As more Americans struggle to pay their debts and keep up with mortgage payments another source of financial strain is creeping in. The cost for child care in America is among the highest in most countries. In order to pay for rising day care expenses, more families are turning to second mortgages and home equity loans.
A Fine Line
The average cost for child care for a child under the age of four is around $850 a month. This cost rises closer to $2000 for children still in diapers or considered infants. These costs vary around the country and depend on additional factors such as the type of childcare chosen and how many hours per week the child attends. However, even these factors do nothing to combat the fact that child care costs have risen by nearly 6 percent over the last few years.
The recession, struggling job market and escalating costs of living have all brought increasing financial pressure for many families. Sadly, many have resorted to taking out personal loans or loans against their mortgages to cover these expenses. The trouble here is that defaulting on either of these types of loans can lead to bigger problems such as overwhelming debt and even foreclosure. This essentially creates a cycle of borrowing from one source to pay another, a fine line that separates success from devastation.