Planning Children

mstopham

I am not sure if this is the right place to post this, I am after advice on budgeting for having children.

A quick senario is for me to be debt free (currently on target as per the sig).
At the point the BH and I are planning to purchase a property together.

What we would like to happen is her not have to work and raise 2 children, the second being in nursery by the time she returns to work part time or even better I am earning more so she doesn't have to.

The budget is as follows (this is rough and guestimated but with investigation into several sources)

My income (take home) £1400
Expected mortgage cost £1000
Monthly bills (gas/elec/water/phone/tv/council tax/insurances) £400

So I am paying the mortgage and all fixed bills with no surplus/deficit.

Plan is for the BH to work for a year have 1st wee one, 2nd one 3 years later.

This would give her a total of £42,000 income to cover all other costs for 6 years.

Travel costs are expected to be relatively fixed at about £100 a month

£7200

I am anticipating a monthly budget something like this:

Year 1 £200 £2400 (this is around the mark we are living on taking entertainment out of the equation)
Year 2 £430 (First Child) £5160
Year 3 £430 £5160
Year 4 £430 £5160
Year 5 £650 (Second Child) £7800
Year 6 £650 £7800
Total £33480

This is a kind of worst case budget, wanting feedback to see if this would be possible, obviously lots of great people on here that have kids and do this kind of budgeting. (And those that don't that are just clever!)

I would honestly anticipate my income to have gone up and us have several £000 in savings before taking the plunge on this.

Any input apprecitated!

~Beanie~

Apologies if I am being a bit dense but I don't really understand your budget.

mstopham wrote: »

Plan is for the BH to work for a year have 1st wee one, 2nd one 3 years later.

This would give her a total of £42,000 income to cover all other costs for 6 years.

Where is the £42,000 coming from or am I missing something?

I think you are being a bit optimistic paying all bills and unforseen expenses with £400 per month.

gil13

I think an important thing with budgets is to allow for inflation; food, fuel, c.tax etc, it's is not clear from your post if you have built in this cover. Running a tight budget is one thing but there always needs to be the contingency.. We found with our first that we managed with savings, the SMP/OMP the other half got paid and also the fact that we got a really cheap fix rate mortgage. The OH then went back to work p/time and we have now just begun a 10 year fix mortgage, simply because then we know the budget and can work around it, and with another baby on the way all being well... We are working toward my wife stopping work altogether next summer, one toddler is one thing but two..full time job in itself ain't it !? (or so i'm told)

So how are you fixed for the mortgage, would it be worth considering a longer term fix rate and work from there as the mortgage is the big one to consider first.

I think if you can get a good amount of savings behind you both it certainly gives you that bit more confidence to survive on the one wage for a few years, you could even take a monthly interest from it to supplement the income and keep the capital retained. Obviously longer term inflation would then erode the spending power of that capital but for a few years and new families, babies and the like you have to make your money work the best you can. Good luck.

mstopham

~Beanie~ wrote: »

Apologies if I am being a bit dense but I don't really understand your budget.



Where is the £42,000 coming from or am I missing something?

I think you are being a bit optimistic paying all bills and unforseen expenses with £400 per month.

This will be her total income for working then maternity pay. That is 18 months and a bit wages.

The £400 a month is for all fixed expenses excluding mortgage. I currently pay £140 a month for these with my housemate (£280 total). I have worked them out to be around £300-350 a month for the larger property and said it as £400 to match my current income and allow for inflation.

mstopham

gil13 wrote: »

I think an important thing with budgets is to allow for inflation; food, fuel, c.tax etc, it's is not clear from your post if you have built in this cover..

I have in the fixed costs budget as explained in my post above. Food and Fuel (Diesel) I have built in somewhat in the yearly budget from then on.

So how are you fixed for the mortgage, would it be worth considering a longer term fix rate and work from there as the mortgage is the big one to consider first.

I am working this budget based on a 5 year fixed mortgage. Obviously it will need refining nearer the time based on the economic climate etc and we will delay trying until we are happy we have sufficient funds!

The big unknown for me is the financial cost of the children, is £220 - £250 a month a resonable budget per child? (There would be very little in the way of childcare costs, main point of this planning is so my BH can be there for the children!)

MrsBartolozzi

Sorry as bit off topic, but what does BH mean please? :0)

You need to also factor in things like child benefit (everybody gets this)and tax credits which you are likely to get on your income of £1400 per month. (at the very least £10 odd a week - not much granted, but buys nappies etc.)

MrsB.

vij

bh - better half

mstopham

MrsBartolozzi wrote: »

Sorry as bit off topic, but what does BH mean please? :0)

BH = Better Half!

You need to also factor in things like child benefit (everybody gets this)and tax credits which you are likely to get on your income of £1400 per month. (at the very least £10 odd a week - not much granted, but buys nappies etc.)

MrsB.

I will near that in mind. I am trying to get to a "minimum" figure for bringing a child in the world and then another! Then getting them to school and nursery respectively before my BH has to return to work (or I am earning enough)

Does anyone think £220 a month is reasonable as this figure (this is all for the child)? Or is it likely to be £150 or £500?

gil13

I would say once initial outlay is made cot, nursery stuff and the like then the £220 pm per child is way over the top, but depends what you are including in this I guess. For the first child you'll get £75 pm child benefit and perhaps another £40 odd quid tax credit. Breast feeding is cheap but not always possible and formula can add up to quite a bit. I'm not really sure where you are getting these big figures but if you can afford for your BH to stay at home then that to my mind is a great place to be. When the baby is onto solids, make your own food up, freeze portions avoid the spend on baby food jars, and when they are a bit bigger often you can up a pot meal for you two and then whizz up some for the little un'. All the best.

mstopham

gil13 wrote: »

I would say once initial outlay is made cot, nursery stuff and the like then the £220 pm per child is way over the top, but depends what you are including in this I guess. For the first child you'll get £75 pm child benefit and perhaps another £40 odd quid tax credit. Breast feeding is cheap but not always possible and formula can add up to quite a bit. I'm not really sure where you are getting these big figures but if you can afford for your BH to stay at home then that to my mind is a great place to be. When the baby is onto solids, make your own food up, freeze portions avoid the spend on baby food jars, and when they are a bit bigger often you can up a pot meal for you two and then whizz up some for the little un'. All the best.

Thanks for the advice. That sounds good then! I had got the figures by looking at the recent report on cost to bring up a child and trying to work out how much from there. Breast feeding will be done if possible and the other options will certainly be done if my partner is at home.