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For College Savings, 529 Plans Are Hard to Beat

Raising kids is hard enough, so why not make things easier for yourself when it comes to saving for college? Ideally, you want a savings vehicle that doesn’t impose arbitrary income limits on eligibility; lets you contribute a little or a lot, depending on what else happens to be going on financially in your life at the moment; lets you set up automatic, recurring contributions from your checking account so you can put your savings effort on autopilot; and offers the potential to stay ahead of college inflation, which has been averaging 3% to 4% per year.1 Oh, and some tax benefits would be really nice, too, so all your available dollars can go to college and not Uncle Sam. Can you find all of these things in one college savings option? Yes, you can: in a 529 plan.

Benefits

529 college savings plans offer a unique combination of features that are hard to beat when it comes to saving for college, so it’s no surprise why assets in these plans have grown steadily since their creation over 20 years ago.

Eligibility. People of all income levels can contribute to a 529 plan — there are no restrictions based on income (unlike Coverdell accounts, U.S. savings bonds, and Roth IRAs).

Ease of opening and managing account. It’s relatively easy to open a 529 account, set up automatic monthly contributions, and manage your account online. For example, you can increase or decrease the amount and frequency of your contributions (e.g., monthly, quarterly), change the beneficiary, change your investment options, and track your investment returns and overall progress online with the click of a mouse.

Contributions. 529 plans have high lifetime contribution limits, generally $350,000 and up. (529 plans are offered by individual states, and the exact limit depends on the state.) Also, 529 plans offer a unique gifting feature that allows lump-sum gifts up to five times the annual gift tax exclusion — in 2020, this amount is up to $75,000 for individual gifts and up to $150,000 for joint gifts — with the potential to avoid gift tax if certain requirements are met. This can be a very useful estate planning tool for grandparents who want to help pay for their grandchildren’s college education in a tax-efficient manner.

Tax benefits. The main benefit of 529 plans is the tax treatment of contributions. First, as you save money in a 529 college savings plan (hopefully every month!), any earnings are tax deferred, which means you don’t pay taxes on the earnings each year as you would with a regular investment account. Then, at college time, any funds used to pay the beneficiary’s qualified education expenses — including tuition, fees, room, board, books, and a computer — are completely tax-free at the federal level. This means every dollar is available for college. States generally follow this tax treatment, and many states also offer an income tax deduction for 529 plan contributions.

Drawbacks

But 529 plans have some potential drawbacks.

Tax implications for funds not used for qualified expenses. If you use 529 plans funds for any reason other than the beneficiary’s qualified education expenses, earnings are subject to income tax (at your rate) and a 10% federal penalty tax.

Restricted ability to change investment options on existing contributions. When you open a 529 college savings plan account, you’re limited to the investment options offered by the plan. Most plans offer a range of static and age-based portfolios (where the underlying investments automatically become more conservative as the beneficiary gets closer to college) with different levels of risk, fees, and management objectives. If you’re unhappy with the market performance of the option(s) you’ve chosen, you can generally change the investment options for your future contributions at any time. But under federal law, you can change the options for your existing contributions only twice per year. This rule may restrict your ability to respond to changing market conditions, so you’ll need to consider any investment changes carefully.

Getting started

529 college savings plans are offered by individual states (but managed by financial institutions selected by the state), and you can join any state’s plan. To open an account, select a plan and complete an application, where you will name an account owner (typically a parent or grandparent) and beneficiary (there can be only one); choose your investment options; and set up automatic contributions if you choose. You are then ready to go. It’s common to open an account with your own state’s 529 plan, but there may be reasons to consider another state’s plan; for example, the reputation of the financial institution managing the plan, the plan’s investment options, historical investment performance, fees, customer service, website usability, and so on. You can research state plans at the College Savings Plans Network.


1College Board, Trends in College Pricing, 2014-2018

Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CFS”) a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS:are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS for investment services. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions holding company. Atria is not a registered broker-dealer and/or Registered Investment Advisor and does not provide investment advice. Investment advice is only provided through Atria’s subsidiaries. CUSO Financial Services, LP is a subsidiary of Atria. Prepared by Broadridge Advisor Solutions Copyright 2019.

