Mat leave worries! Money... is this enough?

[owltrousers]

So we've finally had a chance to sit down and work out our finances and what we'll be living on once I'm on maternity leave. To be honest I was putting it off because things are tight as it is..

So after ALL outgoings including debts, rent, food shops and bills we'll have £279.00 left over between us a month. Does this sound do able?

I must admit I didn't actually expect it to be that much. We don't currently drive (I am learning at the moment) and was hoping to get a car before baby arrives, but worried the costs of running one might send us over the edge. Should I bother?

Another question, I haven't factored in any benefits or tax credits I might be eligible for, when does child benefit start?

Thanks!

Child benefit starts the Sunday after they are born (I believe) so that's an extra £80 a month!

No one can say if that is doable. You just have to live within your means. £359 a month is quite a lot though. A lot of people will be doing it for less. There are probably a lot of cheap/free days out and places you can go. Babies don't cost a lot really.

Well you won't be going out eating / drinking at the start, so if you were big socialisers before you'll see a saving there. Tax credits, you'll have to go online and check, no one can advise you really without knowing a lot more.

That's way more than we have after food and bills. I think it's totally fine.

Although I already have a car so that would be quite a big extra expense.

Although I already have a car so that would be quite a big extra expense.

I think it's doable.

Here is the tax credit calculator.

Definitely doable, if that is your disposable income.

That amount would be fine, but are you sure you've accounted for everything? How much will your monthly income be dropping and how much do you have left over now? Why were you surprised?

I think that'd be fine. Keep in mind that your bills might change. We ran the washing machine a lot more and had the heating on more so those bills went up.
But then no going out socialising much, no commuting expenses.

@HipsterRacoon

At the moment we have £700 disposable income between us, but it never feels like that much! I only get stat maternity pay from my job so the reduction is almost half my wages.

Ours will be about 130 per month and it's doable... So long as the bills are paid, and you have food etc x

OK, so you'll need to cut around £450pm from your current spending, have you identified how you'll do that?

If that's after food then that's definitely doable.

You may well be eligible for tax credits. It depends on your household income but you should certainly check.

Little babies are not expensive as such, but there is a whole world of expensive equipment that various people will tell you MUST have. Try and stay realistic and buy second hand and you'll be fine.

It is doable if you recognise that things will be tight for a while. I am just going back to work now after 6 month stat pay. We didn't have time to prepare and spread out cost before baby but did get some into savings and are now running out. I am normally the highest earner so our income took a hit.

Just remember that your bills will change. Add nappies and formula (if bottle feeding) to your outgoings although child benefit will cover that.

Regarding a car. I would say it depends on how accessible where you live is. I would sacrifice disposable income for my car every day. Being home on mat leave without being able to get about would have sent me mad.

@HipsterRacoon

OK, so you'll need to cut around £450pm from your current spending, have you identified how you'll do that?

Not too sure what you mean? a few things will drop once I go on mat leave such as travel to work (£60) dog walking fees (£60) and my phone contract is up in August so I'm going to go pay as you go.

We don't need to cut £450 from spending, we will just have less disposable income surely?

We don't need to cut £450 from spending, we will just have less disposable income surely?

But you currently spend £700 disposable income, so you will need to cut from that spending. If you don't adjust you will find that you get through all of your disposable income in the first week and have no money for anything but essentials the rest of the month.

Try putting that £450 difference aside in a savings account now, to see how you manage without it. that way you'll get a bit of savings built up in case of emergencies while you are on mat leave as well.

Oh i see now! (Maths is not my strong point!) Yes, we are planning to start saving straight away :)

If your tax is worked out on a cumulative basis then you should get a bit of money back each month.

When we were expecting our first, we put the £500 that used to just disappear away into savings so we could get used to having less money gradually.

We did this for 6 months, had a nice pit to buy baby bits / go towards double glazing, and ended up not noticing it gone by the time baby came.

When I was on mat leave, we decide to do the same with my mat pay - put most of it away, just to see if we could manage totally on 1 wage, and to our surprise, we could. Haven't looked back since, DS is 2 1/2 and we have our second on the way. I've been a SAHM ever since!

It's amazing how you adjust to having no money if you have time to make that adjustment rather than being thrown into the deep end.

Yes agreed with yetanother - try living on your DH's salary + mat leave now and putting the rest into savings. We've been doing that since we started trying for a baby which hasn't been easy but has at least proven that we can do it - and now we have lots of savings for baby essentials! It's a win-win. :)