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With baby number 2 on the way, it’s time to start thinking about how I’m going to afford staying home from work on maternity leave with little man after he is born. I want to stay home with him for at least 12 weeks but if I can swing it, I’ll stay home longer.
No matter how long you plan on staying home with your little after they are born, it’s imperative you know how you are going to pay for it. Unfortunately, the United States doesn’t have great maternity leave and pay benefits. Take a look at this chart for an overview of what the world’s policies look like. This was shocking to me to see just how behind our country is.
Frustrating, to say the least. However, this is what we have to work with. So, where do you go from here.
How to Plan & Save Money for Maternity Leave
Family and Medical Leave Act
It’s important to know what laws cover you during your postpartum period. The most well know is Family and Medical Leave Act (FMLA). Think of FMLA as your job security while you are on maternity leave. FMLA guarantees you 12 work weeks of unpaid leave during a 12 month period.
When I was pregnant with Sophie, I figured I was automatically covered under FMLA. Turns out I wasn’t. There are a couple of requirements for you and your company:
- You have to work 1,250 hours within the 12 months prior to starting leave
- Your company must have at least 50 employees working within 75 miles (This is the condition that my previous company didn’t meet)
- You have to have worked for your employer for 12 months. This doesn’t have to be a consecutive 12 months.
There are a couple other requirements, talk to HR for specifics on your position and company policy.
What to do if you aren’t covered under FMLA
Don’t be afraid to talk to your employer/supervisor. Let them know that you would like to take ‘x’ number of weeks of leave but are still very much interested in coming back after your maternity leave.
Express your concern that you aren’t covered by FMLA and would like to find a way to ensure your position is still available when you return. Ask them what you can do to help make the transition easier and if there is anything you can do while you are on leave to help.
Unfortunately, you aren’t in the advantageous position and if you aren’t working, you aren’t an asset for the company. Keep this in mind and make an effort to keep the conversation about how you can help them make your maternity leave easier.
(1) What does your company offer
Next you should figure out what benefits your company does offer. You may be eligible for short-term disability if your company offers this. Some companies require you to elect a short-term disability policy during your benefit open season. Others provide this policy/benefit at no cost to you. An additional option is to get your own policy outside of your workplace. You will take short-term disability in concurrence with FMLA.
Short term disability policies usually cover a percentage of your pay for 6-8 weeks (depending on your delivery type). The percentage of your pay varies depending on the policy. My current short-term disability policy covers 66%. These policies also usually have an elimination period. Which is a period of time you must wait until you start to receive checks. Keep in mind that this elimination period is part of the 6-8 weeks of your coverage.
For example, if your policy covers you at 6 weeks for a vaginal birth and you have a 1 week elimination period, you are actually only getting paid for 5 weeks.
If you are part of the lucky few who works for a company who provides a separate maternity benefit that pays you an additional amount separate from short-term disability and leave… do a happy dance.
(2) How much leave you will have saved up
Now that you have an idea of how much paid leave you will be getting from your company, determine how much sick and vacation leave you will have accumulated. Then determine how much of that you are willing to save for maternity leave. Be reasonable here.
Understand your time keeping policy and figure out what you are comfortable doing. Are you allowed to work extra hours to make up for missed time? Does it have to be in the same pay period? Can you go in the hole with leave?
For me, I determined I’ll have 80 hours of sick and vacation leave saved up. I decided to save at least 40 of those hours. That means I have to work extra hours if I have a midwives appointment, have to stay home with a sick toddler, or if there is a holiday in the pay period. I can also go into the hole 40 hours for vacation leave.
(3) What will your expenses be while on maternity leave
You know what money will be coming in. Next, figure out what money will be going out. Make a list of all your monthly bills and remember that some bills will change if you aren’t working, like your monthly gas costs going down or entertainment costs going up.
(4) How much maternity leave do you want to take
By now you should have a clear picture of what your money flow will look like. Your maternity leave will likely be a mix of short-term disability, paid leave, and leave without pay. This should give you an idea of the amount of leave you can afford to take. If you are going to be taking more than the 12 weeks of FMLA, make sure you talk to your employer and they are ok with it.
Once you figure out the number of weeks you will be taking, put your plan into writing and submit it to your employer for their information. I usually try to do this in my 7th or 8th month. This gives your employer time to look for a temporary replacement or shuffle around your work load.
Also consider when you want to start your maternity leave and be flexible. With Sophie, I started my maternity leave about a week before my due date. With this baby, I’m planning on working until my water breaks. Keep in mind that due dates are just estimates!
(5) Bridge the gap
So you know what your money situation will look like and how much time you want to take. Now you need to figure out how you are going to bridge the gap if you won’t be bringing enough money in while on maternity leave.
Looking back at your finances, can you save up the extra money or can you or your partner work over time?
Determine if there are any places you can cut costs. Can you put your gym membership on hold for a month or two? Are there any bills that can be paid off ahead of time? Can you cut back on your TV/internet services or package? Can you cut your grocery bill down by meal planning, couponing, or shopping at a lower priced grocery store?
Be practical. You don’t want to cut too far back that you will have to stay home for your entire leave and not have the funds to go anywhere. When I was home with Sophie on maternity leave, I went to a local movie theater every Wednesday that had “cry-baby matinees”. I also met up with other moms for coffee or lunch dates. I kept cost in mind but I knew I had budgeted for the extra money.
Make sure you plan to have a little bit of extra money saved up just in case the refrigerator craps out or the car needs a new whatever. There will always be something that needs money thrown at it and being on maternity leave won’t stop that.
Hopefully this guide will help you make a solid plan for saving for maternity leave. Remember to stay flexible though and keep your employer informed of your decisions.
Do you have any advice for others on saving up for maternity leave? Leave a comment below so we can help each other out!