Should I pay off my mortgage?

Is Paying Off Mortgage the Way to Go?

Owning a home is the American Dream. It gives you the feeling of accomplishment. You wait for the day when you can write the last check to pay-off your mortgage. But then you just realized, if you pay-off your home then you will lose your tax benefits. You want to payoff your home but at the same time you don't want to lose your tax benefits.

The mortgage interest deduction is being preached hard by most Realtor and loan officers to their clients. If you look closely at the numbers, the deduction does not add up to give you a  real benefit. If you do your own taxes, you will be aware that the IRS have already given you a standard deduction and for 2013 tax year the standard deduction for married couple is $12,200.

     Source: IRS.GOV  

Below is the list of common deduction that you can claim on your taxes if you decide to itemize. I will give some value that represent a typical family who owns a home. 

1. Out of pocket medical and dental expenses: You can deduct expenses when it is greater than 7.5% of your income. Most people don't benefit on this: (very rare)
2. State and local taxes paid: (1,200)
3. Real Estate taxes: ($3,300)
4. Gift to charity (i.e. Salvation Army, churches) : (let say $6,000)
5. Casualty and Theft Losses (very rare): 
6. Job Expenses and Misc. Deductions greater than 2% of earned income. (rare)
7. Mortgage Interest Deduction: ($3800) let say mortgage balance of $120,000 at 3.5%

In this example,The itemized deduction, will be $14,300 that is $2,200 higher compare to the standard deduction.   

Below shows the IRS income tax bracket for the year 2013.

    Source: Forbes

Let say the family earns $90,000 that will put them into 25% tax bracket. With the above itemized deduction of $14,300 This family's MAGI will be $75,700.

If the family itemized their deduction their tax liability will be $10,782.50

  - $9,982.50 + 800 or 25% of the excess over $72, 500 ($75,700 - 72,500 x 25%)

If the family takes the standard deduction their tax liability will be $11,357.50

This family will save $575 in taxes by paying $3,800 to the bank. If they don't have a mortgage payment therefore taking only the standard deduction, they will not get the $575 tax refund but they also don't have to pay $3,800 to the bank. So by owning the home free and clear, they are ahead by $3,225.   

What if having a higher morgage deduction takes me to the lower tax bracket? 

Let us say there is another family who also earns $90,000 but buys a bigger house and pays $10,000 in mortgage interest with all the deduction the same as the above family?  Their MAGI would fall to $69,500 which will bring down their taxable rate to the lower level of 15% 

If the family Itemized their deduction their tax liability will be: $9,532.50

   = $1,785 + $7,747.50 or 15% of excess over $17,850 ($69,500-17,850 *15% )

If the family takes the standard deduction their tax liability will be $11,357.50 same as the family above

This family will save $1,825 in taxes by paying $10,000 in mortgage interest for a net loss of $8,175. In any day, I will be happy to take the $10,000 and give $1,825 to the IRS not the other way around.

As you can see, having a paid off home is better on both scenario. A paid of mortgage will also comes with peace of mind and bigger cash flow for you that you can use to fund your retirement and your children's college expense.

Walmart Ad-Match Guarantee

Save Time and Money with Walmart Ad-Match Guarantee Program

It is that time of the week when your postmaster delivers a bundle of weekly ads that comes from your local stores to your mail box. You sort through each ad to see where you can buy the cheapest produce, fruits, dairy's and everything you will need for the next week or two. Then you try to figure out how will you manage your time to visit each store to get the best deal for each item you need to buy because the sales price on products you need are listed in different stores. 

If you are lucky enough to have a Walmart store in your area especially the Walmart Supercenter which also carry fresh produce and vegetables then you can save both time and money by just visiting your local Walmart store.  Walmart will price match any competitors price as well as accept competitors coupon and manufacturers coupon as long as the coupon have bar codes in it.  

To summarize the Walmart's Ad-Match guarantee, it will take any local competitor's ad that have a price and/or weight  i.e.  Colgate Toothpaste for $1.00 or rib eye steak for $3.50/lb.  They will not accept ads like Colgate Toothpaste  for .50c off. unless it is an actual coupon with bar code or the ad also included a price.

Tips for no-hassle price matching at Walmart.

1. Print the WalMart Ad-match guarantee and show it the cashier: Walmart have high turnover on employees and some employees have no idea on how to handle this and may just tell you that it is not possible.

2. Bring the ad with you: Walmart website says that you don't need to bring the ad. This is because they do keep the competitors ad on each station anyway and the cashier can look on their copy to verify the price. However, having the ad with you will make the cashier happy. They will be able to process your purchase faster as you will save them time by just presenting the item they need to see.

3. Find a coupon/ad friendly Cashier: Once you found a coupon and ad friendly cashier, try to stay with them the next time you do your purchase as they can process you faster.  I also noticed that each cashier have follow their own set of rules on doing an Ad-Match. I love buying beef ribs and steak at Walmart. They have a center cut ribs that is vacuum packed for around$4.99/lb.  If I have an ad from a competitor that shows rib for $.99/lb I know which cashier to go to as she will take that competitors ad and apply it to the vacuum packed center cut rib. Other cashier will tell me that I can only buy the regular wrapped rib which they don't have on my local Walmart store. Hint: Upon entering the store, look at the picture of employees and see who is the best cashier of the month or who is the team lead as they will usually be the one who can approve such substitute.

