How To Plan Financially For Maternity Leave

By | September 19, 2018

Your finances can deplete at an alarming rate if maternity expenses are not planned ahead of time. Here are some tips to go about it.

How To Plan Financially For Maternity Leave

Maternity leave is symbolic of and ushers in major changes in the life of the expectant mother and the family, both emotionally and financially. The joy and wait for the baby is so exciting that expectant parents often overlook the expenses that come with hospitalisation and all the shopping for the baby. Yes, the ceremonies too.

However, your finances can deplete at an alarming rate if maternity expenses are not planned ahead of time even if you have a bit of money in Fixed Deposits. Hence, it is very important to have a strategy in place well ahead of the due date. It’s wise to set a plan in motion while you are still planning for a baby. This will give you enough time to build a good maternity corpus. With a financial plan in order, you can dive in head-first into parenthood without any concern.

When you plan to bring a baby into your life, you are essentially getting ready to make some key decisions. Always remember, during the maternity process, financial health is as important as your physical well-being. You can run out of money in a very short time if you are not smart about your expenditure. More often than not, no matter how equipped you think you are, as soon as the baby arrives, most parents find themselves underprepared. This is where financial planning comes in. It ensures that you are able to maintain financial stability as you transition into being responsible parents.

We know you have a lot of work to do before the baby’s arrival. Therefore, we have written this article on financial must-dos for expectant parents. Everything you need to know is concisely packed in this one read. Let’s start by getting an understanding of how maternity leave works.

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The Span Of Maternity Leave

The provision of taking maternity leave is an essential right of working women. The government periodically engages in discussions and debates regarding this. They strive to arrange the most comfortable policies for the expectant mother, the child, and the family. Dear working mothers, you are entitled to receive your salary in full while you take time off to raise your child.

India is now amongst the sixteen countries that allow their working women the longest paid leaves when they enter motherhood. The former leave period of 12 weeks has been upped to a span of 26 weeks after India’s Ministry of Labour made the much-needed amendment to the Maternity Benefit Act, 1961.

Employees of both private and public sector companies are entitled to this leave of absence. However, mothers who opt for adoption and surrogacy of a child no more than 3 months old, the leave stands at 12 weeks. Women with two or more children are also allowed only the earlier limit of 12 weeks.

When Can You Start Availing Maternity Leave?

Maternity leave can commence as early as 8 weeks before the delivery due date. Everything depends on the policies structured by your employer. Some institutes allow their women employees to work from home after the set period of leave is over.

The provision of extending or combining the maternity leave with other policies depends entirely on the rules and regulations of the company you are an employee of. However, there is one thing to note – a woman must have worked with the company for at least 80 days if she wishes to avail of maternity leave. However, these policies may vary from company to company based on the HR guiding principles. If the policy is a generous one then you can even get up to 6 months off!

The first step to establishing a good maternity plan is to know the policy which applies to you individually. Dear fathers, you are entitled to maternity or rather paternity leave. It is your duty to be with your family during the process, and more so, join your spouse at unearthly hours to pacify your crying toddler.

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Extra Time-Off

The Maternity Benefit Act gives you the provision to avail of additional leave of 30 days if you face any medical or health complication. In most cases, you will be eligible to benefit from the said term by providing a medical certificate declaring the authenticity of your claim. Additionally, you will be required to act in accordance with the HR policies of the company that you work with. Again, refrain from making any compromises which may affect you and your child adversely. It is better to be cautious and aware of your limitations and proceed accordingly.

Having The Correct Knowledge

Other than maternity leave, companies provide expectant parents with many other benefits as well. These benefits can be in the form of a policy, reimbursements of hospitalisation costs, etc. It’s important to be aware of these benefits as they can help greatly with the finances.

Employees who enjoy the status of being a regular member of the workforce are granted their full salary along with the provident fund, HRA, DA, and other facilities.

Daily wage workers are paid based on the average daily wage for the three months prior to the commencement of maternity leave.

