How do people afford kids?

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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?

Long maternity leave isn’t compulsory. So higher earner has short time off. Benefit is career not affected.
You are renting which is harder. If you had a mortgage could have a payment holiday or interest only for a while.
Don’t pay pension or loans whilst not earning. Move to a job that pays decent maternity benefits not just statutory minimum.
Save a lot now to cover time off - smaller flat, minimum pension payments, no holidays.
Do you need to live where you do? Unless jobs very niche you could probably earn well in place with much lower housing costs.

3 months maternity leave and then don't have another kid until the first one has started school (which isn't free because of wrap around care but isn't £1500 a month)

Economise.

I was earning a similar amount to your household when I became a (lone) parent. I moved to a small one bed flat and planned out how long my savings would last, I set an amount I paid myself per month, that with adoption leave enabled me to have just over a year off work. It was tough as money was very tight that year, but it was doable. I stayed in that flat and generally kept with my financial rules so when I went back to work I could buy somewhere asap. Once I was back at work I had plenty to live on after childcare etc was paid, plus you have the luxury of two tax free allowances.

Buy smart, virtually everything for my son was second hand, the only new thing I bought was his car seat, he was a toddler, so obviously clothes lasted longer. I also didn’t go mad buying stuff, so he didn’t have loads of clothes, toys etc, I don’t think I bought myself anything in that first year.

Start saving now/clearing debt and then saving. Me and my husband would like a child together, so come September we are putting money away so when the time comes we have money to rely on during adoption leave.

My cousin and her wife starting financial planning a year before they started fertility treatment, they lived on what is essentially what they would be earning with my cousin not at work for a year, so essentially they saved almost an entire wage during that year. That has enabled them to have one parent at home for 12 months, plus it meant they weren’t shocked by a lower income, it was already their normal.

Well, in theory you CAN because your individual income is equivalent to DH and I's joint income.

We live in NE Wales. So first off our rent is only £700 pm and everything else is cheaper too I would presume. Our lifestyle is in line with our income. So we don't have two brand new cars, haven't had a holiday abroad in a decade etc. You will spend more, because you are used to having more IYSWIM. I imagine your standard of living is compartively better than mine.

What is your job? What is the maternity package like? I'm confused that a high earner would not receive a generous maternity package. My maternity pay was 75% of my full time wage for 18 weeks. I am with with same organisation and it is now full pay for 26 weeks. I only took six months off with both children. We could not afford me taking a whole year off. When you receive SMP, you will likely receive some income tax back. I did and it put me back to roughly 75% income for those weeks.

In all honesty, by the time you factor in childcare costs, you need to get used to living off about 50-75% of what you usually would bring in. until you don't need childcare anymore.

People generally know they're having a baby and have about 8-9 months to save for it. So there is time to identify and make sacrifices. Which will need to continue through maternity leave TBH. When on maternity leave, I spent less money because I wasn't travelling to work, spending £5 a day on lunch or picking up bits from the shop on my lunch hour etc.

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I would add to mine that many people just take their existing life and try to mentally slot a baby into it, thus not seeing how it would work. But if you are renting a pristine zone 1 2 bed flat for example, you don't have to keep doing that. You could rent a smaller place for a year or 2.

We're on a similar amount in terms of household income split almost 50:50 between us (DH earns slightly more than me) but live up north with lower costs - people saying that it's 'loads' probably have lower existing outgoings, it's always difficult squeezing in extra costs.

I have a good maternity package but still needed to save about £10k to cover the shortfall during maternity leave (I could have gone back to work after my enhanced package ended, but decided to take all the time available to me). Once I went back to work (I went back full time), nursery fees are pretty much covered by not having the 4 holidays a year that we had pre DS.

I'm due a second next month, but my oldest is due his 30 hours a week nursery funding in January and then goes to school 9 months after I return from my second mat leave so we'll only be paying 7.5 days nursery fees for 9 months, we'll get by.

