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The Federal Housing Finance Agency will allow homeowners to receive an additional three months of forbearance as it extends the COVID-19 relief options available.
The agency announced Thursday that homeowners with loans backed by Fannie Mae and Freddie Mac can receive up to 18 months of payment relief. To be eligible for the extended forbearance, homeowners must already be signed up for a forbearance plan by the end of February.
The FHFA also amended its separate payment deferral option for homeowners so they can now miss up to 18 months of payments. Those missed payments can be repaid when the mortgage reaches maturity, when the home is sold or when the mortgage is refinanced.
Originally, Fannie Mae and Freddie Mac instructed loan servicers that mortgage borrowers could request up to 12 months of forbearance on their mortgages as a result of the coronavirus pandemic. But earlier this month, the FHFA extended the forbearance period by an additional three months, for up to 15 months’ forbearance.
The new changes announced Thursday were made to bring the agency’s policies in line with the policies set forth by the Biden administration for loans backed by the federal government, including Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) mortgages.
Beyond extending forbearance, the FHFA also announced that it was extending its moratoriums on single-family foreclosures and real estate owned (REO) evictions until June 30. The moratoriums were previously set to expire at the end of March.
The numbers: The index of pending home sales fell 2.8% in January after four consecutive months of declines, the National Association of Realtors said Thursday. The index captures real-estate transactions where a contract was signed but the sale has not yet closed, making it an indicator of where existing-home sales will go in the months ahead.
The median forecast of economists polled by MarketWatch had called for a 0.5% decline in pending sales on a monthly basis.
“Pending home sales fell in January because there are simply not enough homes to match the demand on the market,” Lawrence Yun, the chief economist for the National Association of Realtors, said in the report. “That said, there has been an increase in permits and requests to build new homes.”
Compared to 2019, pending sales were up 13%, indicating that the housing market remains strong despite the weakness that has crept in during the winter months.
What happened: Pending sales didn’t fall across all regions, as contract signings increased slightly in the South. The largest decline in pending sales occurred in the West, where the index dropped 7.8%, closely followed by the Northeast (-7.4%).
The big picture: A record-low inventory of homes is leaving buyers with few options to choose from, and builders have even begun selling a vast array of properties that haven’t been built yet to meet this demand.
But there’s evidence that demand could begin to suffer as affordability concerns grow. “The timely weekly mortgage purchase applications index is signaling a slowing in activity,” said Rubeela Farooqi, the chief U.S. economist at High Frequency Economics, while citing mortgage application data from the Mortgage Bankers Association. The latest reading signified the lowest level for mortgage applications since mid-May of last year, Farooqi noted.
Some of the decline in the volume of mortgage applications was a reflection of the disruption in Texas caused by recent winter storms. But generally speaking, rising mortgage rates are reducing interest from home buyers to an extent. With prices also quickly rising, buying a home is becoming less and less affordable, which could hinder home sales in the months to come.
What they’re saying: “Home buyers are staying surprisingly active during the colder months. However, buyer demand is getting squeezed by a scarcity of ‘For Sale’ signs and rising mortgage rates,” said Realtor.com senior economist George Ratiu.
Mortgage rates reached their highest level since November last week, cooling off home purchase and refinance applications ahead of the all-important spring selling season.
The average rate on the 30-year fixed-rate mortgage rose to 2.81% in the week ended Feb. 18, the highest since the second week of November, according to mortgage-finance giant Freddie Mac. A measure of mortgage applications fell 11.4% over the same week, according to the Mortgage Bankers Association.
Improving Covid-19 vaccination rates in the U.S. and expectations of a large federal stimulus package in the coming weeks drove benchmark 10-year Treasury note yields, which are closely tied to mortgage rates, to their largest weekly gains in more than a month last week. Demand in safe-haven assets such as government bonds weakens when investors feel optimistic about the economy.
“Higher rates are a signal of expectations of faster growth and a stronger job market ahead,” said Mike Fratantoni, the MBA’s chief economist. “This last week, rates have turned faster than many people had anticipated.”