Ten Year-End Tax Tips for 2019

Here are 10 things to consider as you weigh potential tax moves between now and the end of the year.

  1. Set aside time to plan
    Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There’s a real opportunity for tax savings if you’ll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on December 31, so don’t procrastinate.
  2. Defer income to next year
    Consider opportunities to defer income to 2020, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rents, and payments for services. Doing so may enable you to postpone payment of tax on the income until next year.
  3. Accelerate deductions
    You might also look for opportunities to accelerate deductions into the current tax year. If you itemize deductions, making payments for deductible expenses such as medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2020) could make a difference on your 2019 return.
  4. Factor in the AMT
    If you’re subject to the alternative minimum tax (AMT), traditional year-end maneuvers such as deferring income and accelerating deductions can have a negative effect. Essentially a separate federal income tax system with its own rates and rules, the AMT effectively disallows a number of itemized deductions. For example, if you’re subject to the AMT in 2019, prepaying 2020 state and local taxes probably won’t help your 2019 tax situation, but could hurt your 2020 bottom line. Taking the time to determine whether you may be subject to the AMT before you make any year-end moves could help you avoid a costly mistake.
  5. Bump up withholding to cover a tax shortfall
    If it looks as though you’re going to owe federal income tax for the year, especially if you think you may be subject to an estimated tax penalty, consider asking your employer (on Form W-4) to increase your withholding for the remainder of the year to cover the shortfall. The biggest advantage in doing so is that withholding is considered as having been paid evenly throughout the year instead of when the dollars are actually taken from your paycheck. This strategy can also be used to make up for low or missing quarterly estimated tax payments. With all the recent tax changes, it may be especially important to review your withholding in 2019.
  6. Maximize retirement savings
    Deductible contributions to a traditional IRA and pre-tax contributions to an employer-sponsored retirement plan such as a 401(k) can reduce your 2019 taxable income. If you haven’t already contributed up to the maximum amount allowed, consider doing so by year-end.
  7. Take any required distributions
    Once you reach age 70½, you generally must start taking required minimum distributions (RMDs) from traditional IRAs and employer-sponsored retirement plans (an exception may apply if you’re still working for the employer sponsoring the plan). Take any distributions by the date required — the end of the year for most individuals. The penalty for failing to do so is substantial: 50% of any amount that you failed to distribute as required.
  8. Weigh year-end investment moves
    You shouldn’t let tax considerations drive your investment decisions. However, it’s worth considering the tax implications of any year-end investment moves that you make. For example, if you have realized net capital gains from selling securities at a profit, you might avoid being taxed on some or all of those gains by selling losing positions. Any losses over and above the amount of your gains can be used to offset up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your taxes in future years.
  9. Beware the net investment income tax
    Don’t forget to account for the 3.8% net investment income tax. This additional tax may apply to some or all of your net investment income if your modified adjusted gross income (AGI) exceeds $200,000 ($250,000 if married filing jointly, $125,000 if married filing separately, $200,000 if head of household).
  10. Get help if you need it
    There’s a lot to think about when it comes to tax planning. That’s why it often makes sense to talk to a tax professional who is able to evaluate your situation and help you determine if any year-end moves make sense for you.

Timing of itemized deductions and the increased standard deduction
Recent tax law changes substantially increased the standard deduction amounts and made significant changes to itemized deductions. It may now be especially useful to bunch itemized deductions in certain years; for example, when they would exceed the standard deduction.

IRA and retirement plan contributions
For 2019, you can contribute up to $19,000 to a 401(k) plan ($25,000 if you’re age 50 or older) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if you’re age 50 or older). The window to make 2019 contributions to an employer plan generally closes at the end of the year, while you typically have until the due date of your federal income tax return (not including extensions) to make 2019 IRA contributions.


Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CFS”) a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS:are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS for investment services. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions holding company. Atria is not a registered broker-dealer and/or Registered Investment Advisor and does not provide investment advice. Investment advice is only provided through Atria’s subsidiaries. CUSO Financial Services, LP is a subsidiary of Atria. Prepared by Broadridge Advisor Solutions Copyright 2019.

Last-Minute Halloween Costumes on a Budget

Halloween is almost here and that means your time to find a costume is limited. If you are like many Americans, a Halloween costume is something that seems to slip to the bottom of the list every year. Whether you are putting together a last-minute fix for your kid or a low-key costume for the neighborhood party, we have a few options for you.

