36 year old couple… How bad are our finances?

I think your financial situation isn’t good enough to have another child unless the aim is to rent from family forever? At 36 most of my friends who had kids same age as you (with the same income) were on the property ladder and upsizing

Another who thinks the ship has sailed on the 3rd child. It is just too complicated. Otherwise it is a sad state of affairs where a couple with 4k a month net income is considered to be badly off by many.... with 25k savings. What are we becoming here ? It's not good.

This.

OP: you already have two children. One of them is about to become a teenager, which is an extremely challenging time for most children and their parents. They will need you to be healthy, energetic and present. How will you do that with a 3rd child and work?

Wouldn’t it make more sense to focus on these two children, your DH and yourself?

And what would you do if that 3rd child was disabled, had special needs etc. (which may very well drain your energy and your finances)? Have you taken that possibility into account?

Make sure you also consider the long-term financial impact of your decisions. If you leave buying a house for more than another couple of years, you will have missed the window to get a 30 yr mortgage and pay it off before retirement. Unless you expect you will always love work and want to continue to 70, or will increase your earnings enough to pay off your mortgage early or have an excellent private pension that would cover mortgage payments, a choice to delay buying a house could have a significant impact later in your life, particularly if your health is not great.

I'd also echo the concerns about juggling the needs of teenagers and a toddler.

Your eldest is 12, your youngest 9. You are within six years of driving lessons, university costs ( six or seven years consecutively possibly with the ages of your children) , support for moving into their own accomodation etc. Expensive times lie ahead.

I think a third child would be a push. If you are serious about owning your own property then that should be your goal, though it will be a huge effort, and you would still be at the “ouch” phase of paying a mortgage in six years even if you bought tomorrow.

Why not set yourself a goal for a year to see how much you can add to your savings. Really go for it, packed lunches, no coffee shop coffees, yellow stickered bargains only, batch cooking, heating turned down three degrees, camping holidays in the UK, no new stuff for the house , limit on birthdays and Christmas etc. If at the end of the year you have saved a decent amount then decide if that is how you are prepared to live for the next few years to fund a deposit,legal fees and a mortgage. If not, set your sights lower, decide how much you are willing to fund your children in the near future and forget about home ownership until your kids leave home and are independent when you can revisit the idea and resign yourself to a long working life to pay it off.

They can't spend the £25K on "baby", however - it's ringfenced in a lifetime ISA.

You can't afford two children, how much is a 3 bed house in your area? You'd be better off getting onto the property ladder. Do you both have pensions? Lower paying jobs often don't have very good pension provision. You need to secure your housing status, and start saving for your future and your children's

I must admit I probably am out of touch, we’re a single income household and I don’t know the cost of nursery fees etc.

As someone who had 3 children, please please think hard about this. The costs are significantly higher. (Houses - generally 3 bedrooms with 4 being a lot more expensive. Holidays - most cater for 4 of you so occasionally you are looking at booking 2 rooms). Even food is often measured out for you to buy as a family of 4.
I have no regrets obviously of having my last son but life would have been a lot lot easier with two. Good luck whatever you decide though x

Your incomes good but as others say

Why are so many posters so out of touch?

It's 2 x the minimum wage- just. £25K gross.

Graduates start on more than that now, at 21.

The median UK income is £37K.

It's not a decent income for a couple. It's 2 x the minimum full time wage.
So they each earn around £25K. This is lower than most starting salaries for graduates aged 21.

£25K is their house deposit, although if they need 10% deposit, plus legal fees, removal fees, etc, then it won't go far. They'd be looking at a house for under £250K which in some parts of the UK could buy a mansion, in others a 2-bed flat (if you're lucky!)

I suspect that as they had their children very young (early 20s), neither (possibly OP) has maximised their earning power or their careers beyond a fairly low level or they have been paying out a lot for child care. But I could be wrong.

Your incomes good but as others say - you don’t really have 25k in savings as such, you have some of a house deposit saved. Dependent where you live, more than that will be needed, where I live in Essex you’d need double that at least.

