Money Management

The average parent spends $321 weekly on daycare nationwide. But, this cost differs significantly in some states. See what soon-to-be parents should know. [[{“value”:”

Child care is a necessary expense for many working parents, but it’s one that can significantly impact their wallets. Care costs can vary depending on the type of child care solution chosen, the number of children, and where a family lives. In some states, child care can be more affordable. However, these costs may consume much more of a family’s household income in other states.

Parents should research local care costs to financially prepare before having kids. Otherwise, they may struggle with the expense and feel more stress later.

Thinking of having children? Here are a few of the cheapest and most expensive states for child care.

The top three most expensive states for daycare

For many parents, daycare is a popular child care solution because it’s more affordable than hiring a nanny to provide one-on-one care. The environment is also excellent for child development because kids can interact with their peers well before heading to school.

Care.com’s 2024 Cost of Care Report examined how much families spend nationwide on child care expenses. Parents were asked to provide details on their spending. Here’s a look at the three most expensive states for daycare costs.

1. Alaska

In Alaska, the average family spends $375 per week on daycare costs for one infant. Care.com study data lists Washington, D.C., as the most expensive part of the country for infant daycare costs, at $419 per week. However, since we’re focusing on states, Alaska tops our list.

2. Massachusetts

Massachusetts is next on our list, with parents here spending almost as much as families in Alaska. In this state, parents spend an average of $372 per week on daycare expenses for one infant.

3. Washington

The average daycare cost in Washington is slightly cheaper than what parents pay in Massachusetts. The average family spends $337 each week on daycare for one infant.

The top three cheapest states for daycare

Daycare is much cheaper in areas with lower living costs. Families can save money on child care expenses by living in these states. According to data from Care.com’s 2024 Cost of Care Report, the following three states have the cheapest daycare costs.

1. Arkansas

Parents in Arkansas are paying an average of $129 per week for daycare for one infant. If a family were to pay for 52 weeks of care, they would spend less than $7,000 annually, which is much more affordable than the most expensive states on our list. Parents in Alaska who pay $375 weekly would pay almost $20,000 yearly for 52 weeks of care for an infant.

2. Louisiana

Average daycare costs in Louisiana are slightly more expensive than Arkansas’s average costs.

Parents living in Arkansas are paying an average of $139 per week for daycare for one infant.

3. Mississippi

The next state on our list is Mississippi. Daycare costs here are very similar to that of Louisiana. On average, families in Mississippi spend $140 per week for daycare for an infant.

Research care costs in advance

Parents and soon-to-be parents can better prepare by researching local care costs before they need to enroll their children. It’s wise to contact nearby child care providers as soon as possible to get on a waitlist. Many of the more affordable solutions have very long waitlists.

If you’re considering having kids, you can prepare in advance by setting aside money in a high-yield savings account. Doing this can make child care costs less daunting when enrolling your child in daycare. Plus, you’ll earn interest while your money sits in the bank.

If you’re looking for ways to reduce your spending to free up more income for savings, consider using one of the best budgeting apps. Tools like this make tracking your spending, setting spending limits, and monitoring your progress throughout the month easier. For additional financial tips, check out our personal finance resources.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Interested in buying new construction? Read on to see why you may want to think twice. [[{“value”:”

If you’ve been following the real estate market, you may be aware of the various conditions that are making things very difficult for buyers. For one thing, mortgages are expensive to sign. And mortgage rates might remain stubbornly high until the Federal Reserve begins implementing interest rate cuts.

Another issue is a glaring lack of inventory. As of late February, there was only a 2.9-month supply of homes on the national market, according to the National Association of Realtors. It can often take a six-month supply of homes for there to be enough inventory to satisfy buyer demand.

But there is a bit of good news on the inventory front. Housing starts, which are a measure of new construction, rose 5.9% in February from the previous year, according to Census data. So you may have an opportunity to buy new construction during the actual construction phase. This gives you an opportunity to customize your home and incorporate features from the start that may be difficult to retrofit later on.

But while the idea of buying new construction might appeal to you, there are some pitfalls you might encounter. Here are a few signs that buying new construction may not work out well for you.

1. You’re on a tight budget

Because home prices are elevated these days, as are mortgage rates, buying a home is not going to be an inexpensive prospect. Still, some buyers have more wiggle room than others. But if your budget is very tight, then new construction may not be the best idea.

For one thing, you might pay a premium to get into a newly built home that’s never been lived in. But also, new construction homes tend to come with higher property tax bills than their existing nearby counterparts simply because they’re new.

