2024 Cost of Raising Children Report

It takes a village to raise a child. And if you don’t have that village handy, you’ll probably have to pay a lot to get one.

A new NerdWallet survey finds that just a quarter of parents of minor children (25%) plan to have more children and only 27% of non-parents under age 60 plan to have any children. Why? For many, the cost of child care and the overall cost of raising children is too high.

The survey of more than 2,000 U.S. adults, conducted online Dec. 14-18, 2023, by The Harris Poll, asked parents and non-parents about their family planning, and why many are choosing not to have more kids or not to have any kids. We also asked parents if they pay for full-time child care and, if so, how much it costs.

Key findings

• Cost is a factor for some parents who aren’t having more kids. Around 1 in 5 parents of minors who don’t plan to have more kids (22%) say it’s because the overall cost of raising another child is too high. This is true for 30% of millennial parents who don’t plan to have more children, according to the survey.

• Non-parents also cite costs as a reason for opting out. Nearly a third of Americans under age 60 who aren’t parents (31%) say they don’t plan to have kids because the overall cost of raising a child is too high. This includes 38% of millennials who don’t have or plan to have kids, the survey found.

• Child care is a major cost consideration in the early years of raising a child. Americans who pay for full-time child care report a monthly cost of $631, on average, per child, but 21% are paying more than $1,000 a month per child, according to the survey.

• Child care costs can be stressful. The survey found that 1 in 5 parents of children under age 18 (20%) say the cost of child care is their biggest financial stressor.

“The cost of having kids is so high that it can feel daunting or even impossible to people who would otherwise choose to have more children,” says Kimberly Palmer, personal finance expert at NerdWallet. “Many people feel they simply cannot find a way to pay for child care on top of all of their other essential expenses.”

Most parents don’t plan to have more children

We asked parents of children under age 18 what their plans are for future kids, and 25% plan to have more children. Nearly two-thirds (63%) don’t plan to have more kids and another 12% are undecided, according to the survey. The top reason: 54% of parents of minor children who don’t plan to have more kids say it’s because they already have as many as they want to have. But others cite financial reasons, like the overall cost of raising a child being too high (22%).

In addition to the high costs of child care and raising a child, other financial considerations are holding current parents back from expanding their families. Around 1 in 14 (7%) say they can’t afford to take time off from work for parental leave, while 6% say the cost of infertility treatments is too high and another 6% say the cost of adoption is too high.

Some non-parents don’t plan to have kids because of the cost

Many Americans who aren’t already parents are opting out entirely — 27% of non-parents under age 60 say they plan to have children, the survey found. Another 56% don’t plan to have kids and 17% are undecided. While 36% of Gen Zers (ages 18-26) without children say they plan to have them, only 25% of millennials (ages 27-42) without kids say this. This is possibly because millennials are older than Gen Zers, and if they wanted to have children, they’re more likely to have already done so.

So why don’t Americans without children plan to have them? The most common reason is not wanting children (44%). But nearly a third of Americans under age 60 who aren’t parents (31%) cite the overall cost of raising a child as being too high. This is true for 38% of millennials who don’t have or plan to have kids.

Child care eats up a significant percentage of income for many

Nearly a quarter of Americans under age 60 who don’t have children (23%) say they don’t plan to have them because the cost of child care is too high, the survey found. But how high exactly?

Americans who pay for full-time child care (defined as at least four days per week for this survey) report paying $631 a month, on average, per child. Around 1 in 9 (11%) pay between $1,000 and $1,999, and another 11% pay $2,000 or more a month per child for full-time child care.

Let’s take a look at this average. According to NerdWallet’s annual household debt study, median household income was an estimated $77,221 for 2023. Assuming annual child care costs of $7,572 (based on the $631-a-month average rate), that’s around 10% of gross income per child. If you take home 70% of your gross pay after taxes and deductions, it’s 14% of your net income. And this could be on the low end — the median yearly cost for child care for a single child is $5,357 to $17,171 when adjusted to 2022 dollars, according to the Department of Labor, using 2018 data.

Our survey found that 22% of parents of kids under age 18 didn’t know how high child care costs were before they had children. Also, 1 in 5 parents of minor children (20%) say the cost of child care is their biggest financial stressor. About 1 in 7 parents of minors (14%) say they spend/spent more on child care each month than on their rent or mortgage payments.

