Frugal Tip: If You Can, Escrow Yourself
If you own a house with a mortgage, chances are you have an escrow account that your bank handles, and pays the property taxes and insurance out of annually. The bank doesn’t want your municipality taking your house from them for lack of payment, so they take control and pay it for you.
Escrow accounts, however, have a minimum amount that has to be in them at all times, so the bank in essence is holding some of your money for you. But I’d like to have that control myself, if I can.
In our case, we can’t handle our own escrow account until we owe a lot less on our house than we do right now, but maybe you can. If you can handle your own escrow account, you can earn the interest on that money being held until needed instead of the bank. And you don’t have to have an extra cushion unless you choose to.
Explore the options you have with your escrow. Don’t default to what is customary.
This frugal tip by paidtwice who is actually happy about her escrow account… for once.