(NerdWallet) – – Millennials are a favorite societal punching bag for things like damaging markets-- including diamonds and casual chain restaurants-- and being cringe. Another gripe some have with Generation Y is that they think millennials aren't having enough kids, or any kids at all.
Of millennials who are deciding out, lots of are doing so because raising kids is simply too costly. A brand-new NerdWallet survey discovers that just a quarter of parents of minor children (25%) plan to have more children and just 27% of non-parents under age 60 plan to have any kids at all.
One significant expenditure parents might need to contend with, a minimum of in the early years, is childcare. According to the NerdWallet study, millennial parents who pay for full-time childcare-- care at least four days a week-- report paying $665.70 a month, on average, per kid. Almost a quarter (23%) are paying $1,000 or more a month, per kid.
The estimated typical U.S. home income is $77,221 for 2023, according to NerdWallet's household debt analysis. Presuming month-to-month childcare expenses of $665.70, or $7,988 yearly, that represents more than 10% of gross earnings, per kid. That's if you make the average earnings, if you don't pay more than the surveyed average for childcare and if you just have one kid. Plus, child care is just one expense, albeit one of the costlier kid costs you'll likely have. It's not surprising that the study discovered that a quarter of millennial parents of minors (25%) recognize child care expenses as their greatest financial stressor.
Options for cutting child care costs
If you're currently having a hard time to pay for child care, or child care expenses are holding you back from having children, there are methods to get these expenses down. Some are more perfect and some are less so, and all depend upon what you want for your and your kid's life.
According to the survey, nearly 4 in 5 millennial parents of minors (79%) took actions to lower childcare costs, like working opposite shifts from their partner so they didn't need child care (20%) and working from home while caring for their children (17%). The difficult truth is that sacrifices are frequently made in service of keeping child care within budget plan, and a few of them might need major upheaval. Here are some other methods parents have reduced child care costs.
The survey discovered that 15% of millennial moms and dads of minors used a dependent care FSA to pay for child care. The dependent care flexible spending account (DCFSA) allows you to transfer up to $5,000 pretax per household to be used for kid care costs within a given year.
It's also a great idea to see if you can look for need-based financial support for childcare costs, particularly if your family qualifies as low-income. One-tenth of millennial moms and dads of minors (10%) say they receive/received need-based support for child care costs, according to the survey. You can likewise ask local childcare centers if they use scholarships and, if so, what criteria they use to identify eligibility.
Look for a lower-cost childcare choice. According to the survey, 15% of millennial parents of minors utilized a lower-cost alternative to a day care center, like a co-op or home-based daycare. Home-based childcare may be more inexpensive than traditional childcare centers or a dedicated nanny. This option could offer your child with a relaxing environment to spend their days in with a tight-knit group of kids. A few things to know: In-home childcare might include mixed-age groups and could lack a structured curriculum, compared with center-based choices. Your point of contact for any concerns at a co-op or home-based day care will be the service provider themself; there likely will not be a business office or official administrator like you may find at a day care.
The survey found that 17% of millennial moms and dads of minors say they moved better to their or their partner's family to get help with kid care, while 10% moved to a location with less expensive child care. This may be perfect for those parents who already desire to move, especially for those who want to be closer to family and whose family has provided support with child care.
Leave the labor force briefly. According to the study, 13% of millennial moms and dads of minors say they left the workforce to take care of their kids and 13% state their partner left the labor force. This is a highly personal decision. If you or your partner wants to be a stay-at-home moms and dad and the other partner can earn enough to support the household, it could be an excellent concept. If this isn't something you especially desire, but you're open to the possibility, do the calculations to figure out which course makes most financial sense. Ensure to consider the expenses of missing out on years of career training, promos and raises, and the challenges of reentering the workforce after a number of years away.
Wait it out. That's Okay if you can cover child care expenses however have to momentarily scale back on other monetary objectives to do so. While the hefty bill can be hard to stomach, most kids won't require long-term childcare, a minimum of not on a full-time basis. If you can swing it, it might be worth it to cut back on other things for now and make plans for how to reallocate those funds toward making financial progress when your child no longer requires that full-time care.
Comments
Leave a Reply