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Old 05-03-2009, 09:53 PM
 
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You have strange friends. To most it really doesn't matter what someone else does with thier money except if they get in trouble from over spending.I personally am not that frugal but could carelesss what others decide.They lie thier lives;I live mine.
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Old 05-04-2009, 03:40 AM
 
26,589 posts, read 52,947,716 times
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Quote:
Originally Posted by jlawrence01 View Post
Like when?
Like when, what? Please be a little more specific.
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Old 05-04-2009, 03:52 AM
 
Location: Right where I want to be.
4,507 posts, read 7,824,676 times
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Quote:
Originally Posted by annerk View Post
Depending on your income, it might not be a good idea to pay off the house--yoor money might be better off in some sort of investment account. (There are some that are "safe.") Talk to a tax professional or financial planner about it.
Are you my MIL?? LOL There are all kinds of risks out there and yes, there's some trade off to paying the mortgage early but in the end we will be much more financially sound without a mortgage. We're looking at the big picture. Depending on our income...well, that would be fine if income was guaranteed, but that isn't the case. What is guaranteed is the mortgage payment due on the first of each month regardless of the waves in the economy or how it affects us personally. At any income, we'll be better off with no mortgage. Yes, we've considered paying the minimum on the house and investing the extra to pay off with a lump sum but we're so close now. Any truly 'safe' option isn't going to return enough to make a difference at this point.
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Old 05-04-2009, 05:49 AM
 
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Quote:
Originally Posted by NCyank View Post
Are you my MIL?? LOL There are all kinds of risks out there and yes, there's some trade off to paying the mortgage early but in the end we will be much more financially sound without a mortgage. We're looking at the big picture. Depending on our income...well, that would be fine if income was guaranteed, but that isn't the case. What is guaranteed is the mortgage payment due on the first of each month regardless of the waves in the economy or how it affects us personally. At any income, we'll be better off with no mortgage. Yes, we've considered paying the minimum on the house and investing the extra to pay off with a lump sum but we're so close now. Any truly 'safe' option isn't going to return enough to make a difference at this point.
Actually you might be surprised. If you've got a low fixed rate mortgage, and you invest all that extra payment money into high yield FDIC CD's and get the tax deduction on your mortgage interest, you might actually be better off--and still have that cash available rather than tied up in the house in case of emergency.

It depends on your income, but for an average middle income family it's a financial strategy that can really pay off in the long run. You won't have problems sleeping at night because indeed you DO have the money for the mortgage, it's just sitting in the bank making you profit rather than tied up in the house.
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Old 05-04-2009, 06:35 AM
 
Location: Right where I want to be.
4,507 posts, read 7,824,676 times
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Quote:
Originally Posted by annerk View Post
Actually you might be surprised. If you've got a low fixed rate mortgage, and you invest all that extra payment money into high yield FDIC CD's and get the tax deduction on your mortgage interest, you might actually be better off--and still have that cash available rather than tied up in the house in case of emergency.

It depends on your income, but for an average middle income family it's a financial strategy that can really pay off in the long run. You won't have problems sleeping at night because indeed you DO have the money for the mortgage, it's just sitting in the bank making you profit rather than tied up in the house.
At the risk of taking this thread seriously OT (sorry OP)...

We already have $$ for emergencies to cover the mortgage payment if needed but we're also looking more at long term financial freedom. Sure, paying off the mortgage means losing the tax deduction but how does it make sense to pay say, $5000 in interest to get a $1250 tax benefit? No financially smart person I know thinks that is a good return. I'll gladly give up the deduction along with the interest payment.