4. Show the ads upon check in: Make sure to show the ads prior to the cashier scanning the items so that they can do the adjustment right away. If you do it after all the items are scanned, it will take you forever to wait for the unhappy cashier to do all the corrections or they may just tell you that it is not possible unless you return the items first which means, you have to go to the returns department which will add more time to your wait.

5. Separate price matched items to regular items: I always put the regular items to be scanned first then go through each items that needs to be price match. This way, I can make sure that all items that needs to be price matched are processed properly. It also makes it easy to revisit your receipt as they will all be lined up at the end of the receipt.

Below is the Walmart ad-match guarantee as of this writing.

Good Luck!

_______________________________________________________________________________

Walmart's Ad-Match Guarantee Corporate Website

We’re committed to providing low prices every day. On everything. So if you find a lower advertised price on an identical product, tell us and we’ll match it. Right at the register.

We gladly match the price in the following types of ads:*

• Buy one, get one free ads with a specified price
  • Example: Buy one for $2.49, get one free (BOGO)
• Competitors' ads that feature a specific item for a specified price
• Preferred shopping card prices for specific items that are in a printed ad
• For fresh produce and meat items when the price is offered in the same unit type (lb. for lb.; each for each)

*The following are guidelines and limitations:

• We will match any local competitor's advertised price.
• We do not require customers to have the ad with them to honor a competitor's ad.
• Items purchased must be identical to the ad (size, quantity, brand, flavor, color, etc.)

We do not match the price in the following types of competitor ads:

• Items that require a separate purchase to get the ad price
  • example: "Buy [item A] to get [item B] for $C"
• Items with no actual price that require a purchase to get free product
  • example: "Buy both [items A & B] to get [item C] for free"
• Items that require a purchase to get a competitors' gift card
  • example: "Buy [item A] to get a $B gift card
• Buy one, get one free (BOGO) ads with no actual price given
• Going out of business or closeout prices
• Percentage off
  • example: "All mascara, 40% off"
• Competitors' private label price promotions

We do not honor:

• Ads when the actual price for items cannot be determined
• Internet pricing
• Misprinted ad prices of other retailers
• "Going out of business" sales or "closeout" prices

Is it safe to buy refurbished electronics?

Save Money by Buying Refurbished Electronic Items

When searching for deals and bargain online or in a catalog you will always see items that are marked as refurbished. Most people will pass on these bargain thinking that these products are rejects and was returned because they are damaged or have problems. The question now is when is it safe to buy a refurbished electronics item?

A refurbished item can mean rebuilt but it can also mean returned unused or slightly used due to buyers remorse. The problem is that it is hard to know which item you are getting when you buy a refurbished electronics. So what do you need to do to protect yourself from losing money on a deal?

Do's

1.  Check for return policy: Make sure that you can return the item when there is a problem. NEVER BUY  "AS-IS".
2. Buy Direct from the manufacturers website: The safest place to buy is directly from the manufacturer, the only problem I have with buying directly from manufacturer is that you will almost always pay for return shipping if there is any problem with the item.
3. Buy from a reputable company: This is how I usually buy when I buy refurbished item as it is easier to return. You can buy refurbished items from company like Walmart have it ship to store and if you have any problem, you can also return it to any Walmart location. This will save you money on shipping and no hassle return.  Amazon is another place to buy refurbished product, you just need to make sure that the product you are buying is "Fulfilled by Amazon".  This means that Amazon will handle both shipping and return. It will be hard to get help from amazon if you encounter any problem when you return the item directly to the third party vendor.
4. Check the product description:  Make sure to read the product description. Reputable seller will put the condition of the item such as physical damage, missing parts, not in original box, etc. From my experience, when the item is shipped in original box, It is usually from buyers remorse and the product is more likely in like new condition. 
5. Check product reviews:  Before buying the product, check the reviews first and check for problem pattern to see if there is a common issue that the users are complaining about. Customer will usually give 1 to 3 star when they have a problem with the product. 
6. Test, Test and Test again:  Once you receive the product, check for physical damage then do a thorough test before the return period expires. Make sure to test on the common problem that the users reported on the product reviews. If you are happy with the result the you got a good purchase if not, make sure to return the product right away. 

Don't

1. Don't Buy As-Is: Check and double check the description and make sure that you are not buying a product in an as-is condition. Buying as-is is usually on used "non refurbished" item only but you will be surprised how many companies does this on refurbished items.
2. Don't Throw the Package: Make sure not to damage or throw the packaging until after the return period expires. This ensures that you will have no problem in returning the item.
3. Don't Buy from auction:  Avoid buying from auctions and any individual seller. It will be very hard to deal with these type of seller when you are asking for refunds. Another thing you need to be aware of when buying form individual seller is that you might be buying a stolen item.  

