Planning for Children

Zoe1

Hi, I'm not pregnant, and am not likely to be having found out the statutory maternity pay!! I just dont know how people can afford children.

I have to admit to not being responsible with savings - but today I have made the first step towards a happier financial future by opening a savings account. My real dilema is on how to plan financially for kids.

In an ideal world, do couples budget before planning for a child? How do they do this? Should I be saving for a baby, and should my savings equate to what I would be earning if I wasn't on maternity? Maybe that's just being greedy....

Please advise!
thank you....
Z

Al_Mac

What was it I heard, 52k up to age 5!.

Tricky one, swmbo and I, when we got married bought a house, based on one salary. As such when the time came when we wanted little uns, we stopped spending all the extra and put it away for the leaner times ahead.

I'd say, start putting it away.

Lillibet_2

I'm almost 6 months pregnant & it took me 2 years of planning & juggling before we felt financially secure enough to try for a baby (good thing we planned in advance, I fell straight away!).

It all depends on your personal circumstances & needs. For me it is important that I give up work & bring up my child myself, at least for the first few years, but my husbands salary is not big enough for us to live on. In the end I drew up an estimated post baby budget & we started living on that. We save the balance of our salaries to a specific bank account & will use this money to supplement my husbands salary to see us through the next 3 years. We already have savings for other non-baby emergencies etc.

Is your house big enough to accomodate a family or will you need to move either before or in the year or 2 after it is born? Is you car suitable and are you accostomed to upgrading it regualry or are you happy to stick with the same/existing model for a few years? Do you have any debt other than a mortgage? Persoanlly I would want all these things taken care of, or at least the money available to deal with them when the time comes or before the need arises or you are going to end up going backwards.

I would think that if you plan to go back to work post baby you need to draw up a realisitc budget for your current living expense & then an estimated budget for post baby : remember some things, like entertaiment & going out, will go down as well as some things going up. Don't forget to inculde child care costs & factor in child allowance & family tax credit etc. Can your salaries meet the projected budget? If so, all you need to do is build up enough in savings to meet the difference between maternity pay & your budget plus a bit of a cushion (as much as possible ideally) plus a fund to pay for all the baby equirpment (can cost thousands if you let it, with a bit of planning & some canny shopping & very generous friends I'm spending less than £400!). If not, I'm afraid the hard bottom line is that you need to think about increasing your income or decreasing your outgoings.

Feel free to PM me if you like, I know what you are going through! I can't necessarily say the right way forward for you but I know what has worked for me.

Good luck

stardoman

We didn't save up or plan before I fell pregnant with our first child. During my pg we managed to save £2K. Once I started maternity leave we remortgaged the house extending the period to 30 years. We also took out enough to pay off a loan which was costing £220 a month. The mortgage payments, partly due to the extended term and partly due to remortgaging onto a lower, 5 year fixed rate ended up £100 less than we had already been paying. So this one action saved us £320 a month.

After 5 years our fixed rate came to an end and we remortgaged again, this time over just 10 years. I'm now working part time and my husband now earns more than before, so we are now in a position to pay the mortgage off faster.

I should mention that I worked in a similar role to my husband and earnt virtually the same as him. So when I decided to stay at home with the baby we lost half our income. Maternity pay is actually much higher now and lasts for longer than it did 7 years ago when our first child was born.

Maybe with a bit of creativity you could organise your current finances differently to give you the extra you need when a new baby comes along.

I found that shopping with a baby was a nightmare and consequently went shopping far less once he was born. Also, socialising was much less frequent as we had to get baby sitters and I only trusted very close family to look after him. And once I decided not to return to work I could wear much cheaper casual clothes rather than the expensive suits I'd worn previously.

Its a difficult one, because babies change the way you live your life, whether you expect them to or not. And this in turn can bring about financial savings/changes.

Mandy.

ceegee

Well, if a baby comes along unexpectedly, then you are really thrown in at the deep end financially! The cost of bringing up baby, along with the drop in income can be staggering. Even if you bring the baby up on a tight budget, a baby is still a very expensive little person!

Although it can be hard, not just financially, but practically and emotionally too, the love that the baby brings will make any sacrifices worthwhile! What a baby really needs is love, food, love, clothes, love, somewhere warm to sleep, love and cuddles.The good thing is that the love and cuddles are free!

I'm beginning to get emotional.........

honey

Hi Zoe,

You've made a great first step by opening the savings account, I'd suggest doing the MSE budget, save what you can afford but don't worry yourself silly about it!

We thought we would never cope with only one wage when our first child was born but it's amazing how you adjust. Eight years later and now with two children we still only have one wage - we're happy, not going without and even have a bit of money in the bank!

Totally agree with ceegee it's all about the love and the cuddles!! :T

chugalug

You can never 'afford' children, you will always be poor financially but rich in love!

carpool72

we didn't save before trying for a baby because we never seemed to have any extra! (If only I knew then what I know now...) I did manage to save about £1200 when I was pg which paid the basics along with DH's wages while I was on unpaid AML. I do wish I'd managed to save earlier as it would have avoided a bit of angst, but you know, we managed. Using the moneysaving tips means we don't feel uncomfortably off and I'd definitely rather have my little ray of sunshine than spare cash to squander on big nights out and holidays. btw I worked out the other day that having gone back PT I'm only slightly better off now after nursery fees than I was on maternity pay. I was terrifed about having to manage on that seemingly small amount yet it's just not an issue now.

I'd say, whatever you save now will make life a bit easier later, but don't make a big issue of it.

xx:beer:

Spendless

Me and husband both owned our own place when we met, and we only sold one of them shortly before arrival of our eldest, so we each paid our own mortgages and bills from our own salaries.

This meant we never got used to a 2 income lifestyle.I am so pleased we never did as we can now afford for me not to work. I took a part-time job when eldest was a few months old but haven't worked since having youngest one.

I'd suggest looking at areas where you can cut down to see if you can afford to live on one income. Would you be able to look for part-time work if you were to have a child? (i used to work evenings mon-fri 5pm-8pm), would any family members help with childcare? Have you hd a play about with figures using the 'entitledto' site, to see what you would get with tax credits?

Good luck
xx

Zoe1

Hi Lillibet, thank you so much for taking the time to reply to my message, you have given me a lot of food for thought. Thankfully out house and car won't need to be changed, so that's one less expense. Like you, I should imagine it will take us a couple of years to save enough so that we are comfortable and I'm not worrying about the lack of salary. I will speak to one of my friends tonight about the kind of expenses she and her husband have incurred post baby - these conversations are slightly hard though as I don't want to appear nosy, but also, not having a baby. I have no idea how much things cost and how to budget for them!
Good luck with the rest of your pregnancy, and thanks again.
Z x

Woby_Tide

we started saving once my wife was preganant, we had a couple of funds, one to basically buy the equipment/clothes/nursery stuff etc. once we got closer to the date(as it stands we've still got a fair bit of this fund left having saved money on what we were buying and not buying items in the end so it pays for his clothes/toys other items as we go along), the other savings we made were to cover us for the part of my wifes maternity leave where she dropped down to statuatory levels, as its stands not even sure we are using it taht much. We sat down and wrote down all outgoings etc. (have a look at the debt free and money boards for ideas on this sort of thing) and worked out what money we had going where and how much coming in once she is back at work and we have childcare etc. Luckily we've been able to exclude things like tax credits and still be in credit so any credits we do get are an added bonus. It does look scary on paper but am glad we did it and worked out potential problem areas or where we may have ended up living beyond our means. Got to say after they arrive sitting down and working iit out looks a torrid task, glad we had it mostly sorted and can just enjoy the ride for now!