How do people afford kids?

[crumbsnamechange]

I feel like I'm missing a massive trick here!

DP and I earn around £72k jointly (I earn the bulk of that at £48k, but have ~£250 per month student loans, and high pension payments, and pay slightly more of the cut of the rent than him). DP is expecting to earn a higher salary in about 18 months' time, but it's not guaranteed, and it's uncertain how much higher.

If I went on maternity leave say within the next year, that would leave us with a severe shortfall as DP's salary alone plus maternity pay wouldn't sustain us (we live near London so our current joint income only just covers huge rent and current outgoings with a bit of savings).

How do people manage it? I've been reading on other forums about how you just make do, you sacrifice your lifestyle and don't go out as much etc. so more money for rent and baby, rely on relatives etc. so not paying huge nursery fees all the time etc. It just seems so hard, a huge stress, and unsustainable. And that's before I even consider the effect a baby would have on my career. Would it be foolish to consider a baby now since I don't even know how we would afford it?

I agree with pp - you don't have the income to have it all (you need to earn a lot for that in London).

Life isn't perfect, you have to work out what is most important to you. We wanted dc, so we live somewhere cheaper. There's nothing wrong with deciding you don't want dc if it means moving though.

Where you live is highly relevant... £72k in the north easy and you'd be a very high earner in a lovely area. In London you won't be. You can't compare.

£540 a month seems crazy low though. Is that wrap around childcare for school children, or an actual full-time nursery?

I apologise it's £560 a month - I was £20 out.

It's a Full time childminder. She charges £38 a day, reduced to £35 per day if you use 5 days a week, so £175 pw. An average 4 week month is therefore approx £700. Minus the 20% government tax free scheme leaves £560 per month to pay.

[quote Givemebackmylilo]@loulous1985

Yours is ridiculously cheap, that's how.

I'm also in the NE and if DS went full time it would be £1,100 PCM[/quote]

Well that's just crazy. I don't know where in the NE you are, but nurseries near me are only £40 a day.

We saved so I could have a year off and dh became a sahd

Sounds obvious but do you know where your money goes?

I'd sit down with bank statements and work out what you're spending on food, leisure, haircuts etc...map it all out on a spreadsheet and figure out where childcare would figure into it. That's the real killer with kids.

£1600 is quite a high rent for your income, I'd say. Our household income is six figures and I thought our £1.4k mortgage on our 5 bed detached was large! Appreciate you love where you live but you might just find you need to choose between that and children. How much of the fun things you love will you actually get to do whilst their young anyway?

@crumbsnamechange I earn about £38k and DH about 75k per annum gross. DH works 3.5 days a week. When we had number 1 he worked 3 days. We needed one of us to be part time and it made sense for our personal situation to do it that way. Basically my job doesn't allow part time but my job does provide perks equal the equivelent of £7.5k and my job becomes much much more appealing the older my children become (think childcare related and then coming to work with me). So although it's usual it's what we've had to do. We don't have family to help out either. I've had to relax a bit as DH doesn't cook or clean as I would but is really good with young children and I needed to go back to work.

@user97495

FT childcare for us is £540 a month (NE England)

That must be funded some how surely, that works out less than £25 a day, I live in a cheap area and even 10 years ago I wouldn't have found a childminder for less than £4ph or a nursery for less than £30 per day.

No not funded - just the 20% tax free government deduction. It's actually £560 for an average 4 week month - I was £20 out. Childminder charges £38 a day reduced to £35 if you use a full time place, which works out at £175 pw on average, therefore £700 for a 4 weeks month - which is reduced to £560 with 20% deducted.

Oh lord, pipe up the “can’t live in London on less than 100k” brigade- yes you can, I certainly do. The issue is the rent payment, so high! Aim to buy a place, a mortgage payment would be significantly lower

And it doesn't matter what your income/finances are, having a baby changes them so of course it's normal to worry/discuss it. We have a decent income and no mortgage but I am still freaking out about baby number 2. OK silly things like how expensive holidays will be but it's still a change.

What is your maternity pay like? I get Smt which is basically no pay!

I am I expectantly pregnant and I wasn’t going to have children for a few reasons, one being I wouldn’t be able to afford it. I live a fairly nice lifestyle but nothing flash but enough that I’m comfortable and when you do the calculations that all goes out of the window when adding in a child. However, here I am and I am fully in love with the baby I am growing and prepared to make it work no matter what but I am scared. But people make it work?!

That meant to say unexpectedly but I guess I’m expecting now 🙈

Still thinking about this. In your particular case the issue is that your partner pays over 50% of his net income on rent. That's not sustainable in any situation. Rule of thumb is no more than a third of income on housing costs.

