Financial Education

refinance

Should I Refinance My Mortgage?

You can refinance just about any loan, but doing so with a mortgage requires careful consideration. After all, paying off your existing home loan and replacing it could save you thousands. On the other hand, it could lead to foreclosure. Here are some reasons why people make this choice, along their related pros and cons.

Lower rates & better terms

The most common thinking behind refinancing is to get lower interest rates. However, if it’s only a marginal decrease, it’s likely not worth the switch. There are several expenses that go along with the process, including appraisals, processing, and application & origination fees. Make sure you factor these in before deciding.

Determine your break-even point by dividing the total closing costs by your estimated savings. For example, if you’re spending $200 less per month, but paying $4,000 in closing costs, it will take almost two years to break even. In this case, if you’re planning to move soon, it’s not the best idea.

Sometimes rates can fall low enough for homeowners to shorten their repayment periods and have only slightly higher mortgages. You’ll only want to do this if you’re at the beginning of your term or you’ll be starting all over again.

Lock it in

Adjustable-rate mortgages are for those seeking low initial rates that rise or fall with the market. If you have such a loan and you’re getting nervous about rising payments, you can refinance to a fixed product. On the flip side, you can usually change to an adjustable loan when rates are falling. This could be a good option if you’re not planning on staying in your house for more than a few years.

Cash-in equity

Some will refinance and tap into their equity. This can be a quick way to free up some cash for a large expense, such as remodeling or paying for school. Improvements do add value to a home, and an education may lead to a higher-paying job, but if you should be careful that it doesn’t bring along higher rates and longer terms.

Consolidate debt

And finally, some people refinance and use the equity to pay off other debts, such as credit card bills, car payments, student loans, etc. While a mortgage might bring a lower rate, you should only take this route if you can avoid getting back into debt again. If not, you’ll end up with the same problems, as well as a potentially problematic loan. Not to mention that you could lose your house if you don’t meet your obligations.

If you’re considering refinancing, the first step should be analyzing your existing mortgage and comparing it to your what’s available and what you might qualify to receive. This is easy with America First’s free online calculators.

birthday parties

Birthday Parties That Won’t Break the Bank

Checking Pinterest & Instagram is a great way to find fun ideas for kids’ birthday parties, but it’s easy to be overwhelmed when you see how much other people are spending. There’s no need to take out a loan for your next bash, however. Here are ten tips on how to save while celebrating.

  1. Themes – Decide with your child what kind of party is ideal. Picking a theme helps keep you focused on what you need to buy. Find inexpensive treats, decorations, games and party favors that fit. A little creativity can go a long way and make the occasion more memorable.
  2. Limit the guest list – While your son or daughter may want to invite everyone in your neighborhood (as well as the next one), it’s best to keep the guest list short. Try keeping it to close friends and family.
  3. Find a free venue – These usually require that you do most, if not all, of the set-up and clean-up yourself, but hosting birthday parties at your own home is the least expensive option. If you need more space, consider going to a park or reserving a room at a local community center.
  4. Sign up for savings – If your little boy or girl is intent on going to a restaurant or family fun center, sign up for the company’s birthday club. These loyalty programs typically offer discounts on reservations, free game tokens, or even free admission. Register early, though, because processing may take a few days.
  5. Cut out the cost of decor – The dollar store has a wide variety of paper goods, decorations, and even costumes to fit your theme. However, don’t assume that everything there is a good deal. Compare prices online and get the best bargain.
  6. Get crafty – Your kids can be involved in making the invitations and decorating the space. They will love expressing themselves and putting their work on display for all to see. You can even make crafting part of your festivities and have guests make something to take home instead of candy and toys.
  7. Bake the cake – Cake mixes are less expensive than store-bought items. Make your own with your child and, remember, it doesn’t have to be perfect. Kids can add their own touches with the frosting and sprinkles.
  8. Time it right – If you don’t want to spend money on food for a large group, have the party start after 2 p.m. and end before 5 p.m. so guests don’t expect a meal. If your child wants treats in addition to cake and ice cream, have everyone decorate cookies or cupcakes, which is an activity and treat combined into one.
  9. Examine the entertainment – Keep the activities simple. Well-known games such as freeze tag, musical chairs, charades, Simon Says, limbo and pin-the-tail-on-the-donkey can be modified to fit the theme and don’t require many supplies. You can also check out movies from your local library to put on as things are winding down.
  10. Combine the celebrations – Finally, consider having joint birthday parties with friends or family members who were born around the same time. Then you can split the costs, saving you even more money.
savings

