Financial Expert Can’t Believe Dad Spends $80K On Childcare, People Say He Needs A Reality Check
Managing money in a family with multiple children is no mean feat. Parents have to balance saving for the future with giving their children the best possible life right now. A caller to money management expert Dave Ramsey’s show caused some surprise when he revealed that he spends $80,000 a year just for daycare.
Commenters debated Dave’s advice and whether or not this was a reasonable amount to spend. We reached out to Dave Ramsey via email and will update the article when his team gets back to us.
More info: TikTok
A man called financial guru Dave Ramsey for advice when he found himself struggling to pay $80,000 for his kid’s daycare
Image credits: daveramsey
“The caller: I’m expecting my income to increase pretty dramatically in two years, but in the meantime, I’m having trouble paying costs, including two kids in daycare. My wife is doing a medical residency, so in two years, she’ll be done with that and get a job as a doctor.
Dave Ramsey: Yeah, that will increase things pretty dramatically. And how much debt will you guys have?”
Image credits: daveramsey
“The caller: We own a house, and aside from the house, we have about $25,000 in student loan debt.
Dave Ramsey: And is she borrowing to finish medical school?
The caller: No, she has no med school debt. So the student debt is mine.”
Image credits: daveramsey
“Dave Ramsey: So what’s she making in residency?
The caller: About $70,000.
Dave Ramsey: And what are you making?”
Image credits: daveramsey
“The caller: About $110,000.
Dave Ramsey: Can you explain to me why you can’t get by on $180,000? And you have to borrow money because you can’t get by on $180,000?
Jade: No, something’s not right.”
Image credits: daveramsey
“The caller: The childcare costs are about $80,000.
Dave Ramsey: $180,000 and you’re going to explain that with child care costs?
Jade: Hold on, how much are you paying a month in child care?”
Image credits: daveramsey
“The caller: It’s about $80,000 a year.
Dave Ramsey: Why? You brought them in college?”
Image credits: daveramsey
“The caller: The base tuition for the child daycare we use is $25,000 per kid, then we pay extra for early care and aftercare, and it doesn’t go during the summer, so during the summer we need a nanny.
Dave Ramsey: I’m going to be as nice as I can. You guys have lost your minds.”
Image credits: daveramsey
“Jade: There’s cheaper routes.
Dave Ramsey: Oh, you think? You got them in some kind of dadgum… I mean, are they going to Harvard? What the hell?”
Image credits: daveramsey
“The caller: it is a pretty fancy daycare.
Jade: you can downgrade.
Dave Ramsey: They’re not even in school and you’re already paying 25, 000 a head? Yeah. Come on, dude. That’s just dumber than c**p.”
Image credits: daveramsey
“Jade: Seriously. Downgrade. It’s time to take the kids off filet mignon.
Dave Ramsey: I don’t care how much money you make. There’s not enough money in the world that doesn’t make that stupid.”
Image credits: daveramsey
“Jade: Find you a free summer camp. Anything. During the summertime.
Dave Ramsey: So we’re going to borrow money now. We’re going to take out student loans for the four-year-old because that’s what we’re coming down to. You make $180,000. Yeah, I think you need to become frugal. If that’s what the definition of living on $180,000 is.”
Image credits: daveramsey
“Jade: Look, daycare can be expensive, but it doesn’t have to be that expensive.
Dave Ramsey: $25,000 a kid? Yeah, I think not. Unbelievable.”
