The Cost of Childcare in Every State
Kids can be expensive — really expensive. Recent estimates have the total cost of raising a child from birth to legal adulthood coming in at nearly a quarter million dollars. Some of those costs — like feeding and clothing a child — are constants, while other costs are tied to certain stages of a child’s life. Of the latter expenses, childcare is one that looms large for parents all across the country.
Many people do not have the resources necessary to stay home with a young child all day, every day, necessitating that they return to work before their child reaches school age. They can’t leave someone so young home alone, however, as they would be incapable of keeping themselves safe and fed, not to mention being all too capable of causing general mayhem around the house. As a result, many people turn to childcare services, entrusting their kids to others and paying to do so.
While this system is a constant throughout the United States, the costs are anything but. We at Business Broker Network wanted to find out just how much childcare costs vary from state to state, as well as figure out how those costs stack up compared to average earnings and rent in each state. These findings can serve as a resource for parents researching childcare options for themselves, as well as illustrating the demand for franchises specializing in child-related services.
Using data collected from annual reports on childcare costs, we were able to find out the overall average monthly cost of childcare for a family with an infant and a toddler. This approach was chosen to give a more rounded approach to the research and include data pertaining to children of various ages that might require childcare services. On the whole, the east coast proved the most expensive for these services, with Washington, D.C. coming in first at nearly $3,000 each month, followed by Massachusetts and New York — the only other states with costs over $2,000 each month. On the opposite end of the spectrum, the six states with the least expensive cost of childcare are all in the south. These include Kentucky, South Carolina, Arkansas, Alabama, Louisiana, and Mississippi.
We also found the average costs for a year’s worth of childcare in every state. Washington, D.C. again leads the way at over $35,000 each year. This is over four times more expensive than Mississippi, and is greater than the tuition of many universities.
Of course, those monthly costs don’t tell the whole story. In order to get a better grasp on the relative costs of childcare, we took annual childcare costs for an infant and a toddler and compared them to U.S. Census data on the average family income. We illustrated the comparison by showing each state’s annual childcare cost as a percentage of each one’s median family income. Once again D.C. and Massachusetts led the way, with over a quarter of a family’s income needed to cover childcare costs, with four states tied for third highest at 23%.
We also found the average rent price for a 2 bedroom apartment in every state to see how it compares to childcare costs. All told, there are only five states — Hawaii, Mississippi, California, Louisiana, and South Carolina — where childcare for an infant and a toddler costs are less expensive than the cost of rent. In Wisconsin, childcare costs are almost twice as much as rent.
One question that parents grapple with is the form their child’s care will take. Do they drop them them off at a childcare center on the way to work, take a more local approach and send them to a trusted neighbor that runs a childcare business out of their home, or hire a nanny? For the more money-conscious parents out there, they may want to look around for the best home-based care they can because center-based care is more expensive in nearly every state, and significantly so in some places. In Minnesota, for example, it is 71% more expensive to send children to a formal childcare center than to find a home-based alternative, and four more states join them with costs at least 50% higher for center-based care. On the flip side, only one state in the whole country, Kentucky, features center-based care that is cheaper on average than home-based care.
Kids are expensive, and years of childcare play a big part when it comes to calculating that bill. Even with that in mind, however, parents all around the country will tell you that the joy and love they get from their children is more than worth it, no matter the cost.