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Rough calculations look encouraging

September 20th, 2009 at 11:40 pm

So many things are up in the air about employment and leave next year that it's hard to make any intelligent assessment of our potential financial situation once the baby has come.

It's nerve-wracking, not knowing how our income and expenses are going to change, because obviously we want to be able to provide for our baby, and we don't want to dig our debt hole any deeper to do so (because that wouldn't benefit baby in the long run).

We have a good feeling that AS is going to get a job with a publisher she used to work for years ago. The job would start half-time in January and go full-time in July. But of course, a good feeling is not the same as a concrete job offer. And without a job offer, we don't know what the job will pay. But based on what AS knows about the publisher's finances (which is quite a lot since she was on their board for a couple years), she thinks the lowest salary would be $30K (or $15K during the half-time period).

I found out on Thursday that my job will give me 6 weeks of disability leave at 60% pay. After that, I can take the other 6 weeks (per the FMLA 12-week allowance) first with what PTO (vacation and sick) I've accumulated at the time of the birth (probably 10+ days) and the rest unpaid (four weeks or less).

I asked my HR rep whether I could possibly take some of the leave a few days at a time; in other words, once I've recovered enough to work, I'd like to start working three days a week. AS would be home two days a week, and NT will most likely be able to take one day a week financed by his sick leave (which he never uses any of).

She said she would check with our headquarters in D.C., but that she didn't see any problem with it personally. After I left the meeting, I noticed a statement on one of the forms she gave me that intermittent leave was not available for maternity leave. But on the other hand, the HR person did say that our company is somewhat flexible. So as long as that's company policy and not a legal limitation, there's still a chance that they can make an exception.

So it's difficult to foresee what my income is going to look like after the baby is born.

But I ran some numbers making certain assumptions: 1. that AS gets the job offer at $30K; 2. that I am not allowed to take the 12 weeks intermittently, but that I am able to take my PTO two days at a time once I use up the 6 weeks disability (that would allow me to take 6 weeks off and then two days a week for the next 5 to 6 weeks. So it would still be about 12 weeks before we had to give the baby over to childcare, taking us to the beginning of June); 3. that healthcare coverage for the baby would mean an additional $150 per month, and 4. that my personal loan will be gone by March.

When I calculated our income with me at 60% and the above conditions, our budget--with no reductions in discretionary spending--would have $700 per month surplus to put toward either debt or savings (or unexpected baby expenses). When I'm back to full income, we'll have $1800 surplus.

For the month of June we'd have to add childcare expenses, which we're putting at $1200 per month (while hoping to find a better deal), so our surplus would go down to $600. But in July AS would go full-time at her job in this scenario, bringing in another $1200 per month, so our surplus would go back up to $1800.

This is quite a relief, because even if I'm off by a good deal, there's a lot of wiggle room in the budget. I hope I'm right, because that would mean we could cashflow most baby expenses without depleting the baby/emergency fund, and then use the rest to continue saving and/or paying down debt.

Of course ideally I would be allowed to take the other 3-4 weeks unpaid and intermittently and keep our baby at home for another month or two. Given the above numbers, I'm confident that I could save up enough to absorb that unpaid leave. So if I'm given that opportunity, I'd concentrate on saving during the first few months.

There are still tons of unanswered questions and plenty of uncertainty, but I feel a lot better than I did before these calculations!

4 Responses to “Rough calculations look encouraging”

  1. boomeyers Says:
    1253495375

    It is great to see you thinking so far ahead! Planning is so key and you want to be able to enjoy yourself when you are on leave! Smile

  2. BuckhornGal Says:
    1253502291

    I really think that such a short time for mat leave is unfair. In Canada we get 12 months paid leave (usually about 60% income) which some Companies topping up to 100%. I am so glad you are looking forward and planning in advance.

  3. ceejay74 Says:
    1253546113

    You're telling me, Buckhorn: According to Wikipedia, the only even semi-developed country with parental leave as stingy as ours is Papua New Guinea! And they had stats for Africa, Asia, the Middle East, Eastern Europe, South America--ALL of them had more generous parental leave benefits.

  4. citibank Says:
    1254118172

    rough calculation may only lead to make decision on how much money we want?

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