Childcare Costs are Rising. Here’s How to Weigh Your Options, Save Money, and Handle it.

by Kenneth Medford III

It takes a village to raise a kid. It also takes a whole lot of money. With the U.S. lagging behind other countries and an increasing shortage, it’s up to their parents to front the bill. Unfortunately, that bill is booming.

In this article, we’ll look at the different child care costs and find ways to soften the blow.

The Different Types of Child Care

Not all child care is created equally, and not all will meet your family’s needs. Once you’ve figured out your budget and assessed your expectations, you can decide which route you want to take.

Daycare Center

When someone hears about center care, this is the first thought. You leave your child in the care of licensed professionals tasked with caring for them and providing basic education/socializing. But expert lessons of “Ring around the Rosie” and “A, B, C” don’t come for free.

With licenses comes cost. explains some of the factors that dictate cost:

“The cost of daycare varies by location, quality, [specialization] and age of children. Childcare for babies and toddlers is more expensive than childcare for older kids because younger kids need more hands-on care and there must be more childcare providers in each room.”

And that leads to not only high costs but increased variability in costs.

“The average cost of center-based daycare in the United States is $11,896 per year ($991 a month) for infants and $10,158 per year ($847 a month) for toddlers,” according to ChildCare Aware of America.

Geography matters

Location matters when considering costs. Parents in cities like New York or Seattle may report even higher costs than the state averages listed above. In San Francisco, infant care costs can go as high as $2,450 a month.

The most expensive states for daycare are California, Colorado, Connecticut, Maryland, Massachusetts, Minnesota, New York, and Washington, with costs of over $14,000 a year for infant daycare.

Yes, you just saw a $1,260 difference in potential daycare costs. Unfortunately, this creates a bit of a cycle issue. You need the job to afford the daycare, and your kid is in daycare so you can work the job. That might seem extreme to some, but the facts are there. This article shows that many must make exceedingly tough decisions explicitly based on child care costs.

“44% of parents who left the workforce during the pandemic said it was because the cost of child care was too much, and 65% agree that if child care was more affordable they would have more career options/prospects.”

Even if you can afford daycare services, you may find yourself in what this article perfectly describes as a “child care desert.” This means there aren’t any options within a reasonable distance of your home.

More than half of American families already lived in a child care desert, and now 46% of families report that finding child care is more difficult now, compared to pre-pandemic.”

Family Care Center (FCC)

The most common childcare in the U.S. takes place at family care centers.

Family care centers offer services for a much more comprehensive range of age groups. Those with older children or even adult dependents may use these facilities when working or traveling.

In fact, three-quarters of full-time employed mothers (75.2 percent) utilize some form of family care at least part of the time, compared to 86.3 percent of part-time employed mothers.

This article gives a hyper-detailed breakdown of costs between the different care centers. It shows that family care centers tend to be in the middle to the lower end, making them more accessible. One thing to note, however, is that by their nature, family care centers will likely have a wide range of ages under the same roof. 

Image of a pregnant woman leaning against a wall, bathed in the shade of a nearby tree. The overlaid text reads "5 steps to family planning." The read now button links to the article 5 Financial Steps to Take Before Starting a Family.

Family Care Centers in Homes

Additionally, an FCC risks varying costs due to being run out of private homes. The American Progress article points out:

“Operating out of a private home, the expenses a provider incurs can also vary significantly depending on how the provider manages their taxes and what other income they may have to cover monthly expenses.” 

I’ve known people who have had to shut down their FCC due to conditions outside of their control, leaving entire neighborhoods without available, affordable childcare. The pandemic put increasing stress on family care centers regarding mask mandates and maintaining cleanliness standards. This may result in even more shutting down. 


A nanny is an in-house caretaker that may even live with the family they work for. Unsurprisingly, that level of convenience combined with being a licensed professional makes them super expensive. Very Well Family breaks down some hidden costs of hiring a nanny.

  1. “Some nannies also get benefits, such as employer-paid health insurance, paid holidays, vacation, and sick days.”

Spoiler alert, you’re the employer in this situation, so their healthcare comes out of your pocket.

  1. “Keep in mind that when you hire a nanny you become an employer, and the U.S. government expects you to pay your nanny’s Social Security taxes.”

This cost NEVER crossed my mind and could easily land an unaware individual into some issues with the IRS.

