One income family of four - can we get ahead even after pay cuts?

Sarahwithlove

That's great news congratulations. It's good for first few weeks that Red will be at home hopefully that will make the transition easier on the little ones. How much of your pay do you think you will be able to put away? What are your plans with the extra money do you think? 

joedenise

Congratulations, brilliant news.  Great about Red being able to do the childcare to start with as that will help with the children getting used to you going out to work.

Bluegreen143

@Sarahwithlove our plan is after childcare I’ll put some aside for a holiday and we will save the rest! If we do that, it gives us peace of mind we can still afford to live on one income and I might be able to save £10k in the year. Was thinking first filling our emergency fund to £2k, continuing to fill the help to save accounts (£100 a month) and after that put anything left into either the mortgage or a longer term investment. Leaning more towards the mortgage however.

Sarahwithlove

Sounds like a good plan. I would go with overpaying the mortgage as well myself but also build up some saving pots for yearly/one off expenses as well as your emergency fund. So for example, holidays, Xmas, house fund, car fund etc. That way emergency fund is about emergencies you couldn't have predicted. Like if you get a leak and need a ceiling replacing for example. 

Bluegreen143

@Sarahwithlove absolutely! I’ve factored some of those in and some we already do set aside each month (eg Christmas & birthdays - that made such a difference this year!). Will post a budget later and plan for some wiggle room in case childcare ends up costing a bit more etc.

Sarahwithlove

Great sounds like you have a good plan in place. I shall wait to see your new budget  

Moneywhizz

Congratulations on getting the job and how nice to feel welcome back to a workplace that you left years ago. It sounds like everything will be manageable but you are being really sensible not to use that extra money in your general budget just in case things don't work out and you want to return to being at home.  Even if it only lasts the year it is a great opportunity to get some savings behind you and enjoy some extra spending money for a time.  If things do work out it well it will enable you to make longer term plans, like paying off the mortgage, having a car fund, or more holidays.  Are you settled in your current house with no plans to move in the future? Good luck with it all. 

rugbymadfamily

Congratulations on the job! Great news!

I would advise getting the emergency fund up above £2k before you start OPing the mortgage. I think the general advice is to have 3 months in an emergency fund before you OP on mortgage. That's what I'm currently aiming for (3 months of mortgage / bills / food / petrol etc) and will give you a really solid basis behind you before longer term investment like mortgage.

Bluegreen143

@Moneywhizz at the moment no plans to move. We have a vague dream of moving more rurally once the kids are grown. At the moment we live in the middle of Glasgow so there are lots of parks etc but it’s not quite the same, but I do love that I can take the kids to good museums etc with a 10 minute drive. All our friends and some of our families are close by too. We don’t have any plans to move to a bigger house or anything, we’d rather get the one we have paid off than buy a bigger house cos it would just encourage us to fill it with crap 😆 we have three bedrooms and a really decent sized garden so can’t complain. I think we have around £112,000 left on the mortgage so we could make a decent dent over a few years if I get kept on - maybe even pay it off in about 10 years instead of the 29 we have left on the mortgage... we are 32 and nearly 37 so don’t want it to really be 29 years!

Moneywhizz

Being settled in your current home at least til the kids are grown is a great place to be. I live close to Glasgow so know the benefits of plenty of things to do with the kids and rural isn't so far away when you need a day away. Once you have an amount of savings behind you that you feel comfortable with, paying down the mortgage sounds like a good plan. Imagine being mortgage free when you are 42, that is a dream.