Having a baby is an incredible milestone, but one you need to plan for carefully—especially if you have a job. Whether you're planning to take a short or an extended period of parental leave, here are a few things you should do to prepare for that break.
1. Figure out how much time off you want or need to take
It can be difficult to determine how much parental leave you'll require ahead of time. So much of that decision will depend on how you're feeling physically and emotionally following the birth of your child. But it does help to come up with a ballpark estimate so that you can not only plan for yourself, but also tell your employer what to expect.
If you're planning to put your baby in a daycare center once you return to work, keep in mind that many establishments won't take infants before they're three months of age. That rule could therefore help determine your decision.
2. Understand what your employer's leave policy entails
Under the Family and Medical Leave Act (FMLA), if you meet the following criteria, you are entitled to up to 12 weeks of unpaid leave so that you can care for a newborn. During that time, your employer must hold your position for you. You need to:
- Work for a company with 50 or more employees
- Have been with that employer for at least a year
- Have worked at least 1,250 hours for that employer during the past year.
But although FMLA offers some protection, it won't help you financially. Therefore, be sure to see what sort of leave your company is willing to provide. You may be entitled to several weeks, or even months, of paid leave on top of FMLA. Or not. But knowing what to expect will help you budget for a drop in income as needed.
3. See if you're entitled to short-term disability
Chances are, your company has some sort of short-term disability insurance in place. If so, you might manage to eke out some income during your parental leave, even if that money doesn't come from your employer itself. The amount you'll collect under short- term disability will depend on factors such as your specific policy, the type of birth you have, and whether complications ensue—but don't expect it to replace your entire paycheck. In many cases, it'll give you about half that amount, and only for a limited number of weeks.
4. Save up as much vacation time as possible
If your employer doesn't offer paid parental leave, or doesn't offer a lot of it, you may be able to save up your vacation days and use them following the birth of your child. That way, you'll get paid for some—or more—of your time away from the office. If you want to carry vacation days from one calendar year to another, be careful as some companies don't let you do that. They might also limit the number of days you can carry over, so check your employer's time-off policy.
5. Boost your savings
Unfortunately, there's a good chance you won't be paid for at least a portion of your parental leave. And that could wreak havoc on your finances, especially at a time when there will be many demands on your pocket. That's why it's crucial to pad your savings account in the months leading up to your leave.
Take a look at your budget and cut back on as many expenses as you can. If you have an emergency fund, tapping it is something you can do in a pinch, but remember: That money is supposed to be there to cover unplanned expenses. And chances are, you'll have many months of notice leading up to the birth of your child.
By preparing thoroughly for your parental leave, you can minimize at least some of the financial stress you might face. And that's a good thing, because you'll need all the energy you can muster to care for your new bundle of joy.