How much to save for maternity leave

The United States policy on maternity leave can be a touchy subject among families, and especially women. Unlike all other wealthy countries, many of which mandate weeks and months of paid leave for natural and adoptive mothers and fathers, the U.S. mandates no such thing.

In fact, the last movement toward maternity fairness in the U.S., the Family and Medical Leave Act of 1993 (FMLA), included a provision mandating 12 weeks of unpaid leave annually for mothers of newborn or newly adopted children. Twelve weeks doesn't sound so bad, but that unpaid part can sure sting.

Bundle of Bills?

We all know that babies are expensive, but it isn't just the cost of diapers that adds up. It's also the cost of maternity business attire while you continue to work, your health insurance deductible for the delivery, the cost of bottles and formula, and the crippling bills associated with quality healthcare once that baby is born. When you consider all of those expenses together, it becomes quite clear how easily having a baby can end up being a four- or five-figure investment.

And here's the kicker — all of these costs are borne by women and families at a time when they are simultaneously expected to live on no pay or partial pay.

As a woman who has worked hard to pay her own way through life, I wholeheartedly believe that the country I love is way off track in this respect. As Americans, shouldn't we be supporting families in every way we can?

And why do we insist on punishing women who are out in the workforce, trying to provide for their families?

How to Know How Much to Save for Maternity Leave

Fair or not, that is just the way it is — at least for now. I suppose I was lucky. Even though I worked for a small employer who wasn't required to offer paid leave, or even to hold my job for me, at least I was paid something during the 10 weeks I took off after each pregnancy. (Six weeks at half-pay to be exact, which wasn't nearly enough since I had a cesarean section with both kids.) Here's how I figured out how much to save, and how I went about building my maternity nest egg:

Step 1: Figure out how much you will owe at the hospital

Each time I had a baby, I owed somewhere in the ballpark of $4,000 for the hospital, doctor fees, and delivery. That was a huge sum to save, but it helped that I started saving early. And believe me, it was a huge relief to come home from the hospital with the money for delivery already in the bank.

No matter what your deductible is, consider saving for it as soon as you can. If you have a tax-advantaged health savings account, or HSA, you can even stash up to $6,650 for your family per year. If you can start saving early enough, and if your deductible is low enough, you could easily have enough money saved before your baby is born.

Step 2: Figure out how much you need to replace your income

In my case, I received six weeks of half-pay from work. However, I decided to take off a full 10 weeks in order to enjoy some extra recovery time. That meant that I needed to save six weeks of half-pay and a full month of my salary for maternity leave. Since I had to save this in addition to my $4,000 deductible, I felt instantly overwhelmed each time.

Fair or unfair, it does help to start saving early. In both cases, we were able to start stashing money away in our short-term savings account even before we got pregnant. Once you figure out how much income you need to replace, start saving as quickly as you can. Even if it's just an extra $50 or $100 you can stash away each month, it will help when the time comes.

Step 3: Decide how much to save for baby

There is nothing as wonderful as arriving home from the hospital with a new baby. However, there are certain costs associated with new baby care that are often overlooked and are, consequently, left unplanned. When you are figuring out how much to save for maternity leave, you can't forget about all the extras involved with small baby care at the beginning.

Those extra expenses can include things like specialty doctor visits, diapers or formula for sensitive skin or stomachs, gentle baby soap and laundry detergent, a breast pump, and bottles. You never know when your baby will wind up with an expensive allergy or medical condition, but it helps to plan for the unknown. And although these costs can vary greatly, having additional savings to lean on is never a bad thing.

Step 4: Make the most out of gifts and showers

When you are pregnant with your first (and sometimes your second) child, it seems like everyone wants to shower you with gifts. And while this might be your chance to get all the fancy baby gear you can't really afford, this is also your chance to make some practical decisions that could save you money in the long run.

You might be asked to register for your baby shower at a store like Babies ‘R Us or Target. If you are, you have the perfect opportunity to steer your family away from $40 dresses and toward the practical gifts you can use over and over again. Things like diapers, wipes, and nursery essentials are practical and smart items to suggest. A good breast pump, some high quality bottles, and baby bath care items are other great options.

