How to Budget a New Home and a Baby

Start saving money several months before you begin home shopping. Saving not only gives you a cushion to help cover the costs of your new home and baby, it also helps you practice living below your means. Financial advisers recommend saving 10 percent of each paycheck, but if you're saving for a home, consider setting aside all or most of your disposable income.

Tally the costs of having a baby. Incorporate items such as maternity clothes, baby furniture, diapers and an emergency fund. If you have health insurance, contact your insurance company to get an idea of how much you'll pay for surgical and nonsurgical deliveries. If you don't have insurance, you'll need to either purchase insurance -- which may not cover pregnancy -- or calculate the total cost of giving birth. Costs vary widely depending on whether you use a doctor or midwife, where you are located and what interventions you use. Generally, however, you can expect to pay from $5,000 to $25,000.

Calculate how much you can afford in home payments each month. Most homeowners spend between 25 and 35 percent of their salary on their mortgage, but if you're having a baby, it's wise to budget for even less. Consult with a lender to get an idea of the interest rate you can expect to pay, and then determine the cost of home you can afford based on your ideal monthly payments and predicted interest rates.

Gather money for a down payment. If you're getting an FHA loan, you'll have to pay 3.5 percent, but traditional mortgages usually require a 20 percent down payment. You'll also have to cover closing and moving costs, which can cost several thousand dollars.

Incorporate the costs of moving into your home budget. Particularly if you're already pregnant, you may need help moving furniture and other large items. Try several different moving companies to get the lowest price. You may also need new items -- such as a refrigerator or washer or drier -- for your home. If you're on a tight budget, consider buying these items secondhand. Renting appliances and furniture is also an option if you'd like to keep upfront costs low, but often costs more in the long-run.

Add up the total cost of your down payment, any moving expenses, first year of your child's life, first year of mortgage payments and pregnancy-related costs to arrive at the amount of money you'll need to get through the pregnancy and first year of parenting. If the amount is something you have available or money that you can save, you're ready. Otherwise, you may need to scale back your expenses.