaware

5. South Dakota

 

**Top Five Least Affordable States to Use a Child Care Center:

1. District of Columbia

2. Oregon

3. California

4. New Mexico

5. Massachusetts

**Based on the average cost of care in relation to the state median family income among households with children.

 

CARE.COM 2018 COST OF CARE SURVEY INSIGHTS

What’s the Financial and Familial Impact of Child Care Costs?

American families will go to great lengths to pay for child care. In fact, 26% would put themselves in debt or further debt to pay for child care, and parents report they’ve saved less money (54%) and made major budget cuts (41%) in order to pay for the rising cost of care. These increased costs are leading to more stress. More than one in three (35%) parents say child care costs have caused tension in their relationship with their partner. And one in three families (33%) say the cost of child care influenced their family planning, in that they either waited longer to have children or had fewer children than they would have liked because of child care costs.

Are Families Aware of Child Care Costs?

Child care remains the cost that surprises parents the most when they start having children, followed by formula and diapers. With three in four families (75%) reporting that child care costs were more than they expected, the impact of these increasing costs is causing new parents to feel a bit of sticker shock. The good news is 68% of families are now budgeting for child care, up from 58% in 2014. And they’re doing the research on care prices: 72% look online for more information on costs, 68% turn to friends and family, and 51% ask about rates during the interview process for hiring nannies, sitters or day care centers.

How Does Child Care Influence Career Decisions?

The high cost of care doesn’t merely impact the home: It also has significant influence on parents’ career decisions. More than three-fourths (77%) of parents say they didn’t anticipate the cost of child care would impact their career decisions—and yet 63% report that it did. The most common adjustments are changing jobs to increase take-home pay (28%), asking for a more flexible work schedule (27%), switching from a full-time to part-time schedule (27%), and becoming a stay-at-home parent (22%). In retrospect, nearly one in four parents (24%) wouldn’t have made the same career decisions given the cost of child care.

What Can Parents Do to Reduce the Cost of Care?

There are several ways families can mitigate the high costs of child care. Once families know how much they can afford, they can pinpoint the most feasible child care option by researching the current rates in their area with free, interactive tools, like local nanny rates and nanny tax calculators. Families can also take advantage of tax breaks that can save thousands of dollars.

“Many families miss out on saving a considerable amount of money through tax breaks available to them,” says Kerri Swope, Vice President of Care.com HomePay, a leading provider of comprehensive household payroll, tax and HR services. “Contributing to a Dependent Care Flexible Spending Account (FSA) can help families save as much as $2,300 per year—but the Care.com 2018 Cost of Care Survey found that only 55% of families actually contribute to one. In addition to the FSA, families can take advantage of the Child and Dependent Care Tax Credit, which can save up to $600 for families with one child and $1,200 for families with two or more children.”

Can Employers Help Working Parents and Their Companies?

Another way working families are affording care? They’re looking to their employers. Over half of American families (53%) agree that workplaces should provide benefits— such as flexible work schedules and paid parental leave—to support working families. However, an overwhelming 81% of working parents say their employer doesn’t offer any kind of child care benefits, with 83% wishing they did. And businesses should note that 72% of parents say their work day has been impacted by child care falling through, with 67% using a sick day, 56% being late to work, 39% using a vacation day, and 26% falling behind on work as a result.

“The Care.com 2018 Cost of Care Survey clearly shows more and more working parents are realizing that child care costs have a substantial impact on their careers,” said Alyssa Johnson, Vice President of Global Account Management for Care@Work, Care.com’s enterprise solution helping companies support working families. “The reality is that while child care needs are unpredictable, the impact on a business is not. When care breaks down, people miss work. They can’t focus and they leave jobs. The employers we’ve worked with realize that in order to maintain an engaged, productive workforce they need to provide care support to their working parents, which in turn significantly influences a company’s overall performance and bottom-line results.”

How Do Parents Feel About the Country’s Cost of Care?

Despite the increase in families budgeting for child care and finding ways to reduce costs, families are still struggling. Over half of families (55%, up from 53% in 2017) agree that American culture does not do enough to support working parents when it comes to the cost of care, and nearly half of families (46%) wish the United States subsidized child care costs as some other countries do.

About the Care.com 2018 Cost of Care Data

The Cost of Care Survey is an annual survey to measure the relative cost of care in the U.S. and how care impacts families’ budgets and employment. The Care.com 2018 Cost of Care Survey captured responses from more than 1,300 parents in the United States during the month of May 2018. Respondents were recruited from Care.com.

Weekly rates for a nanny and after-school sitter are based on Care.com 2017 member data, child care center and family care center rates are based on rate information from centers listed on Care.com, and au pair rates, which are based on data from Cultural Care Au Pair, Au Pair in America, and Au Pair Care. Affordability rankings are calculated based on the average cost of care in relation to the U.S. Census Bureau’s 2016 American Community Survey that includes the state median family income of households with children.

For more information about the survey, sources, or to learn helpful tips on saving, visit Care.com/costofcare. Employers can also find helpful tips on how to best support their working families at www.care.com/careatwork.

About Care.com

Since launching in 2007, Care.com (NYSE: CRCM) has been committed to solving the complex care challenges that impact families, caregivers, employers, and care service companies. Today, Care.com is the world’s largest online destination for finding and managing family care, with 16.2 million families and 12.2 million caregivers* across more than 20 countries, including the U.S., UK, Canada and parts of Western Europe, and approximately 1.4 million employees of corporate clients having access to our services. Spanning child care to senior care, pet care, housekeeping and more, Care.com provides a sweeping array of services for families and caregivers to find, manage and pay for care or find employment. These include: a comprehensive suite of safety tools and resources members may use to help make more informed hiring decisions - such as third-party background check services, monitored messaging, and tips on hiring best practices; easy ways for caregivers to be paid online or via mobile app; and Care.com Benefits, including the household payroll and tax services provided by Care.com HomePay and the Care Benefit Bucks program, a peer-to-peer pooled, portable benefits platform funded by household employer contributions which provides caregivers access to professional benefits. For enterprise clients, Care.com builds customized benefits packages covering child care, back up care and senior care consulting services through its Care@Work business, and serves care businesses with marketing and recruiting support. Headquartered in Waltham, Massachusetts, Care.com has offices in Berlin, Austin and the San Francisco Bay area.

*As of March 2018

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Contact:

Natasha Gavilanez

Senior Public Relations Associate

Care.com

natasha.gavilanez@care.com

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