I am coming to the end of my maternity period with my second baby.
When working, I am a higher rate tax payer in greater london.
I can just about return to work when factoring in childcare costs, so basically I would earn £63 per month - full time. Husbands salary pays bills excluding food..just due to huge mortgage and a couple of hundred quid of existing debts.
It's all very jolly to say ah you are a partnership childcare costs should be split, however the opportunity cost of returning to work makes it pointless.
If I go back to work, I will be paying £22000 taxation for someone else to gain tax credits and
I presume have a greater level of disposable cash than me.
That really is an aside...
My real question is, am I being unreasonably to ask, does anyone else work for nothing (full time) for the future of your career, knowing that if you take 5 years out, your skills are obsolete?
How do you motivate yourself?
How do you not feel a little bit bitter?
is your industry one where you could freelance or work from home so more around your dc?
I think you need to weigh up all your options - change the childcare/ change location - cheaper property,travel etc and maybe a better work life balance/change career etc or a combination.
It's worth staying in work in the long run in a career job because when the childcare costs go down you once again have a good income, but YABU to resent people getting tax credits as thy are only getting them cos they are On a very low income to start with, you and your DH would have more disposable income if you had a smaller mortgage, but that was your choice.
I paid to go back to work - in the country where we live, the lower earner can transfer their tax-free allowance to the higher earner; which meant that I had 53% deducted by the state off every eurocent I earned working freelance. By the time we paid for childcare and transport, we were paying more than I was bringing in. But it was essential to go back to work, as my DH was on short-term contracts, and if his contract hadn't been renewed, we would have had to rely on my income. (Which, of course, would have been much higher if I had become the main breadwinner.)
Once the children were older, I acquired a "proper" job, for which I wouldn't have been eligible had I not been doing the freelance work earlier. In my new job I was, in effect, doing exactly the same job as my DH. We had the same employer, an identical job description, but I was working on a different site. But because DH had 12 years' more increments, and because the t's and c's for the job had changed 10 months before I began, and because I had higher transport costs, my take-home salary was nearly 1000€/month less than his.
Just over 3 years ago (aged 48), I changed jobs; with the perks that come with this job, for FTE I would have overtaken my DH. (I had some health issues, so I opted to work 75%.) The impact on my future pension, should I live long enough to draw it, both with my previous job and my current one, is enormous. None of that would have been possible had I not been in it for the long haul when the DCs were small.
'I will get a job in a supermarket'
I'm glad you will find it that easy, a few months ago I would have killed for a job stacking shelves!
I'm trying to get into a very hard industry which I've heard similar things about finance, so I'd say don't leave all together.
I went through a time if paying my nursery fees & was left with nothing at all too. & it worked out in the end, kind off. It's bloody hard, but worth it!
I think you have had excellent advice about how to make this work- you say why not pay the full mortgage for a year or two, but having a mortgage break would allow you to get over the hump of double childcare, or you could do a 5 day week in 4 long days (if employer agreed) or cut childcare costs (there are people on here doing it cheaper).
If you managed to cut your childcare costs and say went mortgage free for one year it is more than doable, and given a mortgage is 25 years anyway, it is for a short time period.
I wouldn't give up a career in a sector you enjoy and that you would like to return to for the sake of temporary financial constraints. It's a bit different if you believe the job is incompatible with family life and want to get out anyway. I am now extremely glad I have an interesting career as my top primary age children don't need me as much and I can ramp up my career at this time point. I feel very sorry for people plugging away doing jobs that pay poorly part-time with no prospect of advancement, so if you have a chance to avoid this destiny I would grab it with both hands (all assuming you like to work, not everyone loves that path!)
part time could be an option. Really it's down to you deciding which is the most important for you - if you are enjoying your job and wish to progress, it'd be a wise choice to go back. If you are desperate for those £63 extra per month, it would be wise to go back. If you're not bothered, you would have to consider what would benefit your kids most - staying with you or at nursery. I plan on going part time personally, as I want the career but also feel kids don't benefit from full time nursery as much as a mixture
Btw i realise i contradicted myself by first saying the student loan and pension weren't relevant costs and then including them in my calculations. Essentially i think there are two issues, the first being the long term view of whether to go back at all, in which case paying off sl and building up pension are positives, and the second question of how many days is best in the short term for you to have enough money for food, in which case i would include them.
do you know when you will have paid off your student loan? You may suddenly get a big increase in your net pay if it is due to end soon.
stealth going part time might actually help, if she stopped being a higher rate taxpayer, which would probably happen if she went down to four days at c.£43k, given pension contributions aren't taxable and would push her under the threshold. Essentially that fifth day is the higher rate portion of her salary so on that day she is paying 40% tax, 2% ni, 9% sl plus ??% pension- that could reasonably add up to 60% deductions, which would mean she is only taking home c. £80 net a week for the fifth day, then paying out childcare and transport costs in excess of that (£130 per day at £2.6k nursery and £200 transport a month)
obviously its not that straightforward, because of discounts on nursery and travel if full time/ season ticket, but if it were, the op would be losing £50 a week/ £200 a month by being full time over doing four days.
OP you need to do some detailed calculations of the relevant opportunity cost of that fifth day- find out from the nursery what the cost difference is between four days and full time(assuming the weekly rate is discounted) and work out whether it is still worth having a season ticket at 4 days per week. Depending on where you live you might be able to get carnet tickets, or oyster payg might be cheaper than a season ticket. So then the question is whether the incremental cost of the fifth day childcare and travel is more than £80, in which case you would be better off asking for four days.
hope that helps
YABVU Because you are completely ignoring the massive pension contributions you're making - you're choosing to save all that cash, and then moaning about not having any spare money.