Comparing Savings & Checking

When it comes to banking, the two most common accounts are checking & savings. Some think they’re interchangeable, but understanding the differences can help you earn more and ensure funds are available when you need them most.

Regarding Spending

Savings is the basic building block for financial well-being. As the name suggests, it’s a safe place to store your money for a rainy day. Most credit unions, including America First, require a savings account for membership.

Because these are funds that should be set aside for later, accessing the account isn’t as easy as swiping a card at a gas pump. In fact, there are federal withdrawal regulations—no more than six per month are allowed and this includes transfers via online banking. There is no limit, however, to how many deposits you can make.

Checking is the highway to your money, with multiple access routes. Checkbooks and/or debit cards come with this account for daily transactions. You can also set up automatic withdrawals for reoccurring payments, such as utility bills, mortgages and auto loans. You should keep your liquid assets here, so they’re available at a moment’s notice.

Many banks require a minimum balance and a minimum number of transactions every month. Others charge you for maintenance or when certain criteria are not met. America First checking accounts offer unlimited transactions and you’ll never have any annual or monthly maintenance fees.

When it Comes to Saving

As easy as they are to use, checking is not a great place to save. Typically, checking accounts earn little to no dividends. If you want your resources to grow, keep them in savings—it’s a simple investment, where your balance will increase over time with virtually no risk.

Using both accounts in tandem is the best way to manage your money. Keep only what you need to cover your bills in checking, then put the rest in savings. It’s also smart to hold savings & checking at the same financial institution so you can quickly transfer money from one to the other. You’ll benefit from higher yields while maintaining access to your money.

winterizing

Properly Winterizing Your Watercraft

For boat owners, one of the year’s saddest days is their last on the water. Proper winterizing, however, can prevent further gloom when the season finally rolls around again. Many watercrafts suffer unnecessary and costly winter damage due to neglectful storage. We can help you protect your nautical investment and save you money with the advice below.

Inspect the exterior

Once your boat is on land, scrub the hull with soap & water, then scrape off any barnacles or plant life. Keep an eye out for any stress cracks or blisters in the body and repair them. If your hull is fiberglass, add a wax coat for cold-weather protection.

Treat the tank

A partially filled fuel tank can cause problems. Temperature shifts cause condensation, while old gas gums up the carburetor and fuel injectors. Manufacturers recommend either filling it to the top or draining it completely. Before doing either, though, they all suggest using a preventative fuel stabilizer to help prevent issues. Once you add the stabilizer, idle the engine for 15 minutes to evenly distribute it through the system.

Clean the engine

For outboard motors, flush the engine with fresh water to remove dirt and other impurities. With inboard and stern-drives, you’ll additionally want to do a final flushing with anti-freeze. Improperly drained engines leave residual water in the cooling chambers, that expands when it freezes—possibly cracking the manifolds or engine block.

Change the oil

Changing the oil & filter prevents potential moisture corrosion. Run the engine beforehand for faster and more efficient draining. Some owners will even change the oil while winterizing and do it again in the spring.

Care for the cylinders

Fogging oil helps protect the interior during storage. If you don’t fog the cylinders, pistons and rings, rust and other decay occur. Many engines allow you to spray this solution into the air intake while it’s running, or you can remove the spark plugs and apply it there.

Keep it covered

Most people don’t have the luxury of a climate-controlled storage facility, but at the very least you should use a tarp or sturdy cover during colder months. It’s important to keep the interior of the boat as dry as possible to avoid mold or mildew. Covers with ventilation deter ice accumulation and allow for some airflow. You can additional buy sprays or dehumidifiers to pull excess moisture from the air.

