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?

We had a cheap mortgage at the time. Only earnt about 35k between us. Ds went to ft nursery, no family help, but we got about £100 a month in tax credits at the time towards it. Our childcare bill has gone way down now he is at school. We could not afford another however. Even though we earn more we would be worse off.

Tbh, baby stuff isn't the issue. You can easily buy it cheap second hand or get it on Freecycle, and you'll probably find lots of people give you things too. The issue is more long term earning loss, childcare and, though I'm not there yet, activities for older children and teens.

But like I said, most people manage it and most people don't earn huge amounts. You earn more than average but I understand it doesn't go so far in the South East.

We saved up before I went on mat leave, economised, bought lots of stuff second hand. We're now in the crap phase of paying for 4 days per week childcare but it will get better when they turn 3. It's all doable, you just won't have the disposable income you once had.

I think some of the issue in your situation is that you live around London OP, as I’m sure you’re aware other parts of the country and you’d be quite comfortable. From my understanding childcare costs in London/ London area are equally high.

So I guess there are a few things, would moving away from London be an option career wise? Can you wait it out for your salaries to increase? That one does depend on maternal age (to an extent). Can you move to a cheaper area etc?

I think it also depends on your mat pay where you work, if your place of work offers just SMP you’ll feel the hit even more than say 6/7 months full pay. If you get 6/7 months full pay then it’s a case of during pregnancy and that full pay time to squirrel as much away as you can to cover that shortfall until you can return to work. Would shared parental leave be an option?
Then back in work; can you condense hours to have a lieu day in the week for you and your partner to take instead of childcare? Do you have family close to help? Does your work have any sort of daycare facilities? You do get child benefit too, although it’s not a huge amount. There’s also 20% tax free childcare for if both parents are working. This saves us about £200 a month. You can get healthy start vouchers, think it’s £10 a week (someone correct me if I’m wrong)

It’s also worthwhile noting, yes there are expenses with a baby but you don’t need absolutely everything the baby market makes you believe you do. A lot can be bought 2nd hand (exception of a car seat and cot mattress, maybe cot too due to safety standards). My child is still young but I would say the ‘expensive’ days are pretty much until they start school at 4/5, then they get greater wear out of their clothes and they’re in school and can do breakfast and after school clubs for a relatively lower cost.

DH and I live in the Midlands, cost of living is still much higher than the ‘average’ as are house prices In our area, but it’s nowhere near London costs and it’s affordable for us. We own our own home (on mortgage). We earn slightly more than you mentioned £78k DH 46 and me the rest (although I do get sizeable bonuses which help too) but we do manage ok. I have a toddler and I’m pregnant with our second. When the second starts childcare is where we’ll start to really feel the pinch. Things like holidays are obviously the first to go, and we’ve started to realise how much money we fritter away on shite (like takeaway or poorly planned meals, and last min food shops). So we try to limit ourselves to one takeaway/ meal out a month and we menu plan and shop at lidl and bulk buy our meat, easily this way we save £200 a month. Same with days out, we limit our paid for days out to once a month (by paid for i mean a day at the local children’s museum which is £30 for 2 parents and one toddler, more expensive treats are only special occasions). We have a terrible habit of buying DC something every time we go out so for numerous reasons we have to nip that in the bud.

It’s worth noting that some of it is economies of scale too, that the higher your salary the more costly your lifestyle and the more you are inclined to spend. But I’m 100% with you, it’s tough!

Dh and I earn a little over what you do, dh earns slightly more. I took 12 months maternity plus 4 weeks annual leave and spread ny payments over the whole year so there wasn't a sudden dip. I think I spent about 6k which I had saved to supplement (leaving me with not much left in savings!).

We managed fine and still did groups, days out etc and had holiday (in uk) that first year.

Ds is now 3 and we have just paid his last nursery fees. Dh is a teacher which helps with the summer holiday child care. I work 3 days a week (did 4 pre ds). We have fabulous families who do a day child care each.

I don't think we could comfortably afford another child right not so are sticking with one at least for the moment!

We used savings to cover maternity leave shortfall.
Then you adjust outgoings when you go back to work. We had childcare to pay as well as going part time. But it works. Life changes when you have a baby and spending priorities change too.

You have them....realise you can't afford them...then you're stuck with them so you manage! On 72K there will be a way. We moved out of London to have DC2 which made a big difference.

All the couples I know (including me) where the earnings split is the female earning double the male have elected not to have children.

