Preparing financially for maternity leave as a solo mum

Preparing financially maternity leave

A crucial aspect to consider when expecting a child as a solo mum, is preparing financially for maternity leave.

When most expectant mums start preparing for their maternity leave, they often focus on planning for the baby's arrival. Things like buying cots, prams, adorable baby clothes, and a myriad of other necessities.

However, when you're a solo mum, there's an added layer of responsibility. Beyond the baby essentials, it’s helpful to dedicate time to carefully planning your finances to ensure a comfortable and worry-free maternity leave.

Whether you're already pregnant or just contemplating the idea of becoming a mother on your own, it's never too early to start organising your finances.

Here, I'll guide you through useful steps to assist you in preparing financially for maternity leave as a solo mum.

Further reading: Support for going through pregnancy alone.

Evaluating your current finances to plan for maternity leave

Ideally you should know the ins and outs of your own financial situation. However, the reality is that most people don’t spend time planning, budgeting and keeping track of their finances. In order to make a detailed plan for your maternity leave you need to know about your income needs. Think about where your income will come from and what your regular expenses are.  

Decide on Your Maternity Leave Duration

Begin by contemplating the length of your maternity leave.

How much time do you want to spend with your newborn? Most mums want to spend as much time as possible at home with their baby.

Twelve months maternity leave is a common length but you could take six months or up to two years. How long you take may depend on the next point.

Determine Your Income Needs

While your current income is most likely sufficient to cover your expenses, assess whether your income will change during this period.

Consider where your income will come from during your maternity leave. Check if your employment contract offers paid maternity leave and the duration of this leave.

If your employer permits, you may request to take your maternity leave payments at half pay. This will effectively doubling the length of your leave. However, this option will also halve your income for this period but it may still be enough for you to live on.

If you have been in your job for a significant amount of time you may also have other leave entitlements you can access such as annual leave or long service leave. You may also be able to take these leave entitlements at half pay.

Explore Government Assistance Programs for Solo Mums

Research the various government assistance programs available for single mothers. Read up on the Parental Leave Pay scheme from Centrelink, so you are aware of the of:

  • The eligibility requirements
  • Payment amounts
  • The process and requirements for applying

You may be eligible for additional benefits, such as:

  • Family Tax Benefit A and B
  • Child Care Subsidy
  • Parenting Payment.

These programs can provide significant financial relief for you once your baby is born.

If you are eligible for any additional payments, you can check how much you may receive by using one of Centrelink’s Online Estimators. You can play around with the figures. Try different income amounts if that helps you to plan how to manage your income before you make any decisions. 

Planning is key to ensure you can take the amount of time you desire with your precious baby.

Factor in Child Support Payments

If you are not a solo mum by choice, you may be entitled to child support payments from the father of your baby.

However, the calculation for these payments won't happen until after your baby is born, and all the necessary paperwork is submitted.

This can add a layer of complexity to your financial planning for maternity leave on a solo income since you won't have a clear picture of how much this additional income will be.

Know Your Current Monthly Expenses

Create a detailed budget of your existing monthly expenses. It's helpful to categorise expenses such as fixed versus variable and essential versus non-essential ones. Once you have this list, it's an excellent opportunity to review and identify areas where you can cut back or reduce spending. This not only aids in maternity leave planning but is also a prudent financial practice that we should all do more often.

Keep in mind that there may be some expenses associated with work that you won’t have once you take leave. These could include transport, parking, lunches, and supplies. But these will be replaced with other expenses and could include nappies, baby food and other baby needs.

When I last went on maternity leave, I was fortunate to have an employer with very generous leave conditions. I had the privilege of enjoying 14 weeks of paid maternity leave. Due to my years of service, I was eligible to use 10 weeks of long service leave. Plus, had accumulated approximately another 10 weeks of annual leave. My employer agreed to allow me to take all of this leave at half pay.

I carefully evaluated my income requirements and expenses. This allowed me to determine that, with my Parenting Payment entitlement, I could comfortably manage on half pay. Doing this financial planning enabled me to extend my maternity leave to an impressive 16 months of paid leave before returning to work. The extra time at home was invaluable, especially as my daughter faced some health challenges. Knowing that our finances were secure during this period alleviated a significant source of stress.

