Excerpts
Child care has long been one of the most significant expenses for families — and LendingTree research shows just how out of reach it has become.
Under federal guidelines, child care is considered affordable when it accounts for no more than 7% of household income. With average annual costs for care of an infant and a 4-year-old reaching $28,190, a family would need to earn $402,708 a year to stay within that benchmark. However, typical two-child households earn just $145,656, falling far short of what affordability standards suggest.
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Households with 2 kids need to earn average of $402,708 to afford child care
Child care is a major financial pressure for today’s families — and for most households with young children, it’s nowhere near affordable by federal standards. Across the U.S., the average annual cost of care for an infant and a 4-year-old is $28,190, according to Child Care Aware of America.
The U.S. Department of Health and Human Services (HHS) considers child care affordable when it accounts for no more than 7% of a household’s income. But to keep costs at that level, a family with two kids would need to earn a staggering $402,708 a year.
That income target is far beyond the earnings of a typical household. Families with two children earn an average of $145,656, meaning they fall short of what’s needed to meet the affordability benchmark, which is 176.5% higher. Even many middle- and upper-middle-income households end up spending far more than the recommended share of their income on child care.
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American Indian, Black families earn least for affordable child care
The financial strain of child care isn’t felt equally. By race, American Indian and Black households face the largest gaps between what they earn and what’s required to meet federal affordability guidelines.
American Indian households with two children earn an average of $94,094 per year, while Black families earn about $98,019. To comfortably afford care for an infant and a 4-year-old at the 7% threshold, these families would need to earn 328.0% and 310.8% more, respectively.
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