Working and childcare costs - How do you do it?

[JuliDav]

Hey everyone!

I posted this on the money matters-board, but thought perhaps I could get more responses here...

I'm currently pregnant with my first baby and I'm already petrified and confused about what will happen after my maternity leave when I'd be due to go back to work and I was hoping someone could shed some light on how this works.

Just to give you some specific background knowledge, I live in London with DH and we are both working full-time. My salary is £1500 and DH earns £1300 a month. With rent and all the other bills paid, we currently have about £1000 left in a month for living including food etc. Due to some rough times recently, we do not have any savings. So far I've done some calculations with entitledto.com and see that during my maternity leave, we would be getting about £1000 a month in various benefits(including statutory maternity pay, child tax credits, housing benefit and child benefit). In addition, I intend to work part-time from home during my maternity leave and this would bring an additional £200/month.

What I'm worried about is what happens after my maternity leave when I intend to go back to work full-time. I haven't been able to really find out how much support we could get for childcare and how much it actually costs. I've heard that in London you can easily spend c. £800-£1000 on childcare per month! Is this really the case and how on earth can people afford it?! In our case, all our money would go on childcare and this would leave us about £200/month for food etc.

I'm not sure if people would be happy posting details about their financial situation on here, but any information would be much appreciated. Thanks in advance!

Sounds a bit like the situation I was facing. It can be more lucrative to work part-time but at evenings and weekends, so no child care to pay. I left my office job and went to do care work. Took home about £600 per month. Just while my dd was a baby.

It gets a bit easier once they get funding for nursery/pre-school (the term after their third birthday).

And again, slightly easier once they start school - although even then, before and after school care is £15 per day here - not even thinking about holiday cover.

Working full-time when most of your money will go to childcare is probably not the most practical option.

Even if you can work it out financially, it's really difficult when your dc is ill or the nursery/school is closed due to snow, or childminder ill, or childminder's dcs ill. They catch lots of bugs, particularly in the first term of nursery until they build up some immunity.

Whereas if you work evenings/weekends and you have a partner, your dc being ill doesn't stop you getting to work.

It is a bit of a pain socially. We didn't have a choice really though. I think it's different if you have a mum or mil who wants to help out though.

JuliDav - I think you will find that you will be able to cope once the time comes, so many people have. I'm on maternity leave and had my first child and had similar concerns and really thought about how we would cope i.e length of time on maternity, childcare on going back to work. So far I've made a lot of cut backs on our spending in the house:

• I've reduced trips out (with me it meant spending) - instead say with my son I go to free playgroups from the childrens centre
• I've planned meals better and decreased wastage - I started cooking food in bulk, portioning and freezing. This meant meals go further
• we hardly eat out/takeaway - its a treat max once a month
• vegetables/fruits are sometimes cheaper at the market
• whenever there's a deal at tesco/asda on baby wipes/nappies/milk I buy in bulk - I currently have enough wipes to see us until DS is even 2. Do join the babygroups e.g boots,mothercare, asda, tesco - you get offers in the post and they tell you when there are baby events
• when you start to wean your little one - cooking the food yourself rather than buying the jars is cheaper + you know what's gone in it
• you can cut/reduce on non essentials e.g reduce sky channels if you have, change gas suppliers
• consider buying some baby items second hand - may not appeal to everybody but I got a chicco highchair for £30 as good as new and I attend many of the NCT sales where I get good next/gap items for as little as £2. I found with new clothes for my DS only wore them maybe 4 times before they did not fit anymore. Also if you can borrow a moses basket/stand go for it. I bought mine for £90 but lended to friend for free. My son only used this for 2/3 months at most before he outgrew it.

About income, there is

• childbenefit (About £80/month)
• tax credits/working tax credits (not sure as I don't get but you may be entitled to some - check entitledto.co.uk website)
• child tax vouchers - you may get up to £55/week tax free to help with the cost of nursery/childminder i.e £110/week for both of you if your employer participates but you need to check which is more beneficial i.e tax credits or the vouchers. I think there's a link on hmrc website. Hopefully someone will provide soon
• childminders tend to be more cheaper than nursery. In my area (Romford) I've found a good childminder charging £30/day compared with top nursery in the area charging £48/day
• if you can try to vary your work hours so that you don't have to use nursery/childminder for that long

Hope this helps

My best tip is to start saving now so you're both squirrelling away cash for the time ahead and getting yourselves used to living on one salary. It's good practice. You will manage - you have to so you do. IME making ends meet if you have more than one child needing childcare that's the really tough bit. Streamline, save, think laterally.

compressed hours?
when we lived in London, DH worked 4 long days, for 5 days' pay. we therefore only needed 2 days paid childcare for the three days i worked. maybe there's scope for one of you to work from home at the weekend when the other is taking care of the dc?

