Should I File a Home Insurance Claim? Pros, Cons, When It Makes Sense

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You love the big cherry tree in your home’s front yard. Each spring, it explodes in a riot of bright pink flowers. Each summer, it drops sour fruit that perks up nicely in a sugary pie. 

Until it doesn’t. One summer day, your family comes home to find one of the cherry tree’s limbs in your living room, felled by a strong thunderstorm. The damage is extensive: two broken windows, a caved-in window sill, and serious water and impact damage to the living room floor and furniture.  

Once the initial shock wears off, you prepare to file a home insurance claim. But then, you start to ask questions. What if your insurance company denies the water damage portion of the claim? What if my home insurance premiums spike? How much will I have to pay out of pocket due to your policy’s high deductible? Should I even file this claim? 

Should I File a Home Insurance Claim?

The fact that a seemingly serious event like a tree falling through your house is such a close call teaches us an important lesson about homeowners insurance: It’s not always in your best interest to file a claim. Even when they cause short-term financial pain, some incidents aren’t worth filing over. 

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Plus, standard homeowners insurance policies exclude certain types of incidents that can cause serious financial stress for homeowners, such as floods and earthquakes. You need separate insurance policies if your home is at risk of these uncovered perils.

Pros & Cons of Filing a Homeowners Insurance Claim

If you’re considering filing a homeowners insurance claim, you’re probably facing a hefty bill for cleanup and repairs or a long list of damaged items to replace. Or perhaps you’re staring down a lawsuit brought by a guest or worker who sustained serious injuries on your property.  

In any case, you need to figure out whether it makes sense to go through with your claim — and fast. That means objectively assessing the pros and cons of doing so.

Pros of Filing a Home Insurance Claim

Depending on the circumstances, filing a home insurance claim has significant financial benefits.

  1. It Helps You Pay for Repairs. If your claim is approved, you can use the payout to offset the cost of repairs and restore your home to its previous condition. Without this financial assistance, you might find yourself cutting corners or making ill-advised financial moves to cover the cost, such as dipping into your 401(k). 
  2. It Helps You Replace Damaged or Stolen Goods. Your homeowners insurance policy could help offset the cost of replacing possessions damaged in a naturally occurring incident like a storm or fire. If your home was burglarized or vandalized, the proceeds could cover the cost of replacing stolen property as well. Depending on your policy, you could receive the items’ actual cash value or replacement cost, which is the cost of buying them new.
  3. Repairs Help Maintain Your Home’s Value. Homebuyers don’t pay top dollar for properties with fire-damaged siding, broken windows, or gaping holes in the roof. Your home insurance payout helps restore your home’s value with minimal out-of-pocket cost.

Cons of Filing a Home Insurance Claim

Filing a claim on your homeowners insurance policy isn’t always a slam dunk. The claims process has some hidden and not-so-hidden pitfalls that could leave you worse off than when you began.

  1. Your Insurance Premium May Go Up. Although this isn’t guaranteed, your homeowners insurance rates could rise after you file your claim. Exactly how much depends on the type of claim you file, the size of the claim, and your previous claims history. Generally, liability claims bump premiums more than claims related to fire, vandalism, or natural disasters.
  2. Too Many Claims Mean Your Policy May Not Be Renewed. A rate increase is unwelcome but manageable. A canceled policy is far more serious. If insurers see you as riskier than the typical homeowner, you could have trouble getting coverage on your own. Your lender might need to step in and take out a policy on your behalf — often at a much higher premium than your old policy.
  3. If You Get a Claim-Free Discount, You Could Lose It. Once you file a home insurance claim, your claims history is no longer spotless. That matters because many home insurance companies offer claim-free discounts for homeowners who never file claims.

When You SHOULD File a Home Insurance Claim

So, you’re thinking about filing a home insurance claim. How can you be sure you’re making the right call?

Use these tests to assess your would-be claim. The more that apply to you, the stronger your position.

Repair or Replacement Costs More Than Your Deductible

This is the first test your would-be claim must pass. If it doesn’t, there’s no point in filing a claim.

