At $18,000 annually, childcare is now the biggest household budget item for families, a new Care.com
survey revealed. That amount exceeds food and housing, the survey by the world’s largest online care destination.
The study, conducted by the company which boasts 10.7 million members spanning 16 countries, discovered that nearly 50% of families don’t budget for childcare.
This is the case even though they may start saving for college by the time their child reaches the proverbial terrible twos. The May 2014 findings revealed that 75% of U.S. families are overwhelmed by the cost of child care, perhaps because they failed to factor it in their household expenses.
And of the 700 people surveyed, only 52% knew that they were eligible for child care tax breaks. With average weekly rates for a nanny ranging from $472-$504 depending upon the number of children cared for, without ample preparation, costs can quickly mount.
“There are several planning steps we encourage families to take when expecting a baby,” said Donna Levin, Co-Founder and VP of Operations, Care.com. “They should research the maternity and paternity leave policies of their employers and decide together who will take leave and for how long. Many families are also surprised to learn about the different kinds of care available, such as nannies, baby sitters and day care centers, and it’s important to understand the differences as you select the solution that best fits your family. And finally, budget. Care.com’s pay and nanny tax calculators are a good place to start in determining budget, how much you can afford to spend on child care, and what options make the most sense for your family.”
And the earlier families plan, the more money they can save. Many employers offer flexible spending accounts
(FSAs) where families can set aside up to $5,000 pre-tax for child care expenses. Additionally, some businesses offer child care reimbursements for working parents, on-site day care or membership to services like Care.com. However, the study found that only 31% of employees currently take advantage of benefits like FSAs, although 83% of employees who have access to child care benefits say they help reduce stress and improve work-life balance.
The following infographic breaks down the numbers in the survey for clarity.