Charlie Brown ghost costume

Stick with the classics.

Everyone knows Charlie Brown. While his dreary disposition may not seem like the ideal inspiration for a fun Halloween costume, it is important to remember that Charlie always keeps it simple. Stock up on the following materials and create your own Peanuts ghost costume.

  • 1 white bed sheet
  • 5 sheets of black cardboard paper
  • 1 pair of scissors
  • 1 container of glue

Punny is priceless.

Two men in demin outfitsEveryone knows someone who doesn’t like to dress up. If you are that person, you’re in luck, this one’s for you. This costume commandeers the style of our Canadian brothers and relies heavily on denim. Grab your favorite pair of jeans, a denim jacket or shirt, and one “HELLO MY NAME IS” name tag. Fill out the name tag with the name “Jean” and you’re good to go. As a bonus, this costume will definitely keep you warm even on a cool October night.

  • 1 pair of jeans
  • 1 denim top
  • 1 “HELLO MY NAME IS” name tag
  • 1 marker
  • Denim shoes or hat (optional)

Kick it old school.

Couple dressed as the 70’sStyle is always changing and with decades of life experience comes decades of outdated apparel lining the back of your closet. Dig into your closet and revitalize one of your favorite old-school looks. From the bell-bottoms and big collars of the 70’s to the big hair and bright colors of 80’s your Halloween costume is hiding in your closet, you just have to find it.

  • Willingness to relive past fashion mistakes

At the end of the day, Halloween is about having fun. Keep the stress and the cost low this year and handle the whole process in-house with these easy last-minute costume ideas.

Credit Card Regret: It’s More Common Than You Think

“Regrets, I’ve had a few. But then again, too few to mention.”

– Frank Sinatra

If you’re the kind of person who prefers to play it safe, there’s a good chance that, like Ol’ Blue Eyes, your list of regrets is mercifully short. But if you’re the adventurous type who’s more likely to yell “YOLO!” than take the time to consider pros and cons, you may have made more unfortunate decisions than you care to admit. Either way, it’s safe to say we all have regrets. And if we’re being honest, some of them are probably related to finances.

Going into credit card debt is one of the most common financial regrets. According to a recent NerdWallet survey, “About 6 in 7 Americans (86%) who have or had credit card debt say they regret it.” With numbers that high, it’s safe to assume most of us would make different credit decisions if given a chance. Have you ever signed up for a new credit card and immediately wished you hadn’t? If so, the following reasons will probably ring a bell. If not, pay close attention. You can learn a lot from others’ mistakes.

Common Reasons for Credit Card Regret

If you’ve ever opened a new credit card account and felt that distinctive twinge that tells you it was a bad decision, there’s a pretty good chance you filled out that credit application for the wrong reason. Bad reasons come in a variety of forms. Here are a few of the most common:

  • You wanted that sign-up swag. – T-shirts. Koozies. Collapsible drink coolers. It doesn’t matter what it is; we love free stuff. Credit card companies know this, which is why they set up promotional tables on college campuses and inside sports arenas. Sure, free t-shirts are cool, but are they really worth opening a credit card that will charge you 26% interest on your purchases?
  • You can’t resist that one-time discount. “Would you like to save 25% on today’s purchase by applying for store credit?” If you’ve ever shopped at a retail store, there’s a good chance you’ve heard this sales pitch at the check-out register. If you took advantage of the offer and suddenly wished you hadn’t, you’re not alone. According to a recent survey, almost 75% of Americans have at least one store credit card. Not surprisingly, nearly half of them regret it.
  • You’re in a financial pinch. When your checking account is running low, it can be incredibly tempting to sign up for a credit card just to get some temporary relief. However, credit cards don’t remedy poor financial habits; they tend to make them worse. If you’ve ever signed up for a new credit card “just to cover things until payday,” this regret may feel all too familiar.

 

OK, you signed up for a credit card and regretted it. Now what?

Before we go any further, it’s important to remember one thing: Just because you have a credit card doesn’t mean you have to use it. Even if your regrettable card carries a 26% interest rate, 26% of $0.00 is still $0.00. However, if you’re worried you won’t be able to resist using your card, you might be tempted to close your account immediately. This could certainly help you avoid charges you can’t afford to repay, but there may be a better approach.