Do some maths, figure out where you can cut back. Assume you won't be able to to save lots or go on loads of holidays during the nursery years - you can cut down on your high pension payments, for a start.

There will never be the perfect time to have children, you just either have to decide you want them and just go for it or you'll possibly never get around to having them (I set an arbitrary deadline of having my first child before I turned 30).

I’m our higher earner so I did it by making it clear I was definitely coming back after maternity leave and I went back FT. Second time, I had a shorter ML and my DH had a year off (unpaid) rather than pay for two lots of nursery. It worked for us and hasn’t affected either of our careers badly

I managed; you go out less, have simpler holidays, borrowed, bought second hand, bought less, etc. I don't know how people on normal salaries afford more than two though, being completely honest.

That old saying of waiting until everything is right/you can afford kids is mostly bollocks.

I didn’t get any maternity pay or maternity leave at all, and my household income dropped to literally zero overnight but I still managed to raise a child (and I have a good life and job now).

I just thought as well, if you go on the moneysavingexpert forum and post a state of affairs you’ll get some really good tips

1. Save in advance to cover the shortfall during mat leave.

1. Minimise outgoings in advance. In particular housing costs. Your rent seems high. It's often cheaper to pay a mortgage than rent. So on an income like yours, buy a property first.

1. Transfer all disposable spend ( Eating out, coffee, clothes etc) to paying nursery fees for the first three years.

Of course on your income its possible. But you need to want it enough to prioritise it

I felt the same and could if written your post. The drop in my income when I went on mat leave was so much more that my friends who were already on lower incomes, as our outgoings like mortgage were high, car payments etc.

The way we managed was:

1. Saving before we had the baby
2. Take a mortgage break. We took 6 months off and this was about £900 a month difference so have us some breathing space
3. Don't buy everything new! Half the baby clothes will barely get worn and we bought some stuff that hardly got used.

Going back to work is the hardest if you return part time, but don't forget the tax savings from nursery

No idea, we somehow manage but it is very tight! We also live in outer London.

I come doesn't mean much without knowing your outgoing, how much is your rent

You just cut your cloth accordingly. I live in a two bedroom house with a low and affordable mortgage. I put savings away every month for things that crop up like children’s clothes and activities etc. I have a pre-owned car that I’ve paid off. My partner and I both work approx 4 days per week, flexibly, so we juggle the childcare between us mainly while the other one works. Only use nursery for two mornings a week, and it’s an affordable small local nursery.
We bought all the big things second hand - pram, nursery furniture etc. We go on cheap days out / free places. It really hasn’t felt that expensive. It can be as expensive as you make it.

@ToykotoLosAngeles

I would add to mine that many people just take their existing life and try to mentally slot a baby into it, thus not seeing how it would work. But if you are renting a pristine zone 1 2 bed flat for example, you don't have to keep doing that. You could rent a smaller place for a year or 2.

This is it exactly.

Since having kids my life is totally unrecognisable to what it was before. You have to accept that life Will change and not necessarily in ways you want. At various points in time DH and I have both had to change jobs to fit with childcare needs. After we had DS2, I was working evenings around DHs daytime hours so we didn't need to pay for childcare.

If you want everything to stay as it is, I don't think having children is a good idea.

DH was on £26k when I went on maternity, I didn't return to work and became a SAHM. As long as you have enough to cover the main bills you make it work. We scrimped here and there and I was always on the lookout for savings. It was worth it for us. Plenty ways to make it affordable. Sell what you don't need, hunt around for free/cheap furniture/clothes. Sell it all on afterwards to recoup some money back.

Personally I think it depends a lot on where you live and your outgoings.

My DP and I combined earn about 50K, we're both self employed so this can vary month to month and since being on maternity I'm not earning.

We manage well, we still go on nights out, out for dinner etc. We go on days out and to be honest haven't changed much from what we would normally have done. We do live in Scotland though, our mortgage is significantly less than it would be where you live. We don't have commuting costs really as I only work 15mins away so not a lot in diesel and partner works away at sea for 2 weeks out the month so his company pay the helicopter out.

