The decision to become a parent is an important step in an adult's life. Children can impact your life in many ways, and they will most certainly affect your finances. From daycare costs to an increase in medical insurance premiums to higher costs on groceries and clothing, becoming a parent doesn't come cheap. Here is a look at five things you should do financially before having children.

Maintain a Residence
Prior to taking the plunge into parenthood, one of the most important financial moves you can make is securing a stable residence. Whether you own a home or rent a house or apartment, it is important to be well-established in your residence before becoming a parent. Bringing a newborn baby home from the hospital can be stressful for many new parents. Being established in your home allows you to plan ahead for your baby's arrival.

Have a Stable Income
Another highly important financial task that should be tackled prior to expanding your family is to ensure that you have a steady job and income. By having a steady job, you are ensuring that a regular cash flow is available to pay for expenses like rent and bills. A steady income also allows you to maximize the amount you are able to save for the future. By optimizing your savings, you are helping to safe-proof your future from financial uncertainty.

Pay Down Debt and Optimize Your Credit Score
A financially smart move to make before increasing your family size is to pay down your debt and optimize your credit score. It is wise to pay off your existing debt before taking on more expenses that come associated with raising a family. No one wants to be in debt. By paying down your debt and optimizing your credit score, you are helping to make sure that your financial future is a bright one.

Secure Quality Health Insurance
Another matter of high priority that should be accomplished prior to considering parenthood is enrolling in a quality health insurance policy. To protect your finances against unexpected medical costs, finding a health insurance policy that offers a broad range of services is of the utmost importance. Additionally, with healthcare reform taking the country by storm, health insurance has now become a requirement as opposed to a luxury. Be prepared and enroll in a quality health insurance policy prior to jumping into parenthood.

Learn to Budget Effectively
Learning to budget effectively prior to entering parenthood is a matter of high concern. Many parents find that their finances become strained after having a new baby, and learning to budget effectively can be difficult if you've never adhered to a financial plan before. By budgeting effectively now, you can help to ensure that your family's financial future is strong. Start small, and begin to cut frivolous purchases out of your household budget. It may also be helpful to determine what expenses are necessary and what could be eliminated from your monthly budget. You'll soon be on track to spending less, saving more and preparing for a brighter financial picture.

The Bottom Line
Before you take the plunge head first into parenthood, consider taking these important financial steps first. Not only will it help your financial situation now, but your future financial state will benefit from your proactive measures. Some stability, financial planning and common sense can go a long way when you are planning for your future. When you are finally ready to make the plunge, you will find yourself in a much more financially secure state.