Available credit and length of credit history are two of the main components of your credit score. Having an open, active account you don’t use could actually help you. If you were given a $1,000 credit line with your new card and you don’t make any purchases, you have $1,000 of available credit. If you close the account, you have no available credit. In this case, maintaining the credit line may be beneficial for your credit rating.

As for the length of credit history, that part’s fairly self-explanatory. The longer you maintain a satisfactory account, the more favorably it reflects in your credit score. With this in mind, you might be better off just removing the card from your wallet (and your smartphone’s digital wallet too) instead of closing the account altogether.

Good credit is one of the building blocks of your overall financial health. If you’re trying to find financing options that are right for you, contact your credit union and ask to speak with one of their trained representatives. They’ll be able to help you review your financial situation and recommend the best products and programs for your needs. With their guidance and expertise, you stand a much better chance of managing your credit—and finances in general—with no regrets!

5 Ways to Save for Summer in 5 Weeks

Summer vacation. During your elementary, middle, and high school years, those two magical words meant three months of freedom! No school, no waking up early, no early bedtimes. It was your annual reward for grinding through the previous nine months of academic pursuits. Yet somehow, summer always managed to fly by faster than it was supposed to!

Now that you’re an adult, your summertime respite has probably shortened considerably. Instead of three months, you might get a week away—maybe two, if you’re lucky. But just like when you were young, you always wish your time away could last just a little bit longer. It seems like no matter how old you get, summer vacation still holds a special kind of magic.

There’s still time to save for summer vacation!

But even with all the sun-kissed nostalgia that makes summer vacation a lifelong treat, there’s one thing that can ruin the fun faster than a thunderstorm at the swimming pool: vacation-related debt. Summertime memories are fun to recall, but it’s not nearly as fun to receive monthly reminders that you’re still paying the price for that fun—plus interest.

If you’re like most people, summer usually sneaks up on you. You start the year with good intentions, but somewhere along the way you forget to set aside money to cover your vacation plans. With summer only a few weeks away, you might be wondering whether it’s possible to save enough money to cover this year’s vacation. We’re happy to report that it’s absolutely possible! It will take some discipline, but you can do it. Here are five tips to help you get started.

Five Quick and Easy Ways to Save for Summer Vacation

  1. Create a savings plan.
    Sometimes, the easiest way to save money is to identify the ways you’re currently wasting it. By creating and following a sensible budget, you’ll be able to pinpoint the areas where you’re spending too much. For the next five weeks, do your best to eliminate frivolous expenses and only spend money on things that are essential. You’ll be surprised how quickly your savings add up.
  2. Find fun for free.
    Just because you’re saving for summer doesn’t mean that you can’t have fun in the meantime. But it does mean you might need to find some different activities. Movies, dining out, and entertainment can add up quickly. The average cost of dinner, drinks, and movie tickets for two comes in at around $100, so, imagine how fast you could pile up the savings if you decided to cook at home, stroll through a park, play some board games, or browse at a bookstore instead!
  3. Resist the convenience tax.
    We’re all busy. Sometimes it’s just easier to pay for convenience. Whether it’s drive-thru coffee on the way to work or take-out food for dinner, shelling out a few extra dollars can save precious minutes throughout the day. But if you’re trying to save money for summer, you might want to pause these practices. When you consider that you can save $3 per day just by making your morning cup of coffee at home, the money-saving benefits of this step are ridiculously clear. (And don’t worry, we’re only talking about five weeks. You’ll be back to that extra-hot-triple-skinny-no-foam-half-caff latte in no time.)
  4. Hang onto that tax refund.
    If you’re expecting a tax refund this year, well…you’ve probably filed your taxes already. That means either your refund has arrived already or it’s on the way. As tempting as it can be to celebrate your sudden cash infusion with a big purchase, it might make more sense to hang onto that money and use it to pay for your upcoming summer vacation. Yes, that’ll require a little discipline, but enjoying a fantastic, debt-free vacation is worth it!
  5. Cash in on your spare time.
    OK, so maybe this tip isn’t technically about saving—but it can be. If you figure out how to earn a little extra money, that gives you even more chances to save. (See? Told you it could be about savings.) Once you’ve maximized your creative saving methods, it never hurts to earn a little extra money. Side jobs are a great way to make quick cash, and thanks to apps like Nextdoor, Taskrabbit, and Gigwalk, finding work is easier than you think.