Image credits: daveramsey
Image credits: daveramsey
Image credits: daveramsey
Image credits: daveramsey
You can watch the full videos here
@daveramsey This couple is spending $80,000 a year for child care. #childcare #daycare #moneytok ♬ original sound – Dave Ramsey
@johnbmortgage #Duet with @Dave Ramsey Obviously Dave is clueless about real life childcare costs for American parents. The truth is a majority of households pay 20% or more of their total income on preschool, daycare, aftercare, nannies etc. And that doesn’t mean those are the stupid people and the other third found a “cheaper route”. The remainder either have one parent or other family member at home or they have a high enough income to keep the cost under 20%. So here in the real world childcare costs are a serious burden on our financial stability, and Dave needs to wake up and realize that envelopes and being thrifty won’t cut it here. Get your act together @Dave Ramsey . It’s 2024 let’s lose the 1984 mindset. #cluelessguru #daycare #childcarecosts #householdfinances #expenses #daveramsey #inflation #income #johnbandme ♬ original sound – John Birke 🏡 Mortgage Hacker
@sheisapaigeturner There is a childcare crisis in our country. The cost of childcare is astronomical. The cost of childcare is typically the biggest financial burden for a family with young children. The cost of childcare is rising at a faster rate than any other expense for families. People like Dave, pretending that this isn’t happening is wild to me because it is documented that this is indeed the cost of daycare. Dave should not be giving advice unless he’s well-versed in the topic. ##daveramsey##childcarecrisis##childcare ##daycare##daycarelife##millennialmom##workingmom ♬ original sound – Paige
Normally, debt is the main issue most households face
Image credits: Towfiqu barbhuiya / Unsplash (not the actual photo)
Those familiar with Dave Ramsey’s work and philosophy shouldn’t be surprised that the very first thing he asks about is debt. Indeed, a large part of his personal story and philosophy focuses on the “debt snowball method,” where, assuming a person has debt from multiple sources, you pay off the smallest one first and work your way “up.”
While this particular caller does have five figures of debt, it doesn’t appear like it’s a particular issue for him or his family. After all, he pays his entire college debt, per year, per head for childcare. Most people would look at a joint income of $180,000 and relatively minimal debt and wonder what difficulties this family could ever be going through.
Adding in the extra costs and a nanny during the summer, this family is spending what could amount to a solid annual income just on childcare, never mind all the other costs of actually having a kid. Naturally, Dave Ramsey suggests that they downgrade the daycare they use, which, for some reason, prompted a lot of quite negative comments.
Childcare costs have been steadily increasing, although people without kids might not have noticed
Image credits: Aaron Burden / Unsplash (not the actual photo)
There is some partial truth to this. Childcare costs have been steadily increasing, although this information is rarely front and center anymore, as childless folks will often not have any idea it’s happening in the first place. Similarly, not all people with children employ professional childcare, they might offload the task to family or have state-sponsored alternatives.
One study revealed that, on average, Americans spend around $1700 a month per child. This is no small sum, although still half of what the caller spends on a single child per month. What is more surprising is the fact that so many viewers didn’t seem to even blink. Instead, they call Dave Ramsey out of touch for thinking this is way too much.
It’s true that a person purporting to give financial advice should be informed about the costs people face on a daily basis. However, this particular caller, on top of paying for a summer nanny, is spending over twice the national average per month for each child. Given that many daycares do give discounts for additional children, it’s unclear why he can’t just find a cheaper alternative.
There are alternatives to daycare
As other comments note, given the money he is spending, a full-time, year-round, live-in nanny could do the trick. Since we don’t know the caller’s housing situation, this isn’t necessarily the silver bullet he is looking for. After all, a nanny needs to be housed, he or she will still take holidays, it might make work from home more stressful and who knows what else.
At the same time, we do know that the caller does hire a nanny over the summer, so his household must have the capacity to house one. The real issue here is that, even at higher economic levels, one has to evaluate cost opportunities. If the daycare suits his lifestyle, then perhaps the cost makes sense. However, if it’s too expensive, he might have to live a bit less comfortably to save, the kind of decision all of us are making nearly every single day.
Viewers debated the rising costs of childcare and Dave’s advice
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My coworkers are paying $480 a WEEK for a completely average daycare. This comes out to $24960 a year. The only kind of downgrade they could do would be leaving their kid at some sketchy unlicensed person's house.
Yeah but these people said the BASE is $25K then they're paying another SIXTY THOUSAND FOR CHILDCARE? THAT is insane. It's not the base amount. It's the extra cost that's more than double the base. And then isn't available in the summer? No. Never. WTF kind of school are these kids in? They literally could hire an in-house nanny for $40-50K or even $60K for the YEAR and call it a day.
Load More Replies...
No….they’re “pro life” but don’t do a damn thing to help parents and children
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Wow! How much is child care in your area? In Scotland, the average is around £60 per child per day. Some child care providers give a second child discount. This is roughly £15,000 per year, full time. The price for a full time, live-in nanny is around £30,000.
In my town it depends on parents' income and can vary between cca 30 and 80 Euros A MONTH. But my town has higher tax rates than the rest of the country so the town "pays" for the part of the price (subvention), that's why it's so cheap. In other areas it can reach up to 200 Euros a month per kid.
