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!

Trying to work out why your energy costs are so high if its that cold that you are wearing coats indoors. Do you have a smart meter / give regular readings? Electric heating (including electric underfloor heating)? Old draughty house?

We have a 3-bed Edwardian semi and were paying about £150/month (its lower now as we got solar panels). DH is WFH & I'm on mat leave so we use more than if we were out of the house at work. We have the thermostat set at 19c, heating automatically comes on if it drops below that and everyone is comfortable. I'd be furious if I was paying double that and was cold!

We noticed a difference after replacing ancient boiler & windows, but definitely check your loft insulation too, we noticed a big difference after we laid extra insulation & that was far far cheaper! Are your radiators working properly, heating up evenly (might need bleeding)?

I think you can afford it. You are just over thinking it.

Childcare will be the same as what we're currently paying so around £100 per month and, by that point, our first born wouldn't be in nursery.

Oh, absolutely, some lifestyle changes would be expected. What I'm struggling with is getting to that £13k. Of course we could cut back here and there (the £13k shortfall is already after some cut-backs) but I don't feel we could do enough to save the money "in time". Sure, given five years we could do it but we'd be into our 40s and 50s by then which just isn't the path we want to tread.

Why do you need a window cleaner?
Anywsy just
Go back to work after six months.
No one has to take three months off unpaid

I stopped charity contributions during Mat leave as I was living off savings. You can als pay this direct from your employer so it’s not taxed there’s a scheme for it.
you spend a lot more than me on broadband and tv and music can you slim these down. Do you need two cars? Keep the trusts you’ll need them on mat leave.
take less maternity leave so less time off a salary. Or go back part time so only use the free hours at nursery.

the best thing though is to use the mortgage charter to extend the term of your mortgage and the make it interest only for 6 months, that’s what I did on mat leave

Only on MN would someone with a take home of nearly £7000pm be asking how to afford a second child & being told drop the window cleaner 🤣

Honestly, I’m an only child and it is fine, but i would have loved a sibling. I adore watching our girls together, even though i know there’s no guarantee they will grow up to be close, even though I know sometimes they kill each other.

We earned less than you when we had our second, and while it did spur me to change jobs, and we do both work full time, it is absolutely worth it for me. Charity contributions and savings are not things I would prioritise over having a sibling.

if it is purely the costs of one year, I would go for it. You sound sensible, you have some savings as a buffer, and the long term rewards will be worth it. If deep down you really don’t want to make the changes, then don’t. But if it is genuinely about the money, I think you will ultimately find a way to make it work.

Oh, absolutely, it would be genuinely difficult to change our lifestyle as dramatically as we would need to, to even get close to saving the sort of money we need.

It would cut us out of things with our family and friends, at work etc. I think we'd end up in quite an isolated position and not have the comforts we currently experience which we both feel we "need" after years of scraping by and now working very demanding jobs.

Yes, we absolutely do need two cars - we live in a village, drive in opposite directions to work, the little one's nursery is out in the middle of nowhere and I have frequent hospital appointments 50 miles away!

Savings - none in our joint savings, about £6k in my personal savings which I keep in case of an emergency with the house.

Yes, I've checked our energy tariff - we could go onto one that might save us £10 per month but it hardly seems worth the hassle (we've had problems switching in the past). The house is big. We don't use the heating much but, when we do, it's extortionate. Hoping it'll drop a bit as the weather picks up.

Lots of people on less money than you afford it. Where on earth do you live where mortgages are almost 3k a month but nursery is only £100?
did you mean £1000?
its £100 a day here, even with the 30 free hours I’d struggle to get it down to £100 a month.
your mortgage is obviously pretty high, could you take a mortgage break on 3-6m of your mat leave.
You said you put £200 a month each into savings but also that you have no savings? You dont need to put money into toddlers savings during that period,
you’re paying a fortune for utilities for a cold house that you need to wear a coat in. you should look into that.
you obviously don’t need to make charity payments and there are loads of other things like you obviously don’t need like national trust, woodland trust and a bunch of other subscriptions and you could speak to people with plenty of notice and drastically reduce your Christmas spend. You could start putting all that money away this year to cover your mat leave shortfall and when you’re on mat leave the shortfall also wont be as much

You're right, it is.

And I keep coming to the same conclusion that borrowing is probably going to be the only way to go. If we had longer, it would be ok, but it took us until our 30s/40s to be able to afford the first one!

Beyond the year for maternity leave, I'm confident we'll be comfortable. It really is just that one year and being able to afford it soon, so we're not too old.

You're being a bit OTT really. Cutting out Netflix etc for a year or so isn't a huge change that is going to cut you off from everyone you know.

Either you want to do it because another person in your family tops having to wait a few months for the latest series, or you don't. If you don't that's fine, but that's not anything anyone here can help you with.

Plus you won't be working your very demanding job for a year, you'll be on maternity leave

You do not need a second child

This is such a "real" take.

We had years of shoe-string living, then our circumstances changed. We're now both in very high-pressured, demanding jobs (which have made us both very ill, in the past) so there's absolutely a balancing act for us for our sanity.

We moved to the "forever home" recently with the intention being that we can be a base for our family and friends for socialising, as we don't go out like we used to.

Like you, I don't really buy clothes for myself - just leggings when I wear holes in them! In fact my wardrobe is dire and I generally look pretty scruffy, these days - it's embarrassing. I've put on a lot of weight but never accepted it and therefore never updated my wardrobe. I used to always wear a full face of make-up. Now I'm a dry shampoo and quick brush of the teeth kind of gal.

