Making Cents Videos

“Today Ascentra is Making Sense of Certificates of Deposit”

Looking to stack up your savings?

A certificate of deposit, or CD, is a safe investment option that locks in your funds while earning you higher interest.

When you put money into a CD, you make an agreement to let your financial institution hold onto your cash for a set amount of time.  

Most CD’s have a minimum deposit requirement, and can be opened with as little as $250.

Term lengths vary and are typically as short as three months or as long as five years.  The longer the term, the more you can earn.

If you invest $10,000 into a 53 month CD with a 3% APY, you can earn more than $1,300 once the term is up.

Avoid closing or making an early withdrawal as it will result in a penalty fee.

If you don’t need quick access to your cash, contact your trusted financial institution to apply for a CD and sit back, relax and watch your money grow!

“Today Ascentra is Making Sense of Home Equity Line of Credit”

A home equity line of credit, or HELOC, can be a quick and convenient way to access funds for your next home improvement project or major life expense.  

Like a credit card, a HELOC is a form of revolving credit that turns your home into cash.

It gives you the flexibility to access funds and use them when needed over a period of time, usually 5 to 10 years, known as the draw period.

Once the draw period is up, monthly payments are made to repay the loan during a repayment period, which is typically 20 years.

The interest rate on a HELOC is based on your balance and the prime rate.

Most lenders let you borrow up to 80 percent of your home’s value; at Ascentra, you may borrow up to 100 percent.

Unlike other loans, the interest on a HELOC could be tax-deductible, and generally has a lower interest rate.

Head to Ascentra Credit Union and see if a HELOC can help you with that remodel you’ve always wanted. 

“Today Ascentra is Making Sense of Auto Warranties.”

An extended auto warranty can help protect you from unforeseen and costly repairs.

Automakers offer limited coverage on new automobiles.

Third party extended warranties can fill some of the gaps, but differ in benefits and price. 

Look for exclusionary coverage, which covers everything except the items listed. 

Plans typically don’t cover wear and tear items like tires, brakes, and shocks.

Better plans have benefits such as towing, roadside assistance, car rental reimbursement with no deductibles. And can be transferable if you sell your vehicle before your warranty expires.

Know exactly what is covered before you sign.

The best mechanical breakdown warranties are available at trusted financial institutions that finance your vehicle. 

Avoid warranties pushed by the dealer or through cold calls.

By financing your auto and purchasing the warranty at Ascentra, you could save as much as 60% for similar coverage offered at the dealership.

“Today Ascentra is Making Sense of Annual Percentage Rates”

When determining which loan is right for you, it’s important to look at the APR or Annual Percentage Rate.

APR is an annual rate charged for borrowing money. Simply put, it’s the price tag on your loan.

Don’t confuse the interest rate with the APR.

An interest rate represents the current rate you pay on a loan whereas the APR includes the interest rate plus other costs and fees.

You may find a loan with a lower interest rate, but when you add up costs and fees associated with it, you get a higher APR—costing you more in the long run.

Remember that a good credit score will help you get the best APR with any lender. The higher the APR, the more a loan will cost you. 

Before getting a loan, make sure to look at both the interest rate and APR and compare them with other lenders—do your research and build a relationship with a trusted loan officer to make sure you get the best deal! 

“Today Ascentra is Making Sense of Flood Insurance”

Many believe their homeowners or renters insurance will cover flooding due to rising floodwaters - Unfortunately, that is not the case. 

Usually the only flood damage covered by most of these policies is in cases where a pipe bursts, or if your roof is damaged by a storm and water enters your home.

Flood insurance specifically covers damage resulting from rising floodwaters, - protecting your finances and providing peace of mind.

Flood Risk Areas are determined by the Federal Emergency Management Agency, or FEMA, and are rated as low, moderate, or high-risk.

According to FEMA, more than 20 percent of flood claims come from properties outside high-risk flood zones.  

Flood hazards may change over time due to land developments, or changing weather. 

Visit FloodSmart.gov and use the Flood Map tool to find the risk zone for your home or business.

Then talk to a trusted insurance agent to see if flood insurance makes sense for you. 

“Today Ascentra is Making Sense of Estate Planning”

Estate planning is the process of designating the distribution of your assets upon your death. It also dictates how your affairs will be conducted, if you are no longer able to make these decisions yourself.

Is it just for the rich or older people?  No, regardless of your age or the size and complexity of your estate, a good estate plan should:

Identify the family members and other loved ones that you wish to receive your property;

Ensure that your property will be transferred to those you have identified; and

Minimize the amount of potential taxes and fees that may need to be paid.

