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How Much Does Child Care Really Cost? Don't Forget Lost Raises, Benefits

calculator.pngNew parents, and especially mothers, are often stymied by the question of whether to stay home with young children or to continue working while forking over a significant portion of their salaries to cover child care.

A cost they often don't count on when crunching the current family budget numbers is the loss of wages over time, says the Center for American Progress, a progressive think tank that is in favor of more affordable child care for families. 

"If you're paying more for child care than you're earning in your paycheck, then it doesn't make short-term economic sense for you to go to work," said Sarah Jane Glynn, the director of women's economic policy at CAP. "But we also know that has negative long-term consequences for families."

CAP's report, "Calculating the Hidden Cost of Interrupting a Career for Child Care," includes an interactive calculator to make it easier to see those consequences. The calculator allows users to put in their current age, salary, gender, and how much time you are planning to take off to care for children. CAP is arguing that the cost of child care, if it is high enough to force one partner out of the workforce for a number of years, is actually higher than the initial price tag. 

If, just say, you are a 34-year-old woman planning to take one year off to care for a child at age 35 and your current salary is about $67,000, you stand to lose a total of $162,067 in wages, wage growth and benefits (including retirement benefits) over the course of your life, CAP estimates. If you decide to stay home for longer, say 5 years, the loss grows to $717,202.

The calculator does not calculate lost savings, which might help put a child through college, or lost disposable income in the middle years, which might help send a child to summer camp. Nor does it take into account the monetary benefits that could potentially accrue to a child from getting a high-quality preschool education.

And since that price tag averages $18,000 for two children, according to Care.com, families at nearly every step of the socioeconomic ladder are making tough decisions about whether it makes more financial sense for one partner, traditionally the woman, to be an unpaid caregiver. 

Essentially, Glynn said, the lack of affordable, high-quality child care means that even solidly middle-class families lack complete free choice about whether to stay in the workforce.

"Many folks just frankly don't have options," Glynn said. "If you have a ton of money you can survey the field and decide what's best for you. Most families are not making free choices about what works best for them and their children."  

To figure out your future, check out the child care calculator.

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