Geneve and Paul are wondering how anyone can afford to send their kids to day care. It’s a question families across America have asked themselves, as costs for child care continue to climb.
Although they earn about $120,000 a year combined, by the time they pay all the bills every month, there’s nothing left for savings.
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In Minnesota, where they live, the average annual cost of infant care is $22,569, while the average annual cost of child care for a 4-year-old is $17,882. Between their two children, ages 1 and 3, they are paying $39,000 a year for child care, or $3,250 a month.
That’s more than their mortgage payment, which comes in at $2,100 a month. It’s also an astronomical 32% of their income. According to an Economic Policy Institute (EPI) analysis, “child care is more expensive than rent in 17 states and Washington, D.C.” (1)
When is child care considered affordable?
The analysis, citing the U.S. Department of Health and Human Services, notes that child care is considered affordable if it’s no more than 7% of a family’s income. EPI’s analysis found that there is no state in which the average cost of infant care was within the 7%-threshold for families making the state’s median income.
Child care costs vary from state to state, as does the percentage of a typical family’s income it comprises. In New Mexico, infant child care takes up the largest share of a median income-earning family’s budget at 21%. In South Dakota, EPI’s analysis found costs were the smallest share of income; the median income is $92,383, and families spend 9.4% of earnings on infant child care.
For a couple earning a median income, having two small children in day care can break the bank, like Geneve and Paul’s situation.
A March 2025 report from the Assistant Secretary for Planning and Evaluation (ASPE) and the Office of Human Services Policy (HSP) found “the cost burden of child care is prohibitively high and continues to grow for American families.” (2)
According to the HSP report, the annual price of care for one child in the U.S. was between $6,552 and $15,600 in 2022. One child’s care would comprise between 8.9% to 16% of a median family income.
The cost of care has increased as the choice in the type of care has diminished, the HSP report found. It notes that a previous ASPE analysis found that expenses increased 86% from 1995 to 2016.
According to the HSP, American children are increasingly “in center-based care rather than in smaller, home-based providers or with relatives and trusted community members.” It also found that about one million fewer children are in small family child care homes, a 40% decrease from 1.6 million in 2005 to 960,000 in 2017.
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How to tackle child care costs
Paul and Geneve’s experience is a familiar one — it’s the same reason many families choose to have one parent cut back or step away from work to care for their kids until they’re old enough for school.
For some families, child care is so expensive that it actually makes more sense for one parent to stay home. It can be a practical solution to get through the preschool years — but it’s not without its sacrifices.
Stepping away from work, especially for women, can take a real toll on a career. Those years at home also mean missing out on peak earning opportunities — time that could have boosted retirement savings and Social Security benefits down the road.
The good news for families like Geneve and Paul’s is that child care costs will go down as your children get older, with infant care being by far more expensive.
But for low-income workers, the cost of child care can be completely out of reach. The EPI report notes that for a child care worker earning the median wage in Illinois, to put their own infant in child care would amount to 50% of their income. (1)
Government assistance for child care
There are various government assistance programs for families who can’t afford child care.
Known variously as vouchers, certificates or subsidies, child care assistance can be accessed through state agencies. (3) Every state has different eligibility requirements — visit childcare.gov, select your state and check the “Financial Assistance for Families” page.
Head Start and Early Head Start programs also exist to help low income families with health, early learning and development.
Some states offer state-funded prekindergarten programs for children between 3 and 5. Check to see if your state offers low or no cost prekindergarten, and if you’re eligible. Programs may be part-day or full-day.
Geneve and Paul should also look into whether any local child care providers offer sibling discounts, or look for local non-profits or child care providers that offer fee assistance or scholarships.
With two little ones in daycare, balancing the budget will take some creativity. They could try adjusting their work schedules so one parent can be home part of the time. It’s also worth finding a child care provider that offers flexible scheduling — that way, they only pay for the days they truly need.
If one parent can switch to part-time hours or a work-from-home setup, it could ease the strain of child-care costs for now. The good news is that once their youngest is a bit older and their oldest is in school, those big daycare bills will start to shrink. A temporary schedule adjustment could also protect their careers better than leaving the workforce altogether.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Economic Policy Institute (1); ASPE (2); Childcare.gov (3)
This article originally appeared on Moneywise.com under the title: My toddler’s child care costs more than my mortgage — how can I stretch my budget to cover these high monthly expenses?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.