Child care costs out of reach for most US families, requiring near $400k income for two kids

Child care in the United States has become a prohibitive expense for most families, with the income required to afford it comfortably far exceeding typical household earnings. According to a new LendingTree analysis published Monday, a family would need an annual income of nearly $403,000 to meet the federal affordability benchmark—spending no more than 7% of income on care—for two children. This starkly contrasts with the national median family income of $105,800, underscoring a severe nationwide affordability gap.

Daunting Costs Forcing Tough Choices

The financial burden is overwhelming for average earners. Data shows families with an infant and a four-year-old pay an average of $28,000 annually for full-time care. Monthly, this translates to about $2,252 for two children—an amount that surpasses the median rent in dozens of major U.S. cities. "Child care costs are just incredibly daunting for all but the wealthiest Americans," said Matt Schulz, LendingTree's chief consumer finance analyst. "It forces parents into some really tough choices, including whether to have kids or not."

Policy Responses to a Growing Crisis

The soaring cost has pushed child care to the forefront of the policy agenda. Federal labor data indicates families spent between 8.9% and 16% of their median income on care for just one child in 2022, consistently breaching the 7% affordability threshold. In response, state and local governments are initiating interventions. New York City and New York State recently announced a plan to provide free child care for two-year-olds as a step toward universal access. Similarly, states like Kentucky are expanding universal pre-kindergarten programs, citing long-term benefits for family economics and early education systems.