Childcare shock

[LittleFonzy]

Hi. Totally brand new to the forum. Please bear with me, as I can be a little slow on the uptake sometimes.

My partner and I are expecting a baby this December and like to be as organised as we can.

We both have very average salaries and have just been researching the cost of childcare and frightened ourselves to death.

By the looks of things, the childcare would take about 70% plus of my partners salary if she goes back to work. This is for a registered nursery.

Looking at our finances we have always run a relatively tight ship, and aren't extravagant with clothes, holdiays or monthly entertainment, but we would be certainly losing money each month with these figures.

So, I guess the question is, what are we missing or what should we be thinking about? Do any members have any words of wisdom? Things to think about? Articles/books we should read?

Thank you for any help.

I had an evening job when my dc was a baby. Is this a possibility?

But Surfskatefamily every single parent has a career that will suffer from the loss of 2 years of progression doncha know

It's very expensive but people come up with different solutions, each working a four day week so only 3 days childcare needed, one of you working 3x10 hour days works for some

My DH was already at work and didn't take leave so it was my return that changed things and requires childcare.

Surely it was having the baby that changed things and required childcare?

OK SAHM bashing time

No-one bashed SAHMs.

I don't see any SAHM bashing. Just people making very valid points.

Snuggy no not everyone does have a career that will suffer but lots do and done don't realise the impact of a long career break until it's too late .

I knew two families where the mothers both worked part-time and shared childcare between them.

So mum A worked mon-wed and looked after child A and B thurs-fri.
Mum B worked thurs-fri and looked after child A and B mon-wed.

Mum A paid mum B for one day's childcare, but otherwise they both had free childcare.

@snuggybuggy yup lol. I'm a cleaner before SAHM so I can't imagine I'd have got some massive payrise.
Also would barely break even...better to be frugal and care for my lil guy

As people suggested, look into benefits. You'll also get child benefit so that will help a little. Other things parents do to manage is work around each other (e.g. 9-5 for one and evenings for the other). Generally, though, it can be a very lean period and lots of friends in professional jobs have had to give up holidays, savings and watch every penny to get by.

Definitely no SAHM bashing from me. As I said, I considered it for myself and admire those that do it. Your opinion as absolutely valid and I agreed that OP should consider it. I just felt your comment “I don’t understand the reluctance to stay at home” was a little judgemental, oversimplified and, dare I say it, heading into ‘working mum bashing’ territory. Just like your “better to be frugal and care for lil guy” comment could be construed too.

Apologies if it was my post that offended you (although I suggest you’re over sensitive it reading it wrongly if it was). I don’t want to get into a SAHM vs working mum debate. These threads always go that way, it isn’t helpful to the OP, and I really don’t care what other families do in terms of childcare as long as it works for them.

but we would be certainly losing money each month with these figures.

Isn’t it a bit late to decide you can’t afford to have a child?

The problem is the idea that it's always better to work is so ingrained it can be a bit of a shock to discover there are times when it isn't. I remember after uni thinking I'd be able to move out of my parents home once I had a job and it was a real shocker to discover that my salary wouldn't stretch to private renting.

but we would be certainly losing money each month with these figures.

This is a strange comment. Surely you knew that having a child would mean less disposable income than being childfree? of course you will be losing money. Children don’t come with anything they need, it all needs paid for, including childcare- whether that is done by a parent (loss of income) or a childcare setting. Im amazed anyone can get to the point of having a child on the way and only now realise it will cost them money.

You could both go part time and share the childcare then use paid childcare as well.
One of you being a SAHP is just one option. There are others - I know one couple who split equally and that’s why it’s important to challenge the idea that childcare comes out of one parent’s (always the Mum) salary.

Registered Childminders are a lot cheaper than a nursery, around £4 an hour and can provide a more homey environment.
You may be entitled to child tax credits.

@Yabbers that's why I'm so happy second children are free! We bought everything for the first and that means all others will be free for the first couple of years!

