Low earners planning for a baby - the maths

RainbowLaura

Hi everyone,

My husband and I would love to start trying for a baby this year. Unfortunately we are both low earners. However, my husband always says I should have been an accountant as I am so good at organizing our money, and love to challenge myself to make it stretch as far as I can

We would like for me to be a stay at home mum, and looking at childcare costs against my salary it doesn't seem like a bad idea financially either.

Here are the sums

Currently:

His take home pay is £1450 per month.
£1400 of that covers all of our bills (food and fuel, mortgage, car maintenance, dentist, optician, insurances, TV license... every last essential basically).
£50 goes into our shared "treats" pot.

My take home pay is £1350 per month.
£1000 goes into our joint savings.
£350 goes into our shared "treats" pot.

We have built up a lot of savings over the last six years - most of it is a "nest egg" which we don't plan to touch, but some is in pots for a new boiler, a new car - the big expenses which may or may not come up in the next 5-10 years.

So the plan is for me to give up work when baby (hopefully) comes along and continue to live off my husband's wage, as we do now. I have made a "maternity pot" to pay us £350 per month for a year when my actual maternity pay runs out. When the year is up, I will get a Saturday job to keep the "treats pot" topped up.

Does that sound realistic? My main concern is that I am not budgeting for our expenses to go up at all (as people tell me that the spending doesn't increase, it just changes). For example we eat out around once a week now, which we won't if we have a baby.

Because I am so keen on money saving there really isn't much scope to reduce our expenses, so if my plan sounds over ambitious then I may have to accept that giving up work is unrealistic. However, childcare costs! (Family are not really able to help and I wouldn't expect them to.) Husband works very varied shifts Mon-Fri, so it would be virtually impossible for me to get a job that fits around his, other than the weekend job I already plan to get when my maternity pot runs out.

Although we would have qualified for quite a lot of benefits under the old system, we don't under Universal Credit (plus our savings mean we wouldn't be eligible anyway). That's fine by me as personally I don't think it would be sensible to financially plan for a baby using benefits.

Anyway, if you've managed to get through my essay then thoughts would be very much appreciated

Many thanks,

Laura

Comms69

Your expenses seem too high.

You’d still get child benefit*

Surely you’d take maternity leave / pay before resigning??

DaveTheRave100

Although we would have qualified for quite a lot of benefits under the old system, we don't under Universal Credit (plus our savings mean we wouldn't be eligible anyway). That's fine by me as personally I don't think it would be sensible to financially plan for a baby using benefits.

If nothing else, you can still claim Child Benefit. I don't believe it's limited by your earnings/savings - you could in theory be a millionaire and still claim it!

It's not much, but it's there and you are entitled to it, so you might as well!

https://www.gov.uk/child-benefit

[Deleted User]

DaveTheRave100 wrote: »

I don't believe it's limited by your earnings/savings - you could in theory be a millionaire and still claim it!

https://www.gov.uk/child-benefit

Except the millionaire would have to repay all of it in tax, as would anyone earning over 60k.

However, the OP will be under that threshold.

JGB1955

Under the current system you will also qualify for at least 570 hours per year of free childcare once your child is 3 years old.

RainbowLaura

[FONT=&quot]Ah yes, I was aware of the Child Benefit - that will be for days out

[/FONT][FONT=&quot] Comms, I would love to reduce outgoings if that would be possible, though we seem to be on the best deal for everything at the moment. Here's the breakdown:[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]Food & Fuel £319 [/FONT]
[FONT=&quot]Water £30 [/FONT]
[FONT=&quot]Life Insurance £29 [/FONT]
[FONT=&quot]Gas & Electric £80 [/FONT]
[FONT=&quot]Phone & superfast internet (2 mobiles and landline) £66 [/FONT]
[FONT=&quot]Council tax £138 [/FONT]
[FONT=&quot]Contact Lense schemes £18 [/FONT]
[FONT=&quot]Mortgage £520 [/FONT]
[FONT=&quot]Birthday & Christmas pot £50 [/FONT]
[FONT=&quot]Annual Bills (broken down below) £150 [/FONT]

[FONT=&quot]Car insurance for both cars £500 [/FONT]
[FONT=&quot]Breakdown cover for both cars £100 [/FONT]
[FONT=&quot]Tax for both cars £170 [/FONT]
[FONT=&quot]MOT and service for both cars £400 [/FONT]
[FONT=&quot]TV licence £160 [/FONT]
[FONT=&quot]Boiler service £70 [/FONT]
[FONT=&quot]Dentist checkup £50 [/FONT]
[FONT=&quot]Cat Vaccinations + Flea & Worm Prevention for year £180 [/FONT]
[FONT=&quot]Home insurance £170 [/FONT]
[FONT=&quot]
Unless you mean too high in that it's too high for us to lose my income.

