Everyone who owns a home or property gets to pay property taxes. Most people make monthly payments to a mortgage company to hold in an escrow account until they are due. "Isn't that nice service for my mortgage company to provide," you might say. Well, answer this question then. Who is earning the interest on that money every month until it is paid out? It most certainly isn't you! That is interest that you could be earning for yourself instead of so generously giving away.
Why not start paying your taxes and homeowners insurance yourself as they come due. Property taxes in the United States are due twice a year (in December and April). Insurance payments are also another area, which you can pay yourself and earn your own interest on the money until it is due. If the interest is annually averaged at $250 on both policies (property taxes & homeowners), and we considered a 40-year time frame (this could be over several different homes) at an eight percent interest rate, you could have saved over $62,000 in interest and earnings just by writing those checks twice a year yourself. Wow, and think what the savings are if you had two or more houses.
Now if you spend the money instead of saving it and earning the interest, you might not have the money when you need it and that would be worse than paying it to the mortgage company escrow account each month. A simple solution is to set up an automated withdrawal of the money from your account and have it go directly into a mutual fund which you don't access except for paying the property taxes. Over the years, the account will grow and grow and by starting soon enough, you'll have a great cash value by retirement or when you need that new car or want to take a vacation.
Doris Dobkins is a money saving expert, author and speaker and has helped thousands of people find ways to save money and get out of debt.
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