When you’re welcoming a little bundle of joy into your life, unanswered money questions can distract from your bonding time and bring unnecessary stressors into your first days together. However, by planning ahead, you can create a maternity leave with far fewer financial worries.
Talk to your HR person
You don’t want to start planning your maternity leave based on false assumptions or outdated information. Schedule an appointment with your human resources contact to arm yourself with the knowledge you’ll need to begin designing your maternity leave financial plan.
Think about a flexible health spending account
While you’ve got your HR person’s ear, ask about how a flexible health spending account might help you save on your upcoming medical and childcare expenses. By putting pre-tax dollars toward these costs, you may be able to save a bundle.
Know your insurance coverage
Yes, you’ll want to know how your health insurance plan will cover you and your child going forward. But also know that short-term disability insurance may provide a payout during your maternity leave. Be aware that your plan provider may require that you sign up for this type of plan before you become pregnant.
Budget
Odds are that you’re aware of this, but caring for a new child turns your world upside-down and inside-out. Your finances certainly aren’t spared from this upheaval. Create a spending and savings plan for your maternity leave period that will recognize and incorporate these changes. While there will definitely be new costs, you may also be able find significant savings in areas like entertainment, transportation or dining out.
Save aggressively
Even if you work for an employer who offers paid maternity leave, it’s still a good idea to build up barrier against money problems in your baby’s first months. The beginning of a baby’s life is notoriously unpredictable cost-wise, so it’s better to be prepared than left guessing. If you don’t have an employer-provided paid leave, it’s even more vital to start stashing cash.
Consult a tax pro
One of the unintended – but potentially positive – ramifications of bringing a new child into your home is the change in your tax status. Claiming the Child Tax Credit or deducting childcare expenses can mean less burden at tax time.
Start to think about childcare
You don’t want to spend your first few months with your child worrying about how he or she will be cared for after your maternity leave is over. As much as possible, research your options for childcare now to avoid having to rush into any decisions later.
If you’re giving birth, chances are that by your third trimester you’ll often be too tired to sit down and focus on money questions for extended periods of time. By taking care of these issues as soon as possible, you increase your chances of having fewer financial worries and more time to enjoy your new blessing.