Rising rates sometimes prompt borrowers to put their mortgage plans on hold for a few weeks, Mr. Fratantoni said. Measures of purchase and refinance activity fell 11.6% and 11.3%, respectively, in the week ended Feb. 19, according to MBA data.
If mortgage rates begin to increase at a faster pace, some borrowers could be discouraged from attempting to buy a home during the crucial home-selling months of March through June. In a typical year, more than 40% of annual home sales are made during this period, according to the National Association of Realtors.
Still, rates remain historically low, and more people are applying for purchase mortgages and refinances than at the same time in 2020. Last year was a banner one for the housing market, thanks in large part to mortgage rates, which fell below 3% for the first time last summer.
Mortgage lenders originated a record $3.6 trillion worth of mortgages last year, according to the Mortgage Bankers Association, an increase of more than 50% from 2019. Refinances accounted for about 59% of that volume. With the 30-year rate near 2.81%, between 16.7 million and 18.1 million Americans could lower their monthly mortgage payments through a refinance, according to mortgage-data firm Black Knight Inc.
Lissette Gomez will close this week on a new loan that lowers the mortgage rate on her Cleveland-area condo to 2.75% from 4.125%. Ms. Gomez, a special-education teacher, said she decided to refinance after she watched her boyfriend get a much lower rate on his mortgage.
“Everybody was getting the word, especially in the second half of 2020, that the rates were super low,” Ms. Gomez said. “I wanted to refinance when people were jumping on it, and the numbers were as low as they’ve ever been.”
It’s many people’s least favorite time of year: tax season.
Between frantically searching for your tax forms, organizing your receipts, figuring out how much it’ll cost you to file and trying to remember the most recent updates to the tax code, tax season can be stressful … to say the least.
Thankfully, some smart software companies have made the process way easier — and, in some cases, even free.
Even the tax pros themselves are getting on board.
“I actually informally started my own tax practice using TurboTax to prepare people’s returns from my kitchen table,” said Ben Rugg, CPA.
So you can rest assured your taxes are in good hands with online tax filing services — and save yourself a boatload of money and stress.
Best Tax Software 2021: At a Glance
The three best online tax programs with paid plans are undoubtedly TurboTax, H&R Block and TaxAct. Here’s a quick look at how they stack up.
Note: The prices below are accurate as of Jan. 27, 2021 but may fluctuate throughout tax season.
Each of these three tax prep services offers a similar suite of options that are split among their free and paid tiers. The details and prices vary among them, so take a look at the features that are important to you to see which product is the right fit.
Tax Software Features, Compared
Each tax preparation service includes a free option for basic filers. What each covers varies, so which is best for you depends on how complex your tax situation is.
H&R Block: H&R Block’s most basic online version covers earners whose wages come entirely from W-2 income, and also includes deductions for student loan interest and child tax credits.
TurboTax: The TurboTax Free Edition covers W-2 income, the Earned Income Tax Credit (EIC) and child tax credits.
TaxAct: This tier covers W-2 income; and tax breaks for dependent deductions, Earned Income Tax Credit (EITC) and other child tax credits, student loans and education expenses for current students, and retirement income.
Support for Complicated Returns
Each service offers almost identical paid tiers for more complicated tax returns: a “Deluxe” and a “Premier” or “Premium” tier.
These tiers help you prepare your taxes when you have additional deductions and credits to claim, or you have income from anywhere other than an employer.
H&R Block: Deluxe covers additional deductions related to things like home ownership, charitable donations and Health Savings Accounts (HSAs). You’ll need Premium to cover income from freelancing, contract work, investments or real estate.
TurboTax: Deluxe covers mortgage and property tax deductions, charitable donations, student loan interest, education expenses and 1099-MISC income from freelancing or contract work. Premier covers investment and rental property income, and refinancing deductions.
TaxAct: TaxAct Deluxe is more comprehensive than the others; it covers itemized deductions, mortgage interest, real estate taxes, student loan interest, Health Savings Accounts (HSAs) and adoption credits. Premier adds options for investors, people earning royalties or K-1 income, rental property owners and foreign bank account holders.
