Could we afford a baby on minimum wage?

posted 1 year ago in Family
Post # 61
Member
598 posts
Busy bee

I’m not a mother but I am a teacher and I’ve worked in different schools. I’ve worked in a state school in a very very deprived area, where most of the parents were on minimum wage. I’ve also worked in a private school in madrid where the Beckham’s kids went. 

If im being honest, the kids who were the happiest were by far the kids from the deprived school. They saw their parents a lot, had quality time, appreciated the smaller things. So many of the kids in the school in madrid were on watch for being deprived…And I am talking about deprivation of attention from their parents. The majority of the parents earnt mega bucks so worked ridiculous hours. They never saw their kids and I felt so bad for the children. They were the first ones dropped off in the morning at about 7:30 for breakfast club and picked up at 6pm after being in afterschool club all evening. So long you can afford a shelter and food for them…I think you’ll be fine 🙂

Post # 62
Member
2021 posts
Buzzing bee

walkerqueen4014 :  you suggested she apply before she’s even pregnant. That’s the exact opposite of falling on hard times. That’s just not doing anything to improve your situation and relying on government help for choices you made, full well knowing your financial position. 

OP- at the end of the day, I think you just owe it to your future kids to bring them into the world when you are as financially stable as possible. As someone who is 26 and dealing with infertility, you can have fertility problems at any age. Not just when you hit a certain age. Taking a few years to better your career (whether through education, working your way up somewhere, job training, finding a new job, etc) is up to you. But there’s no rush to have a baby you maybe can/maybe can’t afford because you’re afraid your fertility is going to decline. 

Post # 63
Member
824 posts
Busy bee

Hello, my partner and I are both on £10/hour (he works 40 hours, I work 25 hours a week), we saved for our deposit house living in private renting, we borrowed £130k for our £175k house, but we can afford everything (albeit tightly) if one of us loses our jobs! But it depends on how smart you guys are with money in terms of bills and everything. We are 22 and 24 so fairly young but are careful! We have also bought our own car outright and things. We just make sure that we don’t push ourselves too much! In fact when we finally move in we will be paying £200/month LESS in mortgage than we were on rent!

 

in terms of having a baby we have found that at the moment child benefit more than covers everything she currently needs at 10 months, but I know things get more expensive!

Post # 64
Member
1984 posts
Buzzing bee
  • Wedding: May 2016 - Sussex, UK

I’m a UK bee. Firstly I commend you on saving tbe money you have so far. I definitely think that your current situation gives you a great opportunity to save for a couple more years. 

Where I am in the south east £130k wouldn’t get a studio flat. You’re in a lower cost of living area so if you can buy a place for even less then definitely do it.

Some bees are very harsh. A lot of people are on a living wage here. It doesn’t mean they don’t want to ‘better themselves’. Life isn’t just about the job you have and you said it’s a tough manual job. Not sure where people got the idea that you want to live off benefits from. I do think you need to save a little more so you have some back up if things don’t work out as you plan. 

