Pound Pup Legacy

from: moneycentral.msn.com

When both parents work, families need someone to mind the kids. But with costs as high as $14,650 a year, day care can swallow most of one parent's wages.

Wendy Brauner's rent clocks in at $1,800 a month -- what some might consider a great deal in San Francisco. But don't think Brauner is living the high life. With a son, 3, and another almost 6, she was spending $2,750 a month on child care until her oldest started kindergarten last fall -- nearly 20% of her household income.

"I was writing a check for $17,000 to the preschool and wondered why it sounded so familiar," she says. "Then I realized it was a few hundred off what I paid for my first semester of college at Wellesley. It's just an enormous outlay."

I get that. Even with just one child, child-care costs were a major chunk of my own family's monthly expenses until our daughter, Harper, started kindergarten. The tab never came close to the $3,200 a month we spend for shelter, but that was mostly because, as a freelance writer, I can shuffle my work hours as needed. And that saves money -- a lot of money. In part-time day care, Harper never cost us more than $900 a month. Video: Should one parent just stay at home?

Still, it's a serious budget item. And we're among the lucky ones. The cost of child care in this country is one of those little secrets -- like leaky diapers and colic -- that parents just don't share with friends who are expecting.

Forget about the angst and expense of finding shelter that is safe and warm for your new arrival. I'm talking about the sticker shock of handing over a significant chunk of your paycheck every month just so you are free to work. That $2,750 a month for Brauner? That was after taxes, of course. Map: Average cost of child care

Yes, the federal government grants a tax credit of up to $1,050 per child for up to two children in child care. But that's annual: Brauner ran through it in less than a month.

Talk back: Do child-care costs worsen the middle-class squeeze?

"We're not even thinking of buying a house," Brauner says of her family's current outlook. "We're targeting 2009, when the youngest finally starts kindergarten."

With child care for infants running as high as $14,650 a year and care for a 4-year-old in a licensed center as high as $10,920, child-care costs have outpaced what the average family spends on food, according to the National Association of Child Care Resources and Referral Agencies. The association keeps tabs on how these costs are affecting working families nationwide. Video: Hear the nanny's perspective

Presidential candidate John Edwards has proposed increasing the federal tax credit to $2,500 per child, according to his campaign, and he wants to launch a

program that would provide affordable preschool for children the year before kindergarten -- a year when most families pay for care. But, in most states, that's not the reality in front of parents now.

Some may say the easy choice would be to have one parent stay home. But experts say it's not that simple.

A generation or two ago, Mom -- and it was usually a mom -- could stay home with the kids while Dad put in the hours at the office. His income was enough to let them own a home and a car, and put a pot-roast dinner on the table once a week.

It's just not possible to go back to that scenario, says Elizabeth Warren, one of the authors of "The Two-Income Trap."

"It's not as if parents can roll back the clock and live on one income," explains Warren, a professor at Harvard Law School. "A generation ago, a single-income family would be solidly middle class. Today a single-income family is at the bottom edge of the middle class."

Warren believes the two-income family is stretched, too, however. Child-care costs are rising at twice the rate of inflation, she says. After paying the mortgage, health insurance premiums, transportation costs and child-care fees, today's two-income families have less money left over than the one-income family did a generation ago.

"In order to go back to one income, families would have to make significant changes, possibly losing health insurance and their home," Warren says.

That sounds right to me. My family might be able to squeak by for the short term on one income, but if either Michael or I decided to give up a paycheck permanently, our family's security would deteriorate rapidly.

I remember sharing some facts about the cost of child care with a colleague when Harper was first born. The reaction: "Why even work, then?" Part of it was that I knew that my income -- beyond paying for my daughter's care -- would cover other basics, from food and diapers to the electric bill.

Beyond that, though, I want a career just as much as Michael does. I adore my daughter, but I crave a balance between playing with dolls and having work that's my own. I sputtered over a lame explanation of all this but finished feeling uncomfortable.

"Parents do feel guilty about complaining about the costs," says Warren. "There's a fear that grandparents and others will say, 'You've made this bed.'"

Trouble is, I'm still lying in it -- even now that Harper is in kindergarten.

Because I freelance, I end up as the fallback for child care when school vacations hit. Video: At work with Mommy

It's possible to find a baby sitter during work hours if you are offering regular work, but few caregivers are willing to come in for a day here or there.

There are days, Harper understands, when she has to be quiet while I conduct an interview -- and some when she actually joins me on a day of reporting. Luckily, she's charming. But it's still a struggle.

Between his job as a commercial-real-estate broker and her work at an investment firm, Barry and Annie Wright of Washington, D.C., do a lot of schedule shuffling just to get their 7-month-old son, Max, to day care each day.

"It's a lot of rock-paper-scissors (to determine) who's going to drop him off and pick him up every day," Barry says.

The couple now pays about $1,100 a month. With plans to eventually add two more children to the family, the Wrights know that at some point child-care costs may outweigh the benefits of having two salaries. With that in mind, they were careful to buy a house they could afford on one alone.

"We're both career-minded," Barry says. "But we do wonder -- at what point does it make sense for one of us not to work?"

Talk back: Do you feel squeezed in the middle class?

Return to Middle Class Crunch home

Published Dec. 28, 2007

Here's an article to help adjust to the added cost of dropping the kids off with other care-givers.  Help your Toddler Adjust