Each service includes support for self-employment income in less expensive tiers.
But if the majority of your income comes from self-employment of any kind — as a freelancer, independent contractor or small business owner — you’ll benefit from tax prep support specifically tailored for self-employment and small business owners.
These versions are the most expensive of the basic online filing options, but they cost significantly less than paying an individual accountant to prepare your taxes. They’re a budget-friendly way to tackle your complicated paperwork and ensure you don’t miss out on vital tax breaks.
All three services provide the same basic support for self-employed filers, but here are some highlights that could help you choose:
H&R Block: An interview-style process walks you through industry-specific expenses and deductions you might miss on your own, and you’ll have access to tools covering asset depreciation.
TurboTax: Get a host of perks designed specifically for freelancers, including deductions for your line of work, ability to import your 1099-MISC with a photo, free access to Quickbooks Self Employed and access to a year-round tax estimator after filing.
TaxAct: Gain the ability to calculate personalized business deductions, calculate depreciation and access year-round planning resources.
Live Tax Assistance
All three companies offer tax help from real, live tax professionals — and this option is where they differ the most. Pay attention to these options if live tax support is important to you!
H&R Block: This is the only of the three that runs brick-and-mortar locations, where you can meet with a tax pro face-to-face. It also lets you upload documents online or drop off paperwork to let them prepare everything for you. Like the others, H&R Block also offers online assistance; you can pay an additional fee to get on-demand access from a tax professional while you prepare your returns through the DIY software.
TurboTax: In place of the DIY products, you can purchase TurboTax Live in similar tiers for on-demand answers to your questions and a line-by-line review of your returns by a CPA or EA.
TaxAct: TaxAct builds live assistance into its tiers. You can’t get it with the free version. Deluxe includes live phone support. Premier and Self-Employed include live phone support plus screen sharing.
H&R Block or TurboTax should be your go-to services if you’re concerned about a complicated tax audit. TaxAct doesn’t provide audit support for most customers.
H&R Block: The company’s Peace of Mind Extended Service Plan lets you take in any notification from the IRS to figure out what it means and get access to representation by an H&R Block enrolled agent if you need it.
TurboTax: Through its Audit Support Center, TurboTax customers get access to live, one-on-one guidance online in case of an audit.
TaxAct: TaxAct does NOT provide audit support itself. It gives TaxAct Professional users (tax pros filing taxes for clients) access to third-party service Protection Plus Audit Defense.
H&R Block, TurboTax and TaxAct all have mobile apps available for both iOS and Android. All three offer comparable functionality, though TaxAct’s apps are rated a little lower in their respective app stores than the other two.
Need money now? H&R Block and TurboTax both offer a tax refund advance, while TaxAct does not. An advance from H&R Block will cost you a lot more than one from TurboTax.
H&R Block: The Emerald Advance line of advance credit to put up to $1,000 of your tax refund in your pocket before you file through a Mastercard debit card with a $45 annual fee and 36% interest rate.
TurboTax: The service offers an advance up to $3,000 (typically around 50%) of your expected federal tax refund with 0% interest and $0 loan fees. Eligible customers get access to funds within a few hours via Visa debit card.
TaxAct: TaxAct doesn’t offer a tax refund advance.
Pay with Your Refund
All three services let you use your tax refund to pay for product and filing fees, so you never see an out-of-pocket cost for your tax preparation. The competition is in the fees.
H&R Block: $39.
TaxAct: $17.99 if you’re receiving your refund by direct deposit or $9.99 if you’re receiving it on a PayPower reloadable debit card.
The companies offer different levels of peace of mind for using their products.
H&R Block: If there’s an error in your tax return, H&R Block will reimburse you for up to $6,000 in additional taxes owed due to its mistake.
TurboTax: If you tally up a larger refund (or similar tax liability) with another tax preparation service, TurboTax will refund your fee (or pay you $30 if you used the Free edition).
