Tuesday, August 8, 2017

Creative Ways To Save On Energy Costs



We’ve all heard it before: Close the vents in rooms you don’t use, regularly replace your AC filters and vacuum the coils on your fridge. But what if you’re following all the conventional energy-saving tips and your summertime electricity bill is still astronomical?

Here’s where we come in! You know how much we at First City love helping you save money. So we’ve compiled a list of 10 creative ways to lower your electricity bill – even when the humidity is thicker than pancake mix. And don’t worry; You won’t find any mention of refrigerator coils here!

1.) Plant some trees and shrubs
Trees are a whole lot more than oxygen-breathing beauties; they’re also your key to trimming your electricity bill.

Take a good look at your home’s exterior walls. If there are lots of west-facing windows, you’re likely getting loads of sunlight each afternoon that’s heating your home and forcing your AC unit to work harder. By planting trees and shrubs in front of some of these windows, you’ll lower your energy use in a clean – and green – way.

2.) Go solar
Getting your home’s electricity through solar panels is wonderful – and also incredibly expensive. If you’d love to go green on your home’s energy but can’t afford solar, consider leasing the panels instead of buying them. You’ll be given a set monthly fee, which makes budgeting easier, with no surprises during high-energy times of year. Also, according to Jonathan Bass of SolarCity, the monthly payment for leasing solar panels is often 15% less than the local utility rate.

3.) Rethink your roof
Is your roof dressed in black for 90-degree weather? No wonder your home is so warm! Consider installing a sunlight-reflecting “cool roof” or adding an approved coating to your roof that will deflect heat. Both can reduce your roof’s temperature by up to 60 degrees, which can then trim your AC use by as much as 20%.

4.) Keep your cool
Large, heat-generating appliances can warm up a room quickly. Consider running your washing machine and dishwasher at night or in the early morning when it’s cooler outside.

5.) Lighten up
Lighting generally eats up 25% of residential electricity bills. Listen to what your dad always told you and shut the lights in a room when you walk out. Also, consider leaving lights off completely if it’s sunny out and your windows are open. Lastly, switch to CFL or LED bulbs. By swapping out just five heat-generating incandescent light bulbs in a high-traffic area in your home, you can save $65 a year on energy costs.

6.) Fix leaky windows and doors
If your home isn’t a new build, you likely have leaking windows and doors. Caulking regularly shrinks. Structural walls of houses tend to shift with time.

To check if your doors and windows are leaking air, thus making your AC put in extra effort to keep you cool, run the match test. Shut off your AC, and close all doors and windows. Light a match and hold it near the windows and exterior doors of your house. You’ll see an air flow if the flame moves, meaning there are leaks.

And, if you’ve got air leaks, you can easily reseal your windows by weatherstripping the problem areas. Your leaky door may need a door sweep replacement. Just peel off the old one and bring it to a home improvement shop so they can help you find a new one that fits your door.
Sealing leaks is easy, economical and can cut your energy costs by 30%.

7.) Get smart!
We live in the age of the smart … everything! By installing a smart thermostat, your home will be programmed to cool off at exactly the times you need. Best of all, you can control the settings even when you’re away from home. Let your AC cool off people, not empty rooms.

8.) Pull out the plug
Did you know that up to 75% of energy consumption by home electronics happens when they’re turned off? Save money by pulling out the plugs when you’re done with your electronics, both big and small. Think toaster, coffee maker and even entertainment center. Why pay for something you aren’t using?

9.) Fire up the grill
If you can’t take the heat, get out of the kitchen! An oven that’s cranked up to the standard 350° and a flaming stove-top will both make your AC unit work harder. But who wants to stand over a hot stove on a beautiful summer day anyways? Step outside for a cold picnic supper or make good use of your grill for dinner prep. You’ll keep the heat out and enjoy the glorious sunshine at the same time!