I'm afraid to say that childcare in the SE does easily cost £1000 a month...

So tbh tips about budgeting, etc won't really help matters if you have nothing left over after paying for it! Though I have to say your outgoings sound high (1800 a months for rent & utilities?)

You will probably be entitled to something in the form of child tax credits/working tax credits. If you have a look around on the internet you should be able to find a site that will work it out for you if you put both your salaries in.

And it doesn't get much better when they start school - breakfast club & after school club for two children costs me over £600 a month. Holiday clubs are £250-300 a week for two...

The childcare vouchers nikosmum mentioned are not free - you generally take vouchers instead of part of your salary. The saving comes from the fact that you don't pay tax on that part. It helps a bit but is not a lot if you are a basic rate taxpayer. I think it can affect you tax credits too so might not be an option for you...

You are very unlikely to get all those benefits while on maternity leave as you are still classed as employed. You won't get housing benefit. You need to be saving now to cover your shortfall.

As far as going back to work, I work back to back with dh so one of us is always home with the dc.

You intend on working whilst on maternity leave?? You are only allowed to do a certain amount of keeping in touch days whilst on maternity leave. If you work part-time then you will not be considered on maternity leave.

Yes London is an expensive place particularly for childcare. As mentioned by eons26 your best bet is to get an evening and weekend job so that you do not have to pay out childcare costs.

I am a SAHM and we had to make some serious sacrifices because of it. I wish I could work in an evening or weekend job to bump up the household income but DH works away alot, often works 15 hour days etc and we have no family here so it is just not possible.

You can also do what alot of other local moms do and become a childminder to add to the earning pot, not have childcare expenses and work within family hours.

Hey everyone and many thanks for your replies!

Nikosmum, thanks for taking the time to share with me some money-saving tips and how much the maximums are for some benefits and childcare vouchers etc. My employer does offer childcare vouchers, but I think it's like someone said that I will have to compare them against tax credits to see, if they would save us money. Not sure if DH gets them..

Decorhate, yeah I know our outgoings are high; £1150 for rent and the rest is utilities, transport and all other bills..

ruddynorah, I thought you can still get housing benefit whilst on maternity leave, if you are on low income..? But it is true that we need to be saving, which is why both of us currently work 70-80 hours/week :/..

BecauseItoldYouSo, actually if you have two employers, you are allowed to work for one of them during maternity leave and receive SMP from the other in certain circumstances. In my case my main employer pays my SMP but I am not qualified for SMP from my employer B, because my hours are too short and my salary too little + I haven't worked for them long enough. The key is, you have to have been employed by the two employers before the 15th week of pregnancy before your due date..

but you aren't on low income. this is your first dc and your dh earns £1300 a month. you'll get child benefit of £20 a week and child tax credits of about £40 a month. 'low' income is more like under £15k. your dh must be on over £20k, nearer £24k, so you'll only get minimum credits, no working tax credits, just the basic child tax credits.

or do you mean he earns £1300 before tax comes off?

If it helps, I think you can do self-employed work whilst you are on maternity leave, so if there is any freelance you can do or even catalogue work (Avon or Betterware are supposed to be okay according to the MSE forums, but I don't know), it might be worth a shot?

Childcare is £60 a day where I am - shocking!

ruddynorah, so they don't look at your rent costs at all? Or will they just tell you to move somewhere where it's cheaper? I don't think in my area you can find much for a cheaper price:/.. No DH gets c. £1300 after tax.

FortunateHamster, thanks for the suggestion about the self-employed work. I think for the moment I'll stick to the part-time role, but I will definitely look into that as well.. Yeah I heard that ft nursery places in my area are around £60/day as well ...