TaxAct: If there’s an error on your tax return, TaxAct will reimburse you for up to $100,000 in additional taxes owed dues to its mistake, plus refund your TaxAct fees. If you’re not totally satisfied with TaxAct for any reason, you can discontinue using it before completing your return and paying the fee.
To prepare and file your taxes online with each service, you’ll pay a product fee, filing fees for state returns, and — depending on the company — fees for live tax professional assistance.
Here’s how they compare.
Alternatively, you can download tax preparation software from each company, so you can save your tax information on your own computer. Software products are tiered similar to online tiers and include a one-time download fee and filing fees.
H&R Block vs. TurboTax vs. TaxAct: Which Is Best for You?
Any of these popular, tested tax preparation services are a good fit for you if you want to DIY your tax returns this year and file online — with added assurance from software or tax pros that you’re doing everything right.
Here are a few standout differences among H&R Block, TurboTax and TaxAct that might help you pick the best product for your situation.
H&R Block is best for you if…
You want access to in-person tax pros. H&R Block is the only of these three services that runs brick-and-mortar offices where you can work with tax pros face-to-face.
You’re concerned about a complicated audit. Both TurboTax and H&R Block provide audit assistance, but H&R Block’s service offers a better user experience and is available in-person — which could be comforting in a stressful situation.
You own a small business. All three services provide ample support for self-employed filers, but H&R Block has the most robust suite of services for year-round tax support.
TurboTax is best for you if…
You want live, online help. TurboTax offers online assistance with tax pros comparable to H&R Block’s service at a lower price, and Free filers get free online assistance.
You want to guarantee the biggest refund. TurboTax’s Maximum Refund Guarantee promises to refund your fees if you find a better refund with a different service.
You’re a freelancer. TurboTax’s self-employed editions offers some of the most user-friendly and robust assistance specifically designed for freelancers and independent contractors.
You need a refund advance. Eligible customers get access to a larger advance at no added cost, compared with a smaller advance for an annual fee and interest charges at H&R Block.
TaxAct is best for you if…
You’re shopping for the lowest cost. TaxAct beats its competitors significantly on price at every tier and provides live assistance from a tax professional at no additional cost.
You’re concerned about accuracy. Every tax service comes with an accuracy guarantee, but TaxAct offers one of the highest reimbursement levels at $100,000.
6 Ways to Get Free Tax Filing & Prep Assistance
In addition to these top options for affordable online filing, you can find tons of free ways to file simple returns online for free.
1. IRS Free File
You can always file your federal taxes for free-free, if you’re eligible, through the IRS Free File portal. This service is available to filers who earned $72,000 or less (in 2020), and the page also links to free fillable forms for earners at all levels.
The IRS doesn’t directly provide this service, but it partners with 13 tax preparation companies — like H&R Block and Jackson Hewitt — to facilitate your process.
2. United Way MyFreeTaxes
If you made less than $66,000 in 2019*, take advantage of United Way’s MyFreeTaxes program to file federal and state taxes online for free.
The site notes that 100 million Americans qualify for this free filing option, powered by H&R Block.
*Information for tax year 2020 wasn’t available as of this writing, but we suspect it’ll continue to be in line with the IRS Free File requirement of $72,000.
If a 1040EZ is all you need to file, TaxSlayer will help you do it online for free. The Simply Free edition offers a deduction finder, and you can add your state returns at no charge.
Active duty military members can file a federal return for free, regardless of your tax situation.
EFile offers free basic federal filing and advises this option if you’re single or married and filing jointly with no dependents. You can get 50% off the state filing fee with the promo code “50eFile.com.”
5. Volunteer Income Tax Assistance Program (VITA)
Get help with basic tax prep from an IRS volunteer through the Volunteer Tax Assistance Program (VITA) and Tax Counseling for the Elderly (TCE) programs. VITA assistance is available to:
People who “generally make $57,000 or less” (for tax year 2020).
People with disabilities.
Limited English-speaking filers.
TCE assistance is available for filers over age 60, and volunteers specialize in questions about pensions and retirement-related issues.
