36 year old couple… How bad are our finances?

[UpQuick]

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…

Those illnesses are not within anyone's control (other than trying to live healthily.) Most people do not die in their 50s, as life expectancy is mid 80s. So it's not really a valid reason.
All OP can control is her income and if it will stretch to buying a house and being able to afford time out of work for maternity leave/or paying for child care.

I imagine pensions are the bottom of the list when they can't yet buy a house. They are each on the minimum wage, around £25K pa.

Retiring in your 50s is a dream and not many people do that unless they inherit , earn £ six figures for a long time, or live somewhere that is very cheap.

No, they are not - HMRC are cracking down on undeclared or under-declared rental income from landlords, not making you put your rent up.

The only time this could get a bit sticky would be if they gifted you a house, to avoid IHT/ Care home fees, etc and were charging you well under market rates ie £10 a month for rent. But that does not sound like what's going on.

But the OP should not bank on reduced rates long term, but not for the above reason.They may want to sell up in the coming years, and may say they thought it was a short-term solution etc etc

How much are you saving each month?

How much are you looking to spend on a house?

When you tall about having another baby, if it was me, I'd be asking myself:

"will a baby make life better or worse for my family?"

It's not a simple answer. In one respect, your two are halfway toward moving out so you could just not buy a house and squeeze in for a while (noting that your family will not be expecting to let you live there for a discount long term, whatever they might tell you). On the other hand, do you want to be able to help woth uni costs? Because I don't see that you can buy a house, have a baby, pay loads in childcare and then pay for uni and build up a good pension while still having a life full of holidays, days out, kids clubs etc.

In your circumstances, I don't think I would. We are on the fence about number 3 and we are in a better financial position on paper than yourselves but my concern is that the 3rd does increase outgoings a lot more than going from 1 to 2. For example cars big enough for 3 in the back with car seats, holidays are based on families of 4. Our hesitancy is wanting to provide the existing children we have the best quality of life we can, and I'd only have a third if I could see a way it wouldn't create too much impact on their choices.

I'd just like to add that for the vast majority of the UK population, it doesn't make financial sense to have another child, regardless of whether people say it doesn't make sense to have one kid.

I've a significant age gap, with 12.5 years between the oldest and youngest, less money saved, and significantly more debt than you. I do own my own house, mind, mortgaged, but this is less than £600 a month. As for salary, I'll not go all moms net, it's above average, but we do spend 100% of it every month, holidays, days out, eating out, etc.

Sorry@UpQuick, but I don't think you could both buy a house in future and have another child at this stage unless you have incredibly generous maternity allowances, expectations of very high wage rises and money coming from somewhere else too such as inheritance/family loans in the short term.
It would make more sense to stay in rented, not have another child, and save much more than you are at present if you are to have any hope of buying. Also bear in mind that the 0% credit card balance won't last for ever.

Sorry, haven't had time to read all the thread, but depending on where you live you will need a much, much larger deposit to be able to buy anything with any degree of financial security.

It's a very personal question, and answers will vary so much depending on everyone else's position and what they feel comfortable with. We are 5 years older but kids same age, and if I was in your position I would definitely not feel comfortable having a 3rd child with no home and on that income. You don't say anything about retirement savings or anything like that but you need to consider that and whether you will support your kids through uni etc. it's not just the extra expense for a 5th family member ...for example, we have a very modest pension fund for our age but we are nearly mortgage free (on a home worth around £550k), income similar to yours but always been frugal and got my first home at 25, followed by several renovation projects with my husband, so in a more or less good position to finish paying our mortgage this year. Our focus in the next 2-5 years will shift to topping pensions and plan how can we support our kids in their early adulthood.

Can’t believe all the comments I’m reading saying the OP finances are in good shape. Two kids, renting from a friend and considering another is in my mind batshit crazy.
25k is scarcely enough to be a deposit almost anywhere and if you do buy you’ll then be broke with three kids and a new born, loads of new expenses and a huge mortgage.

My idea of hell.

You're pretty unique to be almost mortgage free at 41.

There are millions of people aged up to 35 still living with their parents because of the cost of houses. Maybe housing is cheap in your area, but it' s close to £300K as an average across the UK.

It sounds as if you've bought do-er uppers and made a lot of equity through that and buying young.

We overpaid our for years and years and weren't mortgage free till mid 50s.

You don't own a house yet. You owe £2k on a card. Get this paid off. Buy a house and then see of you can afford another baby in a couple of years.

Buying your own home should be a priority, provided you can pay the mortgage it will give you security. Renting is always 'someone else's ' home and you can't alter it besides anything rented is not guaranteed. Be thankful that you have two children and get your own property asap.

I had my first at 36 and my second at 38. Its really not that odd or unusual.

You’re 36. You’re doing ok. If you want another baby go ahead, otherwise fertility will reduce. No one ever regretted a baby, they are a blessing. You can make it work

No one has suggested that it’s odd or unusual. They have suggested that for the OP and her parther it’s unaffordable and incompatible with some of her other life goals.

Very few of us can have the job we want and the house we want and the area we want and the lifestyle we want and the number of kids we want. Most of us have to make compromises.
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You need decide how much you want another. If you are being given discount on your property to save for a deposit can you keep saving? Will your maternity leave cause you any issues with your finances? I think some people don’t even think about money when having the number of kids they choose to have but you will definitely have a lot more outgoings than now. You get no help with 3rd child no child benefits if you get them. nursery fees, school costs go up, schools holiday costs.

Don’t wait. Respectfully, you aren’t getting any younger in terms of fertility. If you both want another child I’d say just go for it! You’re working towards a house, you could probably get a 5% deposit with 25k saved. Have you spoken to a mortgage advisor? A mortgage of around £280k - £290k would cost about £1400 a month. My partners income is about the same as yours combined and this is what we’ve been told we could borrow. Is this something you could afford per month currently? I don’t know whereabouts in the country you are, but would this be enough for a house of the size you would want/need? (Obviously if you’re able to stay where you are and save more would be ideal! But you’re not far off by the sounds of things).

as for those mentioning university, you have about 6 years before that could even come into it and your children may not even want to go to uni! Depending on what they want to do, uni isn’t always the best route anyway. I think a whole generation have been misold the ideals and importance of a university degree! But that’s another story. Depending on your financial situation in 6yrs + time, they could be eligible for grants, or you (and they!) can make it work, there are so many different avenues to go down in that regard.

I think in terms of money, you will be able to give your children everything they need and more. It’s not just about material things in life. Life is for living in the here and now, today is all we have anyway. As for the age gap, there is an 11 and 12 year age gap between my youngest sibling and my older 2 - they are really close and get on really well!