If you’re saving for this summer, it’s probably going to feel like an all-out sprint. But with a little advance planning, next year’s summer savings won’t have to be quite so stressful. Here at Scient Federal Credit Union, we offer convenient vacation savings accounts that let you automatically deposit a little money from your paychecks throughout the year and withdraw the funds just in time for your stress-free summer vacation. Call us or visit one of our branches in person to learn more about these specialized savings accounts.

Let the Taxpayer Beware: Learn to Spot Six Common Tax Scams

Now that your W2s and miscellaneous tax documents have arrived, tax season is officially in full swing. While it’s easy to get lost in optimistic daydreams about your tax refund and all you’re planning to do with it, it’s important to remember that scam artists are probably dreaming about what they could do with your refund as well.

After reaching an all-time high of more than 700,000 cases in 2015, tax refund fraud has been declining thanks to significant enforcement efforts by federal, state, and private agencies. While these statistics are encouraging, they also highlight the ongoing need for caution and vigilance. So, before you file your 2018 taxes or pay someone to file for you, we want to remind you about six of the most common tax-related scams happening today.

  • Phishing Emails

This one is relatively easy to spot. Why’s that, you ask? Because the IRS doesn’t initiate communication with taxpayers via email. So, if you see an email from the IRS pop up in your inbox—even one that looks remarkably official, don’t bother opening it. For good measure, go ahead and mark it as spam before deleting it. Emails of this type have only one goal: to trick you into clicking a fraudulent hyperlink or responding with sensitive personal information.

  • Phishing 2.0

In 2018, the IRS reported a new twist on traditional phishing scams. In the new approach, fraudsters hacked the systems of legitimate tax professionals, stole tax returns containing personal details, and then deposited funds directly into taxpayer bank accounts. After those deposits hit the bank, the criminals posed as the IRS or collection agencies and contacted account holders demanding a resolution to the error. The goal of these scams is not to simply regain the money deposited “in error,” but to get the victim to share account details that can be used to access the account at another time. If you find yourself with an unexpected deposit in your bank account, the IRS offers helpful instructions here.

  • Phone scams

Though they come via phone call, these scams are essentially the same as phishing emails. The difference lies in the fact that con artists can spoof IRS phone numbers in an attempt to convince unsuspecting people to answer the call. Once the phone call is underway, the person on the other end claims to be an IRS agent and tries to get the individual to confirm private account details in an attempt to “resolve the situation.” If they don’t get the results they’re hoping for, the fraudsters may even follow-up with phone calls where they impersonate law enforcement officials and threaten legal action. To avoid accidentally divulging personal details, it’s best to ignore these calls completely. Just as the IRS doesn’t initially contact taxpayers by email, they also don’t initiate official communication by phone either.

  • Refund Theft

This type of scam takes place at the intersection of identity theft and financial fraud. Using a variety of tactics, criminals obtain taxpayer social security numbers and file fraudulent tax returns in their name—often claiming substantial refunds. Since this happens without the knowledge of the victim, it only comes to light when their legitimate tax return is rejected due to a previous return already filed under the same social security number. While the IRS is committed to resolving these issues when they happen, the process can be long and tedious. To safeguard yourself against tax refund theft, IRS officials recommend obtaining an Identity Protection PIN, also known as an IP PIN. Instructions for securing a PIN can be found on the official IRS website.

  • Shady Tax Prep Services

Since an estimated 79 million Americans use paid tax preparation services, there are considerable opportunities for dishonest preparers to abuse the system. One of the most common scams involves a preparer illegally inflating an individual’s refund and collecting a percentage of the taxpayer’s refund instead of a flat fee. Many times, the problem isn’t identified until after the refund has been issued and the preparer’s fee has been collected. In these scams, the preparer is long gone by the time that the problem is identified, and the taxpayer is responsible for handling the audit on their own. While the practice of a tax preparer charging a percentage of refund isn’t technically illegal, you’re better off avoiding this type of arrangement and opting for a flat-fee service instead.

