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Congratulations, you’re having a baby!
This can be a very exciting yet stressful time. As a new mom, you have so much to look forward to from nursery essentials, baby registries and birthing classes your to-do list is cramped. As you continue to plan throughout the process, be sure not to overlook financial planning in the process. I thought I was on top of things as I prepared for the arrival of my son. Little did I know that I was in for a rude awakening.
I did not do EVERYTHING that I should have. Check out my blog post called, The Top 3 Money Moves & Mistakes I Made As a New Parent. Do not wait until the baby’s arrival to make the adjustment. Make the change right now! No new mama wants to worry about not having money to pay bills or purchase the basic necessities.
I’m going to help you to financially prepare for maternity leave, by providing these 5 tips.
5 Tips to Financially Prepare for Maternity Leave
1. Establish an Emergency Fund ASAP
Gross monthly income varies from person to person. Review your budget and determine if you can set a few dollars aside for an emergency fund. The money will be used for unexpected events! Based on my personal experience, expenses will arise while you’re out on maternity leave. Having this fund established will take the stress/pressure off of you. If you save $100 a month ($50.00 a paycheck) from the time you found out you were pregnant, you will have close to $1000 saved in an emergency fund.
2. Review your Leave Options
Did you know that, the United States that does not mandate employers offer paid leave for new mothers? According to this article in The Washington Post, American moms are entitled to zero weeks of paid leave under federal law. During my pregnancy, I came across this image, it left me speechless.
(Source: Economic Opportunity Institute)
Although the United States doesn’t require companies to provide paid maternity leave. Eligible employees can take up to 12 weeks of unpaid leave by way of the Family and Medical Leave Act (FMLA) This act basically allows new parents to take time off from without worrying about losing their jobs. Before you go off and misquote me, make sure you read and ask questions about FMLA. According to the Department of Labor, employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.
Both you and your partner should speak with the Benefits Analyst at your respective place of employment to see what the available options are. Schedule time to sit down with each other and compare options. Select the option that works best for the both of you.
3. Review your health insurance options
Review your health options and find a doctor and a hospital that is in your healthcare network. Ask questions! Find out the costs for your prenatal visits and hospital fees. If you’re income-eligible, see if you’re eligible for WIC, Medicaid, Temporary Cash Assistance or Food Assistance. You do not have to be on a public assistance program to qualify for WIC. I know a lot of individuals who weren’t on public assistance programs and they qualified for WIC. It does not hurt to try. Every little bit helps.
4. Avoid buying baby items!
I know…I know this one is a tough one. When I would buy something, I would make myself feel better by saying “it was on sale and I didn’t want to miss out”, LOL. Once I had my baby, I realized that some of the same children stores ALWAYS have sales. In fact, if you miss a sale this week I can guarantee they’ll have another one in two weeks. Don’t purchase anything! Leave the baby gear up to your friends and family. Create a registry that contains essential items. Now don’t go crazy at the store by and scanning EVERY single item. If you do, you will end up like me (1) broke and (2) with a closet full of unnecessary items. Click here to check out my blog post about unnecessary baby items.
5. Cut out Unnecessary Expenses.
Determine what unnecessary expenses can you immediately kick to the curb? For example, I was religious about getting my nails done every two weeks. I was paying $80.00 a month for a mani and pedi. Cutting out this expense allowed me to save $960.00 in one year!! My salon habit could EASILY fund the emergency savings account all by itself, LOL. We also switched cable providers. We learned that we were paying an astronomically high amount to one provider for bundled services. When we switched providers kept all of our services (in fact we gained a faster speed for our internet service). We are now receiving a 50% discount on the same service with just with another provider.
Think about eliminating subscription services, change your eating habits (you don’t have to eat out ALL of the time), try using electronic coupons and redeem them when you go to the grocery store.
That’s It!
Having a baby is a life-changing event. Although there are moments when it’s fun and exciting, it can be very stressful. Planning for maternity leave can be stressful. Rather than think about all of the money you’ll have to spend, think about learning new ways on how to save money. Consider this as your first true test of parenthood. If you follow this guide, I believe you’ll manage.
How are you financially preparing for maternity leave? If you’ve already gone down this road, share your tips with me. I’d love to hear them.
