How to afford maternity/childcare with Mortgage etc to pay

[Bambi1981]

Hi ladies, I hope you're well.

Looking for someone to ease my mind and hoping this is the place. We're just in the process of completing on a house and our outgoings have shot up as a result. I'm excited about the move but we've just started trying for a baby and now I'm really worried we made a mistake buying the house.

My company only offers statutory maternity pay which after the first 6 weeks is essentially 1/4 of what I get paid monthly. I'm a project manager and my husband is a teacher so I earn more than my he does, how on earth would we afford to pay our bills if I was to take longer than 6 weeks off?

I'm 33 now so time is ticking. I had an ectopic in 2010 and was a bit scared of trying again for a while, and kind've suspect that my fertility might have been affected so I don't want to put it off until we can 'afford' it as there's always something else that pops up and you could delay forever.

I've always been careful with money so we're not living extravagantly by any means and we both have fairly decent salaries, but as I say hubby can't afford to cover the shortfall equivalent of 3/4 of my salary. We have two car loans, a wedding loan and obviously a mortgage, life insurance and all the other usual stuff. We don't have credit cards as I don't think they help matters, we live to our means, and we pretty much never go out. I had a nice disposable income before we bought the house which would go on take aways, holidays and clothes etc, but obviously that has dramatically reduced now.

So how did you do it? I have about £3.5k in savings that could cover some of my maternity, but then there's childcare once I go back to work which is scaring me the most as that's basically the equivalent of another person's salary. We can't afford that, and I don't think my company will let me WFH as my role is client-facing.

Right now I'd say we'll have about £600 disposable income a month after bills, food and petrol - is that enough to cover childcare?

We had a massive argument last night and hubby said he never would have bought the house if he'd known all this sooner so now I feel awful, and sick to my stomach as we move in on Friday. I know we should have done the sums before but life just kind've got away with us.....we only got married in August and both have really stressful jobs.

Sorry, I know I sound pathetic (people have been torn to shreds for asking things like this in the past), I appreciate people cope on salaries much lower than ours with higher debts. I think the thing upsetting us is that we've literally been through blood, sweat and tears to get where we are now, I don't want to be irresponsible by any means but it seems really unfair if finances stop us being able to afford kids.

Finally, I've missed this month's period (I was due yesterday). I've had all the PMS symptoms but nothing so did two tests today and both negative. This is what brought it all on but I'm really worried I might still be pregnant - how awful to be 'worried' as I was previously praying for it so much.....

L x

Well, I'll tell you how I've done it. When I was 20 I fell pregnant (with now my husband then bf) and had stupidly decided we could not afford it as we were so Young,didn't have steady jobs etc so I had a termination.
I then kept saying "next year" for about 11 years but it seemed like it never was the right moment and we never got rich (surprise!). Then we started thinking that we should maybe consider wiping out all the crap we thought we needed first before having a baby and just start trying. It took about 6 months and I fell pregnant and I was really happy but scared at the same time "is it the right thing to do, how will we afford this?!". Unfortunately I didn't need to worry because I miscarried. And then I miscarried once more.
Now I don't worry about money. My only worry is...will I be blessed with a healthy pregnancy and a healthy baby this time?!
That's all I want really and I think it's all that matters.
Half of our income goes on rent only. Rent, not mortgage. But I know we won't starve and I know we'll do our best for this baby and can only strive to achieve more and do better.

I think you can count yourself lucky you've managed to finally buy your own place. It's a great achievement and I wish you best of luck and a healthy pregnancy if af doesn't come.

If you really want this and are ready, it won't matter.

I agree with the above. Where it comes to money I am definitely in the camp of "things always work themselves out".

To prepare, I would suggest that you look at all your outgoings and see where you can make cut backs, lunches, coffees etc. look at everything.
Moving in to a new house is a great time to get deals on internet etc.
Save as much as you can.

Regarding childcare, do either you or your DH get vouchers through work?
Will you be entitled to any benefits? Child benefit? Every little helps.