You're in an okay position but I’d be concerned how you’d afford childcare and buying a house if you had another child. I suspect it would need to be one or the other.

Exactly, it seems some people posting have no idea about how LISA’s work. So, to me, OP and her family have no savings as in liquid cash, which for a family of four is awful. It makes no sense to have a third child, especially in this economic climate.

Wouldn't having another DC be a finger up to whomever is helping you out?

😂😂😂
I'm laughing lol.
I actually agree with you all, I'm not on benefits because my household income is too high (just over the threshold) but I know loads of people who would do this because its easier.

The 25k savings aren't like regular savings as they can only be spent on a home or withdrawn at 60, otherwise the government takes 25% away. Aside from this the OP has only mentioned debt.

In the context of having three children and not owning a property, no, it is not a lot of savings.

That's not delusional, it's just the truth.

You will not be able to comfortably raise and provide for 3 children in that situation. You can probably just about meet their day to day short term needs, as long as you have a reasonable income, but in the longer term, there's not much there to give them stability. £25k really doesn't go far when you're talking about the lives of 3 children.

Your 39% stat is irrelevant, no one is saying it's an unusual situation. But just because a lot of people are in an even worse situation doesn't mean that OP is comfortable or that it's a good idea to bring more children into it.

I'd want my children to have more stability than this situation provides and I'd focus on the existing two.

Sorry but 25k is a drop in the ocean for houing deposits now.

£4k a month is a decent income, and should be more than enough for a family of 4.
£25k saved is a nice amount, but doesn't seem like a huge about for a double income family pushing 40, who don't own a home.

I suspect it should probably come down to house or baby.

Do you have aspirations of retiring or owning your own home? Say you want to retire at 70 work backwards from then as presumably you need to be mortgage free then. So a standard 25 year mortgage would mean buying at 45 so you have 7 years to build up a 20% deposit… what’s a standard house go for in your area…. Can you get to that amount?

or are you happy to retire in a rental?

4k a month is a pretty good incomings. 25k savings is not so great in my opinion.

But the savings are for buying a house. If they had a house bought and also had 25k cash..then I would say they are in a good position. But buying a house is expensive so that 25k will be gone (and then some) so in theory they have 2k of debt. They already have 2dc…they don’t need and cannot afford a third.

I think if you need to work/your income is needed, you need to think about how much childcare would be (funding didn't cover all my needs) and wether you can afford your current circumstances/commitments with the additional childcare bill or loss of income.

If you can, then as a second thought, I'd be looking at can I do the above and achieve financial security and continue to save and be prepared for emergencies.

I couldn't meet the second if I had another child. So I didn't and couldn't risk the loss of security and independence if life threw me a curve ball. Coincidentally, it did throw me one (health) and that financial security has made navigating that situation so much easier. Others do make different choices though. But given you have other children to provide for.... financial security is important.

Do you have a pension? Most people are very under pensioned and this is something that also requires a lot of thought. The state pension may look very different come your retirement age.

I wouldn’t do it. When you’ve got two close in age, I’m not sure what a third with a big gap would add. If you only had one and wanted a second I’d probably understand a bit more.

Focus on the kids you’ve got. Get on the hosing ladder so you’re more secure and able to leave them something, because it’s going to be even harder for them to own a home. I can’t imagine your earning potential is likely to increase loads at this point and that will be further limited if you have another child given how intense the parenting is for younger ones.

Yes, a brilliant idea, go on UC because as a tax payer I really want to help finance your 3rd baby. I'll do as much overtime as possible to pay towards it.🙄
It's selfish to even consider something like this.
You are relying on good will of your relative for the renting to start with. If that went toes up and you are on UC you might need help in the future with housing benefit et al.
Such entitlement of some people.

@UpQuick as family member is giving you a discount, they could presumably rent out the property for more so effectively they are giving you the difference. How much longer do you think it will take you to save if you have another child vs if you don’t and do you think the property owner will be happy to subsidise you for a longer period? You should probably check in with them. They may view you saving the ‘discount money’ favourably, but spending on another child less so 🤷🏻‍♀️