How I Budgeted During Maternity Leave.

Following The League’s press release which revealed the majority of credit card holders still lack awareness on how much interest they are paying, and as part of our Money on Your Mind, Financial Health Stories, thye sat down with Deirdre O’Reilly; a mother who had to tighten up her finances during maternity leave.

Before Christmas, near the end of Deirdre’s Maternity Leave, her salary decreased further and she sought financial support during this time. They spoke to Deirdre about how she budgeted and tried to make the most of her squeezed income.

Would you consider yourself good with money, and would you usually have a monthly budget?

I would consider myself good with money during lean times – or when I have to be. For example, when I was on unpaid maternity leave, I had 2.5K saved and 5 whole months to make it last on shopping and household bills. From this, I set myself a weekly limit of €30 to spend on ‘treats’.

I wouldn’t account for every tiny purchase during a specific week. But that limit gave me rough idea of what I could and couldn’t afford. New Season blazer from &OtherStories? No. A Starbucks on a Friday? Yes. I would check in on my finances mid and end-of week, and if I had gone over budget I would simply spend less the following week.

Describe briefly the main steps when creating your budget.

1. Calculate your Total Monthly Money Pot
Start with your monthly income plus any savings  (always a nice starting point), to calculate your total  monthly money pot. (If you are doing a yearly budget, you’ll need to divide your savings by 12).

2. Then, calculate your Total Monthly Expenditure:

  1. First, list any regular and necessary monthly purchases such as household, car bills or loans and your monthly food shopping bill and total these (best to get an average of your food shopping over 6 months).
  2. Next, create a column of projected big purchases. This will include holidays, weddings or other big bills that are coming up during the year (divided by 12 to get a monthly figure).
  3. Finally, add the total from 1 to the total from 2 to get total monthly expenditure.

3. Total Monthly Money pot – Total monthly expenditure = Money for Treats

This will give you an idea of how much you have left to spend per month on other tempting things – entertainment, clothes shopping, birthdays and luxury buys (like that new coffee machine you’ve needed for the past 5 years).

Do you have savings, and how much of your salary do you usually save?

I wouldn’t have rainy day savings as I always seem to be saving for a specific life event. I saved to move into the house, and now I am saving for our wedding. I am putting aside 500 per month at the moment. That is based on the target or amount we have left to save for the wedding this year.

What is usually your biggest expense each month (outside of the mortgage)?

Food shopping and buying things for the baby. We are always nipping back out the shop to buy another packet of nappies, some medicine for teething or soothers. Or our own medicine – a bottle of wine. I need to get better at budgeting for misc spending and accounting for these things at the start of the week in the weekly shop when I can buy cheaper.

Congratulations on the baby! When your wage decreased during your maternity leave, and Christmas, how did you readjust your spending and budget?

I cut back on clothes shopping and I put off buying anything even slightly expensive like high-end eye cream etc, and asked for them as stocking fillers instead! I stopped buying little treats In the food shopping and (tried to) limit myself to one Starbucks per week. Some weeks that didn’t happen.

I also account for over spending some weeks such as a friend’s birthday dinner, and would then be extra frugal the following week. I would not have been able to afford Christmas presents if it wasn’t for my credit union loan. Luckily I have a good credit history and no outstanding balance. I borrowed a small amount only because I knew I would get my first pay check in January after my unpaid leave.

Any tips for someone else struggling with a major expense, and trying to balance their incomings and outgoings right now?

If you have a big loan, try as hard as you can to chip away at it gently. Even €20 here and there. Talk to your credit lender and stay in communication with them if you feel you might go into arrears. Ask family and friends for help if you can – my partner and family were very understanding and generous when it came to lending money here.

Finally, did you make any goals or financial plan for 2022?

The goal is to save enough money for our wedding  – try not to get a loan out to cover any of it if we can. We have about €6K left to save. We can do it if we are strict with ourselves – finger’s crossed.

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