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Budgeting for childcare can be stressful for working parents whose paychecks may already be stretched thin. The average cost of childcare in the U.S. ranges from $9,100 to $45,240 per year for a single child, according to Care.com’s 2026 Cost of Care Report.
The type of caregiving arrangement and how often it’s needed can impact what families pay. If you’re struggling with how to afford childcare or you’re thinking of starting a family, learn how to save money on childcare and ease financial stress.
Key Points
• The average yearly cost of childcare for one child ranges from $9,100 to $45,240 per year, depending on the type of caregiving arrangement.
• Childcare costs can vary widely from state to state due to differences in supply and demand, daycare regulations, government subsidies, and average wealth levels.
• Childcare costs typically don’t factor in hidden fees for items like supplies, meals, snacks, and gas for dropping off and picking up a child.
• Joining a co-op, sharing nanny services, and utilizing local community resources can make it easier to budget for childcare and reduce costs.
Understanding the True Cost of Childcare in 2026
How do people afford daycare? It’s a logical question to ask, given the amount the typical family spends on care each year in the U.S. and how it factors into the overall average cost of raising a child. On a weekly basis, households pay $175 on average at the lower end for babysitting services and $870 at the higher end for a private nanny, according to Care.com. That’s for one child; adding more children to the mix raises the cost.
At the state level, the cost of care is a mixed bag, with some states proving more affordable than others. Here’s more on how budgeting for childcare varies.
National Averages vs. State-Specific Trends
Your average cost of care may be above or below the average, depending on where you live. For perspective, here’s a breakdown of the average childcare costs nationwide, per Care.com.
| Care Arrangement | Average Weekly Cost |
|---|---|
| Babysitter | $175 |
| Family Care Center | $323 |
| Daycare | $332 |
| Nanny | $870 |
Again, if you assume a family needs care 52 weeks out of the year, the average cost of care ranges from $9,100 to $45,240. These numbers are averages only and don’t reflect pricing differences for infant vs. toddler care when paying for daycare.
There are significant state differences in the cost of childcare. Compare the five most expensive states for childcare to the five least expensive states in the charts below, based on data from the Economic Policy Institute (EPI).
Most Expensive States for Childcare
| State | Annual Cost of Care |
|---|---|
| Washington, D.C. | $28,356 |
| Massachusetts | $26,709 |
| Minnesota | $22,569 |
| California | $21,945 |
| Colorado | $21,840 |
Least Expensive States for Childcare
| State | Annual Cost of Care |
|---|---|
| Arkansas/Louisiana (tie) | $8,873 |
| Kentucky | $8,756 |
| South Dakota | $8,680 |
| Alabama | $7,871 |
| Mississippi | $6,861 |
Lower costs don’t necessarily translate to better affordability for childcare. The EPI notes that in Mississippi, where the average cost of childcare is lowest, it represents 10% of a family’s median household income. Childcare is deemed affordable if it accounts for no more than 7% of a family’s income. For comparison, childcare takes up 11.80% of a median family’s income in Washington, D.C., despite that income being $240,194 annually.
Factoring in Hidden Costs: Fees, Supplies, and Meals
The average cost of care published by the EPI is based on published market rate data for each state. Care.com uses a different methodology to estimate the average cost of care, but what these figures have in common is that they may only paint a partial picture of what families pay.
For example, you might pay a babysitter $175 per week or $17.50 per hour for 10 hours of after-school care. That figure represents their fee but it doesn’t include other costs, such as snacks or meals you may provide, or the cost of your gas if you’re expected to drive the babysitter home afterward.
Daycare facilities, meanwhile, charge fees for care, but parents must still provide any supplies their child will need. If you have an infant, for example, that means providing diapers, wipes, formula or stored breastmilk, bottles, and other supplies your baby will require while they’re at the daycare. All of those expenses can add up quickly and affect your childcare budget.
7 Innovative Ways to Save Money on Childcare
The secret to how to afford childcare is that there is no secret; instead, families employ a range of money-saving strategies to bring costs down, ranging from small steps to bigger ones. For example, you could establish a daycare savings account at your bank and set up direct deposit into that account savings each pay period to help fund your savings goals.
Another possible small step is to round up your debit card purchases and funnel the difference to a daycare savings account.
And then there are bigger strategies to explore. Below are some innovative ideas for how to save money on childcare. Keep in mind that some may be better suited to your situation than others and it may take some experimentation to find a system that works for your budget.
