How high childcare costs put women at a financial disadvantage

By Rebecca Lake

Reviewed by Kimberly Rotter

Mar 22, 2024

Read time: 3 min


Being a parent? It's not easy. And it's not cheap either, especially when you're footing the bill for childcare. 

The average parent pays anywhere from $5,357 to $17,721 for care per year, and that's for just one child. Considering that the typical family says three is the ideal number of kids to have, according to a 2023 Gallup poll, parents could easily find themselves shelling out close to $60,000 a year for childcare.

In that case, what do you do? According to some financial gurus, all you have to do is look for cheaper options. Like say, downgrading your daycare facility or heck, quitting your job to stay home. 

Except those aren’t realistic strategies for a lot of parents. Especially women.

When childcare eats up a lot of your budget, it's often harder to work toward other goals. And that can burden women financially in different ways. 

For some women, it means forgoing a career to stay home while their spouse or partner works. It's an effective way to save on childcare, but there's one big drawback—unpaid caregiving shrinks a woman's lifetime earnings by 15%. 

That can be a huge roadblock to building long-term wealth. Women who opt out of work may hope to play catch-up after the kids are older, but trying to land a job can be challenging. And they can end up even worse off financially if they end up divorced down the line. 

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Single mothers face additional difficulties

The United States has the highest rate of children living in single-parent households in the world. Families headed by single mothers have a median income that's about half of what married couples bring in. 

How can these women afford childcare? 

Some may receive child support or alimony that helps with childcare costs. Others may receive subsidies through government programs, though funding may be modest and is never guaranteed. 

And those options might not be available to everyone. Which means some single moms may be working multiple jobs to pay for daycare and other living expenses. 

That's not ideal, especially since the gender pay gap has working women earning 82 cents for every $1 a man earns. It's easy to get caught in a cycle of overwork or fall into a debt trap to cover the bills, but there may be nothing left to put away for a rainy day or pay down debt

And it doesn't help that inflation has outpaced women's wage growth over the last decade. So women are paying more for childcare, but they're earning less at the same time. 

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What's the solution for women who need help? 

Obviously, it would be great if childcare were free (or at the very least, affordable) for anyone who needs it. That would immediately open up more opportunities for women who want to work (or need to), instead of closing doors. 

However, unless the government steps in to offer such a solution or pricing in the childcare industry undergoes a massive change, women will continue to face difficult choices. And it's important to remember that this isn't just an American problem—women face similar financial challenges in other countries. 

Is it hopeless? Not necessarily. 

If you're reading this because you're overwhelmed by childcare costs and trying to figure out what to do about it, know that you're not alone. 

Talking to a credit counselor could help. They can go through your budget with you and look at your situation to offer some possible solutions. If you’re struggling to keep up with your bills, you could talk to a debt expert who might have ideas to get rid of debt and relieve  the pressure on your budget.

You could also look into subsidy programs to see if you qualify. The federal government has a website that could point you to childcare resources in your area. 

At the end of the day, you might not be able to do anything about the cost of childcare. But every small step forward you can take to get ahead financially counts.

Rebecca Lake - Author

Rebecca is a senior contributing writer and debt expert. She's a Certified Educator in Personal Finance and a banking expert for Forbes Advisor. In addition to writing for online publications, Rebecca owns a personal finance website dedicated to teaching women how to take control of their money.

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Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

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