Regarding your argument, moving is a really stressful time and it is perfectly natural to have last minute wobbles. If you hadn't bought the house you still would have worried about finances and also the security of renting somewhere when you are having a baby.

All the best!

I am with the general feeling of it'll work out.

Before we had no. 1, I earned more than dh (who is also a teacher, incidently!), and I only got statutory mat pay, but was determined that I wanted to take the full year off on maternity leave, and go back to work part time afterwards. We had some savings, and throughout my maternity leave we used £2.5k in savings on top of dh's salary. In all honesty, if we'd had to, we could have got by on less, but as we could afford to keep the gym membership, netflix etc, we did. I went back to work three days a week, and our son goes to a childminder. After being on mat leave, it feels like we have loads of money!

Now I have just found out I'm pg with number 2, and we are in the process of moving to a bigger house, and we need to get a bigger car. Again, I'd like to take the year off, so we are packing some money into savings again. But this time, we are having to let some other things go too - the gym membership etc, in order that we can get the car.

Ultimately, I think you adjust your life as you go along, doing what's right for your family at each stage, but if it's what you really want then you make it work. Also remember, even if you found out you were pg today, you'd still have 8 months to save up. With no changes to your lifestyle, that's 8 x £600 = £4800 extra in savings by the time the baby arrives.

Also, don't be scared by the media headlines about childcare costs. Yes, they cost, but do some research. Around here, it's about £45 a day for nursery (reduced for a full week) and £30-35 a day for a childminder. Given your husband is a teacher you only need termtime care, and childcare vouchers takes that bill down further.

Could you get a lodger temporarily or have a student from a language school?

If you wait until the right time, it will never happen. There will always be something come up.

The fact that you've thought things through, is great, it shows you're mature and considerate, but don't over think it!

You will ALWAYS find a way, just go with it!

Save save save. And then some.

Have you factored in childcare vouchers which will help? Also what kind of childcare have you costed? Will parents help out? Can you go part time and your DH as well?

You have to think outside the box a little.

You earn more than your DH so could he take paternity leave instead of you taking maternity leave? Or could you just go back to work after 2/3 months?

Re childcare - childcare vouchers save us a fortune. My DH is also a teacher and our term time only, 4 days of nursery come to 505 a month BUT 486 is covered by childcare vouchers, deducted directly from our salary. I think it saves around 150-200 a month.

I went back to work after 7 months off on SMP. I saved very hard during pregnancy, took holiday from 36+6 - 39+3 and then the last couple of weeks were holiday. I also received my bonus as it wasn't performance related. I condensed my hours so now my hours in 4 days instead of 5 which is hard work but great to have a day with DS and to catch up on errands. Your DH could also reduce his hours instead if his school were flexible.

Your expenses with a baby are minimal, or at least they can be. Child benefit certainly covered any food/clothing/nappies for the first while.

How long do you have left on your car loans and wedding loans? Could you down grade your cars so something cheaper and more economical?

You can often reduce your outgoings quite significantly if you need to.

No £600pcm will not cover childcare!

£200pwk+ is more realistic. Why don't you look up the websites of your local nurseries?

Work out if you'll get tax credits whilst you are on maternity leave (some of your mat pay doesn't count as income).

You say you have 2 car loans but would you need 2 cars if you were on mat leave? That would save a lot. Also look at your insurances. Go onto money saving expert. Check if you can get a better deal on utilities. Cut you phone/tv/broadband package. Take packed lunches to work.

Is your house big enough to take in a lodger for now?

If dp is a teacher could he do some extra tutoring?

You do have quite a lot of savings which is a better position to be in than most people.

You need to think about increasing your income, and also you need to think differently about your finances.

You say that you've always been careful with money, live within your means - but you have quite extensive borrowing over and above your mortgage - two cars and a loan for your wedding. You already have lived above your means, because you've had to borrow to pay for these things.

Do some research into local childcare, when we looked at it 7 years ago when I was pregnant with DS1, we would have needed to spend about 800/900 a month before we'd taken off childcare vouchers, so around £700 a month is what it would have worked out at.

How much a month are you saving at the moment?

