Starting a family with 110k combined income in London

[socialmedia23]

How comfortable would it be?
Net income £6100 as I don't have student loan.
Based on the rates of a local childminder, childcare would be £1600 excluding tax free childcare (mother in law has also agreed to help when she can)
Current mortgage is £1020 but our 2 bed flat is teeny and we are looking to move to a 3 bed flat which would probably increase mortgage by £700 per month. Current flat is on the market and I am paranoid that I can't move once I TTC.
Current service charge is £150 per month, would be £200 in the new flat
No car. we use public transport and bike.
We could move to a big flat in St Albans for the same price as our london flat but probably would not have MIL's childcare support and DH & I both work in the London office quite a lot so even the season ticket costs would add up quite a bit (and St A's transports costs are quite low for a Home Counties town).

I just got a new job offer verbally (which is what this figure is based on) and DH is looking for a new role (expecting to get an increase in salary as well).

I am 30 and DH is 32
Just interested to know everyone's views.

Now these are much better questions!

Unfortunately not ones I can help with as a) it was a while ago and b) I was a graduate student when I got pregnant and started my first proper job just after my first was born, so definitely no lifestyle bloat at that time and our income went up a lot more than our outgoings.

Nappies, formula milk are really not going to be very much. "Baby stuff" can be as much or as little as you want it to be - all second hand, or silly-expensive stuff. By far the biggest cost is childcare. Or reducing the amount you work.

A nursery 8am-6pm is going to cost £12k a year, probably more when they are young, less when free childcare sets in. If those hours won't work for you a childminder may cost less and a nanny more. The costs don't stop when they start school as that's only 9am-3pm so you'll need something before and after.

I normally ignore these sorts of posts but the lack of insight in this one is worrying. Are you seriously asking about having a baby on 110k? Pull yourself together and think about how ridiculously you are being. 110k is an excellent combined salary and if you have to come on MN and ask whether that is enough to have a baby on, then something has gone seriously wrong with how you are looking at your finances. Of course it is plenty and is way more than most people have at the moment. So do yourself a favour and give your head a wobble about how silly you were to ask this.

I didn't ask whether it was manageable. I asked if it was comfortable aka meaning you have lots of excess money?

25% of London children are on free school meals, including my DH when he was a child (though DH's mum did have financial help from her dad to buy her house and free holidays for the children). Of course I know that families can survive on much less. DH's mum used no childcare, she looked after the children while WFH. It was completely different to what I am trying to do- pay off a mortgage with a deposit that was accrued from earned income and pay full childcare as well as have a bit of a life outside work. DH's mum's leisure activities were also largely paid off by parents.

I'd seriously consider moving out of London. The difference in space and quality of life will be unbelievable.

I would rather pay mortgage than pay season tickets? The only reason why we can get this income is because we work in London and our jobs are largely office based. Fewer people are in the position to take on such jobs on account of so many living outside London.

St Albans is still minimum 500k for a small terraced house so it is more expensive than London. the other london commuter towns are minimum £500 per month for transport so we could be easily spending £1k between us to go to work!

Sorry if i misunderstood you is your current mortgage £2500?

You mentioned nappies/formula etc. it can be as cheap or as expensive as you make it. Pampers vs Aldi nappies. Breastfeeding (if you can/want to) vs formula. At one point my youngest was doing a tub of formula every 5 days at £14 a go. Now he's weaning it's 1 every 9 days or so. For weaning Ella's kitchen pouches will set you back a lot more than buying fresh veg, cooking and blitzing it. Until you get to the horror that is childcare costs babies don't really cost a huge amount to run unless you're putting them in a new designer outfit every day.

@socialmedia23 it is but that’s with overpaying.

The actual amount is £1200 so we can stop the overpayments is needed (although hoping to keep up the overpayments if possible so we have more equity when we do move).

For the next house the mortgage is looking to be actually about £2.5k.

You will have to do a budget OP.

roll your sleeves up and write down your fixed expenses.

Then add child expenses: food, clothing, stuff, activities, meds, nappies, times whatever you think it will be by 1.5.

Then add a buffer of 2 weeks unpaid parental leave a year when you child goes to nursery and catches all the bugs

Then see what you're left with. That will be your disposable income.

The other piece of advice is give is to see whether you can both do a slightly compressed week - DH and I both do 5 in 4.5, with the 0.5 from home on the same day, which we've been doing since 2011. One of us had the morning off and the other the afternoon, and handed the baby over at 1pm. It saved a day a week of childcare costs and gave us more time with our kids. These days we have both kids at school and we each have an afternoon off. I also know couples where each does a 9 day fortnight.

