Finding out that you're pregnant presents a "revised" version of your life for at least nine months. Though you probably expected you'd need to nix certain substances including the obvious offenders like alcohol and caffeine, you may be a bit more surprised to learn of the other changes you need to make. (Who knew lunchmeat had to be nuked, or that unpasteurized cheese had to go)? Though pregnancy may also introduce you to a new reality of things you'd only previously seen on TV or heard about from friends (like morning sickness, and the inability to tie your shoes once you get far enough down the line), it also introduces you to some pretty awesome first times, like what it feels like to experience baby's kicks, the excitement of finding out the baby's gender if you so choose, and of course, those last weeks when Braxton Hicks contractions start to morph into so much more, signaling that your nine months of hard work haven't been in vain.
But, it also presents a new financial reality that we must plan for, too. Namely, because both pregnancy and the birth of a baby introduce so many unknowns. Though most of take great in choosing a nursery theme, baby's name, and stocking up on the newborn essentials, we don't always take the time to get our "financial house" in order. As a freelance personal finance writer, the subject of how to start preparing for the financial impact of maternity leave is near and dear to my heart, and it's critically important, for reasons far more important than money. The better prepared you are, the more you can ease your stress levels, and ensure that baby enters into a positive family dynamic. Here's a brief look at how to get started.
Figure out what your maternity leave entails. We typically think of a three month maternity leave, but the reality is that most employers don’t pay for that time in full in the United States. You legally allowed 12 weeks of time off granted by the 1993 Family and Medical Leave Act--but it refers to unpaid time only. If you've worked at a company for less than a year, are self-employed, or work for a small business with fewer than 50 employees, however, that law doesn't apply to you at all. Get in touch with human resources and find out what is covered, and how you can financially plan for any "above and beyond" time you want to take. Some employers may allow you to apply unused vacation time to the leave, for example, while others may allow you to break it up by coming back to work after six or eight weeks, and then allowing you to use some vacation time a few weeks later, so you can spend another week or two at home. Depending on your company’s plan, they can also guide you in how to plan to take any short-term disability for your leave (your spouse should also check with his employer regarding a paternity leave. Inquire when you'll have the opportuny to adjust health care and flexible spending accounts, so that you can allocate more pre-tax dollars to medical and child care expenses that are forthcoming, too.
Make a savings plan. For at least 30 days, track spending for your household so you know the bare minimum income you need to make, and whether you need to start saving in order to prep for what may be some unpaid maternity time. Figure out what the total amount you need to save to make up that difference, and establish a savings account where you can grow the cash now. Establish automatic monthly transfers from your checking account so the funds are co-mingled and you can see just how much progress you're making towards your end goal.
Remember that insurance doesn't cover it all. Call your insurance provider and find out exactly what is covered, and what is not. You'll visit the doctor numerous times during your pregnancy. Those visits may be included your plan--or you may be required to cover a portion of them yourself. Some lab work, or additional testing the doctor orders may or may not be covered. Some hospitals put limits on how long mom can stay in the hospital after baby, based on the time of birth, and the type of delivery. Even circumcisions has a price tag! The breast feedings supplies the hospital may offer can also fall outside of your insured limits. Find out what's covered and what's not, so you can make informed decisions throughout your pregnancy, and after baby is born.
Don’t get sucked into baby marketing. Babies are big business. For all those items you think you need now, you'll probably end up forgetting you own them, or returning them once you get a better sense for what your baby responds to, and doesn't. Register only for the items that you truly need new. (Think nursing supplies, bottles, diapers). Reach out to friends, family and consignment stores for gently used items like car seats (assuming it has never been in a wreck or recalled), playmats, baby toys, swings, swaddlers, moses baskets, crib sheets, pack n' plays and bouncers. Of course it's fun to shop for the outfit you'll bring baby home in, but let's be honest--have you ever seen a hospital picture of a newborn and noticed the outfit?
But, it also presents a new financial reality that we must plan for, too. Namely, because both pregnancy and the birth of a baby introduce so many unknowns. Though most of take great in choosing a nursery theme, baby's name, and stocking up on the newborn essentials, we don't always take the time to get our "financial house" in order. As a freelance personal finance writer, the subject of how to start preparing for the financial impact of maternity leave is near and dear to my heart, and it's critically important, for reasons far more important than money. The better prepared you are, the more you can ease your stress levels, and ensure that baby enters into a positive family dynamic. Here's a brief look at how to get started.
Figure out what your maternity leave entails. We typically think of a three month maternity leave, but the reality is that most employers don’t pay for that time in full in the United States. You legally allowed 12 weeks of time off granted by the 1993 Family and Medical Leave Act--but it refers to unpaid time only. If you've worked at a company for less than a year, are self-employed, or work for a small business with fewer than 50 employees, however, that law doesn't apply to you at all. Get in touch with human resources and find out what is covered, and how you can financially plan for any "above and beyond" time you want to take. Some employers may allow you to apply unused vacation time to the leave, for example, while others may allow you to break it up by coming back to work after six or eight weeks, and then allowing you to use some vacation time a few weeks later, so you can spend another week or two at home. Depending on your company’s plan, they can also guide you in how to plan to take any short-term disability for your leave (your spouse should also check with his employer regarding a paternity leave. Inquire when you'll have the opportuny to adjust health care and flexible spending accounts, so that you can allocate more pre-tax dollars to medical and child care expenses that are forthcoming, too.
Make a savings plan. For at least 30 days, track spending for your household so you know the bare minimum income you need to make, and whether you need to start saving in order to prep for what may be some unpaid maternity time. Figure out what the total amount you need to save to make up that difference, and establish a savings account where you can grow the cash now. Establish automatic monthly transfers from your checking account so the funds are co-mingled and you can see just how much progress you're making towards your end goal.
Remember that insurance doesn't cover it all. Call your insurance provider and find out exactly what is covered, and what is not. You'll visit the doctor numerous times during your pregnancy. Those visits may be included your plan--or you may be required to cover a portion of them yourself. Some lab work, or additional testing the doctor orders may or may not be covered. Some hospitals put limits on how long mom can stay in the hospital after baby, based on the time of birth, and the type of delivery. Even circumcisions has a price tag! The breast feedings supplies the hospital may offer can also fall outside of your insured limits. Find out what's covered and what's not, so you can make informed decisions throughout your pregnancy, and after baby is born.
Don’t get sucked into baby marketing. Babies are big business. For all those items you think you need now, you'll probably end up forgetting you own them, or returning them once you get a better sense for what your baby responds to, and doesn't. Register only for the items that you truly need new. (Think nursing supplies, bottles, diapers). Reach out to friends, family and consignment stores for gently used items like car seats (assuming it has never been in a wreck or recalled), playmats, baby toys, swings, swaddlers, moses baskets, crib sheets, pack n' plays and bouncers. Of course it's fun to shop for the outfit you'll bring baby home in, but let's be honest--have you ever seen a hospital picture of a newborn and noticed the outfit?
