Pop quiz! Which is the bigger budget-buster: A) rent or B) childcare?
Across most of America, the answer is a resounding B.
That’s the takeaway from a new Economic Policy Institute (EPI) report, which found that for a family with two kids, childcare tops rent in 500 out of 618 areas studied.
In some areas, childcare is nearly three timesas expensive as rent. As a result, folks in 33 states and Washington, D.C., pay even more for childcare than for the average in-state college tuition at a public, four-year institution.
In D.C., for instance, EPI found that two parents with a 4-year-old could easily be shelling out $1,472 a month—which comes out to nearly $18K a year.
So what’s driving these costs sky high?
Credit (or blame) goes to Millennials. As more become parents, researchers say the demand for daycare is outpacing the supply—pushing up prices faster than inflation.
According to the Bureau of Labor Statistics, childcare has gone up 168% since the end of 1990 (compared to a 76% increase in total consumer prices).
This kiddie cost crunch has some economists worried about declines in labor-force participation and consumer spending. In other words, some families may decide they can’t afford to support two careers, leading one parent to quit and stay home.
If you’re looking to stretch your family’s budget, take a cue from these parents who shared their best baby money decisions, including some creative childcare solutions.
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