Low earners planning for a baby - the maths

Marisco

RainbowLaura wrote: »

Thanks 99bottles, that looks really useful. My phone doesn't seem to like it for some reason (especially the calculator bit) so I'll look properly on the computer when I'm home. This is what confuses and worries me - how some people say that the only real financial impact is the loss of income (in which case we'd be ok) yet other sources give statistics like that (in which case we will just have to make do with the cats unless we BOTH find ourselves earning double what we do now!!)

PS That sounds like an amazing phone deal, maybe I should have a look... we are a bit limited by reception where we live though which rules out a few providers.

Whoever says that hasn't got kids! Babies/children cost money, the nappies alone cost a fortune, never mind the formula, baby cream and all the other what nots as well. I'd stick to the cats if I were you

74jax

DaveTheRave100 wrote: »

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

My (now) husband moved in and our household income was too high too claim.


I'd definitely double check this.

Mummy2cheekymonkeys

RainbowLaura wrote: »

This is what confuses and worries me - how some people say that the only real financial impact is the loss of income (in which case we'd be ok) yet other sources give statistics like that (in which case we will just have to make do with the cats unless we BOTH find ourselves earning double what we do now!!)

I have a 2 year old and a one year old. Whilst I would say that there is definitely more cost then just the lose of income I don't agree with the figures that you hear people say that a child costs so many thousands in the first few years. My experience is that as with most things, like weddings for example. You can spend as little or as much as you want.
Want a pram? £50 from a second hand shop or a top of the range brand new silver cross £1000 choice is yours.
I think you are going about it in the best way possible :T

ViolaLass

Saying children cost £10k a year to raise is a general a figure as 'weddings cost £20k'.

Our biggest financial impact was easily the lost income. We were given a lot of what we needed, found it on Freecycle or charity shops. Look into reusable nappies - you'll save a bucket.

sheepy21

Just saying, I wouldn’t say you’re low earners, our combined income is less than yours a month and we live fine (2 adults, 1 special needs child and 3 cats). And when we had our son 2.5yrs ago we only had £1650 a month and managed on that.

minimuffin12

I'm a bit shocked at you thinking you are a low earner, but still able to put 1k in savings. We have similar salaries to yourselves and we have 2 kids, both have been in day care from babies and now a childminder. I compressed my hours when eldest was a baby to give me a day off and still get a full time salary but have since dropped a day totally.

unholyangel

Deleted_User wrote: »

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.

Child benefit charge starts at 50k. Typo?

minimuffin12 wrote: »

I'm a bit shocked at you thinking you are a low earner, but still able to put 1k in savings. We have similar salaries to yourselves and we have 2 kids, both have been in day care from babies and now a childminder. I compressed my hours when eldest was a baby to give me a day off and still get a full time salary but have since dropped a day totally.

I'm not sure on what you base your definition of low earner, but imo generally its either those paying the lower rate of tax (less than 46k currently) or those earning less than the median or average salary. Median is around 29k I think and average is around 35k.

If someone earns 250k but spends it all so can't afford to save 1k a month, are they a low earner?


As for OP...have you considered thinking bigger picture? Starting your own business? Transferring marriage allowance? Are you getting the best return on your nest egg where/how its invested currently?

Have you factored in other costs? Replacing household items, redecorating etc? I'd also mention worst case scenarios but I guess thats where the nest egg would come in

sn1987a

I wouldn't feel comfortable not being able to save anything by living with one salary. After I had my baby I found out that I still wanted to go out once a week or I would get crazy! But we couldn't go to all the cheap places we used to(no changing facilities, no high chairs etc). We pay more now when we go out, even if my daughter doesn't have her own meal. I started spending more for shopping as well, more fruits and vegetables which can be expensive unfortunately. Breastfeeding provides more nutrients to baby and cheaper than formula!

What about activities you could do with your baby? Will you stay the whole time at home? Not realistic, there will be other expenses. Are clothes for you part of the treat pot?

As others said, it may be hard to go back to work if you haven't been working for some time. Will you have to pay back maternity money if you resign?

There are nurseries that accept shift workers. If your husband's knows that he will work 2 days a week late, you may need nursery for only 3 days a week.

You would get around £82 a month child benefit.
You could go back to work after 3 years and if you both work, you get 30 hours free childcare per week during term time.

Clouds88

I just want to say what a lovely post to read. It’s so nice to see you’ve got clued up and save so well anyway.

As you are going to be a stay at home parent I would (once pregnant) have a look at reusable nappies and if you want to breastfeed that is also a fantastic
Money saving tool. I work part time, would love to be a SAHM but isn’t possible.
However I still breastfeed my daughter who’s just turned 3 now and I can’t imagine how much I would have spent if I needed formula! Also the cloth nappies were amazing. Again if you’ve got the time and are at home, they are cheaper and so much better for baby than disposables.

I think you should just go for it, you’ve got savings to fall back on if it gets tight to see you through until little one gets free childcare hours or if you really don’t want to touch your saved money then just get a weekend job when you feel you are struggling. Good luck

JamoLew

You seem to be doing a great job at managing your current finances.

I personally don't think your outgoing a are high at all.

Looking at you mortgage payment, it is quite low (maybe?). Do you have a very low borrowing or small hous - if small house, will you have sufficient space and room for the new addition now and in the future ?

What industry is your husband in ? Think about sick pay, chance of redundancy as well and possibly consider some level of critical illness/redundancy cover for him. After all, he will be your main source of income. Be aware, this type of cover can be quite costly, so I would seek proper and professional advice on this before going ahead

On a practical level, your life insurance appears low as well (compared to mine). Is the insurable amount designed to just clear the mortgage in the event of death ? If so, you may want to look at substantially increasing the amount payable on death as you would now have a dependant to consider as well.

Being a stay at home parent will also have some impact on you household bills, especially heating costs - don't forget to factor a bit in there as well