IF YOURS IS

the typical young American family, chances are you and your spouse barely see the inside of your home. Between coordinating busy work schedules, business dinners and the occasional weekend trip, who has time for quiet evenings around the fireplace (well, OK, in front of the TV)?

But it's funny how a small bundle of joy changes everything. All of a sudden, you find yourself wrapping up the work day at 5 p.m. sharp and asking your boss for a compressed work week so you can spend at least one more day with your little precious. Or, if your family can afford it, you quit your job altogether and become a stay-at-home parent.

The problem is, in today's world of jumbo mortgages and sky-high tuition bills, not many families can afford to live on one income. According to 2002 Census Bureau statistics, out of 19.6 million married couples with children under 12, only 5.3 million parents (5.2 million moms and 105,000 dads) stayed at home to care for their children. At the same time, 87% of the mothers surveyed in an at-home parenting study conducted last year for Warner Books said they would stay at home to raise their children if they could afford to do so.

"This is an all-too-common dilemma shared by many couples," says Sheri Iannetta Cupo, a certified financial planner with Sage Advisory Group in Morristown, N.J. The good news is, with some careful planning well in advance, at-home parenthood can turn out to be more affordable than you thought. Here are five tips on how to make it work.

1. Assess the situation: It's not as bad as you think
Thirteen years ago, Jonni McCoy, 45 years old, decided to quit her job as a senior buyer for Apple Computer to stay at home with her then three-year-old son. It didn't look like an easy mission. After all, the family lived in the expensive San Francisco Bay area, and she was bringing home 55% of their joint income. How could they ever adjust to living on the other 45%?

It turned out not to be as difficult as she feared. "The first thing that I realized was there were a lot of hidden costs to working," McCoy says. "A tremendous [amount] of expenses just disappeared that we didn't know would disappear."

The couple's biggest savings came from daycare expenses. Also gone were the clothing and dry-cleaning bills that come with a career wardrobe, and the almost daily deli and restaurant tabs. The family's gas bill and parking fees also dropped, now that she didn't commute, and her car-insurance premiums went down because she switched from commuter to leisure status, which automatically means lower rates in most large metropolitan areas. Plus, now that they were living on one income, their tax bills dipped significantly.

"I've met people who [net] less than they [bring home] because of all these expenses, and they've never thought about it," says McCoy, who in her spare time runs a Web site for stay-at-home parents, Miserly Moms.

So when you're thinking of how much income you stand to lose if you quit your job, don't think in terms of gross salary, but try to factor in all the marginal expenses that come with being a career parent. Our calculator will help you figure it out.

2. Downsize your budget
Cutting your budget seems like an impossible feat, especially once you find yourself with a newborn baby. But with a little advance planning, you'll probably find there's a lot of fat in your budget that can be trimmed relatively painlessly.

The key is to track down how much money you've actually got control over each month once the mortgage, the bills and your other fixed expenses are taken care of. "Most people do not have a great amount of control over what their electric bill is, or what their property-tax bill is, but the discretionary money that passes through your hands, you've got some control over," says Denise Topolnicki, a stay-at-home mom and author of "How to Raise a Family on Less than Two Incomes."

Most stay-at-home moms find they can significantly cut the family's grocery budget now that they have more time to spend at the supermarket. Others find that with a baby in the house, they don't want to eat out or go to the movies as often. Giving up such things might not seem like a sacrifice at all.

3. Eliminate debt
The smartest thing you can do to prepare for at-home parenthood is plan it all well in advance. Tackling credit-card debt, if you have any, should be your first step. "That buys you a lot of freedom to make the right decisions," says Cupo. After all, you can probably think of a thousand better uses for the cash you're shelling out each month to interest payments, right? Use our "Digging Out of Debt" calculator to see how long it will take you to get rid of your debt. For additional advice, visit our Debt Management center.

4. Rebuild your financial cushion
After the debt situation is under control, start working on an emergency fund. With only one breadwinner in the family, you want to cushion yourself against unexpected expenses. Ideally, you should have at least six months' worth of living expenses set aside in a liquid account such as a money-market savings account. Unfortunately, with the average annual yield for money-market accounts at only 1.32%, according to Bankrate.com, the money won't be doing much for you, says Cupo.

Of course, not everyone has six months' worth of cash lying around. One way to get some liquidity in a pinch is to establish a home equity line of credit, or HELOC, which is basically a credit line against the equity of your home that you can use should the need arise. "If you never use that line of credit, there's no cost associated with having it," says Cupo. "In the event that you do use it, the bank will start to charge you interest based on what you've written the checks for." Don't confuse this with a home-equity loan, where you get the cash and start incurring interest right away. For more on the difference between HELOCs and home-equity loans, read our story. Again, think of that home equity line of credit as an emergency fund, not as a way to sponsor a family trip to Disneyland.

"Between the liquidity in that savings account and this line of credit... if you are staying at home and you do have some unanticipated big expense the one income can't cover, you've got some avenues to help you without running up your credit cards," Cupo says.

5. After you make the leap...
Once you make the jump, you'll probably find yourself overwhelmed with the kid's homework, soccer practice and what not. But your financial-planning job is far from over. Here are a few important points that you shouldn't overlook:

Life insurance. Don't forget to adjust your life insurance policies now that the family depends financially on only one parent. Insurance experts recommend that you buy coverage equal to at least five to seven years' worth of the working spouse's income. But don't forget the stay-at-home parent. "They provide a value that you're going to have to pay somebody to do if that spouse is no longer there," says Cupo. According to State Farm, an insurance company, the "value" of a stay-at-home spouse could add up to $70,000 a year when you factor in child care, cooking, chauffeuring and so on. Fortunately, term-life insurance is quite inexpensive for people in their 30s and in good health. For more on life insurance, read our story.

Retirement. It's tempting to cut down on your 401(k) and IRA contributions when you need cash to raise your children. But don't eliminate your retirement saving completely. "Retirement needs to be part of your budget," says Cupo. "Maybe you'll have to cut back a little bit: Instead of fully funding your 401(k), drop it back so that at least you get your company match. Even if you save modest amounts, you've got compound interest on your side, and it's going to grow for you."

College savings. With the average four-year private college bill expected to run as high as $300,000 18 years from now, it's only normal for people to start panicking about it before their children speak their first words. That's why it's important to start saving as early as possible. Our College Planning section has a wealth of advice and college-planning resources. But don't neglect your retirement for the sake of your kids' 529 Savings Plans. This is perhaps the one place where you should put yourself first. "There are means of getting through college there are loans and financial aid but there's nothing like that to help you though retirement," Cupo says.

Exploit the tax breaks. Finally, don't forget that Uncle Sam has some very attractive tax breaks for parents. For a detailed list, read our story.