What percentage of a budget should go toward current childcare costs?

I am 25 years old and I make $50,000 annually in a state with a low cost of living. The statewide median salary is about $35,000 annually. I have a company-matched 401(k), relatively low debt, and low cost health insurance with an HSA. On paper, my financial situation is very stable. I have examined my bills to pin down all of my expenses and created a budget based on what I understand as the "correct" proportions. For example, I’m not spending more than 25% on housing.

Right now, I am only contributing 1% to savings. This is all that I can afford because of childcare expenses. My income has increase by 400% since I went back to work after having my son. However, the cost of childcare has been rising exponentially as my income has increased: I need greater flexibility and have higher work demands. Currently, 16% of my income goes to paying the baby sitter.

Is there a budget model that is advisable that factors in childcare, and accurately reflects the current cost of childcare for most families?

Asset Allocation, Women & Money
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January 2018

Unfortuantely child care is quite costly. You are right around the national average.

Like many things, I reocmmend getting a quote from various alterntaives and reviewing the pros/cons of each. That will give you a more specifric average of your area and help eliminate some of the unkowns.

While examining expenses, it may also make sense to examine income. Can you ask for a raise?

Send me an email if you want to discuss further - ashley@rscrum.com. 

January 2018
January 2018