Worried. Going from 2 incomes to 1

[Essexmate]

We’ve made the decision that I will not be returning to work after mat leave. Main 3 factors were

1. all my wages would go on childcare
2. Eldest has lots of medical appts, so along with school holidays etc we wouldn’t have enough time off between us
3. My boss is extremely toxic (v.small work place & he is heavily involved) and feel like this is my way out

Anyway, even though I think it’s the right decision I am really worried about money. So I’m a couple of months we (family of 4 (2a 2c)) will be living off £2,050 pm. I did a rough budget once and worked out that we’d have £500 a month after all bills but that would include food, which we usually spend £90 🤦🏻‍♀️ But I’m too scared to do it again properly.

Not sure what I’m asking really, for lots buzzing round! I guess that means no more holidays?Will we still be able to do fun things or will we just be living by the pennies? DD2 may not get the same experiences DD1 did because no money. Any practical tips? Was thinking of asking bank if we can go interest only for a few years but not sure if we should (or even can). We used to spend every penny of both wages pretty much so we will have a lot to cut down on but from where 🧐

I am hoping to find night work at some point but can’t be until DD2 (6m) sleeps through at night

Maybe list all your outgoings here
People may be able to give advice on savings you could make

And you have to forensically look at your budget - being scared won’t help

I wouldn't be happy with £500 a month for food and all other expenses. Have you calculated in putting any away for savings?

That is a really low wage for a family of four to keep afloat on.

Does it have to be your old job full time or nothing?

Could you not find a different job with part time hours? Preferably with at least some of those hours at different times to your DH (he may also need to negotiate a different working schedule or look for a new job).

That way you would be available for appointments and also have less childcare bills, whilst upping the family budget.

Married? Set up Marriage allowance (probably for new tax year if you have exceeded your personal tax allowance this tax year) so a little of your unused personal tax allowance can be used by your spouse.

www.gov.uk/marriage-allowance

I’m not happy with it either but not sure there is another choice. My current job is part time 9am/2pm. DH workplace just had a major reshuffle and he has just taken a new role so working 8.30am/5.30pm (home by 6ish). So I could work from 6.30ish onwards but not until DD2 is settled (she wakes up so much still). Or maybe I just accept no sleep and look for work anyway?

Think I’ll need to post our outgoings on here but need time to set it all out

How many days a week does your DH work? Could you look for work around those days? Maybe at the weekend if he is Monday-Friday?Night work isn't the only option.

Would it be possible for him to put in a flexible working request to change his hours, maybe to a condensed week (full time hours over fewer days, this is my current arrangement and I love it), so you could maybe work 3 days a week and him 4?

I think it would be v tight. I work three evenings a week so it works around DH's full time day hours.

Have you done a proper budget that includes allowance for things like birthdays, Christmas, haircuts, clothes, car maintenance and MoT, dentist, home maintenance and repairs? While not 'monthly' costs, the money has to come from somewhere.

MSE website has a budget planner that prompts you to add all of the above, and averages it all out monthly. You could easily see another £100 or more of expenditure a month that way.

Here: www.moneysavingexpert.com/banking/budget-planning/#planner

Fill this in and be 100% honest with the figures. If you'll be at a deficit you need to know before you embark on anything.

I would try and avoid going interest only if at all possible.

If your child has a medical condition have you checked whether you might be entitled to additional benefits? That may well be the case.

Also, when you say all your wages would go on childcare, have you factored in things like - childcare includes meals and activities; your pension contributions, (ie the long term gains of working) etc?

Or could you do a 3 day week instead of 5 short days?

You are mad to do this
It is very difficult to get back to the workplace after yrs out. Once kids in school its a lot easier just those few yrs are the hardest financially
.i would go back and look for another job or pm/ weekend work as no work your situation will be horrible . No treats / holidays etc all down to not paying childcare

Have you considered remaining employed and using (unpaid) shared parental leave to cover time off in the holidays?

