AIBU to wonder if we can afford a child on this salary?

[flowerpowerr]

DH and I live in inner London and currently earn about £48k per annum between us after tax - so £2k each per month.

Of that, we spend around £1100 each per month on bills: so mortgage, utilities, council tax, travel, phones, contact lenses for both of us and pet food/insurance.

It leaves us with around £900 per month each of spending money, although food does have to come out of this.

Anyway, we're both in our early 30s and are now considering TTC at some point soon. I was wondering if you would consider what we earn to be a decent income on which to have a baby - or will it be a struggle?

DH is currently in a full-time job and I'm self-employed, but I would consider going FT (which would probably earn me a couple of thousand more per year) if we couldn't survive on that income.

Any insights or suggestions welcome.

Well you have more disposable income than us and we have 3 DC. We live well in my opinion, we don’t go without and can afford holidays etc.

Yes

So 1800 combined after all bills ? Yes you will be fine haha

I forgot to add that we currently have about £1k in savings - so not a lot to buy baby stuff or see us through if anything breaks down in the house.

Also, we pay home insurance of around £370 per year on an annual basis.

Well, think about it. Between you you earn double the average salary. You own a property in one of the most expensive cities in the world. You have £900 disposable income a month. What do you think?

Just seen your update. On that salary and with that disposable income it would be a good idea to up your savings contributions. Savings of 1K is very light.

What about childcare costs though? That will obviously wipe out around £900 a month in an instant.

You have more disposable income than us as well and we have three kids. BUT it all depends on how you live your life. If you want everything new and top of the range, want to go to all the groups, want to eat out a lot, go on lovely holidays,etc etc etc then you’ll find money tight. If you can budget till easily manage within that

Where is that £1800 going each month? On your figures you should be fine, but I'd question whether your outgoings are accurate if you're saving so little.

It'll be tight in London due to childcare costs for the first few years but it's doable. Although with you being self employed you may not be able to take very long for maternity leave.
I also think it's strange that you consider contact lenses as more of a bill than food considering they are really a luxury.

How much equity do you have in your home? What about income protection insurance? You need to think about what would happen if one of you lost your job as a conservative measure of worst case scenarios.

childcare is expensive but is also tax efficient.

It will be fine! I have a similar income and tbh it’s no problem. Baby is young 5 months but so far she costs nothing. We are in our early 30’s so are really just teenagers with lots of money !!!
Income doesn’t seem a lot when you don’t have a big house/loads of savings, I guess we all look at our parents and think they were so much more sorted or parental... But I manage what is in reality a bit of an extravagant lifestyle e.g we eat out a few times a week and have takeaways regularly, I always manage to by extras Chanel foundation, hair and nails. Much to my sisters disgust I use Tesco nappies, they are perfectly adequate if they weren’t I’d buy a more expensive brand. Honestly just go for it, I’m the happiest I’ve ever been and I don’t even think of money. Yes it can be tight if I overspend but, it’s free to sit and just stare at that precious bundle all day.

I'd question whether your outgoings are accurate if you're saving so little.

It goes on our monthly food delivery (about £120 per month) and then the rest is spent on fun stuff - admittedly we do spend a lot on going out at the moment.

4k between you after tax? Your post is a little unclear, also more info needed, is your current property big enough for a child, your mortgage seems low for as family friendly home in inner London -unless you had a large deposit, do you have savings, how much would you be entitled to on mat leave (maternity allowance isn't much about £500 a month, it do you have a ltd company and can pay yourself more than that), will you go back full time, if so what are your child care options either way (nursery can be very expensive, we're outside of London and it's £80 a day), do you have debts, etc.
Sorry lots of questions , in the surface you should be fine, but there's not enough info to be sure

We have about 30% equity in our home at the moment.

Thanks Confused - that's reassuring!

If you’re self-employed, you’re looking at Maternity Allowance, which will mean a drop by around £1400 per month. This is similar to what you’d pay for full-time nursery in inner London, so you’ll need to be used to that drop in income for a couple of years. Would £200 each per month disposable income be enough? Start saving a fund to pad that out until you start getting some free nursery hours?

Seen your updates, you need to save more and get used to having only one income for a while or your maternity leave will be very difficult, £1000 will last five minutes. Our travel system cost £750 alone and there were lots more expensive than that. You also need to factor in doing things with the baby, starting at four walls isn't fun especially with a winter baby, but swimming, sensory classes etc cost money

It's a two bedroom property so yes, it's big enough to live in for a good while yet. I will need to go back to work full time in order to cover our mortgage and bills. Once I do go back we'd need to use a nursery, but £80 a day sounds very expensive!

We earn less than that and we have an almost 4 year old. A 5 month old baby might "cost nothing" but they cost rather more once you are paying for childcare, clothes, shoes that they grow out of in a month, new car seats etc. I cant remember the last time I bought myself some new clothes. Money is quite tight to be honest but he's worth it.

It sounds very do-able, just really need to save more so there is more of a cushion for when you need it.

Baby equipment doesn't all need to be brand new! (Unless you want it to be)

I bought most of the stuff for DC1 from eBay and local selling groups etc. My sister was most outraged about it!

Sorry op, but do you have £1800 per month (as a family)to cover food and extras? If that's the case I think it will be tight. What are you plans wrt work? Research nurseries in you area for an over view of costs.

Your home insurance sounds high and you should get another quote.

But yes, your income sounds fine OP.

Of course you could. Babies don’t have to be expensive outside of childcare costs. If your self employed could you work around your partner’s hours so you didn’t have to put baby in full time childcare?

Look into child care options local to you.
Childcare varies massively depending on what you need/want.