To realise I've been entitled and ignorant Re: maternity leave

[AliceScarlett]

I've had this idea in my mind that when I eventually went on maternity leave that DH and I would have less money (obviously), but that it would be OK overall. "Everyone" appears to have children and they manage it! But I worked it out roughly last night after DH and I decided we will start TTC early 2016 and I'm shocked....and annoyed with myself that I'm shocked.

I just assumed that as our household income is about 40k a year and I work for the NHS (which I've heard has good maternity pay) I'd be able to have about a year off...feel silly now. After the first few weeks of 90% pay I'll lose about 1000 a month after tax....I'm the highest earner by quite a long way, how does this even work?

I don't understand how other people manage and I'm SO cross with myself for feeling hard done by.

Can you live on 1700 a month? Or do a lot of women return to work after a few months? I feel like I'm missing a trick here.

Flame away!

[Champagneformyrealfriends]

We will be about £700 a month worse off. I won't be driving to work everyday (£150 fuel), I'm dropping down to a sim only phone contract (saving £30 a month) and my car loan will be paid by then (£140 a month). These savings along with the usual less nights out/cutting down on luxuries ( DH buys his lunch everyday will make it more manageable. I'm also considering cancelling my gym membership (I'll go out with the pushchair and walk!) and I've already started looking at ways of reducing our utility bills. We'll manage-you just have to be more careful really.

[CrohnicallyAspie]

Something else to bear in mind is the cost of childcare when you do go back to work.

Where I am, full time childcare would cost about £1k, so you'd be managing on the same net wage for quite a while!

[Diddlydokey]

I took 7 months off. I got straight SMP & couldn't afford the £1400 loss for much longer than that. I saved quite a lot while pregnant too.

Don't forget that you accrue holiday. My Dsil is a nurse and had the most part of a year off - she used holiday at the beginning and end and averaged out her maternity pay over the period. She's band 5 and cleared over £1200 a month on maternity.

[MumCodes]

I think that with 15k saved then your fine. I spent so much less on mat leave then when I worked. Didn't need the extra cash I was spending on travel, lunches, clothes, going out etc.

DH also cut down a lot just by making his own lunch and cycling to / from work.

We did a big spreadsheet with non-negotiable expenses (mortgage, bills etc) and worked it our from there. People do manage on 1700 a month, it just depends on what you're paying for.

We were also entitled to child tax credit after DS2 but I dunno if your savings might affect that...?

[captainproton]

I know other people have mentioned it but when daddy doesn't earn as much as mummy then really they need to make the potential hit to their career progression in order to support the family.

Having that conversation can really open your eyes as to how your partner views their responsibility to child raising. If they are edgy and pushing the idea that it's more natural for mums I would be cautious.

No way would I have had a child with a man who expected me to take all the leave etc when I was the higher earner.

I've seen it happen to my friends whereby they turn into super stressed mothers trying to juggle career, maternity leave, going back to work with sick children at nursery whilst their husbands seem to congratulate themselves if they change the odd stinky nappy. Man's career thrives, woman's dies.

Get all this sorted now when arranging finances. Once your child starts childcare they will catch every bug going and someone will need to take care of them. Try and save as much annual leave for this as possible. No one warns you about this but is just as important as costs.

[waterrat]

Well have you looked at what childcare costs will be once you are back at work.

You are likely to be taking this hit in finances permanently so better think of it as a long term.change ! Childcare is roughly 50 a day where I live

[BondJayneBond]

How much you can live on definitely depends on your outgoings.

So now's a good time to have a look at all your outgoings - mortgage, utilities, groceries, other spending- and think about where you can make savings. Lots of baby things can be bought cheaply or second hand. Plus some work related costs are things you spend less of when on maternity leave. And I think that now fathers can take part of the maternity leave? That may be worth looking into if you're the higher earner.

Childcare costs definitely need to be considered, but these vary a lot depending on where you live. They're not necessarily £50-£60 outside London. We live outside London, and the nursery we use charges £38 / day for children under 2, and if the child is booked in full time you get 5 days for the price of 4.

[Moonriver1]

Others have given you good advice but I also want to say this:

You don't have to take a year off!

It's not for everyone, having a year off and just because everyone seems to do it nowadays as there is now the entitlement, it is perfectly reasonable to take less time for any reason including financial (or for career or because you're bored or because youre not enjoying it).

I took between 4-6 months off for my three maternity leaves. First child was 3.5 months when I returned to work and was fine on all of us.

You don't know how you'll feel til you have a baby and you also have no idea when you will fall pregnant and what kind of pregnancy, birth and baby you will have.

Don't plan too much

[Mistigri]

If the difference in incomes is very great then it may make sense for your DH to stay at home.

My earnings were our main source of income, so I didn't take maternity leave and DH became a SAHD for a few years.

[Introducer]

You should definitely look into Shared Parental Leave for your DH to take time off. You'll need his Company's policy and yours.

We saved during pregnancy, reviewed finances and made cuts in certain places, and I also got saavy with eBaying / selling on FB sites whilst on maternity leave (you'd be surprised that you do have time to do this with a newborn). It brought in a little cash in hand and also cleared our house of things that I'd been meaning to sell for years!

[mrsjskelton]

As a teacher my maternity is similar - my combined SMP and OMP means I should only lose about £300/month... Have you taken into account both maternity payments?

