Maternity leave is given to working mothers who are about to give birth or have recently given birth. The maternity leave can be paid, unpaid, or paid in part. When given maternity pay, a question might arise for some women: how can I survive on this?
In UK law maternity leave can be paid for up to 39 weeks which is usually 90% of the employee’s average weekly earnings before tax for the first 6 weeks. The remaining 6 weeks is approximately £172.48; this is known as statutory maternity pay. Some companies even pay full salaries for the first 6 months of maternity leave and then they pay 50% of salaries for the next 3 months.
Every company has a different policy. Make sure to check your company’s maternity pay policies to learn what pay they will offer you when you are on maternity leave.
A woman can start her maternity leave 11 weeks before the baby is born. However it is all up to you, some decide to work until the due date or start their leave one month before the due date.
How to Survive on Maternity Pay?
Knowing you are pregnant and will have maternity leave to spend all the time with your new baby is a happy thought for you. But, you may also be worried about how you would cope with all the additional finances that will arise.
Surviving on maternity pay is one of the biggest challenges. If you are used to a high salary, you may face difficulties especially after the first 6 weeks of maternity pay. The statutory maternity pay may not even come close to what you have been used to earning.
Spread out your Maternity Pay
Make sure you read the maternity leave policy of your company in full detail. This will help you to plan your budget.
Some co
mpanies also offer occupational maternity pay through which you can spread out into equal amounts over the period of the first 9 months.
This will give you a benefit that you won’t spend all of it quickly.
As mentioned, maternity pay starts off well but goes down to nothing. If you can spread it out; it will be easier for you to budget.
If your company doesn’t offer to spread out the maternity pay, you can either request them to do it or do it yourself. You can plan how much you are going to spend and save some. This will help manage the budget when the maternity pay begins to drop.
Short-Term Disability Insurance
Short-term disability insurance is a type of insurance that pays a portion of your salary during a medically related absence from work. It can be a great asset during maternity leave.
It can be of huge benefit for pregnant women; the actual amount depends upon the provider. There is a waiting period of one week which is followed by six weeks of coverage for normal pregnancies.
Also, in terms of complicated pregnancies the length of coverage increases. This also covers the medical-related complications that may arise prior to delivery.
Some companies offer short-term disability insurance, however, you can also get it through another insurance provider.
Maternity Pay Gap
It’s likely that there will be a huge gap between your salary and your maternity pay. Many mothers face difficulty surviving financially when there is a huge gap between maternity pay and salary.
Even if you think you have lots of money saved in your bank account, know that the maternity pay gap is not small. The bills won’t stop; you have to fulfil your basic needs as well as your baby’s and everything else you can manage with your salary. When you are on maternity leave, you will realize how difficult it is to manage everything with a small amount of maternity pay.
You might now be worried about how you will survive on maternity pay, but plenty of parents do it, they survive it, and they do not have to make a lot of compromises.
Despite that, it is important to check out what your company will pay you when you are on maternity leave and for how long. This will help you in planning ahead to manage the finances.
We have provided here with you some ideas that will help you to manage finances on your maternity pay.
Saving in Advance
Saving in advance should be your number 1 priority; it’s obvious you cannot survive on maternity pay without saving some extra money, and I know it won’t be the easiest task. If you and your partner are both working, try to save a percentage or a specific amount of money from your salaries in your savings accounts.
Cancel some of the unnecessary memberships that you had taken before pregnancy and save that money in your savings account.
Another way you can save money is by figuring out how much money you will receive during your maternity leave. Now multiply that amount of money by the total number of months of maternity leave. Now figure out the diff
erence between this amount and your monthly spending. This will tell you the amount of money you need to save for a stress-free maternity leave.
Also, you can try doing everything on the amount of maternity pay by reducing your extra expenses, these small budget adjustments will help you to save money and prepare for a stress-free maternity leave. By planning ahead, you will be able to survive on your maternity pay.
All the money you save will make a difference during your maternity leave; you will be less burdened with the finances and can plan everything effectively.
Take Little Holidays
This tip will help you a lot. This kind of strategy allows you to have a few weeks annual leave saved when the maternity leave begins. The maternity leave should begin the day your baby is born. But if you want to take longer off and stay at your full salary; you can use the saved annual leave that you did not take.
This is important because the more days you work, the more money you will be paid. This will help you to maximize your paid time when you go on holiday. Secondly, you won’t have to finish maternity leave earlier to go back to work, which means you will be able to have enough money to survive on maternity pay by taking as less holidays as possible.
Budget Plan
Go through all of your spending habits and see how you spend money and plan everything, and how you can change it. You can do it by tracking your expenditures over a few weeks. Note down everything that you buy.
