San Francisco Childcare: What does it really cost?

Our “What does it really cost” series sheds light on how much different women across the country spend on the big life events: having a baby, taking a sabbatical year, moving, getting a master’s degree, buying a house, etc. This week’s feature is highlighting one woman’s cost of having two children in childcare, one is 2 years old and the other is 3 months old.

Location: San Francisco Bay Area

Age: 34

What were your total childcare costs for two children?

This year, with two kids in paid care, we expect to spend $70K per year. That consists of a part time nanny (27 hours per week at $35 per hour plus payroll and employer taxes) and part-time preschool (20 hours per week at $1380 per month). Our nanny during the pandemic (for one kid!) was $30 per hour. We offered her a yearly raise and a more significant bump for taking care of two kids and increasing her job responsibilities. This also included a holiday bonus, and our toddler will start preschool in the fall. The grandparents help when the kids don’t have childcare in order to work 40 hour per week jobs. We are counting down the days until the kids are in public school!

Final Costs: About $70K per year.

Was this more or less than you were expecting?

Way more! Beforehand, we had budgeted about $2k per month per child. In part due to the pandemic and in part due to increase in childcare costs and naivety, we had no idea that childcare would consume the vast majority of one of our after tax salaries as (relatively) highly paid workers.

Childcare Workers Share Why They Have Quit or Are Considering Quitting

Were there other options that you considered? What are the pros and cons of this compared to other options?

We did! We looked into daycare and even had our name down on several waitlists. One home daycare was $400 per week and offered us a spot but when we toured. The kids were sitting in front of the TV all day and it didn’t feel like a great environment to leave our son in. We opted for a part-time nanny to make the costs more comparable to daycare, but that meant we are relying on grandparents to do a day a week of care . Our nanny makes our lives dramatically easier but it’s also a luxury childcare choice. I really wanted to stick to my principle that domestic labor is labor and that caring for children is one of the most valuable ways for someone to contribute to society. We pay in the middle to high end of the range in our area. It’s important to me that our nanny be able to access government benefits that we might not be able to financially provide as individual employers (for example, in California, she is entitled to paid parental leave!).

What do you wish you would have known?

I wish I had realized some of the hidden costs that come along with nanny childcare. In our area, it’s typical to offer guaranteed hours (you pay the nanny for the weeks you’re on vacation), a Christmas and work anniversary bonus of one to two weeks salary, and the additional costs associated with payroll and employer taxes which pushes the effective rate up by $3-5 per hour. I also wish I would have realized how hard it was with daycare as well. With how often kids get sick and COVID protocols, it can be really hard to find backup care as often as you need it. It seems like there’s no great option, just a bunch of families muddling along in non-optimal situations. I hope we can address this at a policy level!

In conclusion, this woman’s total childcare costs are about $70K.

We hope this gives you insights into how someone else navigated the costs of childcare and the different options she considered. Do these costs surprise you?

This post was created as part of the “What does it really cost series?” Her Personal Finance’s mission is to help high-earning women take charge of their finances. As an MBA, our founder has a particular passion for supporting this community. Here is a link to a Q&A with Harvard Business School students about finances in school. You can also learn more about our founder and our classes on our website.

Did you enjoy this post and want to contribute your own story? Send us an email to eryn@herpersonalfinance.com.

San Francisco Childcare: What does it really cost?

San Francisco Childcare: What does it really cost?

What were your total childcare costs for two children?

Was this more or less than you were expecting?

Were there other options that you considered? What are the pros and cons of this compared to other options?

What do you wish you would have known?

In conclusion, this woman’s total childcare costs are about $70K.

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