Is this a reasonable budget setup? 2 young kids

[DonutEnvy]

Hi

I previously posted about going back to work with young kids (1 and 2 years old) and I have decided to go back to work in a few months 1 day a week (they will be in nursery 1 full day and 1 half day- half day I will use as errands time).

My income will be roughly £1100 a month (including child benefit).

I set my budget out as-

• contributing to joint account for bills and kids essentials- £500
• personal spending money (DH has same amount too)- £350 for treats for myself or clothes/ hair/ lunches etc
• savings I put in joint savings acc- £200 (this includes £100 a month for kids’ junior ISA but husband puts half in)
• SIPP contribution £50

My DH covers majority of bills as he works full time and he contributes to savings abit more too. I wanted to check if this budget was feasible or if I should consider anything else.

How will you make up for lost pension years?

Sounds like you are pretty well off there!

Quite a small amount into savings, I'd try to increase that and reduce personal spending, perhaps swap the budgets round.

Could you not increase to 2/3 days a week working so you're getting a decent income?

My DH would also be contributing to the savings- so altogether we would be saving £8-900 a month

At the minute I’d rather not work more as I want to be with the kids whilst they aren’t in actual school. This will get me enough to be able to spend on myself and the kids and contribute to the household finances abit too.

I'd love to know what sort of job pays £1k a month working 1 day a week! This is the dream!

Haha so I am a self employed pharmacist (haven’t been working for a while due to kids).

But locum shifts, especially a weekend day, can earn a good amount so that’s how I will be getting around 1k a month with 1 work day a week!

The only thing I’d change is to put more money into your pension. £50 a month isn’t enough.

Agree re the pension. I’m 45 & set up my pension when I was 21. Not massive amounts but it’s not doing bad. But im still worrying that I’ve only got 20ish years left & im going to top up as much as possible over the rest of my working life. Thinking about retirement creeps up on you faster than expected!

What would you guys suggest I put in monthly?
I could go to £100 a month if I take it out of personal spending?

Depends how much is in your pot currently and how long until retirement, but for comparison I’m in a similar life stage with 2 young DC and work part time and £800 goes into my pension each month between mine and my employers contributions. £50 or £100 isn’t much, that’s only £1200 a year at the most.

Re the pension…..how many years working have you got left? Are you going to be increasing your hours when your kids are at school? If so & there’s scope for you to top up your pension then that would make a difference.

Honestly I don’t put in as much as I should. I’ve put in what I could afford and fortunately it’s doing okay (by a wing & a prayer) but now I’m only 20 years off retirement it’s becoming more important to me to think about it. Every time I get a pay rise I put more into my pension. Don’t panic yet if you have plenty of working life left but do make it a serious part of your future budgeting plans. £800 a month isn’t realistic for many people (it’s certainly not for me) but stash as much as you can away without it being detrimental to your current living situation and you will be grateful in the future.

To be clear it’s not me putting in £800 a month by myself, it’s a combination of my contributions and my employers. I was just highlighting what a normal pension contribution is like (mine is by far not a high pension, nor a gold plated public sector pension), and it’s not going to make me rich in retirement, and so £50 into a SIPP is not going to be anywhere near enough.

The £350 a month spending money each is very excessive in my opinion. That’s £700 being frittered away every month? Unless you mean that goes towards clothes when they have worn out and a cake in a cafe once a week or something. But still that seems like too much.

What does the £500 (£1000 joined per month covers?

We spend £500 on bills, £600 on groceries. This doesn’t even include the mortgage, clothes for the kids, their pockets money, transport, etc.

Just curious. I assume your husband is paying the mortgage or rent and nursery fees.

OP has said her husband is covering more of the bills if you read her post - it's not £1000 a month in total.

Hi
Yes my husband covers the mortgage and the other big bills.
This is what I can put in the joint account to help out and he says he doesn’t need more than that in he can cover the rest.

the £350 spending money would cover lunches coffees clothes any small bits for the house etc.

I guess you have time to catch up with savings and pension when kids go to school. At the moment the priority is spending time with your kids; those first 5 years are key to the rest of their life; you can start increasing slowly as they grow older.

I loved that time I spent with them when they were little; now they are quite independent so working full time and putting more in pension