Post # 65
Member
94 posts
Worker bee

Whilst its admirable that you’ve saved a good deposit, savings only get you so far. When it comes to mortgage applications it’s based on the affordability of your monthly income – savings have nothing to do with it (other than how much you need to borrow). The mortgage lender will scrutinise your monthly income and outgoings, as well as your living circumstances and employment details (how much sick pay you would get from your company if you were sick/injured and unable to work, what maternity pay you would get from your company, how much you contribute to an employee pension, what age you plan to retire, etc). They will ask you if you forsee any changes to your personal circumstances within the next few years. If you do decide to plan for a baby within the next few years, it would be wise to tell the mortgage company. I suspect a mortgage adviser would advise you to see what mortgage you could get on just your partner’s salary alone, in case you have to stop working completely when you have a child (for example if your parents are unable to help with childcare). Or you may be able to estimate what you would earn if you reduced your hours to part-time, and ask the mortgage advisor to give you an estimate of what you could borrow based on those lower hours. I don’t think you could get a mortgage on your partner’s salary alone, and it’s also doubtful whether you could get one on your potential reduced hours (but if you did it would probably be much lower than you’re expecting).
You also need to factor in the potential rise in mortgage interest rates and what type of mortgage you would want. At the moment interest rates are quite low, especially if you choose a 2 or 5 year fixed-rate mortgage. But after those 2/5 years you would need to apply for a new mortgage product and therefore go through a new application process. If you’ve had a child and given up work/reduced your hours to part time, that would substantially change your income/expenditure figures (eg-childcare, maternity pay etc) and you could risk not being able to get a new mortgage product – that would leave you stuck on a standard variable rate mortgage which would be a much higher interest rate and therefore a very high monthly payment (eg – a 2-year fixed mortgage might give you an interest rate of 2% and a monthly payment of £500, whereas a standard variable rate might be 6% and a monthly payment of £900 per month (these are random figures i’ve plucked out of thin air – I haven’t done the calculations). If interest rates rise, your monthly payment on a SVR mortgage would automatically go up and therefore could go well beyond what you could afford for just the 2 of you, let alone if you have a child to provide for as well. A mortgage company will work out whether you could afford the mortgage if interest rates go up to 8% for example, but that can only be based on your current income/expenditure at the time you apply for the mortgage. If your income changes after taking out the mortgage you could find yourself in a very difficult situation and risk having your home repossessed if you don’t keep up your monthly payments.

I think it’s good that you’re thinking about your options before commiting to having a child, but it seems to me that you’ve asked for advice but only want to hear one answer.

In answer to your questions:
is it doable? – technically yes it is doable to afford a baby on minumum wage, but in my opinion you would have to rely heavily on the government/local council (eg council house) because I don’t think you would be offerred the mortgage figure you want, and I certainly wouldn’t advise that option. You seem smart enough and sensible enough to know that you have to work for what you get in life, not expect it to be handed to you on a plate. I appreciate for some people it is unavoidable, but in your situation it is totally avoidable and some would argue not the ‘right’ thing to do.

Is raising a baby on one full-time minimum wage job and one part time low paid job realistic? No. Not if you want to provide a good quality of life for your child. As PPs have said, unexpected costs crop up all the time when you own a property and/or have a child. In my opinion you would do best to both focus on increasing your earning potential and revist the decision of having a child once you are both better-off financially and your partner is in a better place mentally.

Post # 66
Member
824 posts
Busy bee

Just as an extra point we will save ~£1200/month when I go back to work, that’s with me on base hours, so if I get extra hours that figure could go up a lot! 

Post # 67
Member
2485 posts
Buzzing bee
  • Wedding: May 2017

azf0019 :  it was in direct response to a bee suggesting that OP could just apply for every gov assistance under the sun to have a child instead of offering options where the OP actually tries to prepare for a child with the means she has instead of using that as THE WAY to be able to support one.  It has nothing to do with my situation of taxes and doesn’t matter if only 5 cents goes to it from my paycheck. It’s ridiculous to use government assistance as your plan instead of as something to help when you fall on hard times which anybody could,  including myself.  But I’m not setting up my life to have the gov pay for a kid I didn’t NEED to have. You don’t have to agree and I’m not going to argue with you. 

Post # 68
Member
2485 posts
Buzzing bee
  • Wedding: May 2017

walkerqueen4014 :  no one is shaming her for it seeing as how OP isn’t using it. You suggested it as a PLAN which is a huge difference from what you’re trying to argue here. Someone who uses it as a PLAN to have  a child is abusing the system in my opinion. It is not a reasonable solution for a permanent situation, a child,  which OP is asking. The reasonable options have been covered which are: stay at her job and continue to save, try to go to school to earn a degree and then get higher pay, or wait and see where she and her H are financially aftet buying their house so she can sort out her savings and options.  ALL reasonable.  Your solution is not in my opinion. 

Post # 69
Member
2814 posts
Sugar bee

happybridetobe1988 :  I️ think it could be other way around too. Some People who are poor have to work 3 jobs to put food on the table and some people who are well off enjoy the perks of flexibility in schedule, work from home, etc. I️ know struggling families that never see their kids as they work double shifts and are exausted and ppl making well over 6 figures working 40 hours week. 