10.) Laundry smarts
An incredible 90% of the energy used when doing laundry comes from heating the water. When possible, choose the cold setting on your washing machine to reduce your energy consumption. The next big culprit in electricity use in the laundry process is the dryer. Hanging your clothes to dry will trim your bill significantly. If you must use the dryer, consider sticking some tennis balls in there to make the dryer more efficient and help it finish its job faster.

Friday, July 21, 2017

The Best Deals On Wheels For College Students


You’ve shopped for weeks and you’ve packed for hours. Now, you’re finally ready to load your trunk and pull out of the family driveway toward your next stage in life.

Which set of wheels will accompany you on your rite of passage into the grown-up world?
Yes–you’ve chosen your college, your major, and perhaps your roommate. Now it’s time to choose your car.

There are loads of factors at play when making this decision, though.

First, you’ll need to determine if it makes more sense for you to lease or to purchase a car.
Leasing offers flexibility. It’s the perfect choice for those who aren’t ready to commit to a car for long-term usage. It’s also more practical if you can’t afford to be solely responsible for a car’s maintenance and repairs. Monthly lease payments – even with repair warranties and liability waivers – also tend to be cheaper than payments on a purchased vehicle.

Of course, a lease won’t net you anything of value in the long run. When your lease is up, you’ll be out the thousands of dollars you spent “renting” the car, and have nothing to show for it. Also, if you max out the annual mileage limit, you may end up paying a small fortune in fees.

Purchasing a car, on the other hand, is a commitment that pays off in the long run. If you can afford the down payment, monthly fee, and can foot the bill for any repairs (talk to First City Credit Union about affordable coverage for mechanical breakdowns), it may be the choice for you. Remember, though, that cars depreciate as soon as you take them for their first spin. It’s also hard to predict which vehicle will serve you best a few years down the line.

If you do decide to purchase a vehicle, first determine exactly what you can afford. Don’t take on a monthly payment that’s going to squeeze your budget. Building and maintaining a good credit history is crucial – at every stage in life.

Be sure to do extensive research before signing on a car. As a cash-strapped college student, you need to make the most cost-effective decision possible – but that doesn’t mean buying the cheapest car you can find. Your vehicle should serve its purpose without draining your wallet on fuel costs and repairs.
Carefully screen every car you’re considering for fuel efficiency, safety, warranty inclusion and coverage, and cargo capacity.

To make your search a little easier, we’ve compiled a list of the top six cars for the budget-wise college student. Each one is fuel-efficient, offers excellent cargo capacity, and is well-priced. (Cargo capacity listed is with the rear seats folded.)

1.) 2016 Kia Soul
Starting price: $15,900
Cargo capacity: 24.2/61.3 cubic feet
Fuel economy: 27 mpg combined

2.) 2017 Honda Fit
Starting price: $15,990
Cargo capacity: 16.6/52.7 cubic feet
Fuel economy: Up to 36 mpg combined

3.) 2017 Chevrolet Sonic Hatchback
Starting price: $18,455
Cargo capacity: 19/47.7 cubic feet
Fuel economy: 32 mpg combined

4.) 2016 Mazda 3 Hatchback
Starting price: $18,545
Cargo capacity: 20.2/47.1 cubic feet
Fuel economy: 33 mpg combined

5.) 2016 Hyundai Elantra GT
Starting price: $18,800
Cargo capacity: 23/51 cubic feet
Fuel economy: 27 mpg combined

6.) 2017 Volkswagen Golf Hatchback
Starting price: $19,895
Cargo capacity: 22.8/52.7 cubic feet
Fuel economy: 29 mpg combined

Before heading to the dealer’s shop, it’s best to get pre-approved. This way, you’ll know exactly what you can afford, and you’ll be taken more seriously by the dealer. Be sure to drop by First City for your pre-approval and auto loan! Our credit union offers low rates on pre-owned vehicles, so call 800-944-2200 or apply online at www.firstcitycu.org!

Thursday, June 8, 2017

Plan The Ultimate Family Vacation – Together!


