# Trying to budget for another child...



## ailbhe (6 Jun 2008)

Age: 26
Spouse’s/Partner's age: 26

Monthly net income from employment or profession: 1800
Monthly net income of spouse: 2200

Type of employment: e.g. Civil Servant, self-employed : Both employees, private sector

In general are you spending more than you earn or are you saving? Not saving but not building up debt either

Rough estimate of value of home: 360,000
Amount outstanding on your mortgage: 290,000
*What interest rate are you paying? Tracker mortgage (not sure of exact rate but it is a new mortgage and it was the best rate at the time we got it -about 12 months ago)*

Other borrowings – car loans/personal loans etc
My car loan €11000 outstanding (268 per month)
His car loan €5000 outstanding (155 per month)

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €2k on mine, €7k on his (accumulated during a period of unemployment last year)
he tries to pay 400 per month off his which wouldn't be possible if we had another child. I pay approx 100-200 off mine per month.

Savings and investments: None

Do you have a pension scheme? I don't, his work contribute a sum of approx €200 per month to his pension (they won't reduce his pension and pay him more - we've tried)

Do you own any investment or other property? No

Ages of children: One child aged 5

Life insurance: €54 per month for us both (loaded due to a health condition I have)


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


*We are considering having another child but not sure if it will stretch us too much financially.*

*We would be looking at another 800 per month at least for a creche for a baby. At the moment it costs us €325 per month for our older child.*

*We are also considering consolidating all our loans and credit cards into one loan (approx 500 per month) and cancelling my credit card and reducing the limit on his to €1000.*

*This would mean our income would be 4300(including childrens allowance for 2 children)*
*Less mortgage(1500), loan repayment(500), insurance(120), creche fees for 2 children(1200 approx) Total 3320*

*This leaves us with approx 240 per week for food, petrol, ESB, phone bills and essentials which doesn't feel like enough.*

*I am elegible for maternity benefit (total 1120 approx per month). My employer will not top up my maternity benefit. I would return to work once my paid maternity benefit ran out. I would also remove our older child from creche whilst off work leaving a shortfall of 355 per month while I was off work so i am not too concerned about that period of time.*

*My main issue is the cost when I return to work. I have looked into childminders but it is not that much less expensive than creche. I am adverse to the idea of an au pair. *

*All suggestions welcome. *


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## annR (6 Jun 2008)

> *This leaves us with approx 240 per week for food, petrol, ESB, phone bills and essentials which doesn't feel like enough.*


 
You could tot up what these expenses come to and see if you can afford them on 240 per week.


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## so-crates (6 Jun 2008)

ailbhe said:


> Other borrowings – car loans/personal loans etc
> My car loan €11000 outstanding (268 per month)
> His car loan €5000 outstanding (155 per month)
> 
> ...


 
You have the makings of a problem here. I think for your own sakes at the very minimum you need to completely clear your credit card balances prior to thinking about increasing the loading on your income and having another child.

Is the balance on your credit cards actually diminishing? Or are you still using the cards? Assuming you aren't using the cards, at your current rate of repayment when do you envisage that your debt will be cleared? Have you investigated moving at least one of them to a zero interest balance transfer deal to allow you to tackle the money owed? You say your husband "tries to pay €400 per month" off his credit card. "Tries" implies does not always succeed, how much has actually been paid off each month for the last say six months? Is he paying it off first thing he gets paid or last thing?

If you do decide to (and manage to) consolidate your loans then you need a single loan of €25k by my rough calculation. I think it would be very advisable to get rid of the two cars you have and trade down to something much cheaper, using the balance to reduce the amount you have to repay. I must confess that I would never buy a car on credit so I am quite biased against owing so much money on what is a depreciating asset simply for the "new car" feel.

You are both only in your mid-twenties yet and you have a sizeable mortgage but if your husbands employer is also contributing to his pension scheme, in addition to the tax relief it is probably wiser to continue paying into it.


