You just found out you are pregnant and you are freaking out!  Rightfully so.  Your life is about to change in so many awesome ways!  Some you may not realize because you will be so sleep deprived.  I’m joking, but seriously.  There are approximately one million things you are going to try to prepare prior to your little one’s arrival.  There will be plenty of time for nursery decorating, registry shopping and baby showers so don’t worry about that right now.  The most important thing you should be doing is preparing your budget for maternity leave.

You should not waste any time getting started adjusting your budget for your new family size.

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No matter your work situation (full-time, part-time, stay-at-home mom), you will have new expenses with your new baby.

I was so scared when we found out we were pregnant with our first child.  Could we afford to have a kid? How much was it going to cost? Was I going to be able to take maternity leave and still be able to pay our bills?  How would we pay for childcare? How much were our medical bills going to be? How did people do this?!!

Okay, so let’s take a breath.  If you are planning on getting pregnant or have just found out you are pregnant, there is plenty of time to save.  If you are late to the game and due in a few months, this is still doable, but you will really have to put it in high-gear to save money.

Here is the mental walk-through I do everytime I find out I’m pregnant and need to get organized!

Use our FREE Maternity Leave Budget Prep Forms to walk you through each step!  Gain instant access by signing up below!

Step 1.  Are you taking maternity leave?

Decide how many weeks off work you are taking (4, 8, 12 weeks?).  Are these paid? Unpaid? Partially paid?

Pro tip:  If you are not planning on getting pregnant for another year, now is the time to look into a short-term disability policy that will cover natural childbirth.  This is a savings game-changer. Paying $1,000 (average estimate – my plan was $880) annually for a policy that will pay you 70% of your normal wage while you are on maternity leave will majorly cut down how much you need to save.

Make sure you find out the policy dates for when it will be covered for you.  Most policies will cover any pregnancy 9 months and beyond the initial policy date.  Meaning, the policy won’t work if you purchase it when you are already pregnant.

As an example for this question:

Let’s say you are taking 10 weeks maternity leave and you make $3,500/month that is part of your monthly budget for living expenses.

10 weeks work = $8,750.

If your work will pay you for 4 weeks and then the last 6 are unpaid, then you will need to make up $5,250.

Or,

If you have the short-term disability that will pay you 70% the whole time  (10 weeks = $6,125), then you only need to make up $2,625.

For our first child, I took 8 weeks.  I had no pay from my work and no short-term disability (this meant a lot of saving happened on my end).

Step 2.  Are you predicted to have a healthy pregnancy?

This is such a hard question to answer because you can’t predict the future.  What I mean by this is, has your doctor warned you about any possible complications or need for possible bed rest?  Are you at risk for any complications?  If you haven’t talked about it, just ask your doctor.

If you are, this is something to think about, especially if you could end up on bed rest needing to quit working sooner.  If you have disability coverage for something like this, then it will be a non-issue.  If you do not have coverage for this, then you will need to have an extra 2-4 weeks of work savings set aside.  

I have been super fortunate to not have any issues and have been able to work until I popped with both of my kids.  I always had the fear of what if I couldn’t work a month before I was due.  Would we have been okay?

The best thing you can do to not have this worry is to have an extra month of income saved.  It is worth it to take away the stress of the unknown. 

Step 3.  Look at your health insurance plan to understand maximum out-of-pocket costs you could have.

This is a bit scary to think about, but again, I am all about planning for worst case scenario (if we plan it won’t happen, right?).  I had a separate baby fund account (within our checking account) and a medical fund account specifically for hospital bills.

In a perfect world, you would save the entire max out-of-pocket amount (ours was about $7,000).  I know we are not in a perfect world, so if you can’t, make sure you at least have your deductible plus a little more saved.

Nobody wants to be paying off their child for the next ten years, and yes, that happens all the time.  If you can plan and save for this, it will be so much better to leave the hospital with your new child and not take the hospital bills home with you for the next decade.

Step 4.  Write up a mock budget for the first month after you have your baby.

Take a look at what your budget will be while you are on maternity leave.  Figure out how much you will need to live during that time.  With you not working there are some costs that may decrease from their normal amounts, as well as some that will increase.

Decreasing costs may include:  gas (less travel for you to work), food (you may have freezer meals prepped or be eating out less since you are home), clothes (you will not want to shop with your postpartum body for a while)

Increasing costs may include:  electric/gas (more lights and laundry in use with you at home), a baby category will be added (formula, nursery water, little odds and ends you need for newborn essentials), newborn photos

Example:  You determine your budget will be $3,750/month during maternity leave (when it is normally $4,000).

Step 5.  Now bring your spouse’s income into the equation.  Write down how much they are making per month.

Example:  Husband’s pay $3,500/month.

This was a simple step :-).

Don’t forget to use our FREE Step-by-step Maternity Budget Prep Worksheets to fill in the blank with each step!  Get them now by signing up below!

Step 6.  Put it all together for a grand total.

This might hurt, but just rip off the band-aid!

Example:

You are taking  10 weeks unpaid maternity leave.

You need to budget for 10 weeks of maternity leave + an additional 2 weeks in case of bed rest (= 12 weeks, or 3 months).

You have determined your budget during maternity leave to be $3,750/month x 3 = $11,250

Health Insurance maximum out-of-pocket = $7,500

= $18,750  (on average, it costs $20,000 to have a baby when you are paying for everything).

That is how much you need to be saved for medical and maternity leave.

Step 7.  Calculate how much you need to save per month from now until the baby arrives to have these expenses covered.

Example:

Mom income $3,500/month + Dad income $3,500/month = $7,000/month

9 months until baby comes……

$18,750 divided by 9 months = ~$2,000/month in savings.

In this example, this couple is bringing in $7,000/month.  Their current monthly budget is $4,000/month.  That leaves $3,000 excess each month to put towards baby (give or take some other expenses).  They could have all the maternity leave and max out-of-pocket medical expenses saved in less than 9 months.

Pro tip:  When you find out you are pregnant, you stop all other payments toward debt.  From the time you find out you are expecting until the time you deliver, you should be hyper-focused on squirreling away as much money as possible for the baby.  Do not worry about debt during this time.

This may seem impossible when you look at saving a large sum of money, but it is extremely doable.  We have done this with both children. Our first child we took the 9 months to save. With our second child, we had the bright idea to move mid-pregnancy (moves always cost something), and we had to bust it with that one to save everything in 6 months.

It’s as simple as that.  Follow the steps and see what you need to do to save.  Even if you are just thinking about starting a family now, it is important to start thinking about these things.  Figure out what you have to do to give yourself a stress-free maternity leave experience.  Saving the money for medical costs and maternity leave is so simple, but so often overlooked.

The last thing you want to worry about is how you are going to pay your bills when you should just be snuggling your new baby.  The last thing you need to feel as a new mom is guilt over being on maternity leave, not making money.  Take the stress out of maternity leave so you can just be Mommy!

Are you pregnant?  Follow these steps today and start saving that money!

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