35% of Parents Are Dipping Into Their Savings to Cover Child Care Costs
Many parents are spending nearly half of their savings to pay for child care. But this is a risky money move. Find out what parents might want to do instead.
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The cost of child care is a stressor for many parents. Many families are already struggling financially because of rising living costs. Once you add in this additional expense, it can make an already stressful situation more challenging. A recent study found that 35% of parents are dipping into their savings to afford this cost. Find out why that's the case.
Parents are spending 24% of their income on child care
Finding affordable child care in the United States can be a struggle. While some low-cost options exist, these child care solutions often have a long waitlist. Delaying getting care may be impossible. Many families don't have the support of loved ones to help watch their kids while they work, so child care expenses make up a big chunk of their monthly expenses.
According to the Care.com "2024 Cost of Care Report," study respondents spend nearly one-fourth of their household income on child care. And 60% of parents are spending 20% or more. Considering so many parents are spending a sizable portion of their income on this expense, it's little surprise that some have been dipping into their savings to afford it.
Many parents are depleting their savings
The same study found that 35% of parents have to use their income and savings to afford child care costs. Of these parents, 42% are spending, on average, up to nearly half of their savings on this necessary expense. That's a concerning statistic.
Many families have an emergency savings fund so they have extra money when needed. This money should be used when necessary, but some parents could quickly deplete their savings if they continue to rely on savings to help cover some of the cost of child care. Families could soon face even more financial stress once they no longer have savings in the bank.
If you're a parent paying your child care bill partially with money from your savings, consider exploring ways to reduce care costs. If you can make some adjustments, you can avoid draining your savings account balance.
Three ways to trim child care costs
If you're currently paying for child care and are looking for a way to make this necessary expense more affordable, here are some tips that may help.
1. Share child care costs with other parents
Some families share a sitter to keep care costs down. It may be worthwhile to see if there are other families in your community who are interested in hiring a shared nanny. If you can find a great caretaker, this could be an excellent alternative to using traditional child care providers.
2. Alter your work schedule or switch jobs
Another way to trim these costs is to alter your work schedule or change jobs. If two parents work similar hours, they will have a greater need for child care solutions. But if one parent can alter their schedule to work different times or days, it may reduce some need for care because the other parent will be available instead. If a schedule change isn't possible, you may want to explore getting a higher-paying job so you feel more comfortable paying this expense.
3. Explore more affordable nonprofit care centers
You may save some money on care costs by enrolling your child in a nonprofit child care center. Research programs in your area to see if this is an option. You may need to get on a waitlist for these programs, but if you can get your child enrolled, the savings could add up.
If you're overwhelmed by the high cost of child care, you're not alone in having these feelings. Remember that while this expense is high, it's not a bill you'll be paying forever.
You can reduce or eliminate this cost once your children are old enough to attend school. For additional money-saving tips, check out our free personal finance resources.
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