To ask what we can do to be financially prepared for kids

[OlivePhone]

Extremely broad question but thinking this is the best place to ask.

Myself and DH will be trying later in the year. We’re really excited but I am very worried about costs related to children, particularly childcare. We currently have a combined income of around about 60k before tax depending on commission which is likely to rise in future as he climbs the career ladder. Our mortgage repayments as of autumn will rise to circa 1100 a month with current rates. I am worried about the cost of childcare on top of this.

Funded 30 hours will help immensely if it comes in for all children aged 9 months+ in September 2025. I know there’s top ups to pay but it would make such a difference.

I will likely not afford to be a SAHM unless I wait until my mid/late 30s to have children, and we don’t want to make that compromise knowing statistics say it is biologically better the younger I am. Nor would I necessarily want to be, I do enjoy my job very much. I may want to drop my hours to 3 or 4 days a week but again know there’s then a consequence on future maternity pay and pension for doing this.

There’s an option to build a bit of a side hustle alongside my 9-5 (tutoring groups with a qualification I have) which could be lucrative and bring in another £500-1000 a month, for a few hours of work a week. I might look into this but don’t want to bite off more than I can chew if I’m doing this alongside salaried employment and family life!

How has everyone else made it work, if it’s not too nosey to ask :-)

Save as much as you can now. I wouldn't buy any new clothes, treats or luxuries and would just save like mad. You could rhen maybe overoay the mortgage with the savings, or just have a bigger savings buffer.

I didn't use childcare for my 2, so don't know about that.

I guess you just start putting 1k a month in savings.

Thank you both! I don’t know how we’d ever save for a second child whilst first is in nursery.

I had two very close together as could not afford the nursery fees so didn't work for a few years. We thought it would take us ages to get pregnant but it happened the first month. Definitely a bit of a scramble, but we got through it.

Clear debt. Overpay mortgage. Save into pension.

Start saving. Save for childcare costs.

Have fun too though.

Assume childcare will cost more than you think.

When we started paying childcare 5 years ago it was about £900 p/m, now it's more like £1300. Per child, outside London. Even with the 30 hours I think it is something like £900 per month now for a 3 year old as it only actually saves £350ish per month. You can get tax free childcare to save £2k per year and child benefit helps. You need to work out the difference between what you'll be able to afford and what it's likely to cost and have that accessible before you go back to work, plus the money to afford maternity leave as it's not all paid. Don't forget the childcare hours aren't guaranteed and if nurseries aren't paid properly for them they'll have to up the price on the non funded hours or just not offer them.

Just for reference, the £900 per month without free hours was right before the 30 hours was announced. Funnily enough it's still £900 per month now with the 30 hours...

For context we paid for childcare for a total of 15 years. I stopped counting once we were over £65,000

Nursery years were the most expensive. More than our (interest only) mortgage WITH the tax benefits of the time AND only 3 days per week.

You're still young so agree you do need to still have fun, equally you're very wise to be considering the cost of having a child.
Start by finding out how much childcare is in your area - it does vary widely. Put that amount away each month, partly as savings and partly so you can see what else you need to cut back on to be able to do without that amount when the time comes. I never thought we spent an awful lot of money but when we had to cut back for a combination of reasons, it was amazing how much more we spent than really needed.

Start living on the income you'll have while on maternity leave or after childcare, and save the rest.

If that's not enough start making the cuts to your budget now and/or use the difference to calculate how much savings you'll need or debt you'll build up.

Lots of families build up debt during the early years and it doesn't mean ruin as long as it's well managed

Write wills.
Take out enough life insurance to pay off all debts and for the surviving parent to be able to maintain the lifestyle the family is accustomed to. The trauma of losing your partner & coparent is enough without the compounding devastation of financial difficulties.
Not enough people do this, on average one child in every secondary (state school) class has lost a parent.
Sorry to be a downer, but this advice should be given out on maternity wards x
(I am a widow & am financially secure, but the additional financial trauma & compounding of suffering I have heard from fellow widows is utterly dreadful.)

We had about £85k joint with the first and mortgage of £1500 ish. Now on £110k joint with two with a bigger mortgage.

We scrape by but there's not anything left for savings or holidays or clothes/treats. The childcare is horrendous.

