I have a monthly reminder to analyze all of my recurring payments to determine if there is a way to reduce or eliminate them. I don't necessarily review everything every time (I'm not shopping car insurance every month) but I ensure that everything gets checked as appropriate (electric rates, phone rates, insurance rates, internet rates, etc.).
This month, I came up with brand new (to me) success stories I wanted to share.
Mortgage Escrow I had always assumed that the bank would require the escrow to ensure your bills get paid on time the same way the bank requires you to have appropriate coverage on a vehicle used to secure a loan. I had seen where others had successfully eliminated their escrow to pay their property taxes and home owner's insurance using their cash back credit card. I called the bank asking what the requirements would be in my situation expecting it to require an appraisal to determine my equity in the home. The representative said that because I didn't have PMI, I could choose to do whatever I wanted with the escrow. Unfortunately, there is a 2.9% service fee for paying my property taxes with a credit card so I left that in the escrow but I am now paying my home owner's insurance using a 2% cash back credit card. I just make the same payment I was to escrow into a high yield interest savings account instead so that I can pay off the credit card as soon as I make the payment.
529 Education Accounts I had known that my state (Maryland) had offered a small deduction for contributing to their 529 plan. This had never been incentive enough for me to change the kids education accounts over. What I hadn't known is that this small deduction is per beneficiary per account holder. My wife and I have two children so we could get a 4X deduction by each setting up a new account with the state's 529 plan for each of our daughters.
Result I didn't lower either payment amount but by paying differently, I'm saving about $60 a month.
April 02, 2017 at 08:21AM
