Maternity leave is granted to expectant mothers that are bringing new lives into the world. In fact, maternal or paternal leave is governed by the Family and Medical Leave Act (FMLA). This federal law was enacted in 1993, and protects your job (without pay) for up to 12 weeks after the birth of a child. The law also covers parents who need to take time off for child adoption procedures.

In any event, it is important that you understand the law in order to fully protect your rights. You must sit down with your boss and discuss all options — including possible paid leaves and whether your insurance coverage will continue. It is also vital to formulate a strategic plan with your partner that effectively addresses loss of income and financial budgeting for the baby.

Budgeting is Essential

Even if you are granted paid leave or short-term disability insurance, this is usually 40 percent to 60 percent of your salary for a set amount of time. With this in mind, post-baby delivery care will strictly depend on your budget. The following are a few crucial tips in planning a budget for maternity leave:

  • You and your partner must first create a monthly budgeting plan that will now include diapers, wipes, formulas and especially follow-up appointments with obstetricians and primary care physicians.
  • Giving birth is truly a lifestyle change — to prevent dipping into savings, you have to try to curb all unnecessary expenses. This includes movies and entertainment, along with eating out and indulging in extracurricular activities.
  • Budget allocation — While taking care of the baby is the highest priority, you must be able to continue paying credit card bills, medical bills, insurance premiums and rent or mortgage. Take into account how much you spend for gas and transportation; try carpooling or using public transportation to avoid financial drain.
  • Open a new savings account — Keep this account strictly for baby care and necessities. Put aside certain amounts per month from any financial sources you have (investments, part-time work from home, partner income, rebates or granted paid leaves). This money should only be allocated for baby expenses and should not be used for other bills.
  • Stick to your budget at all costs — Create a budgeting plan that takes into account all expenses versus money earned. For example: rent or mortgage can be 35 percent of your budget, while food and clothing can be 25 percent. Try asking your creditors for lower APR rates to decrease monthly payment amounts on credit cards and loans.

In order to stop financial duress, you and your partner must stick to the budget at all costs. This is the only way to prevent dipping into savings and ending up in additional debt.