How to Afford a Second Child?

[MiniLob]

My husband (late 40s) and I (late 30s) have one child and have been discussing a second but I'm not sure how we might afford it. We earn roughly the same, bringing home c.£3,400 and c.£3,300 per month (so £6,700 in total).

Our outgoings are:
£2,800 - mortgage
£340 - council tax
£300 - gas and electric
£100 - water
£700 - housekeeping (food, toiletries, bank account fee, window cleaning, any items we need for the house)
£600 - cars (fuel, repairs, tax, MOT, insurance for two cars, train fares)
£100 - nursery
£15 - TV licence
£83 - Virgin broadband and TV
£18 - Spotify
£13 - Netflix
£13 - National Trust
£3.50 - Woodland Trust
£3 - insurance for TV
£50 - home insurance (we set this aside to pay annually but it doesn't actually cover the full amount)
£40 - football for little one
Total: £5,178.50

Then we put aside:
£200 - holiday
£100 - savings for little one
£100 - clothes (for all 3 of us - husband gets through at least one suit and one wear of work shoes per year which eats into the budget quite a lot)
£100 - presents and Christmas (we spend £30-£40 per family member on birthdays and £75-£100 per family household at Christmas, £15 on Mother's Day/Father's Day, up to £100 on little one's birthday, then a main Christmas present and a stocking for little one at Christmas (probably up to £300 in total) - the budget also covers any other birthdays we have to buy presents for, as well as the cost of Christmas dinner and hosting over Christmas)
£100 - "fun money" in case we're invited to do something with family / friends or go to visit / stay with family or friends
£500 - me (personal money - charity contributions, mobile phone, gym / sports, alcohol, birthday / Christmas/ Father's Day gifts for hubby, basically anything that doesn't come from one of the other budgets, savings - I tend to try to put £200 aside each month in savings, donate £50 to charity and spend £250)
£500 - husband (personal money, as above, though I think his charity contributions are more than mine)
Total: £1,600

Total outgoings: c.£6,778.50

If I was to take maternity leave, I would receive full pay for 3 months, half pay for 3 months, statutory pay for 3 months and nothing for 3 months.

First 3 months: no issue
Second 3 months: £4,950 short
Third 3 months (assuming 13 weeks): £7,466.66 short
Fourth 3 months: £9,990 short

Total shortfall: £22,316.66

I would be able to use my accrued annual leave to receive a month of pay, so that would bring the shortfall down to £19,016.66.

We could obviously cut the holiday savings for that year, bringing down the shortfall to £16,616.66.

We could also ditch the "fun money", bringing the shortfall down further to £15,416.66.

We could reduce our personal money by £150 each per month, so £300 less each month, a further reduction in the shortfall to £13,016.66.

I think we'd struggle to cut down by any more. It also doesn't account for having to buy baby things (for example new car seats - the current ones we have for the little one were £650 each and we have two of them, but he'll still be in them for a few years so we can't hand them down - furniture for the baby's bedroom, clothes).

We don't have any savings.

So, any suggestions on how we can go about finding £13k to be able to afford a second child? Obviously, time is of the essence, given our respective ages!

Can’t you save money from your personal spends in the year you are trying/are pregnant?

And you could probably reduce your housekeeping budget

How will you afford nursery for 2 dc?

Yeah, we could, but even if we cut down by £150 each per month for a year, that would only amount to saving £3,600 - still very far short of the amount we'd need.

Sorry - I didn't see all of your message.

I don't think we could cut down on our housekeeping budget. We always use it all. By the time we've paid for our prescriptions had a pair of shoes re-heeled, paid the window cleaner etc we're left with about £125 per week for the 3 of us for food, toiletries and cleaning products.

As for nursery, it would be £100 per month for the second child, by which point we wouldn't be paying nursery fees for our first child.

What is paternity/SPL policy like at your husband's work? You could possibly return to work at six months if his SPL pay would be better?

If you feel you can’t afford it, I wouldn’t be having another one. Prioritise the time and money for the one you have. However… I have been criticised for saying that on here before, and the there’s never a good time/you’ll make it work/I raise 6 kids on minimum wage/blah blah crowd, will be along any minute..

I think there are plenty of things you can save on if you are prepared to (cut the charity payments, cut the gym, the subscriptions) but obviously it will change your lifestyle - are you willing to change your lifestyle? Also, is your mortgage fixed? For how long? Could it go up further? It seems high to me - only you will know I suppose if you have a house bigger than you really need? We have chosen to have one only child partly because we don’t feel we could comfortably afford another (we earn less than you, our mortgage is about 1/3 of yours). If you really want 2 kids could you sell your house, buy one half the size and the kids share a bedroom? I’m not saying you should do that but I suppose just trying to make the point that it is absolutely possible to have another kids but at what cost to your lifestyle and what changes are you willing to make?

Also, you say you have no savings but also you put 200 aside for savings each month - is that because the 200/month is your savings specifically and you don't want it to go on shared expenses? Or is setting that aside fairly recent and you don't feel it has enough in it yet to use up?

You are planning to be on maternity leave for a year, why? You could choose 6 months and it woul be affordable if you do the following:

Stop the following expenses:
Charity contributions
Woodland and NHS trust
Child savings
Personal spending £1100 pm is huge, you dont need this. Cut it to £500 a month
Cut down grocery bills by buying cheaper atuff
Cut down. energy bills by turning the heating down
Tv insurance, why do you even have this?

