Looking to start a family, any financial tips?

[Runingoncaffeine]

I am in my mid 30s and I’ve been with my partner for over 10 years. We are getting married in March, and are keen to start trying for a baby asap.

I am worried about the financial side of things given the CoL crisis currently, so do any parents or others have any tips for us financially?

We don’t earn too badly - but we live in SE England and our mortgage is fairly high. I have spoken to my partner about the possibility of relocating one day as my job is remote, but he needs to be down here for work (works in a niche industry, so needs to be close to London).

I am going to start making some cut backs now so I can start adjusting to a different lifestyle as obviously life without kids is very different and somewhat luxurious dare I say….

Find out how much nursery costs are and what you/he plan to do about returning to work (or not). You won't know for sure until it happens how prepared you might be to put the baby in childcare but it's absolutely essential to work out costs.

I hadn't realised that nursery 3x a week cost almost as much as a second mortgage!

Don't. They are expensive.

If you're on universal credit they can help you pay for child care. You get up to 85% back

Only if you make it that way and they are so worth it

Good grief

Why would I be on universal credit? I’ve just explained in my post. We are fairly high earners, there’s no way in hell either of us would qualify for that. We are the squeezed “middle class” that qualify for nothing.

Very helpful!

What is your employer’s maternity leave package and what parental leave entitlement does your DH have?

Honestly childcare is the first thing to look at. It's insane how much it costs but that is the reality!

The baby needs someone looking after them at all times - that's either one of you or a paid professional. Having read countless threads on here about family looking after the child I'd be reluctant to suggest that unless it's e.g. supplementing other settings and is guaranteed to be consistent and in line with your expectations!

The good news is it's a relatively temporary cost until they start school (although then you have holiday clubs, wraparound care etc to pay for, but it's not as much). When mine were 3 they went into a cheaper pre-school but that still followed termtime hours only.

So things will be tight or unaffordable for a few years either on two incomes or one.

Well then you should be okay

You need to look at your maternity package to see what money you would be entitled to and how long a maternity you could take. Look at local nurseries to give you an idea of cost, even if you choose to use a childminder at least know the most expensive option out there. Talk now to your fiance about how you will both fund that drop in your wages and the cost of childcare afterwards.

Cost up returning to work full time and part time or not at all. Know now that for the first year of their lives babies change clothing sizes around every 3 months, then it goes to 6 months then yearly. You can do everything reasonably or spend, spend, spend and potentially regret it later. That cute £1k+ pram might not fit in your boot or be easy to take on public transport etc.

Consider your mortgage and fixing for the duration of your child being in nursery so you know exactly what you will be paying for that. Best time to move is before you have a baby so you can build a network of Mum friends from baby classes.

How we did it, used our joint savings to cover my reduced earnings whilst on maternity. I had a year off work but that is rare as at the end I was on literally no money but had joint savings. I had been married for years so all our savings were joint savings together. I returned part time but all our money went into one pot which covered all child related expenses. Some men can get pissy about their wives going for a coffee meet up with other Mums. This all comes down to your attitude to money and how it is spent and access to it.

We knew financially that affording one child in nursery was totally doable, two children would see us with tight finances. Times have changed, mortgages are based on two salaries so funding children is harder. You might become pregnant immediately from trying so you need to be prepared for that. It might take years, it might just take once.

My top tip:

• Figure out what your monthly take-home pay will be whilst on maternity leave and add DH’s monthly take-home pay. This is your “maternity pay” monthly amount.
• Next month, when you get paid, put everything except for your “maternity pay” monthly amount into an easy-access savings account. The goal is to do a trial on this mock budget. Can you live off of your “maternity pay” monthly amount?

Try this again—this time with what you will be earning when you go back to work, minus nursery fees. Can you live off of that without dipping into what you put aside in the easy access savings account? How is it your monthly budget different if you go back full-time or part-time?

If the trial budget works you can live off of what you’ll be earning in the future—success! And the bonus is that you now have a pot of money in that easy access savings account that you can use to buy cots, prams, car seats, high chairs, etc.

Depends on the size of their mortgage/rent, and whether they have debt.

Are you married? Do not cut back your hours, give up work or otherwise sacrifice your career progression if not. Too many women get shafted on this.
Who is picking up the financial shortfall while you're on maternity leave. Nursery/childcare cost. Children are expensive so you both need all if your financial ducks in a row.
Domestic chores. Women often pick up the bulk of the domestic load while they're on leave and it somehow remains with them when they go back to work.
Time for hobbies/gym. Spending money for frivolous things - will these things be equitable?
It's not just finance - it's a whole logistical plan.

Childcare costs are probably the biggest thing you need to get your head around fully as soon as possible - do the research now and when planning budgets, base your figures on not having any friends and family support because that can never be guaranteed and you need to ensure you have a plan that reflects this.

You will get 15 hours of nursery a week free once they are 9 months old which is a big help.

OP I was a high earner who never returned to the workforce as nursery costs were just so high . I had two in quick succession. Flippant but contraception post birth is important - I know a far few families who got caught out .

