Thinking of starting a family? Thinking of starting a family?
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Thinking of starting a family?

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by Jamie Phythian
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Maternity leave never used to be a big financial issue.

Women were expected to stay at home all day whilst the men brought in the money. But nowadays, women are working just as hard on their careers as men. So, adding maternity leave into the mix can leave a big gap in a family’s finances.

Having a baby can be stressful enough without having to think about money.

We’ve put together 4 questions that once you’re able to answer, you’ll have a much better idea of your future finances!

1. What's your maternity entitlement?

Some employers will just do the minimum (statutory maternity pay - SMP) and others will offer much more through their own scheme. So, make sure you find out what you’re entitled to!

The maximum SMP is £140.98 per week or 90% of your earnings for 39 weeks, depending on which is lower.

You’re eligible to claim this once you’ve been pregnant for 26 weeks. Payments can start 11 weeks before your due date and it’ll be paid via your employer. And don’t forget, it’s taxable.

Use this calculator to find out how much you’re entitled to!

To qualify for SMP you must…

  • Earn at least £113 per week on average
  • Have worked for your employer continuously for at least 26 weeks

Those are the two main things, but there’s still a little more to the eligibility criteria. Find out more here.

 

2. What lifestyle do you want before and after your baby’s born?

A lot of women are now working much closer to their due date so they can bank as much as possible in the run-up to the birth. This allows them to take as much time off as possible with their new baby.

But be careful, some employers won’t let you work too close to your due date for all sorts of reasons. Check this out early on!

Before getting too carried away with your future plans, spend an hour or so doing an income and expenditure exercise.

Get your bank statement (or go online) to work out…

  • Your basic living costs - e.g gas, electricity and mortgage payments
  • Your fun money  - e.g holidays and eating out

Tip: We realise not everything happens on a monthly basis, but try to work it all back to a monthly figure. For example, if a holiday will cost you £1200 pa then think of that as £100 per month.

The ‘fun’ stuff is really tricky to work out because it’s hard to know what life will look like before and after pregnancy, but try to make some estimates.

The idea is to end up with an approximate monthly figure.

3. Is anyone else helping you financially?

If you’re in a relationship or if someone else is going to be helping you out financially, now’s the time to involve them in your life choices.

If you’re in a relationship, joint bank accounts work really well for the ‘basic living costs’. You can both pay a certain amount in each month so that all of the serious stuff is covered.

4. How long do you want to take off?

It's difficult to know how long to take off, but having a good grasp of your finances is going to put you in a much better position for making a decision that's best for you and your baby!

Once you’re confident in your answers to our previous questions (1 - 3), you’ll be able to see what’s realistic without getting into financial difficulty.

We understand that working these things out can be quite tricky...

But, once you’ve understood your money a little better and figured out your maternity leave, things will be a lot clearer. And a lot less stressful.

 

Posted: 15/11/2017

 

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