All volunteers are certified by the IRS and many have professional backgrounds in accounting and finance.
6. Credit Karma Tax
Credit Karma provides free federal and state tax filing for the most common tax forms, including those for more complex tax situations, like business income (Schedule C) and itemizing deductions (Schedule A).
Plus, when you create an account to use Credit Karma Tax, you’ll also get access to Credit Karma’s other free services, including a look at your credit scores from TransUnion and Equifax, details from your credit reports and credit score monitoring.
Should You Do Your Own Taxes or Hire a Tax Pro?
So you can file your own taxes from the comfort of your home… but should you?
Rugg told us that some circumstances add new levels of tax considerations you might miss if you don’t bring in a professional eye.
“There are five situations where taxpayers should consider using a professional — when they get married, when they buy a home, when they have a child, when they have investments and/or when they are self-employed,” he said.
One of these events might trigger you to work with a tax pro every year after. Or you might just want to bring in help for the tax year when the change happens so you can get a better understanding of your situation, the forms you’ll need; and the deductions, credits and additional tax liabilities you should know about.
You probably don’t need to work with a tax expert if you’re a single W-2 employee with no dependents or property. You should be able to easily find free a tax software/platform, instead of paying for guidance from a real person or pricy software.
We hope with the best online tax preparation software at hand, April 15 doesn’t seem so ominous anymore.
Just don’t wait until April 14 to file your taxes, and you’ll be fine.
Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media.
The numbers: U.S. existing home sales inched up 0.6% to a seasonally-adjusted annual rate of 6.69 million, the National Association of Realtors said Friday. Compared with a year ago, home sales were up 23.7%.
Economists polled by The Wall Street Journal had forecast that existing home sales would fall to a median rate of 6.66 million.
What happened: The median existing-home price rose to $303,900 in January, up 14.1% from a year ago.
The inventory of homes for sale fell to a record low 1.04 million units by the end of January. That’s a 25.7% decline year-over-year. The market had a 1.9-month supply of homes for sales. A 6-month supply is considered a sign of a balanced market.
The South and the Midwest showed an increase in sales in January.
Big picture: Sales have been moving sideways since setting a cycle high in October. Economists think that low mortgage rates will continue to boost housing demand in coming months. Buyers are also looking for more room and more remote locations in the wake of the pandemic.
What the NAR said: “Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market. Sales easily could have been even 20% higher if there had been more inventory and more choices,” said said Lawrence Yun, NAR’s chief economist.
What economists are saying? “In general, record low mortgage rates and families fleeing more crowded living situations are fueling demand for single family homes in spite of ongoing turmoil in the labor market and higher home prices. Indeed, this is one sector which is coming out of the crisis stronger than it went into it,” said Josh Shapiro, chief U.S. economist at MFR Inc.
Market reaction: U.S. stocks opened higher Friday with the S&P 500 index up 12.48 points in mid-day trading after declining in the past three trading sessions.
When it comes to money, everyone likes to put in their two cents.
Oh, you should definitely buy and not rent. Stay away from credit cards; they’re evil. Why are you so worried about your credit score? It doesn’t matter.
There’s a lot of — quite frankly — dumb advice floating around out there, and it can be difficult to figure out what’s up and what’s down.
Well, we’re here to set the record straight. Here’s all the dumb money advice out there — and what you should do instead.
Dumb Advice #1: Keep Money in Your Checking Account
You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice.
Maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)
But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Not too shabby!
Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”
Dumb Advice #2: You Should Get 3 Auto Insurance Quotes
People love to tell you to shop around. “You should be getting three different quotes to get the best price on car insurance,” they say.
Sure, this sounds like good advice. Here’s why it’s wrong: Comparing only three companies isn’t nearly enough. We suggest comparing 40. But who has time for that?
A company called Savvy will do it for you for free. It gets people an average of $826 back in their bank accounts a year — and you’ll get the same coverage you already have.
It doesn’t matter when you last renewed; you can get a check from your old company for the time left on your previous policy. (Read: They probably owe you money.)