To put it another way, let’s say you buy a 3,000-square-foot home on a certain block, and there are four other homes around the corner that were built 20 years ago that are similar in terms of size and features. While your neighbors might end up paying $5,000 a year in property taxes, your annual property tax bill might be $7,500 simply because your home is new.

2. You’re on a tight timeline

Home construction has a tendency to take longer than originally expected. If you’re in a flexible housing situation, like a month-to-month rental lease, then new construction may not be a problem. But if your lease is ending in a few months and you have to be out of your current home by a certain date, then you may want to think twice about making an offer on a home that’s not fully built yet.

Factors like inclement weather, materials shortages, and permit issues all have the potential to delay a home build. So if you absolutely have to be moved into a new home by Aug. 1 and you sign a contract with a builder tomorrow saying your home’s estimated completion date is July 15, don’t believe it. Add at least a couple of months to that estimate — and avoid making an offer if the time frame doesn’t work for you.

3. You’re not a fan of financial surprises

When you buy a home that already exists, you know exactly what you’re getting. When you buy new construction, you often don’t realize what features will be missing until after you move in.

For example, you might close on your new construction home only to realize it didn’t come with curtains or window treatments. So now that’s money you have to find and spend.

Of course, reading your new construction contract carefully should loop you in on the items that are (and, by default, aren’t) included. But it’s hard to remember every detail.

You may not think to look for things like towel rods in writing when you’d just plain expect them to be included in your bathrooms. But if you’re someone who tends to get thrown for a loop when extra costs arise, then new construction may not be your best bet.

There are plenty of perks to buying a home that no one has lived in before. But before you rush into buying new construction, think about the downsides as well as the benefits.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Big banks have a reputation as a safe place to put your money. Find out why using an account at one of these banks could be costly. [[{“value”:”

Security is pretty important in a bank account. In fact, it’s a top factor Americans look for when choosing a bank, according to recent banking research by The Motley Fool Ascent. A whopping 91% of respondents consider it an important feature, tied for No. 1 with quality customer service and mobile and online access.

If it’s safety you’re after, big banks may seem like the clear choice. Banks like Chase, Bank of America, and Wells Fargo are massive financial institutions, so it’s reasonable to expect your money to be safe with them.

You’re at almost zero risk of losing money you deposit with these banks. They’re all FDIC insured, and that covers up to $250,000 per eligible account. But there is a different type of risk with accounts at big banks.

Rock-bottom rates that don’t keep up with inflation

The largest banks pay the lowest interest rates. The average savings account rate is 0.47%, according to the FDIC. That’s already not great — some online banks pay over 10 times that.

But at big banks, it’s even worse. Savings account rates at Chase, Bank of America, and Wells Fargo all start at a pitiful 0.01%. Have $10,000 in savings? Well, after a whole year using one of those banks, you’ll have earned another $1.

The problem isn’t just that you could earn much more interest with a different bank account. Your savings also won’t even come close to keeping up with inflation. The long-term U.S. inflation rate is 3.28%. If your savings account only pays you 0.01%, then you’re losing a lot more to inflation than you’re earning in interest.

High-yield savings accounts offer more interest and the same level of protection

If you have your savings at a big bank right now, check out high-yield savings accounts. These are still savings accounts, but they’re usually offered by online banks. As the name suggests, they offer significantly higher rates than what you’ll find at most banks.

At the time of this writing, you can find rates as high as 5.36%. On a $10,000 balance, you could earn $536 in interest — $535 more than what you’d earn at a bank offering 0.01%.

Even though some people see big banks as more secure, online banks are just as safe. They’re typically FDIC insured, as well, so they offer the same coverage of up to $250,000 per eligible account. You can confirm that an online bank is FDIC insured on its website or through the FDIC.

Another good option is a certificate of deposit (CD). This type of account has a fixed interest rate and term, so you can lock in a rate for a set amount of time. With savings accounts, rates can fluctuate. The best CDs also pay rates similar to, and sometimes surpassing the best savings accounts.

For long-term growth, investing is the best option

A high-yield savings account is perfect for savings you might need in the near future. It’s the right place for your emergency fund and any upcoming savings goals, such as a down payment on a home.

But for long-term financial goals, you’re better off investing your money. Historically, the stock market has returned an average of about 10% per year. That’s a much greater return than you could get through a savings account or CD.

As a general rule, if you’re saving for a goal that’s more than five years away, you should probably invest your money. If it’s 10 years or more in the future, you should definitely invest your money. Two of the most common examples are saving for retirement and for children’s college education.

Because of inflation, our savings gradually gets less valuable. The best way to protect against that is by putting your money in places where it can grow. There are lots of savings accounts that are beating inflation right now, but you won’t find them at the big banks.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool has a disclosure policy.

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