maternity leave

How to Financially Prepare for Maternity Leave

As you await the newest little addition to your family, you’re probably facing a rollercoaster of emotions! Preparing for the expenses of a new baby along with having to take time off of work can quickly turn an exciting time into an also very stressful time.

As a mom of two and the Payroll and Benefits Specialist here at Pelican, I wanted to fill in some of those gaps and help out as much as I can. This way, you can spend less time stressing and more time at home with your sweet-smelling newborn.

Reach Out to Your Human Resources Department

The first thing I’d recommend is to reach out to or schedule a meeting with the person who handles all of the benefits for your company. This person will usually be in the Human Resources (HR) department. This person will be your main source of information when it comes to what benefits are available to you.

I’ve listed some important questions to ask your HR department that will help guide you through making a plan and budgeting for your time off.

Am I eligible for the Family Medical Leave Act (FMLA)?

FMLA is a labor law that requires some employers to provide employees with job protection and unpaid leave for qualified medical and family reasons.

There are certain qualifications for FMLA and you may or may not qualify, but it’s good to know if your job and benefits will be protected while you take this time off.

Do I have any paid parental leave policies available to me?

Some companies offer paid time off to their employees, and some even offer a disability policy that covers maternity leave. Again, this is going to be company-specific and the amount they pay during time off can vary. This is why it’s important to ask how much the policy will pay if one is available.  

Will I be required to use any paid time off during my leave? If so, about how much time will I have?

This number may be tricky to lock down because as you have appointments or vacations planned, you may use some of this time before taking official maternity leave.

I’d recommend to save as much paid time off as possible, especially if your company doesn’t offer any paid maternity leave. Utilizing this time while you’re out will help continue to pay your benefit premiums and may help be a small income for at least a couple of weeks during your leave.

What will my deductible and maximum out-of-pocket for my health insurance be? When does the plan year start over?

Of course, this question will only be applicable if you’re on your company’s health insurance policy. By asking this question, you’re essentially asking, “How much is having this baby going to cost me” and, “Will all of my expenses fall into the same plan year?”

Let’s say you get pregnant in September and your plan year starts over in January—your deductible will also start over, so you’ll essentially have to meet that deductible twice.  

How much will it cost to add the baby to my benefit policies each month? When do I need to contact HR to add them to my insurance?

I’d recommend getting this information from your HR department, as well as your partner’s HR department to compare. It may be more beneficial to add them to one plan versus the other.

It never hurts to ask and you want to make sure you have all the information to make the most financially-sound decisions for your family.

Don’t let the expenses of parenthood sneak up on you!
Check out this blog post to see some of the hidden costs of having a baby plus some steps you can take to be financially prepared. 
Cushion Your Budget

Once you have the answers to these questions, you can now sit down and set a budget.

Taking the steps necessary to start saving and preparing for future expenses will make taking that additional time off not so scary.

Here are a few tips and tricks that allowed me to take the full 12 weeks that I had available:

Research daycare expenses and start saving NOW!

As a new mom, the one thing that shocked me the most was daycare expenses. Many times, new parents are coming off an unpaid maternity leave and then have to pay for a week or even two weeks of daycare before they get their first check again. That can be such a burden!

My best advice is to start putting the cost of daycare into a savings account as soon as possible. By doing this, you’re making room in your budget now so you’ll have a cushion to help with some added bills that come with newborns. This will also help supplement unpaid time off or even pay those first few weeks before you start to get a paycheck again.

This is such a great way to prepare your budget and set yourself up to be ahead of the expenses instead of trying to play catch up.

Buy secondhand whenever possible.

This is my biggest mommy hack. I always buy from friends, co-workers, or secondhand shops whenever possible.

Before you buy something brand-new, check social media and ask friends and family if they have what you need and would be willing to sell it. You can get things for half the price you would online or in-store.

This is such a huge way to save on something you may only need for a few months before your baby outgrows it.

Start stocking up on nonperishable essentials now.

Every time you go to the store, buy a pack of diapers or wipes. These are things that won’t go bad and they’re also things that you’ll definitely need an abundance of.

Shopping hack:
Save some SERIOUS cash and find out how you can make the most out of couponing!

Buying now and spreading it out little by little while you’re still actively working will help lessen the burden when you’re without a paycheck.

Have you taken time off of work for maternity leave? How did you financially prepare for it? Let us know in the comments below!

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