You don’t have to make any calls or fill out any forms. It takes two minutes to see how much Savvy can put back in your pocket.
And the best part? Because we’re driving less, some insurers are slashing prices this month.
Dumb Advice #3: You Need to Save $1,000,000,000,000,000 Before You Die
All your life, people have been telling you to save. Save for emergencies. Save for the future. Save for your family. At that rate, you’re gonna need a gazillion dollars in the bank.
Here’s the thing: You should keep a healthy amount of savings in the bank, but if you want to give your family up to $1 million, use something called term life insurance.
We suggest a company like Fabric. Maybe you’ve considered this before, but thought it was only for rich or older people. But we’re hearing that people are getting it for as little as $14 a month.
And the truth is, this is one of the smartest things you can do with your money right now.
Answer a few quick questions here and finish the form to see how much money you could leave your loved ones — it only takes minutes.
Dumb Advice #4: You Need to Be a Billionaire to Buy an Apartment Building
This year has been a rollercoaster. Historically, though, real-estate investing offers the best long-term returns. (Does the name Rockefeller ring a bell?)
That’s why we like investing with pros like DiversyFund. They’ll help you make long-term investments in apartments and office buildings all over the country — and you don’t have to be a millionaire. You can get started with only $500.
You can see exactly which properties are included in your portfolios — like a 200-unit apartment complex in Killeen, Texas or a 59-unit building in San Diego. And you don’t have to be the landlord — DiversyFund does all the heavy lifting.
Because they know how to ride out the market’s ups and downs, they’ve historically seen annual returns of 17% to 18%, though they can’t make any promises.
As a partial owner, you make money on rent payments and when property values go up. It takes just a few minutes to sign up and own your first apartment building.
Dumb Advice #5 You Have to Pay Your Credit Card Bill Every Month
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape…
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.99% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.
INSIDE: Worried about how to pay for braces? Costing more than $3,000, they aren’t cheap! Learn the simple ways to save money on braces or spacers.
Braces are expensive. There’s no getting around that. But there are things parents can do to help pay for orthodontic care.
I’ve got three kids, and the youngest is already getting a spacer (also called a palatal expander). My oldest will need braces this spring, and my son will be in his spacer in a few months as well.
If you have a dental insurance plan, it may cover as much as 50% of the cost. You may be able to get dental insurance through your employer, or you can get it through the Health Insurance Marketplace when you enroll in an eligible health plan or dental plan during the Open Enrollment Period or Special Enrollment Period. But even if insurance pays 50% of the cost, that still leaves the remaining balance as your responsibility. You’ll need to find a way to save money on braces and spacers.
HOW MUCH DO BRACES FOR KIDS COST?
Depending on your child’s needs and the area you live in, the cost of braces can run anywhere from $3,000 to $7,000 or more!! While the cost of the expander may be included, it may not be. Traditional metal braces typically cost less than ceramic braces, lingual braces (braces placed behind the teeth) and clear aligners, such as Invisalign.
We recently visited our orthodontist for our oldest daughter. The total cost for the spacers for braces, expander, braces, retainer and all visits will be $3,300. That’s a lot of money!! And because we’ll need to do this for three kids, it will cost around $10,000 out of our pocket!! YIKES!
This is a situation all too familiar to many parents. How can you save money on braces when there’s no sale or discount? It seems impossible. But it doesn’t have to be. There are some ways to lower the cost for your child’s orthodontics.
HOW TO PAY FOR BRACES & SPACERS
1. COMPARE PRICES OF BRACES
Not all orthodontists charge the same amount for braces. You’ll find that costs vary greatly between offices. Before you decide where to go, do your research. Most offices offer a free orthodontic consultation, so you can find out the cost, payment plans and discount plans they may offer.
Make sure it’s also the right office and you like the doctor. While one doctor may be less expensive than another, he or she may not have the best reviews or do the best work. You certainly don’t want to use the wrong orthodontist; it could end up costing you more in the long run.
