To wonder how people afford a 2nd child?

[ScruffleCake]

We have just found out we are going to have our 2nd baby but now going through finances I am wondering if we can even afford to keep the baby How do people afford to have another one? I thought we were both decent earners, my DP earns £24,500 and I earn £28,000. I know we live in the south-east where living costs are higher but I still see plenty of 2 children families around.

Our breakdown of our incoming & outgoings are below. The Bike loan will be up in 2 years (DP uses it to get to/from work) and the childcare is based on both babies going into care 3 days a week (assuming our parents will be okay looking after 2 babies on the other 2 days!).

Net income including both wages & child maintance: £3400
Outgoings breakdown:
Mortgage - £1,150
House Insurance - £20
Bike loan - £156
Internet - £39
TV Licence - £13
Bike insurance - £158
Energy (electric & gas) - £95
Water - £40
Mobile phones - £80
Food Shop - £350
Childcare - £1500
Fuel - £200
Total £3714

I suppose there are these free childcare places? But I can’t seem to find anywhere around me that offers these? And we will have 1.5 years till that starts when 2nd baby is born anyway. Not sure where we are meant to find this extra £314 from and we were hoping to be getting married in a few years but that can’t happen if we haven’t even any spare money for clothes etc let alone savings!

I have 4 and couldn't afford to work full time. So I work evenings and husband works days so we have no childcare and we earn far more this way. As others have said your mobiles, bike insurance and food are a lot. Can one of you get another weekend or evening job?

Do you have to go back full time?

When I had my second child, I went part time so only need two days childcare. Also helped that DD had just started school so that reduced costs. It is a struggle though and it limits our remortgage options as I now earn less. On the plus side, we qualified for tax credits on my part time wage.

Look into childcare vouchers or tax free childcare. Money saving expert has an article on them and there might be a calculator.

Is it worth him working? If you take the cost of childcare, his bike and insurance would you be better off without him working or him getting an evening or weekend job?

We are waiting until we get the 30 free hours of childcare at 3 so we don’t have full lots of chilcare to pay at once.

The 15 hours part is for pre-school, for a childminder to offer it, they must be able to offer a preschool equivalent - many won't, but won't charge you for the 3 hours if your dc is in a preschool they drop and pick up from for you.

Also note most nurseries can only discount 3 hours per preschool session, so morning or afternoon. They can knock this off the bill if you do 2.5 days.

Definitely get your dc1 on the wait lists for those - assuming you have a year and a half to get to the top of the list.

We had 6 kids before child care vouchers and the 30 hours. God that would have been nice.

I gave up work. It was the only way to afford it snd our choice to have 6 anyway.

As long as the mortgage is paid all options are on the table.

I do already meal plan but maybe it is a bit of a luxury ensuring we have at least 7 portions fruit/veg a day (Just wanted a healthy family!). I'll bulk the meals up with cheaper pulses and beans instead.
We do only buy home brands already. But maybe I do laundry a bit much, I'll try and get us to cut that down.

We have already done comparisons on bills etc.

Bike we cant get rid off, I have explained this in various posts now.

Mobiles will have to wait till end of year when contracts end.

Extra child benefit has been counted.

Haven't counted the tax allowance though so I guess that will all go into savings ready for when we start making a net loss.

peacheachpearplum we will still be £200 a month short

The funded childcare is provided by nurseries - e.g. school attached ones when your oldest child is 3, or private ones that accept the funding.

I think a lot of people struggle with young children, which is why a lot of couples work shifts around each other to cut down on childcare (so someone works your standard 9-5, and the other works evenings and weekends), or have one partner cut down their hours/give up work altogether to eliminate that cost altogether.

Can either of you shift your hours around like that? Or get another job that involves working weekends/evenings for a few years?

We were in a similar position.

I had DC 22 months apart. With DC2 I took 6 months maternity leave and looked after both children so no childcare. I breast fed; it was hard but I refused to spend £15 a week on formula.

After 6 months, I went back to work as I earned more and DH stayed at home for 1.5 years. He had a ball although it did not go down well with the older generations in the family.

We had no childcare (saved £1500 x 12 months= £18,000), ran one car (saved £3000 a year in fuel, tax, insurance and repairs), I fed DC2 before I went to work and when I got home- he had solids at lunch (saved £60 x 12 months = £720), giff gaff phone contracts (£15 for 2 phones), we cooked from scratch (spent £50 on food), saved on house insurance as house was occupied during the day and qualified for child tax credits (£600 a year)

This was a few years back now, DH does not regret it one bit and has fond memories of the time spent with the children. Very few dads get that luxury. We no longer ran round like head-less chicken rushing the children to child care and spending no quality time in those formative year with our children.

DH went back part time after 1.5 years, when we worked out how much better off we were with 1.5 wages coming in and childcare costs, it worked out at £20 a month but he needed to go back as he craved adult conversation!

But if your DP really is only using £10 a month fuel in his bike he must only live 2/3 miles away from work at most, which would take no time at all to cycle, or could he get a lift with a colleague?

Selling the motorbike, paying off most of the loan and cancelling the insurance and buying a cheap pedal cycle would save more than £200 pm so would bridge the gap.

Sorry but you don't earn enough for 2 kids in the SE to keep both of your careers

I'd say in london a minimum incom is around £80k for a non stressful penny watching life

Prices going up and up everything v expensive

Sorry but you can't afford to have the 2nd one

We waited.
This isn't an option for you now, but it's how many people I know have afforded two children.
The other option is that both parents don't work full time, someone works part time.