Post # 70
Member
2485 posts
Buzzing bee
  • Wedding: May 2017

solnishko1186 :  I agree with you because I grew up poor with a mom who worked 2 jobs and was never home and wasn’t able to help me with school or anything. I didn’t get time or money from her. So it goes both ways.

happybridetobe1988 :  this doesn’t seem like a reasonable conclusion to come to considering the deprived children will most likely continue being deprived and have to live a life of struggle or try to be the exception to beat the odds. It usually is the rule and not the exception that those children will repeat the cycle of having children growing up in poverty or that are poor and that is so unfair to think love and  a shelter are enough. I can tell you from my experience being poor, it’s not. 

Post # 71
Member
824 posts
Busy bee

OP honestly sit down with a spread sheet and your bank statements, see how much you have left every month, look at real mortgage rates in your area and find a real house that you can afford and zoopla the bill costs. Factor that into your current financial situation. Now subtract the highest paid persons salary. Can you honestly afford to stay afloat if the breadwinner loses their job? Everyone gets child benefit (even the rich) which works out at almost £90/month. When my baby was newborn She went through 15 nappies a day ish at 6p a nappy it was nearly £30/month on nappies, now she’s 10 months she goes through 5-6 nappies at 9p/nappy so £17 a month on nappies, but this is offset by higher food cost, (I breastfeed) if you buy pouches of food at 10 months you’d be looking at £45/month on baby food, I tend to give her toast for breakfast, pasta for lunch and whatever we have for dinner (plus veg snacks) and this works out MUCH cheaper but is a LOT more effort. 

 

Like I said the child benefit everyone gets will cover most of your monthly baby related costs over the first year, (obviously the expense of cot/pram/clothes is not included in this). Also NEVER buy new clothes, absolutely not worth it, go on gumtree and get a massive bundle of clothes! Ive got clothes I’ve never put her in, but I’ve never spent money on shop clothes (I have been bought them though) so it’s fine! 

 

Its hard im not going to lie, but it’s very possible! If me or my partner lost our jobs tomorrow, it absolutely wouldn’t be ideal but we could manage until we found a new job!

 

im sorry if this has been a jumble of sentences it’s 1am 😂

Post # 72
Member
751 posts
Busy bee

As PPs have mentioned, you will be fine. Right now your priority is try not to stress. When I got pregnant, ex-hole lost his job over some anger issues and couldn’t find one even until 7 months in to my pregnancy! surprised And, I had just finished a contract shortly before I became pregnant, and didn’t bother taking up another one because ex-hole’s income was very good. That is, until he gave it up. yell

But I tried all the time not to stress about it. I helped him considerably during that time to do up his resume, apply to the jobs, prep for job interviews, etc.

End of day, now I have an almost 4 years’ old. And I am still not working. I was, but then I decided to school full-time, but life has gone on many times on bare minimums, and the boy is as happy as a clam.

Post # 73
Member
158 posts
Blushing bee
  • Wedding: June 2018

If you want to raise a baby on one income then start doing it now. Bank the difference in income that you will be losing going part time. Feel what it is like to live at that wage now without the responsibility of a baby. Then instead of using that money to buy a more expensive house use it to buy a house at the rate that you are paying now and cut the time you will be paying on the loan because kids only get more expensive as they grow. Keep in mind that you will not be

Post # 75
Member
2693 posts
Sugar bee
  • Wedding: July 2011

gypsymermaid :  It sounds like you have a good head on your shoulders so I would say to continue saving – really think about what you can afford and go from there.

For the Bees having a go about getting government help, I think there is a cultural difference here. In the UK there are lots of benefits for people who are in work. That includes government maternity and sick pay, child benefits (which are capped at 2 children) and support for housing. We also have a universal health care system so there is no need to health insurance as that is covered for by our taxes. We also have a living wage as well as a national wage.

I don’t think anyone was suggesting the OP live off benefits, but they can be used to support a working income.

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