by Doris Dobkins
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.
Take the Next Step
- Are you getting the best CD rate? Use our simple tool to find out. It's completely private, extrememly simple and you'll know what rate is available to you in seconds!
- Compare money market rates with our best rate finder. Don't let your bank pay you less than you deserve. It only takes a minute and your privacy is complete protected.
- If you haven't looked for a lower mortgage rate in the past year you could be wasting money each month. Use our simple tool that compares different lenders to see what your monthly mortgage payment could be. It's private, only takes a minute and could show you how to save thousands!
Share your thoughts about this article with the editor: Click Here
Trending on TDS
- 5 ways to prevent elderly relatives from throwing away money
- Couple's finances: Should you combine or keep money separate?
- The difference between credit and debit
- Before you hunt for a job
- How to adjust your financial plan for the new year
- 5 big bills you can cut fast
- Traditional IRA vs. Roth IRA
- Tips for boosting your credit score
- 7 times you can save money by spending money
- Negotiating your next raise
- Money-saving secrets of the rich and frugal