Maternity Leave and Financial Independence; How to Pay for Maternity Leave?

Maternity leave and financial independence can seem like a contradiction, but as with many other life events given the right circumstances and preparation maternity leave can be used to continue or even speed up the path to financial independence.

I am preparing to have another child in short order, so have had to determine my financial approach to maternity leave.  I am lucky with the timing, because my employer changed in the last year to include 6 weeks of paid short term disability (after a delay of one week to process the claim) and then six more weeks for paid parental leave in our benefits package.  This adds up to 12 weeks of leave at 65% pay, plus one week in which I will use my saved sick leave.

In addition to this employees can purchase supplemental short term disability at the rate of about $30/month.  This will pay for 45% of base pay regardless of any other pay being received during the 12 week FMLA period following childbirth.  Since Mr. AF and I were trying to get pregnant, I bought into this plan so that I would be covered once I gave birth (cost: roughly 30*52/4 = $390).

Both of these combined means that for the 13 weeks of anticipated time at home my take home pay will experience roughly a 9% increase.  This well outstrips the $390 cost of the supplemental insurance.  To me, that sounds like a fabulous savings opportunity to gift to my new child or to put towards our FI savings to increase the financial stability of our family.

That being said, I do not recommend getting pregnant simply for a short term bump in pay like this.  One of the risks includes needing a longer than 13 week time at home (I think that 9 months is a more humane time if you have the choice to facilitate familial bonding, baseline a child's immune system before they go into daycare to support long term health and ensure that they have a secure attachment style, which will also support their future happiness).  Another risk is having a child who may need more of your time than anticipated, decreasing your ability to work due to supporting their health or development concerns.  Finally, childbirth is an inherently risky proposition for the mother as well, at times leading to permanent physical limitations, disability or even death.  Having had a very dodgy experience with a miscarriage earlier this year where I came within an hour or two of bleeding to death (an emergency surgery and major blood transfusion saved my life) I can say this is a very present risk for mothers with utmost certainty.  And did I mention that the best outcome is that you have a child to care for, for the next 90 years?

Partly due to my miscarriage near-death experience I have done some research into the safest ways to give birth, and astoundingly for low-risk, non-complicated births like mine midwives have shown to have better outcomes than physicians.  There is a lot of speculation as to why this is the case, but most of those are anecdotal accounts that lead down through an internet wormhole of terrifying birth stories and forced c-sections.  This is an area that I believe deserves further scientific study and possibly legislative action in states where midwifery is banned.  But with childbirth as with every other life choice, you need to determine the birth plan that is right for you (and take your medical advice from a medical professional for your personal situation- I am not one).

So, if all goes according to plan, this round of maternity leave will support our current timeline to financial independence and possibly even accelerate it.

How have you navigated maternity or paternity leave in your pursuit of financial independence?

Update 2/2019: I recently learned that we also have an extended illness bank that can only be used in conjunction with short term disability leave.  With my current balance in that bank my pay will jump to 145% for about three weeks, then drop down to the 109% calculated above.  This will really help me to reach my $5,000 goal for my newborn daughter's 529 while keeping us on pace with our retirement goals.


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