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.

Once I was pregnant with DC1, we started to live on just DH's salary and saved mine. It was a great cushion once the DC started to arrive.

Once you have your DC, you won't be spending as much on fun things, and your DC will keep you entertained and provide all the fun you need!

If your self employed could you work around your partner’s hours so you didn’t have to put baby in full time childcare?

Yes that is potentially an option!

So your monthly income is £4000 and you have £1800 left after bills to buy food / disposable income.

You can afford a child.

Some families survive on less than £1800 a month total.

£1100 a month on bills in inner London but you only have 30% equity doesn't sound right. Are you sure?

People manage on a lot less, but you'd have to look at loss of income while you were taking maternity leave (can your DH take any shared leave to minimise the impact on your business?).

£2k each per month - £4k

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

1100 + 900 + 900 = 2900 so there's a grand missing somewhere in your monthly income.

You could well afford a kid

@BarbaraofSevillle why does that not sound right?

That figure includes mortgage, electricity, gas, council tax, water, internet, TV, travel (expensive in London!), pet food and insurance, contact lenses for two people and mobile phones. It's £1100 each BTW, not between us.

It's £1100 each, with £900 leftover each, but I misread it too as I couldn't see how their bills including London mortgage came to £1100, but as it's actually £2200, that's a lot more believable.

If they can minimise the childcare by working at different times, and making use of free things to do, which we are always told are available in abundance in London, and don't pick up other expensive habits instead of going out, such as Deliveroo as an alternative to cooking, I'm sure they'll be fine.

1100 + 900 + 900 = 2900 so there's a grand missing somewhere in your monthly income.

Eliza, you've misread my initial post.

You need to think carefully on how you will fund maternity leave. Your dhs salary doesn't cover your outgoings right now so you need to save the difference up front or look at things like mortgage holidays. Check out child benefit and maternity allowance too.

You said £80 per day seems high but honestly it's probably not. My ds is in a South East not London nursery and it's £65 per day and we buy the nappies and wiped still. It drops when they are 2 but not by much.

You can do it but you will be on a tighter budget than now. You will also need to save some money for baby equipment. You can buy second hand on some things but somethings you may not want to like car seats or mattresses.

Given that money will be so tight (only £1800 disposable income!!) there are options. Lots of baby stuff can be brought second hand, they grow out of it so quick. Supermarket baby grows do just as good a job at absorbing baby vomit as designer ones.

In all seriousness though, of your £1800 play money, even if you say £300 is food and incidentals, save half of the remaining £1500 so assuming 3 months to conceive that's £9k by the end of the pregnancy. That still leaves about £170 a week for fun.

Even if you spend £1k kitting out a nursery and 1k on a baby moon you'd have £8k to fall back on.

Get DH to take split paternity leave so you can go back to work after X months but as you're working from home will still be about if your bf or for cuddles etc.

Childminder if you can get it hourly might be better than full days at nursery if you can both be flexible.

You won't be going out every weekend drinking etc with a new baby (or possibly even toddler) so you'll spend less any way.

Would you want them to go to private school? You'd need to budget for that but you just need to cut back

Thanks Sleeping. I don't think private school would ever be affordable on our salary, so we're not even considering that as an option.

Eliza- i think its £1100 each per month on rent, council tax and bills which would make sense for london. So £2200 per month from £4000 take home. Leaving £1800 for food, house insurance, travel and fun

I think its possible, but isn't loads as others seem to think. If a nursery is £80 from others figures, thats 80 x20 per month approx = £1600. That wouldn't be affordable as you would only have £200 per month for food, travel and other expenses. So basically childcare will be the biggest expense.

The way around it would be:

1. as self employed, factor in some hours when your dh isn't working. that way you might only need childcare each morning, or a few days per week only. reducing total childcare bill

2. Payrise. Sound simple, probably isn't, but no harm in you increasing your fees a little, and your dh asking for a payrise %. Every little helps.

3. look at other childcare options. Depending on your location, nursery may be the most expensive option. A nanny share or childminder may be an option.

4. working alternate days. If one of you work a weekend day for example, or you both look at 4 day week, if may be more cost-effective

Babies really don't cost much. Admittedly in mine/DP's case, we were fortunate to have an old pushchair/carseat already in the loft (from when his older DC had their own child)--but were also not too proud to use something over 10 years old!

London can be an expensive city, but is also unbeatable for how much free stuff there is to do. We could have gone to some kind of baby group every dayall funded by the LAif we wanted to. Special swimming lessons? Nah--we found out through the baby groups about a special under-5s session at a local warm pool, then went to the nearest warm public pool when that stopped running.

I grew up in a poor family with cheapskate parents, so won't be cheapskating once DD is old enough to be aware of and embarrassed by it...but we buy around 70% of her clothes from charity shops.

I agree with a PP. Seems mad that you have nearly £1.5k spare a month between you but only have £1k in savings.
That's a lot of extra spending.
Start saving more and see what it's like to live on a lower income. That way you can see what it's like with less money coming in for maternity leave but also saving up at the same time.
I think it's do able if you prioritise it.
Most these "can we afford a baby posts?" Are based more on what people are willing to give up for a baby. Less meals out, less socialising, less holidays.
If it's what you want you can definitely do it, especially as you can save money on childcare as you're self employed.

It sounds doable although as you point out childcare could easily be £1000/month.

Why not have a couple of months of just living off £1000 and bank the rest (as if it were nursery fees). That would give you a better idea of how tight it feels and whether you can do it.

Unless you plan on sending your child to private schools and having the best of everything, yes. My DH and I earn less than you and have three children. They are well cared for, do after school activities, have hobbies and we have days out etc - we don't go on holiday or buy luxury but we manage.

You’d obviously have to cut back on your spending once you start paying childcare but it’s definitely affordable. We earn similar with very similar outgoings (cheaper area but large loan from housing renovations) and are managing fine. Have to budget and can’t go out for meals etc as often as we like, but we are certainly not struggling to keep a roof over our head and food on the table. I’m full time but do compressed hours to save a days childcare and to give me an extra day at home with DD.

When deciding to TTC I worked out how much income I’d lose on maternity leave (minus what I’d save in fuel and parking costs) and tried to save that in advance - personally in your shoes I’d start saving the equivalent of nursery fees now to cover your mat leave and so it’s not a big shock to the system when you need to pay them.

Remember with that salary you will be entitled to £20 per week CB and also tax free childcare, so you can take 20% off your predicted nursery fees. Plus the huge nursery bills are just for a few years, it’ll be much less once your DC starts school.

Apart from childcare and the loss of earnings on maternity, IME babies don’t cost much in terms of what they need. I’m aware that will change as she gets older but at least we won’t need to pay childcare then!

It really depends on childcare costs in your area, in my part of London a full time place would cost you £1800-£2000 a month so you wouldn’t be able to afford that. You would be able to survive on maternity leave though.

It goes on our monthly food delivery (about £120 per month)
Is that all you spend in food in a month? Gosh I feel awful now

I do a lot of batch cooking plane - plus we have leftovers about three times a week! That figure doesn't include wine though.

planespotting

Why? There’s only two of them and they spend 1.5k a month going out. They just rarely be home.

That's true - we also eat out two or three times a week!

I think I would really seriously audit the £1800pcm spending figure and cut back on it now, so you have good savings before you go on maternity leave. There must be some big numbers in there if you're only spending £60 each on food, and you need to know what they are and whether you're prepared to cut back on them.

*must, obviously!

of course, kids really don't cost much, it's lifestyle choice that's the bummer.
Our first, total surprise had nothing but love, slept in a lined drawer and had second hand everything.
He's grown up ok.