Can we afford kids?

Discussion in 'Money makeover' started by mrs.m, Feb 6, 2008.

  1. mrs.m

    mrs.m Registered User

    Posts:
    22
    Age: 25
    Spouse’s/Partner's age: 28

    Annual gross income from employment or profession: 23k
    Annual gross income spouse: 25k

    Type of employment: permanent in private sector
    Expenditure pattern: In general are you spending more than you earn or are you saving? no

    Rough estimate of value of home 315k
    Mortgage on home 276k repayments incl. insurance & less TRS €1315 a month
    Mortgage provider:ptsb
    Type of mortgage: Tracker
    Interest rate 5.1%

    Other borrowings – credit union repayments €85 per week friends first €43 a month owe family member €3500

    Do you pay off your full credit card balance each month? yes
    If not, what is the balance on your credit card? 0

    Savings and investments: 6700

    Do you have a pension scheme? no

    Do you own any investment or other property? no

    Ages of children: none yet

    Life insurance: got at time of mortgage shopping around at the moment


    What specific question do you have or what issues are of concern to you?

    We are a young couple just married..hence the c.union loan! and I am trying to figure out if we'll ever afford to have kids! I have a budget done for ourselves for the year and by the end of this year we will have payed off all loans and have maybe €3k in savings. A couple of things set us back in the last few years but in general i dont think we're bad with money. As it is now we have €200 a week for household money (not including bills) and this is do-able. But when i work out that if we we're to have kids and to be a stay at home mother i'm not sure how much we should aim for weekly spending.

    Apart from the obvious cutting back on sky tv I cant see any other way to free up money!
    As it is our ESB is around €90 - €100 bi monthly..our gas maybe €170 and our eircom about €160..are these too high in anyones experience?

    sorry for all the info..just looking for a fresh pair of eyes..

    thanks
     
  2. ClubMan

    ClubMan Frequent Poster

    Posts:
    43,911
    Yet again in response to such queries - it make no sense to have the unsecured borrowings that you have when you could clear the debts with the savings that you have.
     
  3. mrs.m

    mrs.m Registered User

    Posts:
    22
    i realise that..thats why we are using the savings to clear all loans this year some sooner than others..the savings are in the credit union and can be used against that loan..and by the end of this year we will have savings and no loans..if we have kids we could not afford to continue saving/start a pension etc.
    I would like to be a sahm if possible
     
  4. HighFlier

    HighFlier Frequent Poster

    Posts:
    549
    The big issue you need to consider is childcare.

    If one of you has to give up work or if you need a professional creche it seems to be a big streach.

    On the other hand if Granny was available to step in then its a different matter.
     
  5. SuilAmhain

    SuilAmhain Registered User

    Posts:
    12
    For what it's worth that Eircom bill seems very high to me. Is it monthly or bi-monthly? Maybe there is a better "plan" you could switch to
     
  6. mrs.m

    mrs.m Registered User

    Posts:
    22
    No granny available to step in. i would have to way up the cost of childcare against staying home but definatley dont see the point of working to pay child care. i have always thought that I would prefer to stay home with my children but not too easy in modern ireland.
    Do the other bills seem a reasonable amount?..i could probably get the phone bill down with a bit of effort.knowing life something will crop up to replace it anyhow :p
     
  7. hlm

    hlm Registered User

    Posts:
    41
    If you want to be a sahm, your partners salary would need to increase significantly to service your current mortgage and day to day living expenses. How likely is that to happen within say a 5 year timeframe? Would extra qualifications increase his earning capacity, are there any chances of promotion in his current job, you might look at this. As things currently stand for you, a child could put you under serious pressure financially, even if you were to return to work childcare fees would eat up most of your salary. Your mortgage looks high relative to both of your earnings.
     
  8. mrs.m

    mrs.m Registered User

    Posts:
    22
    My hubby wouldnt get a promotion as its a trade job he does but he will get a pay rise this august and on a yearly basis thereafter..also if i was to stay at home he would have my tax credits and after aug pay rise would be on about €29,500 take home a year..that plus childs allowance of €1900 or so and yearly bonus up to 6yrs old of €1000 would be €32,400
     
  9. SuilAmhain

    SuilAmhain Registered User

    Posts:
    12
    The other bills seem ok but it's hard to compare. My last 2 bills were 200 ESB and 300 gas but we've got electric shower and gas hob with 4 adults living in the house so the usage of those is probably quite high by normal standards.
     
  10. leex

    leex Frequent Poster

    Posts:
    255
    Have a look at UTV Telecom for your phone. Am with them for a few years. Landline calls to IRE and UK are free after 6pm and at weekends and you only pay line rental. Mobile calls and other international calls are extra. For 9.99euro per month extra, landline calls to IRL and UK are free during the day. This is reduced to 6.99euro if you have BB with them.
     
