Even Families Making $400,000 Are Struggling With Childcare
If you’ve ever done the mental math on daycare costs — during a work call, in the pickup line, or while staring at your bank account at midnight — you’re not alone. According to a new report from Fortune, even families earning what many would consider a very comfortable income may still struggle to afford childcare. We’ve reported on this before when we read financial strategist Michael W. Green’s Substack essay on “My Life Is a Lie.”
There’s more evidence to support the issue. Fortune‘s analysis found that a household with two children would need to earn around $400,000 per year for childcare to be considered “affordable,” based on federal guidelines that recommend families spend no more than 7% of their income on care.
Yes, $400,000.
For many parents, that number feels less like a statistic and more like validation of what they’ve been quietly experiencing for years.
The Childcare Math Isn’t Adding Up
The report, based on LendingTree data, found that the average two-child household earns about $145,656 — far below what would be needed to meet the affordability benchmark. In fact, families would need a 176% increase in income to make childcare comfortably affordable.
And that’s just childcare — not even housing, groceries, healthcare, or college savings. This explains why many families are feeling squeezed, even when they’re doing everything “right.” For additional context, I have two kids who go to a New Jersey public school, which is free. But since I work, they go to aftercare through a YMCA program which runs me about $850 for both of them per month. Prior to that, when they went to a modestly priced daycare from age 3 months of age to 5 years old, we paid roughly $1100 per child per month. It’s easy to run the math to know how much we’ve spent on care alone, but I’ll refrain because the number might just cripple me.
These costs might also be a factor in declining birth rates. As Fortune noted, the growing cost burden makes it “easy to see why birth rates are falling,” as more families rethink whether they can afford multiple children at all.
What This Means for Families
For many families, childcare costs don’t just strain budgets. They shape major life decisions.
Parents may in turn:
- Delay having another child
- Reduce working hours
- Leave the workforce entirely
- Rely on grandparents or patchwork care
It’s not just about money. It’s about careers, identity, and long-term financial security. If you look back how boomers fared, you’d see a whole different story.
The disconnect between income and childcare affordability is one that families would feel daily. Even those with dual incomes, good jobs, and careful budgeting often find themselves making tough tradeoffs. As childcare costs have climbed steadily, wages haven’t kept up with the pace.
And unlike other expenses, childcare isn’t optional. You can’t shop around endlessly, delay it, or substitute something cheaper. There’s no discount code. There’s no workaround. If you need to work, you need care.
Dealing With It
For now, parents are doing what they’ve always done: figuring it out. They’re leaning on family, adjusting schedules, working from home when possible, and sometimes just absorbing the cost — even when it feels unsustainable. And with that $400K threshold Fortune cites, affordability isn’t just a middle-class issue anymore. This universal parenting challenge is one that not even six-figure households can’t easily solve. Childcare has become a luxury.