Car payments, mortgage interest deductions, the morality of money, and who has control of your money: This episode addresses these popular financial topics and we give you a new perspective.

Today's show is brought to you from Jon White, my pal and comrade from JW's Financial Coaching. He is all about giving you a new perspective on your money by encouraging you to focus on improving YOUR economy, which is the only economy you can control. Today he gives us...
Four new perspectives on money
When it comes to making changes in how we handle our money, quite often all we need is a new perspective or different way to look at how to do things. That’s because we take a lot of our advice or beliefs on how to handle money from the commercials we watch on TV or the credit card offers we get daily in our mailbox. But once we get a new perspective on how money really does work, it opens up a whole new avenue of ideas, beliefs, and actions.
The Mortgage Interest Deduction
One of the biggest ways that mortgages are sold to consumers today is that you can deduct the mortgage interest you pay from your income taxes. While that is true, often the tax savings from having a mortgage are overstated and it’s definitely NOT a reason to take out a mortgage in the first place or to keep your mortgage.

A tax deduction is not the same as a credit. A deduction allows you to subtract that amount from your income so you don’t pay taxes on it. So for example, if you paid $5,000 in interest and you made $105,000, you will pay taxes on $100,000 ($105,000 less $5,000 in mortgage interest.) So if you are in a 25% tax bracket you will save $1,250 in taxes, not $5,000.

In addition, you can deduct your mortgage interest only if you itemize your taxes. Everyone gets to take what the IRS calls a standard deduction ($6,100 for singles and $12,200 for married couples in 2013). But the IRS also allows you to deduct things such as mortgage interest, property taxes, charitable contributions, and state and local taxes, among other things. If all those add up to be greater than the standard deduction you can deduct that. But only 30% of income tax forms itemize, so for most of us the mortgage deduction saves us nothing on taxes!

If you do have a mortgage and are paying interest, take the deduction if you qualify, but don't stay in debt just for the tax break. It's a really bad idea, and it actually might not be any benefit to you at all.
Car Payments
There is a myth out there that car payments are a way of life and that only the upper class can live without them. We believe this myth because that is what we are taught and told so believe it to be fact. For example, how many times have you heard yourself or someone else rationalize a car payment by saying they were "forced" to take one out due to a car breaking down or other emergency. The truth is that we are never forced to take out debt; we choose to do it. A lot of times we choose a car payment for the convenience of not having to drive around town or drive a car that might raise a few eyebrows when you stop at the light.

But living without a car payment is possible; Jon and his wife do it and thousands of other families in our situation do it as well. It is isn't always fun driving around in an older car with a lot of miles on it, but it is worth it.

Why is that you might ask? It is because a car payment costs us a lot more than just the monthly payment. It would cost Jon's family the ability for his wife to stay home with their son. It would cost them their ability to save for retirement. It would also cost them the ability to save for their child's college because instead of funding his 529 plan they would be making a payment to Toyota, Honda, or whoever they borrowed the money from. It would also add a lot of risk to their lives as it would add another monthly obligation in their budget.

I know a lot of us can't imagine not having a car payment and paying for our next car in cash,