Why Don’t Some Millennials Want Kids? They Say It’s Too Expensive

A new NerdWallet survey finds that just 25% of millennials who don’t have kids plan to have them. A major reason why? The high cost of raising children.

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Written by Erin El Issa
Senior Writer
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Edited by Courtney Neidel
Assigning Editor
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Millennials are a favorite societal punching bag for things like destroying industries — including diamonds and casual chain restaurants — and being cringe. But another gripe some have with Generation Y is that they believe millennials aren't having enough kids, or any kids at all.

Of millennials who are opting out, many are doing so because raising children is simply too expensive. A new NerdWallet survey finds that just a quarter of parents of minor children (25%) plan to have more children and only 27% of non-parents under age 60 plan to have any children at all. Of millennials (ages 27-42) who aren’t parents, just 25% say they plan to have kids, while 61% don’t and 14% aren’t sure. When millennials who don’t have kids or plan to have kids were asked why, nearly 2 in 5 (38%) said it’s because the overall cost of raising a child is too high.

How much are millennial parents paying for child care?

One major expense parents may have to contend with, at least in the early years, is child care. According to the NerdWallet survey, millennial parents who pay for full-time child care — care at least four days a week — report paying $665.70 a month, on average, per child. Nearly a quarter (23%) are paying $1,000 or more a month, per child.

The estimated median U.S. household income is $77,221 for 2023, according to NerdWallet’s household debt analysis. Assuming monthly child care costs of $665.70, or $7,988 annually, that represents more than 10% of gross income, per child. That’s if you make the median income, if you don’t pay more than the surveyed average for child care and if you only have one child. Plus, child care is only one expense, albeit one of the pricier kid costs you’ll likely have. It’s no wonder the survey found that a quarter of millennial parents of minors (25%) identify child care costs as their biggest financial stressor.

Options for cutting child care costs

If you’re currently struggling to pay for child care, or child care costs are holding you back from having children, there are ways to get these expenses down. Some are more ideal and some are less so, and all depend on what you want for your and your child's life.

According to the survey, nearly 4 in 5 millennial parents of minors (79%) took steps to lower child care costs, like working opposite shifts from their partner so they didn’t need child care (20%) and working from home while caring for their children (17%). The hard truth is that sacrifices are often made in service of keeping child care within budget, and some of them could require major upheaval. Here are some other ways parents have cut down on child care costs.

Use accounts and programs available to you. The survey found that 15% of millennial parents of minors used a dependent care FSA to pay for child care. The dependent care flexible spending account (DCFSA) allows you to deposit up to $5,000 pretax per household to be used for child care expenses within a given year. Look into the benefits your employer provides to see if you have access to a DCFSA to put some money aside for child care and lower your taxable income.

It’s also a good idea to see if you can apply for need-based financial assistance for child care costs, particularly if your family qualifies as low-income. One-tenth of millennial parents of minors (10%) say they receive/received need-based assistance for child care costs, according to the survey. You can also ask local child care centers if they offer scholarships and, if so, what criteria they use to determine eligibility.

Seek out a lower-cost child care option. According to the survey, 15% of millennial parents of minors used a lower-cost alternative to a day care center, like a co-op or home-based day care. Home-based child care may be more affordable than traditional child care centers or a dedicated nanny. This option could provide your child with a cozy environment to spend their days in with a tight-knit group of kids. A few things to know: In-home child care may include mixed-age groups and could lack a structured curriculum, compared with center-based options. Also, your point of contact for any issues at a co-op or home-based day care will be the provider themself; there likely won’t be a corporate office or formal administrator like you might find at a day care center.

Move closer to family, or to a more affordable community. The survey found that 17% of millennial parents of minors say they moved closer to their or their partner’s family to get help with child care, while 10% moved to a location with cheaper child care. This may be ideal for those parents who already want to move, particularly for those who want to be closer to family and whose family has offered assistance with child care. Whether this works for you will likely depend on your job, social and property ties in your current location, familial relationships and willingness to relocate.

Leave the workforce temporarily. According to the survey, 13% of millennial parents of minors say they left the workforce to take care of their children and 13% say their partner left the workforce. This is a highly personal decision. If you or your partner wants to be a stay-at-home parent and the other partner can earn enough to support the family, it could be a good idea. If this isn’t something you particularly want, but you’re open to the possibility, do the calculations to figure out which path makes most financial sense. Make sure to factor in the costs of missing years of career training, promotions and raises, and the challenges of reentering the workforce after several years away.

Wait it out. If you can cover child care costs but have to temporarily scale back on other financial goals to do so, that’s OK. While the hefty bill can be hard to stomach, most children won’t require long-term child care, at least not on a full-time basis. So if you can swing it, it might be worth it to cut back on other things for now and make plans for how to reallocate those funds toward making financial progress when your child no longer needs that full-time care.

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