Congratulations — you’re expecting! Between prepping the nursery, scheduling prenatal visits and shopping for essential baby gear, you probably have a long list of tasks to check off the coming months. If you’re a working mom, you may have to include one more item: figuring out how to make up pay while you’re on maternity leave.
Fewer than a quarter of civilian workers have access to paid family leave, according to recent data from the U.S. Bureau of Labor Statistics. If you don’t have paid family leave, that means you may need to do a little more planning to ensure you’re able to make ends meet after your baby is born.
Most doctors recommend mothers take six weeks for recovery after giving birth naturally and eight weeks after a cesarean section. The good news is that the Family and Medical Leave Act (FMLA) allows many employees to take up to 12 weeks off to care for a newborn child. To be eligible:
- You must have worked for your employer for a minimum of 12 months or 1,250 hours over the past year.
- Your company must have 50 or more employees within 75 miles.
The bad news is that while FMLA protects your job and group health benefits, it doesn’t require your employer to pay you while you’re on maternity leave. Unless your employer offers full paid leave, you’ll have to do some planning to ensure you have the money that will allow you to take the time you need after giving birth.
Clarify your employer’s parental leave policy
Connect with your HR department sooner rather than later to clarify your employee benefits. About 25 percent of companies have some sort of paid parental leave policy, according to a 2019 Kaiser Family Foundation survey. You’ll want to ask how many weeks are included and if you can expect to receive your full pay during this time.
Seven states and Washington, D.C. currently provide some sort of paid leave. This includes California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island and Washington state. Colorado and Oregon have also passed legislation to begin requiring this benefit in the coming years.
Other ways your employer might support you during maternity leave
If your company doesn’t offer a parental leave policy, it may still help you make up income during your maternity leave. Short-term disability insurance is one key way employers have traditionally helped new moms replace income during a leave. It’s designed to cover lost income due to a temporary injury or illness. Most policies offered through an employer will cover a percentage of your income following the birth of a child. If you’re not already pregnant, check to see if you need to sign up for this benefit, as it may be optional at some employers.
Some employers may also allow you to use a stockpile of paid time off (PTO) or sick days. This may even include borrowing forward into future time off. Just be aware that doing so might leave you owing money if you leave the company prior to accruing the days that you borrow.
Your employer may also offer a flexible spending account (FSA) that can be used to cover childcare bills when you return to work. FSAs allow you to use pre-tax dollars to cover qualified expenses.
Make a financial game plan with your partner
Financially preparing for a baby goes beyond maternity leave. As early as possible, make some time to talk to your partner about your financial future
- What’s your plan for childcare and how will you fund it?
- Does your partner’s employer offer parental leave benefits?
- If you will be pausing your retirement contributions during parental leave, what’s your plan for getting back on track?
- Do you have a strong emergency fund? Experts recommend saving up six months’ worth of expenses, but you may want to increase your target if you’re facing a stint of unpaid time off. It can also come in handy when navigating medical expenses related to prenatal care and birth.
Once you have addressed these questions, you and your partner can update your monthly budget accordingly. Planning ahead in this way can help alleviate stress before the baby comes home. This is also a good time to get some other financial ducks in a row. This includes updating your will and life insurance policies. You’ll also want a game plan for the possibility that a disability could keep you from earning an income. You might also want to research college savings plans for your little one.
This may all seem a little overwhelming, and that’s OK. You’ll get through this (just like many other parents in the same boat have). You may find it helpful to sit down with a financial advisor. He or she can help you work through your maternity leave and build a financial plan for your future.