How to Figure Out if You Can Afford Not to Go Back to Work after Maternity Leave


Make a Plan
Sit down with your partner and make a plan. If you create and stick to a new budget, you may be able to swing staying home or working part-time.
Sit down with your partner and make a plan. If you create and stick to a new budget, you may be able to swing staying home or working part-time.
©iStockphoto.com/gchutka

If you've always known that you want to stay home with your child, ideally you'll plan better (or at least sooner!) than my husband and I did. But even if you've experienced a sudden change of heart as the end of your leave approaches, don't give up hope!

As soon as you suspect that you don't want to return to work after maternity leave, try living on one paycheck and banking the other. Not only will you see if you can make ends meet on one salary, but you'll also build up your savings account in the process. Now is also a great time to pay down any credit cards or other consumer debt to help reduce or eliminate your monthly payments and put yourself on more solid financial ground.

With your list of expenses in hand, ask yourself a few questions:

  • Where can you cut or significantly reduce your nonessential spending?
  • Can you lower your spending on any essential items by refinancing loans, sticking to a grocery budget, shopping around for lower insurance rates or bundling phone, cable and Internet service?
  • Could you get by with just one car instead of two if you weren't working?
  • Aside from giving up your salary, how else might your income picture change after you stop working?
  • Will losing one income (and adding a dependent!) give you a significant tax benefit?

But what if you didn't plan, and you're weeks into your maternity leave before you realize that you want to stay home? Think about how your habits have changed since the baby was born. Chances are you go out much less, but you may be spending more on diapers, groceries or take-out dinners at home. Have you been collecting maternity benefits during your time off, or are you on unpaid leave, already essentially living on one salary? Imagine that next month (or next week) you will need to get by on your spouse's salary alone. How do the numbers look?

Take the time to answer these questions as thoroughly as you can. The more information you have, the better prepared you'll be to make your decision.