For families with young children, childcare is no longer a secondary household expense. In many cases, it competes directly with housing, debt payments, savings and even the income a parent earns by returning to work.

The latest data from Child Care Aware of America puts the national average annual price of childcare at $13,184 in 2025, up from $13,128 in 2024. Childcare prices have risen approximately 23% since 2021.

For a household with more than one young child, the expense can become substantially larger. Child Care Aware reports that center-based care for two children costs more than median rent in every state for which it had 2025 price data.

An August analysis from Financial Samurai goes further, estimating that childcare for two children costs more than median rent in 85 of the 100 largest U.S. metropolitan areas. In San Francisco, the site estimates average childcare at roughly $36,000 per child per year.

Those numbers help explain why childcare has become much more than a parenting expense. It can influence whether someone works, how many hours they work, where a family lives and how much money remains for every other financial goal.

Childcare Now Competes With Housing

Housing is usually the largest expense in a household budget.

For many families with young children, childcare can rival—or exceed—it.

Child Care Aware found that the 2025 national average annual price of care was $13,184. For married couples with children, that represented about 10% of median household income. For single-parent households, it represented roughly 33%.

And those figures represent one average childcare expense, not necessarily what a household with multiple children or infants will pay.

Care for infants is often more expensive because younger children require lower child-to-caregiver ratios and more intensive supervision.

That creates a financial period in which some parents are simultaneously managing:

• Rent or mortgage payments

• Childcare

• Groceries

• Transportation

• Health insurance

• Student loans

• Credit card debt

• Retirement contributions

• Emergency savings

A household can appear to earn a strong income on paper while having relatively little flexibility once these fixed costs are paid.

Two Children Can Completely Change the Equation

The financial challenge becomes even more pronounced when two children need paid care at the same time.

Child Care Aware reports that, in all 47 states where it had sufficient 2025 price data, center-based childcare for an infant and a 4-year-old cost more than median rent. In 39 of those states, it also exceeded median mortgage payments.

That comparison is useful because it illustrates the scale of the expense.

Families are not simply deciding whether they can absorb another subscription or discretionary purchase.

They may be taking on what effectively amounts to a second housing payment for several years.

That can change the entire household financial plan.

San Francisco Shows the Extreme End of the Problem

The pressure is especially severe in high-cost metropolitan areas.

Financial Samurai estimates average childcare in San Francisco at approximately $36,000 per child annually, with costs varying significantly depending on the child’s age and type of care.

At that level, two children in paid care could create a gross annual expense approaching $72,000 before considering housing, food, taxes, transportation or healthcare.

San Francisco is an extreme example rather than a national benchmark, but it illustrates why high-income households can still feel financially constrained in expensive cities.

A salary that looks substantial nationally may support a very different lifestyle after local housing and childcare costs are included.

Childcare Costs Can Determine Whether Working Makes Financial Sense

The cost of childcare also affects employment decisions.

A 2025 Census Bureau working paper examining childcare costs and maternal labor-force participation found that higher childcare costs reduce employment among mothers with children under age five, with lower-income mothers showing greater sensitivity to price changes.

The financial decision can become surprisingly direct.

If returning to work requires a household to pay for childcare, transportation, work clothing, meals and other job-related costs, parents may compare those expenses with the additional take-home pay generated by working.

For some families, the numbers clearly support returning to work.

For others, especially households with two or more young children, childcare can absorb such a large portion of one parent’s income that reducing hours or temporarily leaving the workforce becomes financially rational.

The U.S. Census Bureau has also noted that parents of young children must weigh the cost and availability of care when deciding whether to work outside the home.

Leaving the Workforce Has Costs Too

Choosing to leave work because childcare is too expensive does not necessarily eliminate the financial burden.

It changes it.

A parent who temporarily stops working may avoid childcare expenses but also gives up:

• Current wages

• Employer retirement contributions

• Social Security earnings history

• Career advancement

• Employer health benefits in some cases

• Future raises

• Professional experience

That means the true cost of childcare is not always captured by the tuition bill alone.

Families may be choosing between paying a very large expense today and sacrificing some amount of future earnings and retirement growth.

Neither option is financially simple.

Reduced Hours Can Have Long-Term Effects

Some parents respond by staying employed but reducing their schedules.

That may preserve a connection to the workforce while lowering childcare needs.

But fewer hours can also mean:

• Lower income

• Smaller retirement contributions

• Reduced employer matching

• Slower debt repayment

• Less emergency saving

• Delayed homeownership

• Less money available for college savings

These effects can continue long after children enter school.

A temporary reduction in household income during early childhood can alter savings and investment trajectories for years.

Childcare Is Also a Workforce Issue

The economic effects extend beyond individual families.

Childcare workers themselves are generally paid relatively low wages compared with workers across the broader economy. Bureau of Labor Statistics research has described childcare workers as essential to parents’ labor-force participation while also documenting persistently low compensation in the industry.

That creates a difficult economic structure.

Parents say childcare is too expensive.

Providers often operate on thin margins.

Workers may still earn relatively low wages.

