With the United States as the only developed country without government-mandated paid parental leave, many new parents are left scrambling to make ends meet financially. Here's how to be prepared for maternity leave when it comes to money.

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It's no news that having a baby is a life-changing event, one that will completely turn everything as you know it upside down. It's an event that's most often filled with joy, tears, exhaustion, excitement, lots of pictures, and a little bit of spit-up thrown in for good measure. Then there's the fact that many new parents who take maternity or paternity leave during their child's first weeks find that "time off" accompanied by uninvited financial stress.  

With the United States being the only high-income country to not provide government-mandated paid leave after the arrival of a child, many new parents are left scrambling to figure out how to make ends meet. This lack of paid leave can create a major burden for parents during a time that is meant to be full of snuggles and learning the ropes of parenthood.

But the financial hit that maternity leave can cause doesn't need to come as an unwelcome surprise. Well, yes, it will be unwelcome—but you can be prepared. Setting yourself up for financial stability during maternity leave can be instrumental in fostering a more positive experience of parental leave at home with baby.  

An image of money and baby objects on a colorful background.
Credit: Getty Images (3). Art: Jillian Sellers.

Know what benefits your company offers 

Many companies have some sort of benefits guide that should offer you some guidance as to what you might be eligible for in terms of maternity leave. Be sure to read the details, as the Family Medical Leave Act provides 12 weeks of unpaid leave dependent on your employer.  

If you're lucky, you might happen to reside in a state that mandates paid family leave—these include California, Connecticut, Massachusetts, New Jersey, Oregon, Rhode Island, New York, and Washington, with the length of paid leave varying by state.  

Short-term disability (STD) can often be an option for parents who are only eligible for unpaid leave but need some sort of income during that time. STD can also be helpful for parents who feel they need more time than their company is offering for their leave. Check with your Human Resources department for more information or to see if you are eligible for STD or any other benefits.  

Understanding what benefits you're eligible for is a critical part of planning for financial success and stability during your time away from work.  

Negotiating 

When we think about negotiating at work, we often think about negotiating a raise or negotiating our salary upon receiving a job offer. There is very often wiggle room for negotiation in other areas of our employment as well, and that includes negotiating your maternity leave—which can be especially helpful if you aren't satisfied with what is, or isn't, being offered after reviewing your company's maternity leave benefits and talking with HR. 

Say your company offers six weeks of paid leave, followed by an optional additional six weeks unpaid via FMLA. If you want to take the full 12 weeks to be with baby, but your family's financial situation is such that you simply won't be able to save up enough to cover the remaining six weeks, this is the point where you can brainstorm what might work for you and your family.

Would you like to take three days to work from home part-time for the remaining six weeks, while taking the other two days unpaid? Do you have a family member who might be able to spend time with your baby to support you working from home full-time for the six weeks? Decide what you'd like and what would be best for your family, and present this to your supervisor.  There is often room for flexibility if we take the time to think about what we want, create a plan, and ask.  

Save in advance 

You have an understanding of your company's benefits, you've negotiated your leave, and you know how much money you'll be bringing in during your time away. This is the perfect time to look at your budget, or calculate your monthly expenses if you aren't already using a budget, and determine how much you need each month to make ends meet. Cutting out the fluff and focusing solely on your bills and necessities will help you determine this amount. 

Let's look at a new imaginary scenario where you are only eligible for FMLA, with no other benefits offered through your employer. After doing the math, it turns out that you need $2,000.00 a month to cover your necessary expenses. The next step is to see how many pay periods you have remaining leading up until your due date. You've started planning early and have about 6 months, or 12 pay periods before baby is scheduled to arrive.  

For a 12-week maternity leave, you will need $6,000.00 to cover your expenses. With 6 months to go, you will want to be saving about $1,200.00 a month, or $600.00 each pay period.  If you have a partner, you'll want to be sure to look into their options for leave as well, and add those benefits into the mix as you look at how much you'll need to save.  

Keep that budget going

While starting a budget during pregnancy will help you save what's necessary to cover your expenses during maternity leave, keeping that budget after baby arrives will maintain stability—if you stick to the amount that you've worked so hard to save. 

The simplest and most effective way to do this is to set an allotted amount to spend each month on food, baby items, bills, and other things you may need, such as nursing bras, pumping equipment, and/or formula. Then, track the comings and goings of your money—either with pen and paper or using a budget app on your phone. If you go over in one category, you might have to pull from another category to keep things balanced—but with time and some adjustments, you'll be able stabilize your finances long beyond maternity leave.