Babies are expensive--plan ahead!

woman holding purse filled with money
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Being pregnant is exciting, but suddenly the reality sets in that as soon as your maternity leave kicks in you're not going to have as much cash flowing in as once before, and you're going to have even more expenses (diapers, wipes, clothes, gear; it all really adds up!). So after you do research on what your state and your specific company can offer you as far as paid maternity leave versus unpaid time off, it's time to figure out how you're going to pay for this beautiful baby of yours!

How much time do you want to take off?

If three months is the magic number (12 weeks of unpaid leave is given to many, but not all, women under the Federal Family and Medical Leave Act), then start off by figuring out how much money it will take you to live for those three months without your paycheck coming in.

How much do you spend per month?

Margaret Magnarelli, assistant managing editor at Money magazine and author of the textbook Per$onal Finance, suggests using a program like Quicken or Mint to track your monthly expenses, if you're not already. Aside from the usual suspects like rent or mortgage, transportation, credit cards, food, and entertainment, Magnarelli advises you "make sure to pad the budget with likely new expenses like diapers, wipes, and formula."

Suze Orman, financial guru, author and host of CNBC's Emmy-winning The Suze Orman Show, stresses that you need to find out exactly how much you'll need each month-which isn't as easy as looking at last month's bills to tally what you need to save, because you do not spend the exact same amount of money each month. For example, you spend differently in June than December, during the holiday season; you might use more electricity to work the AC in the summer and more gas in the winter months when you're heating your home. Not to mention presents and added electricity in December if you have Christmas lights.

"What you really need to do is go through every single check, cash you've paid, charge you've put on a credit card, in the past 12 months," Orman says. "You should categorize all of those expenses by what they were spent on, like gas, food, and rent and then divide by 12. That will give you your average on the amount of money you really spend per month."

How much do you need to save before you go on maternity leave?

You'll need to have money saved up for as many months as you plan to take off, as well as an eight-month emergency fund, according to Orman, because anything can happen: a medical complication for you or your baby that could be costly and prevent you from going back to work, or your partner could be laid off from his job, etc.

Once you have the total dollar amount you'll need, weigh your expected expenses against your expected household income during this time period to see if you'll come up short. If so, take this deficit and divide by the months you have left before having a baby. That's the amount you need to save each month.

"Part of the reason to do this as soon as possible is that you'll feel the pinch of the savings less the earlier you start," Magnarelli says. "For example, if you'll need to save $2,400, starting six months before your due date means socking away $400 a month; start just four months out, and you're going to have to kick in $600 a month."

Open a new savings account

The best way to help you save the money is to create a new account that you direct deposit money from your paycheck straight into while you're still working. "You won't miss the money if you don't have it at your disposal to spend," Magnarelli promises. "Keep this money in the bank rather than investing it; it's important that it be liquid, and you can't afford to take risks with funds you need so soon."

Decide what to pare down

A good plan would have your rent or mortgage at about 35 percent of your budget; transportation, 15 percent; food, clothing, and entertainment, 25 percent; debt (which includes credit cards and loans), 15 percent; and savings, 10 percent.

In terms of where to cut back, look at your budget to see where your money is going. Most people have one or two spending areas that are particularly inflated (like eating out, for most). Instead of trying to go cold turkey and cutting out all of your fun, try to cut it down by half--otherwise you'll give up and blow the budget.

Instead of having your hair cut every four weeks, do it every eight. Rather than going out to eat six times a week, go out to eat three (if you can cut it down more, even better). Rather than going to a movie once a week, go every other week. There are ways that you can cut back little by little from each category to make up what you're going to need.

Orman also suggests the Wants vs. Needs test, when you really need to save a lot in a short amount of time. "Every single time you start to make a purchase, ask yourself the question: 'Is this a want or is this a need?' A need is medicine, food at a grocery store, gas to get yourself to work.

If you spend money only on needs, you'll be amazed at how much you'll be able to save every month. And before you know it, you'll be at your maternity leave money goal. Once you're back to work, keep up your budget to start saving for college!

Copyright© 2013 Meredith Corporation.