When preparing for a baby (or when unexpectedly finding out that you are expecting), one thing that a lot of people forget to plan for is the financial aspect of maternity leave. It’s all very well budgeting for baby ie. budgeting for what baby will need like clothes, cot, pram, car seat etc (check out our baby essentials list), but what about once baby is here? We are going to dive into how to afford maternity leave:
Speak to your employer when preparing for baby
How are you going to pay the bills when your pay gets cut in half or even goes down to zero?
First thing to do if you are preparing for a baby, or if you have found out you are pregnant, is to speak to your employer and find out how long you are allowed to take for maternity leave and how much pay you will receive during that time. The length of maternity leave varies from country to country. In the UK for example, you are allowed to take up to 1 year for maternity leave. During this year, the pay differs according to your employer.
My employer for example would pay 3 months full pay, 6 months statutory pay then the final 3 months would be zero pay.
How long should your maternity leave be?
Once you know how long you can take and how much your pay will be, you then need to decide how long you would ideally like to take off – do you want to take as much time as you are allowed or do you want to get back to work sooner. Whilst deciding on this, it is worthwhile mentioning that some workplaces also offer shared parental leave where you can share your leave with your partner for example, instead of you taking 9 months, you could take 6 and your partner could take 3.
Draw up a budget
Now that you know what you are entitled to, what your pay will be and have decided on how long you and your partner wish to take for parental leave, it is now time to do some calculations. Draw up a budget and calculate all your monthly expenses. Include all current expenses that you pay every month eg. rent, mortgage, energy bills, phone, broadband, subscriptions etc. Also make sure you include new expenses related to your baby such as baby classes you wish to attend with your new bundle. As well as that, take into account any increase in your energy bill that you foresee – we had a winter baby which meant our heating bill was much higher than usual as we needed to keep our newborn warm.
We have created a handy calculator spreadsheet to aid you in this process, this calculator is tried and tested and helped me plan successfully for a full year of maternity leave, download it here. Upon purchase you will also receive a tutorial video on how to use the calculator from start to finish.
Once you have a total for your monthly expenses, you then need to go month by month (if your pay is expected to change), doing your income minus your total expenses and note down if you are in surplus or deficit by the end of each month.
Calculate the money needed for your maternity leave
Take note of the months when you are in deficit and add up the total deficit over the duration of your proposed maternity leave. The deficit total is how much money you will need to have in savings prior to your maternity leave to be able to keep you afloat whilst you are off. This number, at least in my case, was quite shocking.
Depending on your circumstances, you may need to adjust the proposed length of maternity leave, or you may wish to make a ruthless savings plan to make sure you hit that number in time for baby’s arrival. Whichever you choose to do, do it with confidence that you will be financially secure when baby arrives. The last thing you want is to be stressing about money or the thought of having to go back to work sooner than expected when you are adjusting to life with a new baby.
Get our handy Maternity Leave Calculator here.
Check out more preparing for baby content here.
