There always seems like a lot more to spend on at this time of year, and the bills just seem to keep on going up too.
While there may feel like many obligations that cost extra money during the end of year holiday season, some bills just can’t wait. Once you fall behind on your property taxes it just becomes harder and more expensive to catch up. In fact, you may lose your home even faster for failing to pay your taxes than your mortgage payment.
With some county employees even getting sizable pay raises, most Long Island property owners can expect their annual tax bills to go up even more.
So, what are some of the ways others are making ends meet? What’s the best way to afford your property taxes, without setting yourself up for financial disaster?
1. Credit Card Debt
Consumers have been racking up record amounts of credit card debt. Almost $1T of it. Often to maintain their lifestyles in the face of extreme inflation. However, more and more are also running out of credit, and are defaulting on that debt too.
While falling behind on your property taxes isn’t cheap, you may pay even more in interest on credit card debt. Often 29% instead of 18%. It is just delaying and making the inevitable even worse.
2. Tapping Into Savings
The Long Island Business Network reports that US households have now fallen to having the least amount of savings in almost two decades. While saving your home may be a priority and emergency situation, it is necessary to maintain an emergency savings fund for food, heating, and other housing costs too. If you aren’t making ends meet, then it is necessary to find a way to reduce other living costs or to increase income. Otherwise those savings will run out.
3. Liquidating Retirement Funds
Some are even going as far as cashing out their 401ks and IRAs. This is extremely expensive. The financial penalties can be high, and once your money isn’t earning for you any more, you are going to have less income later.
4. Refinancing Your Property
Most property owners have already missed out on this opportunity. Rates have more than doubled, and lenders are being more cautious than ever. More property owners now owe more on their mortgages than their properties are worth due to falling property values.
Still, if you do have a large amount of equity, it is possible to do a cash out refinance or reverse mortgage to fund the funds to pay your taxes. Just make sure that you understand all of the costs and long term consequences.
5. Appeal Your Property Tax Bills
By far the most appealing and financially wise option is to get help challenging your property tax assessment and bill. The odds are pretty high that you should really owe a lot less than you are being billed.
If you can cut your bill by hundreds and even many thousands of dollars per year, just by appealing, you may be able to also save your savings, retirement accounts, and credit.