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Paying for child care drives some parents to bankruptcy

Workers in Washington are likely already familiar with the rising cost of living despite seemingly stagnant wages, but it is more than just rent and groceries that are putting financial pressure on families. Providing child care is no longer something that most families can pay for out of their paycheck. Instead, many are going into debt simply to cover the cost of daycare and child care, and this could be pushing some families toward bankruptcy.

The average American family shells out $18,000 annually in order to pay for child care. For some, this takes up a sizeable chunk of yearly income. A recent survey found that nearly half of all families work significantly harder just to earn enough to cover the cost of care, while 25 percent of surveyed families admit that child care costs put them deeper into debt. Leaving the workforce in an effort to avoid these costs -- which 10 percent of people do -- can place an even larger burdens on families, as the loss in lifetime earnings can be significant.

Child care costs also have a secondary effect on working parents. Many parents responding to the survey said that they move to part-time positions from full-time or turn down certain opportunities in order to retain flexible work schedules. While these might reduce the costs of child care, reduced earnings leave most parents in the same financially compromised positions as before.

Bankruptcy is rarely an easy choice to make, especially for concerned parents who are worried about their children's futures. However, the rising cost of child care in Washington prevents many people from saving money or planning for retirement, both of which can help secure a more stable future for the entire family. When increasing debt prevents consumers from paying for even basic costs -- such as child care -- bankruptcy can be a positive solution.

Source: Yahoo!, "A quarter of American families go into debt to pay for child care, and the cost is significantly changing the way people do their jobs", Aug. 19, 2016

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