Having a baby is very exciting, but there are some things you should do to prepare yourself financially for maternity leave.
One benefit many companies offer is maternity leave for their employees. Even though you may be compensated during your leave, it is still important to do some financial planning for maternity leave. You will probably be off work for several months so it’s important for you and your significant other to sit down and think about preparing for maternity leave and how you are going to handle it. Following are a few tips on how to think about preparing for maternity leave.
Make a budget
One of the smartest things you can do when financial planning for maternity leave is to make a budget. You need to sit down and write down all your monthly expenses so you see where your money is going each month. You will also need to account for spending when you are on maternity leave and what type of income you will be bringing in if any. Also, you need to think about the additional expense of having the baby. Diapers, wipes, clothes, food should all be taken into account when doing your budget. You should do this for several months before the baby is born. This will show you where all your money is going and prepare you for any big ticket items that may be coming up, such as property taxes or car registration. By writing everything down, you can also see where you might be able to cut expenses on your budget to make more room for the baby’s expenses.
When doing financial planning for maternity leave you will want to look at areas of your budget that you may be able to cut back on. Many people spend money each week on eating out, or pay a lot for cable or cellular phone services. Take a look at these bills to see if you can cut them down or even out. The more you can cut out, the more money you will have to save or spend on the baby. You may also not be getting paid while you are on maternity leave so cutting back will make you feel a bit better about not bringing in any income. There is always some place you can cut in your budget, so take a very close look at it when you are preparing for maternity leave.
If you do not already have it, get insurance. Prenatal care itself is extremely expensive and without insurance you will be paying big bucks. It is also important to have insurance for your new baby. They require a lot of doctor visits during their first year of life so you do not want to be paying for these visits out of your own pocket. If your company does not provide insurance, make sure you shop around so you get the most suitable deal possible. You also want to consider a life insurance policy in the chance that you or your significant other passes away, you will want your baby to be financially stable in that case.
Use credit wisely
Do not go out and rack up debt on your credit cards when you find out you’re pregnant. This is the worst mistake you can make. When you are on maternity leave you may not be getting paid so paying back those credit cards will be difficult. If you already have debt, use the time before you have the baby to put any extra money you have towards paying off any credit cards or loans you have. Starting a family debt free is a great feeling and you want to show your children good financial planning in the future.
Save where you can
One of the ideal things you can do is cut coupons, look at ads and save, save, save. There are so many ways to save money on groceries and services, you just need to look for them. Get used to doing this now, as once the baby comes you will not want to pay full price for anything. Cut out the name brands and buy generic, if you look at the ingredients they are all the same! Any extra money that comes in should go right into a savings account. It’s nice to have a cushion when the baby is born and it prepares you for a future of saving for college tuition.
Make extra money
If you or your significant other has the option of doing overtime, do it now before the baby is born. Sell some unwanted items on eBay to make extra money. Do side jobs for family or friends if you want, anything to bring in some extra while you can. You won’t have the time once the baby is born to do anything but take after them.
These are just some tips for planning for maternity leave. Do what is suitable for you and plan accordingly.Back to top