Evaluate Your Savings

Do you have savings reserved for unexpected circumstances?

Even a modest amount of savings can prove invaluable for essential purchases or extending your maternity leave slightly. While it's best not to touch savings earmarked for specific purposes, having a small buffer can offer peace of mind.

If you've built up substantial savings, you might have plan to use a portion to support your solo mum maternity leave.

Create a Comprehensive Budget

Now that you have gathered all your information, create a budget.

This helps you assess your financial security during maternity leave. If you've never made a budget before, it's simpler than it sounds. Choose a period, ideally monthly, list your income sources, and total them. Then, list your expenses and total them.

Review the figures to see if they align with your comfort level. If your income exceeds your expenses, your budget is in the positive, and you're on track. If there's a shortfall, don't fret; solutions are available.

Further reading: Personal finance apps to budget your spending.

Reduce Your Expenses

Cutting expenses not only readies you for potential income reductions during maternity leave but also boosts your savings for unexpected costs. It's a proactive step that ensures financial resilience during this period.

With your projected maternity leave income and expenses in mind, identify areas where you can reduce costs. Evaluate insurance policies, phone plans, and utility services, and explore options to renegotiate rates or switch providers. This can yield substantial savings.

If you hold professional memberships or subscriptions related to your job, inquire about temporarily suspending them during your maternity leave as a way to trim expenses.

As I was preparing financially for maternity leave as a solo mum, I decided to trim down on unnecessary expenses. I took a close look at my budget and made some smart changes. I cancelled subscriptions I no longer used. I adjusted my phone plan, which saved me a cool $25 per month. And I shopped around for better insurance policies.

Thanks to these efforts, I managed to reduce my car insurance by $300 annually. It took a bit of effort to set everything up, but the long-term benefits have been undeniable.

I have continued to monitor and adjust these expenses, so I continue to enjoy these savings.

Plan Ahead for Your Financial Obligations

Even after trimming expenses, you'll still have your regular bills to take care of.

The key is to avoid finding yourself in a tight spot where you can't meet your financial obligations. Here's a simple method: calculate your monthly expenses and divide this by your pay period. Then, set up a dedicated 'expenses account' and deposit that calculated amount every time you receive your pay. This ensures you always have enough to cover your bills across the year.

This approach mirrors how I handle my household bills. I implemented this system before the arrival of my first child, and it's been my go-to ever since. Rarely have I encountered a situation where there wasn't sufficient funds in that account to meet my financial commitments.

Saving tips for solo mums on maternity leave

While on maternity leave, saving money is crucial, especially for solo mums. Here are practical tips to help you manage your finances effectively:

Start a Savings Plan

If you've managed to trim your expenses while still employed, consider directing the saved amount into a dedicated savings account. If you have a mortgage, adding your savings to your mortgage account can increase your savings as it reduces the amount of interest you pay each month.

That’s a win-win situation, though also make sure you can redraw the funds if you need them.

Adjusting to a lower income during maternity leave becomes easier when you've already started building your savings. This reserve can prove invaluable for significant purchases or unexpected expenses.

Start a Baby Gift Registry

Babies can incur significant expenses due to essential large purchases. Initiating a baby gift registry with a baby store is a savvy strategy to cut down on your expenses.

Friends and family often enjoy contributing to a registry, guaranteeing you receive the items you truly require.

This approach helps you steer clear of amassing an array of less practical gifts, while relieving some financial pressures from you.

Smart Shopping for Baby Essentials

Keep an eye out for sales, discounts, and promotions on baby necessities. Buying items in bulk during sales can yield even more significant savings.

However, exercise caution not to go overboard when purchasing items during pregnancy. You want to avoid spending your hard-earned cash on things you might not end up using.

Accept Hand-Me-Downs

If you have friends for family who have finished with baby items they will often offer to hand them down to you. Accept items that you will find useful as it can be a huge money saver.

