Financial Advice Blog

How much maternity leave can you afford to take?

If you're expecting, or plan to start a family in the near future, here's how to figure out how much time you can take off work.

With a baby on the way or in your plans for the future, you’ll need to know how much maternity leave you can afford to take. Depending on your income, expenses, employment situation and leave entitlements, with proper planning, you might be able to take more than you think. To work out what you can afford and what will suit your family, here are a few tips.

1. Create a maternity leave budget

If you don’t know how much you’re spending it will be difficult to work out how much maternity leave you can afford to take.

Sit down and create a realistic maternity leave budget, ensuring you account for all your expenses. Financial Spectrum has an online budget calculator that can help you do just that.

Remember to add baby-related expenses such as nappies, clothing, medical appointments and formula (if you need it).  Also take into consideration the reduction in work-related expenses such as clothing for work, transport costs and weekday coffees and lunches.  You’ll probably be doing less socialising for a while too!

2. Live off one income

Many couples find it easiest to budget based on the income of the partner who is not taking maternity leave. This way, whatever income is received by the partner who is taking maternity leave, such as employer-funded maternity pay, Paid Parental Leave or Family Tax Benefits, can all be put into savings.  Alternatively, it could be used to help extend maternity leave if desired.

Once you’ve completed your budget in step one, review it based on the income of the partner who is not taking maternity leave.  Do you have a surplus or a shortfall?  If you have a shortfall, you may need to go back and see where you can cut expenses.

We share advice on how to live on a single income here.

3. Know your entitlements

Employer-funded maternity leave, Paid Parental Leave and Family Tax Benefits are a few sources of income people are eligible for when having a baby.

How much you will receive, if anything, depends on your family’s income and other eligibility requirements.  Speak with your employer and use the Centrelink calculators to estimate what you may be entitled to.

If you think you may be eligible for Centerlink payments, make sure you apply early.  The payments can take several weeks to kick in and you don’t want to be dealing with Centerlink when you’re sleep deprived with a newborn!

4. Make a plan

Having quality time to bond with your baby without worrying about money or having the pressure to rush back to work is priceless. With careful planning, you could afford more maternity leave, while still maintaining the lifestyle you’re used to.

If you’re struggling to see how you can take the leave you want while making ends meet, it may be worth speaking with a financial adviser.  By working with a good financial adviser, you’ll get a clear idea of exactly how much maternity leave you can afford to take.  You can also get advice on what options you have to extend it.

We put so much effort into making sure we have a healthy pregnancy, set up the perfect nursery and have a fabulous baby shower.  Why not plan for your finances properly too?

5. Know your other options

It’s a wise idea to have back up options in place for the unexpected.  For example, if your baby comes early, you may require more time off work and be hit with additional expenses.  Knowing what options you have available will mean you won’t be stressed if you need more time or money available to you.

One option is to check your mortgage and see if it has a pregnancy pause.  While we wouldn’t normally recommended you do this, it may provide peace of mind for if an unexpected situation arises.  Speaking with a professional as mentioned in tip four will help you identify all the options available to you.


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