Can we afford to have kids?

[Polkadotbug]

This could be a long one as I don’t want to drip feed. DP and I are thinking about having children. Our current flat isn’t suitable for a baby due to space and the amount of internal and external stairs to access it.

For a modest 3 bedroom house where we live (West of Scotland) you’re looking at a home report value of around £240-£260k and houses are selling for around £15k-£30k over home report value. We have around £50k that we can use for a deposit and any amount we need to pay over the home report value. With this in mind, our mortgage payment would be around £1100 pcm on a 5 year fix.

Our joint income is £4220 after tax pcm. Total outgoings for the new house including ALL bills, groceries, petrol would be around £2900 leaving us with £1300 pcm disposable income. This would be to cover emergencies such as the car breaking down, clothes, gifts, days out, holidays if we can afford it, house maintenance/upkeep etc. This would be liveable as our disposable income at the moment is around £1800 pcm due to our low mortgage payments and we are lucky enough to have money leftover each month to save.

The worry is though that when we have a child, we would need to pay between approx £700-£950 pcm for nursery fees after I go back to work following maternity leave. This would leave us with either £600 or £350 disposable income.

I know that there will be people here who could easily live off that but the thought of it worries me. Is that liveable without worrying how we will make it to the end of each month?

I think that’s doable. You’ll also get child benefit, and could look at childminders who are cheaper than nursery. Did you take into account tax free childcare too?

Would compressed hours and a day off be an option? What age are you? You could spend a couple of years building your savings pot to top up the maternity leave and nursery years (could TTC in the second year as you’d still have months to save whilst pregnant). Once your child is 3 they’ll get 30 hours of funded childcare so the bill will go down a lot. No sign yet if Scotland will follow England and introduce funded hours at age 2 but probably not for a few years if they do.

I think that if you want children then you ultimately make it work by cutting your cloth accordingly and making changes to your lifestyle: your choice is either to do that, or not have children. Your estimated £2,900 a month seems very high considering only £1,100 of that would be mortgage: there will absolutely be money in there which can be saved, even if it’s e.g. getting rid of expensive car payments and driving something cheaper.

I think it’s fine, do you have jobs where you could do compressed hours to reduce number of days you need nursery? Your bills/essentials beyond mortgage seem very high, our bills/essentials are only £1000 a month including a car loan payment. At least mortgage is a static payment over your fixed term period, when you’d hopefully have pay rises as well.

I think that's definitely doable! Don't put off having children

You will always be poorer if you have children, it depends on what sort of life is ok for you. Some have zero choice, you at least have a choice. My DH calculated exactly how much he spent over the last year, it was way under what he could have but we are quite simple souls on a weekly basis. Our one big exception all our lives has been holidays and we have spent a lot.

Live now on the income you would have if you have children and save the rest and don’t touch it and see how you feel.

Thanks for your replies. I didn’t take into account tax free child care or child benefit. Taking it into consideration it would take the monthly childcare bill to approx £500 pcm (if my calculations are accurate…) which would free up more disposable income.

I’ve worked this out on the basis of both myself and DP compressing our hours then paying for 3 days childcare. I will look in to local childminder costs.

We’re 32 so definitely don’t want to delay. We have a good savings pot but unfortunately most of it will be eaten up with a deposit for a new home.

I agree that our outgoings are high. That does include £300 per month for groceries and £250 per month for petrol for both of us (public transport to/from work isn’t an option and we wouldn’t be able to afford the house prices near my work). We could look to cut things like Sky tv, Amazon prime (thanks Kirstie!), gym membership but may only be able to cut back around £100 taking that in to consideration

It also includes around £150 for the dog (food, insurance, grooming etc) but I could never be without him!

Just a thought on petrol costs, if you’re spending £500 a month on that, would a mortgage payment for a house closer to work costs less than this? As then you’re making an investment rather than spending it. We have spent more on a property to live near work, but it saves us money overall with cheaper travel

If it helps (probably not) we have three children and take home a fair bit less than you on a monthly basis. One is still at nursery and the other two are at primary school now but we still have to pay for after school care for them.

We don't have savings, which I know is a crime on Mumsnet, but we have two cars and a couple of UK holidays a year, so we're not exactly ok the breadline. The kids do various clubs and activities and we can offers that.

My view is that you can make it work if you want to, unless in genuine poverty obviously and you are very far from that. Don't overthink it.

