Infant care costs how much in New Jersey?

💲 Child care can be a significant financial burden for parents

💲 Bankrate has released its "Cost of Infant Care Study"

💲 How much does infant care cost in New Jersey?

Child care costs in the U.S. continue to rise and can significantly strain a family’s budget no matter where they live.

According to Bankrate’s “Cost of Infant Care Study,” care for one infant takes at least 10 percent of a family’s annual income in almost every state, said analyst Alex Gailey.

For this study, Bankrate looked at the percentage of income that a typical family in each state would have to allocate to afford average infant care costs. The estimates came from the U.S. Census Bureau and Child Care Aware of America. For the purposes of this study, Bankrate only considered average prices for full-time daycare for one infant.

The study found that, on average, full-time center-based infant care costs around $14,000 annually per child in the U.S. which translates to almost $1,200 per month, Gailey said. So, nationally, a typical family would have to allocate nearly 15% of their income to afford that.

Bankrate looked at what the costs were in every state.

Where does New Jersey rank?

New Jersey ranks #33 on the list of infant care affordability. In New Jersey, it costs a typical family nearly 16% of their annual income for full-time day care for one infant, Gailey said. On average, full-time daycare for one infant costs about $19,600 annually in New Jersey, which is above the national estimates.

The annual median income for a typical family in New Jersey is $126,000.

Why is child care so expensive?

There are many reasons.

“Daycare and pre-school costs have risen exponentially over the last three decades over one and a half times faster than overall inflation since January 1991, according to BLS data (Bureau of Labor Statistics),” Gailey said.

Second, 70 to 80 percent of the cost of child care is due to staff costs because there has to be a certain ratio of staff to children, Gailey explained. At the same time, many of their child care workers are earning low wages, so there’s a lot of turnover and broader staff shortages. She said childcare centers are struggling to keep their doors open and pay their staff fair wages, but at the same time, parents can’t afford to pay more.

Third, there is limited federal and state funding. There are certain child care subsidy programs but families have to fall within a certain threshold to qualify for them. Gailey said the programs can be confusing and hard to understand, so many times there are families who do qualify but don’t apply because they don’t realize that they do qualify for the subsidies.

When you look at the child care cost differences across all the states, it really comes down to the cost of living, the makeup of their local child care supply and demand, and the labor force, Gailey said.

So, for example, the cost of living is very expensive in New Jersey. The state is more populated than some other states, which could mean more demand. If there’s a higher demand, there may not be a big enough supply of childcare providers, which in turn, can drive up costs, Gailey said.

If there’s a shortage of child care workers in the state, that can affect costs, too.

How can parents cope with higher infant care costs?

Gailey said parents need to get creative with their budgets. It’s a combination of increasing income, and cutting costs to afford child care.

Some common cost-cutting strategies for families may include limiting vacations, tailoring grocery lists to shop for what’s on sale that week, and cutting down on monthly subscriptions.

Gailey says she hears often that many moms cut back on self-care, meaning they don’t get their nails or hair done as often, to save some money for childcare. Many parents are also trying to find additional sources of income by getting side hustles to afford child care, too.

Automating everything related to your finances as much as possible can help. Set up automatic contributions to retirement accounts, and using a budgeting app that tracks spending on a weekly and monthly basis helps. Parents are busy and many times they’re not paying attention to what’s coming out of their bank accounts every month, Gailey said.

Parents should also claim tax credits for dependents, especially the Child Tax Credit and The Child Independent Care Credit. Gailey said this can help offset some child care costs and put money back in their pockets.

Contact the local family services office to find out what services, tax breaks, and financing opportunities are available for child care in their state.

What are the most and least affordable states for childcare costs?

The Bankrate study found that New Mexico is the least affordable state for infant care, coming in at 51st place. In this state, families with children under 18 earned a median income of $65,952 last year, and child care for one infant cost $13,521 on average, or 20.5% of their annual income.

Hawaii is the second least affordable state for infant care, followed by New York, California, and Massachusetts.

On the flip side, South Dakota is the most affordable state for infant care. In this state, families with children under 18 earned a median income of $90,343, and child care for one infant cost an average of only $7,862 last year, or 8.7% of their annual income.

The full report can be found here.

Report a correction 👈 | 👉 Contact our newsroom