Childcare has become one of the largest household expenses high-income families face during their working years, sometimes even rivaling a mortgage or exceeding the cost of in-state college tuition. Even for high-earning families, childcare costs are forcing people to reshape their monthly budgets. In this guide, we walk through what families in markets like Boston, New York City, and the San Francisco Bay Area are paying, why the numbers vary so much, and what strategies can help the costs feel more manageable.

Average Childcare Costs in the United States

Childcare costs vary by state, but national data gives us an important starting point. According to World Population Review’s 2025 childcare cost analysis, which draws on U.S. Department of Labor data, the average cost of center-based infant care in the United States is approximately $1,200 per month or close to $15,000 per year. For dual-income households, it is not unusual for childcare to consume 15 to 20 percent of gross income during the early years.

For toddlers and preschool-age children, costs are somewhat lower than infant care, though families in high-cost states like Massachusetts, New York, and California will find the gap can be smaller than they might expect. According to the Care.com 2026 Cost of Care Report, the average parent is now spending 20 percent or more of annual household income on childcare. These costs rose almost 7 percent in 2024, significantly outpacing inflation.

According to a March 2025 analysis by the Economic Policy Institute, the annual cost of infant childcare now exceeds in-state public college tuition in 38 states and Washington, D.C. There are many tools to use when saving for college, including 529 plans and financial aid packages, and parents have about 18 years of their child’s life to save up enough money. None of the same tools exist for childcare, yet the price tag is just as large and can start in infancy.

What Impacts the Cost of Childcare?

Several factors will determine the cost of childcare for your family, including the age of your child, the type of care, and the location. Your child’s age plays a significant role in what you will pay. Infant care is almost always the most expensive childcare category because state regulators require lower caregiver-to-child ratios, often one caregiver for every three or four babies. As children move into the toddler and preschool years, these ratios expand, and costs tend to trend downward—however, not dramatically in many states.

The type of care matters too. Center-based daycare is one of the most common options and typically offers predictable scheduling and structured programming. Licensed home daycare can sometimes cost slightly less. A more expensive option is a full-time nanny, which according to the Care.com 2026 Cost of Care Report averages close to $900 per week or roughly $45,000 per year. These numbers can be significantly higher in major metro areas depending on experience, number of children, and local cost of living. Each of these options has trade-offs between costs, flexibility, and personal attention that must be considered.

Besides age and type of care, where you live is the single biggest driver of what you will pay for childcare. States such as Massachusetts, New York, and California consistently rank among the most expensive for childcare. Families relocating from lower-cost states are often caught off guard by how dramatic the difference can be.

Childcare Costs by Region: What Families Are Actually Paying

The gap between national averages and what families in high-cost areas experience is striking. We will take a closer look at some of the most expensive childcare markets in the country as well as what costs looks like in southern New Hampshire.

Massachusetts

Massachusetts consistently ranks as one of the most expensive states for childcare, second only to Washington, D.C., nationally. According to TOOTRiS’s February 2026 Massachusetts childcare cost analysis, the average annual cost of infant care in Massachusetts is around $26,000, or approximately $2,200 per month. According to Wonderschool’s 2026 Massachusetts daycare cost guide, in the Boston area, center-based infant care averages closer to $2,200 to $2,800 per month, reflecting the premium for urban childcare options.

New York City

New York City takes these costs even further, illustrating just how extreme childcare expenses can become in major metropolitan areas. Full-time daycare in New York City typically ranges from $2,000 to $4,000 per month, depending on the child’s age and the type of care, with annual costs often reaching over $50,000. According to the Citizens’ Committee for Children of New York, a family would need to earn over $300,000 per year to meet the federal affordability benchmark of no more than 7% of income spent on childcare. This highlights how even high earners can feel the financial strain of childcare costs.

San Francisco Bay Area

The San Francisco Bay Area is one of the highest-cost childcare markets in the country. According to TOOTRiS’s 2025/2026 California childcare cost guide, which cites data from the California Child Care Resource and Referral Network (May 2025), families in San Francisco pay over $31,000 per year for infant center-based care. In Santa Clara County, annual costs for infant center-based care similarly exceed $30,000. For many Bay Area families, childcare alone rivals or exceeds housing as a monthly expense.

Southern New Hampshire

For many of our clients in southern New Hampshire, costs are more moderate than in major metro areas, but they are still significant. Based on current tuition rates at childcare centers in the Bedford, New Hampshire area, full-time infant care prices typically fall between $2,000 and $2,600 per month, or $24,000 to $31,000 per year. As the age of your child increases, expect the cost of childcare to decline moderately. For families with two young children in care, annual costs can quickly approach $45,000 to $55,000, which requires careful planning regardless of one’s income level.

Five years of childcare per child is a long time to absorb costs this significant. Families who start planning early have far more options than those who wait.

