Easy ways to budget for maternity leave
Posted: Tuesday January 14 2020
Expecting a baby is exciting, but it can also be a daunting time from a financial perspective. Aside from the sleep deprivation and responsibility, it’s likely that your finances will also be under more pressure. With this in mind, I thought it would be a good idea to consider the how to get on the front foot with your money, before your bundle of joy arrives.
A really good place to begin is to know how much you currently spend. If you don’t have a budget, I would advise that you start to look at your expenditure in more detail. Dividing this into categories such as ‘essential’ and ‘discretionary’ would be a sensible starting point. If you’re good on Excel then a spreadsheet can be a great way to keep a record of this – but you also can’t go wrong with good old pen and paper!
By looking at what you spend now, you’ll be in a better position to consider how this may change when you have another person to cater for. There may be items that you can cut back on or stop altogether – particularly if they are unnecessary. If it’s your first child, why not speak to friends who have had babies and pick their brains to find out what are vital purchases and what they wish they hadn’t bought. This way you can avoid making expensive mistakes.
Additionally, if you have any debts, you could consider reducing these before you take a break from work. That way you could have more disposable income.
Looking at the maternity benefits offered by your employer will also ensure there are no surprises regarding how long you are paid for before these earnings reduce. It will also support you in identifying any shortfall in income you may have.
Identifying savings opportunities
Once you have spotted any deficit, you can try and save some money while you’re still working. These savings will help you to top up your maternity pay while you’re off work. Setting up a designated savings account for this will help keep you focused and separate the money, so you can clearly see your progress.
Check entitlement to government benefits
Another important area to take into account is exploring any benefits that could be available, such as tax credits and child benefit. You’re also entitled to free prescriptions and NHS dental care with the use of a maternity exemption certificate. If you’re pregnant and on a low income you may also be entitled to Healthy Start Vouchers – https://www.moneyadviceservice.org.uk/en is a fantastic resource for research.