Growin' Up Gregory

I wrote the other day about if you should or shouldn't escrow. If you choose not to, here's a method my wife and I have been using for a few years to help ensure those annual or semi-annual bills don't break the bank...or ruin Christmas. 1. Calculate your annual or irregular expenses - hashtag # house hashtag # tax & insurance, car tax & hashtag # insurance , life insurance, etc. House Tax = $900 House Ins = $720 Car Tax = $300 Car Ins = $900 Life Ins = $1,000 Total = $3,820 2. Divide that total by 12 = $320 (rounded). I also like to keep this on a spreadsheet so I can update it every year or so. 3. Set up a separate interest bearing hashtag # savings account for your "escrow." Note: this should NOT be the same as your regular savings account since this money is already allocated for a special purpose. Plus, instead of the hashtag # bank earning interest of your money, you do! 4. Now comes the hard part, being disciplined enough to put that amount into...

If you have a hashtag # mortgage , you've probably heard the term escrow. Escrow is simply the monthly payment to the bank to pay your house taxes and insurance at a later date when they come due. This amount is added on top of the principal and interest payment you make to cover your loan amount and will likely require a "cushion" or escrow deposit at your closing. So should you do it? It depends. If your bank charges a fee, absolutely not. If not, it's your call. If you are really good at managing your money, you can place the money in a savings account monthly which earns you interest and then you pay the taxes and insurance when they are due. This works well for those who really like their house payment staying consistent, like earning interest, and can budget well. If you aren't great at disciplined saving, an escrow account requires you to pay that hashtag # money to the bank each month and they take care of those bills when it's time. However, this can...