  • Public Wi-Fi Scammers

It seems like this one should go without saying, but we all use a reminder from time to time. The public Wi-Fi at coffee shops, libraries, and bookstores can be great for hopping online to browse social media, but it’s terrible for filing your taxes. Not only can these unsecured networks be accessed by almost anyone, but dishonest scammers can also set up hot spots that look like the establishment’s Wi-Fi and intercept logins, passwords, and personal information. So, if you’re filing taxes electronically this year (and considering the fact that approximately 90% of taxpayers filed electronically in 2018, you probably are), do yourself a favor: file at home from your personal computer and your secure Internet connection.

As with most financial scams, these can be simple to sidestep as long as you know the signs to look for. If you observe questionable practices or have additional tax-related concerns, you can find helpful instructions here on the official IRS website.

If you are receiving a federal or state tax refund this year and want to make the most of your money, please contact us here at Scient Federal Credit Union. Our financial specialists can help you assess your financial situation and show you all the beneficial programs and products available to you as a credit union member. Call, email, or stop by a branch today!

 

Mind the GAP: Understanding the Value of GAP Coverage

Picture the following scenario: After months of research and planning, you take the plunge and buy a new car. Once the financing is secured and your auto insurance is in place, you’re ready to hit the road. You’re so excited about your sparkling ride that you’re not even worried about the fact that most new cars depreciate by as much as 10% the moment you drive them off the lot—and up to 20% in the first year. That’s a financial fact, but you’re too busy enjoying that new car scent to get bogged down with details like that.

Now, imagine that after just a few weeks, you’re involved in an accident that badly damages, or worse yet, totals your car. (Don’t worry—unlike your car, you emerge from this imaginary situation without a scratch.) Fortunately, you did the responsible thing and secured good auto insurance. Once all the proper claims have been filed, you find out that insurance will only cover your car’s market value—which, due to the depreciation, is several thousand dollars less than the amount you owe on your auto loan. If only there were a type of loan protection that would help you make up that difference. Fortunately, there is. It’s called Guaranteed Asset Protection—GAP, for short.

What is GAP?

GAP coverage is an optional protection plan offered with auto loans or leases, and depending on the plan coverage limits, it effectively waives most of, if not all, the remaining balance on your loan. While your auto insurance plan’s comprehensive and collision policies cover your vehicle’s value in the event that it is totaled or stolen, GAP coverage is designed to ensure you don’t get stuck making payments on a car you no longer own.

How do I know if I need GAP coverage?

While the product makes good financial sense for some, not everybody needs to get a GAP policy. According to the financial experts at NerdWallet, there are a few basic guidelines that will help you decide whether GAP coverage is right for you. You should strongly consider adding a GAP policy to your auto loan if you:

  • Made a small down payment on a new car, or none at all
  • Agreed to a loan term longer than 48 months
  • Drive a lot, which reduces a car’s value more quickly
  • Lease your car
  • Bought a car that depreciates faster than average

 

Where do you get GAP coverage?

While a variety of companies provide GAP coverage for consumers, it often makes the most sense to obtain the protection plan from the same financial institution that financed your vehicle purchase in the first place. In many cases, a credit union makes the most sense. If you already financed your vehicle through a dealership, keep in mind that many GAP programs are refundable up to a certain number of days. This means that should you decide to refinance your auto loan through a credit union, they may be able to help you get a refund on your original GAP plan and secure a new plan at a lower cost.

Not only are credit union GAP plans traditionally less expensive than those available through finance companies, they can also be added to your loan at any time (vehicle age and mileage limits apply). Securing coverage through the financial institution that services your loan reduces the need to coordinate communication between multiple parties. It also increases the likelihood that you can put the frustrating accident experience behind you sooner rather than later—and that peace of mind is priceless.

If you have questions about Guaranteed Asset Protection or want to know how to add it to your existing auto loan, contact a financial representative at Scient Federal Credit Union. They can help you review your current financing situation and determine whether GAP coverage is right for you.

Throw a Super Bowl Party That Doesn’t Break the Bank!

