Affording to have children
I've seen this sort of thing asked in various places before including IRL and the general consensus is that somehow you just manage.
Despite being an OCD planner (spreadsheet for everything!), I can get myself onboard with managing buying what's needed for a baby, and even managing financially during maternity leave. The bit I don't understand is working out whether I will have to go back to work full time after, or can I afford to go part time etc. I would like to work part time but how can I find out how much childcare is likely to cost?
I don't think we can manage for me to give up work entirely but I don't think I would want to go back full time, at least not to my current job. A colleague who has 2 children and works 3 days a week implies that she's pretty much paying to be at work........
Not even pregnant yet just trying to get my head around timescales and everything around it.
Replies
The things to look at are cost of childcare, how much of a salary drop you'd be taking, other benefits. Child benefit is cut if you earn over £50k now, you might be eligible for working tax credits or similar depending on hours worked and money earned.
For me, because of my tax position and cost of childcare working 5 days only makes me £120 a month take home more than 4 days!
Kids aren't that expensive really but childcare is! Ours is £1000 for 4 days a week. Somehow we manage but I'm already looking forward to when number 2 finishes!
Childcare will depend on whether you go for a nursery or childminder, I think childminders are slightly cheaper? It obv depends where you are in the country. I think from previous posts on here, £40-£50 a day is about normal for nursery. Childcare vouchers are worth looking into too as they come off your salary as a deduction and aren't taxed so you savea bit there.
HTH
Fwiw, I think you are looking at it exactly the right way, rather than rushing in with an oblivious/ignorant mindset.
Your options are, broadly speaking, nursery, childminder, family or a nanny. Or a combination of any of the above. Call around some local nurseries to get an idea of what they charge per day/week/hour.
Look into claiming childcare vouchers, it's a salary sacrifice scheme limited to £240 ish for lower tax band payers and £120 ish for higher rate tax payers, you don't pay tax on the amount (thus saving iro £50 per month). Both you and your H should be able to claim them. I'm not sure if it applies to self employed.
If your family are able to help, does this work? I.e. are they close enough, reliable enough and how much would you expect to pay them?
Think forward too, are you planning another child? If so you'll need to factor childcare in after that.
The cost of clothing and feeding a child(ren), whilst not insignificant, is no where near as much as we spend per month in childcare.
Another thing to consider is how doable is your job part time? Don't take it for granted that it is an option.
A good starting point might be to have a look at some websites for nurseries near you and see how much they charge? Or childminders if that's what you prefer although I'm guessing that might be a bit harder. Nurseries here are £35-40 per day (approx 7.30-6), but whether they include things like nappies and formula varies. Should be enough to give you an idea though. We're lucky and will have grandparent care for 2/3 days I will be working, so our childcare bill will be about £180 a month. If I were to go back full time most of the extra I would earn would go on childcare, so part time is best for me, but that will all depend on whether you have additional help, how much you earn (obviously!) and what hours you and your OH work - one of the nurseries we looked at does a "school day" of 9-4 for £22 so if one of you could start/finish early and the other start/finish late you could save money that way. Hope that helps a bit!
What sort of childcare would you be looking at? We phoned round some local nurseries to get prices, and friends have told us how much they pay for a childminder. We've worked out how much I'll earn if I go back part time, and have been keeping track of spending, to look at our monthly outgoings.
You can work out if you would be entitled to any benefits too (although I'm not sure of the website). Also check things like childcare vouchers, we can get them through my job, although I haven't actually looked into it.
I'm thinking probably nursery or childminder - depending on cost I expect. I've had a look for some local ones but they don't advertise prices!
Family wise, the IL's are about 30mins away and MIL has openly said she would happily drop her days at work to help with childcare but a) I don't know how much of a reality that will be and b) both H and I have issues with her smoking around children.
Childcare vouchers I have heard of but both H and I work for companies with less than 10 employees and stuff like that isn't offered (can it be requested or does it cost the employer money to setup a scheme like that?)
It all sounds so expensive!! If I were only gaining a small amount per month I don't think I'd see the benefit and would rather stay at home. I wish I had a talent I could use to earn extra pennies from home!!!
I don't think it costs anything for employers to set up.
Another way to look at it is that once they've done 4-5 years at nursery, what would you want to happen when they start school? If you think you'd work again then are you better keeping your toe in the water to keep your experience and /or qualifications up to speed so that you could work with lower childcare fees then?
Don't underestimate the mental side of working - some people, myself included, actually enjoy the balance of working as well as being a mum.
We've had a loooong conversation tonight about what we'll do when they start school and whether I'll give up work. It's easy whilst they're little!