If you’ve ever taken your kids on vacation and had to listen to them complain about your choice of activities and about not having enough money to do everything, try something different this year! Bring the kids into the budgeting process, letting them know how much you have to spend and what the costs of various attractions will be. You might even withdraw the money needed and make actual piles of cash for each day. They’ll quickly understand that choices have to be made, but making them part of the process will improve their attitudes and lead to more summer fun!

Planning the ultimate family vacation is quite a challenge. This is especially true when you’re trying to fit in the best attractions and give your kids the vacation of a lifetime while staying within a budget.

How can you accomplish all that and still keep your kids happy?

The solution is simple, yet brilliant: Let your kids be a part of planning that vacation! This way, they’ll be the making many of the choices, thus eliminating the usual complaints and groans about your chosen attractions. Plus, your job will be that much easier. As an added bonus, your kids will learn invaluable lessons about budgeting and making choices.

Several weeks before your planned vacation, hold a family meeting. Then, let your kids know what your destination is before enlisting their help in planning the itinerary. Make sure they know what your exact budget is and fill them in on all the best attractions in the area.

Tell them they are going to have to make some very hard choices. They need to decide exactly what they want to do with the vacation budget.

Do they want to try out the famously fantastic Thai restaurant near the hotel and then spend a day at the beach? Or, would they rather pick up a budget meal and take in the huge amusement park in the area? Do they want to go horseback riding and skip the ATVing? Or, would they rather give both activities a miss and spend the money on water-skiing? Let them know that each option is going to make a dent in the budget, so they need to choose wisely!

To make it even more tangible for your kids, withdraw cash for the entire amount you plan to spend on your vacation and place it on the table. Then, when a choice is made, physically subtract the amount it would cost you from the stash of cash. This will allow your kids to actually see how much each attraction will “cost” them and force them to make better choices.

When your meeting is through, you will have your itinerary planned and your kids will have gained an invaluable life lesson in budgeting and decision-making.

How do you save on a vacation and still keep your kids happy? Share your best tips with us in the comments!

Tuesday, May 9, 2017

Choosing An Equity Loan In A Rising Rates Environment

Question: I’d like to take out a loan against my home’s equity, but I’ve heard that interest rates are expected to climb soon. What are the differences between a home equity line of credit (HELOC) and a typical home equity loan? How does an environment of rising interest rates impact each choice?


Answer: It’s true that most financial experts are predicting an interest rate hike (or multiple hikes) this year. With rising rates, borrowing against the equity of one’s home will likely become a more popular choice. That’s because people will choose to fund home renovations and other high-priced needs with their equity instead of moving to a new home with a mortgage that has higher interest rates. Refinancing their existing mortgage for a lower payment will no longer be a viable option either, since they probably already have a great rate they won’t want to give up.

With that said, here are some basics you’ll want to know about each kind of loan:

HELOCs


1) How they work


A home equity line of credit is a revolving credit line that allows you to borrow money as needed to a limit, with your home serving as collateral for the loan. Lenders approve applicants for a specific amount of credit by taking a percentage of their home’s appraised value and subtracting the balance owed on the mortgage. They may also consider any outstanding debt you have, your income and your credit history.

If you’re approved for a HELOC, you can spend the funds however you choose. Some plans do have restrictions, though, and may require you to borrow a minimum amount each time, keep a specific amount outstanding or withdraw an initial advance when the line of credit is first established.


a) Pros


HELOCs allow for more freedom than fixed home equity loans. Since you’re opening a line of credit and not borrowing a set amount, you can withdraw money as needed from the HELOC over the course of a set amount of time known as the “draw period.” This is especially beneficial if you’re renovating your home or using the money to start a new business and don’t know exactly how much money you’ll need to fund your venture.

Repayment options on HELOCs vary, but are usually very flexible. When the draw period ends, some lenders will allow you to renew the credit line and continue withdrawing money. Other lenders will require borrowers to pay back the entire loan amount at the end of the draw period. Others allow you to make payments over another time period known as the “repayment period.”

