Even before the presidential debates kicked off this week, affordable child care had already emerged as a headline issue in the 2016 race. Both the Republican and Democratic candidates have plans they say will help alleviate family budgets.
What do today’s child care expenses look like? To get a feel for just how much they can affect family finances, take a look at the following stats from Child Care Aware.
The Reality of Child Care Expenses
The annual cost for child care can be as much as $17,062 for an infant and $12,781 for a four-year old in a day care center.
- The cost of center-based care for two children is the highest single household expense in the Northeast and Midwest and is second only to housing in the South and West.
- Sixty percent of funding for American child care comes directly from parents. Unlike other areas of educational investment–including higher education that may get subsidized through scholarships–families pay the majority of costs for early education.
- Expenses for two children are more expensive than mortgages in 24 states and Washington, D.C.
- Average fees for an infant in a day care center can cost more than food bills for the average family.
- Center-based care fees are higher than transportation costs in every region in the United States.
- The average annual cost for center-based infant care was higher than a year of tuition at a four-year public college in 28 states and D.C.
Put a “Pay and Save” Strategy in Place
As these figures clearly show, child care is a significant portion of household spending. For many families, the hefty price tags may tempt parents to narrow their focus on this short-term expenditure. But doing so means they miss out on the opportunity to save for their children’s future.
The fact is it doesn’t require a lot of money to start saving for college. Many college savings plans, such as 529 Plans, let you start with a little as $25 a month. And, the earlier you start investing, the more time you give your money to grow and compound.
Learn how you can plan smart for your child’s education so they can dream big.