1. Joining or Starting a Babysitting Co-op
A babysitting co-op involves sharing childcare duties with other families. In a typical co-op arrangement, families provide care for one another without any exchange of money. Instead, the only thing you give up is your time.
This type of arrangement can save money since there’s no financial payment required, but it does require organization and oversight to ensure that every family is pulling their weight. You’ll also need to be comfortable with giving up some of your time on a regular basis to provide care.
2. Exploring Nanny Shares with Local Families
A nanny share is an arrangement in which multiple families use the services of a single nanny. The nanny cares for all the children in one family’s home, and the family’s split the cost of the nanny’s fee.
Nanny sharing could work for families that prefer a private care arrangement but can’t cover the full cost of a nanny themselves. This type of childcare may work best when all the families involved live close to one another, since families can rotate whose home hosts the care.
3. Leveraging High-Quality In-Home Daycare Options
High-quality in-home daycare programs operate from a care provider’s home and go beyond the level of care a child would typically receive at a public daycare. For example, in-home care providers may offer personalized care for children with special needs, incorporate early childhood education into the daily care routine, or provide whole foods-based meals prepared fresh onsite.
This type of childcare may be less expensive than traditional daycare if the provider works with a smaller number of children. In addition to comparing costs, it’s important to consider the caregiver’s credentials, qualifications, and background. Look for facilities that are fully licensed and regularly inspected by state regulators, and ask about the types of insurance they carry for their business. Also ask the care provider for references and check them carefully.
4. Utilizing Community and Nonprofit Resources (YMCA, Boys & Girls Clubs)
You can explore options locally if you need help budgeting for childcare. Local organizations like the YMCA or Boys & Girls Clubs may offer low-cost after-school care for older kids. Churches may offer care for younger children during the week, to both members and non-members.
Your local social services agency or nonprofit council can likely point you in the right direction for local nonprofits and community groups that offer help with childcare. Keep in mind that some of these programs may offer help only during the school year, while others have year-round care options, like summer camps or day camps.
5. Negotiating “Grandparent Daycare” or Family Assistance
Family assistance is another option for how to save money on childcare, as long as you have people who are willing to pitch in. For instance, you might ask your children’s grandparents, aunts, uncles, or cousins to lend a hand when you’re not available to manage their care.
If you plan to go the family route, establish the ground rules early on. For instance, how many days per week will they watch your child and for what length of time? Will you offer them payment for their time? Will you pay for any snacks or supplies your child will need while in their care? How will you handle transportation costs if they’re picking your child up or dropping them off? What will your back-up plan be if an emergency comes up that prevents them from caring for your child on a specific day?
You might want to consider drafting a written agreement outlining responsibilities on both sides. That can help you avoid misunderstandings that could hurt your relationship.
6. Asking for Sibling Discounts at Centers
It’s not unusual for childcare facilities to offer a discount for each additional child you enroll. If you have multiple children, it’s a good idea to ask about sibling discounts. Even 5% or 10% off the typical rate could save you a decent amount of money in the long run.
Just be sure to check for any hidden fees that could make a discount less valuable. For example, if a facility charges a fee for each minute you’re late picking up your child that could easily eat up your savings if you happen to run behind once or twice a month.
7. Researching Employer-Sponsored Childcare Benefits
More employers are prioritizing childcare benefits for workers, according to Care.com. If your employer is among them, you might have some options to save on daycare that include:
• On-site care
• Childcare subsidies or reimbursements
• Flexible/remote scheduling
• Dependent care flexible spending arrangements
• Tuition discounts for daycare/private care
• Paid family leave
Any of these benefits could help reduce some of the stress of paying for childcare. Talk to HR or your benefits coordinator to ask what type of childcare help may be available at your company, and how to qualify.
Maximizing Tax Breaks and Federal Assistance
Claiming tax credits and applying for federal assistance programs are other ways that may make budgeting for childcare easier. A tax credit reduces your tax bill on a dollar-for-dollar basis, while assistance programs provide vouchers or subsidies to help families afford care.
The Child and Dependent Care Credit allows you to claim up to $3,000 in childcare expenses for one child or $6,000 for multiple children, if you qualify. A qualifying child is someone who is a dependent child under the age of 13, or a dependent of any age who lives with you for more than half the year and is unable to care for themselves. The credit is good only for expenses you paid to be able to go to work, look for work, or attend school.
Federal and state assistance programs, like Head Start or daycare voucher programs, are typically designed for low-income families. You may need to be within certain income limits for your household size to qualify, or have limited resources to pay for care. Your local department of social services can help you identify programs you may qualify for, and help you apply for them.