Monthly payments also vary. Some require a monthly payment of both principal and interest, while others only require an interest payment each month with the entire loan amount due at the end of the draw period. This can be beneficial when borrowing for an investment or business, as you may not have the funds for repayment on a monthly basis but anticipate earning enough to pay back the entire loan.


b) Cons


HELOCs have variable interest rates. This means the interest you’re paying on the loan can fluctuate over the life of the loan, sometimes dramatically. This variable is based on a publicly available index, such as the U.S. Treasury Bill rate, and will rise or fall along with this index. Lenders will also add a few percentage points, called margin, of their own.

Obviously, taking out a HELOC in an environment of rising interest rates means your rates are likely to increase over the life of the loan. In addition, HELOCs that only require repayment of principal at the end of the term can also prove to be difficult for some borrowers. If you have trouble managing your monthly budget, you may not be able to pay back the full amount on time. In that case, you will be forced to refinance with another lender, possibly at an unfavorable interest rate.

Home Equity Loans


1) How they work


A home equity loan, also secured by your home’s equity, allows you to borrow a fixed amount that you receive in one lump sum. The amount you will qualify for is calculated based on your home’s loan-to-value ratio, payment term, your income and your credit history. Most home equity loans have a fixed interest rate, a fixed term and a fixed monthly payment.


a) Pros


The primary benefit a fixed home equity loan has over a HELOC is its fixed interest rate. This means the borrower knows exactly how much their monthly payment will be for the entire life of the loan. In an environment of rising rates, this is especially beneficial for the borrower, as their loan will not be subject to the increasing rates of other loans. Also, the interest paid on a home equity loan is often 100% tax deductible (consult your tax advisor for details).

Unlike the repayment policy of HELOCs, every payment on a home equity loan includes both principal and interest. Some loans allow borrowers to pay back larger sums if they choose, but many will charge a penalty for early payments. Regardless of policy, at the end of the loan term, the entire amount is paid up and you can forget about the loan.


b) Cons


Taking out a fixed home equity loan means paying several fees. Receiving all the funds in one shot can also be problematic if you find that you need more than the amount you borrowed. Also, the set amount is due every month, regardless of your financial standing at the time. And, of course, if you default on the loan, you may lose your house.

Carefully weigh the pros and cons of each kind of loan before tapping into your home equity. Shop around for the best rates and terms, and be sure to calculate whether you can really afford the monthly payments of your chosen loan.

Don’t forget to call, click, or stop by First City Credit Union to find out about the loans we have available for you.

Tuesday, April 18, 2017

Regulation D: How Does It Affect Me?



Have you ever wondered about the real differences between your savings and checking accounts? Many people realize there must be more to it than just the fact that one includes checks and the other does not. However, they just don’t know what those differences are. So let’s look at some of the technical differences that define each account type.

Reserve Requirements

Did you ever wonder how much cash your credit union keeps in its vaults? It’s not all the money that members have deposited into their accounts. If that were the case, the credit union could never lend or invest money, and you could never earn any dividends on your deposits. Your credit union would simply function as a gigantic communal piggy bank.

There are laws determined by the Federal Reserve’s Board of Governors, called reserve requirements, which govern how much cash financial institutions (including credit unions and banks) must hold in reserve against the accounts at that institution. The portion of federal regulations that contain these rules is called Regulation D – Reserve Requirements of Depository Institutions.

The percentage of funds that must be kept by institutions is currently 10%. But here’s the catch: Only accounts that are defined as “transaction accounts” are considered when calculating this ratio. Other types of accounts do not have the same requirements. If you think about it, it makes perfect sense.

Transaction accounts, such as checking accounts, are used by account holders on a daily basis for their personal finances. That being the case, there is a great likelihood that the credit union will need to come up with a portion of those funds each day. On the other hand, non-transaction accounts, such as savings accounts and money markets, are intended more for long-term savings, so account holders usually leave the deposited funds in the account to grow over longer periods of time.

This also explains why savings accounts frequently offer higher dividend rates than checking accounts do: because financial institutions can use more of the funds on deposit to make money with savings deposits than they can with checking deposits.

