How to have a baby without making debt?

RoxieW

Hi hon - typed you a long reply earlier but it got wiped for some reason!!
Anyway just felt I had to say that this is the dilemma many of my friends are having at the moment. They have commited to a house/lifestyle that requires 2 wages and are abit stuck now they've come to think about babies.
Sounds odd but I really count myself liucky that I fell pregant when hubby and I were at uni and didnt have 2 beans to rub together! We rented a tiny house and didnt do much of anything or go anywhere, the baby had charity shop/primark etc but tbh I never look back and feel that we did without!
Fast forward and that child is 5 and we have another one, a much improved financial situation and a lovely home. I've had the luxury of being a SAHM as we only ever lived within one wage.
We recently started thinking about upgrading house, but to do that would mean me working, and as we want a 3rd baby we've had to shelve those plans for now.
A couple of suggestions for you -
1) check entitled to for what benefits you will get. As far as I know child benefit and tax creds should be at least £200 a month for the first year of babies life. You may get more tax credits depending on income.
2) Can hubby have anther go at getting a better paid job? If he made a big effort over, say the next two months to find something - then if it doesnt happen it doesn't happen? Or, not ideal I know, but could he take on more hours or a small 2nd job?
3)I agree you will spend less by not working. No travel/lunches/impulse buys/socialising. Wok out how much you will save by not working.
4) Think about going back part time after baby is born ie 2 or 3 days. But of course, then you have childcare to pay for. We found that when I worked, we were no better off financially.
5) Think about a work from home job ie AQA, Ann Summer, Avon etc. You wont make a fortune but you can work when the babies sleeping etc and it might make up some of the shortfall.
6) Get rid of a car if you wont need it for work. We did this and its freed up so much money. I get my shopping delivered and we go out as a family on weekends etc - or I get the bus. Even the odd taxi doesnt equate to running costs of a car.
7) Think carefully about moving. I would. Look on rightmove for areas that arent too far away but may be more reasonable. You could free up hundreds a month by doing this - it would really take the pressure off of you and hubby.
8) Do a budget and work ut what you could save if you cut out the non essentials. Putting this amount away each month might give you enough to have a year at home!

What you decide to do will depend on how badly you want a baby right now. it is really difficult, i appreciate - but if it was me, I'd scale down the home. The last thing you want to be doing is worrying about making huge mortgage payments each month. just do some looking - dont dismiss it.

Good luck

summerday

Hi,I understand how you feel, it is easy to get in the 2-income huge mortgage trap then have to plan for a baby.I definitely echo others and recommend that you double check exactly what benefits you would get, in terms of maternity pay from your emplyer, plus entitlements such as child tax credit, working tax credit and child benefit. You might get more than you think.Good luck, sarah x

PeskyPenguin

With all due respect, you do not appear to be willing to change any of your lifestyle to free up some cash and you have a problem every suggestion offered to you. Perhaps you really don't want a child? (and actually I feel neither does your partner). Maybe you should have a read of the 'Trying to Conceive' thread....I'm sure alot of those ladies would gladly live in a tent if it meant getting pregnant.

sdooley

Money saving basics worth doing:

Change your gas and electric to the cheapest supplier
Remortgage to the cheapest deal
Cancel and get a refund of any payment protection policies, including on the mortgage - they are a con and will not keep you in your home longer if you lose your job, especially considering you are taking maternity leave - this could save you thousands
Reclaim any banking charges - if you have really been living beyond your means

Insurance: the general rule is never insure yourself for a risk you can cover yourself. So KEEP life insurance (though get the cheapest quote which will probably be on a level, relatively short term (e.g. 5 years) not a whole of life basis), KEEP car insurance but shop around, KEEP home insurance but shop around.

For home and car insurance you can normally massively reduce premiums by taking a large excess, e.g. a £500 excess might save you £250 a year or more. Sure, you have to pay the excess if you make a claim, but if you don't within 2 years you have saved that amount and interest.

DITCH all other insurances and NEVER buy an extended warranty - instead pay the amount of the warranty premium into a designated savings account and if the machine doesn't break down you can use the savings for something else.

missbee

PeskyPenguin wrote: »

With all due respect, you do not appear to be willing to change any of your lifestyle to free up some cash and you have a problem every suggestion offered to you. Perhaps you really don't want a child? (and actually I feel neither does your partner). Maybe you should have a read of the 'Trying to Conceive' thread....I'm sure alot of those ladies would gladly live in a tent if it meant getting pregnant.

Sorry, but this really isn't true. I have already cut some DDS as mentioned - contact lenses, insurance etc and sold quite a bit on bay. I really do appreciate what lots of you say about the house but I really can't believe it HAS to be house or baby! I rented from the age of 18 to 27 and was forcibly told to move 3 times due to landlords wanting to sell. Plus, renting is not that much cheaper, Double plus, on our last house we stayed there 3 years made a really big profit that has enabled us to not be in a scary area, on the night before my wedding there was a knife fight out the back and kids used to regularly throw stones at our windows - I really am not joking!! I am willing to make every sacrifice there is except the house quite honestly, I really don't think this means I don't want a baby enough!! As for my husband not wanting children - I'm not sure where this idea came from????

Thanks for all others advice - I this getting rid of a car would actually not be too bad as my husband has his anyway.

