The Good Life on a Budget

• Posted by JvW on July 28th, 2009 filed in Frugality, House, Real estate, Taxes

A few weeks ago, I got our annual letter in the mail from the mortgage company. It reviews our mortgage payments, specifically our escrow account. Apparently, since our home’s value has decreased, so has its annual taxes. Not much of a silver lining, but I’ll take it.

With my letter was a check for the escrow surplus of $105.91 as my account has more than the required cushion. In addition, next year’s taxes have decreased, and along with it, my mortgage payment. The principal & interest amount remained the same, but our monthly escrow payment dropped by about $20.

Instead of letting that $20 fade off into oblivion, I plan to put it to work. My emergency fund is woefully inadequate (current balance: $60.88), so every month, that $20 is going to be automatically transferred over to that account. It’s not much, and the account is certainly not up to par, but our focus is on debt repayment for right now. This money was already budgeted so it’s not really “found money” and I want to make sure it has a place to go.

I’m pretty excited about this approach to an unexpected change in our budget. It’s all too easy to ignore little changes like this and let them be absorbed into nothing. In fact, the $105 check we received from the escrow surplus has been spent on who knows what. Little “bonuses” like this can really add up and make a difference if they’re put to work. If they’re treated like free money to fritter away, then they will be gone before you know it. Maximize your money by making it work for you!