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

Just a thought about the car - a lot of people have suggested dropping to one car, and it would be a great way to save a lot of money. However, do think through where you live, your access to public transport, where your friends live, whether it'll be essential for commuting when you go back to work etc (public transport to get to work may be feasible now, but will it be feasible when you have to stop at a nursery/childminder on the way?). Selling one now and then rebuying in a year because you change your mind could prove more expensive in the long run, and being stuck at home alone with a tiny baby and no feasible way to go out/visit friends is very lonely.

Having said that, monthly payments on two cars must be a big financial hit. If selling one and buying a cheaper runaround car would mean that you could own it and not be making monthly payments on it, then that is definitely worth considering.

It's not your fault your dh didn't know this sooner - he could have done the research/thought it through himself. It's BOTH your responsibilities how to go forward from here.

Is there any way you can get rid of one of your cars and clear that debt? I think unless there is absolutely no other way of getting to work then two cars are a luxury. Even if it only takes you a couple of months to conceive you could save that 600 for a year and have a significant sum to help you through maternity. Would your company allow you to compress hours or would it work out better for your DH to drop to 3/4 days? It's worth exploring all your options. I would also say from experience that you never know how things are going to go when ttc so aside from saving and getting rid of some debts I would try not to worry too far in advance.

X-post with knitting!

All I will add is don't diss credit cards! I get around £200 cash back on mine. I just use it sensibly.
Check the APR on your loans and move them if you can get cheaper elsewhere (including 0% credit cards).
WFH means exactly that. You can't work and look after a baby at the same time. You'll get 15 hours of pre-school education when baby is 3, and even if you are not eligible for the childcare vouchers now, the new Government scheme will pay 20% of the cost, up to £2k a year.
Congratulations on your new house and try to relax and enjoy the first weekend in your new home. Moving home is stressful. Get a bottle of bubbly to share with DH.

I'm 34w pregnant and was in a similar position to you- during my pregnancy I have been made redundant, then self employed and now have perm employment but too late for SMP so I'll only be getting Mat Allowance which is slightly less than SMP.

The first thing I did was budget for during the pregnancy, for mat leave and for afterwards. You're not pregnant yet, so you have more time to get this in place before you're even pregnant.
Work out what you'll need during mat leave to make up any shortfall to cover your expenses and what you can save until then. Don't forget you'll spend less on some ways on ML, eg less petrol, less work related spending (coffees, lunches, clothing etc), less socialising as you'll have a baby etc. Obviously your food shopping may go up with nappies etc.
Look at what you can cut back further on now eg where you are spending money frivolously. I've found since being pregnant I've cut back naturally on clothes shopping and socialising expenses as a result of being pregnant and also made some conscious savings like cutting down on eating out with DH.
When you start to budget and you've had a reasonable disposable income before you suddenly realise how much you fritter because you don't track it carefully.

Also look at childcare for afterwards and factor that in for your post ML budget. As your DH is a teacher could he do school holidays? That would cut down your costs if you can find childcare that fits with that and some childminders etc do term time only. Find out average childcare costs in your area. Also look at flexible working you might be able to do, eg condensed hours. As PP have said use childcare vouchers if you have access to them as you save tax on them.

I changed job for something I thought would have better long term prospects so I was ok with halving my salary even though we were moving house and doubling our mortgage. Then I got pregnant.

Nursery feeds back then (12 years ago) were approx £650 per month. We had nothing left after bills and food for about 2 years. I won't lie to you, it was grim. There were times we thought we'd lose the house, but no matter what else we missed, we made sure the mortgage was paid.

Slowly, things improved. Pay rises, DH's work introducing childcare vouchers, DC qualifying for the 15hrs free childcare (which reduces your nursery bills). Promotions. DC2 came along and nearly knocked us back to square one. But we survived.

I was fairly pragmatic and viewed them as our lean years. I knew our financial situation would only improve. It was horrid at times and I'd feel sick if the car started making a noise or the boiler was temperamental.

But now, we've two children, we're on the home stretch mortgage wise, we've both progresses in our careers and those hard times are behind us. They won't last forever for you either.

Thank you all, I really appreciate your feedback and I do feel a little better now.

Sadly we're not in a position to pay off the car HP agreements and Wedding loan (or get rid of 1 car) so we'll just need to really tighten our belts in other areas.

I think I can take a few months off based on what we should be able to save and my savings combined, and then we'll cross the childcare bridge when we come to it.

Thanks again, hopefully I'll get some sleep tonight now ;-)

L x

^^ this.
I have so many friends who have up work when they had their children because the childcare costs made it "not worth it".
Fast forward 5/6 years and they are now really struggling to get back into work.
However, if they had hung on and ridden out the lean years they would be much better off now.

I'm not saying it works for everyone but it's certainly what I intend to do.

It's very scary but you do manage. I went pt after dd1 but then 3 years on had baby number 2 (planned so I'd have a year mat leave then dd1 would start school and dc 2 would be at nursery so just one in childcare). Well that all went wrong when baby number 2 was twins. Love them and wouldn't change a thing but we have had to survive on dh's salary as nursery was more than I earned for 2 dc and we don't get any tax credits. Dh's company also stopped childcare vouchers. I managed to do some work free lance and now dc are getting 15 hours free childcare I have a new job. If you looked at finances you'd never have a baby!
Can you do a year of interest only payments on your mortgage? We had that option but have never had to use it. Nice to know it's there. Maybe move into the house and adjust to living there. Try to put disposable income into a savings account then in 6 months time you'll have an extra 3k and can start trying for a baby still saving while pg.

You could post you out goings on the mumsnet or netmyms money saving forums and people will advice his you can save money\cut back.
No one can really afford children these days but we still have them fortunately!

It's a really good point re lean years. Ours was when DC2 was 6mths to three. We had 2 sets nursery fees at worst point. And moved house. We cut out everything we could and gritted our teeth!! ... Costs dropped as DC1 got 15 free hours then went to school and now DC2 gets 15 free hours (worth about 200 a month).

Last time we took a payment holiday on the mortgage for 3 months to free up cash whilst I was on mat leave. This time, if we need to, it'll have to be going onto interest only for a few months as the new mortgage company has different rules.

Save, save, save!

Babies themselves aren't that expensive until they start walking & you'll be amazed at what people give you.

Going to work in itself is expensive (travel, food, clothes)

When you return you can look at compressed hours if available. It can help you maximise income versus childcare costs.

You'll stop going out & that costs money!

See if you can have a mortgage holiday or just pay interest when on mat leave.

Mat leave is surprisingly cheap.

Sell a car?

We have had 1 week in Cornwall and 1 week in The Lakes in the last 6 years, since the dc came along. We have no one to babysit so we never go out !