Winterizing may seem like a lot of work, but when it’s done correctly, it will save you time and money when the time arrives to get your boat out on the lake again. And these tips are only the basics—please consult your owner’s manual for additional instructions and recommendations for specific makes and models.

cruise

Low Costs on the High Seas—Saving on a Cruise

Some people have never gone on a cruise because they think it’s too expensive. However, when you consider that the room, the food, and the entertainment are all included with the price of your ticket, the cost is comparable to other vacations. If you want to save some additional money on your nautical voyage, here are some tips.

Right place, right time

Cruises range from luxury liners to economy trips—and the cost can vary even more depending on the time of year. Decide where and when you’d like to travel, then look for the cruise line that will give you what you want for the best price. You’ll save some extra money if you go during the off-season, which is typically late spring or early fall.

You can also spend less by either planning far ahead or waiting until the last minute. Some companies will offer early-bird specials for those who book their trip more than a year in advance. On the flip side, when the sail date approaches and the companies want to fill their cabins, some will drop their prices or add incentives to attract passengers, such as additional credits, room upgrades, and complementary amenities. Keep your eye on the prices throughout the year and note what’s included—then you’ll know when you’re getting a good deal.

When creating your budget, don’t forget to factor in the price of traveling to the ship’s location, which is not included with the price of a cruise. Consider using a travel agent—they usually know about the best deals and can bundle your admission with things like airfare and a hotel room, if necessary. Or pick a port close to home to save on travel costs.

Prioritize your perks

Determine what is a want and what is a need before you book your tickets. For example, it would be nice to have a large, private veranda where you can watch the ship pull away from the port, but you can also do this up on the deck. Inside state rooms are cheaper than ones with a view, and you only really need them for sleeping and getting ready. Plus, if you easily get seasick, inner rooms are usually more stable, too.

Many cruisers blow their vacation budget on unnecessary extras. There’s really no need to upgrade for fancy dining when buffets are included with the price of your ticket. Tap water, coffee and juices are usually free, but soda or alcoholic beverages will add up on your final bill. A wireless connection while you’re out to sea can also put you over budget. Unplug while you’re on the ship in order to save money. If you need to check your messages, find a café with a free Wi-Fi on the shore while the boat is docked.

When it comes to shore excursions, you don’t have to purchase the packages offered by the cruise line. You can enjoy a day on the beach, go on a hike and explore the port on your own. If you’re going to buy souvenirs, you can probably get them for cheaper by bargaining with vendors on land than you could in the ship’s gift shop. However, if you’re hungry, you should go back to the boat to get some food, since you’ve already paid for it.

contactless payments

Make Quick Purchases with Contactless Payments

Swipe, dip, tap, insert. It can be confusing when you approach the check-out counter, but contactless payments are now a popular way to transmit funds. And if you think making purchases with your phone is something for a far-off future, the ability is probably in your hands right now.

The technology behind it

To understand how this process works, you first must be familiar with radio-frequency identification, or RFID. This technology uses a memory chip to store data and an antenna to send information to a reader when they are in close proximity. Examples include security tags on clothing in department stores, microchips implanted in pets and, of course, credit & debit cards. In fact, you may already have tap-to-pay access. If the contactless symbol (which looks like a sideways Wi-Fi signal) is on the back of the card, it means you’re good to go.

Near-field communication, or NFC, is a slightly more advanced cousin to RFID. Such memory chips can also act as readers, meaning you can send and receive data—and money—from one device to another if they’re within an inch or two of each other. It’s still relatively new, but most of the latest smartphones come with this feature pre-installed. To check your phone, go to settings and look for the switch that turns NFC off and on.

How to use it

Millions of restaurants and retailers worldwide have contactless terminals. You may also already have a mobile payment app, such as Google Pay, Apple Pay or Samsung Pay on your phone. If you don’t, you can easily download them for free. Then add your compatible cards by manually entering the information or scanning the card. When it’s time to pay, simply unlock your device, open the app and tap it on the terminal.

