how to save money on maternity leave

How to Save Money on Maternity Leave

Having to spend the first weeks with your newborn after their birth is crucial to developing a bond. For these reasons, parental leave is the most wonderful benefit offered by offices to working moms and dads.

Maternity leave is extremely important for moms because they need more time to adjust to the baby’s arrival and the changes in their routine.

From learning how to use the baby supplies to soothing and feeding the baby at night and ensuring that all their needs are fulfilled, it’s a full-time job that requires moms to be fresh and attentive, which is not possible if they are working 9 to 5.

Whether your maternity leave is partially or fully paid, it’s important to have a maternity fund so that you don’t dip into your savings account for the new expenses. Hence, you need to plan because even though you might be on a paid lead, you will need more money to buy the necessary supplies before the baby arrives.

Before we begin, let’s take a look at what are the rules regarding maternity pay in the U.S.:

Family and Medical Leave Act (FMLA)

pregnant woman on her maternity leave working on a laptop in her kitchen.

FMLA provides eligible employees with 12 weeks of protected and unpaid leave every year. During this period, the employee must maintain their group health benefits as if they were still working in the company.

FMLA does not offer paid leave to employees. However, an employee can use their casual, sick, and annual leaves as partially paid maternity leave, which an employer cannot deny. This option allows you to increase your maternity leave budget and add to your baby registry.

These leaves are designed to help mothers balance their family and work responsibilities. The FMLA applies to public agencies, private schools, and companies that have more than 50 employees. The maternity leave is given for the following reasons:

  • For care of the new baby
  • When an employee adopts a child
  • To care for a family member (child, spouse, or parent) who has a serious health problem.
  • For extended medical leave when the employee can’t work due to a serious health problem.

The employee will only be eligible for maternity leave if they have worked in the same company for 12 months and clocked in around 1,250 hours. If you take any leaves because of pregnancy complications, they will be counted against the 12 weeks of medical leave.

How to financially prepare for maternity leave

Here are some tips on how to financially prepare for your maternity leave.

Work out your budget

Make a list of all the things that your baby will need. This list will help you prepare for unexpected expenses and calculate exactly how much you should be saving for maternity leave.

Review your joint finances

It would be best to consider your and your partner’s income to determine how much money you make and how much of it is used to cover the daily expenses. Now that only one of you will be earning, you will have to set aside some extra cash before the baby arrives.

Lower your expenses

Now that you know about your monthly expenses, you will have to limit your luxuries, such as multiple weekly outings and buying non-essential items. There are plenty of other things you can do, which we will discuss later.

Minimize your debts

In the long run, your debts can derail your plans. Now that you have a new addition to your family, you might think about buying a house. To apply for a mortgage, you will have to clear your debts.

Start putting some aside for a rainy day

Transfer your maternity savings into a savings account to know how much money you will have after the reduced income. As new parents, you will have to cut costs and transfer part of your income into the savings account not to be tempted to spend it.

Boost your income

At the start of 2021, the American Rescue Plan Act increased Child Tax Credit (CTC) for children aged below 6 and 17. Starting from a newborn to 6-year-olds, tax filers can claim $3,600 in CTC, and for those in the age range between 6 and 17, parents can claim $3,000 per child.

Is it required by the law to offer maternity leave?

A mother sitting on a chair holding her baby and working on a laptop

Sadly, no.

Whether it’s maternity or paternity leave, the law does not pressure a company to offer days off to an employee. Although FMLA offers job protection to employees, most women are not eligible because they do not meet the Act’s requirements.

Additionally, the decision also rests in the hands of the H.R. department to determine if an employee has clocked in the recommended hours.

However, in Washington, D.C., New Jersey, New York, Rhode Island, and California, employees have a right to paid family leave, which can be for anything such as short-term disability and to take care of a new baby. The amount paid and the leave time differs by state.

How does short-term disability work for a maternity leave?

A short-term disability plan will cover your maternity leave expenses for a short period. This plan will include all expenses you incur while you are on bed rest due to some complications. Hence, you should think about buying short-term insurance and go for additional coverage so that you will be covered if any complication does arrive.

10 tips on how to save for your maternity leave

Baby supplies such as a diaper, rubber ducks, nipples, and toys placed on a surface.

