A Nine-Month Plan for Getting Your Family's Finances in Order

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Third Month

Check up on your credit. Even if you pay your bills on time every month, errors can slip into your credit report. Save time and aggravation by correcting mistakes now, when your life is relatively sane. A clean record is particularly important for expectant parents since they may soon be in the market for a bigger home or car, says King.

You can order your credit report from Equifax (800-685-1111; www.equifax.com), Experian (888-972-5722; www.experian.com), or Transunion (800-888-4213; www.transunion.com). By law, they may charge no more than $9 for a standard report. Be forewarned that applying for a free credit check from less reputable providers can be an invitation to identity theft. In addition, limit yourself to only one a year. Any more than that can hurt your rating.

Crunch the numbers. Now it's time to get down to the last step of budget-making. Your checkbook log, credit card statements, and the receipts in your wallet will give you the numbers you need to get started. Type them into your software program's budget worksheets, along with your household earnings. Print out the results -- this is the "before" shot for your budget makeover.

The "after" picture will need to be a lot leaner. Your goal is not to just break even but to save money regularly, says Stephen Brobeck, executive director of the Consumer Federation of America (CFA), an advocacy and education organization in Washington, DC. At present, Americans save a meager 2.4% of their income. Experts say 10% is a good goal for young families.

When creating your new budget, keep in mind your upcoming childrearing costs. According to the USDA's calculations, households with an annual income above $65,800 can expect to spend about $1,120 a month to provide an infant with basics like food, clothing, shelter, transportation, and childcare. If you take an extended leave from work -- or switch to part-time hours -- you'll face the financial double-whammy of covering these new expenses on an income that is suddenly smaller.

Couples who can't seem to save their way to the 10% mark may want to book an appointment with a certified financial planner, a pro trained to help clients set monetary goals. The Financial Planning Association explains certification and fees on its Web site, www.fpanet.org. The CFA offers free consultations along with other budget guidance through its America Saves program (www.americasaves.org).

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