How much maternity leave can you afford to take?
With a baby on the way or in your plans for the future, you will need to know how much maternity leave you can afford to take. Depending on your income, expenses and employment, 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 budget
If you don’t know how much you’re spending or where your money is going, it’s really hard to work out maternity leave. Sit down and create a realistic budget, check your spending and make sure you are accounting for all your expenses. Once you know that, you can plan maternity leave better. Remember to consider an increase of expenses such as nappies, doctors appointments and formula if you need it. Also take into consideration the reduction in expenses such as your regular commute which might mean less petrol, parking and other expenses are gone.
2. Plan on living on a single income
Many couples find it easier to plan all their budgeting around only one income. This way, whatever is made during maternity leave such as maternity pay, parental leave or family tax benefits can all be put in savings or used to help extend maternity leave if desired. If you’ve done step one and know your budget, review it based on one income. We share how to live on a single income here.
3. Understand what you are entitled to
Employer-funded maternity leave, paid parental leave and Family Tax Benefit are a few options many families are eligible for. How much you will receive, if anything, depends on your income and other eligibility requirements. Speak with your employer and use the Centrelink calculators to get an idea of what you will get.
4. Make a plan
Speak with a financial professional to get advice and make a proper plan for maternity. We put so much effort into making sure we have a healthy pregnancy, set up the perfect nursery, have a fabulous baby shower and everything in-between, so why not plan for your finances properly? By working with a professional, you can have a clear idea of exactly how much maternity leave you can take plus get advice on options to make it longer.
5. Know your other options
Having savings and a proper plan ahead of time to enable you to take the amount of maternity leave you want is a great option. However, having backup options helps as well. Realistically, most babies are not born on their due date. If your baby comes early, it can change your plans in terms of the time you have off and extra expenses. Knowing your options to help extend your maternity leave means you won’t need to stress if you need more time or money available to you. One option is to check your mortgage and see if it has an option such as a pregnancy pause. Speaking with a professional as mentioned in tip four will help you identify the options available to you.
Having quality time to bond with your newborn without needing to worry about finances or having pressure to rush back to work is priceless. With careful planning, you can afford more maternity leave, while still maintaining the lifestyle you’re used to.