We just received our 2014 house tax bill for the year. Many include their house taxes in the mortgages. We never did that, even when we had a mortgage, always choosing to save for our house tax and pay in full each June. Our home here in the Comox Valley is a little different as utilities for water, sewer and garbage collection are included for the year where on our home in Alberta we were billed monthly for those items.
What we pay:
2013 = $2900
2014 = $3000 (of which $837 is for water, sewer and garbage)
Our house value is essentially the same as when we bought the home in 2012, $384000 for a 1700 sq foot bungalow on a crawlspace single lot. If this home was not our primary residence the bill would have been $3770. If one of the two of us was 65 or older we would only have to pay $2725.
It went up by $100 which is not terrible and I believe we get what we pay for. We get nailed every year in June and July with large bills as the house tax, car insurance and homeowners insurance are all due around the same time. We save for this by putting $600 per month into a special savings account for "Big Bills". We paid $700 two months ago for updating our wills and personal directives. That money was taken out of the big bill fund.
I hate when bills come out of left field so we try and plan for the year with a little bit of wiggle room for unexpected expenses. Some have an emergency fund but we choose not to as always have access to lines of credit, credit cards and assets that could be sold if a true emergency. In the mean time we sock away money every month.
Even if you don't own your own home, everyone has re-occurring large expenses. How do you pay your "Big Bills?"
We save up monthly like you do. For any differences, we do keep an emergency fund, but it is fluid, meaning we take and give more than we should.
ReplyDeleteI like the idea of your fluid emergency fund. Kind of like our line of credit if need be.
DeleteMost all of our bigger bills (property tax, home and auto insurance) are all witndrawn on a monthly basis from our account. I really like it this way!
ReplyDeleteI would too if we weren't self employed, we have to try and keep our monthly expenses low so try and get the big bills out of the way.
DeleteI used to use an envelope system and it worked really well. I have to get back into that habit. I think I should pretend we have a mortgage and start paying it to a fund so that when we get our own house, we'll already be used to making that payment. I just have to figure out where to get $500 a month. :-/
ReplyDeleteA pretend mortgage is a great idea, even if you can't do the full $500 a month.
DeleteGood question!!!
ReplyDeleteDen has extra money taken out each week and put towards our taxes. That way we get a large chunk of money in Feb/March. I slowly use it throughout the year. It helps so much doing it this way. I have a hard time save xxx amount each week.
I didn't used to be the kind of saver I am today but every paycheck I cut off a chunk into savings. Your way is good though, forced savings then you have money for things
DeleteIn London my property tax is billed monthly over 10 months giving me a free month in Nov. and Dec. which is lovely. In PEI I make 3 payments per year for property taxes and one payment for home insurance. My car insurance is monthly. All of which means pretty much everything is part of my monthly budget which is the way I like it!
ReplyDeleteWe could go monthly on the insurance but I like to get them out of the way to keep our monthly expenses low as possible, easier with self-employment.
DeleteMay I ask (and this is simply out of ignorance on my part) why is it better to keep monthly expenses as low as possible? Isn't it still the same amount of money in the end?
DeleteWe keep a spreadsheet of our monthly expenses but we also have a separate one for any large bills that we need to save for. Our property taxes come out of our account each month and I like that as it's no different than paying it annually and it's one thing that is budgeted but paid each month. With 2 properties, just easier for us for now. Other big things like winter tires or a trip, we have separate savings accounts for. Right now, our travel account is healthy and we both have TFSA's as well which is more new house money and then it will flip to be our retirement savings (beyond our current RRSP's). Our big expenses/emergency fund account is fine and we flip money in to it each week as well. I did empty it at the beginning of the year as we had nothing coming up and we didn't see any major crisis looming. But then started to build it again as we had maxed out our TFSA's. Works fine for us now. Always re-evaluating to make sure and we'd definitely make changes if needed. Thanks for sharing how you manage the big bills!
ReplyDeleteWe keep a spreadsheet too but I am not always on top of it. We are in charge of how much we pay ourselves and are always trying to balance bills with paychecks. Cheers!
DeleteI try to squirrel away as much as possible for when big stuff comes out of left field. But I live in an apartment split with a roomie so big stuff is an a minimal, they're always car emergencies if anything.
ReplyDeleteYes, cars definitely eat away at money. They say we spend more on our cars now than ever before. Cheers!
DeleteI like to pay my big bills yearly too. So every month I pretend minus 1/12th of the amount of the house insurance, car insurance, house taxes, even heating oil and add it to my "slush accounts" for those items onto a ledger I keep on a piece of graph paper inside of my checkbook.
ReplyDeleteSo while the money remains in my checking account it's not seen in my available balance in my check register. This might seem silly for a lot of people but I have done this for years and years and it works well. We always have the money to pay the big bills when they come in.
Debra
I do the same thing! One savings account that holds all our funds, Christmas, travel and big bills.
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