How on earth do people afford childcare?

[vivodare]

Hello everyone

From a slightly concerned would-be parent. My wife is in the early stages of pregnancy and I've begun to look into financial forecasts for maternity leave and beyond.

I commute into London (at a very hefty monthly train/travel cost) but between my wife & I our earnings are classed as high (£45k+) but real net earnings significantly less due to the above.

I've checked the Gov.uk site and others but it seems we're not entitled to any form of benefits. Average weekly nursery costs seem to run at ~£250 (?), plus essentials for baby would push net earnings to a significant monthly loss, in both scenarios my wife going back to work plus being a full-time mother.

I am slightly concerned but also mystified as to how people afford having children?!

Is there something we are missing or is this standard for all parents? Do any tax breaks or benefits means test net earnings less commuting costs or similar?

Any input from people in similar situations or in the know would be hugely appreciated!

Thank you all
VD

Any possibility that you could reduce your commuting costs by using the coach instead of the train? I know coach may be slower and make your day longer, but it could save you money

Easiest way is to condense hours.

So say your both currently work 10 hrs x5 days. Then you now both work 4 days a week, at 12-13 hr days. That's means differencing days you only need 3 days childcare as both home one day

On days in work, also try and have one parent going in super early, and one later. To save the super early nursery fees. So instead of dropping baby 7am-7pm in nursery. One of you drop baby at 9am, other collects at 6pm. Saves 3hrs childcare a day

A nanny share can work well. Whet rupiah share a nanny with another family, often cheaper than nursery

How is it possible to lose 1300 a month if you have free childcare?

I think that poster went from full time to 2 days a week so its possible to lose £1300 a month in income.

£45k is not a great wage to pay childcare out of. We managed as we don't live in London (but in an expensive part of the country) and earned more than that. Two years later we are still paying of CC bills!

It is very difficult. We are (were) in a similar situation salary level.
I ended up taking 1 year off after each child as it was cheaper than the cost of commuting and paying for childcare. I then returned to work and work 3 long days and dH does 4 long days meaning we only have 2 days of childcare costs.

I think you just suck it up and expect it to continue until they are at least at secondary as the cost of breakfast and afterschool club, plus all the activities they do is only marginally cheaper!

£45k joint income wouldn't be classed by most people as high i am afraid, especially when commuting and childcare costs are taken into account. Have you looked at what maternity pay your wife will get?

The childcare costs should come from joint salary so you shouldn't end up with a net loss. you will get child benefit and also help with childcare costs in the form of salary sacrifice childcare vouchers or the new scheme that starts later this year.

Also childcare is ine thing that gets cheaper as they get older as nursery fees go down a they get older and staff to,child ratios increase and when they turn free they get some free hours.

Best to do a new budget of joint incomes me joint outgoings including childcare and see where it leaves you,

Other option is to earn whilst looking after child by becoming s nanny or childminder.

Good luck

Firstly - congratulations!

Secondly, welcome to the world of working parents. It can be a bit shit

Trust me when I say the real stress doesn't come in the form of nursery fees. It drops by to scream HELLO in the form of a sick child. One trace of vomit and you're faced with a 48 hour exclusion from nursery and an argument over who's calling into work to take the time off. The fun.

What kind of work do you both do? Is there any option for either of you to work twilight hours or night shift? This is how a lot of couples at my work place manage to avoid childcare costs. Mum works during the day and dad at night, for example. Somebody is always there in case of illness and there are no childcare costs at all. It's exhausting and you may not get as much quality time together, but you'd save thousands in the long run. If that isn't an option, could one of you drop to part time hours?

Oh and don't forget to look at child-minders. A lot of people dismiss them out of hand, but they can be significantly cheaper than nurseries depending on your area and if you get the right one they're arguably a more suitable option for the under 3s.

Yes was just going to suggest childminders can be cheaper.

If you plan to have another child bear in mind the additional cost of that.

Also your salaries will likely increase as you progress in your careers

Both do compressed hours so 5 days in 4 ( if your employer allows it) then family and childcare vouchers.

My whole salary was swallowed up by childcare fees for overs two years when Dc were young. No grandparents willing or able to help. We once calculated what we had spent on childcare (and continue to do so several years on), and reckoned we could have bought another property with what it had cost us! Absolutely worth it though for my sanity.

My final invoice on leaving nursery showed £44k fees paid, for 2 children , 3 days per week from 15 months old till starting school.
Ouch!

