A new analysis shows just how overwhelming childcare costs have become for American families.
According to a recent study from LendingTree, a household with two young children would need to earn roughly $400,000 a year for childcare to qualify as “affordable” under federal guidelines.
Here’s how the numbers break down: The average annual cost of care for an infant and a 4-year-old is about $28,190 nationwide. Federal standards define affordable childcare as costing no more than 7% of a household’s income. To meet that threshold, a family would need to bring in approximately $402,708 a year.
By comparison, the typical two-child household earns around $145,656 annually — nowhere near the level needed to meet the government’s affordability benchmark.
Analysts say the widening gap highlights why so many parents feel financially stretched and may also help explain the nation’s declining birth rate.