With all the maternity costs, having access to your salary will help you immensely. Hence, before you go on leave, speak with the HR representative for a full understanding of the policies and benefits. Once the baby is around, every rupee will count.

Maternity Insurance Is The Way To Go

When you join a company, your employer will most likely provide you with a Health Insurance plan. These plans are often group plans, covering your family at large. Often they also cover maternity costs. Hence it is important that you are thoroughly acquainted with the Health Insurance Plan provided by your employer. You should know whether maternity costs are covered and if yes then which ones. Some plans allow the fathers to avail benefits on behalf of their expectant wives. In case you are not a part of any such plan, that is, your employer does not offer such policies, then you can contact insurance companies independently and get yourself covered much before you decide to have a kid.

Maternity Insurance helps you stem the outflow of money for the duration of the time you spend in the hospital. However, be sure to note that the policies come with a certain waiting period. This means that you cannot immediately use the services offered under the Insurance Policy. Therefore, it is advisable to get a policy well ahead of the maternity period so that you are eligible for all the services. You don’t want to be haggling with insurance agents when you should be cuddling with your newborn.

Hence, well researched and informed decisions are indispensable when you plan to enter the world of motherhood.

Estimation Of Your Savings Account

As mentioned before, bringing a child into the family means a great deal of responsibility. The task of preparing for the upcoming changes should begin much before you plan to materialise the idea of starting a family. Maternity leaves entail a steady flow of cash in the form of your monthly salary. However, it is wise to prepare for events when you expenditure may exceed your income. Create a strategic budget which encompasses the funds required for unforeseen situations as well. Think ahead of your immediate requirements and ensure the safety of your future.

Often, expenses go beyond even the best of estimations. For extra assistance, create an emergency fund for any unexpected needs which may arise once your little one is born. Keep a separate category composed of your savings for the overhead expenses which you may be bogged down with. It is better to avoid a crisis than face it head-on. The financial burden of supporting a child can get quite heavy if one is unprepared. Keep a systematic account of the money you have in reserve to deal with any crisis which may arise in the future.

Creating A Budget For A Safe Tomorrow

The time taken off in the form of your maternity leave will give you enough space to re-plan and restructure your family budget. It will also give you time to organise your lifestyle to facilitate the addition of a new family member. Parenthood comes with the heavy responsibility of supporting the health, education, and standard of life of your child.

Planning for a newborn baby is a difficult task. You remain unaware of the expenditure which you might incur. However, it is considered sensible to keep future objectives in view as well. You can start by thinking about your child’s nutrition requirements. This isn’t something any parent wants to compromise on. The next factor to think about is the education of your child.

We know that’s very important for your child’s future. You can open a Savings Account or Recurring Deposit for your child/children and keep depositing money in it on a regular basis to create a safety net. It is best to keep indispensable future expenses into account when doing the calculations for your savings plan. You might want to consider creating a fund for your child’s college tuition well ahead of time. Starting early is a key to starting right.

A Good Health Insurance

As a parent, your first instinct will be to protect your child. Consequently, the next step is to select a good Health Insurance Plan for your little one. You can either get an individual cover for the baby or a comprehensive family Health Insurance Plan. If the option exists then you may even recommend your child’s name to the plan provided by your employer. Choose a policy which provides an adequate financial cushion for a safe future for your toddler. Read up on the various policies available or call someone who has good knowledge about them. Do not compromise on the quality of the policies which you select.

Celebrate The Miracle Of Life

Planning for a safe and bright future for your child is a responsibility which should have your undivided attention. However, do not fret and overthink things to the point that you forget to enjoy the little yet miraculous pleasures of life. Systematising and structuring your actions during your maternity leave will enable you to lead a carefree life later.

These are some points to keep in mind before embarking on the journey called parenthood. In a nutshell. secure the future of your child and your own with some timely planning, the right investments, and a perfect Health Insurance Plan.

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We’d love to hear stories from your maternity days – how you managed the finances, prepared for the baby’s arrival and how it helped you post the delivery. New expectant mothers can take learning lessons from those more experienced.

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