The benefits

Tap-to-pay technology makes shopping quick and easy. You won’t be carrying around a stack of cards, nor will you need to rummage through your bag to find the right one. All your information is safely secured behind the phone’s lock screen, and there are multiple layers of security to help prevent fraud.

If you’re hesitant to try contactless payments with your phone, we hope this explains it’s not as complicated or scary as you might have thought. In fact, tap-to-pay technology is probably already in your pocket. And once you’ve try it, you may never want to swipe again.

breakfast

Sunrise Savings: Breakfast on a Budget

Just because breakfast is the most important meal of the day doesn’t mean it also needs to be the most expensive. Whether you’re cooking for one or feeding a horde of children, here are some ways to save some money every morning.

Make a Menu

Grabbing whatever you can find as you’re rushing out the door is not only unhealthy, it can cost you. Create a weekly menu so you’re not buying too much at the grocery store. Identify where you can utilize an ingredient in multiple meals, like spinach for a dinner salad as well as your morning smoothie. Proper planning will save you time, prevent waste, and keep you out of the drive-through.

Buy in Bulk

When certain breakfast ingredients go on sale, get larger quantities and store them. For example, if you buy a whole bushel of peaches while they’re in season (May through August), you’ll spend less per pound than you would picking up two or three at a time during the winter. Chop fruits and vegetables you don’t plan on using immediately to freeze before they spoil.

Go Generic

Many Americans wake up to big bowls of cold cereal. Bringing home box after box of name-brand products can get expensive. Generic versions are a fraction of the cost and usually taste the same. This saving principle can be applied to other items such as cream cheese, bagels, jam, peanut butter, bread and even microwavable meals. Don’t pay extra for the label.

Make it Yourself

You’ll also be charged for the labor that goes into pre-cooked, pre-sliced and otherwise pre-made foods. A box of pancake mix is easy, but purchasing flour, sugar, baking powder, salt, eggs, milk, vegetable oil, and making your own batter will produce more and cost you less. Less processed products are the more frugal choice.

Keep it Simple

When it comes to the first meal of the day, people tend to overcomplicate things. Your kids may be just as satisfied with a hard-boiled egg as they would eggs Benedict. And instead of grabbing a breakfast sandwich from a restaurant on the way to work, bring a piece of buttered toast with jam from home. Substitute simple rolled oats for pricey cereals—you can even mix in those delicious peaches you have in your freezer. Start your day off right by saving!

cryptocurrency

Virtual Money: Understanding Cryptocurrency

The concept of cryptocurrency can be fairly confusing to those who are just hearing about it. After all, words like Bitcoin, blockchain and mining sound like they belong in a video game rather than the financial sector. If you’ve ever wondered what this world is all about, here’s a brief introduction.

What is cryptocurrency?

In the simplest of terms, cryptocurrency, or crypto, is virtual money. It only exists electronically. Bitcoin is the most popular, but there are thousands of others, with names like Ethereum, Litecoin, Ripple, Feathercoin and TRON. Users can’t make their own Bitcoins, but anyone with the know-how can create their own digital currency, so it’s not easy to tell which options are viable for investing. Some digital coins may be worth more in the future, but others may disappear completely, leaving the investors with nothing.

How does it work?

People use digital currency much like they do regular money. If someone can find a person or business that is willing to accept the crypto they have, they can make an exchange, no matter where in the world they are. This system is dependent on a peer-to-peer network with multiple parties supervising what’s going on. While users are anonymous, each transaction is logged and verified in digital ledgers, otherwise known as blockchains. Since there is no overseeing authority for cryptocurrency, these blockchains are monitored by various users around the world.

How do people get it?

There are a couple ways. First, people can purchase it with real money. One Bitcoin, for example, currently costs over $6,000. Interested parties can buy a fraction of one coin, too. Another way to earn some types of digital currency is by putting a computer to work, verifying blocks on the blockchain—a process known as mining. When a computer successfully confirms a logged transaction, the owner may be rewarded with a certain amount of crypto. Some people spend lots of money buying special hardware and software to mine for Bitcoin and other virtual currencies.

What are the risks?