Transaction Vs. Non-Transaction Accounts

What accounts fall into the category of transaction accounts? These include demand deposit accounts, also called checking accounts and NOW (negotiable order of withdrawal) accounts.

What characteristics do transaction accounts share? The depositor is allowed to make an unlimited number of payments and transfers from the account to third parties as well as to other accounts belonging to the depositor. The account holder can perform these transactions in various ways, such as by writing checks and by using a debit card and online payment services, among others.

Which accounts are non-transaction accounts? These include savings accounts and money market accounts. What characteristics do they share? Firstly, financial institutions must reserve the right to require at least seven days of written advance notice before account holders intend to make a withdrawal. This right is rarely if ever exercised, but it is included in the account agreement. Additionally, the account holder is limited to making no more than six “convenient” transfers or withdrawals per month.

These “convenient” transfers include preauthorized automatic transfers, transfers and withdrawals requested by phone, fax or made online, checks written to third parties and debit card transactions. Less convenient transactions, however, are unlimited. This includes any transactions made in person, by mail or at an ATM, and phone withdrawals requesting a check mailed to the account holder.

If a depositor tries to exceed the six-per-month transaction limit, the financial institution is required to refuse transfer privileges or convert the account into a transaction account. When this happens to them, many people are unaware of the laws in Regulation D (and never bothered to read their account agreement) and think their credit union or bank has a strange policy. But the truth is, if you don’t like it, you’re going to have to take it up with the Federal Reserve. Your financial institution is just following regulations.

Of course, there are simple solutions that allow savings account holders to avoid the issue. If you need to make more than six payments or transfers from your savings account, you must be up for a little more inconvenience and may need to complete the transactions in a less high-tech method than usual.

Wednesday, April 12, 2017

Buying A Home In Today’s Economy


Whether you’re a regular news junkie or you rely on your better half to keep you updated on the latest, you’ll get the same conflicting messages about the state of today’s economy. One day you’ll hear about rising wages, and the next day you’ll read about the lagging growth in the GDP, or Gross Domestic Product.
The only thing certain about today’s economy is that it is uncertain. While things look relatively stable now, no one can guarantee what the next few years will bring.
Fortunately, you don’t have to give up on the home of your dreams because of a fluctuating economy. Read on for four steps you can take to make sure your money – and your house – are completely safe regardless of what’s going on.

1.) Maximize your down payment

The magic number for down payments has been established at 20% of the home’s value. Those who can’t afford to plunk down that much money, though, will often put down a much smaller amount.

If you can’t come up with a down payment worth at least 5% of the home’s total value, you may not be ready to buy a house just yet, because having little or no equity in a home could mean taking a loss should you need to sell it. Also, not making any profit from selling your home means you won’t have funds to cover the down payment on your new home and offset the closing costs. That’s why it’s always best to own as much of your house as you can.

2.) Borrow less than you qualify for

If you’ve been hoping to qualify for a more expensive home, you may be planning to push the limits of your mortgage approval. In fact, it’s best to buy a house that comes in well under your approved limit, allowing you to maintain a lower debt-to-income ratio. This will give you breathing room and keep your mortgage payments from dwarfing your monthly budget.

Also, if the economy worsens and you feel the effects, you’ll have a smaller mortgage payment to scrape together each month.

3.) Pick the right Realtor

Here’s how to cut through the hype of the real estate market and find the Realtor that is truly best for you:

    •    Speak to recent clients. Ask about their level of satisfaction and their overall experience with this agent.
    •    Look up the licensing of your prospective agent. You should be able to easily find this information online.
    •    Choose a winner. A Realtor who has been recognized for their excellent work is one you want working for you.
    •    Research how long the agent has been in the business. You don’t want the rookie Realtor who’s building their experience through you.
    •    Check the current listings under the Realtor’s name. Are they in the same price range as the house you’re hoping to buy?

4.) Look for red flags

A professional inspection before signing on a home is a given, but did you take a careful look around? You don’t want any unpleasant surprises after you’ve moved in.