@Peony654 I think it's £250 for both of them which is only 3k a year, it wouldn't make a dent in the higher house prices in some areas. Also you'd still need petrol for a shorter commute/nursery drop-offs/socialising so probably not an option.

OP I'm really interested in this thread. We're similar age, similar area, similar mortgage payments, but earn just over 5k net a month and I still don't know how people afford it! You just do though, my parents managed and they had a lot less money than I'd have.

Terrible typos there, on my phone, but you get the gist!

It’s £250 per month in total for petrol. There is hope my work will be opening an office in my area in the next fear years (cheaper area to live) so it makes sense to stay here rather than move out to where work is currently based as it’s much more expensive

You’ll make it work, life changes so much when you have a child/ren and you live a different lifestyle anyway - you get enjoyment out of spending your money doing different things. Also, paying for childcare doesn’t last forever, so even if you’re cutting back those few years at least you know it’s not for long. Go for it!

Strange post, that’s hugely doable.

Having children shouldn't be an economic decision, you'll kick yourself for that in years to come.

As others have said, you cut your cloth accordingly. Life changes so much, your priorities change in a way that you just can't understand until the child is there.

Don't get caught up in the "everything has to be perfect before I have a baby" trap. There is no right time to have a child. However well set up you think you are they find ways to turn your life upside down!

Nursery fees are a finite cost by the way, once they start school no more nursery fees.

I don’t think it’s odd

OP we are in a very similar situation, I know it’s daunting but I think people do manage on a lot less and if you overthink and second guess future finances you’d always find a reason not to. I really do think that.

I think it's doable, plus the government is hopefully going to bring in 30 free hours for all children under 5 which would help massively. I also think that you spend less money on certain things when you have kids, like nights out etc,so that would be a bit of a saving.

I would do it (I don't have that much disposable income!) but I would want to keep a little bit of my savings back. Reducing your deposit by even £5000 shouldn't make a huge difference to your repayments (extra £16 a month ish w/o interest). I would then try to cut back elsewhere. You won't have time for the gym anyway 😉

Also, if your wages are pretty even it's irrelevant, but if one of you earns significantly less than the other, it might work out better for the lower earner to take a career break rather than pay for childcare. But obviously affects pensions etc, so consider carefully.

It looks doable. Nursery fees are only for 3-4 years. Is there any help in Scotland from the government?
Babies can be as expensive as you make them. We've been given a lot of baby stuff and bought a lot second hand. We've passed most of it on as it's still useable.
I'm counting down to the subsidised hours were due next year. Nursery is a temporary expense.

OP I was def like you - I started spending money in my head in advance before I was even pregnant. Like pottys and potty training. A travel potty is like 30 quid! And I have never seen one sold second hand. So I worried about all the advance costs.
The biggest one is nurseries and wraparound care if needed. I alwasy just envisioned the baby being dropped at nursery around 7.45am and then picking them back up at 6 but in reality once I actually had a baby that idea horrified me so I switched to a more flexible job so shes not in for so long.
People make so with much less. You do just adjust your spending. And tbh for me personally, I didnt want to spend as much money on myself anymore, I enjoyed spending it on my child!

Can anyone afford them to be honest?

We have two children on less than £23k and UC top ups. We make it work.

Totally this. My third baby has almost entirely been decked out in hand me downs her whole life (she's three), either from our older kids or from friends or various Facebook groups where people give stuff away. I literally can't think of a time I've gone out and bought her clothes.

You would be surprised by what people give away or sell for peanuts just to get it out of their house and you can get total bargains. You just have to keep your eye out and not be proud or snobby about second hand stuff.

I think it’s definitely doable but you’d have to live quite tightly during the nursery years. Could you keep some of the deposit money back to help with rainy day fund?

That’s helpful everyone, thanks so much.

We would actually already be keeping a little deposit money back but it was a good point that reducing our deposit by even £5k wouldn’t really put a dent in our monthly payments. I’d rather that £5k was swallowed up by childcare costs tbh.

I think I’ve been getting my knickers in a twist due to the cost of living being at the forefront of everyone’s mind for the best part of a year or more.

As pointed out, at least it’s a short term cost until they start school. We both earn the same and work in the public sector with great pensions so it wouldn’t make sense for either of us to reduce hours or stop work completely