Childcare is the really tough bit in London. It's so expensive and places can be tough to get. Tax free childcare does make a difference as does free hours after they turn 3. But on your salary it's doable even with the higher mortgage.

I agree with you on time v space. When your kids are little, a shorter commute is so valuable for lots of reasons.

I think London is a good place to have a baby IMO. Easy and reasonable transport system and access to lots of free or cheap activities. St Albans won’t have quite the same offer! I lived in Hackney and there was stuff on at local libraries, we got the bus to free sessions at the big museums, lots of park walks. We got DS a London Zoo pass for
christmas so it was £85ish for a years membership for me and him.

FWIW I’d plan on full time nursery and use your MIL for backup childcare. Having someone take your child when they are in the 48 hour exclusion period from nursery is a godsend.

Another thing to consider when setting your budget is increased utilities and possibly council tax in a larger property (plus some London boroughs have comparatively cheap CT, so it can be a shock if you move away from one of those places) and also higher interest rates that you'll pay on the extra mortgage borrowing and on your main mortgage when your current deal ends. All that could have a significant impact on your budget and disposable income.

You mention changing jobs, what are the comparative parental leave provisions, especially as you might not qualify for the full allowance as a new starter.

I would imagine you’d be fine, still able to save etc. Without your monthly expenses it’s pretty difficult to actually say though!

My DTs cost £50 a week in formula/nappies at their most expensive hungry phase back in 2018, so would guesstimate a singleton would probably run about the same nowadays.

Childcare is expensive (full time would’ve been around 25k pa for my two) but you get a maximum of 2k a year back on the tax free childcare govt thing.

Could you afford to live on one persons wage and save the other to build up a nice healthy buffer?

Oh, do bugger off. It amazes me how a couple who supposedly have an income higher than the vast majority of the planet can't manage to budget.

would it have worked if you decided to move? Sorry if this is intrusive?

I can produce a bare bones budget. I mean we saved 60k in 3 years when earning much less! But those were different times and we had different need. Was overpaying £1500 per month into mortgage at one stage.

Earning much more than the rest of the planet doesn't really help. We have vastly different expenses and dare i say it expectations. In my home country, I could buy a 3 bed flat from the government and it could range from 150k to 1 million depending on location but I know the government would not repossess my flat (if there are babies involved) even if I did not pay the mortgage (my aunt lived in such a flat and they forgave 50% of her mortgage loan when her husband died!). Could get a domestic helper and parents would 100% help out. So would need much less. Here, we don't even qualify for CB and will have to pay full childcare. So the numbers are different.

You'll be fine but having a child dies change your lifestyle anyway. I brought mine up on 20% of that at first (even with inflation it's around 65% less) and we managed fine. You have less disposable income and you have to budget for the extras like the zoo and soft play, the upside is the best kids activities are free eg park, walking, beach and you won't have time for expensive adult activities.

Yes childcare is expensive but if you earn decent money and love your job then it's something you have to pay if you choose to have children.

@socialmedia23 no it’s fine!

I think if we had a £2.5k mortgage it would work, but we wouldn’t be able to add to savings at all during the high childcare years. However, we have family so our nursery costs are lower (about £800pcm).

So doable but tight!

Children are surprisingly cheap I found - most of the expensive elements aren't actually essentials. I had cloth nappies (£100 outlay, extra washing costs but sold for £130 after second child!) I breastfed, essentially free though I bought 2 nursing bras and a pack of bamboo reusable breast pads. Clothes don't need to be expensive, all the supermarkets sell the basics and you get plenty of gifts. You'll need transport equipment but I highly recommend compact and easy to fold over elaborate expensive systems, especially for public transport. Mibe coslept so no bed needed until a bit older

Nappies, food, baby kit, toys etc are fuck all on that sort of income. The money you save on going out will easily cover pampers and a buggy. You could get almost everything free on facebook marketplace if you were so inclined. Most of London is also full of free baby/pre-school activities that are easy to access.

The biggest costs of children for the first 5 years are a) childcare and b) the impact on your career/earnings. That's what you need to focus on.

i think someones trying to brag about there🙄 income

You are from Singapore ? Why don't you move back. You could get a maid etc so not having to pay for separate childcare and cleaner. I couldn't live there because culturally I'm British and I couldn't stand more than a few weeks. I'd say lifestyle wise Singapore is better than London.