Check for the following:

    •    A sturdy roof.   Do the shingles look like they’re going to give way in a few years? That can translate into expensive repairs. If you like the house and don’t mind replacing a faulty roof, use it as a negotiating point to get a lower price.
    •    Efficient heating and cooling systems. These can be costly to fix and replace, and inefficient systems can really hike up your utility bills.
    •    Strong structural components. Most sellers will give their house a new coat of paint before showing it to buyers, but don’t be fooled. If the foundation is weak, the best paint job won’t cover it up. Check beneath the surface for strong pipes, wiring, and insulation.
    •    Overall functioning of the home. Don’t be shy; try out everything in your potential new home. Open doors and windows, turn on every faucet, flick each light switch, flush toilets and taste the water. If you find any major problems, you may want to give this house a second thought. If you don’t mind a handful of minor repairs, remember to use these as a negotiating point.

Don’t forget to call, click or stop by First City Credit Union to learn about our fantastic programs on home loans and mortgages before you start your search. We’re here to help you with the finances as you find the home of your dreams!

Friday, March 31, 2017

Feeling Stuck In Your Car Loan? Might Be Time To Shop Around!

Bills are a lot like bad weather. They’re going to come anyway, so you might as well not try to fix them, right? For some bills, that’s the case. For others, though, you can make a big difference in your monthly budget with a little legwork.

One of the bills you can change is your car payment. Refinancing your vehicle loan can lead to a lower monthly payment, a shorter term, or both! It depends on a wide range of factors, including the value of your vehicle, how much you owe on your current loan, and your credit standing.

If any of these factors have changed since you bought your car, you owe it to yourself to check out your refinancing options. Let’s look at some common life changes and when they might be cause to look at refinancing. Read on to learn about three scenarios where refinancing makes sense for your car or truck:

1.) Your credit improves

One of the biggest factors in determining your auto loan status is your credit score. When your lender is building a loan package, a credit report is pulled as a central part of that process. That number helps define your interest rate, whether or not you’ll have to pay a premium for insurance, and what other fees your lender might charge.

It’s worth keeping a copy of the credit report your lender pulled. That can let you see if your credit score has improved. It can take as little as nine months of steady repayment to boost your credit score, and that could result in a cheaper loan if you refinance.

If you didn’t have much experience with credit when you purchased your vehicle, refinancing can do you a world of good. Interest rates as high as 18% are common for borrowers who have little to no credit history. Having even a few months of solid payments on your side can cut that rate in half or more.

2.) You didn’t shop around before you borrowed

Many people feel railroaded throughout the car-buying process. They pick a car they like, then they are told what the price is, what the monthly payment is and everything else. It may seem like the choice of lenders for your car loan is predetermined.

Dealers tend to have a smaller range of lenders with whom they work exclusively. Those lenders know they have limited exposure to competition, so they can charge slightly higher fees and interest rates. By doing your own comparison shopping, you can save quite a bit on both the loan and any ancillary insurances or warranties you may have purchased. Dealer rates tend to be 1 to 1.5% higher than those offered at smaller lenders, like credit unions.

If you’ve never shopped around for a car loan, it’s definitely worth doing. By getting multiple offers, you can ensure you’re getting the best price available for your loan. Try to do your shopping inside a 15-day period. Otherwise, the multiple checks on your credit could negatively impact your credit score.

3.) You need to change your monthly payment

You may be in a much better financial situation now than when you bought your car. You may have a better job or more security. You may have paid off credit card or other debt. All of these things free up how much you can pay per month.

Most people don’t go into the refinancing process looking to increase their monthly payment, but you can save yourself money in the long term by committing to a faster repayment plan. If you can afford to pay more per month now, you can pay off the balance on your car faster. Shorter term loans usually also have lower interest rates, since the lender assumes less risk in making the loan. Once the car is paid off, you’ll have all that money to devote to other saving or spending priorities.

On the other hand, if money is tight, it might be a good idea to refinance into a longer term. While you might end up paying more in interest, you can reduce your monthly payment and save the money you need right now.

Don’t forget to stop by First City Credit Union to find out how refinancing can improve your financial life!