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?

4 kids on a bit more than half that. When we had 2 we were earning under 20k...it was perfectly do-able. No family help, but I guess also quite a frugal lifestyle. Second hand clothes and books for all of us (to be honest we would do this even on 100k for environmental reasons) It helps we are a very feral family and always outside in the countryside, which is free

We were on proportionality that sort of income when we had DS. Nursery was 25 per day 19 years ago, I know it’s a lot more now. I had a job where I got 9 months paid maternity leave of a decent proportion of my wage. We are both from SE but moved out for work, both worked in higher education so pay is kind of the same everywhere. We will never live back in SE.

We are also small spenders in that our hobbies are hill walking and gaming, both video and board games. DH still runs though I can’t anymore due to my health issues.

We both despise shopping. Even out of lockdown we would only go twice a year max to replace anything.

We don’t really drink.

Being slightly introverted nerds pays off sometimes:)

We were in a similar situation to you before kids. I am a higher earner than DH and am self employed, so I don't get maternity benefits in the same way as an employee. We are in London, so similar struggles with housing costs etc.

We planned to have kids but we knew the financial situation would be tight. If you don't have family nearby, I would recommend investigating the costs of formal childcare in your area. For us, full-time nursery is around £1,700 per month At least you can be prepared if you know the cost.

We took shared parental leave and that, combined with a timely promotion for DH and paying off our student loans, means our disposable income isn't actually that different now, but it was a huge worry so I totally understand. We definitely will have to sacrifice big holidays over the next few years while full-time nursery is so expensive, but hopefully in a few years we will be able to enjoy them again

If kids are what you want, you will manage it. Make sure your partner checks his work paternity policy as well - a lot of them a more generous nowadays.

[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]
Here! @crumbsnamechange
Me and my DH both had a reasonably high salary before kids. We earned exactly the same.
After DS1, I reduced to 3dpw, and received anyway a Promotion to a better role and better salary while working Part time.
I Took 20 weeks mat leave, he took 4, DS was in daycare at ca. 6 months.

Expecting DD in 2 months, mat leave will be the same (20 and 4 weeks), I will keep my 3dpw role, he will decrease to 4dpw to enjoy life with DC.

@crumbsnamechange how quickly does it stagger and at what %? That’s the important bit. The 6 weeks is standard

Yeah, seeing your update, you need to move house!

I'm in a 3 bed semi for half your rent. I appreciate everyone loves London life, but can you realistically look at something even a bit cheaper?

Mortgage would probably be cheaper than rent - could you buy before you try for a baby? We are in London - rent is 1.5k a month, childcare will be about 1.3k for full time. So that is a fair chunk of our combined earnings before you factor in other essentials like bills, baby things, food! If we owned a home our mortgage would probably be half what we pay in rent which would make a big difference. We saved in advance to cover Mat leave. Some people get loans for childcare. The problem with going back to work early and doing shared parental leave is that if you have a tough birth you might not be physically ready for work for a while (8 months in my case!)

OP we have a similar combined income to you (80k) and we saved like mad before my maternity leave to cover the loss in my income. However I'm lucky in that I work for the NHS and their maternity package is very good, much better than the standard SMP, so that makes a difference. We also used savings to cover large purchases like the pram, car seat, cot etc. In terms of childcare when I go back in January we will be using FT paid childcare (no family help) and claiming the 20% government tax free childcare, but otherwise no financial help towards costs. Childcare will cost us around £540 a month with 20% off. We are in the NE of England - not sure if that makes a difference.

For us, full-time nursery is around £1,700 per month

this is absolutely staggering. FT childcare for us is £540 a month (NE England). How is there such a significant discrepancy?!

DH and I are both high earners and stayed in our expensive city (abroad, but on a par with London I think) we manage because I went back to work full time! Childcare is expensive, but we can cover it, even if things are tight. Living in the city means we also don't have to have a car which saves a chunk of cash. We also both have very short commutes, so we can maximize our time with DS.

We made sure we had a decent chunk of savings before we had him, but other than the childcare, he's not particularly expensive. We got lots of hand me downs and mostly by things second hand or on sale/. Because we live so centrally, we have access to loads of parks and free or cheap activities which helps a lot too - there's always something going on.

