I took my first parental leave after I had my daughter. It lasted for two weeks. A few years earlier, when I was pregnant with my first child, I actually quit my job and didn’t work for nearly a year — I didn’t see another way to make it all work.

My kids are older now, and things may have gotten better for working moms since then, but not by much. Did you know that the U.S. is the only developed country in the world that doesn’t require paid leave for new moms? And that only about 20% of large corporations offer paid parental leave? And moms only take, on average, 10 weeks of leave? (In case that didn’t put flames on the side of your face, the E.U. mandates that all women receive at least 14 weeks of paid maternity leave.)

Yeah...helps explain why so many new moms have to use hacks — combining paid time off, short-term disability, and unpaid leave — to spend time with their new child(ren). And why so many moms don’t return to work.

Since the U.S. is so behind the times on paid leave, parental leave isn’t only about adjusting to life with your child, it’s also about adjusting to changes to your finances. On top of taking prenatal vitamins if you’re pregnant, filling out paperwork if you’re adopting, and generally freaking out over this whole taking-care-of-a-little-human thing, you’re preparing for, on average, 2.5 months with less money and more expenses. Which, from a numbers standpoint, seems like quite the problem to solve.

The math gets more complicated if you decide to forego leave altogether and take a career break instead. Your finances can stay strong once your kid arrives, though. Here are three tips to help you get started:

Find Out Parental Leave Policies

We already know that most employers don’t offer paid leave; and thanks to narrow criteria, many women aren’t eligible for the government-mandated 12 weeks of unpaid leave either. Talk to your HR department or check out Fairygodboss to understand how your company handles parental leave. Knowing early on how much time you’ll be able to take off is a must when you’re preparing your finances. (Knowing before you join a company is even better.)

Where you live can also influence your parental leave financial plan. Right now, only three states offer paid family leave. Definitely a small step in the right direction. Meanwhile, twenty-five states have added provisions to the federal unpaid maternity leave law so more mothers are eligible for time off, although it’s still unpaid in most states.

Kiss Expensive Debt Goodbye

Moms-to-be with credit card debt: Do not pass go, do not collect $200 until you take care of that plastic. Having credit card debt is stressful (and beyond worthless since you can’t even get a tax deduction for it, unlike a mortgage or student loans). Having a child is extremely stressful. Money stress + child stress = the worst. Paying off or refinancing your credit cards or any other high-interest debt has three big benefits: it reduces stress, it lowers your monthly expenses, and it frees up money during your leave.

When you’re on parental leave, you may take home less pay or none at all, but the bills, bills, bills keep on coming. Trimming as many expenses as possible beforehand is smart, and it makes parental-leave math (how to pay for X while having less $) more doable. Oh, and children and expenses go hand-in-hand, so having more money at your disposal for whatever random thing you’ll inevitably end up needing during your leave is great.

Build Up That Emergency Fund...And Invest

After you take care of that high-cost debt, then it’s time to start or increase an emergency fund. We recommend aiming to save up three to six months’ worth of your take-home pay (plus a few months more if you’re self-employed) just for emergencies. Keep that money in its own safe, easy-to-access bank account.

Parental leave is typically pretty short, so keeping money in a bank account makes sense. But if you’re planning on taking a long break (a year or so) and are a few years away from having children, investing — like with our Ellevest Executive “Kids Are Awesome” goal — may help you better prepare financially for many of the costs that come with raising them. Nannies, daycare, doctor visits...the list goes on. Also, investing could help you make up some of the money you lost during your career break — something saving can’t really do.

Here’s another thing to keep in mind if you’re planning on taking a career break when you have children: your retirement. Research shows that women tend to put retirement plans on the back burner when taking career breaks — and end up paying for it with their retirement savings. Sure, a couple of weeks without contributing during your leave isn’t the worst thing in the world, but a year, or two, or longer can seriously cramp your retirement planning style.

Let’s say you’re 30, making $85,000, and saving 20% of each paycheck. Five years later, you have a kid and decide to take two years off from work. Thanks to that career break, chances are you’ll take a pay cut when you go back to work. But because you’re into planning for your future, you continue to save 20% of each paycheck over the next 40 years and end up with an estimated $1.1 million in retirement savings.

This isn’t bad as far as retirement goes, though it’s less than the $1.5 million you could have had if you didn’t take that break (so no pay cut) and stuck to saving 20% of each paycheck. And it’s still less than the $1.9 million to $2.5 million we estimate you could have in retirement savings by Ellevesting in a diversified portfolio instead.*

Which brings me to my final point: Get an early start on saving for retirement and invest regularly (because compounding) in a diversified portfolio while you can. Our “Retirement On Your Terms” goal recommends the amount we believe you should aim for in order to give you the best chance to retiring the way you want. We give you recommendations about how much to invest each month in order to give you the best chance of reaching that goal amount. It also factors in your salary and gender (because women’s salaries peak earlier than men’s and we live longer).

So maybe you’re years away from having a child, or maybe you plan on having one in the near future. No matter your timeline, the sooner you start sorting out your finances and investing in your future, the better your parental leave will be.

For more on the financial side of motherhood and career breaks, check out 5 Things You Must Do Before You Have Kids and What A Career Break Can Do To Your Finances.

Disclosures