We worked opposite each other. Me in the evening and weekends, him in the day. Now, though separated, we still do similar. I do a mixture of school hours and evenings. He finished early twice a week so I can work til 5 those days.

Any experiences on whether (strictly financially speaking) it's better to not work + look after child vs. full-time vs. work + nursery vs. half + half?

Childminders are cheaper than nursery and I know of very few people who are working at an actual loss with only one child in a cm (but i don't live in the SE) but several who work for very little.

I'm a SAHM and financially there are several things to consider on top of the actual loss of salary (which is obviously the biggie).
-Pension loss/NI contributions
-Employment Gap- How will this effect your career over all. I was self employed and could just start again tomorrow if I wanted but this is rare. Most careers take a hit.
-Costs of SAH- You don't have a commute but you find that things like your utilities go up as you're home more. Also, occupying your time when it's pissing it down and you're bored-lots of trips to soft play, cafes etc can add up.
-Nursery- You may find you want to send your children to nursery anyway as they get a bit older to socialise with other kids (or you have another, or you go mad!) so end up paying for a small amount of childcare anyway.

You also need to be mindful of the timing of your babies, if you're SAH, having two close together reduces the time overall you're out of employment. This is what we're doing as I think I'll go back pt when by kids start school. Most of my friends who are ft are waiting until their youngest is entitled to 15 free hours at least.

Speaking in terms of being a SAHP- I love it but it's really not for everyone and the difficulty is that it's hard to know which you are until you've had a go. We had ds on the proviso that I could go back to work if I wanted to (all be it for very little money).

This is why parents are always going on about how expensive children are!!

My final invoice on leaving nursery showed £44k fees paid

Ouch indeed!

I think people afford it because they earn more? £22.5k each is the national average or below isn't it? It won't go far in London.

Only you can tell if you can afford to keep working.

Unfortunately like a lot have said you just have to take a major hit for the first 4/5 years.

We had four kids close together and the only way we could afford them was to work around each other so we have no childcare costs. My husband wors roughly 9-5 and i work evenings/ weekends/ nights. We have no help from family.

Babyroobs Not having help from family is a massive deal isn't it? We also have none but a lot of friends who have gp do two days a week-it makes a huge difference financially.

I work FT compressed hours, so Mon-Thursday. Dh does a 5 day week and has Sundays and Mondays off. So we have Sunday as our one family day a week, dh has the dc on Monday, I have them Friday and Saturday.

That means only 3 days childcare, from Tue-Thursday.

It's fine now, as they're in school - so a cm for after school care for 3 days comes in at about £55 a week - peanuts compared to what we used to pay.

BUT when we had a 1 year old needing all day care and a 3 year old needing half day care but still at FT prices because you had to pay for a full day -- the difference in only having to pay for 3 days was phenomenal and saved us about £140 a week.

How people manage to pay for childcare for 5 days a week when they have more than one is beyond me tbh. DH and I are both on decent salaries and we couldn't have managed it.

I think you save like mad now to try to cover the maternity leave. Cut costs as much as you can. Be thankful its not twins !!

Find out what local nurseries / child minders are charging so you can get a feel for what the expense is going to be. Don’t forget to check whether that includes nappies, whether there are any charges for being late, what hours they operate. Check what the rate is for 3 days / 4 days / 5 days (you usually get a better deal the more days you do). Bear in mind that you may have to fit in with childminder holidays / nursery will probably be shut over Christmas / Bank holidays if you or your wife work at those times.

Find out if your employer offers a salary sacrifice scheme / vouchers / compressed hours. I know a lot of people have mentioned compressed hours on here but in my field, there are few employers offering that. Don’t forget you’ll get child benefit.

In answer to your question, strictly from a financial point of view, PT is more expensive (on a daily rate) than working full time. The cost of nursery is hardly ever 5 x daily rate. So it might be say £60 a day. You’d be charged £180 for 3 days, but only say £225 for 4 days and only £260 say for 5 days. Similarly, if you’re commuting, you’ll find that the savings you make having a monthly / annual season ticket (and working 5 days a week) are lost when you only work 3 days. 3 x single fares per week isn’t that much less than weekly pass once you factor in the discount. But of course earnings are always linear – 3 days work = 3 days salary. 5 days work = 5 days salary.

Agree with pp who said they were still paying CC off. Our youngest child finished nursery 18 months ago and we are still trying to clear the overdraft.