This will help you realize the extra expenditure or bad spending habits you didn’t know about. With this, you can make effective decisions before spending on something unnecessary. Decide to spend on those areas that make you happy, and stick to it.
Remember maternity leave is just a year and sometimes shorter, but it is when you should stop spending on luxury items. Stopping spending on unnecessary items will help you save a lot of money, and you will be able to survive with your maternity pay.
You can also create a sample budget plan before beginning your maternity leave.
Furthermore, You can also talk to your friends that are mothers in this regard, they will let you know about the expenditures that may arise during maternity leave and will help you to create an effective budget plan.
Ensure you also leave some money to have fun during your holidays. You can do many different things during your maternity leave, do some old stuff that you enjoy, or try new things.
Check out this amazing budget planner for mothers.
Baby Essentials
Many new mothers face a major panic about getting everything for the baby without thinking about how they will afford it.
Even if you search on Google about baby-related items, you will see many ads telling you that you need almost everything. To be honest with you, those ads are lying. You don’t need all that stuff and should stop worrying about it.
The baby industry is huge and growing every year because many parents panic buy, thinking they need almost everything for their baby. Before your baby arrives stick to the essentials (car seat, clothes, bed, pram, feeders etc) and when the baby arrives, you can decide if you need other things such as teddy bears, colourful lights etc.
Another tip is to ask your friends or family members about the baby essentials. They can pass on some of the essential baby items. If you don’t want to ask them, you can check out second-hand markets such as Facebook, eBay, Instagram, and others. Know that babies outgrow items very quickly; second hand items are often just as good as new.
KIT Days
Many companies offer Keep In Touch(KIT) days. These days give you 10 days of extra pay when you are on maternity leave.
The best part of these days is that you don’t have to work for a full day for a full day’s pay. This means even if you work for only 20 minutes; they will pay you a full day’s pay.
Check your company’s policy on how much they will pay you these days; however, usually, it’s your normal hourly rate.
These days allow you to stay in touch with the company and prepare you to get back to work. The type of work you do is discussed with your employer.
You can utilize these days strategically in the last three months of your leave when you get paid nothing. I would recommend that you wait until your maternity pay ends, then start working some hours until you return to work properly.
If you work during those days when you receive maternity pay, you will only get some extra money. Therefore, you should wait until your maternity pay ends to get the maximum amount of money out of these days.
Start a Side-Hustle
Earning extra money won’t hurt, moreover, any work you do at home (being a self-employed woman) won’t affect your statutory maternity pay.
So, think about anything through which you can earn some extra income by working from home. If you don’t have such skills, try learning some new during your maternity leave. Make sure to read your employment contract though because some companies won’t allow you to do any kind of work when you are on paid maternity leave.
If you love writing, you can start your own blog; it won’t bring you money quickly but you never know. It could explode! It will take some time and hard work but your statutory maternity pay won’t be affected at all.
There are also many other ways through which you can earn. Remember, do something you like; this way, you will find this side hustle fun instead of a pressure cooker.
Stay at Home More
You will likely spend more time at home during your maternity leave. If you travel a lot, think how much money you will save if you stop travelling. You will also reduce spending on car fuel by staying at home.
The money you save by travelling less during maternity leave could be saved for emergencies only. In this way, you will have something to fall back on if the unexpected happens!
You could plan a meetup with friends at home rather than at a café or restaurant; this will also reduce yo
ur spending on outside food.
If you get sick of staring at your four walls then check out local library and children centre websites; if you are lucky they will be advertising free activities for you an your baby to go to.
While at home, ensure you don’t waste any energy. You could switch to a better energy provider that offers better rates. This will save your gas and electric costs.
Tell Friends about what you Need
Your friends will want to buy gifts for your new baby and it’s a good idea to tell your friends what you actually need. A lot of friends will definitely ask you what you want so use that opportunity and tell them what you actually need. You will be grateful for any gifts; you don’t want to be drowning in blankets and have no sleep suits for your little one!
You could plan a baby shower and tell your friends about your checklist of essentials that you need. If you are looking for a baby shower gift for someone how about checking out our shop.
Meal Planning
Meal planning can be a fun way to save some weekly expenses. Note down everything you need for the following week’s meals and just do one food shop. This can cut back on your spending and gives you a head start when for the week.
Final Thoughts
The time you take off to spend with your baby should be one of the happiest times of your life. Don’t let financial worries ruin it in any way. By planning and thinking strategically, you will be able to have a stress-free maternity leave.
Maternity leave will come to an end, and you will have to return to work full-time. You will face a lot of new challenges when you return to work. You can look for Tax-free childcare. That scheme will allow you to pay for child care with tax-free methods and save you a lot of money.
Wondering how to spend all that time off on maternity leave? How about diving into other ways to spend your time during maternity leave.
