How To Prepare Financially For Maternity Leave In Five Steps

How to prepare financially for maternity leave is a question that leaves many families frustrated and puzzled. In the United States, we have sparse maternity coverage, This leaves many families both stressed for time and strapped financially. Luckily most pregnancies last nine months, which gives you time now. Start sorting out how to fill the gaps financially with our five steps.

How To Prepare Financially For Maternity Leave

Check If You Qualify For FMLA

Many families will receive 12 weeks of unpaid time off according to the Family Medical Leave Act in the US.  The law does vary if your state also has maternity laws, if your company has less than 50 employees or  how long you have been with the company can also affect FMLA time. Plan carefully for the amount of money you expect your household will be missing. Some employers also require that you use vacation time and sick time before you use FMLA time. Check your company policies carefully.

Investigate Disability Policies

Short-term disability policies can seem like a quick fix for how to prepare financially for maternity leave. Most premiums are through employers. Then you’re covered during your pregnancy right? Not exactly. Many short term disability policies such as Aflac, require enrollment ten to twelve months in advance. When I found out I was pregnant I already had a policy. I quickly found out that at the level I had enrolled the payout was not much. I would have been better putting the money into a saving account for baby.

Some companies have other options for short term disability. I recommend waiting until after the first trimester to announce to your boss and HR department.  Meanwhile, investigate your workplace short term disability policies through your company handbook and see how to opt in.

Related: Should I Return to Work After Maternity Leave?

Set A New Home Budget

In your budget, not only will you want to account for your missing income in your monthly budget, but also keep in mind the medical expenses you will have. If you have copays for each doctor visit or a yearly deductible, you want to know what those expenses will be. Now is the time to do a temporary overhaul of your finances, and to save aggressively for the short term. Babies can be unpredictable, so cutting back drastically will help you and every bit helps.

Budget For Gear

Many of the necessities for when the baby comes home can be purchased in advance. Start now looking for sales on baby gear or buying gently used items. Keep in mind what items you will actually need versus gear that is nice to have. Likely you will receive a few newborn items as gifts. You may want to consider purchasing clothes in bigger three and six-month size. You can also start stocking up on items like diapers and feeding supplies you may need. Don’t forget yourself! I picked up most of my maternity clothes from outlet shops and borrowing from friends. :)

Related: A Working Mom’s Guide to Surviving Maternity Leave

Look For Extra Income

There are several ways to pick up extra income that will help you prepare for maternity leave. Look into freelancing or other side jobs that will give you a little extra cash. Have a garage sale or sell items you do not need on local garage sale groups through Facebook to make room for baby.

What did you do to prepare financially for maternity leave? Tell me your tips in the comments.

Image Credit: Brad Brundage.