Daycare costs can vary from region to region and are dependent on the age of your child and other daycare competition in the area. According to the US Census Bureau, the weekly average child care payment for families with "employed mothers" was $143 in 2011. However, the cost rose to $179 for preschoolers and dropped to $93 for children in grade school.
Information on the Average Cost of Daycare
Using the average cost of $143, you can expect to pay about $572 per month for one child. Some daycare centers offer a discount for children after the first child but this varies widely from place to place. That's an annual cost of $7436 per year per child. Even if you take a few weeks of vacation, many daycares require you to pay to hold your child's spot.
In a 2013 report, Child Care Aware of America (CCAA) found that child care ranks as the highest budget item for most families. In many states, the tuition at a four-year public college was comparable to the average price of daycare. Since the cost can vary so much from one area to another, it is helpful to know what people in different areas of the country are paying on average.
In the report mentioned above, CCAA estimated that Oregon is the worst state for childcare costs percentage wise. In 2012, the cost of infant care in a daycare center was more than 18 percent of the average income for a married couple with children. The cost was around $13,450 per year ($258 per week or $1034 per month.)
While Oregon was the least affordable, it was actually Massachusetts that had the highest overall cost. The state averaged a heavy hitting $16,500 per year ($317 per week or $1269 per month). However, Massachusetts' average income was higher than Oregon's, keeping Oregon as the least affordable.
Other High-Cost States
Based on the percentage of median income for a married family with children, the other states that ranked poorly for child care costs included:
- New York at $14,939 per year (16.5 percent of median income). That equals $1,244 per month or $311 per week.
- Minnesota at $13,876 per year (15.5 percent of median income). That equals $1,156 per month or $289 per week.
- Colorado at $12,736 per year (15 percent of median income). That equals $1,061 per month or $265 per week.
- California at $12,068 per year (14.8 percent of median income). That equals $1,006 per month or $251 per week.
- Illinois at $12,697 per year (14.8 percent of median income). That equals $1,058 per month or $264 per week.
- Hawaii at $12,473 per year (14.4 percent of median income). That equals $1,039 per month or $259 per week.
Most Affordable States
On the other hand, the report maps out states where the cost of childcare is lower based on the average cost and the median income for a married couple in that state. The following states rank under 10 percent of the average income for a married couple in that state.
- Wisconsin at $7,893 per year (9.7 percent of median income). That equals only $657 per month or about $164 per week.
- Arkansas at $5,909 per year (9.3 percent of median income). That equals only $492 per month or $123 per week.
- Kansas at $6,741 per year (8.8 percent of median income). That equals only $561 per month or $140 per week.
- Indiana at $5759 per year (7.8 percent of median income). That equals only $479 per month or about $120 per week.
- Georgia at $5742 per year (7.6 percent of median income). That equals only $478 per month or $119 per week.
- Kentucky at $5389 per year (7.6 percent of median income). That equals only $449 per month or $112 per week.
- Montana at $5301 per year (7.6 percent of median income). That equals only $441 per month or $110 per week.
Daycare for Your Child
Your actual costs for daycare will vary, depending on the type of daycare you need, the age of your child and if you need early drop-off and late pick-up. In addition, you'll likely pay more if your child eats one or more meals at the daycare center.
The average costs of caring for an infant, that requires almost constant care, will run quite a bit more than the cost of care for an older child that is more independent. For example, the Boston Globe estimated in a July 2014 article that the cost for infant care in the state of Connecticut was $12,973 per year, while only $10,692 for a four year old and $5,421 for a school-aged child. In the District of Columbia, expect to pay upwards of $21,948 per year for an infant, $16,908 for a four year old and $13,211 for a school-aged child.
When it comes to daycare, the choices vary between a center, home daycare or care in your home by a nanny. By far, hiring a nanny to take care of your child in your own home is likely the most expensive option. While the pay rate for nannies can vary, Kiplinger cautions that if you pay an in-home employee more then $1,800 per year, you must withhold and pay Social Security and Medicare taxes. You also have to pay into federal unemployment tax and may need to provide health care options. These extra costs can add up quickly.
Urban Versus Rural
The cost of daycare can also vary by whether you live in a metropolitan area or in a more rural location. According to the CCAA report (mentioned above), it is estimated that urban families with four year olds placed in a daycare center paid about 30 percent more each year than families living more rurally in that state. Hawaii had the biggest difference between urban and rural costs with families pay as much as 150 percent more for urban daycare.
Budgeting for Child Care
Once you know the average cost of child care in your area, you'll want to sit down and figure out which options works best for your family and your budget. Although the average annual cost of child care can quickly add up to what you'd pay for a year at a state public college, tax credits and planning can help defray those costs.