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## ailbhe (6 Jun 2008)

so-crates said:


> You have the makings of a problem here. I think for your own sakes at the very minimum you need to completely clear your credit card balances prior to thinking about increasing the loading on your income and having another child.
> 
> Is the balance on your credit cards actually diminishing? Or are you still using the cards? Assuming you aren't using the cards, at your current rate of repayment when do you envisage that your debt will be cleared? Have you investigated moving at least one of them to a zero interest balance transfer deal to allow you to tackle the money owed? You say your husband "tries to pay €400 per month" off his credit card. "Tries" implies does not always succeed, how much has actually been paid off each month for the last say six months? Is he paying it off first thing he gets paid or last thing?
> 
> ...


 

I have a 02 car and he has a small 03 car. We can't really downsize these any furthur and both commute for work so need 2 cars. I had a much older car but it cost me so much in repairs and days lost because it wouldn't start etc that I decided to upgrade and even at that I didn't buy new as I feel new cars are a waste. 
These 2 loans we have were taken out in the last year or so. I am not using my credit card and the balance has decreased from 3500 to just over 2000 in the last few months by using savings and childrens allowance etc against it. I would hope to have mine clear in about 5 months, hopefully less. I always pay 200 off mine when I get paid and then whatever I have left at the end of the month I also put against it.
He estimates it will take him about 10 months to clear his at the rate of a minimum of 400 per month at not using it and putting any money he has left at the end of the month against it. He is trying not to use his but sometimes he must, moreso in the last few months as our daughter was ill and his car kept breaking down. At the time we had no money and had to put it on the credit cards. He has paid 400 off his card for the last 6 months but has had to use it on a few occassions too. 

I am wondering if consolidating is a good idea or if we should just keep the two loans and try to work at paying off the credit cards? I know by consolidating we would be paying more in the long term but the payments each month would be lessened.


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## rmelly (6 Jun 2008)

And ensure you factor in EVERYTHING else e.g. Car Tax & Insurance, TV Licence & TV Service provide, Phone(s) etc.


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## Mpsox (6 Jun 2008)

If I understand your figures correctly, you'll be getting paid €1800pm and paying €1200pm in creche fees. Therefore you will be working for €600pm. Is it worth it?. 

Have you considered taking a career break for a number of years and would that allow you to reduce your expenditure by getting rid of one of your cars? If you were not at work you'd be able to transfer accross your TFA to your spouse so his take home pay would actually be more.

Alternatively, you could find yourself better off if you gave up work during the week and took a part time evening/night job/ That way you'd avoid creche fees altogther


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## so-crates (6 Jun 2008)

ailbhe said:


> I have a 02 car and he has a small 03 car. We can't really downsize these ant furthur and both commute for work so need 2 cars. I had a much older car but it cost me so much in repairs and days lost because it wouldn't start etc that I decided to upgrade and even at that I didn't buy new as I feel new cars are a waste.


So there is little hope of a saving to be found there. I do wonder sometimes how some people seem to manage to drive quite happily in a 12-15 year old car with few problems and other people seem to break down all the time. With the value of your property, I am guessing that you probably live in a pretty sizeable town or city, is there any possibility (and I appreciate there would be effort on your part to do so but no harm in considering it) of using public transport for one of you to commute on? At least for a time? If there was you could possibly also avail of the taxsaver scheme for public transport commuters which attracts tax relief and you could then look at getting rid of one of the cars.



ailbhe said:


> These 2 loans we have were taken out in the last year or so. I am not using my credit card and the balance has decreased from 3500 to just over 2000 in the last few months.
> He is trying not to use his but sometimes he must, moreso in the last few months as our daughter was ill and his car kept breaking down. At the time we had no money and had to put it on the credit cards. He has paid 400 off his card for the last 6 months but has had to use it on a few occassions too.


This is good, so you are tackling the balance and not simply treading water on it. Are you already in a zero interest period (I am guessing you must be if you have managed to clear 1500 off in a matter of months repaying up to 200 per month)? If so when does that end? And what interest will it attract at the end of that period?

