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The Cost of Bringing Up Baby

Get Your Financial House in Order

"From the moment you learn that you're pregnant, start tying down the financial loose ends of your life," advises San Diego financial planner Peggy Eddy. Vow to pay down credit-card debt as fast as you can. Refinance your mortgage if rates have dropped since you took out your loan.

Try to build a financial cushion that will cover at least six months of your living expenses. One smart way to accomplish that goal: Sign up for an automatic savings or money market program with a bank or a brokerage or mutual-fund company, and arrange to have a set amount deducted from your checking account every month and placed in the savings vehicle of your choice.

Now is also the perfect time to devise a livable budget, or to fine-tune the one you've got. Sit down with paper and pen or a computer spreadsheet and set up two columns: Life Before Baby and Life After Baby. Under the first column, list all of your current expenses, from your mortgage payments to the amount you spend on such incidentals as newspapers and gum. Then, follow the same guidelines for the second column, estimating amounts for new expenses, such as diapers, formula, and childcare, and refiguring old ones (for example, your entertainment expenses may drop since you'll probably go out less). Finally, rework your income figures to reflect how your earnings may be affected by the amount of time you're planning to take off after the baby arrives. With the hard numbers in front of you, you can then see where you need to make adjustments to bring your income and expenses into balance.

If you're seriously considering leaving work entirely, it's a good idea to give a single income a trial run, and attempt to live on just one salary for a few months while you're still pregnant, Barbara Hetzer advises. You'll likely have to make some serious adjustments to your lifestyle  -- brown-bagging it at lunch, eating fewer dinners out, and making do with a limited maternity wardrobe. Although you may not succeed entirely in relying on a single salary, the exercise can show you just how much of a second salary is necessary.