Financial Planning for Maternity Leave

Maternity period is a wonderful phase in a woman’s life. One has to be prepared physically, emotionally and financially for it. Whether it’s a planned pregnancy, medically coaxed one, or a total surprise, one thing remains identical. Your life will never be the same again. Jane Weideman said “Giving birth should be your greatest achievement, not your greatest fear”. Be financially prepared for this delightful chapter of life so that you can enjoy this achievement.

Maternity Benefit (Amendment) Act, 2017

Under the Maternity Benefit Act, 2017 which is effective from April 1st, 2017 a pregnant woman is allowed 26 weeks of paid maternity leave. This benefit could be availed by women for a period extending up to a maximum of 8 weeks before the expected delivery date and the remaining time can be availed post childbirth.

For women who are expecting after having 2 children, the duration of paid maternity leave shall be 12 weeks (i.e., 6 weeks pre and 6 weeks post expected date of delivery).

Maternity leave of 12 weeks to be available to mothers adopting a child below the age of three months from the date of adoption as well as to the “commissioning mothers”. The commissioning mother has been defined as a biological mother who uses her egg to create an embryo planted in any other woman.

The Maternity Benefit Amendment Act has also introduced an enabling provision relating to “work from home” for women, which may be exercised after the expiry of the 26 weeks’ leave period. Depending upon the nature of work, women employees may be able to avail this benefit on terms that are mutually agreed with the employer.

Financial Planning

Being prepared financially for a pregnancy has become essential. With rising costs of healthcare, it is mandatory to have a foolproof financial plan. Here are few tips for having a financial plan.

Savings

The law guarantees cash inflow during maternity leave in the form of salary. But is that all you require? Exhausting savings is the last thing you want to do during this time. Having extra bucks as savings is important during this time. You must have an emergency fund built up for any complications.

Health Insurance

Check your insurance plan with your employer. Check what benefits you can avail of this insurance. Sometimes corporates offer maternity insurance along with the health insurance. If not, take a maternity insurance which will help you with covering the costs of delivery. Check with your existing personal health insurance policy if you can get an additional rider with the insurance you have now.

Rethinking Budget

Even when you are receiving your salary during your maternity leave, make sure you coordinate with your partner and prepare a new budget. Everything from coffee to car has to be on the table when trimming down on expenses. Cut down on unnecessary expenses. Contribute every extra penny to the emergency fund.

Plan for 2 years instead of one

With multiple complications in pregnancy and childbirth, you might not end up joining work earlier than intended to. In this case, you will need to have extra money at your disposal. Calculate the medical costs in advance and see how much your insurance can cover it. Child health care is something that you can’t compromise on. Most of your spending would go towards the diapers and formulas of your child. Build your emergency fund quickly and have your savings built up for two years instead of one. Your major goal during the maternity period is to save every extra penny.

For married couples who have kids on their cards in the next couple of years, I would suggest you invest in short-term instruments like debt mutual funds so that you are well prepared to have a baby.

Preparations for complications during childbirth

With an increase in the incidence of neonatal complications and high costs of NICU’s, it has become important to have a cover for the newborn. NICU costs are somewhere between Rs 17,000 – Rs 25,000 a day varying with different hospitals. The Insurance Regulatory and Development Authority of India (IRDA) has defined a newborn as a “baby born during the policy period and aged up to 90 days”. Currently, seven companies provide medical insurance to newborns.

Insurance schemes tailor-made for newborns covering all minor and major disorders are yet to be a reality. Until then, expecting parents can rely on the family floater and maternity plans that mention newborn care.

Restart your career

Most of the mothers like to concentrate on their child and take a break from their career. But they find it difficult to restart their careers after the break. Websites like JobsForHer, Avtar I-Win, SHEROES, and HerSecondInnings have not only helped women to restart their career by finding jobs but also helped in being competent with the other workforce by conducting e-coaching sessions. They have jobs for women looking for a work-life balance. They offer jobs that have work from home, temporary assignments, permanent jobs, projects and consultancy and entrepreneurial opportunities.

As a mother, it’s your duty to plan for a bright future for your newborn. Enjoy your time with your newborn without having to think about a financial crisis. Brace yourself to welcome your little one into this world.

Emotional Planning

As much as you need to be prepared financially, being prepared emotionally is also important.

Be prepared, a grand adventure is about to begin. There will be a lot of changes in your life. Your feelings will be all over the place. You have to make few compromises. Health will be fragile. Basically, you will have to change the way you are living to a completely new one.

There are few ways to cope with the changes. Listen to some good music and read books that will help you during this period. Physical exercises can help you divert your thoughts and help you build the fitness you need. Go for regular checkups with your doctor to monitor your and your baby’s health. Take proper rest and stay away from anything and everything that can harm your child.

Children reinvent your world for you and so can you for them. Babies are always more trouble than you thought but also wonderful. Get ready to celebrate the greatest joy in your life. Upwardly wishes a very happy mother’s day to all the mothers out there.

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