The first thing you need to do is inform your workplace that you are pregnant and take days off to prepare for the new baby. Have a meeting with H.R. to find out what are the parental leave policies.

Maternity leave usually includes using paid and vacation time and health insurance, applying for short-term disability, and partial payment for your paid maternity leave.

Depending on what types of benefits your company offers, you can also opt for a flexible spending account (FSA) that will help you save more pre-tax dollars for any childcare and medical expenses.

With that being said, let’s take a look at a few tips on how to save money when your employer does not offer paid maternity leave:

Look for baby bargains

If this is your first pregnancy, you will need many baby items such as diapers, formula, clothes, wipes, etc. Instead of heading to the store every week to buy these supplies, why not buy them in bulk.

For example, Amazon offers a great discount on diapers, which is the most used baby item. You can subscribe for a 30day trial that offers 20% savings and free shipping for the first two days. You might feel that you are sending a lot when buying in bulk, but the money saved in the long run is a game-changer.

Shop at consignment stores

Your maternity leave savings won’t last for long if you shop at expensive stores. Most of your money is spent on things like baby baths, cots, bed sheets, and a car seat. Most of the things you buy are seldom used or not all, so why not buy them second-hand. This approach will help you save money, and you can include things in your list, which you initially thought were too expensive.

Ask your friends and family members for practical gifts

Setting up the baby registry is the second most important thing as many people will be sending you gifts. To make sure that they will buy something useful, tell them what you need. You can also ask for Amazon gift cards, which you can use to buy bulk supplies.

Look for a side hustle

If you need to save more and improve your financial situation until the maternity leave ends, look for side hustles. Take stock of your skills and create an account on Fiverr to market them.

Save and use your vacation time

From the moment you learn you are pregnant, start saving your vacation time. The extra money will come quite in handy towards easing you into your maternity leave. Plus, by lowering your monthly expenses and saving money from there, you will have no trouble during your 12 weeks of maternity leave.

Hold a spending freeze for a month

Want to know your limit of saving for maternity leave? Stop all your spending for a month. For example, buy your groceries at the start of a month, don’t dine out, don’t buy anything until necessary, take a limited amount of cash to the store, and save on electricity.

By the end of the month, compare your savings to how much you spent the previous month. Once you have the numbers, you can prioritize and contribute more to your emergency savings.

Adopt lifestyle deflation

Lifestyle deflation refers to the practice of removing costly things that you like to indulge in, such as manicures, massage, gym and yoga memberships, eyelash extensions, dining out at expensive restaurants, etc.

One of the best examples of lifestyle deflation is cutting your cable. A cable connection costs $100 to $120 depending on your subscription, whereas Netflix costs $11.

Use a credit card with a “cash back” option

A cashback credit card allows you to redeem a certain percent of your cash in points. When you receive your statement credit, the cashback is applied to the credit card’s balance. When you request a check, you get your rewards, which are transferred into your bank account. You can then use the cash in the form of points without paying a dime.

Hold a yard sale

The easiest way to make more money apart from the extra income you earn from the side hustles is to spring clean your house early. Hold a yard sale and sell all the necessary things that you bought on a whim.

Shop online

It’s time to boycott malls and shop online because you are more likely to find better deals here. From new clothes to toys for developing their motor schools and any other baby items that are a must in the first few years, you will be able to save cash… A LOT.


One of the biggest benefits of maternity leave is that you get a break from your hectic work schedule and spend quality time with your munchkin. From going on a spending freeze to canceling all your subscriptions, spending time on side hustles, and bring lunch to work after your maternity leave is over, these are just some of the ways to budget for your baby.

In addition to earning extra money and asking for paid leave, you might have to create a separate category and save money for it too. Creating categories will include your medical costs and post-birth care. In the first few months, you will spend more on formula and diapers than anything else, so keep the margin for these baby items high.

Before you know it, your baby will be crawling and destroying their cute way. Babies grow up pretty fast in the first year, which is why you need to prepare because the money will be flowing out financially. Saving for maternity leave is a hard task. You need to count every dime you spend before giving birth so that you can spend several weeks with them without worrying about the expenses when the baby arrives.