Your deductible is the amount you must pay out of pocket before your home insurance kicks in. Your policy documents should clearly specify this amount. It’s either expressed as a flat dollar amount or a percentage of the policy’s total coverage amount.

Dollar amount deductibles typically range from $500 to $2,500, with $1,000 being a common value. Some policies have more than one deductible, depending on the type of property damage. Separate “wind and hail” deductibles are common, for example — and often higher than the standard deductible.

If your home sustained significant damage or loss, your claim value should easily exceed your deductible. For example, if you expect repairs to cost $20,000 and your deductible is $2,000, your insurance company covers $18,000 — 90% of the total cost.

On the other hand, if you expect repairs to cost $3,000, your insurance company only covers $1,000 — 33% of the total cost. That’s a closer call because filing a claim could result in higher home insurance premiums that eventually offset your payout. 

The Event Is Covered by Your Policy

Your homeowners insurance company isn’t obligated to provide reimbursement for every type of damage or loss to your home. In fact, while your policy covers a lot, it probably excludes specific events, known as exclusions.

Common exclusions include but aren’t limited to:

  • Earthquake
  • Flood
  • Damage and liability issues caused by poor maintenance 
  • Insect infestations
  • Mold
  • Personal property losses and liability issues caused by power outages or power surges
  • Intentional damage caused by a resident
  • Damage caused by war or nuclear fallout
  • Injuries caused by aggressive dogs
  • Issues related to or caused by home-based businesses
  • Costs related to building code violations

You may need to purchase separate insurance policies to cover some of these perils. For example, your lender may require you to carry flood insurance if you live in a recognized flood zone. 

Other add-on policies are optional but often a good idea. For example, if you run a business out of your home, you should consider carrying business insurance to protect against inventory or equipment losses or damage to your workspace.

You’ve Suffered Significant Loss or Damage

Often, it’s not a close call. If your home is seriously damaged or destroyed in an event that’s covered by your policy, you absolutely should file a homeowners insurance claim. Otherwise, you’ll be on the hook for tens or hundreds of thousands of dollars in repair or replacement costs.

If you have any doubts about the extent of the damage to your home, get a few repair quotes from building contractors in your area. You can also talk to your insurance agent or ask your home insurance company to send out an insurance claims adjuster before you file.

You Haven’t Made a Claim in the Past 5 Years

Approved homeowners insurance claims typically remain on your insurance record for five years after they’re made. 

This record is known as the Comprehensive Loss Underwriting Exchange (CLUE) database. When you make a claim, your insurer checks its own records and the CLUE database to see whether you’ve made any other claims in the past five years.

If you have made a claim in the past five years, expect your insurance premiums to spike after your second claim is approved. 

For fire, theft, and general liability claims, the increase could amount to 50% or more of your previous premium. A weather-related claim won’t increase your premium quite as much, but you’ll still notice a jump.

When You Should NOT File a Home Insurance Claim

It’s not always worth it to file a home insurance claim. 

Certain situations, such as minor damage that costs less to repair than your insurance deductible, all but rule out a claim. Others, such as an active claim history, bring an elevated risk of a denied claim.

If any of these situations apply to you, think twice about filing a home insurance claim.

Repair or Replacement Costs Less Than Your Deductible

If the damage or loss is relatively minor, your deductible could be too high to bother filing a claim. There’s no point in filing a claim — and potentially increasing your policy premiums — if you won’t even receive a payout.

Even if it’s a close call, be mindful of the potential for your premiums to go up after a successful claim. A claim worth $20,000 probably makes sense, but a claim worth $3,000 or $4,000 might actually set you back.

Damage Was Caused by Lack of Maintenance or Normal Wear & Tear

An event that appears to be covered by your policy might not be if the insurance adjuster can argue that it was caused by neglect, poor maintenance, or even normal wear and tear.

For example, let’s say your home loses heat during the winter, causing a water pipe to burst in your ceiling. Homeowners insurance policies generally cover this type of event — if the burst pipe was in good condition to begin with. If the pipe was already heavily corroded, your insurer might blame you for not replacing it sooner. They could deny the claim altogether.

