Can anyone offer some insight?

[FinanceQueryNC]

Name change for this, just because there's a lot of details.

I just wondered if someone could give some insight as I have baby brain, and me and DH sometimes have different views on what’s possible.

He’s trying to get some figures together, on what he thinks he would need to be earning, for us to afford a 4 bed house worth £300,000 - which he is wants to achieve by May next year. He wants these so, along with his company, they can set some work goals.

Current situation:

Employment
DH - £39,000 for 56 hours per week
Me - £15,000 for 21.75 hours per week

House

Mortgage
20 years left when we come to renew in April
Mortgage of £110,000
Payments of £524.59 were fixed for two years, this was overpayment, so 2 years of payments will have cleared 4 by April

Council tax - £155 pm
Water - £33 pm
Gas and Electric - £76

Sky - £58 pm

Insurances

Car insurance (FC for two drivers) - £30.73 pm
Life Insurance - £29.22 pm
Buildings and Contents Insurance - £15.44 pm
Mortgage Insurance - £15.30 pm
Pet Insurance - £8pm

Debts / Loans etc
Credit Card - £7000 interest free - pay £110pm (over minimum payment amount)
Car - £210 per month

Childcare
Nursery - 3 days per week £650pm

Other
Shopping - £200pm
Fuel - £150pm
Birthdays - Average of £60 per month

However, I’m going on maternity leave, so will be earning the standard £145pw for 9 months. DS will still be attending nursery 2 days a week, and a cheaper pre school 1 day a week, bringing nursery fees to £500pm.

When I return to work, everything will be roughly the same, except nursery fees for two will be £1100 per month (taking in to consideration the 30 funded hours DS will be eligible for by then).

DS will then start school Sept 2020, bringing childcare back down to around £800 with wrap around care and nursery for second born.

So, I’m already panicking about feeling the pinch, (and slightly gutted about no holiday this year), but DH and I are struggling to come up with what we realistically would need, to not only cover the above but also what he would like to achieve and maintain a good level of disposable income for family days out, social events etc.

Him working 56 hpw !!!!

Download my budget sheet from the spreadsheets thread
on your own machine, set up two versions
one of each scenario
then it will drop into place

Do you have any equity in your existing house? Any savings?

I know @Ta1kinPeace, a lot of hours, these are over 6 rays

@Yearinyearout we have £90K equity in the house. We have little savings, roughly about £2000, but we are trying to build that as much as possible before baby comes so DS can carry on nursery while I'm on maternity leave

Those hours are INSANE for that amount of money.
6 x 10.75 hour shifts
that is not safe
and as an hourly rate its £13.40 an hour which is barely above the living wage

I've been questioning it for years @Ta1kinPeace but my DH LOVES his job, and doesn't see the problem.
But I don't think it'll hurt to show him the break down of what he's getting.
I'll definitely be doing the budget spreadsheets, thank you

To add, I'm sure you've guessed from wages and hour prices, we are well outside London or any cities

House

Have you played around with some mortgage calculators to see roughly what you would be paying back each month? You are looking at doubling your mortgage! Plus you will have a second child and children get a lot more expensive as they get older, you have a joint income of just over £50 000 and want to buy a 300 000 house? Almost 6 times your income? I would say that isn't sensible or realistic at all.

Sorry missed the bit re the 90k equity that makes things a bit better but buying a 300k house there will be stamp duty and fees etc to pay, higher council tax. Also your budget figures make no provision for clothing, footwear, haircuts, etc

Drop the idea of having one child in any kind of paid nursery or pre-school setting while you are on maternity leave, both before and after new baby arrives.
I have had three children within four years and can assure your that what seems "nice" and "good for child one" etc etc now, while become a total pain whe new babe arrives, you will be sleep deorived and struggling to get baby into new routine, older child will be confused as t ew babe arrival and need to be around you lots more, take it easy hon, you do not want to have to get everyone ready and out the house at set times twice a day to drop and collect at a nursery. give yourself a home based cheap as chips year to establish yourselves as a cohesive family of four.

Who knows what state the housing market will be in in May next year?

You could think about dropping Sky at £58 per month.

There is plenty on Freeview.

You won't be able to afford a mortgage for a £300k property on the figures you've given

I don't think you'll get to 300k on 39k as essentially you won't be earning when the application goes in if I've read correctly?

So you want to purchase a house for £300k and would have a deposit of approximately £80k as £90 in house but no savings to pay for fees etc

Even if you save you have £7k of debt so pay that off

So a mortgage of 220k

Over 21 years at 3.92% the repayments are just under £1300

So just childcare and mortgage would be £2400 per month after maternity leave

I agree with TAmum that giving notice in nursery would be a great deal of money saved - infact over a year it would pay off the credit card

You could seriously look at your finances now to see where you could save money enabling you to save some funds for moving

Could you postphone the goal date until your eldest goes to school?

£200 per month on shopping seems very tight for a family of 3 and nappies, perhaps keep all your food shopping receipts for January, main shops and top up shops and then on 31st add it all up to see what you actually spent to see if you can do it all in for £200

This is not a good time in your lives to be moving to a more expensive property. Park it for a couple of years.

To be fair, it's a time in life about half my friends have moved- you squeeze one baby into your pre kids home, but burst at the seams with two...
I'm no help Re calculating how much your DP should be earning for the 220k mortgage though.
What field does he work in? Is a massive pay rise plausible? How about you?

A 4 bed house with 2 small children is not usually a necessity though!

I reckon that as a rough guide you are looking at around £1000 per month for the £220 000 mortgage ( possibly slightly less or more depending on how many years it's over,), plus around £1000 childcare, then bills utilities food etc, I have a 4 bed house and all my bills and utilities (not including mortgage) come to about £500 per month, then food and household items for a family of 4 around another £500 per month, I know it's possible to do food and utilities on less but I would say this is an average if you want to run a 4 bed house, cater for a family of 4 and have a reasonable standard if living. The £500 per month food money covers school dinners all family meals and household items and food for 3 cats and the odd takeaway, So basically you are looking at around 3 grand a month before you even start adding on the cost of petrol, clothes, travel, entertainment, holidays, Xmas, it's endless. So on a joint income if £54 grand a year you are going to take home about 3.5 grand a month and it's going to be very tight. You are going to end uo with about £500 per month to pay for absolutely everything else.

Fair point @Shitmewithyourrhythmstick ! Most of the people I was thinking of were moving from 1-2 bed flats to 3 bed cottages/maisonettes. London though, so the figures work out like moving to a palace in the Hebrides...