I will definitely check out what I'm entiteld to.

saw my friend's baby last night and has confirmed all I thought :j

missbee

sdooley wrote: »

Money saving basics worth doing:

Change your gas and electric to the cheapest supplier
Remortgage to the cheapest deal I'm fixed in for 3 more years
Cancel and get a refund of any payment protection policies, including on the mortgage - they are a con and will not keep you in your home longer if you lose your job, especially considering you are taking maternity leave - this could save you thousands I'm on to that now - thanks
Reclaim any banking charges - if you have really been living beyond your means Never had charges - thanks anyway



For home and car insurance you can normally massively reduce premiums by taking a large excess, e.g. a £500 excess might save you £250 a year or more. Sure, you have to pay the excess if you make a claim, but if you don't within 2 years you have saved that amount and interest. Done already - I did save £120 per year - definitely recommend to others

DITCH all other insurances and NEVER buy an extended warranty - instead pay the amount of the warranty premium into a designated savings account and if the machine doesn't break down you can use the savings for something else.

I never do buy them! - But admit putting the cost in a savings account for if washing machine does break is highly sensible!

RoxieW

You wouldn't have to rent - could you not buy a house in a slightly different area (not a bad one, but like everywhere I'm sure there are cheaper but still decent areas within a 10 mile radius).

I'm not having a go at you - I appreciate how hard it is. But sometimes something does have to give. We really desperately would like more space/a garage/forth bedroom etc but it would just put too much pressure on us at a time when your expenses are already increased with a new baby.

Having said that - if you're only planning on staying at home for a year or so, I think its reasonable that you could manage to stay in your home. You just also have to bear in mind that even if you do go back to work, your income will be decreased due to childcare costs (normally about £800 a mth for one child.) You will be unlikely to get help with this from tax credits - we didnt and we have a lower household income than your joint one. Therefore, you will have a significantly decreased income until the child starts school.

I do think its great you're considering getting rid of the car. Its not ideal i know but sometimes we have to make these sacrifices. We manage just fine - incidentally, the only time I really miss one is the holidays (like now!) when i'd love to be able to pile the kids in the car and go out somewhere for the day.

You know, it might be helpful if you posted a budget as it would be without you wage. That way we can have a look through and see if there's anything you may have missed.

It may well be that by going interest only, getting rid of the car and then the extra benefits, you may be ok. You just have to factor into the budget nappies/some money for big purchases ie buggies, cot etc.

You'll find a way through!

RoxieW

ps - I know you dont want to give up your house - and you may be absolutely right - it may be the right decision for you to stay put. For example, how many bedrooms do you have, is it in a decent school catchment? If not then you may well be having to move anyway in the future, so it wouldn't harm to look around.

All I would say is please have a look on rightmove and just see what you could get for your money in different areas. You may be surprised and absolutely love the look of somewhere, making it not such a scary thought.

If however, where you live now is the family home you'd like to see yourself bringing up children in, then do a budget to see if thats possible.

It may well be. On the other hand, with mortgages as big as they are nowadays, it might not be. Think carefully about whether being able to stay at home as long as you like with your baby, without pressure, would be worth considering a different area. Sometimes, it can be quite difficult to go back to work.

Welshlassie

I suppose you could say I was in a similar position. I have recently returned to work after having our first child. My husband gave up work to look after him so we are now down his salary this has left us almost £400 a month short of meeting all our outgoings, until his self employed business starts generating enough to cover this. We knew this was going to happen and have spent the last 2-3 years preparing for this by saving as much as possible, cutting back somewhat and when we did get pregnant buying for the baby as cheaply as possible. I have been back in work almost 2 months and at the beginning of this month when I sorted the finances out instead of being short in March I was able to put £800 into our savings account. How did we manage this, through budgeting for everything and sticking rigidly to it and DH has done some mystery shopping.

Fill in Martins budget spreadsheet and see where you can cut back. I also posted my SOA on the DFW board for advice and they were able to identify areas I could cut back further. We haven't sacrificed our life as our life has changed significantly since DS was born and we don't need to spend as much.

We are on interest only for our mortgage, but we have savings plans to cover the difference between IO and repayment, we both still pay into pensions, we still have regular savings.

It can be done, but you have to want to do it and really cut back. Try living on what you would be earning whilst on ML and saving the difference, this would help you to build up a buffer whilst on ML and help you understand how you manage. It will be difficult, but it is possible and having a baby makes all the saving and cutting back worthwhile.

bandraoi

I think you need to find out what you will get on Maternity leave from your company. It sounds to me like you're guessing. You say you've only been there a year, but by the time you get pregant and have the first 8 months of your pregnancy you'll be there two years.

You also need to work out what benefits you'll get and what expenses will reduce because you'll no longer be working.

You don't need the savings now, even if you get pregnant straight away you have nine months to save. What you need is an action plan, showing your expenses now, your expenses while pregant (healthy eating, no alcohol, saving hard), your expenses when on maternity leave and your expenses when you go back to work.

You also need to consider things like tax.
Just for instance, basic calculation:
Right now you're earning, £31K, take home £1923 or thereabouts
Suppose that next year you worked for a bit and had SMP for a bit and ended up earning a total of £20,500.
From Listen to the tax man, while you're taking home 2/3rds of your salary before tax, you're taking home closer to 70% of your salary after tax. The difference might not sound like much, but 3% works out to be just under £1000.