If you’d asked me 10 years ago if I’d ever reduce my working hours and therefore face a pay drop after having children, the answer would have been a hard ‘NO’. Fast forward to 2019 when I had my first baby and it was a somewhat different story. At the time, my job involved shift work which meant working lates and weekends. My chosen nursery didn’t accommodate shift patterns and I felt I was going to be missing out on time with my child even beyond that of a traditional 9-5. Despite this situation this is how I started budgeting to handle an £8000 pay drop and spend more time with my kids….
However, for a good few years I was the higher earner in my household and by the time I returned to work, my husband and I were 50/50 earners meaning my salary contributed to half of the household income. This meant that dropping my hours would have a significant impact on our finances. After many calculations, a lot of stress and a very long and painful admin process, when I eventually went back to work in 2020 I dropped my hours slightly going from 40 hours a week to 33.5.
Whilst it wasn’t much of a drop in hours (and I certainly don’t feel like I work part-time at all) it cost me a whopping £8000 a year off my salary! I also picked up a £700+ monthly childcare bill which put a huge dent in my disposable income. Welcome to parenthood.
Clearly something had to change in the way we managed our finances as a family and this post is a rundown of a few things I did to manage that major life change.
1. STARTED BUDGETING.
The number one most important thing I did during my maternity leave to prepare for the changes ahead was making my first ever budget. I’ll go into how I did this specifically in a different post but going from mindlessly spending to having an actual plan for our money and spending limits was an absolute game changer. I discovered sinking funds, fixed expenses, variable budgets and I now refer to myself as a ‘kind of’ zero based budgeter which means I give all of my money a purpose before it even hits my bank account. I honestly think that without learning how to budget I might have been forced (like so many women are) to return to work at the end of my statutory maternity pay and miss out on the final 3 months of unpaid leave that I’m entitled to in the UK.
2. CUT UNNECESSARY OUTGOINGS
We may not have been budgeters BC (before children), but I have always been pretty money savvy so it was a surprise to us when we combed through our outgoings to find recurring payments we didn’t even realise we had. We also had three different TV subscription services which we were using but we decided two was enough and cancelled one of them. Regularly reviewing our outgoings has helped us to lower the cost of certain expenses and make sure we know EXACTLY what is coming out at all times.
3. TRACKING SPENDING
I distinctly remember being SHOOKETH when we added up how much money we had spent on food during a month. It was obscene but we’d never tracked our spending before so we had no idea it was so bad. This has been vital because we overpay our mortgage, save and invest. This means our remaining budget is tight. Keeping a close eye on where we’re up to helps us to stay on track and it also makes us more conscious and mindful of our spending.
4. SURROUND MYSELF WITH LIKE-MINDED PEOPLE.
I can’t remember how I happened upon the money saving, debt free, deal finding side of instagram but somehow, I did. It has really changed my social media experience. Before I was following influencers who were constantly selling me things or trying to get me to join their multi level marketing company. Social media made me feel inadequate and left me wanting after unnecessary things. Since I created my own money based instagram my feed is now full of people (especially women) who are trying to pay off debt or save house deposits. They are finding the best deals on items or opting out of spending altogether and it has made such a difference to my spending habits to be surrounded by people trying to save and maximise money instead of spend it. Instagram is actually the reason I started investing. No one in my immediate family had ever been an investor and I just didn’t think someone like me could do it but by exposing myself to the theories, terms and just becoming more comfortable with the idea, I was able to go off and do enough research to finally feel comfortable dipping my toe into the stock market.
5. CASHBACK APPS AND DEALS
I started using food and drink cashback apps like Shopmium and GreenJinn for the first time ever during my maternity leave. Prior to this I’d only ever used Top Cashback and I was a bit suspicious of these other cashback apps. Free food and drink? But why? It all seemed a bit too good to be true. Then one day I decided to try one out and I’ve never looked back. Now I have three main food and drink cashback apps I use to get free and discounted food and drink in addition to various other general cashback site and I’ve saved SO much money! This is something I’ll touch on in a separate post also if you’re interested.
6. CREATED ADDITIONAL INCOME.
You have two options when dealing with improving your finances and budgeting and that is to reduce your outgoings or increase your income. It’s a fact of life that you can only cut so much out of your budget and so I now make a little extra money both on and off my instagram account from things like survey apps, referral schemes and sign up bonuses which is helpful. There are so many ‘side hustles’ out there but personally, as a busy mum, I have to choose where I spend my time wisely. I don’t recommend working 24/7 and I’m definitely anti toxic side hustle but if you can find something you enjoy or something that is low effort which you can monetize then you’re onto a potential winner.
7. TAKE ADVANTAGE OF FLEXIBLE WORKING.
This is a topic all in itself and it’s a MAJOR item in a working parents tool belt. Childcare is EXPENSIVE and I just don’t have the option to use family to help so I had to use a nursery for my child from the age of 1. I also happened to choose the most expensive nursery of the options because it was the best. Yes, there were cheaper options but this is where my child was going to be cared for when I was at work so in my opinion, worth it and I’m thankful to be in a financial position to make a choice like this. I applied to go part-time in my job and used the flexible working policy to secure one fixed day off per week (despite the fact that I worked shifts at the time). This allowed me to recoup the cost of childcare on that day and spend that day each week with my child before they start school.
With all of these strategies combined, despite the massive loss of £8000 of my annual salary I have been able to not only manage the drop in pay but thrive! Thanks to budgeting, in 2021 we were able to overpay our mortgage by £10,000. We have become the first generation of investors in our respective families and we have already ensured that our toddler is an investor!
2023 looks set to be a very different year as I recently had a second baby which is going to change the budgeting game again as I will be going onto statutory maternity pay and 3 months of unpaid leave. I’ve used everything I learned from the last 2 and a half years to be able to get myself into a financial position to manage a second 12 month maternity leave during a cost of living crisis that I could never have anticipated.
I can honestly say that reflecting on the period that I’ve been ‘part time’ (which will forever be in air quotes) I don’t for one second regret trading the loss in pay for the gain in time. Being able spend one weekday with my child every week during the first few years of her life before the education system prises us apart is worth more than money. Budgeting and learning how to maximise my money has given me that gift. My future goals would be to reduce my traditional working hours further as my priorities have vastly shifted since becoming a mum and I know that all of these tricks and tips are what will help me make that a reality.
Happy budgeting!
Leigh