To ask your opinion re what household income is 'enough' to afford to start a family?(40 Posts)
We earn just 43k between us and with a £700 mortgage and all other bills and outgoings, it really doesn't feel enough
Too many variables and not enough information to do more than generalise.
I'd want to know also how much is childcare near you, how much of it will you need, what are your commuting costs, which of you is earning what and how much in pension contributions and student loans are you paying?
That said, those housing costs are relatively low. Makes me think you're probably not in the south east. If you are though, if you're somewhere childcare is very expensive, it might even be cheaper for one of you to be a SAHP or at least go part time.
Brace yourselfs for the MN chant of "if you love it, the money will come!" (or there abouts: "you just make it work" "just buy a second hand buggy instead of new and that'll increase your income ten fold and cover all childcare" "cloth nappies cloth nappies" etc)
All of which is bollocks or there wouldn't be any child poverty in the UK! - how come all of those families can't "just make it work" hmmm MN?
You don't sound like you're in the poverty bracket or even near, but yes, if you're finding it tight now it'll be tighter with a kid for sure!
I do wonder though whether your issues are budgeting rather than income, 43k and 700 mortgage and the ends should be meeting
Housing costs should be about a third of your income to be 'affordable'. They are normally the biggest expense. You are in this bracket, which is great. So where is your budget falling down?
We started a family with nothing, young and reckless! But it all panned out ok. As long as you aren't too proud to buy second hand and accept hand me downs, the first few years don't have to cost too much.
It depends on the lifestyle you want to provide. Clubs, holidays, nice clothes etc all cost money, lots of it. You can have healthy, happy children on not much money but you need to plan and budget in some way.
FFS second hand/hand me downs doesn't make a dent in the main costs of having a child which are usually loss of earning/earning potential/earning progression and childcare.
And if you rent add in loss of full market choice of properties (because you go to the bottom of the heap in a landlords market if you're not a nice childless professional couple any more)
Yawn @ MN being predictable!
Depends on so many things. We have an income of around £35k at the moment with a similar mortgage and manage fine. The odd tight month, but fine. We have 2 kids and expecting #3.
I suspect OP will be worrying about the cost of childcare.
A household income of 42k and perhaps around £2800-3k a month take home leaves well north of 2k a month after housing, which I imagine feels nicely comfy for a childless couple. Rather less so if you add a full time nursery place to the list of bills. OP are you aware of the help available for childcare costs? Voucher scheme and the new tax free childcare scheme that will be introduced soon.
Fortunately tinsel OP isn't renting so they at least don't have the landlord shit to navigate.
We have a similar amount mortgage and earn a combined income of about £70k. Husband still paying back student loan and have credit card we pay a bit off each month. Two kids, two cars, two cats... aren't splashing the cash around but more than enough for essentials and a few luxuries and a holiday each year. And we are in London. I'd say you earn more than enough.
Fortunately tinsel OP isn't renting so they at least don't have the landlord shit to navigate.
Yes I know that was a comment @ the posters who inevitably come on telling OPs not to give financial planning before TTCing another thought because a second hand pram and some cloth nappies will bridge any gap in earnings and it'll definitely be fine
Even if you don't rent, if you have a mortgage, being pregnant can affect re-mortgage applications as you have to declare life changes.
Being part time can affect balance transfers, that sort of thing
The OP is wise to think about getting their ducks in a row prior to having a baby because it's NOT as simple as using hand me downs once you HAVE the baby - it can be harder to get things sorted after rather than before.
Depends on current outgoings? Can you afford to run the house and associated costs on one full time wage? What's your maternity package at work?
If people left it until they had enough money, you'd probably never have children as some expense would always come up, however having a child is as expensive as you want it to be. My niece for example has 10 month old. She spent £750 on a silver cross pram and car seat. Neither of which are no longer used. The car seat is too small and she can't get the pushchair up and down the stairs in the block where she lives.
I never had a pushchair, I used a sling and never needed a car seat because we didn't have a car, the transport was amazing where we lived.
The only time finances should dictate children is if you're already struggling and scrapping the barrel to survive already.
Where do you live?
Will one of you give up work for 3-5 years? Can you pay basic bills on one income? Alternatively how much is full time childcare in your area, and can you pay bills from what you'll have left.
How much is enough is how long is a piece of string, it's meaningless.
You need to write out your essential outgoings, see what your after tax income will be with one income or childcare deducted, and see whether there is anything left.
Babies don't have to cost anything much, it's the loss of income or childcare that you need to look at. Older children cost more but you don't have to pay for childcare and can both work then.
We have a joint income of £36k and a mortgage of £700 and manage fine
(you may get some tax credits, I have no idea how that works, childcare vouchers schemes to offset some of your tax against childcare, and child benefit, but if your sums leave you in the black without those you're fine and any state help a bonus).
We did have a joint income of about 45k when we had dc1 and found we'd be stretched to the maximum by dc2 (due to childcare costs) living in Surrey, so we moved (abroad).
You need to rethink your spending. 700 mortgage is virtually nothing. a lot of people I know pay 1.2k rent and still manage to have well dressed, well fed kids who get to go on school trips, with incomes in your range.
Our joint income is about £44k and our mortgage is £600, rest of the bills take it up to about £1.3k a month. We don't spend loads of food, drink, going out and our childcare costs are about £60 a month now that DD is at school.
As PP have said, look into childcare costs, we were lucky to find a reasonable childminder which was about £31 a day (I think) and I only worked 3 days a week. Factor in cost of holiday clubs when they are at school, the ones round here range from £20 to £50 a day.
There won't be tax credits on that income, not even childcare tax credits. 43k is just about the point where you get zero. However it's possible you'd be better off, depending on commuting costs in particular, for one of you to reduce hours, and childcare costs would need to be factored into that.
Table of childcare tax credit entitlement here:
Dunno about UC.
It all depends on the life style and out goings that you currently have. If you are having a couple of holidays a year, eating out often and having expensive shopping trips etc, then you will have to consider whether you want to forgoe most of that for a family.
Similarly if you are up to the elbows in debt then starting a family isn't wise.
It all depends on your personal circumstances and what you think you can and can't afford.
The main consideration for me would be, if one of us lost our job, would we be able to manage a family and all our outgoings.
OP you are being really sensible considering things now. The biggest cost is childcare or loss of salary if one of you gives up work or goes part time.
Look into the cost of all childcare options in your area. Also look at your employers maternity leave policy to understand what you will be paid during maternity leave.
I think it depends greatly on where you live and what other long term commitments you have. I am currently pregnant with our first child, we're also a 43k household. However our mortgage is only £350 (Scotland - 40minutes from any big city). But we both have car finance (cars both needed for work) which adds to another £330 and monthly insurances of around £80 combined so I know it all adds up quickly.
We're comfortable enough to know we'll cope long term my bigger worry is when my maternity goes down to statutory pay as we are entitled to help with childcare (worth looking into, we didnt think we were entitled at first but turns out we are) but my big income drop for 6 months is going to be the tight time where we will just have to enjoy picnics and dog walks for entertainment but it will pass!
cut your cloth accordingly and you can do it....
we went for 60k to 20k when first had kids, new we could eat and pay the bills - beyond on that its up to you. as wanted to give up work as well
a friend was jealous - but then they went on the holiday of a lifetime and moved from a 4 bedroom house to a 5. and struggled on an income of well over 150k a year
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