In spite of a six months’ paid maternity leave that you’re entitled to in India, there are still some exigencies that you will need to financially prepare for during your maternity leave.
Motherhood can easily be considered as one of the most momentous occasions that mark a woman’s life. Whether you’re opting for a natural birth, surrogacy or adoption, this period is likely to bring tumultuous changes to your life. So much so that no matter how many baby books you might have combed through, you will still never be quite prepared for. While you may not have all the resources that will ready you for the emotional roller-coaster this new journey is going to be all about, you can, however, prepare for the strain this period is likely to put on your finances.
If you’re all nerves about what your maternity leave entails, like rising household expenses, inflated budgets for provisions like diapers, daycare, healthcare, baby food, etc. then here are some tips to help you financially prepare for your time off:
Maternity Leave And Its Duration:
In India, after the amendment made to the Maternity Benefit Act, 1961, the duration of maternity leave was increased to 26 weeks from 12 weeks. Both private and public sector employees are entitled to maternity leave. If you’re opting for surrogacy or adoption of a child up to three months old, you’re entitled to 12 weeks of maternity leave. Women having two or more children are also entitled to 12 weeks of maternity leave.
Women can avail maternity leave eight weeks prior to their due date. Some companies also offer their women employees the option to extend their maternity leave or even continue working from home well after their maternity leave is over. If you’re not sure what provisions your company is offering to working mothers, it’s best to check with your company HR or go through its maternity-related policies carefully.
Additional Reading: Crucial Financial Planning Tips For Single Mothers
Understand Your Health Insurance Policy:
If you have an existing Health Insurance plan with your spouse/partner, read the fine print carefully to find out the inclusions and exclusions. Understanding well what your Health Insurance policy will or will not provide for will help you plan your budget well before you go on maternity leave.
If your employer is offering a Health Insurance cover for you and your family before you go on your maternity leave, take some time out to go over the following things with your HR business partner:
- Does the existing Health Insurance cover maternity costs as well?
- How much would you have to co-pay on the existing Health insurance cover?
- What would be the maximum amount for your out-of-pocket expenses on this cover?
- Will you have to pay an additional amount towards your Health Insurance while on maternity leave or refund any premiums paid by your employer?
If the Health Insurance cover offered by your employer doesn’t cover maternity costs, then it’s best to buy a maternity insurance policy with adequate coverage. Once your newborn arrives, remember to also add him/her to your existing family floater plan as well as in the insurance plan offered by your employer. Infants are vulnerable to infections in their formative years so you may even have to buy a separate Health Insurance plan for him/her that provides adequate coverage.
Build Your Budget:
Even if you’re getting a six months’ paid maternity leave, there are still some curveballs that you will need to prepare for. For example, complications could arise should you need to undergo a caesarian section etc. Thus, it is of prime importance that you make a careful estimation of your budget and start saving well before you prepare to go on maternity leave.
Before your baby arrives, re-adjust your budget to identify areas where expenses can be cut down like eating out, travel, and entertainment. One creative way to go about doing that is to create a need versus want list and list down all your expenses. That way you’ll know which area to focus all your efforts on in order to boost your savings.
Additional Reading: 6 Key Money Lessons My Mom Taught Me
Bringing up a baby will bring its own share of joys, frustrations, sleep-deprivation and considerable strain on your pockets to be able to afford baby food, diapers, furniture, childcare, etc. You might be sleep-deprived, but you can sit back and relax knowing that your finances are in order and your entire focus should be on your baby.
If you foresee having a baby in the next couple of years, you can start saving up for it by investing in a Fixed Deposit now. Rates go up as high as 8.25%.