Record pre-baby spending habits. By tracking your spending habits before the baby arrives, you can identify expenses that can be eliminated or pared down to accommodate the new addition into your old budget.

Determine day care expenses. Research child care options and begin budgeting now to avoid a financial jolt after the baby's birth. Other parents, your pediatrician and your hospital are good sources for advice. Many cities also have directories of licensed day care providers.

Discuss the pros and cons of staying home with baby. If mom or dad is staying home to take care of the baby, calculate how the loss of income will affect the family budget. Remember there are both advantages and drawbacks to this arrangement: while you'll have one less salary to count on, you may also have fewer dry-cleaning bills, lunch expenses and other work-related costs.

Look into flexible spending plans. Some employers offer this benefit to help cover dependent care expenses. You may be able to direct a portion of your pre-tax wages to a personal account from which you can draw reimbursement for child care costs. Since you'll have less taxable income after channeling dollars into the plan, you'll pay less in taxes and increase spendable income.

Baby needs a doctor. If you and your spouse have separate health coverage, compare the two plans to determine whether to include your entire family under a single plan. Be sure to note premium, deductible, co-pay, exclusion and pre-existing condition clauses of each plan. Also, find out which insurance plans are accepted by your chosen care providers, including your new pediatrician, and don't forget to consider each plan's hospital affiliation.

Shop early for baby. By spreading out major purchases throughout your pregnancy — such as a crib, changing table, infant car seat and stroller — you will avoid a budget crunch in the ninth month. You'll also have more time to comparison shop and find items on sale.

Delay making smaller purchases. Your baby's birth is a joyous event sure to bring gifts of clothing, toys, blankets and other less expensive items from well-wishers. To avoid having to return duplicates, wait until after your baby's birth to purchase these. But you'll still want to stock up on some baby necessities that usually aren't given as gifts, such as diapers.

Talk with experienced moms and dads before heading to the store. Arm yourself with information by talking to other parents about which baby products they found helpful and which were not worth the money. As a new parent, you'll be bombarded with promotions for baby products. While some products may be useful, others may be expensive annoyances. You may also want to consult consumer products guides.

Buy with caution at garage sales. While buying used clothing at garage sales is a cost-effective way to outfit baby, be especially careful about purchasing cribs, car seats and other products that may not meet current safety standards. Consult the Consumer Products Safety Commission (1-800-638-2772) or the Juvenile Products Manufacturers Association (1-609-231-8500) for more information.

Review your disability coverage. If your current disability income insurance will not replace enough of your income to pay your bills and provide your larger family the lifestyle you wish, you'll need to purchase additional coverage either through your employer or on your own to adequately cover your new family's expenses. Consulting a financial professional can help you determine your family's exact disability income needs in the event a sickness or injury prevents you from working.

Consider additional life insurance. For most parents of young children, coverage equaling between five and ten times their annual salaries should generate enough income to cover their expenses if an unexpected death occurs. Consult with a financial professional to determine what life insurance plans are best for you and your family.