It’s not all bad news, though. According to more than a quarter of parents of children under age 18 (27%), their child-related costs became more manageable once their children started full-time school. And 1 in 5 (20%) say their first child was more expensive than subsequent children, so for those considering more children, the cost per child may go down.

Some parents are taking or took steps to reduce child care costs

Child care is undoubtedly expensive, but parents have found ways to reduce these costs. Of parents of children under age 18, 71% say they need or needed child care at some point and took steps to lower their child care costs. Around 1 in 6 parents (17%) say they and their partner work or worked opposite shifts to avoid child care, and the same proportion (17%) work or worked from home and cared for their children while working.

There are clear gender lines when it comes to those who left the workforce to take care of their children. About 1 in 6 women who are parents of children under age 18 (17%) say they left the workforce to make child care more affordable, compared with 8% of their male counterparts.

Consumer takeaways

Evaluate your job in terms of parental benefits. Whether you have kids now or plan to have them in the future, it’s worth taking a look at the benefits and perks your company does or doesn’t offer parents. This could mean a lot of different things, but some common benefits to look into might include paid parental leave, adoption or infertility treatment assistance, access to a dependent care FSA, flexible schedules, child care stipends or on-site child care, and access to affordable family health care premiums. Understand that few companies will offer all of these — and many won’t offer any — but it’s worth looking into the options at your company.

If you find that your company doesn’t provide parental support, you might consider seeking a new job elsewhere. Take some time to decide what’s most important to you and see what’s available. Talk to friends and family members who are also parents about what their companies offer in terms of benefits.

“When negotiating a job acceptance, consider asking about benefits beyond just salary. In some cases, flexibility or health care benefits could end up being worth more to you than the take-home pay alone,” Palmer says.

Take steps to lower your child care costs, if desired or necessary. If you want or need to lower your overall child care costs, there are a few options to consider.

Research the typical rate for child care in your area. Look up local day care options online and talk to other parents near you to see what they pay, so you have a general idea of whether you’re paying more than necessary. That’s not to say you have to opt for the cheapest day care, just that it’s a good idea to see where your costs fall and if there’s room to save money, if you’re comfortable doing so.

Relocating for lower-cost child care isn’t a small step, but if you’re not living where you want to be long term and you see yourself in a more affordable community, it’s worth considering whether now is the right time to move.

If you have employer access to a dependent care FSA, you can get some tax savings on up to $5,000 a year in child care costs per household. And if you qualify for need-based child care assistance — or think you might qualify — look into those options to get some financial help.

“It can be hard to power through the years of paying for day care, especially for more than one child at once. But once they start school, you can often find more leeway in your budget, so the sacrifices during those early years can pay off,” Palmer says.

It may seem strange to talk about children in terms of their costs. And the decision to have children and how many isn’t simply a financial one, or even primarily financial. But many parents don’t have access to that village they were told would help raise their child, at least without paying dearly for it, so it’s generally a good idea to consider the financial implications of child-rearing while family planning.

Make plans for your money once child care is no longer necessary. For many parents, full-time child care won’t always be needed. Kids may go to school or be able to care for themselves as they get older. If this is the case for your children and you’re currently paying for child care, make a plan for what you’ll do with that cash once they no longer require that level of care.

Maybe you want to use the money for other childhood expenses, like sports fees, lessons and activities; maybe you start using that money to save for college in a 529 account. Or perhaps you want to save more for retirement, travel more or upgrade your lifestyle. Whatever the case, it’s a good idea to map this out ahead of time so the money doesn’t reallocate itself, as extra funds are liable to do.

“Parents can stay on top of their finances, despite the inevitable challenges along the way, by planning for child care costs as soon as possible — setting aside money while they’re pregnant or trying to get pregnant and then consciously reallocating those funds to other purposes once they no longer need regular child care,” Palmer says.

Methodology

This survey was conducted online within the U.S. by The Harris Poll on behalf of NerdWallet from Dec. 14-18, 2023, among 2,061 U.S. adults ages 18 and older. The sampling precision of Harris online polls is measured using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.7 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, contact [email protected].

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