Have you tried keeping a spending diary? As you have said you don't know whether 240pw would be enough for living on which could indicate that you haven't a clear picture of what your cost of living per week is now. Keeping a diary would clearly show you what your cost of living per week is and it may also show up where you are spending money that you may not realise.


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## ailbhe (6 Jun 2008)

I need the 600 per month and I was a stay at home mother with my daughter and didn't enjoy it at all. I am also on the bottom rung of the career I love and want to work my way up. In reality a part time/evening job wouldn't be possible in my current occupation. If I could get a job from 8pm to 12pm and one day a week at the weekend I would be coming out with more money (by my calculations about 200 more than by working full time) but I would be sacrificing time with my partner and it sounds exhausting to be honest 

If I could do it in the field I work in I would definitely consider it but I have spent 3 years getting to where I am and am half way through my qualifications after which I hope to proceed and specialise in a certain area. This is partly why I want to complete my family now. No matter what people say I do believe that your career suffers when you go on maternity leave and I would prefer for that to happen when I am in a junior position as opposed to a senior position. The lack of responsibility at this stage in my career also makes it easier to have small children as there is not as much pressure on me to stay late, nobody minds if I have to take a day off at short notice because of a sick child etc.


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## ailbhe (6 Jun 2008)

so-crates said:


> So there is little hope of a saving to be found there. I do wonder sometimes how some people seem to manage to drive quite happily in a 12-15 year old car with few problems and other people seem to break down all the time. With the value of your property, I am guessing that you probably live in a pretty sizeable town or city, is there any possibility (and I appreciate there would be effort on your part to do so but no harm in considering it) of using public transport for one of you to commute on? At least for a time? If there was you could possibly also avail of the taxsaver scheme for public transport commuters which attracts tax relief and you could then look at getting rid of one of the cars.
> 
> 
> This is good, so you are tackling the balance and not simply treading water on it. Are you already in a zero interest period (I am guessing you must be if you have managed to clear 1500 off in a matter of months repaying up to 200 per month)? If so when does that end? And what interest will it attract at the end of that period?
> ...


 

Alas, we live in a large town but it is rural and therefore the public transport is poor. We both work about 25miles from home but the first bus arrives too late and the last leaves too early. 

My interest free period ends next month. As I said I pay a minimum of 200 but will sometimes pay 400 in the month off the credit card. Mine is diminishing but my partners isn't. The interest accumulates very quickly on a balance that large and we have tried to find him a 0% interest rate in order to transfer the balance but we can't get one that gives him a limit that large.

We do need to keep track of what we spend to see where we can bring down our costs and how much we actually need to survive on.


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## so-crates (6 Jun 2008)

ailbhe said:


> Alas, we live in a large town but it is rural and therefore the public transport is poor. We both work about 25miles from home but the first bus arrives too late and the last leaves too early.


 All to often the problem and not one confined to rural areas either. I take it then that car-pooling together isn't an option either?



ailbhe said:


> My interest free period ends next month. As I said I pay a minimum of 200 but will sometimes pay 400 in the month off the credit card. Mine is diminishing but my partners isn't. The interest accumulates very quickly on a balance that large and we have tried to find him a 0% interest rate in order to transfer the balance but we can't get one that gives him a limit that large.


I missed the second part of your original sentence, you reckon you could have yours cleared in 5 months? I assume you then intend diverting your payments towards clearing his? I think it is still a bit optimistic to see his cleared in 10 months, if the balance is 7k, he will only have paid 4k at 400pm or if you divert all of yours towards his once yours is cleared that would be 5k (excluding for the moment the additional you are paying over the 200). Realistically, short of a windfall you are looking at probably a year and a half to clear his card, would you be willing to hold off on having a second child until then? You would certainly have a bit more flexibility in your income at that stage.



ailbhe said:


> We do need to keep track of what we spend to see where we can bring down our costs and how much we actually need to survive on.


 This is probably the best thing for you to do, if it were possible to free up even €100 pm it would mean you could definitely pay yours off in 5 months if you can manage it in addition to the 400pm and probably knock a few months off the repayment time on his card.

I don't think you will find too many people who would disagree with you that careers suffer with maternity leave.


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