2. PAY FOR YOUR BRACES WITH CASH UP FRONT
Many offices offer a discount if you pay your entire bill up front. The office we go to gives a 5% discount when the bill is paid at the time of the first visit.
When you have your initial consultation, ask the office manager about possible cash or sibling discounts. We were able to save more than $100 by going back to the same office. Between the cash and the referral discount, we shaved hundreds off the total cost.
Some offices may not initially show you a cash discount offer, so be sure you inquire. And while 5% doesn’t sound like much, it’s still money in your pocket. In the case of our family, which will have three kids go through this, we’ll save more than $600 in total!!! So every penny counts!
Related: How the Cash Envelope System Saves Me Money
3. START EARLY
With many medical conditions, early intervention is key. The same is true with braces. If you can get your child into an expander at the right age, the final costs and needs when he or she is older may be minimized.
In addition, if you know your child will need braces in three to four years, you can start saving now so you’re prepared when the bill arrives (and can then take advantage of that cash discount). Start cutting back on your monthly bills, such as groceries and dining out. When you need to save for a big expense such as this, the sooner you start, the better!
Related: Why You Need to Set Financial Goals; How to Build Your Savings (i.e. How to save money for braces)
4. GET LESS-EXPENSIVE BRACES THROUGH A DENTAL SCHOOL
If you live in an area that has a dental school, it’s a great way to save money on braces. The students need to learn, and helping them do so can save you as much as 50% or more on the cost of braces.
All work is done alongside a dental professional, so you know it will be done the right way. The only downsides to using a school are that the visits can take longer and the number of available office visits each day is limited.
5. SEE IF YOU QUALIFY FOR FREE BRACES
Oh, how I wish this program had been around when I needed braces!! It would have helped my mother immensely because she could not afford them. Therefore, I had to go without.
That’s something I wish on no one. If your child needs braces but you are financially strapped, you may want to learn if you can qualify for free braces. Smiles Change Lives offers nearly free braces to families in all 50 states. You need to complete an application and pay a $30 application fee. If you’re accepted, you’ll pay just $650 – instead of $3,000 or more!
If you don’t qualify for Smiles Change Lives, there are other subsidy programs to help you pay for braces. Check with your orthodontist about the American Association of Orthodontists program called Donated Orthodontic Services. It initially launched in select states but has recently expanded nationwide. This is another program that offers deeply discounted orthodontics to select lower-income families who don’t have any type of dental insurance for their children. Because this is only available through select offices, you’ll need to call 866-572-9390 to find a participating office near you.
Medicaid also often covers orthodontic care when braces are deemed medically necessary for a child in a low-income family.
6. PAY FOR BRACES THROUGH YOUR FLEXIBLE SPENDING ACCOUNT
If your employer offers a flexible spending account (FSA), be sure you use it! With a flexible spending account, the cost of the braces or expanders is paid before you have to pay income tax on the money. A similar plan is a health savings account (HSA), which is paired with a high-deductible health insurance plan. An FSA or HSA won’t save you money at the orthodontic office, but at least you won’t be paying Uncle Sam before you pay your orthodontist. (Note, though, that you typically must use the money you contribute to an FSA within a year or it is forfeited.)
7. SET UP A PAYMENT PLAN
Orthodontists realize that the cost of braces is a financial burden for many families. Most of them offer flexible payment options, such as an installment payment plan. Rather than paying the total up front, you can break up the cost into easy-to-manage monthly payments.
And most will not charge interest, which makes it a better option than taking out a loan or paying the fee with your credit card. But be careful about using a third-party provider because it may charge interest at a higher rate than you would be charged elsewhere.
First published in 2018. Updated in February 2021.
The numbers: The construction industry’s outlook improved in February amid better foot traffic from home buyers, even as the cost of building homes increased.
The National Association of Home Builders’ monthly confidence index rose one point to a reading of 84 in February, the trade group said this week. The modest increase comes after two consecutive months where the index has dropped.
Index readings over 50 are a sign of improving confidence. Last spring, the index dropped below 50 as concerns regarding the coronavirus pandemic grew, but the index rebounded and later hit a series of record highs in the fall.