Elements of estate planning include a Will or Trust, Power of Attorney for medical and financial needs, and a Medical directive - known as a Living Will - which in the event you’re incapacitated, spells out, the care you’ll accept.

A well-planned estate can help avoid family disputes, and is a valuable gift to your loved ones, during a tough time.

“Today Ascentra is Making Sense of Annual Percentage Yields”

The APY is the actual rate of return that includes compounding interests on savings accounts, and investments that financial institutions pay you.    

While it’s important to compare the APY, the frequency of compounding is just as important. 

Because some financial institutions compound more frequently, comparing accounts based on the APY alone, is not accurate. 

Say two financial institutions offer a CD for 12 months at 2% APY, but one pays out compounding interest monthly, and the other annually. 

Your return will be higher with the one that compounds monthly, since each month; you have an increasing principle earning interest, as opposed to only once.

Also, be sure to compare penalties for pulling money out of an account early, or if you fall below a certain balance.  This may reduce your interest earnings, principal balance, or even hit you with fees. 

Read the fine print when comparing accounts or CDs, and realize that the highest APY doesn’t always pay you the best.  

“Today Ascentra is Making Sense of IRA Rollovers”

If you’ve been putting money away in an employer retirement plan such as a 401k, you have options on moving your retirement dollars safely.

If you’re switching jobs, and don’t want to move your existing retirement plan to your new employer, or pay penalties and taxes if you cash it out, you have the option of rolling it over to an IRA- an Individual Retirement Account. 

An IRA rollover from a qualified retirement plan has no penalty and no tax consequences.

Perhaps you’re retiring, and wish to have more control over who, where, and how your hard-earned money is invested -  An IRA rollover may be a perfect option. 

Before making any big financial decision, it’s important to talk to a trusted financial advisor, to find out what works best with your retirement goals, and to make sense of any penalties or tax consequences that could apply.  

With the right help, it can be done safely and easily. 

Should I refinance?

This is a very good question, especially if rates are low!

The general rule of thumb is that if you can save at least one point in interest (for example lowering it from 4% to 3%), you can definitely save money in interest.  And often times, you can lower your payment or even the term of the loan down from, say, 30 years to 15 or even 10.

But while that may be a general rule, the most important question is “What is YOUR goal?”  

Some reasons you might want to refinance are

• To save money each month with a lower payment.
• To pay off your loan sooner by shortening the term of the loan.
• To consolidate other debts into one easy monthly mortgage payment.
• To borrowing against your home’s equity to make improvements or upgrades to your home.

Or maybe you are just unhappy with your current lender because your loan is constantly moving from one investor to another.  That won’t happen at Ascentra because we service all of our loans locally.  So when you need assistance WE will be here to help.

At Ascentra, we are your mortgage experts.

Setting a budget and learning how to save are a couple of the first and most important steps in getting on the path to financial wellness at Ascentra.
It's our job to help you learn and find success in managing your finances.

And while all situations are different, here are four steps for budgeting and saving that can help any member get started.

First, make it visual. 
Listing out your expenses and seeing on paper where your funds are going each month can really put things into perspective and in some cases provide the shock factor you may need to spend less.
Visualizing your spending can help determine where you're spending the most money and where it may be possible to cut back.

Next, make sure you pay yourself and make sure you budget to treat yourself.
Include yourself as a bill or expense and pay yourself too.
Personal savings needs to be a priority when budgeting.
If you aren't saving, it's hard to get ahead and have extra funds available when things do come up.
If you don't budget for fun things you like to spend your money on, you could end up overspending or using loans and credit cards or just unable to purchase the fun things or experiences you want at all.

Lastly, diversify your savings into different accounts.
It's best to have two or more savings accounts that serve different purposes.
You can have special accounts for things like long term or short term savings, vacations, home repairs and more.
Splitting your savings up can make it easier to track progress on the way to each savings goal and allow for flexibility when unplanned emergency expenses come up.
Having dedicated funds can make spending that money less painful, since it's coming from a predetermined place and not your main savings account.

We really hope this gave you a different perspective on what budgeting and saving can really be like.
When you're ready to sit down with the financial coach and get on the path to financial wellness, you can find one close to you at ascentra.org/coach.

No matter who you meet with all of our coaches are certified financial counselors and have gone through the financial counseling certification program and would love to help.
We hope to see you soon.