Prudent Parent: Build a ‘rainy day baby’ fund for parental leave

I built a ‘rainy day baby’ fund to take three months off with my son during the summer. 

During the summer months I became a statistic, part of the ‘2 per cent club’ – the frighteningly low number of fathers who have chosen to take advantage of Shared Parental Leave (SPL).

In a nutshell, the policy allows parents, regardless of their gender, to share up to 50 weeks of leave once their child is born. Both parents can be at home at the same time, for up to six months, but in reality the majority of the minority split the year. My partner and I opted to do nine and three months respectively, with Daddy Day-care taking the reins in the summer, just as the World Cup knockout rounds were about to commence.

The low take-up of SPL has forced the government to respond by launching a new publicity drive, in order to further raise awareness for both new dads and employers. Various surveys have also done the rounds since the policy was introduced, to ascertain what the main barriers for dads are. Two reasons crop up time and again: the financial impact on the household income and the potential negative career impact. Many working mums will no doubt roll their eyes at the latter, being all too familiar with the concept with respect to their own careers.

In terms of finances, there’s no magic money tree. SPL is paid at £140.98 per week or 90 per cent of average earnings, whichever is lower. Therefore, those dads who do want to take time out need to prepare. In our case, I had decided I wanted to share some of the leave with my partner prior to the baby’s arrival. We both sat down (she did the maths), and then we started putting a certain amount away each month to cover our outgoings, most notably the mortgage.

In essence, we built a ‘rainy day baby’ fund, covering three months’ salary in cash. It meant cutting back a little in the short term, but those precious weeks with my son were worth every penny. With a bit of forward planning it can be done. Dads! If you can afford do it, don’t hesitate.

Prudent Parent is a new column that offers money-saving tactics to help save for children and grandchildren.  

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