Baby on the way, could do with some advice

MrsSave

The soa showing the basic maternity and your basic pay looks pretty good. You have money left over each month so you can definitely do this. You are still missing your car insurance from it, and I notice that Christmas/birthday is 0. Surely that's not realistic? As with the car insurance, I'd recommend putting money away each month to cover gifts and any extras associated with birthday/Christmas, such as any extra food/drink you buy, Christmas trips out (maybe you won't do as much this year, but put a little aside each month ready for next year), birthday party, etc.

If you can live off this soa now, you can blast the debt in time for when the baby arrives and have money put aside (especially for the last 3 months of zero pay).

bobcat2

It looks from you SOA that you can clear all debts in less than 2 months. Your salary alone is more than sufficient for you to both live on comfortably and build up some savings without taking into account any maternity pay.
when my son was born I was earning £6.30 an hour, his mum £0 and had far more debts after just finishing university and we were fine. I'm pretty sure you're gonna be ok!!:)

bobcat2

I don't understand this, it's says you have over £3k left a month after everything is paid, just pay the credit card off surely? Budget effectively and you will have tons of spare cash left over.
Your mortgage interest rate looks really high, even with a high LTV. I would look to overpay your moretgage so when you come to the end of your current deal you can get a much better rate with a lower LTV.

Happier_Me

I think what you're feeling is quite natural. You are about to become a family of 3 with the responsibility of a baby and a reduced income at least for the first year. Your attitude to money is therefore changing. Pre- kids we lived in the moment, we still saved but wasted god knows how much each month on rubbish. We could have gone a abroad each month with our spare cash!

Fast forward 12 years and two kids and several years of reduced income we have come out the other side and we can now afford a holiday each month again with our spare cash....if we reorganised our finances! We choose instead to commit to paying around £2,400 in mortgage and debt repayments so we don't waste our money. We still have a good life but kids really do put things into perspective.

If I were in your position I would start living on your 'maternity' budget NOW. This will clear your debt and hopefully save a buffer. It will be a shock to your system but you can still live well living a financially cheaper life. You may well look back in six months and kick yourselves for all the waste.

One important thing to consider which I haven't seen mentioned (apologies if it has), is you budget when your partner goes back to work. You will be fine regardless because you have a good surplus but you do need to consider childcare arrangements and part time working. My take home dropped from £2,200 when I had my first to around £900 max because of part time working and child care costs.

If you're feeling anxious about the future with a drop in your own salary the best way to counter this is to budget to clear debts and save, save , save a buffer.

Debt_is_terrifying

I think I probably haven't done the SOA as extensively as i should have done. When I think about essentials coming in and going out there is a huge surplus but we seem to waste so much money.

I'm going to stop smoking, at the end of the day today I am going to try going "cold turkey" and see how that works. This week we have also decided to stop eating out as often, stop with the odd takeaway here and there and to actually eat the food that we have bought.

To save money I am going to;

Stop smoking
Stop eating out and takeaways excessively. Maybe one meal out per week.
Take food to work
Shop at Lidl (a new one has just opened where we live and having been in once I can't see any reason for shopping at sainsburys anymore)

We are in a very fortunate position when my partner returns to work my mum is going to retire, my partner's mother also only works part time so we should be pretty set for childcare without having the extortionate outlay I keep hearing about.

MrsSave

Good luck with stopping smoking.

Your plan sounds good. You're very lucky with the childcare. I think during maternity leave and afterwards you'll do perfectly well as long as you stick to your plan.

nkkingston

If you feel like you don't have as much money left at the end of the month as the SOA suggests, go through the last three month's spending and figure out where it's going. It was a shock to me when I realised how much I spend on food a month - we have minimal food wastage (I even boil peelings for vegetable stock) and I bring a pack up to work several days a week, but the cold hard numbers made me realise that we're making poor choices in terms of brands and when i do eat lunch out I spend silly amounts.

I'd suggest setting up a separate account for things that are paid annually, work out the various monthly totals and set up a standing order for that amount (with a bit of a buffer in case insurance etc goes up). Then whenever an annual bill rolls around you know you've got the money already stashed away, and you won't need the credit cards. Keep separate monthly bills, annual bills and saving accounts, and then you know the money left in your current account is safe to spend.

Happier_Me

You are very fortunate with the childcare. It would be worth firming up your plans with your parents as soon as possible though to avoid any surprises/changes of mind. A baby is hard work and a toddler even harder because they move more and start to talk back! Not every grandparent is cut out for it!

Will you/your partner be part or full time? You can afford some reduction in hours as long as you reign in the spending. Although it's more than feasible for you both to work full time with a baby, some time at home, if spent wisely, could benefit you all as a family. Getting some cleaning, meal planning, batch cooking, shopping, etc done will create more quality time at the weekend. Full time work can actually be financially counter productive - more takeaways because you're tired, less time to plan and cut costs/shop around for bargains etc. We never really had anything more to show for the extra money when I've worked full-time in the past because much of it just got wasted on ...well, your guess is as good as mine!

I would suggest a spending diary too to start to track where your money is going, coffees, lunches, takeaways, a nip to the shops, little wants here and there really do add up. You need to have a life but you will sleep sounder at night with money in savings and your debts gone...

Debt_is_terrifying

I've looked through my expenditure over the last month and from what I can work out I've spent;

£230 on meals out
Approx £200 on cigarettes
£60 on food at work
£130 on petrol
£20 cinema
£250 on hotel and doing things in York
£130 clothes
£60 on other trips to supermarkets
£2000 paying off credit card debt

This month I was paid well but I'm back in my overdraft. When I get paid I transfer money over to my credit card. I don't know if I'm doing the right thing doing it then or if I should do it at the end of the month. I feel like if I don't have it I can't spend it but then go overdrawn anyway.

That's really given me a reality check about the amount of money I am wasting. I could save money by taking food to work, stopping smoking and eating out less. We have a fridge and freezer full of food and always end up throwing stuff away.

Hopefully this is a reality check, if my maths is right I've spent another £950 on non essentials that would be better spent paying off debt

cms-help

Debt_is_terrifying wrote: »

I've looked through my expenditure over the last month and from what I can work out I've spent;

£230 on meals out
Approx £200 on cigarettes
£60 on food at work
£130 on petrol
£20 cinema
£250 on hotel and doing things in York
£130 clothes
£60 on other trips to supermarkets
£2000 paying off credit card debt

This month I was paid well but I'm back in my overdraft. When I get paid I transfer money over to my credit card. I don't know if I'm doing the right thing doing it then or if I should do it at the end of the month. I feel like if I don't have it I can't spend it but then go overdrawn anyway.

That's really given me a reality check about the amount of money I am wasting. I could save money by taking food to work, stopping smoking and eating out less. We have a fridge and freezer full of food and always end up throwing stuff away.

Hopefully this is a reality check, if my maths is right I've spent another £950 on non essentials that would be better spent paying off debt

It's actually quite frightening when you work out what you spend money on!

Several years ago I had a very well paying job but rubbish maternity benefits - SMP was all I got. We didn't have any debt but the salary reduction was a culture shock. After I had my eldest, I decided I wasn't going back and retrained into a career where I earn less than a quarter of what I used to earn. The salary reduction and cost of childcare made us really look at how much money we were actually frittering away each and every month.

So just to really say, it can be very daunting but also worthwhile for gaining perspective!

For example, without thinking you've spent £350 on food in your figures above for 2 of you - presumably that is on top of your normal supermarket shops. My husband is a bit of a brand freak and with 2 kids we spend £300-ish a month at Tesco (youngest still in nappies).