Next, include your rent or mortgage payment. If your mortgage payment includes taxes and insurance (escrow account), you want to separate those out from your monthly payment and list them separately. The reason you want to do this is because once you have 20 percent equity in your home, you can set-up your own escrow account and earn the interest yourself.
If you have a second mortgage, home improvement loan, private mortgage insurance, you need to include those items in your money blueprint.Do not forget to include, home insurance, property taxes, and home maintenance.
Remember, when you have an outstanding mortgage loan, the financial institution will include home insurance and property taxes in your monthly payment. However, once you set-up your own “escrow” account, you will need to account for these items in your money blueprint.
The reason I put quotes around the word escrow is because you won’t really have an actual escrow account. You are going to set-up a separate savings for the insurance and taxes. Just ensure that whatever account you save your insurance and taxes doesn’t charge you for having the account or for withdrawing funds from the account.
Don’t save your money in Certificate of Deposit (CD) account because with this type of accounts your money is tied-up for the length of the CD. If you withdraw it early, you are assessed a penalty.
Under this category, you also want to include your utilities, homeowner association dues, telephone, gardening, pool service, and house cleaning. I realize that some of you might have someone coming by to clean your pool or home or you might not have to pay homeowner association dues. If you don’t have these, don’t include them.