I find this website really helpful www.listentotaxman.com as we were much better off with both of us going part-time. Sadly work wouldn't let H do it, so I've dropped down to 2.5 days.
I will be paying to go to work when we have number 2. Because I want to keep my hand in, and also not go mad. We can't manage on one wage alone, so either way we'd need a sum to money to plug the shortfall IYSWIM? So we're saving up money now to cover the cost of 2 in childcare.
Also you may feel differently when you've had the baby. I thought I'd want to stay at home, but I've realised I definitely wouldn't want to do that full-time. Others think they'll definitely want to go back to work, then decide they don't after all!
I think its sensible to think of the cost beforehand, and have done so (only TTC as well).
As you are organised, I'm guessing you have a spreadsheet for all your bills - so you know roughly how much you spend / save per month? I think this is helpful to work out how much you need to bring home before childcare costs to get by. You can work out from that whether your OHs salary covers it, or how much you need to earn to add to it, etc. I then have looked at nursery fees, although personally taken this with a pinch of salt as honestly don't know whether we will need that or a childminder, or grandparents will help out and probably won't know until we have a BFP. I use this to work out (under pro-rata) what I'd bring home through hour changes; www.thesalarycalculator.co.uk
I agree with what someone else said RE thinking about once the children are at school and taking that into consideration before you cut your hours dramatically. I'd also take into consideration what your work will accept and whether you can continue with your job with the hours you would like to do. I think for it to be accepted it needs to be a realistic change.
I'm panicking thinking about this too. I swore I wouldn;t work full-time with kids again, but here we are! I want to do 4 days but I would probably be voluntarily setting a ceiling on my career, they are actually likely to say no, and if they agreed we would lose £700 a month, plus still need to find childcare costs. We can do this, but I don't know if I want to. It would really sting and change our lives (and my son's) dramatically. I have lots of time to think about it!
Hubby could drop to 4/5 (although he does 4 shifts in 8 days so I don't know how that would work) and again, he'd be kissing goodbye to any chances of progression. The cash impact would be less for us though.
We had it totally sewn up because my sister was going to be our childminder, she'd work to our inconsistent rota and we'd pay her what her part-time job pays, and she'd get more time at home/with her son. Only now, wonderfully, she's expecting twins and there's only 9 weeks between our due dates so I cannot see any way at all she could possibly be able to help out. She's adamant she wants to try but that's because she is going to be more skint than she's ever been in her life, bless her.
Then there's the fact we'd like to have another as soon as possible after.
I am a super-planner, I have budgets at varying levels of earnings, plus 1 year of childcare rotas in excel trying to work out what each of the scenarios means for us. But really, I think I need to just wait and see (which is so hard for me!). I will tell work I will return full-time and just see what happens. I can't afford more than 8 weeks or so off after baby is born anyway (as things stand), there's nothing in my contract about maternity pay so I assume it's the stat minimum.
Nutella, I found this link helpful re costs: http://www.daycaretrust.org.uk/data/files/Research/costs_surveys/Childcare_Costs_Survey_2013.pdf
Pretty much WEES. Childcare costs vary depending on whether you go with a nursery, nanny, childminder or other options. We were in a position where I needed to go back to work to help contribute towards our joint costs and looked at various options and worked out different cost scenarios (eg income if I went back for 3 or 4 days, costs if she went to a childminder or nursery for those days). In the end, we actually went for the most expensive option (nursery - ours costs £42 a day) but is definitely the one we felt most comfortable with, plus we felt it would suit her better too - it's an outstanding nursery and we felt she would benefit from the social aspect of it. Even though a term time contract with a childminder would have worked out MUCH cheaper, the nursery has really been beneficial for her.
I claim the maximum childcare vouchers possible as will my H and it won't take much effort for your companies to sign up to a scheme. It does give us a tax saving - not masses, but definitely enough to make a difference.
When I go back to work in January, I'll have 2 in nursery for 4 days a week, which will be costing us nearly £1500 a month. It's just an incredible amount of money. However, we have worked out that our childcare costs will never be more expensive than during the next year. C gets some funded hours in 2015, then 18m later, when she goes to school, O will get some funded hours. Then, when he goes to school, I will still be in a job that I can work in for 4 days a week, will have some flexibility, will be relatively well paid for a part time job, and I will not have gone mad by being a SAHM (I just can't do it, I need to work for me) or will not have to go into a more junior role because its the only job out there IYSWIM.
You're really sensible working out all the costs up front, but in reality, you'll just make it work because you have to.