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…

Sorry but 25k is a drop in the ocean for houing deposits now.

In the context of having three children and not owning a property, no, it is not a lot of savings.

That's not delusional, it's just the truth.

You will not be able to comfortably raise and provide for 3 children in that situation. You can probably just about meet their day to day short term needs, as long as you have a reasonable income, but in the longer term, there's not much there to give them stability. £25k really doesn't go far when you're talking about the lives of 3 children.

Your 39% stat is irrelevant, no one is saying it's an unusual situation. But just because a lot of people are in an even worse situation doesn't mean that OP is comfortable or that it's a good idea to bring more children into it.

I'd want my children to have more stability than this situation provides and I'd focus on the existing two.

The 25k savings aren't like regular savings as they can only be spent on a home or withdrawn at 60, otherwise the government takes 25% away. Aside from this the OP has only mentioned debt.

😂😂😂
I'm laughing lol.
I actually agree with you all, I'm not on benefits because my household income is too high (just over the threshold) but I know loads of people who would do this because its easier.

Wouldn't having another DC be a finger up to whomever is helping you out?

Exactly, it seems some people posting have no idea about how LISA’s work. So, to me, OP and her family have no savings as in liquid cash, which for a family of four is awful. It makes no sense to have a third child, especially in this economic climate.

Your incomes good but as others say - you don’t really have 25k in savings as such, you have some of a house deposit saved. Dependent where you live, more than that will be needed, where I live in Essex you’d need double that at least.

You're in an okay position but I’d be concerned how you’d afford childcare and buying a house if you had another child. I suspect it would need to be one or the other.

It's not a decent income for a couple. It's 2 x the minimum full time wage.
So they each earn around £25K. This is lower than most starting salaries for graduates aged 21.

£25K is their house deposit, although if they need 10% deposit, plus legal fees, removal fees, etc, then it won't go far. They'd be looking at a house for under £250K which in some parts of the UK could buy a mansion, in others a 2-bed flat (if you're lucky!)

I suspect that as they had their children very young (early 20s), neither (possibly OP) has maximised their earning power or their careers beyond a fairly low level or they have been paying out a lot for child care. But I could be wrong.

Your incomes good but as others say

Why are so many posters so out of touch?

It's 2 x the minimum wage- just. £25K gross.

Graduates start on more than that now, at 21.

The median UK income is £37K.

As someone who had 3 children, please please think hard about this. The costs are significantly higher. (Houses - generally 3 bedrooms with 4 being a lot more expensive. Holidays - most cater for 4 of you so occasionally you are looking at booking 2 rooms). Even food is often measured out for you to buy as a family of 4.
I have no regrets obviously of having my last son but life would have been a lot lot easier with two. Good luck whatever you decide though x

I must admit I probably am out of touch, we’re a single income household and I don’t know the cost of nursery fees etc.

You can't afford two children, how much is a 3 bed house in your area? You'd be better off getting onto the property ladder. Do you both have pensions? Lower paying jobs often don't have very good pension provision. You need to secure your housing status, and start saving for your future and your children's

They can't spend the £25K on "baby", however - it's ringfenced in a lifetime ISA.

Your eldest is 12, your youngest 9. You are within six years of driving lessons, university costs ( six or seven years consecutively possibly with the ages of your children) , support for moving into their own accomodation etc. Expensive times lie ahead.

I think a third child would be a push. If you are serious about owning your own property then that should be your goal, though it will be a huge effort, and you would still be at the “ouch” phase of paying a mortgage in six years even if you bought tomorrow.

Why not set yourself a goal for a year to see how much you can add to your savings. Really go for it, packed lunches, no coffee shop coffees, yellow stickered bargains only, batch cooking, heating turned down three degrees, camping holidays in the UK, no new stuff for the house , limit on birthdays and Christmas etc. If at the end of the year you have saved a decent amount then decide if that is how you are prepared to live for the next few years to fund a deposit,legal fees and a mortgage. If not, set your sights lower, decide how much you are willing to fund your children in the near future and forget about home ownership until your kids leave home and are independent when you can revisit the idea and resign yourself to a long working life to pay it off.

Make sure you also consider the long-term financial impact of your decisions. If you leave buying a house for more than another couple of years, you will have missed the window to get a 30 yr mortgage and pay it off before retirement. Unless you expect you will always love work and want to continue to 70, or will increase your earnings enough to pay off your mortgage early or have an excellent private pension that would cover mortgage payments, a choice to delay buying a house could have a significant impact later in your life, particularly if your health is not great.

I'd also echo the concerns about juggling the needs of teenagers and a toddler.

This.

OP: you already have two children. One of them is about to become a teenager, which is an extremely challenging time for most children and their parents. They will need you to be healthy, energetic and present. How will you do that with a 3rd child and work?

Wouldn’t it make more sense to focus on these two children, your DH and yourself?

And what would you do if that 3rd child was disabled, had special needs etc. (which may very well drain your energy and your finances)? Have you taken that possibility into account?

Another who thinks the ship has sailed on the 3rd child. It is just too complicated. Otherwise it is a sad state of affairs where a couple with 4k a month net income is considered to be badly off by many.... with 25k savings. What are we becoming here ? It's not good.

I think your financial situation isn’t good enough to have another child unless the aim is to rent from family forever? At 36 most of my friends who had kids same age as you (with the same income) were on the property ladder and upsizing

I agree. Its irresponsible to have another child when you are in such a financially precarious position. You are trying to get on the property ladder and acquire security and an asset for yoyr hildren. You can’t create more debt and liability in the form of a third child just now.

I don't know why everyone is being so negative. If you are young enough to carry a pregnancy safely and have the energy to raise a third, why not. Bigger age gaps and worse off families out there.

Remember, as things stand you won't get child benefit or tax credits for number 3 though, so you will need to rely on your incomes to cover costs. However, feeding 5 isn't much more than feeding 4, and loads of clothes, kit, toys available second hand. Childcare and maternity will eat away at your savings. Have a plan to build them back.

if OP had 25k in her Lifetime ISA and 25k in her savings (or checking) account, the situation would be different. But OP doesn’t seem to have liquid assets.

although I personally (as somebody with an 11 yo younger sister!) still wouldn’t recommend a 3rd child…

I have £3500 net after tax, solo parent with two teens, mortgages house . I struggle every month even though I budget within an inch of every £. Politely you don’t have enough to have another child. You need to get a house first if that’s what you want. Have child first and you will never get that house.!

I wouldn't have a third in those circumstances. We have two, own our own house and bring in slightly more than you and the nursery fees are about crippling us.

39% of people have 1k or less

I was one of them at that age.

The difference is I had already bought a house.

Madness to consider another child. You need, both of you, to up your earning potential, your deposit is very small.