My wife is thinking of quitting her job when we have kids. We have a 25 year $1500/month HDB loan, and my annual salary is $63k. Any advice on how we can afford my mortgage on just my income? - Seedly
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Anonymous

Asked on 08 Nov 2018

My wife is thinking of quitting her job when we have kids. We have a 25 year $1500/month HDB loan, and my annual salary is $63k. Any advice on how we can afford my mortgage on just my income?

Currently, we have 50k in our combined savings.

Is there a way to extend my mortgage so that the monthly repayments are lower?

Is it strongly not advisable for my wife to quit her job?

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Tiffany SQ

Tiffany SQ

Level 4. Prodigy

Answered on 08 Nov 2018

From the current single income salary that u have.. I don't think ur cpf is able to cover the monthly loan.. and with the combined income that ur family have as a safety net.. is quite risky too if any unforseen circumstances happen(e.g. hospitalization, loss of job, etc). Even if u can barely scrap through with ur per month salary to cover all the loans and fixed expenses, ur wife n u may have to compromise on other things such as holiday or letting ur kids attend extra lessons, etc..

Would suggest u to:

1) save at least a yr of annual income(usually is 6months of ur pay, but since u have loans and family to take care of, ur expenses is way higher)

2) Talk to ur wife.. see isit becos she dislike her current job.. maybe she can change a job that is less stressful n more flexible though maybe lower pay..

3) calculate the avg expenses ur family need.. N future big ticket items such as kids education to see what is the ideal income that u need to earn before the family can just rely on ur single income.. assuming ur income will rise gradually..

In a scenario that ur wife really wants to quite.. u probably should also consider the following:

1) talk to her to see isit ok for her to get a part time job to cover some expenses

At the end of the day.. years later, u won't want to be in a scenario when u dont have enough for retirement, could not even spend anything to enjoy life or stuck in a job where u can't quit cos of the debts that u have piled up..

Meanwhile u should also look for ways to earn more money.. such as put ur salary in banks with better interest, learn about low risk investments, etc..

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Lim Tian Shang

Lim Tian Shang

Level 4. Prodigy

Answered on 08 Nov 2018

How much reserve in ur CPF account? Maybe able to cover the mortgage payment for 1 to 2 years?

It will be ideal for ur wife to look after ur child if circumstances allow. The benefits and enjoyment will definitely outweigh the material losses.

My wife is looking after our 4 month old boy boy full time. She is enjoying her motherhood and the time spent with our baby. Babies grow up really very fast, time spent together with them is definitely priceless!!

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Lee Jiahui

Lee Jiahui

Level 6. Master

Answered on 09 Nov 2018

Decide after you see the kids expenses... You may change your mind.

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Maybe you should ask yourself what is the loss of income to your household of your Wife quit her job? Do also factor in that it may be tough for her to get back to the workforce in the future and for young children in childcare,working mum subsidy is 300 bucks per child..if the kids go to school on weekdays, you still will see them at nite and on weekends with a 9-5 job..so I do not understand why parents have to be 24/7 with the kid. Worst situation u get a maid to help out Is still cheaper than quitting a day job.

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Daniel Ling

Daniel Ling

Level 5. Genius

Answered on 08 Nov 2018

Is your cpf contribution per month able to cover? If yes, why not.

But consider that there will be no backup plan.

Consider that once your wife stops working, your savings is likely to stop growing as much or even begin to decline.

If your family is ready to commit and be discipline enough, it's definitely workable.

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