What the experts say
How savings can affect student aid
It’s generally true that “the richer you are, the less you’ll receive in financial aid,” said Katie Lobosco in CNN.com. But “if you know the rules of the game,” saving for your child’s college education won’t significantly reduce his or her financial aid award. The key factor is income; savings are considered, “but only a little.” For every dollar you set aside, “you might—at most—lose 5.6 cents in financial aid.” If you do save money for tuition, “don’t save it in your child’s name.” Any assets listed in the child’s name, including a savings account, trust fund, or brokerage account, will “count more heavily” against financial aid. It’s particularly smart to consider a 529 account. “To play it safe, make sure a parent is the owner of the account.”
Paying cash at the pharmacy
Your insurance doesn’t always get you the best possible price for prescriptions at the pharmacy, said Alicia Adamczyk in Lifehacker.com. The reason: the so-called gag rule, which, because of agreements with pharmaceutical benefit managers, forbids a pharmacist from informing customers if the drug is cheaper when purchased with cash rather than insurance. “In other words, your pharmacist legally can’t tell you that there’s a cheaper option for you.” The problem is significant: Roughly one in four drugs purchased in 2013 was cheaper if paid for in cash, according to Kaiser Health News. Ask your pharmacist for the cash price whenever you purchase prescription medicine. “While they can’t bring it up to you, they can let you know if you ask.”
Tax law changes mortgage strategies
“Now is the time to find out if you are one of the millions of Americans who won’t be able to deduct their monthly mortgage-interest payments,” said Laura Sanders in The Wall Street Journal. Some 32 million tax filers took a mortgage-interest deduction last year, but in 2018 that number is expected to plummet to 14 million. The primary reason? The recent tax overhaul nearly doubles the standard deduction, to $12,000 for single filers and $24,000 for most married couples, and caps SALT deductions at $10,000 per return. “For 2017, a couple needed write-offs greater than $12,700 to benefit from listing deductions on Schedule A. Now these write-offs have to exceed $24,000.” Run your numbers. The result could mean that it’s beneficial to pay off your mortgage faster.