To afford maternity leave:
Save any disposable income you have now. I worked out how much we needed per month of my salary, how much get in from: maternity pay and child benefit ( if you earn less than 50k you get it) and how much short we would be. Then saved it. Had a set amount of savings for baby costs etc (pram, cot - does not have to be new/costly)
You do not have to take 12 months off. As dh is a teacher depending on when give birth you could use his holidays for your return to work and him have the baby so no childcare - for eg if you go back at start of his 6wk holiday
You should get 28ish days paid holiday when on maternity leave ( teachers do not but think just your dh is teacher from post so you should get) - tag this onto maternity leave ( eg 8months maternity leave, one month accrued and paid holiday)

Work out childcare costs now. If dh is a teacher where I live all the teachers use childminders who only want to work school terms - so you only pay 39 weeks childcare a year ( not 52!) and dh looks after baby/child for free in his holidays. Would he do this? It is cheaper. If he will not then you will have to decide what is more important.

I would try to overpay those loans as soon as possible - 3 loans coming out every month is a lot! Could your dh take on any marking in the summer for an extra lump sum to pay the debts off?
You already have some savings, so I would keep those but really push on being frugal and getting the loans paid off before a baby comes along, then that extra money, plus the money you've been paying off it can be saved/used for childcare.
You might also be able to do compressed hours, so five days' worth of work, but doing it over one day to have a day off and save on childcare.
If your dh is a teacher, some childminders will do term-term only and that can save a few grand!

Do not delay children or it will never happen. You will find a way. You just need to look at finances differently. Childcare costs vary massively between London and cheaper areas. Ave FT nursery is prob £800-1000 month. Lots of people only take 3-6 mths mat leave. Dads can take it too. You ruthlessly cut out things like buying sandwiches and make your own. You don't buy many clothes for a couple of years. You buy everything for baby off eBay and save a fortune. It's a question of new priorities

• Childcare vouchers so if both employers are in the scheme then you can save the tax on up to £243 each (this is changing - can't remember when the new scheme starts)

• Child Benefit is c£80 per month (every little helps)

• Do the sums to see if sharing your mat leave will help

• Child minders tend to be cheaper than nursery (but you're more likely to need emergency childcare if they are sick)

• One of you going part time if transport costs + childcare is greater or close to your take home

• Free hours help once they are 3 so this is a short term problem

• Both save every penny you can from today to both build up a fund and get used to lower disposable income

• You can start buying child care vouchers as soon as the baby is born so you can maybe use this as a saving scheme to give you a buffer when you return to work (your dh could buy some when you're on mat leave, and you could buy some on your return to work if he takes some of the leave).

It will work out, but it does make having a second child with the 2 year gap prohibitive. We have a 6 year gap, mainly for fertility reasons, but it did mean that the childcare costs were spread out more.

Just realised your DH is a teacher. Look for childminders who only want to work during term time - they are rare but do exist.

Agree focus on overpaying loans, no holidays/takeaways/non essential spends to do this.
Or wait a few years to ttc until feel financially more comfortable.

3 loans and a new, higher mortgage means you have choices to make. What you choose depends on priorities.

We have had no holidays for 5 years to pay for ivf. That was our choice (once had one free NHS cycle which failed).

I haven't read all the posts so sorry if someone has already said this. Have you factored in the child benefit you would receive once baby is born, and also have you done a tax credit checker? Unlikely you'll be eligible if you're both working, but you never know.

I was in a similar position to you. We were moving into a new bigger house when I found out I was pregnant. In some ways it would have been easier to stay in our old house as our outgoings were much lower (mortgage, heating, council tax etc) but we made it work. We saved a lot each month while I was pregnant and used this so I could have a year off.

Childcare was expensive but we both used childcare vouchers and cut down on other things.

We're back in the same position now as my DH's job is at risk and I've been part time for the past 10 months. Am also pregnant with DC2! So I wish I could go back to our smaller cheaper house!

Whatever happens though you will manage. You just need to start saving now and look at where you can cut back!

