Hold on to your hats. According to the U.S. Department of Agriculture (USDA), a child born in 2005 costs the average parents between $182,920 to $366,020 (depending on income level) by the time she reaches age seventeen. If you've been living an unbudgeted lifestyle, now is a good time to start setting up a family spending and savings plan.

Cost Comparisons

Clueless about baby care costs? Take a reconnaissance mission to the grocery store to gather prices on diapers, wipes, and other essentials. If you're considering daycare or an in-home babysitter, now is also a good time to get information and monthly cost estimates. As usual, other parents are an excellent source of tips and leads to the best resources in your area.

In one week, the average baby goes through about sixty to eighty diaper changes. That's a potential pile up of 4,160 diapers in the first year alone! If you're using disposable ones, price out cases of diapers at the local warehouse club or discount store since bulk purchases are typically cheaper.

Don't forget to factor in pediatric care and additional health insurance premiums on your bottom line. If you belong to an HMO or other managed-care health plan, it's probable that well-baby visits are covered at 100 percent or with a minimal copay. You may want to review your health insurance options now so that when baby comes you can enroll her in the most appropriate and cost-effective program.

Setting Savings Goals

So now that you've figured out what you'll be spending on baby care, of what practical use is this? Lay out your current spending habits, including basic monthly bills like utilities and housing, debts that can be downsized (for example, credit cards and car payments), transportation costs, food and household goods, health care, and discretionary/disposable income. Accounting for everything in black and white will give you a much clearer picture of where you're spending and the size of any gap between income and expenses. This can also help you figure out big-picture questions like whether you have the financial means to switch to a part-time schedule at work.

Where does all the money go? A two-parent household with a gross income of $57,400 spends an estimated $250,530 to raise a child to age seventeen.

When it comes time to balance your home budget, be realistic in your planning and prudent when you eliminate discretionary purchases; brown-bagging it to work each and every day for the next three years is a noble goal, but a weekly or biweekly meal out with colleagues could pay off in other ways. Give yourself a little breathing room for unforeseen emergency expenses like an appliance meltdown or car repairs. A little scrimping here, one less latté a week there, and you'll find budgeting easier than you thought.

Some parents find it daunting to consider long-term expenses, like college, when the costs and responsibilities of child-rearing itself seem so overwhelming. Just remember that early planning can net big returns over time. If you start saving just $50 a month in a savings account or other interest-bearing investment at a 5 percent interest rate when your child is born, you will have $16,026 by the time your child is ready to start college. If you don't know an IRA from the NRA, you might want to sit down with a financial advisor to discuss college savings options. She might also be able to assist you in reevaluating your life insurance needs, something else that should be done periodically as your family grows.