Maybe if you'd thought more about not getting a completely inappropriate mortgage and other debts you wouldn't've got in this position.
Surely they cannot survive on £60 per month for food?
stealth is right - whether you give up work or not, you will not have enough money to buy food. So you need to look at ways of reducing your household bills (remortgage to consolidate debts?) and if you decide to go back to work, look at ways of reducing childcare eg get a nanny (live in if possible), suspend pension for a bit etc.
fudgeface her numeracy is fine, and she has explained all the deductions, you cant just use a mse calculator and think you know the ins and outs of someone's payslip.
I'm an accountant, earn 5k more than the op, and my net pay is only 2.8, after not only tax and ni, but student loan, pension and childcare vouchers. Oh and you are only allowed £124 as a higher rate taxpayer of ccv if you joined the scheme after they changed the rules.
op that being said, you need to look at the sl and pension deductions ( and ni i guess) as being a longer term investment. Although it is reducing your net benefit from going to work at the moment, you should take them out of the equation as irrelevant costs. Essentially the gain you make from going to work is £63 PLUS reduction in your student loan debt that will otherwise be earning interest, PLUS accruing pensions for the future, and of course the career benefits in the long term. Perhaps if you added those into the equation you would come up with a more palatable figure that would make you feel less bitter?
I don't understand how you are going to survive actually
Your DH pays for everything other than food and childcare
Your salary covers childcare and you have £63 per month left over
Which presumably you'll spend on food ~£15 per week for the family
And how will going part time help? You obviously earn slightly more than childcare so PT will just mean that net difference is smaller
Returning to work for me would only have been financially worthwhile if i had gone back full time, but for DH and I to both work full time with a 3 hour commute juggling childcare drop offs and pick ups would have been a logistical nightmare.
I don't regret being a SAHM, but don't fall into the trap that I did of thinking your childcare costs are zero if one parent stays at home. All the activities (and meals and snacks) that a nursery provides have to come out of your pocket. It's certainly cheaper than the £70 a day I would have paid to a nursery, but activities aren't always cheap.
You mention looking for a part time role, have you actually asked your current employer for flexible working? Or are you just assuming you will need to return to full time?
Also, does your DH claim childcare vouchers too? If so that's another £243 to deduct from your childcare costs that you're paying
Ha - after possibly my longest post ever appear to have X-posted...typical
Can we please avoid the 'I pay my tax and it goes to everyone else - poor me - it's unfair' thinking? Roads / schools / hospitals? It also implies that the person who is genuinely struggling on a very low wage can do without the little financial help they get.
Also, it isn't helpful to say to the OP ' you chose your huge house so huge mortgage'...this is the SE; I expect even a small house is expensive; ditto for transport.
OP - you will be working for your career and you have to ask yourself is it important to you? Also, you are paying a pension, be grateful you earn enough to even consider this. I went back to work (part-time) in part because I would have been a fool to pass up on my pension. I think you need to be a bit more pro-active - can you take a break from your mortgage? Opt out of pension or reduce payments on pension for a short period of time? Is it possible to freelance / work from home for some of the hours you work? Share a nanny / get a childminder?
And yes....it does look a bit daft if you say you work in finance but your maths doesn't (at first) appear to add up....
Thank you for all your points, it's really given me some food for thought.
Err, just to say I am exactly correct about my net position, however I made a mistake regarding tax. Other than that, finances are spot on - aside from finding cheaper childcare costs I can really see any viable solutions. I think it would be daft to stop paying mortgage in order to subsidise myself working for nothing. If we need the money that badly I shall get a job in a supermarket stacking shelves in the evening and then there will be no childcare costs.
I shall spend some time updating my CV and make more of a concerted effort to see if there are any part time roles available. I think I have now come to the conclusion that I want to work part time so I get the best of both worlds. I really want to be a viable prospect to an employer in 5 years time so I suppose I just need to grit my teeth for a few years.
Where we live a childminder is 6.50ph per child. I shall look into nannies and see if that will help the budget.
"I did resent all the tax I paid, rewarding society for my hard work, whereas if you are a SAHM society rewards you"
Huh? How do you figure that out? As far as I know, SAHM don't get anything, financially speaking, that working parents don't get.....
80k to pay 22k in tax.
That is 50k after tax/NI, 4k plus a month take home, £200 per day.
I suppose if you figure child care/travel etc it wouldn't leave a lot.
You do it so that in five years time you have a job that uses your skills and you don't have a black hole on your CV.
A nanny would be cheaper for childcare for two.
How are you going to buy food with £63.
I really understand how you feel OP. I remember it well.
It's crap getting out of bed early in the morning ad dropping kids to nursery for so little reward. And I did resent all the tax I paid, rewarding society for my hard work, whereas if you are a SAHM society rewards you. And to say that on MN is taboo, because of all the people on tax credits etc who are so touchy about any hint that anyone else is subsidising them.
The best solution for me was to go part time, 4 days per week, just made it all more bearable. I'm now a couple of grades higher than the ones in my career who did SAHM , and my salary and pension pot reflect this and make it worth it.
Your choosing to invest in your future by having the massive mortgage.
If you gave up work, it's not just the wage you give up on, it the lack of promotion opportunities. Worse than that, when you do go back you go back at a ladder level then you are now and your career has gone backwards.
You also lose out on pension and a sense of self as society, and you, see you as just a wife and mum, many see you as unemployed!
Being a 'kept woman' isn't the easy life people think it is hat from the things I've written above.
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