My grandfather was always insistent that we manage our own escrow account. Never let the bank pay your house taxes and home owners insurance, do it yourself. They’re making money off you when you could making that money for yourself. Here’s how you do it.
Add up your annual payments for your house taxes and home owners insurance. Take that total and divide by 12. That’s how much you need to put in savings every month in order to have the money to pay those things when they come due once a year. Actually, I also put our car tags, life insurance and auto insurance in with those totals, too, that way I’m always sure to have money in savings for whatever bill comes due at odd times.
In my case I put $550 a month in savings which goes toward paying those items. Whenever I get a bill for auto insurance (every 6 months) or the truck license plate tags (annually) I always have the money in a special savings account called Escrow. I never have to scramble to work extra hours to find money to pay them. There’s never a sense of panic, we always have the money tucked away. Continue reading ‘How to Manage Your Own Escrow Account’ »