I was talking to a pregnant friend recently who was telling me about her struggle to maximize her maternity leave. Unfortunately, this is a common problem many parents face when trying to find the right balance financially and emotionally of raising a newborn.
In the U.S., 114 million people don’t get paid maternity leave, according to PL+US, a nonprofit advocacy group — meaning they don’t get a cent from their employers.
But if you’re in that position, don’t worry. There are ways you can fund and extend your unpaid maternity leave. Here’s how.
1. Be strategic with your vacation and sick days
You have nine months to prepare for a baby, which means you can plan out how to use your vacation and sick days way. If your company allows you to roll over you paid time off (PTO), you could start saving your days a few years before getting pregnant or adopting.
Let’s say you get 20 vacation days and five sick days a year that roll over and you use a total of five days in the two years before having a child. You could have 45 paid days saved up, which would give you nine weeks of PTO to use after having a baby. That could be in addition to any other paid leave you might get. All this could cover you financially for some time if your company doesn’t provide any paid maternity leave.
If you and your partner both save up your PTO days, you could take your time off consecutively to have someone home with the baby for the first few months without missing out on a salary. That’s what my friend and her husband did, so she’s able to take six months off, after which her husband will take three months off.
Talk to your employer’s human resources as early as possible to see if your vacation days can roll over and if you can use your unused sick days for maternity leave. Also, check the policy on batching together PTO days because not all companies offer the benefit.
2. Use short-term disability insurance
Whether you work full time or are self-employed, you might want to consider buying a short-term disability insurance policy to cover part of your unpaid maternity leave. You’ll need to make payments on the policy for the months or years leading up to having a child and then get a payout once you use the coverage.
That payout typically ranges from six to eight weeks of coverage, which can offer a percentage or the full amount of your salary. The range could be extended if your doctor deems you unable to work for a longer period due to medical complications before or after the baby is born.
Some companies offer short-term disability insurance as part of their benefits package. If they don’t, you could purchase an external policy. You’ll have to put money aside ahead of time to pay for the policy, but you’ll have peace of mind knowing that you’ll have all or a portion of your income coming in when the baby arrives.
3. Take out a personal loan
Babies can cost a lot of money. According to the Baby Center calculator, you could be spending over $8,700 in the first year alone — and that’s not counting childcare. Even one-time startup costs are nearly $4,500. If you don’t have that kind of money saved up, you might want to consider taking out a personal loan.
Taking out a small personal loan to cover these expenses means you’ll have the money you need to take care of the baby while on unpaid maternity leave. Once you’re back at work and have a steady income, you can start making monthly payments to pay back the loan. This makes the child-raising process more financially manageable.
4. Rack up overtime ahead of time
If your employer offers overtime, start working more hours and racking up the overtime pay. This won’t mean you’ll have a paycheck coming in while you’re on unpaid maternity leave. But you could start setting aside that extra cash to use once the baby comes.
If both you and your partner can take advantage of overtime before the baby’s arrival, then you could save much more. Also, ask your boss if you can work from home in the days leading up to giving birth, so you don’t have to use up your paid leave time.
5. Take on a side hustle
If your job doesn’t offer overtime, you can make extra money by taking on a side hustle. Try any one or more of the gig economy opportunities, such as TaskRabbit, Uber, or DoorDash, to make a little more dough to save up for the baby.
The benefit of such side jobs is that you can set your own schedule and not face startup costs. With Uber, for example, you can make an average of $19.04 an hour, according to the company. So, if you work two hours a day, you could make more than $1,050 a month. Do that for eight months, and you’re looking at an extra $8,400.
Funding unpaid maternity leave is possible
Don’t fret if you’re one of the millions of Americans who don’t get a penny in maternity leave from their employers. There are ways to fund and extend your time off.
Also, there are many side gigs you can do from the comfort of your couch to make money after the baby arrives. Research your options and use the time before childbirth to plan financially for your family.
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2 Important Disclosures for Citizens Bank.
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