For families paying $2,000 a month for childcare in the United States, the federal definition of what counts as affordable is increasingly out of reach.
At that level of spending, a household would need to earn about $343,000 per year to remain under the government's 7% affordability benchmark, underscoring how childcare is becoming a major pressure point in family budgets.
Here's what to know
New research from the Bank of America Institute, cited by CBS News, says nearly 8% of U.S. families now spend more than $2,000 each month on childcare, including daycare, nanny services, and other programs. That share has more than doubled in the past three years.
In September, families spent about 8% of their monthly income on childcare, according to the same research. That is higher than the federal affordability guideline, which sets the threshold at no more than 7% of household income.
Federal labor data showed that daycare and school-related fees increased faster in September than other major household expenses, including rent and medical care.
For working parents, childcare isn't optional, so when costs rise faster than housing and healthcare, the rest of the household budget can quickly come under pressure.
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More background
That gap becomes clearer when compared with typical earnings. The Census Bureau said median U.S. household income in 2025 was $87,460, while keeping annual childcare costs at $24,000 below the 7% threshold would require about $343,000 in income.
The costs also fall unevenly across income groups. The Bank of America Institute found that lower- and middle-income households spend almost 9% of yearly income on childcare, versus 7.3% for higher-income families.
The strain extends beyond parents. AARP research found that grandparents provide $172 billion a year in direct financial support.
What's being done?
The Bank of America Institute found that childcare prices rose fastest in September in Nashville, Tennessee, followed by Jacksonville, Florida, and Phoenix, Arizona.
Demand appears to be part of the explanation in those areas. "There's been an increase in domestic migration to these areas," BofA Institute economist Taylor Bowley told CBS News, adding that stronger demand for childcare services is pushing prices higher.
Staffing is another pressure point. CBS News reported that childcare-sector employment fell 0.7% in September, making it harder for providers to offer care. Families in those areas are facing both stronger demand and fewer workers available to provide care.
Where can I learn more?
Elsewhere, families and providers face the same squeeze from different angles. These stories cover subsidy expansions, long waitlists, rising daycare expenses, and broader affordability pressures in the U.S. and Australia.
• In San Francisco, free tuition and 50% off benefits are expanding child care access for families.
• In Texas, a 190,000-child waitlist is keeping subsidized care out of reach.
• In Massachusetts, daycares are turning to gardens and coupons as food costs jump 43%.
• In California, families need $101,213 for a stay-at-home parent and one child.
• In Australia, costs hit $17,800 a year, pushing some parents to delay having children.
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