Can I afford to take parental leave

[ali1971]

Age: 37
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: 48000
Annual gross income of spouse: was unemployed for a year, now working temporary since May at €10euro/hr 3-4 days/weekly

Type of employment: Myself Public sector

In general are you spending more than you earn or are you saving? Generally saving but have taken 4 months unpaid maternity leave. Had previously saved up for this.

Rough estimate of value of home: 300,000
Amount outstanding on your mortgage: 87,000
What interest rate are you paying? AIB Tracker rate

Other borrowings – car loans/personal loans etc : None

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

Savings and investments: 30,000 Rabodirect, 15,000 AIB (to be used to finish the outside of our house) Approx. 40,000 in shares.

Do you have a pension scheme? Myself Yes, Husband No

Do you own any investment or other property? Have some land, yearly income €2200

Ages of children: 9 months

Life insurance: €40/month for both of us


What specific question do you have or what issues are of concern to you?
I would like to reduce my hours from 39hr week to 30hr week by taking parental leave to spend more time with my baby. However, husband feels we would be leaving ourselves short and end up eating into our savings. He is worried about our future. We would spend approx 2800/month on all essentials, ie mortgage, house bills, petrol, all insurances, clothes, food etc. He will look after the baby the days I work if he doesn't get full time work before then. We do need to finish up around the house and he needs a new second hand car!
I do need to contact my manager soon so I would appreciate some of your kind wisdom.

 

[Mammyto2]

Hi Ali1971

Im not big on financial advice but just to give you my perspective..
Im curently on parental leave, normally work 33 hours pw and take 6.6 hours (1 day ) off a week. I hardly noticed the difference with tax situation and saving on childcare. This was with hubbie working FT.
My situation has changes recently as hubbie now finding it harder to get work so thinking of going back 5 days but when things pick up again I will definately take more parental leave.
With your husband able to mind children while you work then you will save there, and you dont have any repayments.
My view was that they are only small for such a short time.

 

[legallady]

the first few years of your babys life are precious. It looks to me like you are in a healthy enough financial situation. I would take the parental leave

 

[dem_syhp]

Okay - besides the lifestyle choice let's look at the figures! I'm using this tax calculator to approximate earnings.

Your husband is earning, before tax approx 3.5 * 8 (hours) * 10 (Euro) = 280. I'm using 13440 yearly for tax calculator (just to get ball park figures). Using this with your 48K, you've a combined taken home pay of 4425. If your salary drops to 37K this drops to 3809. So the question is will you cut back by 600 a month by saving on child care, etc... or are you prepared to use some savings to make up the difference. A formal budget with a diary of your spending will give you a more realistic understanding of the 2800 that you say you spend monthly.

Unless you're cutting back by 600 a month you will be eating in to your savings. It's a choice and only you can make it.

 

[Butter]

What about holding on to your parental leave until your husband goes back to full-time employment? At the moment he is working 3 or 4 days a week and I presume that he minds the baby on the other day or two days. If you held on to your leave until later then you could take a day a week off to spend with the baby when he is back at work full-time. Means that you would not have to put the baby in full time childcare for a long time.

 

[ali1971]

Thanks for all your time and replies. I will chat to my husband again tonight and hopefully we will go for it. Looking back over the last months the 2,800/monthly would have included extra expenses/bills finishing off our house so should be able to cut back a bit there. It is lovely to be able to spend time with him now.