DEAR BRUCE: My wife and I have just found out that she's pregnant and we are very excited. She plans on quitting her job this fall right before she has the baby. She would like to stay at home with our child at least through elementary school. In today's hard times, I don't know financially if this can happen for us. I pay child support of $800 a month for my children from a previous marriage. My health-insurance costs have increased, and I only bring home about $2,500 a month. Our current mortgage is $700. We also have car payments of $400 a month that will end right about the time the baby arrives. I think we should pay off the house, which we have saved for, and still have some cash left over if we need it. If we didn't have the mortgage payment, we could be able to make it without her working. Do you think we should pay off the mortgage or leave it in place and do the best we can? I have no other debts, as we pay off the credit cards every month. — Reader, via e-mail

DEAR BRUCE: My wife and I have just found out that she's pregnant and we are very excited. She plans on quitting her job this fall right before she has the baby. She would like to stay at home with our child at least through elementary school. In today's hard times, I don't know financially if this can happen for us. I pay child support of $800 a month for my children from a previous marriage. My health-insurance costs have increased, and I only bring home about $2,500 a month. Our current mortgage is $700. We also have car payments of $400 a month that will end right about the time the baby arrives. I think we should pay off the house, which we have saved for, and still have some cash left over if we need it. If we didn't have the mortgage payment, we could be able to make it without her working. Do you think we should pay off the mortgage or leave it in place and do the best we can? I have no other debts, as we pay off the credit cards every month. — Reader, via e-mail

DEAR READER: It's a nice thought about having your wife stay at home with the new baby, but it's one that I think should be rethought. The reality is that your expenses eat up almost all of your take-home pay. I don't see how you can manage this way for four or five years. Is it possible that she could pick up a part-time job to keep some extra cash coming into the family coffers? There is no reason to feel guilty about both of you working. In this present environment, the two-income family is a necessity.

DEAR BRUCE: My daughter's boyfriend recently lost his job and got behind in his car payments, which was their joint car, and it was repossessed. What is the time limit that the finance company has to ask for their money? Doesn't the finance company have to let them know something? — G.J., via e-mail

DEAR G.J.: The finance company will sell the car, most likely for less than is owed. The difference is called "the deficiency." If the numbers are significant the likelihood is that they will apply to have a judgment rendered and if either your daughter or boyfriend are working, the companies will move to have a garnishment placed upon their pay. You mentioned responsibilities of the finance company, but you failed to mention responsibilities of your daughter and her boyfriend. They undertook these obligations on themselves, and now they are responsible for the consequences.

DEAR BRUCE: I'm contracting with a builder to build our house of his design on his lot. It's a cash deal, and he wants payments as we go along. What happens if he closes up shop and I have a half-built house? Because it's on his property, I own nothing. — Reader, via e-mail

DEAR READER: I have no problem with a reasonable down payment, but such a down payment should be held by his lawyer or preferably yours in an escrow account. He should be coming up with the dough to build the house, not you, as he goes along. Once completed, do a walk-through and make any adjustments, changes, etc., before the money in escrow is released.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.