[StubbleTurnips]

OP are you AFC? You'll be eligible for the enhanced mat pay if your worked for the nhs for 26 weeks

And as others say, save. It's really that simple. Tbh the cost of my year off was nothing compared to nursery bills.

[prettywhiteguitar]

Childcare is your biggest hit by far, depending on where you live it can vary from £45-100 per day. Children are very expensive if you work :(

[mrsmugoo]

To be honest we have just got used to having a lot less disposable cash. We realised how much we frittered away on clothes, nights out, holidays...general "stuff". We lead a much simpler life now and I appreciate every new thing I have.

[arethereanyleftatall]

I think you also need to be aware, that the time when you get mat pay, ie till your baby is 9 months old, is actually the time you have the most money! After that, if you decide to be a sahm, it's nothing at all, and if you don't, there's childcare to pay.
Lowest earner should be the sahp, in this case it's your dh.

[LumpySpaceCow]

Try working out your enhanced mat pay again, you can always ask payroll for assistance.
I'm a band 6 in NHS. The role I have been doing means that I don't work unsociable hours so no enhancements but when I was on maternity last year (and will.be again next year), it pretty much worked out at 6 months full pay (maybe less about 100 when went on half pay plus smp but this was offset by not paying petrol to work).
Are you a nurse? Do you work unsociable hours? If so, remember that your mat pay is calculated from the paydays between 17-25 weeks so you could try to work nights/weekends the months before those paydays (people get mistaken and request nights during weeks 17-25 but it is not what you work between these weeks but what you actually get paid on the paydays in these weeks).
You can spread your mat pay over the 9 months, but to be honest, when I looked into it, it would mean having less money at the beginning of maternity rather than at the end.

[CharmingChampignon]

At the risk of being patronising - Are you sure you've got your calculations right? You will be eligible for your trust's OMP as well as SMP. Unless you are a v high band? For me, 50%+SMP isn't a massive drop so the first 6 months weren't a huge difference to full pay.

We used savings, DH took holiday instead of SPP, I worked out my year's pay in total and divided it by 10 months then did KIT days and took annual leave again at the end to ease back into work and settle dc into childcare as well as boosting income.

This time round our savings are meagre (3rd dc) an we are less able/willing to reduce outgoings so we've remortgaged and taken a small amount of equity to cover the unpaid portion (as with 3 lots if childcare I may as well be off longer).

Mat leave allows more time for being financially efficient though - meal planning and using what you've already got, walking instead of paying for petrol/public transport, meeting friends at home instead of out, paying bills on time, online comparisons for best deals on utilities etc.

Some unions allow you to reduce your cover for mat leave and therefore your dd. Get out of things like gym memberships now as there will inevitably be a period you can't use them, change tariff on your mobile etc etc. You can save hundreds/month in small changes.

I agree with pp though - the real shock for me was how your income doesn't recover though as going back to work necessitates childcare costs...

[Lasaraleen]

Agree with pp that the real hit is when you go back to work as that is "forever" (obviously not forever but it feels like that at the time!). We were down about a grand a month and that was 10 years ago.

[TheBestChocolateIsFree]

Seconding everyone else to say
A) you can save up holiday and tag it onto your maternity leave to give you more paid time off
B) should lower paid DH take shared parental leave for some of that time?
C) look into the costs of childcare now - for an under 2 year old it is a lot of money, possibly even "DH should quit his job to be a SAHD" money if you want two children close together.

[nightandthelight]

I second ringing HR and rechecking as what you have said doesn't sound right for the NHS! Like others have said I will be getting the 8 weeks full pay, 18 weeks @50%+SMP and 13 weeks SMP.

[trilbydoll]

I've had a year off both times but only taken one month unpaid, the rest was accrued holiday. And tbh a year is a long time, I wouldn't want any longer off.

I'm an accountant, I earn decent money, but with two dc my salary may as well go straight into nursery's bank account! Agree you need to budget even further forward than mat leave

[Mouthfulofquiz]

Also, if you are paid by the NHS, ask your Hr department and see if there is a nursery that they have a deal with, who will take all nursery fees before tax rather than just a portion via childcare vouchers. That's what we do and it saves us a fortune as all of 2 kids doing 28 hours a week in nursery is paid before tax so is significantly cheaper.

[ChatEnOeuf]

As far as I'm aware, NHS mat pay doesn't vary by trust - what has been quoted above is what I received (doctor). 90% for 8w, 50% plus SMP for 18w, SMP only for 13w.

Seconding the advice above: Save now. Planning now is also good - look at outgoings and what will change. Travel costs will probably fall, as will nice meals out. Holidays may well become much cheaper. After the initial outlay on baby stuff (which doesn't have to be expensive), little ones are pretty cheap.

Do look into childcare - I get an NHS discount and work part time, yet our childcare bills are still £800 a month.

[milkysmum]

I work as a nurse for the NHS and like you am the higher earner in the household. I couldn't have afforded to take a year off most certainly as we had no savings. Like others have said though remember that the real cost will come with childcare. Once we had 2 in nursery we were paying out more than the equivilant
Of a full time wage so we decided then that dh would take some time off as the stay at home parent as it made more sense financially. Do you need to take a year off?