You need to have an honest conversation about what you both want

[quote crumbsnamechange]@DrSbaitso that's what I suspected, which worries me, because it would mean DP would do the bulk of the childrearing/responsibilities, and he'd have to make earning sacrifices to do so.

Are there any examples of two reasonably high-earning parents who have made it work? I feel like I've always been surrounded by high-earning dad and part-time or low-earning/SAHM, and would love some different inspiration.[/quote]
@crumbsnamechange

My DH and I are avg. high earners, combined £85k salary plus bonus to being to around £95k a year.

Currently pregnant with our first not planned, just moved house (tripled our mortgage) to have room for kids but we bought 12 years ago so we made a little bit of profit and barely had a mortgage left, so we’ve been very lucky in that part but we will still have a £1500 a month mortgage. I think will bills another £500 a month, £500 in food, £500 in savings, £500 in children so £3500? Leaving £1500 ish a month for our own expenses so we are incredibly fortunate,

I have a very generous maternity package due to my service with my company providing I return for a minimum of 12 months after Mat leave or I repay. I get 3 months full pay & 3 months half pay which I know is only 6 months but on my salary makes such a difference against SMP of £600 ish a month which would just be such a huge drop and likely unaffordable for us.

I’ve tagged enough annual leave on either side to make it just over 7 months in total so I don’t feel like I’m cutting my Mat leave short.

I plan to return to work 4 days a week, as I can combine 5 in 4, we both WFH full time with no plans to return to office. Plan for baby to go to nursery 2.5 days a week, with DH cover 0.5 days as he has flexible hours and my mum is doing one day as will I so we have half child care costs compared to someone Full time which is a bit saving of around £500 a month which is a huge help.

We certainly won’t be having the type of holidays we’ve had previously, no new car for a few years, but we’ve swapped city centre living for local town with good schools, a huge garden etc. It’ll still feel tight some months if we need to fix something etc but we don’t eat extravagantly or socialise extravagantly either.

I honestly feel very fortunate and I don’t know how those on avg. salary afford to do without some serious saving/help and/or planning.

Combined income of £29k. Two children and we live very comfortably. You live within your means.

This is why evolutionary psychology tells us women have evolved to be biologically attracted to higher earners.

If you are the highest earner there, you better think twice. You will want to stay at home with your baby and maybe even not going back to work - yes, all your wages will go to childcare.
You need to think about your career, if you want to stay near London and if you want to buy a house.
Moving away from London will help you with the quieter/ safer life, cheaper house, but then everything that comes alongside that… job changes etc….
Is doable but ….

Don't live near/in London for a start, I can afford both my children but if I moved over to London/near London I'd not be able to afford them. The amount you are paying in rent for 1 month would easily cover 2 months rent (maybe even more) in other areas of the country.

You sound exactly like me but I am currently 8 and a half months pregnant. For years I wondered how we could afford it. We are both high earners, we have a mortgage and other bills to pay, I just couldn’t understand how people were able to take on the extra cost of a child and child care. I looked into my company maternity pay figured out how long I was going to be off, what my salary would be (this tool really helped and you can edit it to your company maternity factor in Student loans, pensions and child benefit maternity.money/maternity-pay-calculator) once I had worked that out I figured out how much we needed to save each month to make up the shortfall. My partner and I earn the exact same amount (we work for the same company) but he knows he may have to contribute more while I am on maternity. Things like Christmas and birthday presents will be less extravagant. I live on the doorstep of a beach so I plan on going for long walks, when I can, to lose the weight and get out of the house so barely any transport/lunch costs which I would have spent going into work.

Before I had kids I thought the same but honestly you do just manage! I thought my budget just won't allow it and it yet it does, and I work part time!? I dont even know how we got there! No help I know!

There are choices that you have to make. We lived in a less expensive area. Our car was years old. We shopped, entertained and lived within our budget. Our second pregnancy was a surprise in that we had twins! We took hand me down clothes and furniture. We had no family to rely on for childcare. Our priority became our family and less about what we had and did. It was tough for a few years.
We always knew that we could just make it and it does come through.

Can you afford to live just outside London if it would cost you less?
We have 3 children and only earn about £20 0000 a year. We get by pretty well on that, we don't live in London though although we are in the South West. Certainly don't feel like we or the children are missing out. You really do just make it work if it's what you want

Hi OP,
ISsue excellent advise above, but just want to add some more info, usually the nursery fees is higher in central London. I would suggest you to check out the nursery fees first, as for me the bigger blow is the nursery fees as i pay almost all of my earnings towards child care. My maternity allowance was less than yours but manageable but as i said bigger blow is monthly childcare and it increases every 3 months..

The first 30 years of a baby’s life is the most expensive. It’s never the right time financially to have a baby.
If you move to a cheaper part of the county it may help. We couldn’t afford to live in London.