Now that Christmas and New Years are behind us, it’s time to plan for the next big holiday. That’s right—Super Bowl Sunday is just around the corner! As the NFL’s top two teams prepare to battle at Mercedes-Benz Stadium in Atlanta, the festivities leading up to the game will clearly show that the NFL has spared no expense in trying to make Super Bowl LIII the greatest championship game in history. When it comes to planning your Super Bowl party, we suggest taking a different—and slightly more sensible—financial approach.

8 ways to throw a budget-friendly Super Bowl party

If you’re looking for some ways to host a Super Bowl party that’s as frugal as it is fun-filled, here are a few of our favorite suggestions.

  1. Start with a financial game plan.  Sounds better than “make a budget,” doesn’t it? Since Super Bowl parties are all about football, it makes sense to prepare like a coach. Setting a spending limit before you shop will help you stiff-arm the creative displays and impulse items at the grocery store. To quote Super Bowl-winning QB, Russel Wilson, “The separation is in the preparation.”
  2. Team up with a co-host. Since football is a team sport, why not recruit a co-host to help you plan your party? Not only can the two of you share the cost of food and decorations, you’ll be able to split the stress of planning as well. Sounds like a win-win, doesn’t it?
  3. Digital invites over classic invitations. Sure, Pinterest is packed with clever ideas for intricate Super Bowl invitations, but you know which detail those posts forget to mention? Postage costs. Rather than sending out old-school invites, create a Facebook event and share it with your friends or jump over to Evite.com, where you can design and send online invitations for free!
  4. Downplay the decorations. Let’s face it, even though extravagant decorations might make impressive Instagram posts, people aren’t coming to your Super Bowl party to marvel at your elaborate sandwich stadium and coordinated team napkin displays. Don’t overdo it with the decorations. Dollar store party supplies are perfect.
  5. Generic snacks: The Real MVP. Your guests will probably be snacking from the pre-game festivities to the post-game trophy presentation. What they won’t be doing is critiquing the subtle flavor undertones of your chips and pretzels. So rather than springing for brand name snack foods, grab the store-brand counterparts, serve them in a giant bowl, and kick back knowing you have money left in your food budget.
  6. Encourage crowd participation. Food and drinks are usually the most expensive part of a Super Bowl party—especially if the beverages are of the adult variety. A pot luck meal plan and BYOB policy are great ways to ensure refreshment costs are divided evenly and everyone is guaranteed to have at least one dish they’ll enjoy.
  7. Save big with Super Bowl promos. If you decide to provide all the food for your party, you might as well look for the best deals. Keep an eye on your local grocery store flyers, as they routinely run special sales on traditional party food.
  8. Make post-game meal plans. You plan, prepare, and present a spread of tasty food for your guests. Then, when the game’s over, you have to figure out what to do with the leftovers. Fortunately, game day favorites like burgers, chili, and sandwiches can make delicious meals for a few days after the big game. This makes meal planning easy and lunch costs less expensive.

With a little creativity and some careful planning, it’s entirely possible to throw a great party without throwing away money in the process. Whether you use all these ideas or just a few that work for you, following these tips will help you host a winning party without spending more than you should.

When It Comes to Financial Solutions, There’s No Place Like Home.

Homeownership: more than just the cornerstone of the American Dream, it can be a powerful tool for improving your financial future. While renting can be a smart financial choice for someone starting out or starting over, owning your own home offers a multitude of benefits—not the least of which is the ability to build equity.

For practical purposes, equity can be defined as the difference between your home’s value and the balance owed on your mortgage. Since most mortgage installments are comprised of interest and principal amounts, each payment chips away at mortgage’s remaining balance, resulting in a larger difference between the property’s value and what you still owe. That difference is your equity. And while equity is reassuring in theory, it can be even better when you make that equity work for you.

Loan vs. Line: Find the right home equity option for you.

Because your house’s value offers relatively stable collateral, equity lenders assume lower risk than creditors offering unsecured loans or credit lines. Less risk for the lender means better rates for you. Traditionally, home equity loans and lines of credit feature more attractive interest rates than credit cards, making them ideal for larger purchases. But before you decide to put your equity to work for you, it’s important to know the difference between a Home Equity Loan and a Home Equity Line of Credit. Understanding the benefits of each can help you determine which is best for you.