Our financial adviser told us not to save for the dc - to maximise our financial position first and then give them money from our investments. Certainly £100 is a huge proportion.

do you have private or workplace pensions?

do you get child benefit?

i can’t see how you can cut down much without dramatically reducing your outgoings.

how will you afford childcare ?

my dh buys more expensive shoes but gets them
re-soled and polishes them carefully. They last 4- 5 years and that’s with over an hour walking in them every day. Tm Lewin or Charles tyrwit suit - one jacket and two pairs of trousers: again lasts at least 4-5 years rotating 2 suits

im afraid I went from giving hundreds a month to charity to a hundred a year when dc2 came along

a number of families I know stopped at one dc as they didn’t want to sacrifice their and their dc1 quality of life so dramatically.

Sorry - I didn't see all of your message.

I don't think we could cut down on our housekeeping budget. We always use it all. By the time we've paid for our prescriptions had a pair of shoes re-heeled, paid the window cleaner etc we're left with about £125 per week for the 3 of us for food, toiletries and cleaning products.

As for nursery, it would be £100 per month for the second child, by which point we wouldn't be paying nursery fees for our first child.

He only gets statutory, unfortunately, and because he works in a school he can't choose to take annual leave.

£650 x 2 on car seats!!! There are some fantastic ones available costing nowhere near that much!!! That is excessive.

I think shop round and see if you can reduce outgoings, can you get a better mortgage rate (even buying yourself out of a deal can work out cheaper) or can you take a mortgage holiday with your lender/ put it on interest only whilst on maternity leave?

bills - again call them up and say you’re considering your options (eg threaten to change supplier) and ask can they offer you a better deal?? They won’t want to loose you so probably will

food - cut back a bit on that perhaps

fun money £500 needs reducing as does the gifting and maybe a temporary pause on saving for holidays/ little one etc just whilst on maternity leave bills leave

also to consider…….

would you return full time?

some pay for 9 months but last 3 months unpaid - not everyone takes 12 months and some people utilise the shared leave

childcare - funded hours and some you’d pay. Have you priced this up??

nappies/milk/ baby things

ongoing costs of 2 not 1 child. We have 3 and it is a bit easier now they’re out of full time child care but when they were little my wages virtually disappeared but funding is better than it was these days.

I hope you can find a way to make things work ❤️

I think your best option is to reduce your maternity leave alongside making the savings.

To be fair, this is kind of where I'm at... Can we actually afford it? We can definitely afford it once I'm back in work and the 30 hours of funding have kicked in. And we are in the boat of trying to make the most of our time with the little one we have. A good chunk of my personal money goes on a trip to the cafe with him, once per week!

Having one child is lovely. I'm 14 years in and it's been beneficial in lots of ways but if you really want a second then that's what you want but it does sound tight.

And this is a bit extreme but our old window cleaner stopped coming and it was 2 years (!) before I got a replacement. He now comes once every 2 months unlike once a month like the neighbours.

stop the cafe visits. I got a £90 coffee machine and now prefer coffee at home.

i meet friends for walks not cafes or invite the over to mine for coffee or soup and fresh bread.

We have only recently moved to the "forever home". We wouldn't have had room for a second child in our last house. What we've got now is a lot bigger than our previous house however the prices meant it was worth paying the extra £40k to buy something significantly larger than what we otherwise would have gone for (which would have been half the size and only really one step up from our previous house!). Not sure how much sense that makes!

We're fixed for 5 years on the mortgage at 4.04%.

I think the key thing is what is your job security like and what is likelihood of pay rises and promotions outstripping inflation?

In all honesty, I'm a lot better with money than my husband so while it is my personal money that goes into the savings, I keep the fund as a rainy day fund in case we need any emergency repairs or anything like that. I think there's about £6 in there but I really wouldn't want to use it during my maternity leave because we be screwed if something went wrong.

There's so much there that is not essential. So it's not that you can't, it's that you have to choose what you want most?
Eg non essentials would be trips to coffee shop, window cleaning, charity donations, gym. You won't need alcohol when pregnant. Have you shopped around for broadband etc? You do not need to spend £650 on carseats...how many other purchases are there like this?

Childcare won’t be completely free though will it?
You can’t afford another dc without some significant lifestyle adjustments but there is nothing wrong with not wanting to make them.

If you think you can afford it long term and are determined to have another kid then I would cancel all non-essentials (subscriptions/window cleaners :)/ charity etc) cut the mat leave a bit and cross fingers and live super frugally for a few years. The alternative is probably to have one child :). We have only one and we are very happy with choice we made but if you feel you really want another I think you can do it - but you’d need to accept the changes it will bring to your spending and mat leave etc. It sounds like you are not so sure you would be happy with that?

Do you absolutely need two cars?

How much do you have in savings? If you have a comfortable buffer you could pause savings (and charity donations) and resume them after maternity leave.

Have you checked your energy usage and tariff? £300pm seems quite high.

The problem with going back to work after 6 months is that we'd have nursery fees to pay because the funded hours wouldn't kick in for 6 months. Nursery fees would be c.£1,000 per month which we couldn't afford, even if I was working.

I don't think we could cut down on the housekeeping bills by much - maybe £100 (we've actually recently put it up from £600 because we were struggling) - but that £700 has to cover a lot more than just food, toiletries and cleaning products. I shop in Tesco (online deliveries with the cheapest 4-hour delivery slot) and batch cook then freeze things down. We don't go crazy but we do have a healthy and balanced diet. I don't really want to compromise on matters than affect health.

As for our energy bills - we don't put the heating on much at all. Our family always say it's too cold in our house and sit around in coats 🤣

But £6k is a lot less than the £13k which is what you're estimating you'll lose and a lot of the £13k is weighted towards the last 6 months. I think the question is how much you'd pay for a second child. It'll probably mean some borrowing but if your child is at nursery some costs reduce: days out in the week, lunches, utilities.