- Date : 02/06/2021
- Read: 4 mins
Having a baby can certainly put you under financial pressure. But what matters is taking action early to get a grip on your finances – while there’s still time to plan – and ease some pressure off your budget.
Embarking on motherhood is a landmark moment and one of the most treasured phases of any woman’s life. With all the excitement surrounding the arrival of your little bundle of joy also comes the added financial responsibility of becoming a parent. As you start preparing for pregnancy and impending motherhood, it is just as crucial to be prepared financially. Given the rising cost of healthcare, it is mandatory to have a foolproof financial plan.
1. Establish a budget
The purpose of budgeting for maternity leave is to have enough money saved to replace your income during your leave period. As you plan to save for maternity leave, make sure to account for your loss of income and the new expenses in your maternity leave budget. Once maternity leave ends, your budget will evolve again as your income changes and you will need to accommodate new baby-related expenses. Review your budget and factor in any new costs. Make a note of any increase or decrease in your income and expenses. This will give you an idea of what adjustments, if any, you need to make to keep your budget running smoothly.
2. Reduce your spending
As exciting as welcoming a new baby is, it also means tightening your purse strings and saving more money. As you save for maternity leave, it’s important to find ways to reduce existing as well as new expenses. It helps to have extra money on hand the first few months after you have a baby. Cut down on unnecessary expenses. Whether that means slashing big-ticket spending or making small savings, every penny saved can help. The best tip is to cut costs on things you don’t need, like subscriptions, movie streaming services, new clothes, eating out, etc. That money should be earmarked towards your new baby’s needs. Even when you are receiving your salary during your maternity leave, make sure you coordinate with your partner and find ways to cut discretionary spending.
3. Coordinate your leave
With all the frenzy surrounding the arrival of your new baby, spending quality time with your partner and the idea of going on one more vacation before you give birth may sound appealing. But you might be better off saving your vacation and sick leaves to cover your maternity leave. This is an easy option to tide over a portion of your maternity time. You and your partner could take parental leave at different times. Coordinating your leave period like this will maximise the amount of time you can spend at home with your child. Check on your company's policy for saving up sick days and vacation days.
4. Account for miscellaneous expenses
It’s no surprise that a major chunk of your spending will now go towards the expenses associated with raising a baby. So, in addition to replacing any loss of income during pregnancy, you might need to plan for extra expenses that didn’t exist before. Medical expenses related to doctor visits or postnatal care, cost of diapers etc., can quickly add up. Baby accessories such as a car seat can be very expensive too. Additionally, with all the exhaustion, you may not have the energy to cook and find yourself ordering in more often, which can deplete your monthly budget. So look for ways to factor in unexpected expenses in your budget and plan them in a way that doesn’t hurt your wallet.
5. Explore the possibility of a job change
Most new mothers like to concentrate on their child and take a break from their career. But they often find it difficult to restart their careers after such a break. So, you should explore the possibility of a job change where you can enjoy a healthy work-life balance without sacrificing on a source of income. You could look for jobs that allow you to work from home, temporary assignments, projects or consultancy, and entrepreneurial opportunities.
Budgeting for maternity leave may take time and meticulous planning, but it is well worth the effort. Having your finances in order lets you relax and enjoy making memories as a new mother instead of having to stress over money. Health insurance plans with maternity benefits: What you need to know?