Everybody has different circumstances, but your income will probably reduce when you go on maternity leave. Grants, Statutory Maternity Pay (SMP), enhanced maternity packages, no monetary support; it’s a lottery. But regardless of your individual financial circumstances, if they’re changing then your bottom line is bound to be impacted. So how can you mitigate the impact of this change? Can you budget for maternity leave before you have a newborn in your arms? Here are my tips:
1) Make sure you’re getting what you’re due
Citizens Advice is a good place to start if you’re not sure what you’re entitled to. If you have questions about the information you read online, then make sure you call for advice or drop into your local centre.
2) Make a budget
Once you know what you’ll be getting, make a budget. Some people don’t bother, but unless you want to run out of cash eight months in, I suggest you sit down and do the sums.
You can work out what your fixed bills are and estimate the cost of additional items that are likely to crop up during your maternity-leave period. You will need to buy some things and you might want the odd coffee, or to attend baby classes, so account for it beforehand.
If you want to save for your baby’s future, make your plan before your maternity period begins.
3) Work out your overall maternity leave income
If you’re planning to take a whole year off then calculate your total income over that period. You can then divide that number by twelve to work out your average monthly income will be.
It’s up to you how precise your calculations are. I decided not to include holiday pay in this figure, as I thought it would be good to use this as wiggle room in case I did overspend.
4) Check your figures
Once you’ve worked out what you’ll be getting, ask somebody to double check it. This could be your partner, your pal, or the lady at the Citizens Advice Bureau.
Alternatively, you could send the figure to your work’s HR department. If the head of payroll will be processing your maternity leave pay, then ask them directly if your calculations are correct. If you do this and they know you’re on the ball, then they’re bound to take extra care to ensure your pay is right when the time comes.
5) Save your holidays until the end
If you’re in employment then you will still accrue holidays and bank holidays (if you usually have them off) whilst you’re on maternity leave. I decided to take my holiday entitlement at the end of my maternity leave period. By that point, I was happy to receive some extra money.
6) Pay yourself
It’s possible that the amount of money you will receive on maternity leave will vary each month. If I received more than what I’d calculated my average monthly income to be then I saved the extra in a separate account. If I received less one month then I topped it up.
By saving and paying myself at a future date, it meant that extra money (which I’d actually already accounted for) wasn’t spent.
7) Consider KIT days
If you’re in employment then you can work up to 10 Keeping In Touch (KIT) days during maternity leave. They are completely optional and both the employee and employer need to agree to them.
KIT days will provide a boost to your maternity leave income. They will also enable you to find out what’s been happening at work whilst you’ve been away and you can test your childcare arrangements before the big return to work.
Personally I can’t recommend KIT days enough. As well as boosting my income, they helped me to feel more confident about my return to work.
8) Be honest
It’s overwhelming coming up with a budget for maternity leave and sometimes, no matter how hard you try, you can’t get the numbers to work. Rather than worrying, confide in your partner, a friend, or a professional.
One of my friends was worrying herself sick about the bills, but she didn’t want to ask her partner to up his share. Your partner might not be in a position to pick up extra bills, but if you’re in a relationship then it’s a problem for you both to solve, so don’t face it alone. It’s okay to feel overwhelmed and it’s okay to ask for help if your budget isn’t working.
What else can I do?
There are other things that will help if your books aren’t balancing. You can make sure you stick to a strict list of essentials when buying maternity wear and I also saved money by buying second-hand baby items. It’s also possible to keep costs down during maternity leave, there are plenty of ways to keep your baby entertained without having to buy specific equipment and once you’ve got to grips with the new addition, you could look into setting up a new business.
Did you make a maternity leave budget before your baby arrived?