I’m certainly not a financial expert, but I totally disagree with the “it’s ok to do because it’s a tax write-off” philosophy. B efore you can write it off, you have to pay it, and the payment is ALWAYS much bigger than the write-off. How can owning your personal dwelling be a liability? You have to live somewhere, and given a choice between buying and renting, renting is a TOTAL liability. Owning is just taking the money you’d be spending to live somewhere and investing it into a tangible, negotiable asset. Like any other asset, you can diminish its value through lack of upkeep and maintenance. I moved within the last year, so I have a relatively new mortgage that I’m paying on. My INTEREST payments at this point are almost $700 per month. That’s a total of about $8400 for the year. If my “tax writeoff” from those interest payments of $8400 amount to even $840 I would be surprised. OTOH, if the house were paid for, I would have additional disposable income every month of more than $700, of which at most $245/month, or $2940 for the year, would be paid in income taxes (if I were at the top of the tax brackets). So which is the better deal? Paying an extra $7560 each year in mortgage interest minus tax writeoff, or having an extra $5460 per year ($8400 that I’m NOT paying for mortgage, less $2940 or less in additional taxes)???
Then we have 3 savings accounts. (1) Emerg. Fund (2) Gift Giving/Holiday/vacation $ (3) Incidentials that we don’t spend every month (ie: clothing,subscriptions, home repairs, replace furniture, etc). Then Quicken Splits it so we know when and where we use it. Once allocated and downloaded into Quicken it helps with our monthly cash flow sheet.