THERE ARE TWO POPULAR types of tax-favored health care account, and they’re sometimes confused. First, your employer may offer a flexible spending account, or FSA, which you can use to pay for health care expenses—such as deductibles and co-payments—that aren’t covered by your employer’s health plan. These accounts are funded out of pretax income, so you avoid income taxes and payroll taxes on the money involved. Each year, employees commit to funding these accounts up to a dollar amount they choose,

AT MOST EMPLOYERS, gone are the days when you paid little for health insurance and you could see pretty much any doctor you wanted. You may still be able to pick a plan that gives you ample flexibility, but you’ll likely pay a steep price for the privilege.
Fortunately, this is an area where you can legally trade on inside information. Do you or other family members go to the doctor frequently? How much do you value the ability to see any doctor you want?

THE 2010 PATIENT Protection and Affordable Care Act, otherwise known as Obamacare, remains a political hot button for many people. A 2017 attempt to repeal Obamacare failed in Congress, though the tax penalty for not having coverage was eliminated with the passage of 2017’s tax law. Keep in mind that most folks are largely unaffected by Obamacare, because they receive health insurance through their employer or they’re covered by Medicare.
However you get coverage,

INSURANCE IS A GREAT way to cope with life’s major financial risks—dangers such as getting sued, suffering a disability or dying prematurely and leaving your family in the lurch. Think of it as a way of pooling risk. You buy coverage from an insurance company, but what you’re essentially doing is tossing dollars into a pot with other people. Those who suffer misfortune collect from the pot. Everybody else gets nothing back, which is usually what you want,

PROTECTING YOUR family against financial disaster is vitally important. But it isn’t cheap—and many folks aren’t doing an especially good job:

Just 44% of U.S. adults say they have enough emergency savings to cover at least three months of living expenses, according to a Bankrate survey. Meanwhile, Bankrate also found that just 41% would pay for a $1,000 emergency with savings, while 43% said they’d borrow to cover the cost. 
A Federal Reserve study was similarly bleak: It found that just 63% of Americans said they would use cash to cover a $400 financial emergency,

THE AMERICAN Opportunity Tax Credit is designed to help students pay for four years of undergraduate education. The Lifetime Learning Credit is geared toward those studying later in life: While it can be claimed for undergraduate expenses, it’s more likely to be used for graduate school or professional degree courses. There’s no limit on the number of years that you can claim the Lifetime Learning Credit.
The credit is worth up to $2,000 a year.

THE AMERICAN Opportunity Tax Credit is a tax break available to help pay for up to four years of higher education for yourself or your dependents. For those eligible, it can be hugely valuable. Remember, a tax deduction shrinks your taxable income, so that a $1,000 tax deduction might save you $220 in taxes, assuming you’re in the 22% federal income tax bracket. By contrast, American Opportunity is a tax credit, which means it gives you a dollar-for-dollar reduction in your total tax bill.

YOU CAN DEDUCT the interest charged on your education loans, just like you can deduct the interest on a mortgage and on margin loans. But as with these other loans, the tax break on education loans comes with limitations.
In 2024 and 2025, you can only deduct up to $2,500 in interest on qualified education loans. Still, the tax savings could take some of the sting out of those student loans in the years after you graduate.

IF YOU’RE STRUGGLING to pay your federal student loans or you’re simply overwhelmed by the number of loans you have to pay each month, consider both consolidating your federal loans through StudentAid.gov and enrolling in one of the income-based repayment plans.
The interest rate on the consolidated loan will be based on the weighted average interest rate of your existing loans. When consolidating, you might extend the term on the loan. Most federal loans are for 10 years,

THE FEDERAL government offers not just student loans, but also loans to parents through the PLUS program. PLUS loans incur interest immediately, but parents of undergraduates can defer all payments until six months after their child graduates. Click here to learn the interest rate for the current academic year.
You can borrow up to the cost of your child’s college, minus any other financial aid received. To borrow through the PLUS program, parents are subject to a fairly lenient credit check,

TO RECEIVE FEDERAL loans, you have to file the Free Application for Federal Student Aid, or FAFSA. There are three main federal student loan programs:
Subsidized Stafford loans. These loans, which are awarded based on financial need, don’t incur interest while a student is in college. Repayment begins six months after graduation or, alternatively, if a student starts attending college less than halftime.
Unsubsidized Stafford loans. These loans, which aren’t awarded based on need,

GROWTH IN STUDENT loans has been a big source of worry in recent decades, and it seems many graduates struggle to repay the money they borrowed. Still, research suggests that those who struggle the most often either borrowed to attend a community or for-profit college, or they failed to graduate.
Can’t afford to help your children with college costs? Consider counseling them to avoid costly colleges that will leave them heavily in debt, especially if their planned career will pay a modest income.

FAMILY MEMBERS—especially grandparents—often chip in to help with college costs. If your children are eligible for financial aid, you should discuss the best way to give this financial assistance.
For instance, while folks might ordinarily limit their generosity to the annual gift-tax exclusion, there’s no cap imposed on financial help with education costs, as long as the money is sent directly to the educational institution. Problem is, if the grandparents or others do this,

WANT TO BOOST YOUR family’s financial aid eligibility? Consider these four strategies:

Use taxable account savings to pay down debt. Consumer debts such as credit card balances and auto loans are ignored by the aid formulas, so they won’t make you appear needier, while paying them off will reduce the money you have in regular taxable accounts, which is assessed. You might also use spare cash to pay down mortgage debt and make necessary purchases,

THE FEDERAL FINANCIAL aid formula and the institutional formula used by many private colleges differ in notable ways, including how heavily they assess the income and assets of parents and students. But you should pay particular attention to two key differences.
First, while the federal formula ignores home equity, it’s considered in the institutional methodology. You hear about parents who use their savings to buy an overly large home or undertake elaborate remodeling projects with an eye to increasing aid eligibility.