In contrast to @Brimorion we (accidentally) managed it by having children prior to being high earners. I fell unintentionally pregnant just out of uni but on reflection it worked out very well for us. We were eligible for tax credits for the majority of the childcare years, I worked part time whilst studying to quality in my field which enabled me to be home part of the week but still advance my career, did a lot of my uni reading on the commute! I developed a huge amount of resilience having young kids whilst studying and working. Earnings increased, tax credits decreased until we were self sufficient so a pay rise was never really a pay rise in disposable income but was satisfying all the same. We were able to buy a home in our 20s when youngest got 30 free hours, and the forever home not too long after in our early 30s.

By the time they started school (when I actually find childcare more difficult, cheaper but more challenging to find sufficient care) I was qualified and senior enough to own my diary so now work very flexibly around the kids.

I guess what I'm trying to say is, there is no one size fits all, of course research and prepare as best you can, but there will be a way to have a child in your situation. Most of us make sacrifices of some kind and you will find a way that works for you.

OP would you like to buy a property before having a baby?

All money in and out becomes family money - none of this who pays how much of the rent/bills. You also need to be on the same page where you want to plan for a child and do what is needed.

Huge spreadsheet capturing all family money and all spending in detail and transparently. Work out together how you can strip back absolutely everything that is non essential. No new cars, fancy mobile phones, expensive entertainment packages, holidays, work lunches all add up, coffees, going out, new clothes that aren't really needed etc. Review all direct debits/outgoings and see if you can get better prices. Work out where the money is going and how to stop/reduce spending it. Work out how much money you need (as a family) to cover maternity leave and first months of childcare and start saving.

Babies aren't that expensive if you don't get sucked into the £1000 designer prams etc, save your money for the big costs which are loss of earnings during maternity leave and childcare. We saved to afford my maternity leave (basic package) and I went back after 7 months.

For childcare, dh worked 1 day at the weekend and took off one day mid week to save nursery fees. When I went back I used accrued holidays to work 4 days a week for nearly the first year - so the first year we only paid for 3 days a week nursery. Also changed our working hours to reduce hours in nursery (he started late to drop at nursery, I started early and finished early to do the pick up). Look at childcare vouchers and any relatives that might help to reduce costs.

It is a complete change of lifestyle financially for most people when you are paying for childcare, but you do it if you want a child.

Yes my husband and I, I went back to work three months after we had our daughter, we paid childcare and it was fine, we were skint for a period obviously, you need enough savings behind you to survive maternity leave. All our child responsibilities were split Ie pick up drop offs bed times etc.

I earn £42k plus bonus. My husband is self employed and makes £3-5k a month, it varies. I'm pregnant with my second.

Luckily, I'm getting full pay for the first few months and I'll get my car allowance for the duration. But, we've also saved our arses off for years. I have £19k and I think he has similar. I'm taking 9/10 months off. That's how we are going to afford it.

When I had my first, I was earning £21/22k. My husband was just starting his business so was earning £500-£1000 a month. It was bloody hard!

DS was a "surprise" I just found a way to be honest. Me and the father were not in a living together relationship, he was forces living on camp and I was at home in my studio flat with baby, I stayed in the studio till he was 2 to help with costs. He would visit Friday to Sunday to help and see DS. He paid £300 a month maintenance.

I only took 16 weeks maternity leave and then paid 3 days nursery 2 days family help. So the "crunch" was short term. Assistance with childcare fees from WTC was also my saviour.

You do find you economise a lot more once they are here by situation not choice. Popping out for a coffee is like some military mission, you'd rather be at home cuddling baby than out for meals and cinema trips. So savings are made there.

I'm now a lone parent, DS father isn't here anymore. So again now I find myself economising as a lone parent with no maintenance. He's 7 now. You just sorta make it work as weird as that sounds.

You save in advance. The lower earner stays at home. You muddle by. The costs are very front loaded to the early years when childcare costs are the main outlay

We saved up what would have been the difference in earnings when I was on maternity leave. And tried our best to save on that too by not spending every penny we had available to us. Also saved a chunk up for the first few months of nursery. Moving forward, we budgeted the nursery fees in and had to make cuts elsewhere. I also couldn't afford to go back to work full time as full time nursery fees would have wiped out my income. Had to find the part time balance that was affordable whilst still having disposable income. We have no family around to rely on for childcare so had to plan financially for the arrival of our baby. Having said that, whilst not being near family, we are lucky that my parents have supported us with smaller amounts throughout (totally not expected but a very welcome help) plus DM loves clothes shopping for DS which is a real bonus. I genuinely doubt we'd be able to afford a 2nd child so quite lucky that we are content as a family of 3. Oh, and we also reduced our pension payments for the duration of maternity leave. For reference, our combined earning is around the 60k mark and our nursery fee is roughly £450 / month and mortgage is £600 - it's crazy isn't it!! DH is the higher earner so no question who had to stay in full time employment. One real advantage is that we own our car so no repayments there!