Saving for Maternity Leave … While We Wait

As the mother of two young daughters, I sincerely hope that maternity laws are changed to ensure fairness among all parents in the very near future. After all, society has a lot to gain from making sure that women who work aren't punished for having families.

But in the meantime, it's all on us to save for our babies and for the future. So start saving now and don't stop until you've got enough money tucked away to make it work. It may not be fair, but it is definitely worth it.

How did you save for maternity leave? How did you decide how much to save? Did you start saving early, or did you wait until you got pregnant?

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Michael
Michael

As someone very much in this situation (wife is due in 5 weeks), I completely disagree that anyone is trying to punish us. At the very least you have 8-9 months to save a little extra for the baby; I know in our case we started looking for extra savings when we first started discussing children — things like not going out to lunch/dinner, cutting coupons, paying more attention to sales (both groceries and places like Target/CVS), going to the library rather than buying books, anything to save a few extra bucks. It was our decision to have children and… Read more »

Holly
Holly

I’m not sure what is led you to believe that I “chose not to look into my company’s maternity leave policy.” I didn’t just look into it, I agonized over it. And, as I mentioned in this post, I saved large amounts of money before and during pregnancy so I could get through it all without going into debt. And I didn’t save “a little bit extra for the baby” either. I had to save somewhere between $8,000 and $9,000 each time. That was a lot considering the fact that I made less than $40,000 at the time. I was… Read more »

Shannon
Shannon

Wow Michael, your post is quite… shocking, to say the least. Only thing I wanted to point out is that some of us are “grandfathered” in to NOT getting the breast pump benefit. I’m a City of New York employee and they are not covered for us.

Ramblin' Ma'am
Ramblin' Ma'am

“I have seen generous policies abused (ie 8 weeks of paid leave, woman takes all the leave only to come in and put in her 2 week notice on her first day back) so there is definitely room on both sides.”

Anecdotal, I know, but my company offers 12 weeks paid leave, and we’ve had several woman do this in the last few years.

Danielle
Danielle

Yeah Michael, I think you’re missing the author’s point… I think the author is acknowledging the current reality – we have to save a bunch of money upfront to have a baby because for several months we’ll loose 1/2 our family’s income, ironically, at a time when its expanding. I think the author is also pointing out that this totally sux.

PJ Ryan
PJ Ryan

I will try to keep this civil. Give me a flippin’break when it comes to the “I know a woman who abused her company’s maternity leave policy” BS. I’m sure you do. I’m also sure you know plenty of people (men and women) who shop around companies and accept a job offer from one only to turn around and use it as leverage to get a better offer elsewhere. I’m sure you know of people (men and women) who hang onto their jobs when they are very ill, and usually missing a lot of work, so that they can keep… Read more »

Michael
Michael

I never said I was an expert, or even that it wasn’t smart policy to fully utilize a maternity/paternity policy (if one is lucky enough to get one). To suggest that I said women= bad, men=good is beyond idiotic nothing like that was said. The fact of the matter is that this is much more likely to effect women (because they are primary caregivers in this country AND because of the lack of paternity leave, which could be improved) than men. If a guy used his full paternity leave I would say the same thing — personally its smart for… Read more »

Adam
Adam

We’ve been lucky with our first child so far, after 2.5 months. My wife has good benefits so we paid nothing for the delivery and hospital stay. She breastfeeds and we received a good amount of gift cards and gifts, so it hasn’t been a big hit on the budget yet.

lmoot
lmoot

This is not going to win me any favors but here I go… I think to mandate companies to offer paid or partially paid maternity leave would lead to abuse. At least with the unpaid time off, it secures your job, but leaves the managing of the finances up to the family (as it should be). There’s a difference between supporting a family’s choices and supporting a family. Just like anything else that’s important to you, it’s best that you consider options that will be the best fit for your goals. If having children is a goal of yours, then… Read more »

Angela
Angela

While there are areas of the world where the population is exploding, that is not true in the US. In fact, there can be concerns about the US economy because of how low our birthrate is.
http://www.usatoday.com/story/news/nation/2013/02/12/us-births-decline/1880231/
Right now immigration is helping to provide for our growing number of retirees, research shows that immigrant families lower their birth rates in subsequent generations, so the effect is limited.

lmoot
lmoot

Thank you for the information Angela. I’ll have to read the link when I get off work, but I’m very interested in population studies and have always sought out books and topics on overpopulation, but I admit not so much on the concept of under-population.