Childcare is expensive.
If one chooses to be a SAHP, they will get full NIC credit towards state pension until child turns 12. So you would only have to fund a private pension in their name to keep things equitable. (Not suggesting stay at home until age 12, that’s just the rules)
Also, if SAHP earns no income, they can transfer their tax free personal allowance to the working partner (married couple allowance) so working partner will have higher take home pay.

The hit to earning power is minimised & equal if partners take turns (you said you both earn average salaries). Taking 18mos off each will get you to age 3 when 30hrs nursery kicks in. A friend did this and was very happy that they both got to develop that close bond with their son by having the opportunity to be there for a lot of firsts.

@AngelasAshes do you know how you go about arranging NI contributions

Think about using a registered childminder instead of a nursery. Most are cheaper than nursery and provide a home base childcare setting, registered by ofsted and follow the Early Years Foundation Stage the same as any other childcare setting. The children are in a family setting with children off all ages and most likely will stay in the same environment til they leave primary school, where as in a nursery the child will change rooms several times as they get older. Look at pacey.org.uk the childcare professional website for more info

One couple I knew ended up job sharing one job, so one of them worked half the week (think it was actually 3 days one week and 2 days the next). It meant that there was always a parent to look after the child, even when ill. Both parents were on an even footing in the workplace. I think that they actually handed over at home - which has some boundary issues I guess but often spouses ask how the day went, and obvious benefited the employer.

They saved over the situation if one of them had become a SAHP because they could both use all of their tax allowance (which is how cutting down both partners to 4 days a week also works) so a greater proportion of their take home pay was untaxed. This would be particularly beneficial if both are higher rate tax payers. Say if the overall salary was £60000, one person would have take home pay of £43399, two people earning £30000 each would take home a combined income of £47874 - a difference of nearly £5000. That is before you consider that they also remained eligible for child benefit.

It also meant that once childcare was less of a pinch point they had both developed their skills to a similar point to then both go for promotion. Although the tax example doesn't include pension if they both contribute to a pension then you avoid the issue of in even pensions in the future.

They did have the benefit of working for a stable employer (civil service), but even if their job had been made redundant at least they would both be in a good position to find another job compared to a scenario where there was one salary earner and they were made redundant.

Condemned hours can help but only in the position where the nursery opening hours permit it - if nursery only open 8-6 then it is hard to do a condensed week (unless other partner is able to do all drop offs and pick ups), also some nurseries give a discount for full time hours so the saving is minimal, plus if commuting by train 4 tickets can be a similar cost to a season ticket.

We managed it by me working in a flexible professional role which was not 9-5, so I would work evenings and weekends, moving over and increasing hours to school hours and weekends as the children started school. It is hard to find such a flexible situation and you then comprise on family time. Ultimately parenthood is a compromise, you just need to find the solution which works for you.

*obviously benefited
*uneven pensions

For some families tax credits pay for quite a lot of your childcare costs. It depends on income. You need to assess this first - if tax credits then that's more favourable than tax free childcare

@ktcluck I didn't mean either of if these to come accross judgemental. I think written word can do that whereas if I'd have said it it wouldn't iyswim.

Only that within my area iv found that almost a soon as you have a baby people start "oh when are you going back" etc etc and it's assumed that everyone is. I felt really pressurised but turned out not the right thing for us personally.

I definitely agree with pp that op should go on entitled to website. They can work out what support they'll be able to get in various scenarios. Weigh up the financial impact and decide from there

We weighed up the amount that would go in the family pot from me working vs the amount that would be paid out of the family pot for childcare. We’d be paying out more than would be going in, even once you factor in benefits (we aren’t entitled to any, not even child benefit, and not married tax allowance either because you’re not eligible if the spouse is a higher rate tax payer).

A lot of people find that childcare exceeds earnings. You have to be earning way above average salary to pay childcare and still make a profit. Some suck it up and work at a loss for a few years in order to keep their career ticking over. Some (like me) won’t benefit from doing that so they stay at home. Without exception all of the lower earners I know who work, are only able to do so because they have free family childcare.

I even know some who moved back near their parents to start families because they couldn't afford childcare

Shop around. The cost of nurseries really varies from nursery to nursery.