Where Child Care Takes Biggest Chunk of Income | LendingTree (2024)

Debt Consolidation

Tiny tots come with big bills.

According to the latest LendingTree study, families who pay for child care spend a significant average of 18.6% of their income on it. In addition to exploring our findings, stick around for expert tips on keeping up with child care costs without going into debt.

• American families who pay for child care spend an average of 18.6% — or nearly a fifth — of their income on it. Families with children younger than 18 earn $1,751 weekly, while those who pay for child care spend $325 a week on it. This percentage is up from 17.8% when we last published this study in January 2023.
• Nevada families spend the most on child care relative to income. Nevada families who pay for child care put an average of 32.3% of their income toward it — $493 a week while earning $1,529. That’s nearly 10 percentage points higher than the next state, Montana, at 22.6%. Louisiana (21.9%) rounds out the top three.
• Iowa families put the lowest percentage of their income toward child care. Families here spend an average of $182 a week on child care while earning $1,812 weekly — meaning it costs 10.1% of their income. Utah (13.5%) and North Dakota (13.7%) have the next lowest child care costs relative to income.
• 52.9% of U.S. families who use child care report paying for it. Families in the District of Columbia are the most likely to rely on paid child care, with nearly 4 in 5 (78.1%) families using child care in the U.S. capital paying for it. Notably, families here spend just 14.3% of their income on child care — tied for the seventh-lowest by state. New Jersey (69.8%) and South Dakota (69.5%) are the next most likely states to rely on paid child care.
• West Virginia residents are the least likely to pay for child care. Here, just 27.9% of families who use child care pay for it. That’s followed by Ohio (35.2%) and Arkansas (35.3%).

Those who pay for child care spend nearly a fifth of their income on it

Families with children younger than 18 earn an average of $1,751 weekly, while those who pay for child care spend $325 a week on it. (Note: Our study assumes families who pay for child care earn the average income among those with children younger than 18.) That means they spend 18.6% of their income on child care — or nearly a fifth. When we last conducted this study, that figure was 17.8%.

According to LendingTree chief credit analyst Matt Schulz, rising child care costs reflect a larger trend.

“The cost of everything is rising,” he says. “There’s so much that goes into child care, including rent, payroll, insurance and much more. When all those costs shoot up, the overall cost of child care does, too.”

Those costs may continue to rise. The 2021 American Rescue Plan Act (ARPA) allocated nearly $40 billion to child care facilities, but that funding expired on Sept. 30, 2023, putting child care centers even further behind financially. Many centers may be forced to pass on additional costs to consumers.

By state, Nevada families put the highest portion of their salaries toward child care. Families who pay for child care earn $1,529 a week while spending $493 for child care — an average of 32.3% of their income. That’s nearly 10 percentage points higher than the next state.

Why Nevada? According to a February 2023 Childcare Policy Report by the Nevada Governor’s Workforce Development Board Childcare Working Group, every Nevada county is considered a child care desert (meaning there are either no child care providers or so few options that there are more than three times as many children as licensed child care slots), and nearly three-quarters (74%) of children 5 or younger don’t have access to licensed child care.

Child care is particularly challenging in Nevada, where the hospitality and mining industries are prevalent — meaning there’s high demand for child care at all hours of the day.

3 states where families spend the most of their income on child care

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey and American Community Survey data.

Montana follows, with families here putting 22.6% of their income toward child care. Similar to Nevada, the majority of Montana counties (59%) are considered child care deserts, according to a January 2024 report from the Montana Department of Labor and Industry. Louisiana (21.9%) rounds out the top three.

According to Schulz, a lack of access to child care can greatly affect these states’ economies. “If child care isn’t available or costs too much, it keeps people out of the workforce,” he says. “That profoundly impacts individual households’ financial stability and the economy as a whole. It’s unfair that high child care costs force people to give up their career goals, but that’s what’s happening in many cases around the country.”