We don't have childcare costs yet and should only need minimal childcare when we do because my job is appointment based and I can work the weeks partner is home and when he's away I'll stay home with the baby until he starts nursery/school.
If we did need to pay childcare we could still afford it, would just need to eat out less etc.

It all very much comes down to personal circumstances, we could comfortably afford another child on our wage, where some people couldn't afford any on it

We waited until we had quite a bit saved up and had got onto the property ladder, to cover the loss of earnings during maternity leave and expenses. Babies actually cost a surprising amount of money even when you try your best to be thrifty! Made me realise that when people downplay the cost of babies they’re really exaggerating. Not to mention that they don’t stay babies for very long!

Meant having a child a few years later than we’d have liked, but it was the best thing we could have offered our future baby, to be born into a home with financial stability.

For us we didn’t just want to ‘manage’ and scrape by, we both grew up poor and didn’t want that for our kids at all, it’s stressful enough having a baby without being up at night stressing about covering the bills.

We also waited until we were on a similar income to you. We’re savers but it’s so easy for a huge expense to come along and throw everything into disarray, like needing a new roof or a car when yours dies or one of you getting poorly and running out of sick pay. We also knew we couldn’t rely on family or anyone for help practically or financially so it was so important for us to wait until we had savings and good incomes. Lots of people I know who were more on the wing it side were able to do so as they had a safety net from family.

I don’t agree with the ‘you just make it work’ crowd personally, lots of people brought up in homes without enough money would say it didn’t work for them.

@MNmonster. Yes, exactly. I was made redundant at the start of Covid (unrelated, just bad timing) and when nurseries reopened I had to take an lower-paid admin job in order to be able to do part-time. Whereas in my old job I had negotiated my middle-manager role/salary down to 3 days.

When our first was born we were in a similar situation salary-wise to you. I’m the higher earner. We live in zone 6. We made it work.

First and foremost was shared parental leave - when my leave on full pay at work finished at 6 months, he took the rest of the parental leave.

We both negotiated compressed hours to reduce the cost of childcare, and we were incredibly strict with each other about neither having the ‘more important’ job and so we shared sick days, emergency pickups etc. Most workplaces are an awful lot more flexible than it appears, particularly during a talent-hungry environment like many sectors are right now.

Our household income has doubled in the nine years since our first was born, and our second was born when the first turned 4 so that we didn’t have a double childcare hit. I won’t lie, the first three years are a total bastard financially. After that it’s a lot easier.

I won’t pretend it’s always been easy but it’s totally worth it and while our careers aren’t where they’d be if we hadn’t had kids, we’ve continued to progress.

We don’t, we are all broke and all our money goes on the children generally!

@LouNatics

That old saying of waiting until everything is right/you can afford kids is mostly bollocks.

I didn’t get any maternity pay or maternity leave at all, and my household income dropped to literally zero overnight but I still managed to raise a child (and I have a good life and job now).

How did you buy food and pay the rent/bills with zero income? Savings?

Not being goady, just think it’s important to be clear and honest about things like this when there are people reading who are considering kids. Money sadly doesn’t just grow on trees as we all know!

Don't have kids is the answer. It's not mandatory. Have a wonderful life without them and feel safe in the knowledge you are doing the best thing for the environment and climate change.

I worked full time and DH worked PT around child care. My employer was amazing and I started work early and finished early so I could be around and then picked it back up once they were asleep.

It’s hard and we had sleepless nights over it before babies came but it was so worth it and we managed. We didn’t have grandparents to help out so had to pay for nursery a few days a week and I went back to work after four months. I wouldn’t recommend doing that to be honest but overall, its true that you find away.

It sounds like you both have good earning potential so you’ll get back on track as it were if you keep your hands in. It’s temporary and get easier once they are at school.

Once they were older I became a SAHM for a few years as my DH had better earning potential. That was a good move and now I’m back working PT. Things change; nothing is set in stone, it’s all phases.