I would do a lot of things different if my goal was to earn every penny possible on our savings/investments but you can't look at things only from a financial perspective. We've done the math on several options over many years but when we factor in financial peace and security (which doesn't show up on a spreadsheet) and options we wouldn't have unless we pay off the mortgage, we like this plan best. The mathematical difference isn't enough to make up for the non-mathematical benefits...at least for us. Otherwise we'd still have the low interest rate student loans, car payments and we'd be buying everything on CC to get mileage points or cash back (never mind that studies say average folks who charge purchases spend 18% more...some folks love their points and 3-5% cash back....kinda like the mortgage tax deductions, the math just doesn't work out)

Fundamentally, we see things differently. I don't see that I have money 'tied up' in a house as a negative, I see that I own my house....that's a positive. Debt is not wealth building tool for us, but I understand that is not how many folks see it. It's good for folks to find a plan that meets all their needs, financial and otherwise. We have just that.
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Old 05-04-2009, 07:02 AM
 
370 posts, read 884,789 times
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My family would go out to eat in restaurants as a big group- like 15 people and I would not and will not go. My husband and I cannot stand going alone as it is. We cannot stand waiting in a line, crowds and the meals are way overpriced at chains such as Applebees, Red Lobster, Friday's. We cannot even stand the traffic to get there. If we go to a place like that ever it is during the week between 2pm and 3pm when it is the least crowded and we have a coupon. If you go out as a big group it is going to be at least a three hour ordeal and it is just not worth it IMO. We do go out to eat but usually just to lunch at Subway or Taco bell or another fast food place. You can still eat healthy at fast food places too, probably healthier than at the other restaurants because one meal is usually enough to serve two at those places. If I go to Taco bell and get a chicken soft taco that is perfect size and healthy too and CHEAP. So to get back to the subject. I do not think you are weird or your family is weird or thinks you are weird for being frugal. It is just a difference of personal preferences.
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Old 05-04-2009, 07:04 AM
 
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Wow. One chicken soft taco will not fill me up--not even close. (And I'm a healthy 5'7" size 8)
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Old 05-04-2009, 08:07 AM
 
13,710 posts, read 22,826,319 times
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Quote:
Originally Posted by annerk View Post
Like when, what? Please be a little more specific.
Like specifically, when is it favorable NOT to pay off your mortgage?
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Old 05-04-2009, 09:19 AM
 
26,589 posts, read 52,947,716 times
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Quote:
Originally Posted by jlawrence01 View Post
Like specifically, when is it favorable NOT to pay off your mortgage?
As I talked about earlier, it depends on your entire financial position, but if you have a low interest rate you can often come out ahead by banking the extra payment into high yeild CD's and taking the tax deduction on the mortgage interest.
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Old 05-04-2009, 11:41 AM
 
Location: Mid-Atlantic
1,820 posts, read 3,898,580 times
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I think it is strange that anyone would feel "threatened" by how people choose to spend their money..
I will say that I find it a bit irritating though when "frugal" people like to push their ways on others or make opinions about how or why others do what they do.
We have friends who are extremely frugal with many,many things they do. We would never make comments on that though and our friends feel the need to comment on everything that everyone else does.
My friend sews. She recently made a bedskirt for her daughter's room and I said it was very nice. Knowing very well that we had just purchased some new bedding for our oldest daughter's room ,she then proceeded to make a comment on how we are wasting our money on things like that and that I should just learn to sew? well.. I have absolutely no interest in learning to sew and find it just easier to pick up a catalog and order something.
I would never make a comment on how they choose to spend their money or what they want to spend their money on. My husband & I feel as though they are frugal on many things and then they waste their money on buying the newest releases on DVD or cd's... I think THAT is wasting money these days. I mean honestly, how many times are you going to sit and watch that DVD that was bought. That is why I have an Ipod and we use Netflix! but that is how we choose to do things.

Our friend also has always made her children's birthday cakes. Again,that is great,quite honestly,I don't think they look that great and certainly she could use a few lessons in baking but she enjoys doing it and claims that it saves them money. I prefer to again,pick up the phone and call the bakery and order a cake! again,that is just me.
I would never tell her that I don't think her cakes are as "pretty" as the bakery or tastes as well.

So,it is fine to be frugal,but it just isn't necessary to comment on how others do things..
Each to their own.
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