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U.S. parents, already struggling with rising inflation, are facing another rising cost: childcare.
About 63% of parents report that child care has become more expensive in the past year, according to a survey by Care.com. That high number was very worried about whether they could afford care and what changes they might have to make to accommodate the rising costs.
“When you think of, as a nation, how much we spend on childcare, and you think of rising costs of goods due to inflation … it’s more than a double whammy,” said Natalie Mayslich, consumer president for care, said. com.
“People are being hit in all sectors and it’s happening at the same time.”
The cost of babysitting increased by about 20% during the course of the pandemic, while the cost of babysitting and day care increased by 5% to 15%, according to Care.com.
About half, 51%, of parents said they spend more than 20% of their household income on childcare and 72% reported spending 10% or more. Care.com surveyed 3,003 U.S. adult parents who pay for professional child care. The poll took place from March 24 to 30.
Child care is considered affordable when families do not spend more than 7% of their household income, according to the U.S. Department of Health and Human Services.
“We’re so burned out”
For single Tori Snyder, figuring out childcare while running a small business was a challenge. During a testimony before the House Ways and Means Committee last week, she called on the government to intervene and help with affordability and infrastructure.
“We are so burnt out, exhausted, overworked and overworked,” says Snyder, who lives in Pittsburgh, Pennsylvania and is a member of the advocacy group MomsRising.
“We are struggling even more now because it is so expensive to feed our children.”
While inflation plays a role in higher costs, the bigger issue is the consequences of the Covid-19 pandemic, Mayslich said.
Nearly 9,000 child care centers closed between December 2019 and March 2021, according to ChildCare Aware. Now many parents face waiting lists that are at least two years long, Mayslich noted.
There was also a greater demand for babysitters and babysitters, as parents in hybrid roles seek help to cover non-traditional working hours.
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Parents are making changes to accommodate the rising cost, with 31% of those surveyed by Care.com saying they are considering taking a second job. About 26% reduced working hours, 25% changed jobs and 21% said they were leaving the workforce altogether.
“The rising cost of childcare is causing families to work less, and as a result save less and spend less, so it has a massive impact on the economy in general,” Mayslich said.
Some are also reconsidering having another child: 35% said they are less likely to have more children, with 43% reporting the rising cost of care as a major reason.
While advocates want the government to help with affordability, infrastructure and access, employers can also play a role, Mayslich said.
The rising cost of childcare is causing families to work less, and as a result save less and spend less.
General Manager at Care.com
A full 56% of employers offer childcare benefits, according to Care.com’s 2022 Future of Benefits report, which collected responses from 501 C-suite and Human Resource decision makers.
“We, as a nation, have jointly realized that more needs to be done to support families in general,” Mayslich said.
What parents can do to save on childcare
Meanwhile, parents need to analyze their specific situation to ensure that they have chosen the most cost-effective option. For example, home providers may be cheaper than sending multiple children to day care. Care.com has a calculator that lets you search for prices in your area.
You can also set aside pre-tax dollars in a dependent care flexible spending account, if your employer offers one. The savings will vary, but Care.com estimates that it’s about $ 2,000 in tax savings, assuming the family sets aside the full $ 5,000 in pre-tax dollars in the account.
By paying your caregiver legally – or on the books – for children under the age of 13, you can get a tax credit for children and dependents. While the credit has been extended under the U.S. Rescue Plan Act, it has returned to the previous rules for 2022: up to $ 600 for one child or up to $ 1,200 for two or more qualifying dependents.
You can not claim money for the tax credit covered by a pre-tax flexible spending account. However, if your eligible expenses exceed your FSA amount, you can use the co-payment for the tax credit.
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