Worried about money, any advice?

[jamesuk]

Hi, me and my partner have a baby who is starting nursey soon (few months away).
We both work full time and in the unfortunate position that we do not have any support, both our parents are not in a position to mind our baby and friends / family aren't either due to either working themselves or just not being able to.

We are thinking the baby would have to go to nursey full time, the cost of this appears like its going to be around £800 - £900, then when you factor in all the other things we would have to pay for like additional travel, i am about to start driving to help so the extra insurance etc.. we are basically looking at it all costing more or less the same as what i actually earn per month.

At the moment we have a mortgage etc and both of us usually have no additional money spare at the end of each month and i am getting really worried about how we will afford this.

I am assuming we would qualify for tax free childcare but that only brings it down a little?

Is there anything else we could looko at or may qualify for?

Its mad because i wouldn't class us as poor but when you more or less take away my whole monthly wage, i just dont know how that can be justified that childcare can cost nearly the same as what i get paid.

Obviously we will have to try and cut back on a lot of things, but when we both have nothing spare now then to need about an extra £1000 per month just seems mad.

It has got both me and my partner so worried, i dont know how others seem to do it, there are people that are a lot worse off than us and they appear to get by fine.

If anyone can give me any advice that would be great.

Thanks

James

As you say, you only have a little left at the end of the month. Have you drawn up a detailed budget...looking at every bill you pay and the cost of food? There's usually something which can either go entirely or be cut down.

How much do you spend on food for example?

We were in the same position (equivalent of policeman and nurse so very average wages) but it does get easier.
Firstly, do you or your wife both have back full time? When faced with the same predicament I decided to work part time as there seems to be no benefit in working full time to pay somone else to look after your child. Also, working part time allows you to keep your foot in the door and you can still pay pension etc.
In terms of money, do you get your child benefit? I also get childcare vouchers- I think it saves me £74 a month or similar.
My husband and i used to spend both of our full time incomes before kids but have managed to make it work and have since had another child (so there was an overlap of two in nursery for 18 months).
When you remortgage, can you extend the term to reduce your monthly repayments?
Things will be ok. Good luck.

If both of you are on a low/average wage, you might be entitled to childcare tax credits.

Is either of your work flexible, eg one of you work more in the evenings and weekends when the other can look after the baby, to reduce childcare costs? Or compressed hours, one of you does 4 days PW Mon to Thursday and the other does 4 PW Tuesday to Friday and then you only need 3 days nursery.

Also need to look at budget very carefully, maximise income, minimise all costs, and have a good think about needs and wants to make it work. eg do you take packed lunches to work, or are you buying food and drinks out? Even cheaper places like Greggs and supermarkets are about 3x more expensive than packed lunches, so a luxury you can't currently afford.

We've just been looking at the same thing, slightly different issue in that my DH is currently on very good money (although perhaps not on Mumsnet where £70k is a normal salary, I bloody wish!) but works away, but has been offered a job closer to home which comes with a big pay drop. Will still have a good joint income though but it's amazing how quickly it disappears when you factor in childcare and an extra car!

The childcare voucher scheme is still open, which may work out slightly better for you than tax free childcare (there's a calculator I used the other day...think it was on the government website, that'll tell you which will save you more).

Is part time an option? I'm hoping to drop to 4 days and I'll only actually lose 10% of my net pay because deductions are so much lower (I'm nhs band 7 so possibly similar to you both?).

If you haven't done so already, make up a spreadsheet with every single outgoing you can think of. That'll show you exactly how much leftover money you're working with and should help you identify where you can cut back.

I know it isn't helpful but you didn't think k about this before you had a baby?

You can start the tax free childcare while you are on paid mat leave so you could have already been paying into it. Same with vouchers. Remember with vouchers you only save be tax on the voucher amount.

We always spent all of our wages as well and it was always really tight when we had one in full time nursery. When we had two, I didn't know where we were gofng to find the money from. We did a budget and wriote everything down and just had to tighten our belts. It's pretty painful. But the end is in sight.

Childminder will likely be cheaper than nursery. We mix and match. 2-3 days nursery and the rest child minder. It is a nice balance.

I know it isn't helpful but you didn't think k about this before you had a baby?

You can start the tax free childcare while you are on paid mat leave so you could have already been paying into it. Same with vouchers. Remember with vouchers you only save be tax on the voucher amount.

We always spent all of our wages as well and it was always really tight when we had one in full time nursery. When we had two, I didn't know where we were gofng to find the money from. We did a budget and wriote everything down and just had to tighten our belts. It's pretty painful. But the end is in sight.

Childminder will likely be cheaper than nursery. We mix and match. 2-3 days nursery and the rest child minder. It is a nice balance.

Have a very close examination of everything that you spend your money on and then work at ways of cutting your spending.

Here are some ideas:

Check that you're on the cheapest possible utilities tarrifs.
Turn your heating thermostat down and get used to cooler rooms and wearing more layers.
Turn off radiators in any unused rooms.
Cancel any paid for TV services and stick to Freeview only.
Only have days or evenings out that are essentially free, eg instead of going out for a pub lunch, or going to the cinema etc, eat at home and then go out for a walk instead.
Shop for clothes for yourself and your child in charity shops, rather than buying new.
Look for the cut-price offers when food shopping; seek out those knock down labels.
Never buy coffee from a coffee shop.
Never buy ready-made sandwiches or buy lunches at work; make your own packed lunch instead.

Look into the cost of using a childminder rather than a nursery. Better value for money and much more personalised care.

We were never able to afford childcare ( 4 kids) so have spent years working around each other - I did nights and weekends and dh worked 9-5 hours. I understand not everyone can do this but many couples do. if that's not an option then look at child tax credits or Universal credit depending where you live. Any help with childcare will depend on earnings. Childminders might be cheaper than nursery. When your child is 3 you get 30 hours free childcare.

Look into tax credits and tax free childcare. There is a bit on the gov website where you enter your details and it tells you which you'll be better off doing.

We were in the same position and somehow we just coped. (Still are!) And we have another year until ds gets his funded 30 hours which I am seeing as the light at the end of the tunnel.

Being in full time childcare does mean that you're not providing 3 meals a day for 5 days of the week and that cuts down costs a little. Try meal planning for the adults as I've found that cuts costs a little.

You need to go through everything you pay each month and identify things which can be cut or changed.

Phone bill - is it up for renewal soon? Could you swap to a sim only deal.

Gas and electric - are you on the cheapest tariff available?

Any kind of insurances etc when they come up for renewal make sure you shop around and don't just accept the renewal quote your current company give you.

Could you cancel sky/virgin or whatever?

Go through your bank statements to see exactly where your money is going.