KW
KW

Sure, there are economic and cultural issues if we are not growing. But those should be solved; they are a result of our culture and history. Those problems could potentially be solved.
We ignore the overall fact that there are simply too many people on this planet to all live at a lifestyle level that we do in the U.S. at our own peril. Because sooner or later, we won’t be able to ignore it.

lmoot
lmoot

I agree. Whether it’s different in one area or another…there are too many people, period. And I’m guessing that the underpopulation topics addresses the need of future populations to support the needs and wants of the current population…which only compounds the problem. We need more people because we have too many people. I didn’t want to expand on these views and I think that’s all I will say on the topic of population as I don’t think that’s what the article asked for. But you are spot on about the consumption by America, and how it is not sustainable if… Read more »

Erik
Erik

lmoot,

I just watched last night that the good US of A has one other partner when it comes to not providing any sort of paid leave for parents. Some level of paid leave would benefit parents and lessen the financial stress/burden. The states of CA & RI already have some system in place so why not the rest of the country?

FYI: the other country in the entire world is Papua New Guinea (thought we had nothing in common but I guessed wrong).

lmoot
lmoot

To be clear, I don’t think it’s a bad thing to offer paid/ partial paid leave, I’m just not gungho on the idea of making it mandatory for employers to offer it. Especially if it’s only offered to women, it could backfire by making companies more hesitant to hire women of child-bearing age. If a family is having issues with making ends meet on unpaid leave, then they should have options to apply for assistance whether through employee assistance at work, or via government aid. I don’t think throwing a blanket over everyone (whether they need one or not), is… Read more »

Adam
Adam

Wow, I can’t believe this comment. here in Canada we get 60% paid leave for 1 year and don’t have to pay for any medical treatment (caesarean, specialty, etc). Sure it is an entitlement but one that mothers earn for helping raise the next generation in our society.

Danielle
Danielle

I love you, Adam. Thank you for saying this.

Pamela
Pamela

I agree with LMOOT. My opinion will also bring on the haters… Having children is a choice. Some of us choose not to have children (or can’t for health reasons). Why do people think they are “worth more” (in terms of paid time off) just because they have CHOSEN to have children? My company offers paid time off and I wish they wouldn’t. By offering it, it makes the total compensation package worth more to people who chose to have children and worth LESS for those that don’t. I have two friends who work here. In just a couple of… Read more »

lmoot
lmoot

Exactly. And I wanted to add something because it’s been weighing on my mind. I would like to see MORE incentives given to those who adopt, foster, or mentor children who are already here. Things that would encourage more people to consider those options over having natural children, or at least in addition to having natural children. Things like making domestic adoption a less expensive, more streamlined process. I’m sorry, but I cannot convince myself to believe the arguments that making a new child (on purpose, because the parents want one of their own), then demanding mandatory, extreme financial assistance… Read more »

Jay
Jay

Wow, LMOOT, I can almost hear your teeth grinding as you write these tirades. I am childless not by choice and I do agree with you for most most part, you just sound so damn angry here most of the time. Chill.

lmoot
lmoot

It’s passion Jay. It’s passion. I’m cool 🙂

Tricia Cliff
Tricia Cliff

I completely agree with you. As a working mom who took unpaid 6 week maternity leaves for each of our four children, I was just grateful for the time off. I did not expect anyone to pay for me to sit around and not work, and I think that it is ridiculous that there are countries that do this. And don’t even get me started on paternity leave. I told my husband that he was free to go back to work a couple of hours after the babies were born. Having a baby is a personal choice; it should in… Read more »

PJ Ryan
PJ Ryan

On a different note, Michael, thank you for providing that link to the breast pump coverage on healthcare, and I completely agree with your point that paternity leave could be better. I have seen my company, which actually has an extremely generous maternity leave policy, treat new dads abysmally. It’s quite shocking.