Childcare costs are pretty area-dependent. We pay near enough £500 a month for dd who is at nursery 2.5 days per week.

I earned more than DH prior to maternity leave but took 10 months off - my employer gave 90% pay for six weeks then half pay for another 12 weeks (this would have had to be repaid should I not have returned to work), then SMP. My original plan was to return full-time but once dd was here I felt she was too young for full-time childcare. As the lower earner, my DH requested part-time/flexible working but this was denied by his employer. I requested part-time work which was agreed and I now earn a few thousand less than DH. DH pays our mortgage and bills and I pay childcare and food/car costs.

We got through maternity leave with a similar amount of savings to yours, it is possible. Babies don't actually need a lot and you don't need to spend a lot on activities - your local Sure Start will offer a lot (ours charge £1 a session).

Our lifestyle now is absolutely different to pre-baby, but that's OK with us. I would buy lunch at work and we would have meals out/holidays regularly, but that doesn't happen now. I very rarely have new clothes! We used to love going to the cinema but we haven't been since the night I went into labour Food shopping wouldn't really have been a special consideration before but now we need to meal plan and be careful with what we spend. It isn't easy, but it's very possible.

Since you make more than dh why dont you keep working and he can look after the baby? I know that deciding who becomes a satp involves more than money but it c could work. And in any case if he becomes nasty during an argument on how to pay the bill tell him that he can stay at home to maximize earnings.

In terms of childcare costs I think you need to take a longer term view eg jf I
Go back to work, even if part-time, I have a better chance of earning, say, £40k by 2025. If you give up to look after kids you suffer jn the meantime and likely struggle to get to the same level again.
Anyway it will work itself out, but you are right to start budgeting now (and saving if you can). Babies don't cost very much btw, But they get very expensive as they grow and I suppose people adapt as and when. It sounds like our finances are not dissimilar to yours, though we are in the fortunate position of having a mortgage we can afford on one salary. We made sure of this when we bought it. However I know plenty who manage on less than we do and broadly speaking they manage, remember when you have children your physical ability to do posh meals out/nice holidays/buy nice clothes/get expensive highlights etc, massively reduces anyway so in the short term esp. When on mat leave, your outgoings will decrease anyway. Your h was very unreasonable to be annoyed with you about it though, he should be just as aware of the cost of bringing up baby/downfalls of mat leave (i.e. Smp) as you

Oh and if you can get family to help with childcare that helps A LOT. That's how some people do it. That said if your h is a teacher that puts you in a good position to start with. My kids are pre-school but I have no idea what to do with them in school hols when the time comes.

Having been in a similar position to you pre-DC, I would advise:

Don't delay having children - there's never an ideal time

Pay off your loans ASAP & save save save as much as you can afford to take more maternity leave. Get rid of 1 car if possible?

Consider your DH taking paternity leave tagged on the back of your mat leave (or time it so you go back just as the summer holidays start )

Both of you request pt/flexible working hours. If your DH earns less it makes sense for him to take on more childcare but you might find going back to work easier if you have a day off with baby too.

Childcare term time only will save you a fair bit of money as will using childcare vouchers.
I honestly wouldn't worry unnecessarily about it but do start making changes now that will make a massive difference when you expand your family.

We waited ten years until we were in a financial position to have children then started trying. Two years later we decided it wasn't going to happen and spent all our money on a house. Four months later I was pregnant. Panic set in, but we decided we'd have to manage somehow, could maybe extend the mortgage, etc. When I was six months pregnant I was made redundant. We sold my car, cut back on everything and managed somehow. It was a really stressful time, but 15 years later I have a lovely teenager and we all survived.

We've saved £9k and that's so I can take 6 months maternity leave- DH is giving up his job when baby is born so we're dropping onto one income. He'll be a SAHD as I earn more, but needs to stop work now as he works (exclusively) nights, couldn't get a day job and For Reasons he needs to be here at night with a baby. It's going to be tough, but hopefully it'll work out.

Advice is save, save as much as you can! Also echo everyone else- it'll work out, there's no perfect time to have a child.