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?

Agree you need to tackle the rent. Downsize to a one bed and save the difference from now until the baby is two ish and you’ve got yourselves thousands in the bank.

Maybe the £25 is for a childminders. Or after the 30 hours age three funding kicks in

Mine is in a cheap SW market town and 8-6 is still £50 a day. So £650pcm for me to work 3 days (minus 20% tax free discount).

We have to live near London as both our jobs are based in the centre and we're currently WFH full-time but this is likely to change to at least some days in the office.

So we could look at moving to a cheaper area near London but my god, we love it where we currently are (explains why we're willing to pay ridiculous rent). It's taken years to get to this point after a succession of shitty rentals in much less desirable areas.

DP's parents are close by for some potential childcare (and I think they'd be willing...) but my own Mum is unfortunately too far away for that and will never move closer.

How do parents manage in a one-bed? Do you put the crib in the living room? Sorry, I'm completely ignorant about all this...

@idontknowwhyibother

You make it work. I can't see how you can't afford a baby on 70k a year when there are families on 12k or less and manage okay with their kids? Sounds like you don't want one rather than not being able to afford one.

Statements like these are ridiculous.

Income makes f all difference, it's your outgoings.

I was on twice as much when I lived in London, but as have more money now as my outgoings are less

@loulous1985

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?!

@loulous1985 no idea, but I promise it's true! I see the money disappear from our bank account on a monthly basis so it's only too real ...

I did a lot of research on nurseries when I was trying to work out if we could afford it. Nurseries in the City of London itself are more than £2k a month. Nurseries around the London Bridge area are north of £1,900, and don't even include milk or nappies. The cheapest in our area is about £1,640, but the hours are shorter (8-6, which cuts it fine with the commute)

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

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

Ours is £1,300 per month but DD only goes part time.

@crumbsnamechange DH and I are both FT, high earners. The result is our childcare expenses have sometimes outstripped our rent or mortgage -- what you cannot provide yourself you have to buy at market rate, and good childcare is expensive. It's only since covid that we've had any flexibility with that and my original post maternity leave plan had to incorporate the rates for full time nursery and wraparound care for my older DC.

It is easier to make it work with a higher salary, and the more flexible your employer is, the more you can save.

@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

@crumbsnamechange

We have to live near London as both our jobs are based in the centre and we're currently WFH full-time but this is likely to change to at least some days in the office.

So we could look at moving to a cheaper area near London but my god, we love it where we currently are (explains why we're willing to pay ridiculous rent). It's taken years to get to this point after a succession of shitty rentals in much less desirable areas.

DP's parents are close by for some potential childcare (and I think they'd be willing...) but my own Mum is unfortunately too far away for that and will never move closer.

How do parents manage in a one-bed? Do you put the crib in the living room? Sorry, I'm completely ignorant about all this...

That's good news on the childcare. Even if they do two days a week, that's a huge load off your mind. And if you and your partner were able to drop to four days each without too much financial strain, that would only leave one day unaccounted for. That is very doable.

I think you would very quickly get fed up of being in a one-bed. For the first six months, the baby would be in your room with you so it's not too much of a big deal (although all the "stuff" that goes with them takes up a lot of space). After that though, you'll probably want them to have their own space, particularly as you and DP will want to get some time to yourselves. Never underestimate how noisy a baby is, even when they are sleeping.... they are crazy loud and you will not sleep well!

[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]
My husband and I earn pretty similar amounts. We made it work - it helped that my employer offers 6months of full pay and phased return. It also helps that your options to go out & spend money are vastly reduced (at least initially) post baby!! 😂 What is your maternity pay likely to be like?

Yes a one bed would be a sacrifice for a short time but something has to give!

If parents can help with childcare that will help a lot but for goodness sake don’t rely on this as part of your plans - you need to know you can afford to cover things yourself. They could get ill, change their minds, be too interfering etc to want them doing it...any manner of issues. Plan to pay and if you get family help see it as a bonus.

We live up north and between us earn £40,000pa and honestly it's not a struggle having one child, I work part time so no childcare costs which helps loads but I imagine it's where we live that makes a difference, can't compare to London prices but I don't see how you could have one on over £70k.

OK. You like the area. You like your flat.

Do you actually want a child?

It's OK not to have children.

But if you do then you will have to make compromises.

Eg. You could move to a much smaller place for two.years, save like crazy and then buy.

You say you are mid 30s. Exactly how old.are you, because if you are 35 then time is not on your side and you need to be realistic about that

We were on less than that when we had our first child. Our London mortgage was about £1350. I did go part time and almost all of my wage went on childcare. We were richer when I was just receiving SMP than when paying childcare so saving up to cover maternity leave would have been pointless. I think our mortgage was almost 2/3 of income at one point. It was tight for a while but childcare got cheaper and our earnings went up.
I think it would be insane to start trying for a baby before you have bought somewhere though.
I am guessing your take home combined is around 4K a month after tax/student loan/pension. Your mortgage would be around £1350 a month. Childcare roughly £1400 a month after the government 20% subsidy. That leaves you with £1250 for everything else which whilst tight is survivable for a year or two until childcare is cheaper and your earnings increase.

