Can we afford to have a baby??

[Planningtobeamum1]

I want to start this thread off by saying I'm not moaning at all about my situation, just need some external advice!!

My husband and I are planning on trying to start our family soon. We've been married for nearly two years and both work hard earning about £40k each. We live on the outskirts of London, TW15 area, where property is slightly cheaper than in London itself. We bought our 3 bedroom 'family home' early last year in preparation of starting a family. We both work in London, meaning long days, my husband is in the Met and so works a shift pattern. We own our house but have a mortgage of just under £1600 per month, combined with household bills, food etc leaves us with about £700 to live off each month. We've worked on reducing our bills and cutting out luxuries, but transport costs add up for us (my train fare is about £300 per month). This is absolutely fine for us both now, but we are not sure how it can work financially with a new baby since our take home pay is unlikely to increase greatly over the next couple of years.

It's difficult to find out costs but childcare costs seem to be about £1000 per month and finding a drop off/pick up which fits with my commute seems virtually impossible. Local jobs in my field are rare and pay much less, we wouldn't be able to afford this house on one salary....

We just can't work out at present how anyone affords to have a child, let alone more than one. Selling our home and downsizing seems ludicrous, since property is just so expensive and now smaller properties cost what we paid for ours.

Do you have savings? If not could you rent out your spare rooms for a while and save the money? The tax free allowance is being raised to £7500 p/a as of April 2016. This would give you a cushion of money to help with childcare costs and maternity leave.

So you earn 80 k between you and mortgage is £1600 I don't understand who that "only" leaves you with £700 a month disposable income. I say only as £700 is a decent amount but not in relation to your income and not if you have childcare costs. Could you do a breakdown of your expenditure and we can help you work out where savings can be made.

Thanks Helen, good idea! The thing is house needs a lot of cosmetic work done to it (we rewired earliest this year and have not had the time to repair the damage and it we dated when we moved in). Bedroom 2 is next on the list for redecoration but I would still feel a bit guilty over the state of the hallway for a paying lodger. Bedroom 3 is done but too small to rent out. Also, I'd worry about finding someone who I would feel comfortable about leaving in my house. I will look into it though

You only need to "survive" for 2.5 years ish (depending on your maternity leave situation etc) till the free nursery hours kick in. In your situation I would rent out 2 of your 3 bedrooms from now until whenever your baby is born. Say for the sake of argument that might be 18 months given you haven't started TTC yet. If all that money goes into a nursery fee fund you will be well on the way to being OK. Plus your employers may give you childcare vouchers. Plus when you have a child you save loads of the money you previously spent on evenings out.

People succeed in having children on incomes of less than 30k per year, even in London. You will manage.

Quite a lot of couples in London now just have the one for this reason. How old are you OP? Have you factored in help with childcare? As you're not pregnant now, even if you conceived really soon, by the time you've had the baby and finished ML, the new tax free childcare will be implemented. With you having quite a high household income and presumably fairly high childcare costs, that'll be more beneficial to you than the current voucher system.

Thanks all- I think getting a room ready to rent out may be our best option.

For the finance breakdown, I'm not sure who much detail you need, so, and apologies if it's too much detail:

• mortgage 1514
• gas/water/elec 98
• TV license 13
• Virgin TV/phone 28
• home insurance 47
• life insurance 27
• council tax 191
• food 450
• 2 x mobile phone 55
• train ticket 300
• petrol 100
• save towards car insurance/tax/maintenance 150
• save toward motorbike insurance/tax/maintenance 100
• gym 40 (luxury!)
• pet insurance 20
• pet food etc 80 (2 cats)
• save/spend towards home improvements 200
• pay off credit cards 200
• loan (to my dad) for building work 200

We take home about £4500 each month leaving us with about £700 spare. We don't think we are particularly frivolous with our money just wonder where it goes so we have to budget when on paper having a combined salary of £80k a year seems loads!! Dh commutes on the motorbike as it's cheaper than a train and quicker. Our car, a 7 year old mini, could be considered a luxury as its only used on weekends as a run about.....

Hi OP your situation is really common I think. We have just had DC and we earn about £100k combined so a bit more- but our mortgage is £1000 per month. I'm afraid there is your problem. When are you out of your fixed rate? Why was it so expensive? At a guess you ve taken on a good £400k worth of house but your salaries aren't really enough for that?
Is there an opportunity to remortgage for a better rate or could you consider a cheaper area?

Sorry LieselVonTwat I'm new the
Mumsnet (as I'm not a mum!) and don't know how to reply directly to your post!!

I'm 34 so don't really want to wait that much longer till we start TTC, we wanted to be in a 'stable' financial situation before we started trying. We were hoping to eventually have more than one child, but realistically, it will
probably be only one child for us!

How long will it take to pay off your loans and credit card? If you were to delay having a baby until those are paid off, that's a good chunk of the childcare paid for already. Also what's the maternity pay like where you work?

Looking at your expenses, the phones could be cheaper. The gym is cut-outable, and you could almost certainly still eat well for less than £450 a month too. Seems quite high for just two of you, do you meal plan? Can you get to cheaper shops? I suspect you could cut £150-200 a month there without noticing too much, though you may need to wait until your contracts have finished.

I'd echo AndNow. I'm quite surprised at the level of disposable income you have left after paying mortgage, bills etc. Are you sure there's nothing else you can cut back on to give yourselves a bit more money to play with?

We have a similar combined salary to you and also live on the outskirts of London with almost exactly the same mortgage payments...but we are left with FAR more than that each month. A lot of this goes into savings/mortgage overpayments. The only difference I can see is that I think as a couple you must be spending more on travel than us, but only about £200 a month.

I do sympathise though, living/working in London is stressful sometimes as it's just so expensive - we fantasise about moving out all the time but we don't know if we'd get jobs elsewhere.