  11. mrs.m

    mrs.m Registered User

    Posts:
    22
    well my last eircom bill was €41 for line rental €41 for broadband and €40 for phone calls plus Vat..i round it up to 160 cause some times it would be..but that would definately be the highest.
    I dont top up my mobile very often maybe a €5 a month and use the home phone mostly. so theres no major phone credit bills to come out of weekly spending.
    I really cant see anywhere to cut back spending..i think €200 a week as we are now seems to be working out ok but theres the cushion of savings there so i dont worry too much..but if we we're unable to keep saving and be on that a week i'd worry more about unexpected things as there'd be no room for juggling around to get through tough patches.
    How much is a reasonable amount a week to spend on a family of 3 as far as clothes, food and day to day living costs are concerned?would love to know what people think is average or enough.
     
  12. SarahMc

    SarahMc Frequent Poster

    Posts:
    779
    If every couple asked rationally "can we afford to have children", I doubt the population of Ireland would sustain itself.

    If you are planning to be a SAHM, you can earn 15K tax free by childminding and still pass tax credits onto your husband. You would probably also be eligible for FIS and the GP visit card.

    As for a budget for a family of 3, add on one third to your existing expenditure, I know its not another adult, but think nappies, formula, wipes etc. You will save money by not travelling to work, making meals from scratch etc.

    I must say Mrs M you sound like a good money manager, so am curious (even though its not my business) why you took out a CU loan to get married, particularly as you planned to start a family so soon after.
     
  13. Brianne

    Brianne Frequent Poster

    Posts:
    352
    Fair dues to you for being so organised but if you want to be a SAHM then stay that way and use the next three years to save a nest egg of about 15000E and attack the morgage. I think that other than your phone you are doing well and are to be congratulated on not having much debt apart from the morgage. Having had children very young myself , I think if I was in your position nowadays, I would prefer to enjoy a few years of childless marriage first. Its much easier to economise with just two young adults.You could still do a lot of things eg. holidays, short breaks etc. within your budget that are much more difficult when babies arrive. By waiting a short few years and yes even though you may not feel it you are still very young , you will, with a bit of money behind you, be in a much better position to enjoy parenthood. Best of luck
     
  14. ailbhe

    ailbhe Frequent Poster

    Posts:
    481
    I am 25 and earn slightly more than you. In terms of income I am estimating you are coming out with net of about 1700 per month.
    So by having a child you will be getting 280 per week for 26 weeks after which you will have no income if you stay at home.
    Having a child will mean you get approx 233 per month (child benefit and early childcare supplement) so you are losing 1467 per month. If you return to work you would be earning €1700 + 233 = 1933 minus creche of approx €1000 so you would still be almost €1000 better off by staying in work.
    I am leaving your husbands wage out of it as his would pretty much cover the mortgage and cost of food, bills etc (he earns approx 2000 per month - 1315 (mortgage) = 685 per month which would be necessary for food, esb etc (and would just about cover that)

    Along with childcare costs you also need to factor in medical costs (kids are always sick with one thing or another), nappies, clothes, equiptment, heating costs by being home all day .....the list is endless really.

    My partner is on more than yours and we have decided to hold off for a year or two so we can save up some money in order to have a second child and that is even with the intention of me returning to work. We had our first at 20 when he was on 20k per annum and I had to give up work. It has been a very hard struggle to get to where we are now (own home, better jobs, bit more free cash) and while I don't regret having my daughter I do wish we had been in a better financial position as it really tested our relationship at times.
    Only you can make the decision as to whether the desire to have a child is so great that you will be willing to spend the next 5-10 years pretty much broke. Some people do think it is worth it. Others prefer to wait.
     
  15. Flax

    Flax Guest

    Not really. I'd wait a few years. You have plenty of time on your hands.
     
  16. Welfarite

    Welfarite Frequent Poster

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    3,057
    I would agree. You are young and say you ar just married. Enjoy each other for a few years before having kids that will take up your attention for the following 18 years! :D
     
  17. annR

    annR Frequent Poster

    Posts:
    654
    Your energy bills seem high to me. Our gas bill is about 70 quid every 2 months, something similar for ESB, that's for two people living in a semi d.
     
  18. pc7

    pc7 Frequent Poster

    Posts:
    597
    I have an eircom bundle that works out at 55 a month, that could save you a little more, along with the usual shop at lidl/aldi, only use cash, keep a spending diary. Enjoy life a little first though :)
     
  19. Calico

    Calico Frequent Poster

    Posts:
    331
    I think you're both very young and as newly-weds, maybe you should wait?
     
  20. oakrise

    oakrise Frequent Poster

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    76
    Like the last few posters , I 'll advise you to wait, apart from finances once you have kids your freedom is out of the window. You are only young and newly married; why not enjoy every minute of it.