Hi Sister Sue,

Deborah and I hear a lot of people saying that they do not want to pay off their house because of the tax deduction they will lose.  Here is what we think about that.

If someone does have a mortgage, then of course take the tax deduction.  But to not pay off the house early for fear of losing the tax deduction is really giving away a lot of money for no good reason!  It is giving the bank a dollar so you can save 25 cents on taxes.  That's not good math.

Why not be done with the bank?  For every quarter you lose in tax savings, you get to pocket 75 cents for yourself!  What do you think of this?  Of course, if you are still concerned about having a tax write off you can always give to a charity and get the same tax savings.  I’d rather them have it than the greedy banks.

Anyway, when Deborah and I realized what is going on here, we decided to make all the extra principle payments we could to get the house paid off ASAP.  Four years actually, from the time we bought it to paying it off.  You can do it too, sis.

Now our tax write-offs are actually helping the world be a better place, and not some bank buy another plane. 

Love,

Dan
 


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    Boiled down money goo guru, Dan

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