Cross posted there. If talkinpeace is reading, she has some good tips about getting credit card debt paid off sooner. Also, don't forget to factor in child benefit- £87 a month. Easily covers nappies, wipes, cheap clothes and either formula or any extra expenses you might incur breastfeeding. Not saying it pays totally for having a child, but covers their basic costs while they're little.

You just make it work. We were on just over £25k in North West London when we had our daughter and weren't entitled to any benefits to help out! You don't need all the expensive gear you're led to believe you do, and honestly, babies are quite cheap. Childcare is ridiculous though so we decided to move out so I could leave my job whilst my daughter is young. If you "only" have £700 a month spare though, you're 70% of the way there to affording it, and with a bit of careful budgeting you could claw back the rest I'm sure.

£700 practically there as you'll get child care voucher. But you can't use all your disposable income- outside of the above paid for you need money for socialising birthdays clothes haircuts etc.

Ah ok so I've just seen your monthly budget!

You seem to have 400 quid a month going out just to pay off loans, which is a huge amount - when will they be paid off? Also how much longer will you need to pay out for home improvements?

Other than that the biggest thing that stands out to me is 450 a month on a food, that's a lot of money. Does it include a lot of eating out/takeaways? I think that would be the easiest things to cut that down pretty quickly with some careful planning.

Childcare vouchers from your employers will help, plus child benefit as you are under £50k individual earnings. Your grocery bill plus cat food looks like it could be trimmed. Along with loan and cc payments once settled would give you £1k.
My parents rented out our 'box' room to students in the 70's to make ends meet.
Go for it and it will work out :)

Check if your work offers salary sacrifice childcare vouchers. Mine alone knock off about £160 from our monthly nursery bill. If there are no local nurseries that work with work hours you could look into nurseries near work. Not ideal but several friends do that. Apart from nursery fees, babies are really cheap... at first!

So basically exactly what liesel said...I should read other posts before posting

We have the same household income, live on outskirts of London (although lived in London when DS born), same mortgage and similar outgoings, although won't need much childcare as I'm going to stay home. And only 1 lot of commuting costs.

We're managing well financially at the moment (DS 4 months old), although babies are way more expensive than I thought! There's always something else to buy. However you can get basically everything you need second hand and there's no need for it to be very expensive. Will you have to go back to work or would it be better financially to stay home?

People do it (in London) on thousands and thousands less than you have. But it depends on what you're used to, what you're willing to cut back on etc. But yes, I would say of course you can afford to have a child.

Start childcare vouchers as soon as you are eligible and build up a surplus for when you go back.

Yes, you can afford it! We did it with similar income and outgoings and we're fine. Your spending goes down once the baby arrives as your lifestyle changes. You can reckon on about £60 a day in childcare costs, but childcare vouchers help massively. I don't think you need a lodger!

Food costs- are very high, switch to Lidl/Aldi and you can easily save £200 a month there.

• cat food I have pets however £80 seems a lot could you try a cheaper brand that is still good quality.

Mobile phones - switch to giff gaff £15-20 a month unlimited data 2000 mins can't remember texts but it's loads. Gym/ cancel and walk, cycle, jog , London parks are lovely. Utilities- seem very reasonable Virgin- if it's just tv and phone cancel it and use mobiles and buy a cheap freeview recordable box.

£80 a month on cat food!! Are you feeding them gold dust to make their poo shine? Some people have that per month to feed their whole families! You should be able to get this below £25, plus £20 for litter if the 80 includes that.

I hope you aren't paying £55 a month each on mobiles. If you are you should definitely downgrade - you can get a perfectly decent smartphone for £15-£25 a month so could get this to £40 is for both of you.

Have you got any family who would be able to help with childcare? Also if your dh does shifts would he be able to have days off in the week to cover one of the days you work?

I would speak to the bank about finding ways to reduce the mortgage repayments plus £450 a month on food seems loads you could easily reduce that by more careful shopping. Also £80 a month on 2 cats what on earth are they eating?! I have 2 cats and spend maybe £15 a month on food, they are both on a pet plan so I suppose that is another £20 a month but God knows how you are spending £80 a month on them!!

However fwiw I think it always seems that having babies is impossible from a financial pov but it seems to work out once they are here. Babies themselves cost next to nothing if you are happy to have hand me downs and are sensible with what you buy.

The obvious saving is £300/month on train fare whilst on maternity leave, that will help with the maternity pay.

You just spend money on different things after kids. Less nights and meals out, more cafe stops and clarks shoes.

Ft childcare seems to be the equivalent of renting a small 2 bed house imo. This is helped massively with vouchers. We both get £243 a month which was the old maximum, this only costs us about 150 in net pay.

I think you have easy savings at some point

The loan to your dad £200 and credit card £200, when are they finished? That's an easy £400 extra once finished

The £300 commute will be reduced if you have say 6 months maternity leave, that's £1800 towards baby stuff.

Food £450 seems slightly high for 2. We probably spend that but for 4. If you tried to spend £80-90 a week that's £320-390 a month so could save £100 ish approx.

In terms of actual childcare, the best way to reduce costs is for both you and Dh to try and consolidate hours or days. Can you both work longer hours over 4 days each for example? Then that's 2 days childcare covered and you just need 3 long days. Or one of you work super early so back earlier, then other in reverse so it trims hrs per day needed

If you have space a live in nanny newly qualified is usually the cheapest option. You could even nanny share a live in nanny to reduce costs further. New to nannying and live in maybe £275 a week. Nanny share live in £400 but you would pay half each family ( slightly less to you if your the ones providing accommodation and food), so you could be looking at £200 a week + accommodation , and other family £250 making a good income for a live in nanny even with some experience.