Last month (October)
Years left: 0.416666667
P =$1,189.48, I =$24.93, Escrow =$812.79
This month (November)
Years left: 0.333333333
P =$1,194.19, I =$20.22, Escrow =$812.79
Right now we spend $812.79 each month in escrow. After the mortgage is gone we will be paying property taxes and insurance directly.
There are a number of different options for how to pay for these. I could continue saving $812.79 each month. I could pay the insurance monthly via credit card (for a small “processing” fee), and the property taxes in two lump sums. Or I could save up an additional 10k in our all-purpose emergency fund and pay each of the bills once a year when they’re due.
The last option seems the least hassle, mental and otherwise for me. Starting in March I will aim to keep our savings account at 31k (though it may take a few months to get there). In July we pay insurance and in December we pay property tax. Then we’ll refill as we get paid. We’ll lose some in say, stock market gains, but it’ll be safer in case DH loses his job. (Dear Hillary Clinton, please get congress to fund research.)
It is possible that if we both continue to have high incomes that I’ll start playing the pay property taxes twice in one year (and itemizing) and zero times the next (and taking the standard deduction) game and time donations to match, but we don’t have to worry about that this year given my leave last year.
Do any of you pay house insurance and property taxes directly? How do you save for them? How do you time payments?