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So you are expecting a baby, and now need to plan for maternity leave. Deciding how long you will be off work may depend on what coverage (if any) you may have for income while on maternity leave.
How long of a maternity leave to take
I live in Canada where we are entitled to up to 18 months of maternity leave and get unemployment insurance from the government to help while we are off work.
You can choose any amount of time off, most people choose either 12 or18 months. If you take 12 months or more, the amount of money you get from employment Insurance (EI) is the same. If you take over 12 months, you need to make the same amount of money stretch a lot further. Make sure you have a good plan and budget for this time.
Employer top up
Does your employer provide any top up pay? For instance, Employment Insurance (EI) will pay out 55% of your regular salary to a maximum of $595 a week while on leave. Some employers provide a salary top up for some or all of the duration of leave. Its important to determine what percent of your salary you may receive as top up and for how many weeks.
No maternity leave coverage?
Are you from the US, or another country that does not provide maternity leave benefits? are you a solo entrepreneur? This may be even more urgent for you to save up for in advance.
Whether or not you live in a place that provides any mat leave or employer top up, it’s all the more important to take all this info to plan out your next 12 (or however many months you choose to take off) months’ budget and see where you may have any shortfalls.
On top of your regular monthly budget don’t forget you also have a new human to care for feed, diaper and clothe.
Set up a Baby Fund
We started saving for our baby fund in a High Interest Savings Account as soon as we got pregnant to make up for shortfalls in our budget once my work top up ends. This is a great sinking fund to have. How much you may need to save is up to you and your partner and your own personal budget. As soon as you know you are pregnant, or even before when you are planning for pregnancy, this is a sinking fund you and your partner should both be contributing to!
If you are looking for a great Canadian High-Interest savings account, check out EQ Bank, and get one of the highest everyday interest rates on your savings by opening your account here.
Review other posts like this in our Savings & Debt Section on the blog.