My company offers 6 weeks at full pay (which a PP said was the statutory amount - thanks, didn't know that!), plus the next 3 months at half pay and then 21 weeks at Statutory Maternity Pay and the remaining 13 weeks is unpaid leave.

I've no idea if that compares favourably with other maternity packages out there or not but at risk of sounding like a brat, it doesn't sound great. However there's a shared parental leave policy so technically I could continue to work at full pay after e.g. two months while my lower-earning DP takes some longer form of partly-paid leave? Is that how it tends to work?

That's on.the good side of average for mat pay.

Lots of places are six weeks and then straight to SMP.

You need to find out what your partner company policy is for shared leave.

Also, as everyone says you can afford to save for mat leave. It's working out how you pay childcare, assume £50 per day minimum. For the time from end of leave until 3 year funding kicks in

24k salary near London is low, that’s your main problem. You may have to jig maternity/shared leave around a bit so that you take less leave and your DP takes more time off.

We live in an expensive south east area and earnt pretty similar pre-baby, but our earnings were more evenly split so when I went on maternity it was less of a hit. You also need to think about what you’ll do when you go back to work. I went part time but again my DHs salary was higher, we couldn’t have done this if he was only in 24k.

I (female) was the higher earner. I saved up money to cover the drop after a very good maternity package ran out, to let me take 10m with #1 and 12m with #2. #2 was planned to co-incide with the free 15 hours (as it then was) childcare, as #1 was in pre school at this point, so we didn't have to worry about childcare at all whilst I was off on maternity with #2. Husband stayed at home to look after kids 2 days a week and we paid out of household income for 3 days in nursery for each of them.

We were in London though for both, high mortgage and high nursery fees. You find your discretionary spend changes - no more coffee and cake spontaneous trips out, and that second hand buggies / clothes / cots etc are perfectly acceptable.

@crumbsnamechange

My company offers 6 weeks at full pay (which a PP said was the statutory amount - thanks, didn't know that!), plus the next 3 months at half pay and then 21 weeks at Statutory Maternity Pay and the remaining 13 weeks is unpaid leave.

I've no idea if that compares favourably with other maternity packages out there or not but at risk of sounding like a brat, it doesn't sound great. However there's a shared parental leave policy so technically I could continue to work at full pay after e.g. two months while my lower-earning DP takes some longer form of partly-paid leave? Is that how it tends to work?

OP, 90% of full pay for 6 weeks IS the statutory amount, not full pay for 6 weeks. Yours seem to be a good maternity package as normally it goes straight to statutory mat pay after the 6 weeks is up which really is not a lot of money compared to an average wage, let alone compared to a high earner's wage. So your half wage is likely to be higher than the statutory amount for sure. So whilst yours is definitely an ok and preferable package, I have seen betters ones too. But its the same with everything, I guess. I too have the same understanding around shared parental leave that you, although I haven't looked much into that as DH does earn a bit more than I do (did full time).

No, that’s not a great package, you’re right. It’s better than statutory but only marginally.

Shared parental leave might be a good option to consider. Your DP would need to look at his employers policy. Some employers pay enhanced shared parental leave, most pay statutory rates. But even if it’s statutory pay you would be better off (after your 3 months half pay runs out) for him to be dropping down to statutory pay than you.

Also, don't forget about holidays! I extended my mat leave to near enough a full year, using all my acquired holidays so in reality, I only had 6 weeks which was unpaid, something we budgeted for so it wasn't that bad! So you can definitely plan it and play around with dates, holidays, shared parental leave etc. I'd seriously think about moving if you can, as your rent is just so very high in London. Imagine how much easier it would be if you had the extra 1k spare each month! Obv. if you manage to get another job elsewhere that pays similar to your current one. Good luck with all the planning!

I had my first babies very young -22yo - and I was barely even aware how to afford daily living let alone a baby but I think that naivety helped as I didn't overthink it. You manage and change your life so it all works out.

And your partner is on a relatively low income for mid thirties in London. Particularly for a graduate. Most graduate schemes start on that income. Has he scope to increase his income, or does he have to be near London.

Ahh! Are you kidding? I am on 24k a year give or take, mostly take. I consider myself pretty well off really. I have 3 kids who are incredibly happy. 72k? You are loaded! I think you need to reassess. Also can I encourage you to think of all of the people all over the world who survive on way less and how privileged it is to be worrying about raising kids on 72k. Kids don't need much. Just a loving family, a safe place and freedom to run about. Sorry if I sound judgemental, I am just genuinely shocked.

DH & I earned similar amounts when we had DC1.

He had more earning potential then me though. We made the decision that I would go back part time when DC1 was 1yr and we used a nursery 2 days a week. Had DC2 when DC1 got free nursery hours and then DC3 when DC2 got the free nursery hours.

We did take a huge hit on incomings but we were actually amazed at how much we saved as we rarely went out and were fairly frugal.

I worked PT for 10 years and then went back FT. DH’s salary is now double mine, but that’s really more a case of our jobs. If I had kept working FT I still wouldn’t have doubled mine.