How to Budget for Childcare Using the 50/30/20 Rule
The 50/30/20 budget rule divides your net income into three specific categories. Fifty percent of your take-home pay goes to necessities, 30% goes to wants, and 20% goes to debt repayment and savings. Childcare can go under the necessities category, which means you’ll need to consider how much of that category’s overall 50% should go to care.
You might run the numbers with a 50/30/20 budget calculator using different childcare arrangements. For example, you can compare the cost of hiring a babysitter to watch your children in your home after school against family care or a low-cost community program. If you’ve done all you can to reduce childcare costs but they’re still overwhelming your budget, you may need to review your other expenses and income to see where you can bridge the gap.
The 30% of your budget that goes to wants (like eating out, entertainment, and travel) is a good place to start. The more nonessential spending you can eliminate, the more money you can free up for childcare. If you’ve cut this part of your budget down to the bones already, you can review your needs next to see if there’s any room for trimming. If not, then you may need to consider how you could bring in additional income through a side hustle, a part-time job, or increasing your hours at work. This can be a catch-22, however, since more time spent at work may mean more hours of childcare you’ll need to pay for each week.
Using Technology to Find and Manage Childcare Expenses
A budgeting app can help you stay on top of childcare expenses, including those hidden costs you might be overlooking like food, supplies, and transportation. You can also use a money management app to find extra funds you can set aside for future daycare needs if you don’t have kids just yet.
Setting Up a Dedicated Daycare Savings Vault
Opening a daycare savings account can help you plan ahead for childcare and avoid having to scramble to cover costs. You can set up a dedicated high-yield savings account just for daycare and add to it each payday through automatic contributions.
No amount is too small to get started; what matters most is that you add to your daycare savings consistently so that it’s replenished as you draw it down. You can look for an account with no bank fees to worry about as you fund your savings goals.
With SoFi savings vaults, you can bucket your savings for specific goals, including childcare. It’s a simple way to keep your savings organized.
Tracking Recurring Childcare Costs
Tracking expenses can help you make sense of where your money goes, which could make it easier to budget for childcare. Whether you budget as a couple or as a single parent, understanding your spending can help you be more intentional with your money.
A budgeting app can make it easier to stay on top of recurring childcare costs, since you can add specific categories for expenses like daycare fees, babysitting fees, food, supplies, and transportation. You can sync the app to your bank account so that the balances update automatically, allowing you to see your biggest childcare expenses at a glance.
The Takeaway
Making room in your budget for childcare can be challenging if you live in a state with a higher cost of care or have a limited income. Some money-saving strategies that might help include looking into quality in-home care, taking advantage of employer-sponsored benefits, and maximizing tax breaks you may qualify for.
Techniques like these might enable you to keep more of your hard-earned dollars in the bank so you save up for other financial goals for your family.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
How do most middle-class families afford childcare?
Middle-class families afford childcare in a variety of ways, which include budgeting and tracking expenses, asking friends and family for help, taking advantage of local community resources, splitting babysitting duties with other families, and sharing nanny services. Some families may qualify for government assistance programs, or enjoy employer-provided childcare benefits to help with costs.
What is the most affordable type of childcare?
The most affordable type of childcare is different for every family, but generally, it’s the method that puts the least amount of strain on your budget. That often means relying on grandparents and other relatives to help with childcare, which they may be willing to do without expecting payment. Babysitting co-ops can also be an affordable option for families who can spare extra time to handle childcare duties.
Can I use my HSA or FSA for daycare expenses?
You can’t use a traditional health savings account (HSA) or flexible spending arrangement (FSA) to pay for childcare expenses. You can, however, use a Dependent Care FSA to cover daycare costs. A dependent care FSA can be used to pay for eligible childcare expenses for children 13 and younger that are incurred so you can work, look for work, or attend school.
How much of my income should go toward childcare?
A commonly-used rule states that families should spend no more than 7% of their income on childcare, per federal subsidy standards set by the Department of Health and Human Services. However, that isn’t always realistic as some families may spend much more than that, based on the cost of care in their state or their income level. The amount you should spend on childcare should reflect what you can comfortably pay while still covering all other necessary expenses for your household.
Are there new childcare tax credits for the 2026 tax year?
The One Big Beautiful Bill (OBBB) did not introduce new childcare tax credits for the 2026 tax year, but it did alter some existing ones. For example, the bill raised the qualified expense threshold for claiming the Child and Dependent Care Credit from 35% to 50%, with phase-down limits based on adjusted gross income (AGI). You may want to consult a tax professional for information about your specific situation.
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