Generally check nursery costs and all the other options - child minder / nanny / au pair (though not for a baby ) , compressed working hours into fewer days

Look at the decent schools locally and make sure you are in catchment - this will help later .
If DH is commuting into London look at other areas - house prices vary quite a lot as far as I can see for areas with similar length commutes

Like the idea of trying to live on the actual amount you will receive too !

Generally apart from nursery costs babies and toddlers are not that expensive to feed or cloth or entertain unless you get silly or have extravagant tastes . Breast feed if you can - it’s free .

Can one of you dropped your hours to a level where you can work them around the others eg. on a weekend, to "Keep their hand in" with the plan to increase once the child is in school?

I worked one 12 hour shift a week on a Sunday (with unsocial hours premium), with DH working compressed hours 4 days a week. We gave a absolutely no family support and didn't pay for any childcare (only local playgroup for DD development).

Buy almost everything second hand (even my breast pump was second hand you just have to do your research to work out which one is designed with that in mind), and try to find some wealthy parents with DC a couple of years older who make you their exit point for clothes, toys etc.

Also if you do end up not working for a while don’t neglect your pension - you ( or DH) can still pay in if not working ( think it’s £2880 plus Government contribution which takes it up to £3600 yearly) . Your National Insurance can be paid for you too by the Government up to your youngest child being 12 (at the moment anyway).

It's really wise to try and be getting on top of things now, as you are doing.

Costs come in waves
-the mat leave period, including the hardest bit at the end with no income (if like me you take 12+ months with a not v generous mat pay package). Little to no income but few outgoings
-the childcare period. This is an absolute killer, plan as much as you can about your childcare options
-childhood period, maybe some wrap around care costs but generally cheaper
-teen period, can get pretty expensive with things like sport or more expensive hobbies, teen social life, tech etc. As well as planning for uni.

At the risk of sounding like an out of touch boomer, children aren't expensive- lifestyles are. Obviously it's not really true but I do think it's a helpful principle when applied with a heavy pinch of salt. The difference between church run playgroups, going to the park, meeting up with friends for a picnic lunch, visiting the library, used clothes and baby toys etc. Are completely different to baby sensory classes, meeting up with thr mums at cafes, and buying everything new. When you're tired and overwhelmed with a new baby it's temping to just spend, but it's really not worth it imo.

Super helpful, thank you!!!

Get into a habit of discussing your finances regularly as a normal topic of conversation. Usually on a Sunday afternoon, we compare our upcoming schedules and have a quick check in with each other. We each look after different parts of our budget, and update the other. I might mention any big expenses coming up (school uniforms, Christmas presents), or he might be switching insurance providers, or researching holidays. It means we’re both in the loop, on the same page and problems don’t escalate.

It’s stating the obvious, but so many couples find money a very difficult topic to discuss. Attitudes and expectations can differ vastly. But if you chat routinely about the small stuff, you navigate those issues before they blow up into bigger problems.

Be very wary of falling into the trap of costing childcare out of your salary alone. Or making decisions about your career based on how your wage compares to the nursery bill. Take a long term view about the impact of maternity leave on your salary (lost wages, lost promotional opportunities, lost pension contributions and compounding interest) and the cost of reducing your hours (lost wages, not being considered for promotion at all, pension) and consider how to offset that cost as a family unit, and how to protect your long term financial security in the event of a marriage breakdown. That’s the pov to start figuring out who pays for what, and who works what hours, and collects from creche/school. Be wary of becoming the default parent.

If you do give up work for any period, you MUST apply for Child Benefit, even if you are over the earnings threshold to receive it without paying it back. You get NI credits which you will need for pension.

I always thought we'd never be eligible for benefits. But luckily read something on here that made me look into Child Benefit.

Find out which pram suits you and look out for it second-hand. I have no idea why anyone would spend £500-1000 on a new one if there are perfectly decent ones for sale locally. You used to be able to go into Mothercare etc and try folding them- that's the absolutely essential thing you need to be able to do with ease!!

If you are up for second hand stuff and put the word out, you will be deluged; equipment, clothes, furniture, you name it. Keep a list of what you need so you know what to accept and what to say no to. But don't go TOO far ahead - keeping stuff that is years ahead of where you are rarely works out.

At my time, a lot of couples I knew both went part-time. That does reduce childcare costs but obviously a big hit on income and pension.

When our income was tightest, I never regretted having decent waterproofs and a thermos flask. Meant we could always get outside and go somewhere even with little cash.

Plan what you're going to do RE work

Nursery fees are high

Most of my disposable income (2k) monthly just goes on my one child

There is always something to buy

Larger costs are pram /car seat/ cots etc

Make a spreadsheet

Berries... plant lots and lots of berries if you have any space to do so. Pretty sure my toddler is trying to bankrupt me with his berry obsession 😣

Also, plenty of people sell large bundles of clothes on Facebook for £10-£20 they grow so quickly and make horrible messes on everything so there is literally no point buying lots of new clothes (even supermarket clothes and primark add up quickly when you need an entire new set of clothes every couple of months!)