I'd make sure you have a reserve pre birth to dip into. If you need any work done to your house do it now. I'd also buy some nice clothes that you can get a good few years out of. Lol 😂

Most importantly don't have number 2 until number 1 is 3 and gets their 30 free h. Also if you can compress your hours do it.

We worked our way into jobs where we could both work a compressed 4 day week and have two of our days off on different days.

For a number of years when we had two young ones (2 year gap), I worked Monday to Thursday and dh worked Wednesday to Saturday. Sunday was family day.

We only needed two days childcare a week which made an absolutely massive difference, both in cost and in stress reduction as there was less liklihood of one of us having to take a day off for dc illness.

Hours arent free. They are (under)funded.

How do you use them? 30 hours can be term time only or stretched over the year. 30 hours doesn't cover a full week so you pay the full nursery fee for the remaining hours. Dinners can be charged for on the funded hours too.

My nursery takes the 30 hours x 39 weeks (term time) then divides that by 51 weeks (we close for Christmas week) which works out at around 22 hours.

We then charge for dinners so if they attend for the 22 hours only, they are charged £6 for lunch. If they dont come for lunch, they don't pay anything.

If they attend for anything above the 22 hours, they are charged for the sessions they attend plus £4 for lunches.

If they use their 30 hours term time only, they only pay for lunches and can't attend during school holidays unless they pay for the sessions (full day am/pm session with/without lunch)

What are you being charged for if there is no difference in price after funding?

Just another thing, sometimes the 30 hours is capped, or doesn’t cover the full year etc. depending on your area I know some nurseries around us don’t accept funded places at the moment (as they’re struggling at stay open). We only use a term time nursery but that means we don’t have childcare in school holidays so paying for that adds up, also we still pay for lunches etc at nursery so it’s not totally free (although significantly less that without the hours). But adding on classes/ groups/ swimming lessons etc adds up each month. The days out to zoos, cinema, farms, activities all add up / basically whatever you think a kid costs, just wave bye to that figure and watch it multiply 😂

Please don’t assume that 30 hours means 30 free hours. In practice for a lot of settings it is a (welcome) subsidy but it isn’t free and is likely to be undeliverable for the under 2s. In theory my 4yo gets ‘free’ hours. Our bill is still massive every month especially those coinciding with the school holidays.

@AbreathofFrenchair Enrichment and the daily price going up in that time. I don't begrudge the nursery it, just pointing out that the nursery need a certain amount of income to be worth running and if it doesn't get covered by the government funding it's coming from the parents who have to pay. It was still a shock the first time I had a bill with the 30 free (ha!) hours.

Aahh, fair enough. Yep the Government definitely didnt think it through. We have around £1.50/£2 difference per hour in funding and our daily rate.

Along with this new funding (that may or may not appear) the Gov have said that nurseries can recoup some money by increasing ratios which means they need less staff and therefore save money. So babies would go from 1 to 3 to 1 to 4. Toddlers 1 to 4 to 1 to 5 and pre schoolers from 1 to 8 to 1 to 13. Once again, no thought or consideration for the reality of running a nursery!

If you're looking for a flippant response compared to all the v reasonable and realistic ones above - invest in a good bubble machine from the start so you're not stuck re-buying crap ones over and over.

I'm SE and pay £17 per week for my 4 yo free hours, he goes 4 full days, 2 are free. It's his little sister who is draining the purse - but she should get 15 hours free from April in theory with the new budget, which for our nursery equates to 1 full day, 52 weeks a year (only closed bank holidays). I imagine there will be a top up for her too.

Save as much as you can now. To be honest, your outgoings fall off a little in the first year after a baby as you will probably not be going to the pub, out for dinner/lunch, to the cinema, boozy brunches, day trips etc. as your weekend plans turn into "catch up on sleep"!

Buy as little as possible new, get what you can from NCT sales, Facebook marketplace, eBay etc. I know people who spent £1k+ on travel systems, but you can get a perfectly serviceable buggy for a fraction of that price.

Lottery?

If family/friends want to give a gift, ask them for tickets to parks, zoos etc. Or for money for DC to put in an ISA for when they turn 18. Much more useful and you won't end up with a house full of tat.

Reduce spending and save hard for maternity leave. If you can start over paying the mortgage.

Funded hours wont be free an isn’t scheduled to come in until after the general election so I wouldn’t count on it.