Cinco financial lessons

One year ago today, we crossed the Texas border.

In this time of immigration hysteria, let me make it clear that it was the Texas-Louisiana border.

Yay! We were finally back! We left Texas as adventurous newlyweds for what we thought would be a short exploration of, to us, hitherto unfamiliar regions of the United States. It was great fun and I wouldn't trade any of it.

But last year, we realized that time truly does escape from you if you're not careful. We knew it was way past time to go home. So rather than watch another 12 calendar pages flip past before we knew it, we just packed up and headed home.

Neither the hubby nor I grew up in Austin. But our Texas hometowns are both tiny burghs and we still wanted some medium-sized city excitement, so here we are.

We found it fitting that we arrived on Cinco de Mayo, a day of celebration and, if not strict independence, one of freedom. In addition to celebrating our return to our native soil, we also were celebrating freedom from the tyranny of hurricane season, although last night's thunderstorms and accompanying power outage brought back a few unhappy Florida flashbacks.

Growing up in West Texas I always was, and remain, very aware and appreciative of the historic connections between Texas and Mexico. And recent U.S.-Mexico disagreements on immigration and drug legalization aside, remember who the Mexicans defeated on this day in 1862: France. Need I say more?

Plus, how can you not love a day on which consumption of Tex-Mex cuisine and margaritas is almost a legal requirement? Sure beats the heck out of crepes and escargot in my estimation.

So viva Cinco de Mayo, viva Texas and viva home!

Texas transitions: That's not to say that our return home has been without incident.

Not only did we have to deal with lifestyle issues (different, although mostly better, grocery stores -- Whole Foods! Central Market!) and temporal considerations (I'm still having issues with Central time after all my years on the East coast), we also faced a few financial challenges upon our return to the Lone Star State.

So today, in joint celebration of our Texas repatriation and Cinco de Mayo, here are five bilingual -- well, in numeration at least. I need to take a Spanish refresher course! -- financial lessons we've learned this past year. Here's hoping that you, too, will find them useful, regardless of where you call home.

Uno
When we went to the bank 11 months ago to transfer our checking account to our new Texas residency, we couldn't because of different banking regulations in each state. We could close our Florida account and open a new one at our local branch here in Austin. Or we could officially remain Florida banking customers and simply change our mailing address on the account.

One local bank rep urged us to open a Texas account. Another said don't bother.

After six years, I had finally committed our bank account's digits to memory and the thought of relearning new numbers was not appealing. Plus, if we closed the Florida account and opened one here, I'd have to recreate our online banking and bill paying system. Whoa! I had enough other stuff going on with the move and house hunting and visiting all my now-closer relatives.

So we still technically bank out of Florida. The only potential problem, according to the bank rep who suggested we keep the status quo, is if we ever need to replace our ATM cards before they are scheduled to be reissued. Rather than walking into our local branch and getting a new card immediately, we'll have to contact our Florida office and have them mail us the new piece of plastic. I can live with that.

Dos
Living in a state without an income tax means the state will find another way to get you, usually through state and local sales and local property taxes.

We had already encountered such robbing of Peter to pay Paul in Florida. But the burden of these taxing avenues was driven home when we bought our Austin home.

The property taxes on our Florida residence, although higher than what we'd been paying on our previous Maryland home, didn't freak us out that much. Plus, in the Sunshine State, the amount a home's taxable value can increase annually is capped. This basically meant that for six years, as home values escalated, we were paying lower property taxes than we should have. Talking Taxes provides a good analysis of this system and the problems it creates in this post.

But what goes around comes around. We are now paying for all those Florida years of taxes on undervalued property by remitting ginormous property tax payments on our Austin casa. At least it's still deductible on our federal returns!

Tres
At least here in Texas, we have a bit of control of those taxes. You don't have to escrow the property tax (or your hazard insurance) payments.

I was stunned. I was sure I heard incorrectly. With every previous mortgage we've had (four homes and three re-fis), I've complained about this process. How I wanted to have that money so that we could earn interest on it ourselves.

Plus, if I could take care of this myself, I could quit bugging the lender to make sure the bills were paid on time or paid early in order to get a discount.

Now one of my biggest home loan wishes was true and I just couldn't believe it. At every meeting with our mortgage broker, I started out the session with, "Now about this no escrow deal …"

The hubby finally had to tell me to shut up or she'd pull the loan because she'd think, since I couldn't get the no escrow concept through my head, that we (and by we, he meant me) were too stupid to have a mortgage.

Of course, there was a price for this escrow freedom. We had to pay a one-time fee of a quarter point at closing. But we figured we'd get that back in a year or less from interest on the money we didn't have to hand over to the bank every month.

Anyway, the seller paid all our points, so we didn't actually have to pay anything. And we got to use those points as a deduction on our tax return. Yes, seller-paid points are deductible by the buyer. Ain't homeownership tax breaks grand?

I still, of course, hate writing that one big check in December to the Travis County tax collector. But I so love being in total control of the payment.

Quatro
Hail and wind storm insurance in Texas is very similar to hurricane insurance.

Both are separate from your regular home hazard policy.

Each has a separate deductible, with the hail damage portion computed as a percentage of your insured property's value. In some cases, this second deductible amount is substantially larger than what you'd have to pay if you put in a claim after someone broke in and stole all your high-dollar home entertainment equipment.

And both wind/hail and hurricane insurance operate on a per storm basis for claims.

So if Mother Nature whacks your house to the tune of $5,000 and you pay a $2,000 deductible to get it all repaired, get ready for a shock if another storm comes barreling through. When hail from that second storm a month later causes another $3,000 in damage, get ready to pony up another two grand deductible before your insurer will issue you another check.

Cinco
Finally, I've had one very distressing financial discovery since returning to my native state. The chances of winning the Texas lottery aren't any better than those in other states we've lived.

Numerals excerpted from Courtney's Portfolio.