The Cost of Parenting Crisis

Bringing children into the world is one of the most rewarding and fulfilling things someone can do in their life. The joy of growing a young family and creating a lifetime of memories with them is special to all parents.

Yet any parent will know that raising their children comes with a cost. In today's economy, that sum isn't getting any smaller. According to the U.S. Department of Labor, the average parent spends between $5,357 and $17,171 per year on child care - almost a fifth of the average household income.

This doesn't take into account all the diapers, after-school classes, toys, and other essential purchases you make when raising kids. With childcare costs rising by 220% in America since 1990, are parents in the middle of a cost of parenting crisis? To find out, CouponBirds have asked 1,289 adults with children about their financial situation and how they are coping with the modern economic strain of childcare.

Key Findings

• Eight out of 10 parents (81.2%) are working more hours and taking extra jobs to pay for their children.

• Almost two-thirds (64%) are skipping meals or have due to the financial burden of parenting.

• More than half of U.S. adults (56.7%) spend a quarter or more of their income on childcare.

• A majority of parents are struggling to pay for school supplies (60.5%) and school trips (56.2%).

• Four in 10 (43%) struggle to afford rent or mortgage payments because of childcare costs.

Eight in 10 parents are working more to pay for their children

The economic conditions of the early 2020s certainly haven't made it easy to be a parent. Inflation has soared to 40-year highs, and estimates suggest the average American household needs to pay an additional $11,434 per year just to afford the basic necessities they enjoyed in 2021.

This naturally puts an additional strain on parents, who, according to 2017 figures from the U.S. Department of Agriculture (USDA) can expect to pay a total of $233,610 to raise a child until the age of 18 - around $297,665 in 2024 when calculated for inflation.

Our survey shows that most U.S. parents are struggling in 2024's harsh economic climate. 81% of Americans told us that they are having to take additional jobs or work extra hours just to make ends meet, while almost two-thirds (64%) have admitted to skipping meals because of financial struggles.

Our research shows that parents are having to adjust to their circumstances. Almost eight in 10 (78.8%) said they have borrowed money from friends and relatives within the last 12 months, while almost a quarter (23.1%) have moved in with others to save money.

Around eight in 10 (80.5%) have also told us that they have started a side hustle within the last two years to help their financial situation. Federal Reserve data shows that business creation effectively doubled between 2019 and 2024, with Gen-Z credited for a resurgence in entrepreneurialism during the COVID-19 pandemic and the years since.

More than half of U.S. adults (57%) spend at least a quarter of their monthly income on childcare

While the cost of living crisis affects us all, parents increasingly struggle with ever more expensive childcare costs. Current provisions only cover one in seven children in the U.S., and despite a $24bn relief fund from the White House in 2022, a family of three earning $32,500 per year would receive assistance in just 13 U.S. states.

As childcare costs soar all over the U.S., working parents are increasingly finding this expense eating away at their monthly income. Our survey shows that more than half of parents (56.7%) spend at least a quarter of their monthly income on it; almost a quarter of people (24.5%) spend the majority (more than 50%) of their salary on childcare.

This increased burden puts a strain on other essential expenses for school-age kids. Six in 10 parents admitted that they are struggling to buy their children school supplies, and more than half (56.2%) have been unable to pay for field trips.

All parents make sacrifices on some level for their children, but with childcare expenses eating into family bank accounts, it seems that parents increasingly find themselves going without. Parents told us that beauty treatment (41.1%), family meals out (38.4%) and alcohol/soft drink purchases (34.4%) were all being scaled back to pay for childcare.

With the added pressure of a long summer vacation to support their children on a daily basis, parents also told us that they are dreading the summer school break; 62.1% of parents agreed that their kids' time off adds to the financial strain.

While kids' summer camps are a staple for families across the U.S., you can expect to pay between $50 and $500 per week in 2024 - costs that quickly start to add up for debt-burdened families.

Are we in a 'cost of parenting crisis'?

According to national research by Care.com, a majority of parents are finding themselves on longer waiting lists for childcare and can expect to spend an extra $7,000 per year on it amid labor shortages and daycare center closures.

The struggle runs deeper than this, according to our survey. Almost half of respondents (43%) told us that they were struggling with housing costs such as rent and mortgage payments. Four in 10 (39.8%) also admitted difficulty in putting food on the table for their children. According to the USDA, grocery prices increased by a further 2.5% between 2023 and 2024.

But are we facing a 'cost of parenting crisis'? We put the question to parents, and almost seven in 10 (68.5%) agreed. Most people (69.4%) also said that they would be unable to financially support their family without the help of friends and family. More than a quarter of parents (28.9%) said that they rely on their parents for five or more hours a week to look after their kids.

Methodology

Between 1/4/2024 and 3/4/2024, a total of 1,289 U.S. parents were surveyed about their financial situation, and whether they are finding it more difficult to financially support their children in 2024. We also asked parents about the sacrifices they are prepared to make in order to afford childcare and other expenses for their children.

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