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Workshop schedule to be published soon!

All Yolo FCU workshops are free of charge and open to the public.
All workshops are presented in English unless otherwise stated.

Seeing your child meet their educational goals and earn a college degree is every parent’s dream. However, with the continuously rising cost of tuition this dream can easily become a financial challenge. According to the Bureau of Labor Statistics, the tuition component of the Consumer Price Index (CPI) increased by an average of 8% per year from 1979 to 2001. In other words, children born today will face college costs nearly three to four times the current prices by the time they are ready to enroll. So, whether college is less than a year away for your high school senior, nearly two decades away for your newborn child, or anywhere in between, it’s never too early to start saving for future college expenses. But, with nearly a dozen different savings options, which one is right for you? Use this quick reference guide as a starting point in your quest for college savings plans and explore how Yolo FCU can help you reach your college savings goals.

Coverdell Education Savings Account
A Coverdell Education Savings Account is used for the purpose of paying qualified education expenses for a designated beneficiary to the account. Qualified education expenses are those required for the enrollment or attendance of the beneficiary at an eligible education institution and include tuition and fees, the cost of books, supplies and equipment, and room and board. If your modified adjusted gross income is less than $110,000 ($220,000 if filing a joint return) you may be able to establish a Coverdell Education Savings account. With a Coverdell Education Savings Account, you are able to make an annual contribution of up to $2,000 per year* and have the ability to withdraw your money tax-free if the dollars are used for qualified education expenses. Funds from this account can be transferred within your family from one child to another, which allows some flexibility if your child’s plan changes.
*Please check with your tax advisor for your individual contribution limits.

Share Certificate Account (CD)
Share certificates allow you to invest your money and save for college expenses all while increasing your earnings. With terms ranging from three to 60 months, the ability to open a CD account with as little as $500, and a guaranteed fixed rate of return for the term of the CD, it’s easy to watch your college savings grow. Dividends are compounded on the daily balance and are paid monthly on CD accounts, if kept on deposit for the entire term. Low minimum balances, flexible terms, and competitive rates add up to an excellent college savings investment.

Money Market Account
If you are looking for a low-risk account to maximize your college savings funds, the Yolo FCU Money Market Account may be just what you are looking for. This account earns higher monthly dividends that are compounded daily and paid monthly and does not require specific term limits, giving you flexible access to your money. So, if an unexpected educational expense arises, you can rest assured that with our Money Market Account that you will have access to your funds.

Traditional and Roth Individual Retirement Accounts (IRA)
Did you know that your retirement funds may actually help you pay for your child’s college expenses? If you have a Traditional or Roth IRA, they can. Normally, if you withdrew your funds from either of these accounts before the age of 59 1/2, you would be subject to a 10% distribution penalty in addition to any regular income tax due. However, if the distribution is used to pay for qualified education expenses, the portion used is exempt from the 10% distribution penalty*. Yolo FCU is proud to offer both Traditional and Roth IRA accounts to help you save not only for retirement, but for higher education expenses as well.
*The money may be subject to income tax. Please check with your tax advisor.

For more information on any of Yolo FCU’s college savings and investing options, visit your local branch office or call (530) 668-2700.

Other Options
Yolo FCU knows that college are expenses are constantly on the rise, so when savings and investing isn’t enough we are proud to offer a variety of other options to help ease the expenses of higher education.

Second Mortgage Loan
Yolo FCU offers many financing opportunities if you are looking to borrow against your home to help pay for higher education expenses. Our second mortgage loans allow you to borrow up to 100% of your home’s appraised value, less the balance owed on your first mortgage. With competitive rates, flexible terms, and low fees, a Yolo FCU second mortgage loan can help you afford college expenses.

Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit can be used for almost any purpose, including paying for educational expenses. The HELOC provided by Yolo FCU is a convenient way to have cash when you need it the most. This account offers a low variable rate and, as an added convenience, a checking account so you can have instant access to your funds.

For more information on any of Yolo FCU’s college expense lending options, contact our lending department at (530) 668-2700.

College Savings Tips and Advice

1. Define your savings goal.
Before you begin to invest in your child’s education, have a specific goal in mind. Decide how much you will need to have saved by the time your child is ready to attend college. It will help if you choose a specific dollar amount or a fixed percentage of your income.

2. Remember what you’re investing in - the future of your children.
Always keep a positive outlook on where and why you are investing your money. According to the US Census Bureau December 2000 report, the average income for an individual with a Bachelor’s Degree is $45,678, nearly twice the income of an individual with a high school diploma ($24,572). That’s nearly a difference of $1 million in lifetime earnings. Set your child up for success now!

3. The best time to start saving is at birth.
But if you haven’t started saving yet, you can start now . The sooner you start saving, the more interest you will earn by the time your child is ready for college. For example, if you start saving $10 a week at birth with a 4% interest rate, by the time the child turns 17 and is ready for college, nearly $13,000 will have been accumulated. However, if you wait to begin saving until a year before your child begins college, you would have to save nearly $250 per week to reach the same goal.

4. Follow the one-third rule.
If you are unable to save the full amount of a 4-year college education, consider following the one-third rule. This rule states that you should expect to save about one-third of the expected college costs. The remaining two-thirds can be broken up in the following manner: one-third from current income and financial aid during the college years and one-third from borrowing through student and parent loans.

5. Don’t be overwhelmed by the numbers.
Start by saving whatever you can, even if it is only $25 or $50 a month. Every little bit helps. The hardest part about saving is getting started and you can do that now. You can always increase your savings amount in the future.

6. Do your research.
Check out the various websites and resources that provide college savings calculators and test out your options. Talk with your Yolo FCU Member Services Representative and discuss all your college savings options before deciding on the one(s) that fit you best.

7. Teach your children.
Use your college savings choices as an opportunity to teach your children about smart saving decisions. Also, involve your child in the investment decisions since it involves their future. Acting as a positive role model for your children will make it easier for you to save as well.

8. Don’t put all your eggs in one basket.
Take advantage of all the options available to you and diversify your investments. Think about investing in a variety of different account types to maximize your total earning potential.

Employee pricing! Zero percent! Rebates! These are just some the incentives dealers are offering this year.

Many consumers believe that zero percent is always the better option vs. a rebate, however, that is not always the case. It depends on the purchase price of the vehicle as well as the rate you can get on your purchase.

For example, if you purchase a vehicle at $15,000 and you have the option of zero-percent, your payments will equal $250 and over a term of 60 months, you will pay a total $15,000. However, if you take the $3,000 rebate and finance the balance of $12,000 at 2.99% over the same term, the payback will be approximately $12,934.42. That’s a significant savings.

Essentially, the larger the rebate amount, the lower the sales price, the more you can save. Credit history will also be a determining factor. Not everyone qualifies for zero percent financing. Consumers with very good credit may be offered both options. Determining which incentive will save you the most is well worth a little research.

To determine the actual cost savings between a rebate and zero percent, visit www.bankrate.com/calculators/auto/car-rebates-calculator.aspx*