You fill the gap by starting to save now, I understand wanting to live your life after being in financial straits but £1k of discretionary spending after all the bills paid is a lot of money to burn. If you set that aside for a year you’d have banked a lot in savings.

In all honesty I’d be doing that anyway, your £6k isn’t even 1 month of expenditure at your current rate of spending. You have a good income, large mortgage notwithstanding, making sure you’re on a good financial footing is a worthwhile use of the money simply because we don’t know what’s around the corner.

With changes to lifestyle you could easily bring your budget down - you may both need cars, but do you need £600 worth of cars each month. Your car costs should come down on mat leave because you won’t be commuting, similarly I’d cancel the gym and do other exercise for free.

Or you could recognise that you have a nice lifestyle with one child that you really don’t want to change and stop at one.

No, we shouldn't need wrap around care.

Two days are taken care of (our NWD). I'm going to request a WFH day on which I'll get up early and do an hour or two before the house is awake, take the little one to school, come home and work, collect him and then, if I have anything that needs picking up I'll do it after he's gone to bed.

We have a grandparent retiring soon who has offered to help so my intention is to move my day around on the other two days each week so I'll start at 6am or 7am, hubby can take the little one to the grandparents, grandparents can do breakfast and school drop-off, then I'll be able to finish in time for pick-up.

If I'm on mat-leave, obviously I'll be around to do the lot!

I think we'd be absolutely fine after the year of mat-leave and it'd be a point where we could make small cut backs, here and there, to afford the extras.

But I don't think we could realistically cut that £1,600 entirely, even if we were to go very basic. There are things we have to pay for. There's also a balancing act of needing certain things to balance out our professional lives, which are really demanding.

It's a crazy situation to think that a couple with a six-figure combined income, no debt, no finance would have to live a completely basic life to be able to afford a second child.

Also, that £13k shortfall is after having already taken account of some of the cut backs you suggested.

I think you could if you cut the mat leave short. Stop giving to charity, stop the gym, stop extra subscriptions, stop the window cleaner and anything unnecessary.

Will your salaries go up at all? It seems like a very big mortgage to take on with a young child and considering a second. What if rates go up?

Something to consider is that kids grow up. What if they both want to learn an instrument/ play sports? My eldest is 10 and in adult size Nike trainers now. Obviously that’s not a necessity but it will increase your clothes spends when two are wanting certain clothes. Plus laptops for homework, driving lessons. Then it also depends how much you want to be able to support them in adulthood.

Basically It depends on your priorities.

I would vote no for the second child tbh.

It’s nuts you earn that much as a household and don’t have any savings.

We’ve never cleaned our windows and we donate to charity by way of clothes to baby banks etc rather than money.

We have absolutely needed savings for things like private healthcare for our young kids when the NHS has let us down several times.

Yeah, the personal spending "allowance" is high, I agree. I try to save £200 of mine and donate £50 to charity, leaving £250. I pay for my phone (recently gone up to £18 per month - cheers, EE), and I take our little one to the cafe once a week (usually £16). Beyond that, I'll buy a bottle of wine each weekend. Every few months, I'll take us out to dinner. It doesn't pay for a crazily extravagant life but probably no more than one would expect of a household with a six-figure income.

If I was to go back to work after only 4-6 months, we'd need to find around £1,000 for nursery. I also wouldn't be able to do my job on the miniscule amount of sleep I had with our first. It took until he was 8 months before he could sleep for more than 20 minutes without being held upright on someone.

The car seats we have are the safest ones on the market and because they last for so long, we essentially get three stages out of one seat so they don't work out as expensive in the long run.

I don't think a mortgage break is an option as we're on the maximum term. Mortgage is for £500k.

We're very lucky with childcare that the 30 hours covers us for the 3 days we need. We just pay a small top up for an extra half hour each day, consumables and a fee for being term-time only. No grandparent help at the moment.

We are. It's taken a very long time to get to this position and we're so grateful for it every day.

Haha! Yes, £6k (thankfully!). I shall keep plugging away with my personal savings because that's something I've always done.

I guess I mean it's a sad concept that the things we donate to really need that money and we'd have to turn off the tap. I also guess because it's a small amount in the grand scheme of things and won't be the deal-breaker.

You can afford it. You need to change your life style. I have two kids on £1500 a month. Way less than you. Your outgoings are luxurious and can be massively cut down.

I think your definition of basic may be quite different to many others. We have a similar income, much lower mortgage but save a good bit every month. We both have a social life, and our kids are teenagers so generally more costly for daily living. We don’t live a basic life by any means, but we are intentional about what we spend, we know exactly where our money goes and where we can cut back if need be.

And you’ve said you’ll be fine once you’re back at work - most people tighten their belt during maternity leave, so what 2 years of budgeting to have a baby?

I don't but my husband does. I'm on the cusp of it being worthwhile. And, I know it sounds silly, but it's always just waiting for that month to come along when we have the cash to pay for it!

I'm absolutely expecting a change in lifestyle (and a big one at that) but I can't get the numbers to realistically stack up. If we had longer to save, it would be ok, but I feel like we don't have much time, given our ages.

I'm genuinely struggling to figure out how we can get to the £13k, even cutting back a lot. That £13k is based on having already made some cut-backs.