John
John

Hi Imoot, as your neighbour to the north I do find your comment pretty far off base. I don’t want to start a whole discussion on the role of government here but I will say with regards to maternity leave, we get a year paid (60%) leave in Canada and a lot of employers choose to “top up” that leave from that. For example my wife gets 95% of her pay for a full year for each child with a combination of government and employer benefits along with no costs for health care including specialty doctor visits. A lot of… Read more »

Hmphh
Hmphh

Michael- I am going to put this as delicately as I can because you are not yet a parent and will never be a mother. The “abuse” you mention is often not intentional. You cannot prepare for the emotional impact of having a child. Many women who fully intend to go back to their jobs find that it is unthinkable to do so after the baby arrives. Many of them try to convince themselves it will work and so they hang on to their jobs. Once they get back, they realize their priorities have shifted in such a major way… Read more »

KWL
KWL

Thanks for posting this! I’m not a mom yet and I’m not expecting, but my husband and I hope to become parents in the next year or two and it is nice to know what to expect in regards to finances. I already know our deductible is in the $4K ballpark as well, so we are slowly working towards that goal(Like you mentioned in an earlier comment, saving money when you make less than $40K is hard, even worse when you are the living on one income while the other is in school). Reading this reminded me to go read… Read more »

Stephanie
Stephanie

Another factor which I forget to consider…if you are on a solo insurance plan and add your child, deductibles may instantly double. We had saved to cover the deductible and my lost salary, but that additional surprise caused some stress in the immediate post partum weeks.

Amanda
Amanda

The topic on the article was maternity leave and mention of a lack of paid maternity leave is evidence of not supporting families. I would propose to broaden the idea of supporting family. I have no spouse and no children by choice, but I have a family. I have parents, a sibling, inlaw, and nieces. Pointing out the lack of paid maternity leave without indicating a similar problem for someone who chooses to care for a sick relative, seems myoptic to me. Is there paid compensation to care for other types of family members?

KW
KW

Or, if you don’t have children, just to take a paid sabbatical in place of maternity leave? And how many times do you get to do that? I have a cousin with 13 children. Would we all want to pay for that? Would I get 13 sabbaticals?

njgirl
njgirl

NJ has paid Family Leave Insurance act where you can receive 66% of your income for 12 weeks to care for a newborn, adopted child, parent, spouse, child. Although it’s not a nationwide program there are some states that do offer it. This definitely helps in instances like you mentioned.

Laura
Laura

When I had our son, my company guaranteed 6 weeks maternity leave but I had to use up all of my sick time for full pay. I had to take 1 extra week and was given 60% pay for that week but had to come in to HR (with newborn in tow) to argue my case. Our health insurance covered 100% of the delivery and hospital stay so no issue there. For me, the biggest issue was returning to work to keep our family finances afloat – not because I didn’t want to, but because child care for a newborn… Read more »

KW
KW

Hot button topic for me. I am a proud liberal who believes we need Medicare expanded to the entire population. But I have much different feelings about parental leave. My husband and I have made the personal decision NOT to have children. Almost all our property taxes pay for schooling for other people’s children, and we pay higher income taxes than families because we have chosen not to reproduce. I understand that an educated populace benefits us all, so I don’t generally gripe about it (yes, I realize that I am doing so now). My husband and I are small… Read more »

Janette
Janette

Don’t worry too much those who “choose not to have children and burden society”. Our children will be the consumers of your business and pay your social security when you are old- so it balances out. You need our children to be educated properly so they will advance society. I assure you- that the family with 13 children is more then an anomaly—but you know that don’t you? That the 13 children may turn out to be some amazing people is not important to the discussion. BTW- My children only went to public school for four years. We paid for… Read more »

Sam
Sam

I don’t like paying for the wars this country keeps engaging in. Unfortunately we don’t get to pick and choose how our tax money is spent, but to me education the next generation is a much better investment than more military spending. Anyways, there are ways to cover paid maternity leave without “burdening” small business owners. In California, partially paid maternity leave is funded via a small payroll tax (i.e. like workers compensation) that the employee pays the bulk of. The surveys show that most Ca. business owners are in favor of it because costs are actually reduced because turn… Read more »

Liz
Liz

Don’t forget to look into any disability options. I got disability pay for both children – though with my plan, they required me to have disability for at least one year before I got pregnant, so I had to think ahead. It isn’t great – I think I got 60% pay for 6 weeks (which is less on a more spontaneous disability), but it helped.