Reducing prices without addressing provider economics can therefore create shortages rather than simply cheaper care.

This is one reason childcare affordability has remained difficult to solve even as demand remains high.

The Cost Hits Single Parents Hardest

The financial pressure is particularly intense for single-parent households.

Child Care Aware reports that the national average childcare price consumes approximately 33% of median income for a single-parent household with children, compared with about 10% for married couples with children.

A single parent also lacks the option of shifting childcare responsibilities to another parent in the household while maintaining two incomes.

That can make:

• Job flexibility

• School schedules

• Care availability

• Commute times

• Sick-child coverage

as important as the stated childcare price itself.

Affordability is therefore partly about dollars and partly about whether care is available when parents actually need it.

Childcare Costs Can Delay Other Financial Goals

Money spent on childcare cannot simultaneously be used elsewhere.

For families paying $15,000, $25,000 or considerably more each year for care, other financial priorities may temporarily move down the list.

That can include:

Emergency Savings

Families may have less cash available to build or replenish emergency funds.

Debt Repayment

High-interest credit cards or student loans may take longer to eliminate.

Homeownership

Saving for a down payment becomes harder when childcare absorbs thousands of dollars each month.

Retirement

Parents may reduce retirement contributions to create more monthly cash flow.

College Savings

Families may postpone saving for future education while paying for current childcare.

None of these choices necessarily indicates poor financial management.

They reflect a household allocating limited resources among several legitimate needs.

High Childcare Costs Can Influence Where Families Live

Housing and childcare costs also interact geographically.

A family may find lower-cost housing farther from an employment center but then face:

• Longer commutes

• Higher transportation costs

• Less convenient childcare

• More difficult pickup schedules

• Reduced access to family support

Alternatively, a family may remain in a higher-cost community because nearby relatives provide unpaid or reduced-cost childcare.

This can make family support networks financially valuable even when they never appear on a household balance sheet.

The lowest-rent neighborhood is not necessarily the least expensive option once commuting and childcare logistics are included.

Family Planning Can Become a Financial Decision

High childcare costs can also influence decisions about whether and when to have children.

Financial Samurai’s analysis argues that extreme childcare costs in large metropolitan areas are becoming one factor affecting family formation, particularly when households are already confronting high housing costs.

It would be too simplistic to attribute decisions about having children to childcare costs alone.

Family formation is influenced by personal preferences, relationships, housing, career goals, healthcare and many other factors.

But when care for two children can exceed rent, childcare inevitably becomes part of the financial conversation.

Families Should Budget for the Full Childcare Period

Parents preparing for childcare should avoid thinking about it as a single monthly payment.

A better approach is to estimate the entire childcare phase.

Questions worth considering include:

• How many years will paid care be necessary?

• Will multiple children need care at the same time?

• How much does infant care cost compared with preschool?

• Are registration, supply or activity fees additional?

• Does the provider charge when a child is absent?

• What happens during school holidays?

• Will summer care be needed later?

• Are employer childcare benefits available?

• Does either parent have access to a dependent-care FSA?

• Is family help reliable enough to include in the plan?

A $1,500 monthly expense lasting several years can influence far more than this month's budget.

It should be treated as part of the household’s medium-term financial plan.

The Financial Goal May Be Flexibility, Not Perfection

Parents navigating childcare costs may not be able to maximize every financial goal simultaneously.

There may be periods when childcare takes priority over additional investing, accelerated debt repayment or other goals.

That does not necessarily mean the financial plan has failed.

It may mean the plan needs to recognize that some expenses are temporary.

Childcare costs can decline substantially once children enter public school, potentially freeing thousands of dollars each year.

Families can prepare in advance for that transition by deciding where some of the future savings will go.

For example:

Childcare ends → monthly cash flow increases → redirect money toward retirement, debt, emergency savings or another long-term goal.

Planning for the expense before it arrives—and planning for the money after it ends—can help families maintain long-term progress.

Childcare Has Become a Financial Wellness Issue

The scale of childcare costs makes it difficult to treat them as a separate parenting issue.

They affect employment.

They affect housing decisions.

They affect credit and debt.

They affect retirement savings.

They affect whether families can build emergency reserves or pursue homeownership.

And for some parents, they determine whether returning to work generates enough financial benefit to justify the cost.

The latest national data shows the average annual price of childcare continuing to rise, reaching $13,184 in 2025.

For families trying to balance young children, careers and long-term financial goals, the more important question may not be simply:

“Can we afford childcare?”

It may be:

“How do we build the rest of our financial plan around it?”

Make Room for the Expenses That Matter Most

Some financial seasons require different priorities.

When childcare takes a large share of household income, understanding exactly where your money is going can make it easier to balance today's expenses with tomorrow's goals.

Copiafy brings budgeting, bills, credit, financial goals and important documents into one organized workspace so you can see how major expenses fit into your complete financial picture.

Whether you're planning for childcare, paying down debt, preparing for homeownership or protecting your savings, a clearer financial picture can help you decide what comes next.

Create your free Copiafy account and start organizing your financial priorities in one place.