I was fortunate to have a friend who loaned me her baby capsule when she was done with it. And, another family friend offered me a baby cot they no longer needed. This was a huge relief as it saved me from worrying about two significant expenses.

What made it even more perfect was that my son was born 14 weeks premature, and I hadn't had a chance to shop for these essentials. Borrowing them was a lifesaver. When we were done using these items, I returned them, and they went on to benefit the original owners' families once again.

Buy Pre-loved Baby Goods

Many baby items are lightly used and available at a fraction of the cost on platforms like:

  • Marketplace
  • Gumtree
  • eBay
  • Local parenting groups.

Ensure safety by thoroughly checking items before purchase, especially cots, car seats and prams.

Embrace Eco-Friendly Practices

Choosing eco-friendly options not only saves money but also benefits the environment. There are several ways to adopt eco-friendly practices when preparing for your baby's arrival.

Join the reusable nappy revolution by investing in modern cloth nappies. While there's an initial expense, their reusability significantly reduces long-term costs, a valuable asset for a solo mum's budget. It also reduces landfill.

Breastfeeding is another eco-friendly and budget-friendly choice for single mums. Formula is a good and safe alternative, but its costs can add up over time. If you encounter difficulties with breastfeeding, seek free support from sources such as:

  • Your local maternal and child health service
  • The maternity hospital where you gave birth

Prepare Homemade Baby Food

Consider making your baby's food at home. It's not only healthier but also more budget-friendly than buying pre-packaged baby food. You can puree and freeze fruits and vegetables in advance. It's a great way to ensure a steady supply of nutritious meals for your little one.

Boosting your maternity leave income

While cutting expenses is essential during maternity leave, increasing your income can significantly alleviate financial stress.

Explore Work-from-Home Opportunities

Consider investigating work-from-home options or freelance opportunities that allow you to earn while taking care of your baby. These jobs offer flexibility and can be a valuable supplement to your finances during maternity leave.

You can begin exploring these possibilities while still pregnant, incorporating them into your maternity leave financial planning.

However, if you're receiving Parental Leave Pay from Centrelink, it's essential to confirm whether taking on additional work is permissible while you're in receipt of payments. Be sure to clarify this before accepting any work offers.

When I was on maternity leave, I started my own online business. There are some costs associated with starting a business, especially with a retail focus. However, it became another income source while being a solo mum. It’s not everyone’s cup of tea, but it can lead to a new career for some mums. It also gives you more flexibility around your work hours for the long term.

Maximise Your Tax Benefits

Look into tax credits and deductions available to single parents. Consult with a tax professional to ensure you're taking advantage of all available tax benefits. Every person’s situation is different so it’s important to have your own circumstances assessed. Also note that you may not notice a difference in your income until you complete your tax return and get a refund.

Sell Preloved Baby Items

After your baby outgrows items, consider reselling them to recoup some funds for future needs. Selling second-hand items is both cost-effective and eco-friendly.

I have a love for buying and selling online, so my kids grew up with lots of preloved goods. I became a savvy buyer, buying many second-hand brand name items that I would then resell later. Sometimes I even made a profit on the items when I resold them.

I estimate that I broke-even clothing my son for the first 4 years of his life! And he was the best dressed kid in town.

Further reading: Sell used clothes online in Australia: How and where.

Preparing for your maternity leave as a solo mum will ensure you are financially secure

Incorporating these additional income management tips and cost-saving strategies as you are preparing financially for maternity leave as a solo mum can significantly enhance your financial stability during this crucial period.

Remember that while financial planning is necessary, it's also essential to enjoy this special time with your newborn without undue stress.

With careful preparation and resourcefulness, you can navigate solo motherhood and maternity leave with confidence, ensuring a bright future for both you and your precious baby.

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Claire Steinke

About the author

Claire is a solo mum by choice, raising two incredible now teenagers. After embracing part-time work following the birth of her children, she ventured into entrepreneurship, establishing an online retail store catering to fellow mums. In her leisure time, she enjoys tending to her chickens and indulges in creative pursuits, sewing, gardening, and crafting furniture

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