I will be taking maternity pay but am thinking about the period afterwards.[/FONT]

ognum

RainbowLaura wrote: »

Hi everyone,

My husband and I would love to start trying for a baby this year. Unfortunately we are both low earners. However, my husband always says I should have been an accountant as I am so good at organizing our money, and love to challenge myself to make it stretch as far as I can

We would like for me to be a stay at home mum, and looking at childcare costs against my salary it doesn't seem like a bad idea financially either.

Here are the sums

Currently:

His take home pay is £1450 per month.
£1400 of that covers all of our bills (food and fuel, mortgage, car maintenance, dentist, optician, insurances, TV license... every last essential basically).
£50 goes into our shared "treats" pot.

My take home pay is £1350 per month.
£1000 goes into our joint savings.
£350 goes into our shared "treats" pot.

We have built up a lot of savings over the last six years - most of it is a "nest egg" which we don't plan to touch, but some is in pots for a new boiler, a new car - the big expenses which may or may not come up in the next 5-10 years.

So the plan is for me to give up work when baby (hopefully) comes along and continue to live off my husband's wage, as we do now. I have made a "maternity pot" to pay us £350 per month for a year when my actual maternity pay runs out. When the year is up, I will get a Saturday job to keep the "treats pot" topped up.

Does that sound realistic? My main concern is that I am not budgeting for our expenses to go up at all (as people tell me that the spending doesn't increase, it just changes). For example we eat out around once a week now, which we won't if we have a baby.

Because I am so keen on money saving there really isn't much scope to reduce our expenses, so if my plan sounds over ambitious then I may have to accept that giving up work is unrealistic. However, childcare costs! (Family are not really able to help and I wouldn't expect them to.) Husband works very varied shifts Mon-Fri, so it would be virtually impossible for me to get a job that fits around his, other than the weekend job I already plan to get when my maternity pot runs out.

Although we would have qualified for quite a lot of benefits under the old system, we don't under Universal Credit (plus our savings mean we wouldn't be eligible anyway). That's fine by me as personally I don't think it would be sensible to financially plan for a baby using benefits.

Anyway, if you've managed to get through my essay then thoughts would be very much appreciated

Many thanks,

Laura

Have you considered a job with unsocial hours, (evenings/weekends) that way you could still contribute to the household and use your free tax allowance and your husband could be responsible for childcare so would not incur extra a cost.

Of course this takes up some of your family time but for us (many years ago) when we had no family support because we lived to far away it made a big difference to our ability to live, pay bills etc. It is also a good way to give a father full responsibility for childcare.

Maybe you could transfer to the type of job that this is available prior to having a child or wait and apply later. You could consider retail, call handling, the care sector, hospitality etc

RainbowLaura

Hi Ognum,

My husband's shifts can be anything from 6am - 2pm to 2pm - 10pm Monday to Friday, so I wouldn't be able to commit to anything in the week unfortunately

I do plan to get a Saturday job to keep the treats topped up, and would obviously work both weekend days if needed, but obviously my earnings would be very limited if I was only doing one or two days per week.

Comms69

Will you need two vehicles once you have a baby?

Your pet vaccination seems high also ( btw might seem silly but watch the cateith the baby, they have a habit of sleeping on them )

RainbowLaura

Comms69 wrote: »

Will you need two vehicles once you have a baby?

Your pet vaccination seems high also ( btw might seem silly but watch the cateith the baby, they have a habit of sleeping on them )

We will need both cars, as we live in a rural area. One of them is 15 years old so that will be my run around car, and my husband will have the newer one (3 years old) to get him to work.

We've got two cats and their vaccinations are £30 each, then we get the best flea treatment you can buy as I'm a bit paranoid. To save on that we get the prescription from the vet and then order online in bulk. Yes we will definitely have to be careful with the cats if a newborn is in the house!

CRANKY40

Do you have a Vets4Pets anywhere near? I paid £99 per cat for their vaccinations for life.