Today’s guest post is from Barbara Delinsky, on an important topic for many including myself Maternity Leave!
Maternity leave – One of the most beautiful times in a woman’s life. Usually during the last trimester, the maternity leave starts, when a woman anxiously waits to hold her child in her hands.
Quite naturally, during this phase, the prime focus in on having a healthy baby and taking good care of the newborn. However, it is also utmost important not to neglect finances so that you can build your baby’s future, the way you want.
So, during your maternity leave, take the opportunity to take good care of your money for your baby’s better future.
As per a statistical data published by US Census Bureau in 2011, only 50% of first-time mothers get paid during maternity leave, and a significant percentage receive only half of their paycheck during this time.
But, one most important point is that you won’t have to sacrifice your financial security to take good care of the new member of your family.
You can plan your financial security even during maternity leave; what you need is a little education, proper planning and trustworthy guidance.
Here’s how you can manage your finances during your maternity leave.
- Start financial planning without delay
As soon as you receive the great news that a new member if arriving in some months’ time, you should start planning. Some financial experts are of the view that it is better to plan your finances when you’re planning for a child. So, planning should start way before maternity leave.
The first thing you need to do is examine your financial situation and plan a budget accordingly. It is better if you plan 2 budgets – one if you get compensation during maternity leave and the other one if you don’t receive any paycheck during that time.
Believe me – Planning a budget and adjusting your expenditure will help you in the long run!
- Plan your future expenses – Both expected and unexpected
Along with your missing income (if you’re not compensated during your maternity leave), you also need to plan some extra expenses, as well.
You might have to pay more for medical cost or you may notice that you have to buy more diapers than you planned.
In short, you should be ready for some extra expenses, more than what you’ve planned, during your baby’s initial months.
So, have some allowance in your budget so that you can afford a maid during the initial months or you can order a meal if you don’t feel like cooking. Planning ahead the meal for the first month is also a great idea.
- Try to save as much as it’s feasible
When you are taking care of your money during your maternity leave, you need to save money as much as possible. You need to look for opportunities to save more.
This doesn’t mean that you’d have to starve and sacrifice every enjoyment; remember, you need to take good care of yourself to have a healthy and happy baby.
However, you can plan and reduce your expenses to save more and deposit the amount into a savings account.
These budgeting tips and saving strategies will help you to manage finances during maternity leave:
- Set an amount for baby care – Be prepared to set one-third of your salary for baby care
- Save on grocery – Buy local produce from farmers’ markets at a cheaper rate
- Create a balance – If you spend more on one item, try to reduce cost on another
- Reduce personal expenses – When buying something, ask yourself if you can do without it
- Save cost on utility bills – Run only full loads of laundry and dishes
- Plan your holiday budget early – Planning early will help you save money
Check your eligibility for FMLA
Family and Medical Leave Act (FMLA) provides 12 weeks of leave to employees for attending health issues like maternity or attending a sick child or spouse. It provides leave, but not necessarily you’ll get compensation during this period.
You should also check out your eligibility:
- You should have joined at least 12 months back
- There should be at least 50 employees at your organization
- You should have worked at least 24 hours a week
Check out your options at your workplace
You cannot leave your job or suffer a wage loss during your maternity leave, because you’d have to manage money for your baby’s future, too.
So, along with discussing with your employer about the coverage, also talk about how you can continue working in a flexible schedule.
One of the most common options is to work remotely, or opt for part-time work schedule during your maternity leave.
Also talk about how you can use your personal leave, vacation days or sick leave, so that you can continue earning your regular paycheck.
Doing so, it’ll help you manage finances during maternity leave.
- Save your vacation time leave
In respect to the above point, make sure you save your vacation and sick time leaves. Taking a vacation with your spouse, when you’re pregnant, is a lucrative thing. But, think about saving the money and using it for securing your baby’s financial future.
It can help you cover a portion of your maternity leave.
Also, ask your husband to save for the paternity leave, so that he can look after the baby, when your maternity leave is over.
- Can you make money during maternity leave?
The new parents have to make certain money decisions while waiting anxiously for the baby.
If you have some leisure time after taking enough rest and looking after your baby, look for some extra earning opportunity, especially if you don’t get paid during maternity leave and you’re not eligible for any short-term disability insurance.
For example, you can start some freelance work and work at your leisure time.
- Pick up new skills which will help you earn more
You can consider yourself lucky if you get a boss who helps you in your career. However, if you continue to pick up new skills, you’ll be a valuable member in your organization, and can even switch career if needs arise.
Many women have used the opportunity to update their knowledge or learn new skills during maternity leave and have switched to more suitable careers after having a baby.
So, instead of thinking about your career break, use maternity leave as an opportunity for career advancement.
- Do you know about STDI?
STDI or Short-Term Disability Insurance covers your income when you’re not able to work due to some medical issues. So, if you have one such insurance policy, you can be compensated for a portion of your paycheck.
Along with following the tips discussed above, start a “Baby Fund”, and manage money for your baby’s future. From now on, decide an amount and put it every month into that account. Doing so, you can use the fund, when necessary, and it won’t put additional pressure on your finances.
So, it can be said that with a little and proper planning, you can plan your financial security during maternity leave, and be fully prepared to welcome the new joy in your family.
Barbara loves to write articles on personal finance to share her thoughts with her readers. She has written for several blogs. In her spare time, she loves to go to new places and experience the flora and fauna. You can get in touch with her on twitter @DelinskyBarbara.