Home Equity Loan
By allowing you to borrow a lump sum at once, these loans let you lock in an interest rate and payment terms for the length of the loan. While interest is charged on the total amount from the beginning, the security of a fixed rate makes home equity loans a reliable choice for larger projects that involve one-time expenses. Popular uses for home equity loans include:

  • Home renovation projects
  • Consolidation of high-interest debt
  • Establishing an emergency fund

Home Equity Line of Credit (HELOC)

Essentially a credit account that allows you to borrow against the equity in your home, a HELOC gives you a cost-effective way to access the funds you need only when you need them. While you can borrow smaller amounts at a time, a HELOC usually features an adjustable interest rate tied to the standard market rate. Depending on the current financial climate, this could lead to fluctuating interest rates and payment amounts over time. However, since you can borrow smaller amounts and pay interest on the amount borrowed as opposed to the full credit limit, this option is ideal for gaining access to funds while maximizing your cash flow. Common uses for a Home Equity Line of Credit include:

  • Smaller home improvements
  • Funding a small business venture
  • Higher education expenses

As with any major financial decision, it pays to discuss all the details with a financial expert. So, before you decide which home equity option is right for you, schedule an appointment with a Scient representative mortgage specialist to determine the best solution for your financial needs.

Plan a Blockbuster Valentine Date on a Budget

From picking the right card to choosing the perfect flowers to selecting the best chocolates, planning for Valentine’s Day can be daunting. When you get it right, the smile on your Valentine’s face is priceless. If you miss the mark, well, so does Cupid’s arrow. The risk/reward scenario is the stuff romantic comedies are made of. But there’s a big difference between Hollywood hijinks and real life. The difference? Budgets.

 

Movie Magic vs. Real Life

While cinematic screenplays portray extravagant splurges that make audiences swoon, most of us don’t have the unlimited finances required to take a hot air balloon ride over Central Park while a string symphony serenades us from below. So, is it possible to plan a successful Valentine’s date without breaking the bank? Absolutely.

Creating a budget-friendly Valentine’s Day that’s memorable for all the right reasons requires purposeful thought and advanced planning—just like your budget itself. This is not the time to keep up with the proverbial Joneses; don’t waste energy comparing your ideas with anyone else’s. When it comes to making February 14th something special, individuality wins. If you’re looking for a few tips to spark your frugal creativity, we’ve got you covered.

 

4 Ways to Enjoy Valentine’s Day on a Budget

  • Cook at home. Go out for dessert.
    Whether you decide to cook dinner for your date or prepare a meal together, staying in lets you plan the menu around your budget and enjoy the experience of crafting your own culinary adventure. After leisurely dining at home, you can venture out for a delicious dessert knowing you’ve missed the overcrowded restaurants and overpriced entrees.
  • Coupons can be your friend.
    Can we get real for a minute? Free food tastes better. It just does. And if you’re looking to counter the unfair stigma attached to coupons, consider the following scenario: If you have $50 to spend on dinner, that means you can get two meals that cost $25 each. If you have $50 and a Buy-One-Get-One coupon from sites like restaurant.com or Living Social, you can each enjoy a $50 meal. Doesn’t sound like a difficult decision, does it?
  • Pick a plant instead of flowers.
    With many florists inflating prices by as much as 100% for Valentine’s Day, buying traditional flower arrangements can an expensive proposition. Instead of giving your date a bundle of flowers that will be gone in a couple weeks, plan a date that includes selecting a plant that will provide beauty for years to come. The shared experience provides an excellent chance to learn each other’s tastes and preferences, which may prove helpful for future Valentine’s Days.
  • Visit museums and art galleries.
    If you live in an area that has a museum or art gallery, many of these venues offer free or low-cost admission. In addition to giving your date a touch of culture, the subjective nature of art and exhibits offers endless opportunities for conversation, lessening the chances of awkward silence throughout the evening.

Sticking to a budget can be tough, especially when you’re trying to impress your date. But if our favorite rom-coms have taught us anything, it’s the fact that over-the-top spending may seem fun, but it rarely leads to happily ever after. Whether you use the tips above or come up with creative ideas of your own, being smart with your Valentine’s Day spending is a great way to craft a feel-good story that will leave you cheering when the credits roll. And who knows, if all goes well, there might even be a sequel!