Load More Replies...
How's that a solution? Downgrade. Yeah, I'm pretty sure that the caller already thought about that. Maybe a downgrade isn't possible - that childcare might be the only one within reach. Maybe it already is the cheapest option - fancy or not. They surely looked up different places to determine price & service correlations. Free Summer camp - sure. Find me one. --- everytime I see/read this financial advices it's "downgrade" / "don't spend x amount" / "Stop doing x" how's that an advice? Assist by determining _how_ to not spend amount x.
Some churches run cheap summer camps, but I wouldn't want my kids going there. We're not Christian and a lot of the camps are pure indoctrination
Load More Replies... Dave is totally out of touch with reality. He's a multimillionnaire straight white guy blaming poor people for being born poor. He got every advantage in life and can't understand why other people don't have the same advantages as an old white guy.
I live in a not cheap area and only pay around $24,000 a year for two kids. $80,000 is insane and not out of touch to think it is insane.
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The cheapest daycare near me is $2300/month for infants, but has some rules that won't work with our schedules. The one closest to me that we'll likely have to go with is $4170/month. For just regular daycare, nothing special. A nanny would cost even more. Granted I can afford it easily, but it's still ridiculous.
You can hire someone/people to come stay at hour house and mind the kids. They don't have to be. A live in nanny. £20/hr, 50 hours a week (40 hours plus some commute time) , even with no holidays that's only 52k per year, and that's a high estimate assuming no one adjusts their schedule to have more time with their kids and they don't take annual leave to spend time with them. I live in quite an expensive city and if you offered 20/hr for 2 kids you'd have qualified and experienced carers applying.
That may be the price, but then the couple needs to stop complaining OR one of them needs to stay home. At some point paying huge day care fees is a fools game and the day care facility knows it.
In Norway right now about 3000 NOK a month. That is around 280 USD. Yet another reason to stay
I was super confused by your comment (because 2800x12 would be 33.6k?) but then I googled it and it turns out 3000 NOK is $280 and that made WAY more sense.
Load More Replies... I think we pay around €150 per month for afternoon care where they stay longer in school, play, do their homework until we pick them up at 3 or 4. Sheesh ... I don't even MAKE 80k a year.
I cannot imagine even making enough money to afford that. I don’t even make $80k/year. But yeah Dave is out of touch. I work for well to do families and child care is VERY expensive.
The Duggars swear by this guy. That’s all I need to know! 🤢
Daycare has been and continues to be unbelievably expensive in the US. Over 20 years ago my husband got laid off when we had a little one in daycare. After running the numbers, we decided to simply have him stay home because the daycare would cost about the same or more money than he'd bring in with a job as a salesclerk, cashier, etc.
Welcome to the US. Especially if they're in any sort of decent-sized city, this is going to be accurate.
I have no idea how much I spend on childcare. But I know that when I put him in a $20,000/ year school it was way cheaper than having the nanny full time. And that only covered 9 months a year, no holidays, and until 3PM. I'm sure daycare is cheaper but I did not want my pre-verbal child in a daycare. The nanny was home with me (I work from home). So I could pop in and see and hear what was going on. Plus my child got to bond with one person. I could see if you were in NYC and had more than one kid how this could add up.
Someone bless America :)) it's a wonder your kids don't run into traffic, since they need "special" this and "extra" that. Maybe actually take the time to take care of your own kids?
You could just not have kids. The world is already suffering from overpopulation. I don't know why people just want the world to keep getting worse.
So tiktokkers can steal Dave Ramsay's content and film it with their stupid head in the way and post it as original content? Please stop posting tiktoks. If you continue to post them, please put something in the title like "boring tiktok post" to save us from clicking on them
My coworkers are paying $480 a WEEK for a completely average daycare. This comes out to $24960 a year. The only kind of downgrade they could do would be leaving their kid at some sketchy unlicensed person's house.
Yeah but these people said the BASE is $25K then they're paying another SIXTY THOUSAND FOR CHILDCARE? THAT is insane. It's not the base amount. It's the extra cost that's more than double the base. And then isn't available in the summer? No. Never. WTF kind of school are these kids in? They literally could hire an in-house nanny for $40-50K or even $60K for the YEAR and call it a day.
