Maternity leave can spark different degrees of emotion in every woman. To some it may be a source of worry, to others it may be a career break to look forward to!
Whatever sentiment you have towards this next chapter, there is no denying that there is often an overwhelming list of tasks and concerns running through your mind and finance is the last thing you need to be losing sleep over (out of the little you do have).
First off, the income from maternity leave may not be enough to support the family during this time, or you might realise you need a longer break than your leave covers. The reality is, maternity leave can be accompanied with a great deal of financial stress, because the nature of a newborn life is unpredictable. That’s why we have put together a list of 6 tips to take care of your money while you’re on maternity leave.
1. Make a realistic budget
It’s important to know what you’re dealing with. A newborn baby carries many foreseen and unforeseen expenses so it’s important to be realistic with your budget during this time. Make a checklist of what you know you will need, what you may need and a buffer zone of at least 10% to account for any unexpected spending. A realistic budget can only come from an understanding of your spending behaviour and by being aware of where your money is coming from and where it’s going.
2. Keep track of your spending
Consider creating a written document whether it’s a hand-written budget journal or an Excel Spreadsheet that will help you stay on top of your expenses. Caring for a newborn is a demanding 24/7 job so for those who find it difficult to spare time to sit down, let alone systematically sort through expenditure, borrow the support of financial tools that track where your money goes and identify strategies that can help you save money and time in the process.
3. Consider work-at-home job options
After having a good look at your income and expenditure your budget might stare back at you with a glaring hole that leaves you with no option but to find extra work to patch the gap. Be assured that you are not alone and there is an entire community of mums out there that are faced with similar circumstances. This means that there is a huge network of support for you to find resources and work to help avoid the social isolation of working at home. This might even be a good opportunity to re-discover or uncover those hidden passions that you never had the opportunity to pursue but this time you can earn an income through! Especially with today’s agile workplace environment and freelance options there are many opportunities to consider, whether that be writing, blogging, transcribing or selling, the sky is your limit.
4. Take the time to invest in up-skilling
If you’re realising that returning to the traditional full-time job is becoming less feasible with no one to take care of your young ones, you can take this break as an opportunity to consider your next career move. It’s perfectly normal to explore these options during this time and there are a wealth of courses and resources that can point you in the right direction as you consider a new career-path, whether that’s a temporary or permanent adjustment.
5. Not everything needs to be store-bought
Research shows that depending on how fast your baby grows, the average span a newborn takes to grow out of its clothes is 8 to 10 weeks. It’s not only a figurative saying when parents complain that their kids grow up in the blink of an eye, newborn babies really do grow overnight! The good news is that this means any recent mums around you will most likely have a bunch of unused or once-worn clothes that could be perfect for your bub. As hard as it might be, resist the temptation to automatically jump online to browse the ridiculously adorable catalogue of baby needs before reaching out to friends and family around you to ask for any hand-me-downs.
6. Understand how maternity leave affects your super
Studies show that women tend to have lower super funds than men and one contributing factor is unaccounted super contributions during maternity leave. It’s important to know whether you’re eligible for your normal super contributions according to your adjusted pay and whether your employer will be covering the full leave period. Discuss with your employer whether there are any available options to recompense for these contributions, whether that’s through salary sacrifice or another medium, you never know what’s available unless you ask! If that doesn’t work, just be aware that you may need to catch up on your super in the future, which is always achievable. Also consider using this opportunity to consolidate your super accounts to make sure you’re not paying unnecessary service fees to multiple providers.
Money is a part of life, but money is not all of life. We hope these tips are helpful in stewarding your finances so that you can have more peace of mind to care of your little one and treasure these precious first few years!