To consider getting into debt?

[MumApr18]

DC2 on the way and we either need to think about second jobs or consider getting into debt to get through the next 3 years until 30 hours free childcare kicks in for both. Right now we have a combined income of £3200 monthly. Minus £550 childcare, £500 mortgage, £150 council tax, £80 utilities, £35 tv and broadband, £20 home/contents insurance, £250 for husbands car/insurance (I have a company car), £200 to CMS for stepkids which leaves approx £1400 for groceries, days out etc.
Once I go on mat leave our income will drop to about £2500. Childcare costs will decrease but AIBU to think it's ok to take a loan or something to cover the period until both kids get their 30 hours free, or should I just quit work (or work a second job and never see kids)?

You have £1400 disposable income? How about saving? Even when it drops you’ll have £700 and if your on mat leave you won’t have £550 childcare. These posts are laughable, how do you think people on low incomes manage?

@Bookworm4 I get your point, I've been much worse off in my life but it's all relative.

It's a scary thought going from having £1400 a month to almost half that. Not to mention the costs of a new baby. We have modest savings, and try to save each month but have just moved house and placed a large deposit so mortgage payments would be lower so our savings were wiped out - and were not expecting DC2 to come along so soon as I have fertility issues.

So I guess, new question..how do people on low incomes manage?

How much do your groceries cost?!

You will be fine. You have more disposable income than us and we have 4 kids and manage fine

@riotlady I do an online shop at Asda which is £60 per week and probably top up milk/bread etc costing another £10 - so approx £280/300 per month? Is that on the high side?

£250 for husbands car/insurance

Per month? Unless he is newly passed or has lots of points/accidents that seems very unreasonable.

I’m on a low income- we get just over 2k/month. I got interest free credit cards, negotiated interest only mortgage payments, and budgeted to get us through the nursery years. Tough, but doable. Once they’re at school it’s easier.

£1400 is more than enough from my pov. £700 disposable is more than we have now. We manage :)

Have a look at the thread for the person trying to manage on £200/month for more people than you. Hopefully that will make it clearer that you will be fine and that you do not and should not go into debt for this.

Thanks @Toothproblems. That's reassuring. I think I need to change my mindset a bit.
Have you got any tips for saving bits here and there? Last time I was on mat leave I didn't spend too much but splashed out on great baby sensory classes etc for my LO. I'm sad that DC2 is going to miss out on this.

I personally would save before baby is due and then cut back of expenses. No takeaways, better energy deals, Aldi supermarket etc. We have had to cut back lately and are enjoying our switch to Aldi, some of the meat is hit and miss but most is ok

I don't understand what you think you need a loan for.
You have 1400 disposable pm currently to include groceries.
When you are on mat leave you'll have 700 disposable pm to include groceries.

Agree, put money aside each month now so you build up a cash safety net now. As youve said you need to rebuild this having remortgaged. See if you can manage on 700 and save the remaining 700?
Budget how you're going to spend your 700 pm and you'll know how you will manage when you are on mat leave.
Also, check your credit rating and work out what you'd do if you had an emergency expense that you couldn't cover with your savings.
Make sure you've done your wills and think about how you would cope if either of you became ill and couldn't work/do childcare at home.

Sorry @Micah should have been clearer - that's the cost of the car lease and the insurance together. His lease is about £210 and insurance about £40.

@riotlady I do an online shop at Asda which is £60 per week and probably top up milk/bread etc costing another £10 - so approx £280/300 per month? Is that on the high side?

That sounds perfectly reasonable tbh and would leave you with £400 for days out and extras on your reduced budget- sounds perfectly doable?

£250 for husbands car/insurance

Micah, I assume that's including a car payment/loan as well as insurance.

1,400 a month for groceries and extras can be cut. We have similar income and budget just 400 a month for groceries and around 300-400 for extras. So maybe start saving an extra 500-600 a month to build up extra money.
I’d try not to go into debt if I could.

£300 a month on groceries sounds very reasonable. Where does the £1,100 go every month? And why would you need a loan- what are you going to spend it on?

Budgeting
Meal Planning
Free stuff like park & picnic for days out
Walking to most places
not buying "stuff"

@EL8888, @palahvah. Thank you, all sensible advice.
With regards to energy deals etc I'm on top of that - I work in the industry lol.
The Aldi switch is something I've considered - I already get some toiletries and DCs nappies from there but would I really save much from a £60 spend to warrant the cost to get there and the time spent doing it compared to a quick online shop?

@Ylvamoon - I think you've hit the nail on the head - I buy too much "stuff". £5 for lunch here, £15 on Amazon there all adds up. I think I would be scared if I actually sat down and added it all up.

I switched from online shopping to Aldi and I get so much more for my money. I only pop into Tesco now for hair products because I don’t like also conditioner

Break down what you currently spend that disposable income on.

Really think about everything you spend on in a year, then you’ll be able to see where you need to cut back for a while.

How long after your maternity leave for DC2 does the 30 free hours kick in for DC1?

For your mat leave, cant you just not use all paid for childcare? Thate would save £550 per month.

And can you get rid of DHS car and get a run around, cheaper.

I have £800 disposable income for 1 child and 2 adults. We usually have fund money left over. Its doable. Not loads of fun but doable.

Both me and dp start much higher paid jobs in the next month that will see that double. It's been worth it for the time being. I definitely would not get a loan to cover that period.

@NoSquirrels Yes, I think I'm avoiding it but I'll have to do that. DC1 will be 23 months when DC2 comes along, so 13 months.

I've had a look into little crèches and 2s groups etc so I can get a small break (as I know I'm at risk of PND this time round) which would probably be about £30 a week. But I'm loathed to fully give up his nursery place as it's a fabulous nursery, which he loves and has a long waiting list so he would never get back in if he left. If he stays at nursery for the 13 months, the least they let them do is 1.5 days a week which would cost £90 a week - almost my full Mat pay! So torn on what to do.

I think I would be scared if I actually sat down and added it all up.

The fear is good! Then you get cross with yourself and start to economise.

If you know right now that you want extra baby sensory classes etc then you need to start saving for them and prioritising them over meals out, “stuff” from Amazon.

Give yourself a challenge - every time you want to buy something you want, not need, transfer that money to a savings account and put the item on a wish list. If you still really want it at the end of the month you can transfer it back out of savings and buy it. But you have to call the savings account something meaningful to you e.g. “Having a happy DC2 maternity leave”

Fun money. Not fund money left over

@Flerkin disappointingly DHs car is already just a small runaround - due to a messy divorce he has a terrible credit rating and this was the best deal we could get.