President Joe Biden may be issuing executive orders to blunt the cost of childcare for American families, but for those in the thick of it, the costs not only hit hard, they keep rising.
President Biden signed an executive order on Tuesday directing a wide range of federal agenciesfrom the Department of Health and Human Services to the Department of Defenseto identify and implement ways to cut childcare costs and make services more accessible. The move builds on directives implemented by the administration earlier this year that mandated chip manufacturers provide childcare in order to get access to the $39 billion in funding.
While many in the childcare community applauded the move, its a far cry from earlier promises to help cover child care for low-income Americans and fund universal preschool programs nationwide.
And for families struggling right now, the directives may fall short. Childcare costs are already prohibitively expensive for familiesaveraging around $10,600 per child, per year. Yet, more than a third of parents (37%) have seen their childcare costs continue to jump over the past year, according to the 2023 New York Life Wealth Watch Survey. The report found that among parents who pay for childcare, they spend about 26% of their household income on this expense.
High-cost childcareor a lack of affordable childcarecan be disruptive to families long-term financial security, and increases in costs due to inflation can add up, Suzanne Schmitt, head of financial wellness at New York Life, tells Fortune. Childcare hinges on workplace and societal support, as the childcare sector has faced significant challenges, which has had a downstream effect on parents.
Childcare expenses hit families hard
For New York City-based mother Lauren Accardo, childcare expenses take about $300 out of the budget per weekand thats just for part-time childcare for her 18-month-old son. To help keep daycare costs down, Accardo and her husband juggle their time and work hybrid schedules at their day jobs as executive assistants and then fit in their second careers as a romance novelist and stand-up comedian, respectively, where they can.
But the roughly $1,200 a month expense on even part-time daycare is a heavy burden. Daycare has completely disrupted our lives financially, Accardo says. And its really not a long-term solution, Accardo admits, saying theyve hit a point where theyre seriously considering full-time care.
Its just not tenable, Accardo says. Youre on a conference call and you have to apologize because either your coworkers are hearing Elmo in the background or theyre hearing your kid scream. And as understanding as people are, youre still at work, youre still trying to get a full eight-hour day in, she says.
But full-time daycare means Accardo and her husband will need to reconfigure their budget again. Its been a constant struggle, she says.
About a third (34%) of parents who are facing higher childcare costs have been forced to cut back on other household expenses to make their budgets work, while 23% say, like Accardo, theyre leveraging a hybrid or remote work model, according to the NY Life research. Over half of parents (59%) report their financial strategy changed in the past year compared to just 41% of non-parents.
Of course, utilizing daycare can also be a struggle during a time when childhood illnesses feel more frequent. If Accardos son is sick, that means she needs to keep him home. Then it becomes a conversation of who watches him, who stays out of work.
My husband is a stand-up comic where he is sometimes on the road. Ive had situations where the babys sick and cant go to daycare, my husbands out of town, and I am expected to work a full day. So I either have to take sick time myself or try and find a friend to come over and watch him, Accardo says.
The lack of affordable, stable childcare takes a tollnot only on parents budgets, but also on their careers. Its partially finances and its partially time, but with more opportunities for affordable childcare I could spend more time on my passion projects, Accardo says.
If full-time childcare was an affordable option, Accardo says she might have more time to herself to really push her career forward.
