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Costs of Child Care in the United States
Child care expenses vary depending on a variety of factors, including:
Once you find a child care program that has all the services you need and comes highly recommended by friends and family, then it’s time to look at how much it’s going to cost you. Here is the breakdown of costs depending upon your child’s age:
Now that you know about how much child care is going to cost you, you need to take a look at your income and the costs of living in your city.
Average Incomes and Costs of Living in the U.S.
How much you can afford for child care will depend upon how much you make and your costs of living. In the U.S., the median household income is just over $63,000, according to USA Today. Household income not only includes wages, but things like Social Security benefits, public assistant payouts, bonuses, and interest and dividends from investments.
Even though unemployment is at its lowest number in decades and wages have risen, they have not increased enough to keep up with the high costs of living. According to a GOBankingRates study, the cost of living in the U.S. rose 14% in just three years; the median home price went from $215,000 in early 2015 to $260,000 in early 2018. Rent increased 7.6% over that same time period.
Even though $63,000 could go far in some places in the U.S., in most major cities, it’s hard to live off that type of income, especially when having to consider child care. In Sacramento, California, for example, a single person needs to make over $72,000 a year to live comfortably. In San Francisco, you’ll have to make more than $123,000 per year, which is way above the national average. And that’s just to cover basic costs like housing, transportation, and food. In states like Delaware, Louisiana, Florida, New Mexico and Kentucky, renters are spending more than 50% of their income on necessities alone.
Add a child or two into the mix and you’ll have to make your wallet stretch even further. According to USA Today, the total average cost of raising a child is $233,610, which doesn’t include the cost of college tuition. If you do factor in college tuition, you’re looking at a significantly higher bill if your child goes to private school and doesn’t receive any assistance. The average cost of public colleges was $20,770 and the average cost for private colleges was $46,950 for the 2017-2018 school year, according to ValuePenguin.
If you feel overwhelmed by child care expenses, there are some steps you can take to lower your monthly payments while still providing your child with high quality care. You’ll first want to start with seeing if you qualify for a child-care subsidy program.
What Is a Child Care Subsidy?
A child-care subsidy is funding to help offset child care costs for eligible families. The U.S. Department of Health and Human Services Administration for Children and Families’ Child Care Development Fund (CCDF) offers a child care subsidy, and, according to the Federal Reserve Bank of Minneapolis, “partially funds state-run child care subsidies that lower the cost of child care for low-income families while parents work, go to school or attend job training.”
State general funds, as well as Temporary Assistance for Needy Families (TANF) provide additional funding for working families that do not receive what they need from the federal government. In terms of child care subsidy eligibility, families may receive a federally funded child subsidy if they make less than 85% of the median income in their state.
According to Child Care Aware, a child care subsidy may also be called a voucher, fee assistance, or go by a specific name, such as CalWORKs in California. You may have also heard of Early Head Start and Head Start, which are financial assistance programs for children up to two-years-old and then three- to five-years-old, respectively. These federally-funded initiatives are in every state in the U.S. Some states will also fund pre-K for children ages three to five, and they will be free or cost very little for eligible families.
To find out if you have child care subsidy eligibility, you can log onto benefits.gov and answer a few questions. According to the site, “In order to qualify for this benefit program, you must be a parent or primary caregiver responsible for children under the age of 13 years of age, or under 19 if incapable of self-care or under court supervision who needs assistance paying for childcare; and must also characterize your financial situation as low income or very low income. In order to qualify you must also be either employed or in some States enrolled in a training or education program.”
You should also check out the federal government’s State and Territory Child Care and Development Fund Administrators page, where you can find your state’s office for child care subsidy programs. Another useful resource is Childcare.gov, which will give you even more information and options for child care subsidy programs throughout the U.S.
Not Eligible for a Child Care Subsidy?
Let’s say you applied for a child care subsidy from a state or federal program but you didn’t qualify for assistance. What should your next steps be?
First, don’t panic. There are options available to help you pay for child care, all while allowing your child to attend a high quality child care provider.
To help pay for child care, you can apply to Jump Start Finance’s program, which will give you a credit line for up to 24 months of child care for a two- to six-year-old. You can lower your monthly payment by up to 50%, and you won’t have to pay any hidden fees.
If this sounds like a great option to you, then apply now or contact Jump Start Finance for more information at (833) 573-5626. It’ll only take a few minutes, but it could mean a world of difference when it comes to affording child care.
We're not just a team of seasoned finance experts, we're also working parents that love our careers and our kids. We're proud to provide a program that gives parents more options for providing the quality care their family deserves.