What would you do?

I'd say baby as well. We have been discussing this recently..... Originally we were going to buy a house etc then TTC #2 but then realised that when we have a mortgage etc, we will have way more bills to worry about so wont be able to afford to have me off work for long so figured it's better (for us) to do it tough for a few years, get the 'having kids' part of life out of the way then I can go back to work (part time only - and Mum will look after kiddies as I'm not a fan of daycare at such a young age) and that way I know that we will be finiancially secure for the more expensive years of the kiddies lives ie School etc
In my opinion, you can never truly afford to have kids but you just somehow make it work iykwim. Do what your heart says is the right thing to do