I have 2 HP home computers that I purchased refurbished and never experience any problem with them. One of the computer is already passed down to my kids which is now being used for kids software and internet access the other one is still being used as our main computer.  I have also purchased 2 refurbished cell phones from Ting just a year ago and also helped my sister-in-law and niece to purchase 2 refurbished phone from Ting. On both purchase one of the phone works without any problem while the other one have battery life issue.  Ting replaced the phone right away and provided envelope with prepaid label to ship the other phone back to them.  The replacement phone have the same issue. When I look the the reviews on the phone, I just realized that it is a common problem with that model. Ting offered to give me full refund as they cannot replace just the battery, the phone is good so I decided to just spend another $10.00 on Amazon to buy different brand battery which solved my battery problem. On the other hand, my sister-in-law decided to get the refund and buy another brand.  

Reading product reviews prior to buying the product will give you an idea on what to expect when buying a refurbished item. You can also use that information to decide if it is worth the risk and/or find the solution to the problems being mentioned by some users. Let's face it, when a user buy a new product and they found something that they don't like, could not figure out or does not seem right, most does not spend time to check on how to resolve or fix the issue, they just put it back in the box and return it to the store. This is where you come in and SAVE.   

Ting Wireless Review

Ting Wireless Review

 How I saved more with Ting plan vs Prepaid Plan

I have been on Ting wireless plan since May 2012 and I could honestly say that me together with my wife saved more money using the tiered service from Ting as compared to prepaid plan we used to have with T-mobile.

T-mobile's gold prepaid plan allows us to purchase 1,000 minutes for $100.00 which averages about .10 cents per minute. Since we are gold member, the expiration of each load is 1 year. We have a regular flip phone so we only use the talk feature. We seldom use the text feature as it is not convenient to do since there is no querty keyboard option.  My wife averages around $300.00 per year and I average  around $120.00 per year for a total of $420.00 on T-mobile prepaid with flip phone.

Why did I switch to Ting?

As you know, flip phone is too light and my wife have the tendency to put my phone in the washer. I was able to save the phone the first time it was put into the washer but it did not survive it the second time.  At this time, Republic Wireless is making a noise on the news so I decided to look into it. When doing my research, Ting came up and I found it to be a better deal as the phone is cheaper and Ting is already available to all customers unlike Republic who is still on beta group and you will have to wait to get in.

How much money do I save with Ting

By using Ting, we are now able to get a basic smartphone LG optimus for me and LG Marque for my wife. We were able to text more and go on the web if needed. Because we were able to text more, we save more money on voice minutes since we don't have to make the call anymore. The best part on Ting plan is that it allows you to share minutes/text/data with as many family members you have. By sharing minutes and data plan we are saving around $120 a year when you compare it to our old prepaid plan. To save more money, we use Google voice to send free text but even if we add the 500 text option, we will only be averaging around $32.00 monthly.  I like using Google voice though because I can give my Google voice number to non-family member and businesses and they can call and leave message on that number. Google will send the transcribed messaged to me in my inbox. I can check and call them back if it is important.

Below is my current plan.

Save $25 on new Ting Device

Below is the dashboard of my usage for the month of September.

Will you save money with Ting? 

If you are a low volume caller and does not use a lot of data or if you are in close proximity to wireless network all the time then you should look at what Ting can offer to you. In the interest of transparency, the link below is a referral link. If you click on the link TING will give you $25.00 off your first phone purchase and will also credit $25.00 on my account.  I am happy with TING so I have no problem recommending their service to others. In fact, I have recommended relatives and friends to Ting already.  

Save $25.00 on your 1st device purchase

What phones are available with Ting? 

If the phone is available on Sprint, you can use it on Ting. You can also check the device they offer if you click on the link above.  

Is the refurbished phone they offer any good? 

To people like me who want to get a smart phone but does not want to spend a fortune, you can look at the refurbished option from Ting website.  Just to let you know that if you buy the refurbished LG Marquee, be prepared to spend and extra $10.00 to buy a new battery from Amazon as the refurbished LG Marquee I got for my wife and the one that my wife's sister purchase both have short battery life. Ting may have replaced those batteries now as they have mentioned it before on one of the forums. I actually recommended the battery I purchased from Amazon that extended the life of the LG Marquee from around 6 hours to 2 days. On the other hand, the refurbished LG Optimus is excellent. Battery life is about 3 days on normal use and it works and looks like new.  

Ting offers refurbished phone which they support and the Used phone from Glyde. I only purchased the refurbished phone but I have no experience with Glyde. With the refurbished phone, Ting is quick to respond to any problem. In fact, they replaced both LG Marquee that I and my wife's sister purchased when we complain about performance issue.

How about customer service? 

  

Ting's customer service is one the best I have experienced. They are based in Canada and you can contact them via a toll free number or online message.  I have used both form of communication and they have responded quickly on all my request. A live person always answers their toll free number and is very knowledgeable to the questions I have. The online help response is just a few hours.  As long as the rep assigned to your ticket is at work, you will get a quick reply on your questions or a solution to your problems.  

Thank you for reading my first blog post. I hope that I was able to help you by sharing my experience with Ting. If you have any questions, feel free to post a comment.  

Thanks!