Load More Replies... No….they’re “pro life” but don’t do a damn thing to help parents and children
Load More Replies... Wow! How much is child care in your area? In Scotland, the average is around £60 per child per day. Some child care providers give a second child discount. This is roughly £15,000 per year, full time. The price for a full time, live-in nanny is around £30,000.
In my town it depends on parents' income and can vary between cca 30 and 80 Euros A MONTH. But my town has higher tax rates than the rest of the country so the town "pays" for the part of the price (subvention), that's why it's so cheap. In other areas it can reach up to 200 Euros a month per kid.
Load More Replies... How's that a solution? Downgrade. Yeah, I'm pretty sure that the caller already thought about that. Maybe a downgrade isn't possible - that childcare might be the only one within reach. Maybe it already is the cheapest option - fancy or not. They surely looked up different places to determine price & service correlations. Free Summer camp - sure. Find me one. --- everytime I see/read this financial advices it's "downgrade" / "don't spend x amount" / "Stop doing x" how's that an advice? Assist by determining _how_ to not spend amount x.
Some churches run cheap summer camps, but I wouldn't want my kids going there. We're not Christian and a lot of the camps are pure indoctrination
Load More Replies... Dave is totally out of touch with reality. He's a multimillionnaire straight white guy blaming poor people for being born poor. He got every advantage in life and can't understand why other people don't have the same advantages as an old white guy.
I live in a not cheap area and only pay around $24,000 a year for two kids. $80,000 is insane and not out of touch to think it is insane.
Load More Replies... The cheapest daycare near me is $2300/month for infants, but has some rules that won't work with our schedules. The one closest to me that we'll likely have to go with is $4170/month. For just regular daycare, nothing special. A nanny would cost even more. Granted I can afford it easily, but it's still ridiculous.
You can hire someone/people to come stay at hour house and mind the kids. They don't have to be. A live in nanny. £20/hr, 50 hours a week (40 hours plus some commute time) , even with no holidays that's only 52k per year, and that's a high estimate assuming no one adjusts their schedule to have more time with their kids and they don't take annual leave to spend time with them. I live in quite an expensive city and if you offered 20/hr for 2 kids you'd have qualified and experienced carers applying.
That may be the price, but then the couple needs to stop complaining OR one of them needs to stay home. At some point paying huge day care fees is a fools game and the day care facility knows it.
In Norway right now about 3000 NOK a month. That is around 280 USD. Yet another reason to stay
I was super confused by your comment (because 2800x12 would be 33.6k?) but then I googled it and it turns out 3000 NOK is $280 and that made WAY more sense.
Load More Replies... I think we pay around €150 per month for afternoon care where they stay longer in school, play, do their homework until we pick them up at 3 or 4. Sheesh ... I don't even MAKE 80k a year.
I cannot imagine even making enough money to afford that. I don’t even make $80k/year. But yeah Dave is out of touch. I work for well to do families and child care is VERY expensive.
The Duggars swear by this guy. That’s all I need to know! 🤢
Daycare has been and continues to be unbelievably expensive in the US. Over 20 years ago my husband got laid off when we had a little one in daycare. After running the numbers, we decided to simply have him stay home because the daycare would cost about the same or more money than he'd bring in with a job as a salesclerk, cashier, etc.
Welcome to the US. Especially if they're in any sort of decent-sized city, this is going to be accurate.
I have no idea how much I spend on childcare. But I know that when I put him in a $20,000/ year school it was way cheaper than having the nanny full time. And that only covered 9 months a year, no holidays, and until 3PM. I'm sure daycare is cheaper but I did not want my pre-verbal child in a daycare. The nanny was home with me (I work from home). So I could pop in and see and hear what was going on. Plus my child got to bond with one person. I could see if you were in NYC and had more than one kid how this could add up.
Someone bless America :)) it's a wonder your kids don't run into traffic, since they need "special" this and "extra" that. Maybe actually take the time to take care of your own kids?
You could just not have kids. The world is already suffering from overpopulation. I don't know why people just want the world to keep getting worse.
So tiktokkers can steal Dave Ramsay's content and film it with their stupid head in the way and post it as original content? Please stop posting tiktoks. If you continue to post them, please put something in the title like "boring tiktok post" to save us from clicking on them
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