Strategies to Help Manage Childcare Costs

Dependent Care FSA

The most straightforward starting point is your employer’s Dependent Care FSA (DCFSA). If they have adopted the 2026 contribution limit, you may be able to contribute up to $7,500 per year in pre-tax dollars if you are married filing jointly. Highly compensated employees, generally those earning more than $160,000 in 2026 or owning more than 5% of the business, may be subject to lower contribution limits depending on how the employer plan is structured. Considering every employer plan is different, it is a good idea to check with your HR team to see if this applies to your DCFSA. For a married couple earning $300,000 and in the 24% federal income tax bracket, that could equate to over $1,800 in annual savings on federal income taxes.

Child and Dependent Care Credit

The federal Child and Dependent Care Credit is another option and allows eligible families to claim up to $3,000 for one child or $6,000 for two or more. However, once your adjusted gross income exceeds $43,000, the credit rate drops to 20% of qualifying expenses, resulting in a maximum benefit of around $600 to $1,200. This tactic is helpful, but for those over the threshold, this typically offsets only a small portion of total childcare costs.

Nanny Share

A nanny share is another option worth considering. In a nanny share, two or more families split the cost of one nanny, allowing each family to pay less than they would for a private nanny while still receiving more personalized care than in a traditional daycare setting.

In practice, most families coordinate with friends, neighbors, or coworkers who have children of similar ages and schedules. Care can take place in one home or rotate between households, depending on the agreed-upon arrangement. Getting this started can be as simple as talking to those around you to gauge interest. From there, families need to align on key details like scheduling, location, expectations, and how costs will be shared. As a group, it is important to think through logistics such as sick policies, backup childcare, and how responsibilities are handled if one family needs to leave the arrangement.

A nanny share requires more coordination than a traditional daycare, but for the right families, it can meaningfully reduce costs while preserving a level of personal attention that a daycare cannot match.

Some employers also offer overlooked benefits, including backup childcare programs, daycare partnerships, or childcare subsidies. It is worth talking with HR before assuming these options are unavailable to you.

Should One Parent Stop Working? The Numbers Behind a Personal Decision

With childcare costs around $26,000 per year, it is natural to question whether it still makes sense for both parents to keep working. But at first glance, the numbers may not tell the full story.

The Reality of Net Take-Home Pay

Consider a second earner bringing in $150,000 per year. In the 24% federal tax bracket, after federal income taxes and payroll taxes, take-home pay might realistically land closer to $100,000. Subtract $26,000 or more for infant care and work-related expenses, including commuting and meals, and the net financial contribution of that second income can look quite different from what the gross salary suggests. For families in Massachusetts, New York, or California, where state income taxes are among the highest in the country, the after-tax picture gets strained even further. When you think about all these factors, it is easy to understand why many families start questioning whether the second income is worth it.

Evaluating Lifestyle and Financial Constraints

For some families, it makes sense to sacrifice a second salary. Childcare costs for multiple young children can stack quickly, sometimes consuming the large majority of a second income after taxes are taken out. With that being said, the value that comes from one parent stepping away from work to be with the kids can outweigh the benefit of a second income in the early years where childcare would be necessary. For some parents, their career may be at a natural transition point or even a slower professional season, in which stepping back from work may not carry the same long-term cost it might otherwise.

The Price of Stepping Away

The long-term financial costs of leaving the workforce are easy to underestimate. Stepping away means pausing retirement contributions, losing employer matches, creating gaps in Social Security earnings history, and risking a difficult re-entry after a potential multiyear absence. Career trajectory can be hard to quantify, but it is equally important; raises, promotions, and professional momentum typically continue building while you stay in the workforce. However, these benefits may be harder to recapture after a pause in your career. At higher income levels, the second income often will still contribute meaningfully to long-term wealth building even after factoring in childcare costs, taxes, and other expenses. The long-term impact of leaving the workforce can amount to hundreds of thousands of dollars over the course of one’s career.

Childcare costs are temporary; however, leaving the workforce is not always easy to reverse. Everyone’s situation is different, and we would encourage anyone working through this to consider the full picture, not just this month’s childcare bill.

Final Thoughts

Childcare is expensive, and for families in high-cost markets, the numbers can be staggering. Having a plan in place before things get hectic makes a difference.

With the right strategies in place, including FSAs, tax credits, nanny shares, and employer benefits, the burden can feel more manageable. But childcare costs are also temporary. Most families face peak expenses for about five years per child. Having a plan for how those dollars get allocated when care ends can make a meaningful difference in your long-term financial picture.

It is worth noting that you have options. Temporarily reducing retirement contributions during the peak childcare years can free up cash flow without completely derailing your long-term financial plan. When childcare costs begin to slow down or go away completely, that is when you can redirect that money back toward your long-term savings goals. This is a short-term adjustment, not a long-term setback in your overall plan.

Stay informed of any changes that may affect your financial life by working with a financial advisor. There is a lot to consider when determining the best route for childcare, and your circumstances are unique to you. If you need assistance with your financial planning or want a second opinion on your portfolio, please reach out to our team.