Saving for Maternity Leave: How to Financially Prepare Your Family

Read the Article

The time off work spent with a newborn is one of the most memorable times in a parent’s life. Like any other major life event, financial planning is crucial to make the experience as stress-free as possible. Saving for maternity leave takes strategic financial preparation, especially in the United States where there isn’t a mandate on paid leave for new parents. Although women are still outnumbering men when it comes to taking parental leave, paternity leave is also on the rise.

Saving for maternity leave (or paternity leave) doesn’t have to be a grueling process as long as you plan ahead. Rather than stressing about finding additional sources of income, it’s helpful to start by finding areas where you can save. With so many unpredictable factors affecting our daily lives, it helps to get as detailed as possible with your plan.

Below, we’ve outlined some of the best ways to stay on track financially while saving for maternity leave.

10 Tips for Saving for Maternity Leave

Check In With HR

As soon as you plan to notify your workplace of your pregnancy, stop by your HR department to clarify parental leave policies. These policies include health insurance, using vacation and paid time off as part of your leave, collecting partial payment for maternity leave, and claiming short-term disability.

Your HR department might also help you maximize a flexible spending account (FSA), which will allow you to devote more pre-tax dollars to upcoming medical and child care expenses. Confirm what your insurance policy covers in regards to the duration of hospital stays, prescription drugs, medical materials, and how long the baby will be covered under your policy after birth. After clarifying the details with HR, you’ll want to discuss your upcoming maternity or paternity leave with your supervisor and coworkers too.

Take Charge of Your Spending

If you don’t actively stick to and monitor your budget, now is the time to start. For at least 30 days, track everything you and other family members spend to get a clear idea of where your money goes each month. Pick a time for a biweekly family financial meeting to maintain your progress.

Successful saving is about defining a realistic plan of action with all parties who spend and generate income in your household. Saving for maternity leave is all about determining what your income and expenses will look like when you’re out of work and caring for baby, at least to the extent that you can reasonably project them.

Crunch the Numbers to Maximize Your Budget

Too many families saving for maternity leave rely heavily on estimates rather than doing the math to figure out specifics. Be sure to project your monthly income during maternity leave.

Factor in payouts you will receive for any partially paid maternity leave by your employer, unused vacation days, and any other extra income you plan on generating by freelancing or working part-time. Then, subtract your maternity leave income from your expenses. If it’s negative, then that figure is the absolute minimum you’ll need to save for each month you won’t be working when the baby arrives.

When you make the time to specifically predict your budget, you eliminate the confusion and stress that comes with unforeseen expenses. Don't forget to also account for spending changes that happen after the baby arrives. Baby supplies and gear can get expensive quite fast. Plus, you might find yourself spending more on takeout and outsourcing cleaning or errands as you’ll have less time on your hands with a demanding newborn.

pregnant woman with son and husband cooking

Automate Your Savings

When it comes to automating your savings, the concept is simple: If you never see the money, you won’t be tempted to spend it. Establish an automatic savings plan through your bank that will automatically transfer money from checking into savings.

Another option is contacting your employer to have a portion of your paycheck directly deposited into your savings account each payday. Using a budgeting app that allows you to see how much you’re stashing away in real-time also helps.

Make Couponing a Family Activity

Savings can really add up by recognizing opportunities to capture low hanging fruit opportunities like couponing. There are a ton of free online couponing sites, but don’t miss out on old fashioned couponing and start a binder or folder as well. Be sure you don’t negate your hard work couponing by splurging.

Try to reduce all non-essential expenses in your budget and dedicate that money to your savings account instead. If you get a tax return or bonus, skip buying the fancy crib and put it right into savings. By connecting with family members, friends, and neighbors you can take advantage of gently used baby items to save cash. Also, it can’t hurt to see if there is a second-hand store in your area specifically for baby clothes and supplies, like Once Upon a Child.

Get a Credit Card That Helps You Save

Although it’s important to be wise with your credit card usage, your credit card spending can help you with your budgeting goals. Depending on your stage of life, certain credit card choices might make more sense than others.

As a reminder, no matter which card you use, always use the same best practices to increase your credit score. For example, make an effort to keep your utilization low and always pay your bill on time. After all, making payments late can have the biggest negative impact on your credit score.

pregnant woman with husband and son looking at laptop

Choose a Bank that Helps Your Financial Goals

Stick to accounts that are free of balance requirements and fees, and compare rates at local banks and credit unions. Remember, smaller financial institutions sometimes offer more competitive rates than major banks, so don’t be afraid to do some shopping around.

If you’re comfortable banking online only, some online banks offer very competitive rates. For example, a high yield savings account will help your money work for you as you’re saving for maternity leave.

Take Advantage of Family-Specific Discounts and Tax Credits

With a little research, you’ll likely find a wide array of discount programs and free resources for expectant parents. Don’t forget to take advantage of tax credits, too.

For example, you may be able to claim the Child Tax Credit for the year your baby was born (depending on the time of birth), deduct qualifying child care expenses, and contributions to a College 529 savings plan. All of these will reduce your taxable income, leaving more money in your pocket.

Plan to Keep Your Professional Skills Sharp

There are certain realities about taking extended time off from work for parental leave that are inevitable. The time away from your job could cause you to feel out of the loop or more stressed when you return.

Taking some time during your parental leave to maintain key skills or read up on company/industry news could help you maintain job security (and therefore financial security) when you get back to work.

Avoid the Baby Registry Trap

Baby registries are big business and can be big budget busters. Only register for the items that truly need to be brand new and reach out to friends, family, and consignment stores for gently used items before you splurge on a registry.

From financial coverage for maternity leave to childcare costs, increased medical expenses, and college savings accounts, there’s bound to be a lot on your mind. Fortunately, you’re not on this parenting journey alone. There are plenty of families making it work with lean budgets who are stressing less by following tips like the ones we’ve compiled in this graphic below:

infographic with tips for a financially smart parental leave


With so many unknowns, taking ownership of your financial circumstances to prepare for a baby is empowering. After all, saving for maternity leave is the precursor to a total budget overhaul once the baby arrives. To avoid financial shocks, work with your family to follow best practices to create a budget that works for you.

Make a game plan and take advantage of resources as you’re prepping for parental leave. Keeping your finances in check while spending time away from work undoubtedly provides a sense of reassurance. Take control of your budgeting goals and get creative with new ways to generate income and save money.


Written by Mint

Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint


National Partnership | US Census | CBS