You’re planning on having a baby in the near future, and you’re wondering about your employment status once the baby is born. How much time can you take off? Will you get paid? Will you lose your job?
Maternity Leave in the United States
Unfortunately, the United States is unique in its treatment of maternity leave, along with any other form of family leave. It’s the only wealthy country in the world that doesn’t offer guaranteed paid maternity leave on a federal level. The terms of paid maternity leave are controlled by state laws and individual employer policies.
New parents may not get access to paid leave. More commonly, the unpaid leave will be available. The Family and Medical Leave Act (FMLA) guarantees 12 weeks of unpaid leave after the birth of a newborn. This also applies to cases of adoption. There are certain requirements for FMLA benefits — so, check to see whether you are eligible or not.
Unpaid leave means that you will not have a supplemented income during your time away, but you will at least continue to access your healthcare benefits through your job, and you can rest assured that your job is secure. Your employer will not fire you for taking this time off. It is illegal for your employer to fire you for getting pregnant or taking maternity leave. This is called pregnancy discrimination.
How Can You Financially Prepare for Unpaid Maternity Leave?
Encourage One Parent to Work
You will not be collecting your regular paycheck, which means you’ll be relying on your savings to get by. If you are in an active partnership, one of you may need to work to continue bringing in a regular stream of income. This could put less of a financial strain on the household while you’re taking care of your newborn.
Budget, Budget, Budget
Try to prepare for this drop in cash flow ahead of time by budgeting for your unpaid leave. Trim your variable expenses so that you can put more savings away for your time off of work.
Do you have any extra savings sitting in your bank account? Unpaid leave could be the perfect excuse to tap that account.
There is one exception for this: try not to use savings from your emergency fund. You never know if an emergency expense will crop up, and you don’t want to leave yourself in a vulnerable position during your leave or after it. If you do use those savings, and an emergency expense crops up after you’ve drained your emergency fund, you will need to look into alternative payment methods, like a credit card or personal line of credit.
If your partner is working during your maternity leave, and you need to find an alternative method to cover an emergency expense, they could apply for a personal line of credit loan in your state of residence. So, if you live in Phoenix, they could look up loans in Arizona and check whether they’re eligible to apply. You may not be able to apply. Online loans require applicants to have a steady income to qualify.
Are you planning a baby shower? Instead of asking everyone to buy cute onesies and toys for the baby, you might want to request more practical gifts that could help you get through the first months of your unpaid leave. This could be gift cards for pharmacies, boxes of diapers, and cash.
When you come home from the hospital, you’ll want to focus on feeding, changing, and caring for your newborn. You won’t want to focus on your finances. So, financially prepare for your maternity leave now.