Cryptocurrency has been referred to as the wild west of the financial world, because there aren’t many rules or regulations. Some say investing in it is akin to gambling, whereas others say it’s the future of money. Either way, investors should not convert funds they can’t stand to lose. Since crypto isn’t regulated by any state or government, no one is there to investigate fraud and investments aren’t insured or protected. If the virtual coins in a digital wallet disappear, the money is gone.

There is a lot more to say on the subject, but this article is a quick overview to help you understand what the digital currency trend is all about. In summary, cryptocurrency is a volatile and experimental market and only time will tell how worthwhile such an investment might be.

The Cost of Cycling

If you’re searching for a new hobby, cycling is a fun & healthy choice. But if you’re going to take it seriously—even train for races such as the Tour of Utah—you’re going to spend some money. Here’s a brief cost overview:

The bicycle itself ($500 – $2,000)
Absolutely the most expensive component. Road bikes are far more aerodynamic and lighter than those made for trails. High-end models are also more expensive because they have carbon fiber and titanium construction. Those you see in the Tour de France run around $12,000, but that’s certainly not necessary for those on the entry level.

Headgear ($25 – $300)
If you’re going to ride fast, a safety should be your first concern. You can be more frugal here, because all bike helmets must pass standardized safety tests. Those that are the most expensive are usually designed for function and aesthetics. These versions weigh less, provide better venting and are more technologically advanced—yet a cheap one will protect your brain from injury just as well. Most manufacturers recommend you replace helmets every five years.

Clothing ($30 – $350 each)
For casual riding, you can wear whatever you have on. However, if you’re going long distances, traditional cycling gear is more comfortable and effective. You may feel a little self-conscious wearing the shorts at first, but they’ll prevent painful chafing. Moisture-wicking jerseys and gloves help regulate body temperature and keep blisters away. Lots of cyclists also buy cleats to improve their pedaling. Once again, these items aren’t required, but they make a difference.

Misc. equipment ($20 – $200 each)
Of course, you’ll also need glasses to keep the bugs out of your eyes, a water bottle to hydrate on the go, a compact bike pump, a multitool for minor repairs, a mirror, sunscreen, and a pack to store all the extras.

When you start riding, you’ll learn what’s essential and what isn’t. Make your initial investment wisely and you’ll get a lot of benefit in return.

credit cards

Smart Spending: Use Credit Cards Wisely

Credit cards may have an iffy reputation, but the truth is that they’re beneficial financial tools if you make wise choices. They can boost your credit score, bring some cash back, and generate rewards. Use them carelessly and you’ll pay for it—literally. Here are some best practices.

Maintain zero balances

Treat your credit cards like personal loans to yourself. Don’t spend more than you have. Carrying a balance means you’re being charged interest, which is money you don’t need to spend. Pay in full and on time every month to avoid this cost. If that’s not possible, at least submit the minimum or more so you don’t rack up fees. And mark the statement closing date on your calendar so you don’t forget to pay when the bill comes due.

Track your spending

Never treat your card like a bottomless pit, create a budget to track spending. Review monthly statements to figure out how often you’re charging, then determine where you can cut back. Also, look at the transaction history regularly and set up balance alerts that tell you when you’re nearing the established limit.

Don’t max out

If you’re consistently reaching your credit card limit, you’re either spending too much or your available cap is too low. Raising your limit is not a bad thing if you’re sensible about it. In fact, using less than 30% of your total available credit can improve your credit score, while repeatedly reaching a smaller limit can make a dent.

Avoid fraud

When you shop online, only enter your card information on reputable sites. Look for URLs that begin with https:// and have a green padlock icon next to the address bar, which means they’re properly encrypted. At gas stations, look for pumps nearest to the shop. Choose indoor ATMs when possible and always check for signs of tampering before inserting a card. If you suspect your card has been compromised, contact your financial institution immediately.

Get rewarded

Many cards offer rewards. Visa® Platinum from America First, for example, gives you 1.5% cash back on every purchase. Or you can get one point for every dollar you spend, redeemable for merchandise, hotels, flights, gift cards and more.

Using your credit cards wisely means you’ll earn more and pay less.