36 year old couple… How bad are our finances?

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DH and I both work. We have £25K saved in a Lifetime ISA as a starting point for a house deposit. We have a combined income of 4,000 per month, after tax. That’s to cover all of life’s expenses. We do have £2,000 on a 0% credit card.

we have recently moved from a rented house into accommodation provided by a family member. They are giving us a discount on this, so it’s helping us to save. We also have two DC age 12 and 9. The thing is, we would really like another, but I’m worried that would be totally irresponsible.

very grateful for opinions…

But lots of people have more than 2 and cope amazingly well. I think its purely your and your DP choice You sound in good financial shape. You'll save more with just 2 kids but if you want a third noone can tell you otherwise. Just remember, itll be a 4 bed houses you need and 2 adults 2 kids plus baby seat = people carrier.

I thought about having another child and then the want disappeared, when I really thought on - 2 are fine with 2 parents, 3 was going to get tricky esp as my DH hated taking the kids to extra curricular activities.

So we stuck with 2.

So glad we did. My DH died leaving me single parent with a 13 and 14yo. I would not have been able to work if I had a 10yo as well.

We have a combined income of £150k.Mortgage paid off and no car debt.We have worked hard yet haven’t had a holiday in 4 years and saved.We have one child.

Think you need to get your priorities right.Only you know if you can afford it but you have to think further down the line.Schools,University etc.

Personally I would hold off having another until you’ve saved and are in a better living/financial set up..

They can’t “spend their savings” on rent and childcare - it’s in a LISA - it’s for a house deposit or retirement - there are big penalties for withdrawing to spend for other reasons.

I can’t fathom anyone who would have a third child using UC as their financial plan. No wonder the country is in the shit.

Maybe see if the 2 child benefits cap is lifted

What's the goal? If you want to buy a house then you really need to think about boosting your saving pot and clearing the debt. You don't give any further info about rent or bills or location so it's hard to know how much you'd need or how much you could save.

I don't think another child would be a good idea - you've got a huge age gap, older kids coming into the expensive years in terms of tech & clothes plus university or apprenticeships looming on the horizon, nursery is very expensive now (even with funded hours), unless your employer offers a great maternity package, you're taking a hit on your income for at least part of a year which will impact your ability to save for your future.

I'm not going to comment on the finances. As someone who grew up being the much older sibling I would like to stress the impact on your existing children of having a baby. It impacts everything. I had 2 younger siblings and then the marriage broke up. I wasn't allowed friends over, we didn't have holidays, I ended up sharing a room and dealing with crying babies / toddlers in the night. I felt quite resentful as a lot of my childhood toys and books were passed down without consultation. I was used all the time for free childcare. Given a lot of chores to help out. Treated like another adult, always running errands to the shop. The only days out and activities we did centred around the little ones. I wanted to go on bike rides, go to the swimming pool, cinema, camping, etc. It also limited me doing clubs after school and on weekends, both financially but also logistically because I couldn't get lifts as the little ones needed naps or dinner or to go to their friends parties. I felt pretty much pushed out. I spent as much time as I could at friends houses. I couldn't wait to leave to be honest.

Up to you but with a 12 and 9 year old having another baby be daft imho. The grandchildren will come along one day so why not plan to give your existing family stability instead. Put efforts into getting that forever home.

Bit judgey … “standards”?? 🙄

I didn’t do “extra-curriculars” when I was younger. It wasn’t a thing in my working class family. But I was allowed to play, use my imagination, hang out with different generations (my best friend for a year was an octogenarian lady next door)

You may say my mum had “low standards”. I say I was loved, cared for and I’ve done well in life as a result.

Your suggestion that not giving kids extra-curriculars is low standards, is just laughable really.

Love, respect, good social modelling, space to play and use imagination none of which cost money….

Lots of activities, museums, art galleries, nature parks, libraries that don’t cost money either.

Who will do the childcare for the baby once mat leave is up? Can you afford to downsize you income to afford mat pay? Can you afford childcare or will one of you have to stay at home until 3rd child gets 30 hours or goes to school? Will the relative let you stay indefinitely- what would you do if that falls through?

Those would be my immediate questions.

My sister and I have a 10 year age gap and I felt indifferent at best about having a baby in the house. I wouldn’t have called that ‘creating love’. This is what I observe in other families with a decade between the children

OP, you’re going to be pulled into two directions: parenting teens and a toddler. Interests are so different for these age groups and it’s not possible to do something that everyone enjoys. So in the end what happens is that the teens are left to their own devices at a young age (11, 12, 13).

So I’d vote yes for a third child but not with that age gap

Focus on the house because otherwise what will you use the LISA for? You can only withdraw it for a house, retirement or if you’re terminally ill.

What are the average house prices like in your area?

I agree with most PP here - having a baby doesn’t seem like a good idea.

I understand the desire to have a third before your fertility window closes but I think that is a common, often hormone/instinct driven feeling. Many of my friends and I went through similar despite knowing we were stopping at two. We just had to ride it out.

You have two children who are just reaching ages where they will be more independent. Do you really want to go all the way back to pregnancy, nappies, sleepless nights etc?

Also the impact on your DCs will be significant. You will be spread much more thinly financially, emotionally and energetically but children in pre-adolescence and adolescence still need lots of support and attention.

Like most PPs, I think you should focus on your two children and providing for them. To bring a baby into the mix now does sound a bit irresponsible.

I’m the youngest of 3 born after quite a long gap (not this big) and born into a family that had gone from being on the up to nosediving financially.

I really can’t complain about the life I had, it’s been good and through a mix of life chances, rich relatives, cultural capital and work I’ve ended up comfortably off. But fuck me we were so cash poor for about twenty years and I did wonder why on earth they had me.