Also, childcare should always be considered as a shared expense - so mentally think of 50% of it coming from your wage and 50% from your DH’s wage. What sort of pension does your employer provide? Are you going to be losing out on retirement income by stopping work? Make sure you understand what you are giving up financially before making a final decision.

I think that would be very hard indeed. How much is your mortgage/rent

I'd be loathe to do this - it might be difficult to get back into the workplace when you want to. I'd be considering all other options - paid childcare, flexible working, not you and your partner taking the load of hospital appointments etc.

^both you and your partner.

Are you entitled to any benefits with just one income. You say your son has medical needs would this qualify for DLA? And then carers allowance for yourself.

Could you work in the evening? Weekends around your husbands commitments. Weekend/evening carers are very much in demand.

Go through all your expenditure. What can be stopped or cut back on. Shop at Aldi. Cook from scratch etc.

Is your point number 3 actually your point number 1?
Escaping a job you don’t like.
If so - the answer may be another job, not to stop working.

You don’t need your baby to be sleeping through to work, there are two parents. If you continued to work 3 days, your husband could take 1 or 2 of the interrupted nights that you’re working. Also with early bedtimes for the adults, you can get through - it’s only temporary.

£500 including food is very tight, and I’d want to stay employed.

Have you factored in savings for house repairs, car repairs/replacement etc? Annual costs? Holidays? Uniforms?

We did it and it was horrible. We didn’t have money for holidays, Christmas etc because we didn’t plan properly. We ended up in our overdraft every month and went without even then.

OP don't panic!
It's perfectly doable, with a few adjustments and financial discipline.

A few things to think about...
Do you have any savings for emergencies? If not or if insufficient, start living on the one wage now and use your current salary in the next couple of months to start or increase a savings pot.
If you get any maternity pay use that too for savings, if you can.

Do you have contractual maternity pay? If so it may be worth returning to work for the minimum required time before resigning to maximise this.

It sounds as if you have already worked through your budget and calculated how much you will have available after bills. Scrutinise those bills to see if you can cancel or reduce any subscriptions or direct debits, or switch to cheaper suppliers.

Have you factored in the additional child benefit payment? Also check any benefit entitlement to top up your DH's salary.

With regards to mortgage - interest only would be one option, but you might also think about just extending the term of a repayment mortgage to decrease your monthly payments.

I'm not a qualified financial advisor and you must do your own research/due diligence on this -
it is just what I would consider as an option in your circumstances...

Does your husband pay into a pension? Is it a workplace pension and does his employer contribute? Is it a defined contribution scheme (rather than defined benefit).

If he pays into a defined contribution scheme, with no/low employer contributions, I would consider looking into suspending the pension temporarily, providing there are no issues opting back in.
Use the money to increase your emergency savings pot. He could opt back in when your children start school and you're free to work. As your children are close in age it will be a short time frame in terms of pensions. And if you haven't needed to use the emergency savings by then, he could top up his pension with the savings.

We couldn’t live on that. If you were spending the whole of 2 wages, how will you actually manage on one? It doesn’t sound doable or it may be doable, but with a miserable life.

Have you thought about your pension as well? Pension is a great reason to stay working.

Do you have rent to pay ? You need to look at Universal credit to top up your income. If you did go back to work you would likely get some help with childcare costs through Uc also.

For numerous reasons, inc hating it, I left my job when my maternity pay came to an end. It was at the height of Covid restrictions but I had a few months off then picked up a zero hours contract delivering online training. Many of these roles simply require you to have a degree and a willingness to learn the software. They’re £25-£35ph and can fit around your childcare needs. Would that kind of work suit?

We’ve been trying to live off one wage to pay our mortgage off and it’s tough.

The thing is, even if I return to this job we will still be in the same situation as the childcare cost is my entire wage. I will do the budget as suggested above and go from there. Sounds like I will need to find some work outside of DH hours (they will not allow him to consolidate days/hours)