Debt and saving/planning for a family?

poppytattoo

Hello everyone, 
I wanted to gather some thoughts from the community on savings alongside debt. What has triggered this question is the fact that over the past few weeks I have been working from home and not doing anything/travelling anywhere/buying anything except food and toiletries. I have ended up with nearly £500 to "spare" on payday. 

I have some significant debts. I have not struggled to make payments on these, and have been paying them down at a steady rate, but they are something that hang over my head. I also have no savings, never really have had savings, and this month our oven broke AND our car battery died, but for the first time ever I could "afford" to pay  to get them both running again so we could cook our food and husband can continue volunteering for NHS. Normally, that sort of unexpected payment would completely floor us, so it was a real taste of freedom for it not to have been a huge drama.

What I'm now wondering is - should I aim to have at least some savings alongside paying off my debts as quick as I can? I know most of the advice is to just aggressively pay off the debt, but in the event of emergencies that leaves us with no option but to creep back into debts. Also in the back of my mind permanently is the fact that we want to try for a family. We did have one pregnancy a few years ago that unfortunately didn't make it to full term, and we haven't tried again for fear that we wouldn't be able to afford a baby. But, we're getting older now, in a few years husband will be in his 40s, I have since had a few issues with my reproductive system that means we've been told it might be a bit difficult for me to conceive a second time, so I don't want to wait for ever. I know the sensible thing would be to not try for a baby until I'm completely debt free and we have savings, but that could be years and years away. I know it's a cliche but I am one of those people that feels they were born to be a mother and it's a real source of sadness for me that that feels out of reach. 

I guess this long and rambling post can be summed up with this question: is there any sense at all in beginning to save a small percentage alongside paying off debts as fast as I can, or should I just continue ploughing into the debts and wait a few more years before trying for another baby?  

enthusiasticsaver

Yes there is some sense in saving as well as paying down debt and most debt advisors would recommend saving an emergency fund before tackling debt.  How much you save though depends on what interest rates you are paying on the debt and any other circumstances which are likely to change (like going on maternity leave or finishing a fixed term contract.) The main reason for saving is to avoid having to add to debt if something unavoidable (like a broken oven) happens so good you have managed to  cope with that without adding to debt. 
The usual advice is £1000 emergency fund initially but if all your debt is on 0% and you hope to plan for a family in the next few years building this up to 3-6 months outgoings makes sense.  If your debt is on high interest rates though and the debt repayments make up a significant proportion of your monthly outgoings I would overpay considerably and stick at £1000 emergency savings for now. 

poppytattoo

Thank you enthusiasticsaver, that's really helpful. I really appreciate you taking the time to respond.

My situation is that the debt repayments do make up a hefty proportion of my outgoings each month. Currently I'm on fixed repayments with the car and loan, if I keep making those without a problem the loan will be paid off in September 2021 and the car will be paid off in May 2023. I haven't looked into overpayment for it yet. 
I need to update my signature - but I moved my overdraft (which was costing me about £120 in interest payments each month) to a 0% credit card, both of the credit cards are currently 0%, one until towards the end of this year, and one for the next 11 months. 
It sounds like at the very least, an emergency fund is a necessity!  

Aspiration

Firstly, I just wanted to say how great it is with how much debt you’ve already paid off, it must feel great!! 

An emergency fund as suggested is a good idea and as per the above advice 3-6 months and preparing for a baby would be sensible.

Don’t forget having a child won’t affect you in the immediate term and if it’s what you both want, then I would recommend sooner rather than later! 

poppytattoo

Thank you Aspiration! I sometimes get a bit low over the debts and beat myself up for previous life choices, but I've found that this forum is so helpful for keeping me realistic and looking towards the future! I'm definitely proud of how my attitude to money has changed, although I know I can do more! Seeing the figures when I work out how much I've paid off really does feel good and put it all in to perspective a bit more that there's a light at the end of the tunnel...
We definitely do want a child but we are so keen to make sure that we do right by any children we have. Although part of me remembers when I was little and my mum and dad barely had any money, I still never went without and we are such a close family and I'm very proud of them and grateful to them. 

EimearF

Dont put off trying for a baby. Obviously in an ideal world you would have no debt when trying but the world is not ideal. 
You can clear the debt anytime but you cant have a baby forever. We have been trying for over a year so I know how you feel. 
I agree with enthusiastic saver about the bigger emergency fund in place but you can build that up during pregnancy. 
Wishing you good luck!

CreditCardJunkie

Consider your finances on maternity pay (whatever your circumstances are), my debt was thankfully serviceable on stat maternity pay as my employer doesn't offer enhanced maternity pay.
I would be inclined to say not to hold off on a family, yes babies are expensive but you can buy second hand etc making cuts where you need to. You said you have a close family so chances are they'll want to help with some of the purchases for the baby too. 
Emergency fund is a priority, we had a whole host of things go wrong just before baby was born and our boiler needed replaced while on maternity leave too! That being said you'll have around 9 months notice 😊
Good luck. There's a thread on one of the other boards called official trying to conceive, they're a friendly bunch over there too! 

poppytattoo

Thank you EimearF and CreditCardJunkie! Your advice and kind words are very much appreciated. 
Emergency fund is my priority then, alongside debt - and I suppose we will "see what happens" in terms of family planning. I might have to hang on for a year anyway now if I want statutory maternity pay as I've just been offered a new job - awaiting a formal job offer - these things always come along when you least expect! But it will hopefully be a little bit more money to put towards saving and debts! I'll see what the policy is like at the new place. 

Thank you so much everyone.

enthusiasticsaver

I would agree with PP that although it is ideal to be debt free and have savings before having children there are other things in play like your age and likely fertility so finances should not in my opinion be the only thing to consider. You would have 9 months to prepare anyway so there would be time to rearrange.  The loan will be paid off in 16 or 17 months and if you resist the temptation to buy loads of new babystuff and look for second hand equipment etc it need not be expensive. As you say if you  are starting a new job waiting until you have worked there for the amount of time to get maternity pay is sensible. 
My philosophy if you have £500 spare this month is to save all of it if the cards are on 0%.  Obviously if you are close to the date when the deal runs out you may want to split it 50/50 to debt and savings. 

Fireflyaway

I'd suggest finding a balance. If you can pay all your bills, keep on top of repayments then personally I wouldn't wait to try for a baby. There is no perfect time and waiting might not be sensible given your medical history.
I think you have just proven to yourself the importance of having an emergency fund. I never had any savings until recently but began to feel vulnerable and knew it was only a matter of time before there was an unexpected expense. Being responsible for a child and animals changed me. I didn't mind going without but I couldn't let them down. If at the moment you have spare cash put it away for your emergency fund. Maybe look at your budget and see if you can cut back longer term. £500 left over is quite significant so we're you previously being a bit wasteful? 

CreditCardJunkie

Poppy just to note, look into maternity allowance, it's the same rate as statutory maternity pay and covers if you're not entitled to stat maternity pay if you haven't been in employment long enough. 
I put off having a baby, waiting for the 'perfect time'. There isn't a magic number you need in your bank account to have a baby. There will be challenges but you will always make it work.