If you really want a third then of course you will probably have one, that’s what people do. But it’s not fun being poor as a kid. It’s not great to shut up about things you want (like a new pencil case or football boots) because you know your parents can’t afford it). So if you’re asking… I’d say two healthy kids is a great family, count your blessings.

What does your DH want. Personally we stopped at 2 DC as having a third would mean needing to move to a bigger house, bigger car etc. We really struggled with paying high mortgage for a good few years, which made us more careful and I didn’t have my first DC until I was 30 and second at nearly 35.

You're not well off but you're doing better than a lot of people. I think having a third child would be madness though.

Your title simply doesn’t match your qn.

In terms of finances - you haven’t clarified if your Lisa is sufficient as a deposit or if you’d need to double/triple this in order to get on the property ladder. You don’t mention any other savings or safety net - emergency fund, junior isas. You dont mention how long the reduced rent arrangement with the relative can last, or if this is likely to change. You don’t mention what a mortgage rate or home renovation costs will be. You don't mention your or DPs job security, career or salary progression. You don’t mention your pensions or plans for future large expenses - kids uni, rent security deposit, etc.

If your question is - with these finances could we have a third then the answer of course is yes, as people with less manage it. But if your question is really how do we best secure our present family’s future, then you need to address your finances more thoroughly.

Are you paying down the credit card debt so it doesn't start accruing interest at the end of the interest free period?

No strong view either way on the third child. I wouldn't have done it once I'd got two past the toddler tantrums phase but we're all different.

Do remember though that if anything goes badly wrong later and you need to claim Universal Credit the two child rule will apply.

I wouldn’t have a third in your position. Not because of the finances - we are roughly same age, income and savings as you and have three (although we are on our second owned home and didn’t have a third until we got here) but I just think the gap is too big now. Your kids will be at least 10 and 13 when a potential baby is born and I just don’t think that’s fair on them, that’s not what they want or need from you now (even if they say they’d be happy with it, they have absolutely zero idea of the realities of it). I also think it would be awful going back to square one when you’re so far on now. I actually can’t think of anything worse than getting that far along the track and then going all the way back to the beginning (which is why I’ve had a tubal occlusion AND my husband has had a vasectomy, to make sure that definitely doesn’t happen to us 😂). I get the longing for a baby though, I think that’s natural. Doesn’t mean you should do it though!

Being really blunt, you are not in a position financially to have a 3rd child.
You have 2 already and aren't able to buy a property.

I'm trying not to be harsh, but you've saved - on average- just over £2K a year for 10 years (based on you being together for at least 10 years.) That isn't a lot. And you've £2K debt- so why aren't you paying that off?

Many young people I know are now waiting till their 30s to have their first child, and in that time they have increased the earnings in order to buy a home.

And with 3 children you'd need a bigger house when you do eventually buy.

Nursery fees are around £1K a month in many areas so have you thought about how you'd afford a mortgage and nursery fees for several years?

Without knowing where you live and house prices it's hard to say, but you don't seem to be saying much about how close you are to being able to buy a house.

Well you have very little money to play with and don't own a home, so adding a third child is obviously going to stretch it all even further.

3 children will each have a lower standard of living than 2 - everything will be spread even more thinly. That's not rocket science and I'm sure you're aware of that.

Personally I wouldn't do it - I'd prefer to focus on giving the absolute best I could to the children who are already here.

If you think about the needs of your children then it seems like an easy decision. It seems a bit selfish to focus on your own desire for another child, above your children's needs and what you're able to give them.

The world is going to be a less and less stable place in the coming decades and children being born now will need all the help and support they can get.

@Namechangerage that world has passed in the sense that whilst people still do many free things and all those things you listed are great information is so readily available now people including children are more aware of what is around them.

I grew up in a family with stretched finances, it was unremittingly shit. Children need love the most but after that it’s quite nice to feel you can have some lessons if you love something and not wear clothes that are hand me downs or too tight all the time. When we were young it was very rare to eat out wasn’t it, these days it’s not seen as so special at all.

Children have the opportunity to try so much more these days, there are many aspects of life that are more loathsome than when we were young and so much of this stuff is not especially necessary but it’s the new norm.

So whilst my children had plenty of playing in the woods climbing trees, making dens, free museums and visits to the library they also had lessons for a serious hobby, no worries about school trips, some eating out, no clothes that were too tight or very worn out and nice holidays.

I get the we were poor but happy stance but let’s be honest it’s rubbish being poor. I remember the strain my parents were under, it wasn’t nice seeing my Mother so worried.

How much deposit do you need to put a deposit down on your home?
As all your savings will disappear then, then you need money for house repairs/maintenance as well.
It’s never ending.
Im the same age and had a mortgage for 12 years. We borrowed well within our limits (the maximum the banks would loan us was ridiculous) but we were lucky to stay at home for uni and it allowed us to save for deposit when we qualified at 21 & 22 for a couple of years so we didn’t have to rent we work in public sector.
We also live in the north where housing is cheaper. Lots of factors influence people’s savings etc.
Our savings could be better we have about 22K but also need to do house repairs etc!

Totally agree.

Children need love, of course. But it's very far from the only thing they need - especially with the world the way it currently is.

It's very whimsical and naive to say otherwise - some people have their heads in the clouds.

I don't know what you're asking, the more I think about it.

Is it 'can we afford a 3rd child' or is it 'can we afford to buy a house?'

You're not saying what houses cost where you live.
Or how close you are to being able to buy.

If you're stuck renting, it will be harder with 3 children compared to 2, in terms of number of bedrooms, especially as your two children are on the verge of puberty and need privacy and space to focus on their school work (homework etc.)

We also only have 1 child and those saving include the money we put away to save for her.
The one child is due to infertility otherwise ideally we would have had 2.