ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

Cost of Childcare in the U.S. Is Rising at an Alarming Rate; What Does It Imply?

About 75% of parents think that having and raising children has been far more expensive than they expected, per a survey.
PUBLISHED APR 30, 2024
Cover Image Source: Childcare costs in the U.S. are growing at an alarming rate (representative image) | Unsplash | Photo by BBC Creative
Cover Image Source: Childcare costs in the U.S. are growing at an alarming rate (representative image) | Unsplash | Photo by BBC Creative

Welcoming a child into the family is one of the greatest and most joyous events for a couple. However, this may not be the case for couples who like to meticulously plan their costs. This is because a 2023 study by LendingTree found that the nationwide average cost of raising a child is $21,681 per year. This excludes college fees (one of the largest costs) and takes into account only costs like rent, food, clothing, childcare, transportation, health insurance, and state tax exemptions or credits.

Representative Image | Unsplash | Photo by Vitolda Klein
Raising children in the US (Representative Image) | Unsplash | Photo by Vitolda Klein

LendingTree estimates that the total cost of raising a child over 18 years is $237,482. This accounts only for the necessities, and it doesn’t include the cost of luxuries, nice-to-haves like vacations, or enrichment classes, which usually cost a lot for an average family. While the cost is staggering, LendingTree also estimates that it is growing at an alarming rate. As per the study, there was a 19.3 % jump in the cost of raising a child between 2016 and 2021. The cost of everything associated with a child like the cost of fancy strollers and formula has hiked for the current generation of parents.



 

Apart from LendingTree, the USDA also tabulates its estimate of the cost of raising a child till the age of 17. While it uses many of the same parameters as LendingTree, it also includes room for miscellaneous expenses, like toothpaste, haircuts, and entertainment, as per a Good Housekeeping report. For 2015, which is the most recent year available, the total estimate for the cost of raising a child was $233,610, which experts believe comes out to be nearly $310,605, taking inflation into account, the report said.

According to a separate LendingTree survey of 2000 consumers, about 75% of parents think that having and raising children has been far more expensive than they expected. Over half of the respondents, 55% admitted to going into debt to pay for child-related expenses. Furthermore, families with young children felt that the biggest financial burdens of childrearing are food, childcare, and clothing and clothing, which are all expected to get even more expensive in the future.

As per a Fox Business report, childcare is expected to get more expensive for Americans as an important pandemic-era relief program has expired. As per the report, Congress allocated $24 billion in emergency funding to help keep childcare providers afloat under the American Rescue Plan in 2021. However, that program officially expired last year, leaving childcare providers in a lurch.



 

The Century Foundation estimated that 70,000 childcare programs could potentially close because of the funding expiration, resulting in 3.2 million children losing access to care. Furthermore, a study from the Bank of America Institute found that families with childcare payments have been dipping into their savings at a faster rate. The study indicated that the average childcare payment per household jumped over 30% since 2019 for middle- and upper-income families with income between $100,000 and $250,000 witnessing the biggest increase. This may even drive some parents out of the workforce to look after their children.

MORE ON MARKET REALIST
Guests on the show would run with it if they ever got that kind of money on Pawn Stars.
12 hours ago
The guest even said to keep the kids in the dark about how valuable these items were.
14 hours ago
The company had fantastic sales but a crushing debt with a high interest rate that the sharks hated.
17 hours ago
It was only Carey's second season in the show and he could have been part of a massive scandal.
1 day ago
“I won’t say anything, and you know why,” he said, with a gesture to zip his lips.
1 day ago
The ring was rescued by the guest's mother thanks to a stranger early in the morning.
1 day ago
"She blanked out. It happens to the best of us," a fan sympathized with the player.
1 day ago
The instrument originally belonged to the guest's grandfather who suffered a horrific injury.
2 days ago
The contestant's wife seemed embarassed at that point of time, and worried as well.
2 days ago
The co-founders of Dino Don got the shark that they always wanted on board.
2 days ago
One can understand why the measure is in place but the shopper was having none of it.
2 days ago
"My husband and I definitely noticed it! We had to rewind it a few times," a fan reacted.
2 days ago
All of the sharks agreed that she had a great product and the drive to be successful a businesswoman.
3 days ago
It's possible that the dog played a little part in making it easier for them to get a deal.
3 days ago
Without the help of his wife, the contestant would have gone home empty-handed.
3 days ago
The pawn store owner had a valid point since the item the guest had brought had numerous issues.
3 days ago
The contestant got the first part of the puzzle right but wasn't able to solve it in time.
3 days ago
"It's a lady's robe. A robe from 1750 is a very rare robe. The only other ones I know of this type, you'd have to go to Beijing," the appraiser said.
4 days ago
Harvey also got other hilarious answers, but nothing could match the woman's sass.
4 days ago
The Gronkowski family is famous for their contributions to America's sporting culture.
4 days ago