Rising Child-Rearing Costs Leave Parents Rethinking Their Spending

(Washington, 23rd) In the United States, the cost of raising young children continues to climb, forcing many families to make difficult trade-offs: Is a dual-income household more realistic, or is it more cost-effective for one parent to stay home? Paid childcare is expensive—but giving up a paycheck can also strain a family’s finances.

According to U.S. media reports, financial analysis platform SmartAsset released a new study ranking all 50 states based on a key benchmark: the minimum income required for one working parent to support a household while the other parent stays home to care for one toddler. The calculation factors in both the savings from avoiding childcare costs and the financial impact of losing a second income—highlighting how the economic pressure of a single-income parenting model varies significantly by state.

SmartAsset’s director of economic analysis, Jaclyn DeJohn, said the findings can help families assess the “career vs. childcare” decision more objectively.

Cost differences largely reflect local living expenses

In California, the study estimates a minimum annual income of US$97,656 (about RM397,265) for a one-income household where one parent stays home. If both parents work, the family would need at least US$115,814 (about RM471,131) to cover expenses.

In Hawaii, a three-person household relying on a single income would need at least US$102,773 (about RM418,080) to meet basic costs. If the child is enrolled in childcare, annual childcare and related expenses for a toddler are estimated at around US$33,363 (about RM135,720).

By contrast, lower-cost states show much lower minimum income thresholds. West Virginia requires about US$68,099 (about RM277,026), while Mississippi requires roughly US$70,242 (about RM285,744) for a three-person household under a single-income model.

Higher risk for single-income families

DeJohn added that single-income households face greater financial vulnerability—if the sole earner loses their job, the impact can be severe. Dual-income families are generally more financially resilient, but often at the cost of less time with children during critical developmental years.

Separately, a LendingTree study also highlights how expensive child-rearing has become: the cost of raising a child has risen by 25%, reaching a cumulative US$297,674 (about RM1,210,940) over an 18-year period.