What happened: The index that measures sentiment traffic of prospective buyers increased four points to 72. Comparatively, the outlook regarding current sales activity held steady between January and February, while the index of expectations for future sales over the next six months declined by three points to 80.
On a regional basis, builders’ confidence regarding the housing market in the Northeast improved dramatically, rising from 68 in January to 89 in February. Builders also grew more confident about the state of the market in the Midwest and maintained their positive outlook on the South. Confidence worsened slightly in the West, however.
The big picture: Demand for new homes remains extremely high. The lack of existing homes for sale, plus renewed interest in suburban living amid the pandemic, is pushing buyers further out from major cities and toward newly-constructed developments. But price pressures could begin to affect builders and buyers alike in the coming months.
“Lumber prices have been steadily rising this year and hit a record high in mid-February, adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are already at all-time lows,” Chuck Fowke, who is the current chairman of the National Association of Home Builders and a custom home builder from Tampa, Fla., said in the report.
“Builders remain very focused on regulatory and other policy issues that could price out households seeking new homes in a tight market this year,” Fowke added.
What they’re saying: “Housing starts and permits should moderate, but from the highest levels since 2006, as building activity continues to be supported by strong demand for homes — especially single-family construction — and low inventories,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note.
Market reaction: The Dow Jones Industrial Average and the S&P 500 index were both down slightly Wednesday morning.
A testimony from Jennifer who blogs at A Healthy Mix
My husband and I purchased our home in July, 2012.
We paid $21,000 for an 1800 square foot home and 2-acres of land. It needed a lot of work, but we made the decision to remodel our home debt-free. It has been a work in progress ever since.
At the beginning of the year my husband received a $1,000 bonus and we knew we wanted to use that money for our latest renovation project — our boys’ bathroom.
We weren’t sure how we were going to remodel an entire bathroom on less than $1,000, because normally, bathroom remodels are expensive. We began by searching Pinterest for a look we desired and set out to achieve it on a small budget.
We knew we would have to refurbish as many items as we could.
We were able to salvage:
a large mirror
the shower fixtures
other bathroom fixtures
We searched the internet for hidden treasures. We found a brand new pedestal sink ($25) on a yard sale page. Then we went to Lowe’s to match our wants with the right price.
We were able to totally transform the old shower by using CLR and a lot of elbow grease. We decided to change the look of the shower by adding sheets of galvanized tin ($12 each) for the walls.
We used wood trim ($3 each) to finish the look. We soaked the old shower fixtures in bleach overnight, and they looked brand new. We did purchase a replacement shower faucet ($10).
Floors and Walls:
We installed the tile floors ($0.62 each). We painted the walls ($25). We used floor molding for both the floor and ceiling. We purchased the contractor pack ($72) since it actually cost less per unit and the leftover pieces could be used elsewhere in our home.
We purchased a glass cutter and cut the large mirror in half. We used left over pieces of the shower trim to trim out the mirror that was placed over the pedestal sink.
We splurged on a curved shower curtain rod ($42) since our kids were not getting a new shower. This was an inexpensive way to make their shower feel larger. We also purchased a new shower curtain ($30).
Since our boys had a pedestal sink instead of a vanity, we made holders that attached to the walls out of wood and mason jars that would hold their toothbrushes, hand soap, etc. We used jars we already had and scrap wood so it only cost $2 to create extra storage.
We changed the light fixture in the bathroom by screwing in a Mason jar into the old fixture. It completed the country look and cost us nothing.
We were actually able to complete the project for less than $500! It was amazing to see what was once the worst room in our home be transformed into a nice space on such a small amount of money.
Jennifer is a wife, mother to three handsome boys, a lover of homesteading on a smaller scale, and an aspiring writer. She loves sharing what she learns with each passing day and encouraging others to chase their dreams while she is busy chasing her own. You are invited to come along on this journey with her at A Healthy Mix.
Have you saved up and paid cash for something — large or small? Submit your story for possible publication here.