Jason
Jason

Am I reading this right that you made up a disability 12 months prior to giving birth so you would get benefits?

Hilde
Hilde

In Germany, we get 12 weeks of paid maternity leave (actually, it is illegal to work during this time) and 14 months of “parents´ time”, where the parent who is not working gets between 100 and 60 % of the former income. He or she also is entitled to return to the former workplace after that time. The funny thing is that our birth rate is much lower as the US one, in spite of all this financial help.

Mick
Mick

I don’t think I have seen this mentioned yet. My memory on all the specifics is a bit fuzzy as my youngest is 19yrs old next week. But I carried short term disability when I had my 3 kids and got (if I remember right) about 6-8wks of 60% pay. I had natural deliveries and I believe if I had had C sections the benefit would have gone a few weeks longer. Something to consider. I would imagine this would help if someone is put on bed rest during a high risk pregnancy too. Short term disability is like a… Read more »

Mick
Mick

One other thing, but I got the policy before we decided to have children. I am sure you can’t get it once you are pregnant.

Emily
Emily

At the time I got pregnant, the school district I used to teach in carried over unused sick days year after year. I hardly ever took them, so I saved up a lot in my 13 yrs there. In addition, the district provided a 3-month paid maternity leave.

Basically, I got (I think) around 6 months paid leave. I didn’t realize how blessed (and spoiled!) I was at the time, but now having read this article, I sure do! 😉

Sam
Sam

Make sure you look into whether your short term disability plan will provide partial coverage when you are out, often times they do. I’m happy to report that at my company I received 3.5 months of full pay maternity leave. A lot of companies due recognize that paid maternity leave is a benefit that women are looking for. And if you work in a competitive field, companies will compete against each other in that arena. Most of the folks I know that work in my field also had paid maternity leave. I’m back at work, full time, and everyone is… Read more »

Susan
Susan

My daughter started a job last December and then found out she was pregnant with twins due in August. Since she can’t use the FMLA until this coming December when she will have been at the job one year (and then only if the dr. says she can since she will have already given birth), she will only get 2 weeks off when the twins come. I think more time off would be more reasonable. Two weeks off would be difficult for any new mother.

Karen
Karen

Thanks for sharing on this topic! Maternity Leave is a very live topic of conversation in Australia this week. The current scheme, government provides employees (via workplace if they want) 12 weeks of of minimum wage to mothers and 2 weeks to fathers. Workplaces trying to retain talent or with feminised, unionised workforce have unpaid and paid scheme up to as much a year. The government came to be elected under a promise of 6 months full pay, to be paid for by a levy on big companies. In an effort to reduce spending this plan has been scrapped. Further,… Read more »

superbien
superbien

KW, I find it odd that as a small business owner, you are so begrudgingly that your taxes are used to educate and support families. I’m guessing you also complain when the employees you can afford to hire are not educated or disciplined enough for your standards. Oh right, results of education, and having parents around enough for instilling discipline and ethics (ie not working 3 jobs and making kids raise themselves). I see a direct correlation between the expenses you are complaining about and your own personal welfare. I would understand you complaining about financing carnage and warfare in… Read more »

superbien
superbien

Raising children is one of the least selfish things possible… And yet the US discourse pretends that anyone who wants a child is (in no particular order) selfish, self indulgent, unreasonable, and borderline pathological. It is the most bizarre phenomenon. My only explanation is that it’s a “female” problem and so easily marginalized and pooh-poohed. I am in the unique situation of being on the fence about kids – it would be so selfishly indulgent NOT to have kids, and get to continue sleeping in, rambling at will, spending my money on whatever I want, and not risking my career… Read more »

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