Family of 3- How much to live on?

ironman1

Only a few months until our first baby comes on the scene. We are both excited and can't wait but I can't help but worry a bit how we will cope money wise...

We are both 24 and live in a Shared Ownership two bed flat in London. So we have to pay mortgage, rent and Service Charge. All in these three bills come to around £900 alone.

We are coping ok at the moment and since moving in two years ago still manage to overpay our mortgage each month and go on the odd holiday and out with friends. Neither of us mind staying in and know next year we won't have much spare cash to go out much.

I think my gf will get around £500pm for the first few months and then it gradually goes down. She will probably be out of work for quite a while as child care costs are obviously high.

My work as a builder is hit and miss at the moment and my take home pay has averaged about 1300pm the last year (self employed).

We are good with bills and know exactly how much food shopping will come to and we only spend about £120 a month on that. The only bill we can cut down on is Sky which is obviously a luxury although I'd like to keep it if possible.

We've signed up to all baby clubs and things like clothes and cots etc we are ok for (don't you just love family!).

Anyone on here in the same boat who can give us some advice and reassure me in any way?

Really looking forward to being a Dad and we are both glad we are going to be parents, just after some advice!

Thanks

Apricot

Does your gf only work part time at the moment? Statutory maternity pay is 90% of wage for the first six weeks and then £124ish per week for the following 33 weeks.
Is she planning to breastfeed? This is obviously cheaper than formula. There are always offers on nappies in the different supermarkets so shop around before you buy (maybe accumulate some in bigger sizes ready)

Maybe do an SOA using your gf's lowest pay http://www.makesenseofcards.com/soacalc.html and see exactly what outgoings you have - either post it here or on the DFW board and people may be able to suggest areas where you can cut down.

LabLover

Il be watching this thread as Im in similar circumstances.My OH is a joiner tho , similar pay , and our mortgage council tax and service charge and car insurance etc comes to around £800 , we will still need to pay for food shopping , gas and lecky(quarterly) and fuel. We are really sensible with food shopping but this will increase with nappies and milk (not sure about breastfeeding yet)
Have you put money aside? We will have an extra £100 a month in savings when Im on maternity pay to ease the stain and hopefully will have alittle pot of emergency money for OH's van (its pretty old and tempremental) and unexpected bills etc. We are not going to cancel sky because that will be our one luxury

balletshoes

You'll get tax credits and child benefit once the baby is born, at those earnings levels.

gonzo127

well the SOA is the place to start

foir the poster who pays quarterly for gas and elec, look at changing, get your annual figures and pop into comparison site, the cheapest tarrif are internet based and use direct debit, this can save you a lot (direct debit discount is usually 5%)

on top of doing a SOA look at the entitled to website which should give you a indication as to how much benifits etc you should get which should help with budgetting

other things to check out

mobile phone tarrifs - if you are on a contract phone them up and find out your usage - do you need as many mins/texts/internet if not ask to be downgraded - sometimes they will allow you to downgrade a tarrif with usualy savings of around £5 so if you have 2 thats £10 a month - however do not downgrade if it will end up costing you more because you use it a lot as you could end up worse off

insurance costs - do you have renewals coming up have you done the comparisons? do you actually need fully comp on car insurance? (if the cars only worth £500 is it worth paying out for fully comp when taking into account normal excess of between £200-300 Compulsary and volentery you would only get £200-300 if you wrote it off!)

fuel - do you actually NEED to drive to some places? can you drive more effciently?

ironman1

Posting on phone so haven't had a chance to check all replies but Car tax and insurance won't affect us as we sold the car.

My girlfriend works full time but in a private nursery so pay dropped to 900pm after tax. Not sure how tax benefits etc work. We still don't know how much maternity pay she'll get either. Her work aren't really bringing it up much. She only started there in April this year so I can understand why they aren't too happy with the pregnancy!

Apricot

Doesn't matter if she only started in April, she is still entitled to statutory maternity pay which are the figures I said above - that is the minimum she would get. Some companies do enhanced maternity pay so she may get more but at least you have the smp figures to work with. Your gf really needs to know what she is entitled to incase they try to do the dirty on her! You will also get child benefit which is about £20 per week, this should cover the cost of nappies and milk at least.

ironman1

A couple of updates, can't do the SOA just now as posting on phone-

Gas and Electric: Online tariff £18pm duel fuel

Water: 90-£100 quarterly bill

Food shopping, cleaning products: £120pm

Mobile Phone: £15 each for the of tariffs we are on. So £30 for both

Sky: £75 roughly per month. Expensive but that includes Internet, landline calls and also line rental

Apart from Sky I'm not sure what we can cut back on. I go to football once or twice a month but that is more or less stopping. We like the odd night out but spend alot of time in cooking and watching films etc.

Overall we pay out about £1170pm for joint bills (includes food shopping). Then another £100 or so on travel and phones. Out of our personal accounts.

So is it do-able? That works out nearly £1300pm which is more than likely what I'll take home a month! Obviously on top of that it's tax credits and mat pay but it looks scary on paper eh

gonzo127

it will be tight but do-able

i would say to look at Sky as £75 a month is a lot (even for the 3 as broadband is £7.50 max, lindline rental is £11.25 so you are paying £56 for tv and calls), so

would changing the the unlimited calls package for £5 a month actually save you money? (how much extra a month do you pay on calls charges?)
do you have full movies - do you actually use it? would something like lovefilm be cheaper
do you have full sports - do you use it? could you drop down to only half sport package?
which of the normal channels do you have - news do you use it music channels do you watch? etc?
do you have HD - is it needed as you still get BBC HD and ITV HD for free even without subscription? (i believe)
do you have multi-room? why not just get some coax cable and a magic eye, yes you cant watch different channels but you can still watch sky in the other room and change channel so if its a bedroom set that you put on when you go to bed does it matter if its the same as your main tv

just a few things to think on of course

ironman1

Thanks, yeah we do watch it all to be honest. She loves the films and I like watching football! We always seem to be on some sort of offer. Things like free HD, 25% off package and all that stuff. Obviously if push comes to shove we'll get rid.

jacqhale

When we were cutting back for maternity leave we cancelled sky and brought a recordable freeview box for £80 from Argos. Landline and broadband from Talktalk only about £23 a month so we were quids in. If you reallly want movies you can afford to rent or buy occasionally with the money you save. I'm not into sports so that doesn't really affect me. Just my thoughts!
You seem to be on a good mobile tarrif but do you use it that often? Would PAYG be cheaper?

We also stocked up on all sizes of nappies, freeze meals, bulk cook etc. Have switched gas and electric for a cheaper tarrif plus got £120 cashback through quidco.

I do mystery shopping, quidco, ebay, car boots etc etc and am (sometimes!) careful what I spend on my credit card - which is also a cashback credit card so I get about £70 a year just for putting all my spends on it.

We now have two and it is tight but I like the challenge of saving money so in a freaky way it's quite fun.

Good luck with the new arrival, it's a roller coaster but it's great!