We also still go out to dinner and drinks with our friends and we have hobbies too - it's much easier if they're a 5 minute walk down the road. It's def less often, but I can't tell if that;'s because of Covid or the toddler. We tend to do more things separately so we don't have to pay a babysitter, but since we've been working from home for all over Covid, DH and I get plenty of time together. If we want a date, we go for breakfast or lunch.

It is harder when you are the higher earner add the maternity leave system isn't designed for that! We lost over £30k by me taking mat leave. We earn a bit more than you do but not a vast amount, I do feel someone's life if I'd thought we'd have an income between £80-£90k when we were young I would've thought that was brilliant and whilst we are comfortable we don't live the live of lifestyle I would've thought. BUT we don't have any debt other than mortgage so I guess we could live more lavishly if we wanted cars on lease big credit card bills etc

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.

We did save well pre DS to cover my leave and bigger purchases and now we don't save as much as we used to because it goes on DS and nursery bills

When we had DD1, we were in a similar position to you - between us on £70k but quite evenly split, living in outer London.

The answer to your question is twofold; firstly you need to try and reduce your housing costs, and secondly you need to save. We bought just before we conceived DD1 and went from £1000 a month in rent to £600 a month in mortgage. You say you're not in a position to buy, but not all 2 or 3 bed places are £1600 a month - moving would save a significant amount per month which you could put away. We saved for my maternity leave - I got nothing enhanced at all; which is not that surprising for the industry I work in - so I went from my usual salary to £550ish a month which was a big drop. We worked out how much we had to have per month and then worked back from that.

It's hard. And it's expensive. Once I was back at work we were paying £1200 a month in childcare as we had no family help so we had to pay for it. And we went without for a while, and timed our second child for after the first started school, and relied on our salaries increasing (which they did).

Your huge rent is the problem. You need to find a way to reduce that (a flat, not so nice area, or relocate entirely). Going on mat leave and having those overheads would be difficult.

To me that’s a lot of money, but then you said you live in London

By living up north perhaps? Our income is similar to yours, we have 5 DC and a 5 bedroom detached house in Yorkshire.

We’re South West and 5 days pw in a nursery from 8.30-5.30 would cost us about 1600 pm.

540pm is crazy cheap.

A family member has chosen to return to work part-time and now because of reducing her earnings, pays 1200 per YEAR in childcare. I find it crazy that childcare is subsidised for those who don’t work as much, why wouldn’t you keep your salary under a certain threshold in that case.

It’s true, you just cut your cloth accordingly. We used to have fabulous holidays and amazing weekends away now we just go to Centre parcs for a week. I don’t really buy new clothes anymore but don’t go out so no need for fancy new clothes. Meals out tend to be at family pubs and bistros rather than nice restaurants but we don’t each out much so save money there as well.

I would prioritise trying to buy before having a baby otherwise it will only be more difficult after.

A family member has chosen to return to work part-time and now because of reducing her earnings, pays 1200 per YEAR in childcare. I find it crazy that childcare is subsidised for those who don’t work as much, why wouldn’t you keep your salary under a certain threshold in that case.

That's not really how it works usually? You need to both be working minimum 16 hours a week to qualify for tax-free childcare before 3 and then 30 hours free at age 3 (22 hours if year-round). If your household has a SAHM or SAHD you get 15 hours termtime at 3 and nothing before that unless you're on universal credit with a household income of about £15k.

Isn't the part time person also probably eligible for three year funding. You don't get childcare subsidised just because you are part time

You wouldn’t get a holiday club for £25 a day near me let alone nursery. £75 a day would be much more typical before free hours kick in.

So I've always been the main earner and my husband has progressively increased hours as the kids have progressed through school.

However I don't know a single couple where one parent doesn't take a knock to their career. What I can clearly see is, in general, more sharing of emergency days off etc when the female is the main breadwinner than the more traditional roles.

Unless you want a full time nanny. Then you can juggle once they go to school because that's when the fun starts with shorter hours and holidays.