8 Wise Tips On How To Prepare Financially For Maternity Leave
8 Wise Tips On How To Prepare Financially For Maternity Leave
Congratulations mama, you’re pregnant!
Time to prep for baby.
It can be quite stressful trying to prepare yourself for what’s to come. Buying all the necessities is already burning a hole in your purse.
If you haven’t started already spoiler alert it’s going to…
I mean, of course, that is, if you’re on a budget.
How can you even think of saving money for maternity leave? Did you even think about that?
Preparing for maternity leave can be demanding.
Especially when you’re already strapped for cash.
How can you possibly save your money when there’s too much month and not enough money?
When you’re running around like a chicken without a head you tend to forget that you need to also prepare financially for maternity leave…
The Family and Medical Leave Act (FMLA) allows eligible employees up to 12 weeks of unpaid leave and still keep their jobs following the birth of a child.
Because you are not getting paid at this time, the struggle could be real in about six weeks or more depending on how long you are on leave.
Just exactly how do you prepare for maternity leave on a budget?:
First of all, do your research mama!
It’s available on Amazon for free in the Kindle version.
Or you can check out the recent prices here for the paperback.
This book will tell you what you should know before you tell your employer you are pregnant.
It is based on both real-life experience and expert advice to give you the best balance of information available.
Don’t stress it too much I am here to help you… I have rounded up 8 tips I found on the internet and compiled them in a neatly easy to ready list for your convenience!
But wait! Feeling stressed about getting everything done before baby arrives? The Nesting Planner will have you totally organized and prepared in no time!
Here are 8 tips to prepare you financially for maternity leave:
#1. Know your rights.
If you are lucky and work in one of the few states that offer some paid family leave, you may qualify for some funding through the state’s short-term disability leave programs. (source)
#2. Contact your health insurance provider.
One of the biggest expenses people incurs every year is healthcare expenses.
So, if you know you’re going to have hospital bills, call your hospital and try to get an estimate of what they will be ahead of time.
I pre-paid $800 for my birth which was the doctor’s fee and then had hospital bills on top of that.
It was good to know ahead of time what to expect, and if you have to add your child to your health insurance policy, it’s good to know what that added cost will be as well just so you’re prepared. (source)
#3. Develop a Plan
The needs of you and your baby are likely to top of mind during your pregnancy, but your employer likely wonders how your job will get done while you’re gone.
“Don’t focus only on your needs and what’s going to help you from a personal perspective,” says Chris Duchesne, the Boston-based vice president of global workplace solutions for childcare website Care.com.
“You need to look at it from a company’s perspective as well.”
He recommends meeting with your manager to develop a game plan for your absence. In preparation, create a list of your main responsibilities and jot down whom you think would be the ideal person to fill in.
If you have authority for hiring, consider bringing in a temporary employee for your leave.
Additionally, document all arrangements you make with your boss or human resources, just to protect you in case the situation changes in months to come. (source)
#4. Start Saving
Just because your maternity leave doesn’t start for 6 months, doesn’t mean you should wait to prepare financially.
Begin saving money from every paycheck and from those reduced expenses.
It’s tempting to take those savings and spend them on other things you need, but you never know what your maternity leave may hold for you.
You could have a difficult delivery that involves extra time in the hospital, a sick baby, or a spouse that loses their job.
None of these things are things you really want to think about, but they should be planned for.
Ideally, you should save enough money to mimic your paycheck while you are on leave, and then some. It may sound impossible, but with careful planning and the reduction of your expenses, you can do it!
#5. Short-term disability leave — is it for you?
Take out a short-term disability insurance policy if you plan to become pregnant in the near future and are a freelancer or self-employed, or simply are not covered under your employer’s policy.
Pregnancy, as well as the postpartum period, is one of the most commonly covered “disabilities” that prevent an employee from working.
Just make sure that if you purchase a short-term disability policy that you read the fine print so you are satisfied with the coverage you will receive. At some employers, short-term disability is a benefit offered to some (or all) employees.
At some companies, you must elect into this optional benefit before you are pregnant (talk about a Catch 22). Once you do so, you will see monthly deductions come from your paycheck, but at least you will know that your pay will be partially covered when you become pregnant.
For those employers who do offer short-term disability insurance, there may be a portion of the expense that the employee pays for.
Typically, short-term disability leave policies cover six weeks of pay at some percentage (up to 100% depending on your policy) for a normal birth and eight weeks of pay for a Caesarean birth. (source)
#6. Curb splurging.
If you enjoy dining out often, going to movies and taking trips — consider paring down those luxuries.
We don’t suggest going cold turkey, but maybe do movie nights at home or dine out once or twice a month instead of several times.
This will help you cut costs and save more without neglecting the things you really love. (source)
#7. Think long-term.
Saving for maternity leave is the precursor to a total budget overhaul once the baby arrives.
As soon as you’ve accrued enough financial coverage for maternity leave, keep your healthy saving habits going by planning for future childcare expenses, life insurance premiums, increased medical costs, and college savings accounts.
Don’t forget to take advantage of tax credits, too.
For example, you may be able to claim the Child Tax Credit for the year your baby was born (depending on the time of birth), deduct qualifying child care expenses, and contributions to a College 529 savings plan.
All of these will reduce your taxable income, leaving more money in your pocket. (source)
#8 Work a side hustle
Saving can only get you so far.
Once you’ve tapped into all you can save for maternity leave, consider making more money as well.
One of the best ways to do so is to work aside hustle before you give birth. We’re not talking full-fledged businesses here, but little ways to increase your income.
The possibilities truly are endless, so start with what you already do well.
Some of the things I’ve done in the past include:
- Writing calligraphy for people’s wedding invitations
- Freelancing as a graphic designs
- Creating handmade cards for special events
- Selling items on eBay, Craigslist, and consignment stores
Your skill sets and interests will be different, but switching from saving to earning mode will open up possibilities of earning income to pad your maternity leave. (source)
Guys I know it’s really stressful and it’s hard to think about these things and actually put them into reality, but trust me you want to be thinking about this.
As always, if you have any extra tips for your fellow new moms/moms to be let us know down below!
If you liked this post on 8 Wise Tips On How To Prepare Financially For Maternity Leave or have any questions please leave a comment down below!
If you liked this helpful article and are feeling a little lost about how to prepare for your new baby, you should check out The Nesting Planner!
It is an amazing solution for you to stay on track throughout your entire pregnancy. It also comes with an easy to navigate Breastfeeding Handbook for beginners that will help you let go of your worries and lays out everything you might encounter in the first few months of your breastfeeding journey.
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8 Wise Tips on How to Prepare Financially for Maternity Leave
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