When people say you do manage I guess they mean if you look at your finances, you HAVE to factor in childcare fees. It's other things that will have to give. Reducing cost of food / clothes shopping. Skipping holidays for the first couple of years etc. Cutting back on night outs and finding activities that are free. You do manage because childcare fees are non negotiable, whereas Sky Sports package is (just a random example, hope I'm not offending anyone!)

I will add though working full time with a 16 week old baby who was very much and understandibly still night feeding nearly broke me. But it was a choice between break me or break the bank. I chose the first option.

Without figures it’s hard to see what the issue is. I stopped my pension payments during my Mat leave- u will get child benefit.
What’s your mat leave policy?

My husband and I simply never got used to spending our whole (substantial) salaries. Each time I got a pay rise that just meant more on the savings or pension standing orders.

We saved a 60k deposit between us over about eight years, whilst progressing from 20-35k salaries.

Then our careers really took off and we just kept stashing money away, whilst buying cheapish clothes, shoes, budget (but v frequent) travel.

Seeing friends who earn a lot less with expensive TV and phone contracts and lease cars fret about money makes me satisfied with these choices. Or even the high earners who buy expensive stuff fret about the long term.

Heck, I'm on a career break right now because I didn't want to plough straight from one position into the next as well as training.

Honestly, there will be crap you are buying that isn't worth the money worry.

My partner and I earn a joint salary of £75k and its a pretty even split (he earns £3k more than me.

People say it all the time, but you do just make it work. You do have to make sacrifices though.

I went back to work on less days per week to make child care cheaper (no family locally), we use the tax free childcare scheme, budget a lot more etc.

I guess for you it will be the cost of living in London, an issue we don't have, so our mortgage is just under £700 pm for a 3 bed semi. We consciously moved somewhere cheaper before we had the baby. Is there any possibility of relocating to free up some money?

It does seem impossible, but it absolutely is possible.

Me and dh are reasonably high earners and earn about the same as each other - combined around £90k. We saved for maternity leave and made cut backs during that 9 month period. For the long term I think the biggest difference is renting vs mortgage - we pay in mortgage payments far less then we would in rent. We live in the South London suburbs - cheaper than further into London. Over the years our salaries gradually increase and our mortgage gradually decreases. Our first place was a very modest flat but the value doubled in 5 years so we were able to move to a house with not too big a mortgage. There may be more too it as well, but basically our quality of life is certainly no worse than pre-kids. Childcare costs were high but only until 3, then they get 30 hours free and then school.

Savings.
Cutbacks.
Few luxuries for the parents.
I do not regret my children at all. I pay £££ in nursery fees to sustain my career. But they won’t be in nursery forever.
We don’t go abroad (we will when they are older) we also car-share.
I love my life now, i wouldn’t ever be without them.

[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]
I have a 3 and 1 year old so know lots of parents of young children. Literally know one SAHM who was low earning prior to having children due to health issues. Everyone else has returned to work on 0.6 - full time, all as teachers, doctors, accountants etc. Know lots of couples where both work 4 days. Don't recognise the high earning dad / low earning mum scenario at all. What percentage of your joint income goes on rent? Do you get an enhanced mat pay package?

The most expensive aspect of having a baby is childcare if you don’t qualify for funding. Everything else you can get cheaply and manage by cutting back on other things.

Most people can afford it as they don’t live in or around London. We can manage on just one salary, although no longer have the lifestyle we once had but having children is a sacrifice in all aspects of life. The only thing you really need to focus on is childcare. If you have family who can help cheaply or for free then you will be fine. If not, then save save save starting now. Cut back on things starting now.

And it’s true what others are saying, once your child is here you manage, because you have no choice.

Hope it works out for you.

Oohh I also forgot to say the best thing we did was joined our accounts. So no 'you pay x% of mortgage and i'll buy food shopping' etc. All money came in, bills went out and what was left was family money, minus what we put into savings.

We did this about half way through my maternity and it has made everything so much easier.

Understand not for everyone / every relationship but worth considering.