Is this enough money to have children

[Lainey1988]

Me and DP both would like children. I’m in my thirties and am thinking about our finances.

We both earn about 25k per year so take home is about 3k after taxes and pension. Is this enough? I want to ensure we can give the kid a good life.

Tax free childcare gives you 20% back of what you pay to childcare, childminders are cheaper - mine is £36 (£30 with TFCC) compared to £56 at the local nursery. You also get £21 child benefit a week which helps with nappies etc. I have friends with a couple kids on a lot less than you would be on and seem happy.

If your mortgage is only £450 how are your outgoings £2300? That's not much less than we spend for a family of 4 and our mortgage is nearly £1,100pm.

God, I loathe the ‘if you waited til you could afford it’ trope.

People still have bills to pay. From the limited info here the OP can’t afford to give up work because her partner doesn’t earn enough to cover their current outgoings, let alone with a baby too.

I’d also think very, very hard about stopping work entirely, especially if you are unmarried. The benefits (pension etc) can make it worthwhile even if you don’t clear much after childcare.

Your first mistake is thinking you can't return to work because childcare is £1000 and you only earn £1500. Childcare is £1000 so that's £500 for you and £500 for your partner. Therefore wouldn't make sense for you to not return to work unless it's just a case you actually don't want to?

Look at tax free childcare - if you are both working you get 20% back each month plus child benefit.

I'd also be reviewing outgoings. Ours aren't that much for a family of 4 with a mortgage double yours

@bumbledeedum

If your mortgage is only £450 how are your outgoings £2300? That's not much less than we spend for a family of 4 and our mortgage is nearly £1,100pm.

Came here to say this! We are mortgage free and our outgoings are around £1,300 per month, including £250 nursery fees. Can you cut the cloth on any of your household spending OP?

@WhatNoReally

I think you'd be crazy to let your finances dictate whether you have a child. My dad was a milkman and mum stopped working when I was born. The house we lived in was unheated and without a fridge. We're all now comfortably off and and my siblings and I are happy to be here! My parents never regretted it even though money was tight during my childhood.

I grew up in similar circumstances and am thankful to be here, but as the same time absolutely not crazy to consider finances before having children- it's crazier to just have them without planning imo! OP yes as you have a home with another bedroom already you could stay put there and remain on the low mortgage- that would probably be the biggest immediate upheaval if you didn't have that in place. I'd be open minded about going back to work, you don't know how you will feel after a year or what will be best for all of you, but good to crunch the numbers assuming you won't go back. I think you'd be fine if you were mindful of what you are spending.

Your outgoings are so high for such a small mortgage. So I’d look at that first. I reckon you could easily save a grand there.

It is definitely NOT crazy to wait until you’re in a position to provide warmth and a refrigeration for your child..

Thank you all for the advice! I was a bit nervous posting!

Our outgoings are roughly
450 mortgage + 200 overpayment (could be cut down but I worry about interest rate rises so am trying to get to a lower figure before our fix ends in 4 years)
400 bills (electric, gas, water, council tax) not sure there’s much room here
200 petrol and car maintenance (get to work and kept cars running)
200 insurances car and house, pet insurance etc
300 fun money for clothes/outings/hibbies (150 each per month)
250 food and pet food
200 savings (holidays, general financial buffer)
100 per month on Netflix, monthly takeaway, birthday gifts etc)

To all PPs you are right about not seeing childcare as ‘my cost’ it should be 500 each and that’s good advice! We pool household money anyway but I think you’re right that I ensure we see this as a 50/50 cost

I'm on my own. Earn 27k a year. Even with outgoings I can afford to put him in 3 clubs a week and pay for his nursery and go on holiday a couple of times a year. I'm very, very careful with money. Get minimal in Universal credit. So still not close to your income. Guessing you're still at an age where your income will increase with time too?

Oh ‘insurances’ includes life insurance

But then again, 2300 outgoings is mega!

Is the £700 per month spare to cover food, days out, savings, holidays?

You need to work out what your maternity pay would be. Also consider what such a long career break would mean for you when you do want to go back to work in terms of salary.