Combined with the $612 weekly average nannies received in 2020, according to data gathered by the previously mentioned article, the bottom line is constantly ballooning. Though it might be a dream to have an Alice of your own to look after your very own Brady Bunch, be aware that a full-time nanny is likely to be the most expensive child care option out there.


Babysitting is one of the most common forms of in-home child care. Many states don’t require private babysitters to be licensed, so there is a possibility of finding less expensive care. Of course, the other side is getting less than stellar care. My suggestion would be to use search engines specifically for local babysitters. This database was highly recommended to me and offers a fair amount of information about each potential caregiver. 

Keep in mind that a babysitter is typically more for specific situations as opposed to routine care. This would be a reasonable avenue to pursue if you wanted a date night or have to travel for work. Not all babysitters fall into that category, but look closely at each profile to see if they fit your needs.

How To Cut Costs

If you’re like me, these numbers are a bit jarring. These costs can seem overwhelming if you have a child or if you plan on having kids. Now, our task is to find a way to lessen the blow.


As a kid, I always heard, “it takes a village to raise a child.” If you’re lucky, your village might be blood-related and willing to change your kid’s diaper. Having your family’s support can help offset the cost of childcare. I can’t imagine the amount of money my parents saved by having me stay with my grandfather after school instead of paying for a babysitter. Assuming your family member of choice isn’t asking for an arm and a leg, this can make a massive financial difference. Even if they ask for some form of payment, it will probably be far less than what you’d have to pay a professional.

Once again, comes through with a really dope idea of working out a family contract to avoid misunderstandings or resentment. 

“For example, you may want your family members to feed your children specific foods or not allow them to watch certain TV shows. But your family member has expectations, too. They may need to avoid all Saturdays for babysitting because they have their own errands and an afternoon bridge game.”

The point of your contract is to ensure you’re both on the same page about your expectations. This way, there aren’t any surprises that lead to an awkward situation.”

Using Employer Assistance

If you happen to work for a larger company, there may be care options available to you that you might not even know about. As seen in this MultiBriefs article, child care benefits simply aren’t mentioned to most employees and thus, go unused.

“Many companies (60%+) offer moderately inexpensive child care benefits, such as Dependent Care FSA,” explains Pedro Silva, co-founder and CEO at Küdos, which offers an employee-sponsored solution to make child care and education affordable.

However, he says these benefits tend not to be well-publicized, so employees don’t know about them. Additionally, such benefits alone hardly make primary care affordable to families, who have been facing increasingly expensive child care options.”

Of course, this is the most damning part: “At the other end of the spectrum is the 6% of companies that offer the type of benefits that can truly help working parents, such as on-site care facilities.” So while it’s unlikely your employer will provide that kind of complete child care you need, they can alleviate some of the burdens as long as you’re aware of the benefits they offer.

Using Tax Credits to Offset Costs

A simple yet effective way of getting the most out of those extra tax dollars you get for claiming your kids is to separate them from the rest of your money. Use that money specifically for child care. A friend of mine started to do that about 3 or 4 years ago, and he and his wife were able to take a little pressure off their monthly expenses. It also allowed them to put their daughter in programs that have put her ahead for life. also notes:

“Take advantage of tax breaks and credits made available to you by paying your caregiver on the books. The American Rescue Plan makes in-home care more affordable for families who pay their nannies legally by expanding the child tax credit from $2,000 to $3,600 for children under 6 years old and to $3,000 for children 6 and over.”

A woman is sitting at her kitchen table reviewing her bills with a pen in hand while her child sits next to her doing their homework. The read now button links to the article Inflation Adjustments Marginal Tax Brackets Explained.

It won’t pay for the whole thing, but utilizing these tools can help people seek better opportunities they may have never had access to because they were concerned with where their kids might be.

Knowledge is power, and I hope you’ve gained a clearer understanding of child care costs. Plus, insight into the resources and sites to help with whatever issues may arise for you and your family. Take any and all of the tools here and take control of your finances. We’re rooting for you!

Related Reads

5 Financial Steps to Take Before Having a Family

Here’s How Much to Save for Maternity and Paternity Leave

5 F.R.E.E. Financial Tips for Families

Understand 2022 versus 2023 Marginal Tax Rates

Headshot picture of the writer of this article, Kenneth Medford III, with a muted black and white filter.
Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

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