Conversely, those in Iowa spend the least of their income on child care. Here, families earn $1,812 weekly and spend an average of $182 a week on child care. That’s 10.1% of their income. It’s followed by Utah (13.5%) and North Dakota (13.7%).

Full rankings

States where families spend the most/least of their income on child care

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey and American Community Survey data.

Over half of families pay for their child care — here’s where that’s most (and least) common

Child care is crucial, and over half (52.9%) of U.S. families who use it report paying for it. According to Schulz, that makes the average cost of child care even more impactful.

“The high cost of child care keeps people from putting money toward other financial goals such as emergency funds, mortgage down payments, retirement savings and even starting a small business,” he says. “This stuff matters. Financial stability and wealth begin with being able to live beneath your means. For millions of Americans, child care costs mean that isn’t possible.”

By age, those 25 to 39 who use child care are most likely to pay for it (62.0%), while those 18 to 24 (15.6%) are least likely. Meanwhile, Asian Americans are the most likely race to report paying for child care, at 60.5%. That’s followed by:

• Black Americans (56.5%)
• Americans identifying as two or more races (55.1%)
• White Americans (53.9%)
• Hispanic or Latino Americans (45.4%)

Also of note, those earning $200,000 or more (77.7%), those serving on active military duty (73.9%) and those whose highest education is a bachelor’s degree or higher (68.9%) are among the most likely demographics to pay for child care.

By state, families in the District of Columbia are the most likely to rely on paid child care. Here, 78.1% of families who use child care pay for it.

Still, families in the District of Columbia spend just 14.3% of their income on child care — tied for the seventh-lowest by state. Of course, high incomes help here. The average weekly family income in the District of Columbia is $3,002 — the highest by state.

3 states where families are most likely to pay for child care

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.

Following D.C., New Jersey and South Dakota are the next most likely to rely on paid child care, at 69.8% and 69.5%, respectively. Notably, both states have a high share of children younger than 6 with both parents in the workforce, at 70.0% and 76.3%, respectively. Across the U.S., that figure is 67.8%.

Conversely, West Virginia residents are the least likely to pay for child care, with just 27.9% of families who use child care paying for it. Ohio (35.2%) and Arkansas (35.3%) round out the bottom three.

Full rankings

States where families are most/least likely to pay for child care

Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.

Dough for day care: Navigating child care costs

Raising children is undeniably expensive, and child care takes up a hefty chunk of those costs. For those looking to offset child care costs, Schulz recommends the following:

• Consider reaching out to trusted friends, relatives and even co-workers about sharing costs. “In an ideal world, Grandma and Grandpa or some other trustworthy relative would be willing to step up,” he says. “In the absence of that, consider working with friends and colleagues to share a nanny or some other type of child care.”
• Look into government programs. “So many people feel helpless and powerless when it comes to the cost of child care, but there’s help,” Schulz says. “Consider taking advantage of government assistance programs. You could also lean on local nonprofits, such as the YMCA or churches and other religious groups.”
• Advocate for more. “There’s always more that governments can do to help parents struggling with child care costs,” he says. “For example, providing more protections for workers needing to take time off to care for sick children would be huge. Any parent knows young kids get sick a lot, especially those in child care. The problem for many parents is that when their kid gets sick, they can’t work, and they don’t get paid when they don’t work. That makes a bad situation even worse.”

LendingTree researchers analyzed U.S. Census Bureau Household Pulse Survey and American Community Survey data to estimate how much income families who pay for child care spend, on average, on it across the U.S. and in each state.

The Household Pulse Survey spending data is based on families, while the American Community Survey income data is based on families with children younger than 18. Our analysis assumes families who pay for child care earn the average income among those with children younger than 18.

Additionally, we estimated the percentage of families who use child care and pay for it.

The Household Pulse Survey data covers April 26 to May 8, 2023 — the latest available on the topic. The American Community Survey income data is from 2022 (one-year estimates).

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