America’s families have been struggling with rising costs. But even as consumer price inflation has begun to level off this summer, childcare costs are still surging.
As pandemic-era federal aid programs come to an end, childcare providers continue to raise tuition costs. Some families are now paying more for childcare than their mortgages.
Childcare Costs On the Rise
In July, the average cost of daycare and preschool services rose at nearly double the pace of the overall inflation basket: 6% versus 3.2%.
Three main factors are driving this cost increase:
1. Escalating costs for providers, including food, utilities, instructional materials, and more
2. Increasing demand for childcare, as parents continue to return to the workplace
3. Increasing costs for workers, driven by labor shortages
On top of that, more than 220,000 care providers, serving nearly 10 million children, will lose out on federal financial aid next month. The $24 billion in childcare grants authorized by the American Rescue Plan Act of 2021 will only remain available through September.
More Planning for Parents
Childcare prices vary widely depending on where you live, your child’s age, availability, and the provider you end up choosing. But here are a few tips for finding care that can help parents get started:
• Start your search early. Getting a headstart before you require care will give you time to compare providers and prices.
• Share child care. Parents can partner up to curb costs and share a nanny for children of similar ages.
• Take advantage of flexible work. As hybrid schedules become a new norm, strategic scheduling may help parents reducei childcare costs.
That said, the cost of childcare is likely going to continue to climb, as economic factors driving the price hikes don’t abate. Smart budgeting, drawing on family help and shared resources remains top of mind as parents are planning for childproof finances.
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