If you reduced your
Working week to 4 days and your parents had your children for 2 of the 4 that would save you £500 pcm.
The reduction in your salary would be about £300 per month (I've done a few very rough sums to work that out!
Saving you £200 by working less time.

Childcare is our second biggest outgoing, after mortgage (only marginally). We have a 6 year age gap and we use a very good, flexible and reasonably priced child minder. We spend £240 pm on food - but that excludes nappies (but we buy those from Aldi so minimal expense). Having two close in age just wasn't an option for us financially, which I'm afraid doesn't help you much. Agree with selling the bike and repaying the loan. We bought a lot of second hand stuff for our second too, but you've probably already got things you no longer use for your first.

I guess I will just have to find a new job then... not sure I will be able to find a part time job in my sector that pays that well (especially since the gender equality in pay as just been highlighted today)

It's your loan and mortgage and childcare are stuffing you- have a look at childcare options, nursery v childminder. Most councils have a childcare /early years advice service -use them!
Look at how soon you can transfer your mortgage onto a lower rate. Has your house increased in value? Have you been paying the mortgage for at least a year with no missed payments? Time to look around for a better rate before you go on maternity leave. If that's not an option you may need to go interest only for a year or two.
What rate are you paying on the bike loan? You could ask them for an early settlement figure and pay it off with a low interest loan/credit card to cut your monthly payments.
If you have 3 bedrooms could you take a lodger for a year?
Look at your 'cashflow month by month through your maternity leave, return and up until your childcare costs start to reduce.

Your husband needs to pack in work. You say you'll still be £200 short? So he then gets an evening job to make up the shortfall. He's also there during the day for childcare.

That's how most of us afford more than one child when we 're on low incomes.

If he's not prepared to do that, then you'll have to pack in work and work evenings/weekends instead.

I think you can make some savings and also think a bit longer term, in terms of how many months would you have a shortfall, you might find it's not as long as you think. If you have a budget spreadsheet [basically what you have above] work it out month by month, as your childcare costs reduce for your child you can see what you've got. Plus, do either of you get bonuses?

GiffGaff for mobiles, there's no contract and you pick a bundle that has what you need, I only pay £12/mo but they have cheaper than that too. plus calls between giffgaff are free.

Food bill; we've just started doing a fortnightly meal plan, then buy all the food for that + sundries in an online shop, it really cuts down on 'nipping to the shop' which can rack up.

£80 for mobile phones is massive. We pay £35 for us both. I’m on a £20 rolling contract and dh is on a £15 one both on Three. We only use wifi for calls and imessage.

Childcare, childminders are much much cheaper than nurseries. Around here they charge around £6-10 an hour, and we’re in an expensive area.

£39 for Internet is a lot. We’re paying £18.99 a month for Sky WiFi (£8.99 for the broadband and £10 for landline). They increased it last year and we phoned them asking to cancel our subscription so they automatically slashed our price back down to keep us!

Gas and electric, we switched to southern electric last year and now we’re paying £75 a month. Go on to a price comparison site and see if there’s anyone offering cheaper. Through bitter experience, British Gas are complete thieving arseholes.

Food shopping is a personal thing, but we bulk buy large bags of rice and flour and lentils/pulses that last for 1-2 months. I buy things only on offer apart from staples like bread cheese and milk. We never shop from one place either. We have an Iceland, Sainsbury’s, Waitrose, co-op, tesco all in our area so it’s easy to see who has the best offers on.

The bike seems to the big problem in your finances. Do you really need to pay that much for just a bike? And you’re also paying fuel for cars too?

Your employer had to Consider your request to work part time.
They don't have to accept it but they have to consider it.
If you don't ask, the answer is always no.

What sector do you work in?

I'll be honest, these sums should have been done before you began 'trying' for a second child. I'm Constantly surprised when people find themselves in this situation having not made plans.
People say you can never afford children, perhaps they are right (perhaps not!) but seriously you should have a good go at getting yourself in the best place before you dive in.

Unfortunately one of you will need to change careers at least temporarily. It's one of those silent costs of raising children that so many people ignore or don't think about.

Unless you earn vast amounts of money (so you can afford childcare without a worry) or one person already stays at home, it's often not possible to pay for a mortgage, living costs and two loads of childcare every month. It's a huge amount of money that most families don't have.

I live in quite a low-income area and I would say the vast majority of families with pre-schoolers all either have a SAHP, two parents working around each other, or grandparents who are retired and able to step up and help with childcare. It's just reality for a lot of people.

We are the same and can't cut ournpitgoings any more - we are looking at between 1500 and 1800 a month for nursery fees when I go back to work next year and will be that way for the next couple of years.

We are remortgaging to free up some equity in our home to get us through it. Although drastic, to us it's far less drastic than one of us giving up work. You will find a way.

You were conned into buying a superbike at that cost and with £58 per month insurance. Especially if your DP only spends £10 per month on fuel. Your DP could have bought a much cheaper moped (cheaper to buy, cheaper to insure and cheaper on petrol too) he must have a bike licence to would have been able to ride a moles too.
So given you were conned into such an expensive purchase your DP has to be part of the solution. Extra shifts? Second job?
Contact the bank to find out how much to clear the loan. It's probably less than you think and if you sell the superbike privately you should have enough to buy a moped.

That moles should read moped!