Somewhere between “we’re expecting” and “I’m going back to work in a few months,” almost every parent has the same moment: they look up childcare costs for the first time and are genuinely stunned. It’s worth having that moment now, while there’s still time to plan around it, rather than a few weeks before your leave ends.
The number nobody tells you upfront
According to Care.com’s 2026 Cost of Care report, the national average cost of full-time daycare is around $332 a week — but that’s just one option among several, and it varies enormously depending on where you live and what kind of care you choose. Nationally, families spend roughly 20% of household income on childcare, well above the 7% that the Department of Health and Human Services considers the threshold for “affordable” care. No state currently meets that 7% threshold for center-based infant care.
That context matters because it means feeling surprised by the number isn’t a sign you’re bad at budgeting. It’s just an accurate reaction to what childcare actually costs right now.
The four ways people pay for childcare, and roughly what each runs
There isn’t one “childcare cost” — there are several different paths, and they land in very different places financially.
Daycare centers are the most common option and typically fall in the middle of the cost range. Infant care is the most expensive tier, since licensing rules require more staff per baby; costs generally drop by 20–30% once your child moves into toddler care, and drop again at preschool age. This step-down usually happens somewhere between 12 and 18 months, so the highest-cost stretch is also the shortest one.
In-home or family child care — a smaller, licensed provider caring for a handful of children out of their own home — tends to run somewhat less than a center, often 15–30% lower, though it varies by provider and location.
Nannies are the most expensive option per child, since you’re paying for one-on-one, in-home care rather than a shared staff-to-child ratio. Nationally, full-time nanny care averages significantly more per week than daycare — often two to three times as much — though the math shifts if you have two or more children close in age, since a nanny’s rate doesn’t multiply the way per-child daycare costs do. A nanny share, where two families split one caregiver, is a common way to bring that cost down while still getting one-on-one attention.
Au pairs — young caregivers, often from abroad, who live with your family — have costs set within a fairly predictable federal range, and like nannies, the cost doesn’t increase per additional child, which can make them worth considering for families with more than one young child.
Costs vary substantially by state and even by city, so it’s worth looking up local numbers for your specific area rather than relying on the national average alone — the gap between, say, a major coastal metro and a smaller Midwestern city can be dramatic.
The two tax tools that quietly help
Before the number feels too overwhelming, it’s worth knowing there are two federal tools that can meaningfully offset it.
A Dependent Care FSA, if your employer offers one, lets you set aside up to $5,000 pre-tax per year specifically for childcare expenses. Because it comes out before taxes, it effectively gives you a 20–30% discount on that portion of your childcare costs, depending on your tax bracket.
The Child and Dependent Care Tax Credit lets you claim a percentage of qualifying childcare costs on your tax return — up to $3,000 of expenses for one child or $6,000 for two or more, with a maximum credit of roughly $1,050 to $2,100 depending on your income. You can generally use this credit on top of the FSA for costs above what you set aside there, though it’s worth double-checking the interaction with a tax professional since the rules are specific.
Neither tool eliminates the cost, but together they can meaningfully soften it, and both are easy to overlook if nobody mentions them to you.
A smaller number of families also have access to state child care subsidies or employer-sponsored childcare benefits, which are worth checking regardless of income level — eligibility rules vary a lot by state, and some programs have waitlists of their own, so it’s worth applying early rather than assuming you won’t qualify. Some employers have also started offering direct childcare stipends or partnerships with local providers as a benefit; if you haven’t checked your benefits portal for this specifically, it’s worth five minutes to look.
How to actually budget for it before the baby arrives
The most common mistake isn’t underestimating the cost — it’s underestimating the timeline. Good daycare centers, especially in higher-demand areas, often have waitlists that stretch six months to a year. If you know you’ll want center-based care, it’s worth researching and getting on lists during pregnancy, well before you think you need to.
For budgeting purposes, plan around the higher infant-care number for the first year, and expect that number to decrease once your child moves to toddler care — building your budget around the more expensive early stretch means you won’t be caught off guard, and you’ll likely see some relief once the first year passes.
It’s also worth pricing out more than one option, even if you already have a favorite. Comparing a nearby daycare center against a licensed in-home provider, or getting a rough nanny-share quote, gives you a real range to plan around instead of a single number that may or may not hold up. And if you have more than one child in care at the same time, ask specifically about sibling discounts — many centers offer them, and they’re not always advertised up front.
The other cost: what happens to income
There’s a second calculation that’s easy to skip but worth doing honestly: comparing the cost of childcare against what a second income actually nets after taxes, commuting, and other work-related costs. For some families, the math clearly favors continuing to work. For others, it’s closer than expected, and worth genuinely running the numbers on rather than assuming. This isn’t a judgment about what anyone should choose — it’s just a calculation worth doing with real numbers instead of a gut feeling, since the honest answer is different for every family. (If you’re still mapping out leave and your return to work, our guide to planning parental leave financially covers the income side.)