For many parents, childcare is a substantial expense, and one that's become even more costly in recent years: Daycare costs have increased by 214 percent over the last three decades, according to the First Five Years Fund, one of many groups advocating for more affordable childcare. Today, daycare in many states is actually more expensive than in-state public college tuition!
As you start to research childcare options and consider how they'll factor into your family finances, here's some information on the average daycare costs, plus ideas and resources for how you might be able to make daycare more affordable for your family.
What is the average cost of childcare?
According to nonprofit organization Child Care Aware, the average monthly cost of full-time daycare in the U.S. in 2020 was around $850. On average, families who hire a private full-time nanny spend around $2,450 per month, according to a 2021 survey conducted by Care.com.
Those averages provide a ballpark range for childcare costs, but there's really no simple answer to this question. Nanny and daycare costs depend on a number of factors, including:
- Where you live
- What type of childcare you choose
- Your child's age
- How many hours a week your child spends in childcare
Where you live is what really determines the bottom line. For example, the monthly average cost of full -time, center-based infant daycare in Mississippi was $494 in 2020, compared to $1,881 per month in Massachusetts. Often times this is connected directly to the cost of living and wages in a specific location.
Daycare – whether in a center or in someone's home – could cost double, triple, or even quadruple in a relatively expensive city compared with a more affordable area. Check with friends and caregivers near you to find out the going rate for the type of childcare you prefer, and don't be afraid to gather several quotes from different places before making your decision or assessing your budget.
Some couples may think that having one parent stay at home is the less expensive option, but being your child's full-time caregiver has costs, too – most significantly, the loss of your previous income. Read more about what to consider if you're thinking about being a stay-at-home parent.
To find out more about daycare costs and options in your area, contact your local Child Care Resource and Referral (CCR&R) agency. There are hundreds of agency locations throughout the country that provide families with information about local childcare options and resources.
To find an agency near you, you can search for one on the Child Care Aware website. The site also features a helpful tool that tells you the average cost of daycare and home daycare in your zip code.
How much does daycare cost?
Daycare costs vary based on the same factors above, notably where you live, how old your child is, whether you're enrolling them in full- or part-time daycare, and if you're using a center- or home-based daycare facility. You'll pay more for childcare during the infant and toddler stages because very young kids need more hands-on care, so the center must hire more caregivers. Daycare costs for preschool-age children are generally lower.
Daycare costs for infants
The average cost of center-based infant daycare ranges from $5,993 to $22,577 per year ($494 to $1,881 monthly) depending on which state you live in, according to Child Care Aware of America.
The most expensive states for infant daycare are:
- Massachusetts: An average of $1,881 a month
- California: An average of $1,449 a month
- Washington: An average of $1,447 a month
- Minnesota: An average of $1,414 a month
- Hawaii: An average of $1,385 a month
The least expensive states for infant daycare are:
- Mississippi: An average of $494 a month
- South Dakota: An average of $619 a month
- Arkansas: An average of $625 a month
- Kentucky: An average of $631 a month
- Alabama: An average of $650 a month
Daycare costs for toddlers and preschoolers
Depending on which state you live in, you'll pay anywhere from $5,933 to $20,776 a year ($494 to $1,731 a month) for center-based daycare for a toddler, according to Child Care Aware. Those prices range from $5,439 to $16,781 a year ($453 to $1,398 a month) for center-based daycare for a 4-year-old.
Massachusetts is the most expensive state for a 4-year-old in a childcare center. Following right behind are New Jersey, Washington state, and Connecticut, where average costs exceed $13,000 per year. The least expensive states for a 4-year-old in daycare, all costing less than $7,000 a year, are Mississippi, Arkansas, South Dakota, and Kentucky.
How much does an in-home daycare cost?
The cost of home daycare also depends on your child's age and where you live, as well as the size of the facility and whether it's licensed. Some in-home daycare providers charge almost as much as bigger daycare centers, while others charge very little, especially if they're close friends or neighbors of your family.
The average cost of licensed home daycare for an infant starts at around $5,500 a year and goes up to more than $12,000 a year (that's $458 to $1,000 a month), but in large cities this cost is likely to be higher. For 4-year-olds, the average cost for home daycare starts at about $5,000 a year and goes up to more than $11,000 a year ($417 to $917 a month).
How much does a nanny cost?
The price of a nanny can vary, depending on where you live, how many children you have, and how stiff the competition is for qualified candidates. But on average, nannies can cost around $612 a week for full-time care, according to Care.com. (An older International Nanny Association survey calculated that average a little higher, at around $765 a week.) Your costs might be a bit lower if you choose to hire an au pair or a live-in nanny.
Hiring a nanny may be your most expensive option for childcare, or you may end up finding out that it's more cost effective for you if you have more than one child. Whatever you decide to do, keep in mind that when you hire a nanny you become their employer, and the government expects that you will pay your nanny's Social Security taxes and fulfill other responsibilities.
Since a nanny is an employee, many parents pay for their nanny's health insurance. If you do this, the nanny usually picks their own health plan and provides you with the financial breakdown. You can then decide to pay for all or part of the premium, which might give you a tax credit. You may also want to offer other benefits, such as paid holidays, vacation, and sick days. (Hiring a nanny through a local agency is another option, and the agency usually helps with the contracts, taxes, and other logistics.)
Ways to help make daycare more affordable
Childcare is a huge expense, but often an essential one for families where both parents work or in single-parent households. If you're struggling with figuring out how you'll afford daycare, here are a few ideas and resources for potentially saving money.
Ask a relative to care for your child. Grandparents and other relatives nearby may be more than happy to help provide childcare, often for free or for way less than what daycare costs. That said, if you're fortunate enough to be in this situation, you might want to find some type of compensation other than money. Get your relative gift certificates for restaurants, movie theaters, or their favorite store; surprise them with a thank-you card and flowers every few weeks; or offer to pay a bill or help with household chores or yard work. You should also plan on giving your relative days off and vacation time.
Look for corporate discounts and company perks. Many daycare centers offer discounts for employees of larger corporations, so be sure to ask when you're researching options. And as more private companies provide generous paid family leave packages, they might also offer childcare benefits you don't know about, from babysitting stipends to backup childcare options. Ask your HR department about what benefits are available; or if you're looking for a new job, keep perks like these in mind.
Consider a nanny share. A nanny share is when a private nanny cares for the kids of two or more families at the same time, either at one family's house or back and forth between each. This allows parents to split the cost of a private nanny, making it a more affordable option.
Pay for childcare through a Flexible Spending Account (FSA). Some companies offer employees access to a Dependent Care Flexible Spending Account, which lets you use pre-tax dollars to pay for childcare. Ask your HR department if this is something that's available. It may not help you save money month-to-month on daycare expenses, but it can lower your tax liability at the end of the year.
Look for low-income support or assistance. Every state offers income-based assistance for those who apply and qualify that can help pay for or subsidize the cost of childcare. To find out what's available in your state, check the database on Child Care Aware for a list of state-by-state resources. Other help is available through the Child Care Development Fund and state-by-state Head Start programs.
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