Saving Up for Your Time Off

According to the CDC’s National Center for Health Statistics, August has the highest number of births. What’s more, September 16th represents the most common birthday of the year.

While we can only speculate about why so many babies are born this time of year (insert cheeky remarks about too many glasses of egg nog and holiday parties), we recognize that this is one of the most financially stressful times for expectant parents.

According to the U.S. Census Bureau, only half of first-time mothers get paid time off for maternity leave — and many of those only receive partial pay — leaving a gaping hole in their finances. So what can you do now to ensure that taking time off leave doesn’t leave you scraping by? Here are seven tips to consider:

1. Find out what your company offers. 

Most companies with over 50 employees must comply with the Family Medical Leave Act, which provides 12 weeks of unpaid leave to new parents while protecting their position. Some employers may provide paid leave during those three months, but it could be just a portion of your regular salary (50-75 percent of your weekly income). Either way, consult with your Human Resources department and find out what your options are. There may be additional benefits you can tap into.

If your company only offers unpaid leave or a portion of your salary, some moms suggest “saving” your paid time off (PTO) or looking into short term disability coverage options, which can provide about six to eight weeks of pay in connection to childbirth.

2. Track your expenses.

If you don’t track where your money goes, you’ll never know where you can cut back. Understanding where you spend money each month can help you determine if you should cut that cable service, freeze your gym membership or nix those Starbucks visits.

3. Curb splurging.

If you enjoy dining out often, going to movies and taking trips — consider paring down those luxuries. We don’t suggest going cold turkey, but maybe do movie nights at home or dine out once or twice a month instead of several times. This will help you cut costs and save more without neglecting the things you really love.

4. Determine what your new insurance costs will be.

Once you add another family member to your insurance policy, your deductible and monthly costs will also increase. If you have a high deductible for health insurance, consider putting more away in a Health Savings Account (HSA) to help cover unexpected doctor visits.

5. Craft a baby-friendly budget.

You’re used to saving for just yourself and maybe your partner. But after your baby arrives, your expenses will change. You’ll not only need to purchase baby necessities, such as clothing and diapers, but will also need to factor in your new monthly insurance premiums.

6. Play house.

After you know what your post-baby budget will look like – let’s say it’ll go from $2,200 in monthly expenses to $2,550 (with baby expenses) – put that $350 difference into your savings. It’ll get you used to paying that amount regularly and help you save a nice chunk of change each month in preparation for maternity leave.

7. Start a savings account/rainy day fund.

With any baby or child, there will likely be unexpected expenses, whether it’s hospital bills, doctor visits or other issues you didn’t anticipate. Most experts suggest having three to six months of living expenses saved up prior to your child’s arrival. Even setting aside $150 per paycheck, can build up to be a sizable nest egg and allow you to save for their future.

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