@Anansiskunk I’d genuinely welcome advice on where we could cut back. I know the mortgage overpayment could go but with inflation as it is we might need to use this to subsidise energy costs and petrol. What do you think? It’s hard to read tone in text but I’m genuinely open to your thoughts/others thoughts

Honestly, most people don’t have enough money when you have dc. Children will cost what ever you have available to spend. Our income has dropped by £16k since this time 12 months ago. If you had said then that we would be Financially managing on one wage, I wouldn’t have believed you, but we are coping. Yes, we have less treats and aren’t saving anything, but we are still warm and fed. We just don’t do our hobbies (kids do), no meals or coffees out and less expensive days out/outings. But it’s ok.

You will manage, just like everyone else does.

@Lainey1988

I don’t honestly think I would go to work until the child was at school as I think nursery would be about 1k per month and I earn 1.5k

Why are you thinking like this?

Assuming 1 year mat leave, then the 30 free hours kicks in when they're 3. So there is just 12-18 months in the middle where nursery is that £1k figure. You just need to save and/or tighten your belts as a family over that period. Do not give up your salary for such a short-term annoyance. You're earning an ok amount now, you can progress and end up incredibly comfortable.... or you can give it up watch your partners career soar and yours be left behind.

If your outgoings are 2300 and you don’t work, and your husband only earns 1500, that clearly won’t work.

If you cut out the savings, takeaways, fun money and mortgage overpayment then you might be fine.

Sorry I've got my months wrong above but the point still stands. It's only from age 1 to age 3 you need to worry about. If you could both do compressed hours (5 days in 4) then you could reduce nursery need to 3 days/week.

Between the overpayment and the savings you are saving £400 a month. Do you have a pot from this you can dip into to see you through a tighter period? If so that makes a big difference.

£200 a month for insurance looks a lot to me though obviously don’t know what you are covering. We pay about £500 a year for house and one car.

£300 fun and hobbies might dip anyway when you have a young baby - depends what you do now and how much you see it changing.

[quote Lainey1988]@Anansiskunk I’d genuinely welcome advice on where we could cut back. I know the mortgage overpayment could go but with inflation as it is we might need to use this to subsidise energy costs and petrol. What do you think? It’s hard to read tone in text but I’m genuinely open to your thoughts/others thoughts[/quote]
Food is a big one for me. Cooking from scratch with cheap ingredients, no takeaways, don't go out to eat often at all. Also don't eat meat which reduces costs. Sold car and bought a more economical one. Have a heated throw and turn radiators off in rooms we aren't using. Bought equivalent of oodies and avoid using heating wherever we can. Don't buy things like coffees, always take a thermos. Don't upgrade my phone, its perfectly fine and now pay £10 a month with Smarty. Started working out at home and running which got rid of gym membership. Bought a bike and cycle everywhere. Even if it's 10 miles plus at times. Son loves it. Don't have loads of subscriptions. None of it makes me feel like I have less. I actually feel really good about it all and feel less like a consumer, which is good. I also sell a lot of stuff so for example when I want a new item of clothing, I sell another. Everything I have left at the end of the month goes in to a holiday/emergency fund which soon builds up. Shove a tenner in fairly regularly when I might have bought a takeaway instead in a previous life. I also have 'no spend' days where I don't spend a penny. I use a lot of discount codes etc. Looks a lot of effort but you just get used to it... 0

You're right thinking ahead.

Is timing will never be perfect, don't wait years for the perfect life if you really want a child.

A lot of time women who really want a child wait until everything is in place and it doesn't happen easily for them, that's heartbreaking.

I wouldn’t if we were on your income but DH and I have very low risk tolerance when it comes to finance. Hate living close to the edge of our means. I think you have to decide if you’re willing to watch your pennies for the next 20 years or not. Plenty of people do it on much less, but you have to understand you’re going to have significant life style sacrifices.

You would make it work. People have kids in far less favourable circumstances, things might be tight for a little bit (they always are) but you will manage.

@Happyhappyday

I wouldn’t if we were on your income but DH and I have very low risk tolerance when it comes to finance. Hate living close to the edge of our means. I think you have to decide if you’re willing to watch your pennies for the next 20 years or not. Plenty of people do it on much less, but you have to understand you’re going to have significant life style sacrifices.

Agree with this. I have a great life with my son, but equally do have to say no to a lot of things. Doesn't bother me at all but if you're a social butterfly or like lots of nice things etc might be more difficult.