The Event Isn’t Covered by Your Policy

It’s often quite easy to figure out whether a particular event is eligible for home insurance coverage. If your home collapses in an earthquake and your policy specifically rules out claims for earthquake damage, you’re out of luck. Hopefully, you have earthquake insurance.

But closer calls are more common than you’d think. If your resident termite colony worsens an existing foundation issue that eventually spurs a costly repair, your insurer could argue that the entire claim falls under the insect damage exclusion. 

When in doubt, it’s worthwhile to begin the claims process anyway. If you don’t like what the insurance adjuster has to say, you can drop the claim without increasing your insurance rates. 

Or you can hire a public adjuster — an independent insurance adjuster who can make a stronger case to your insurance company. Public adjusters usually work on contingency, so they only get paid if your claim is successful.

You’ve Made Multiple Claims in the Past 5 Years

The more homeowners insurance claims you make in a five-year period, the more your insurance rates increase after a successful new claim. 

Make too many claims in too short a period, and your insurance company could drop you altogether. If you’re unable to find replacement coverage, your lender could take out a policy on your behalf. Expect this lender policy to cost a lot more than your old policy.

All that said, you shouldn’t automatically rule out a new homeowners insurance claim just because you recently got an insurance payout or two. If your home is seriously damaged or destroyed by a covered event, it’s probably still worth it to file. Just be ready to pay higher premiums on the back end.

Final Word

Some say the best way to save money on homeowners insurance is not to file a claim at all. There’s a grain of truth to that, but don’t take it too literally. 

If your home is seriously damaged in an event that’s covered by your policy, a home insurance claim is absolutely warranted. Taking the time to file could save you tens or hundreds of thousands of dollars in out-of-pocket expenses, keeping you on track to reach your long-term financial goals.

Still, it’s always a good idea to take stock of the situation before filing a claim. If your home sustains damage due to an event not covered by your policy or the cost of repairs doesn’t exceed your policy’s deductible, a claim isn’t in the cards. And even if filing a claim would be profitable on paper, it’s worth considering the long-term costs — in the form of higher premiums for years to come.

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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.


Student Loan Interest Rates for June 2022

There’s no way around it — college is expensive. This means that for many students, taking out a loan is the only way to realistically cover these expenses. And, like most other loans, student loans accrue interest.

In this article, we’ll explore the current interest rates across the most common student loan products, including federal and private student loans.

When we discuss federal interest rates on student loans in this article, we’re referring to what the rates would be when the freeze is lifted.

Comparing Rates Between Federal, Private and Refinance Loans

Something you may notice is that, at the lowest end, private lenders seem to offer better interest rates than federal. It is important to note that these lowest interest rates are very difficult to get — your credit needs to be outstanding.

It’s also important to remember that, although fixed interest rates appear to have a higher range in the tables below, your interest rate by definition can change. So, while you may qualify for a lower interest rate on a variable-rate loan, it’s entirely possible that this rate will eventually go up and become higher than you would have gotten with the fixed-rate loan. This is simply the tradeoff (and risk) of variable interest rates.

Federal Loan Interest Rates at a Glance

Loan Type Borrower Fixed Interest Rate Loan Fee
Direct Subsidized and Direct Unsubsidized Loans Undergrad students 3.73% 1.057%
Direct Unsubsidized Loans Graduate or professional students 5.28% 1.057%
Direct PLUS Loans Parents and graduate or professional students 6.28% 4.228%

Federal rates increased across the board for the 2021-2022 school year by nearly a whole percentage point. That’s unfortunate, but they are still lower than they have been for years, and generally much lower than an equivalent private student loan.

Federal loans come in two basic types: subsidized and unsubsidized. The primary difference is around when the interest starts accruing:

  • Subsidized student loan: Interest is paid by the Education Department as long as you’re enrolled at least half-time in college.
  • Unsubsidized student loan: Interest begins to accrue as soon as the loan is dispersed.

There are some other differences, but they’re relatively minor compared to this.

The last thing to cover with federal loans is the loan fee (also known as the origination fee). This fee is calculated as a percentage of the total loan amount and then deducted automatically from each disbursement. In practice, this means you’ll receive a smaller loan than the amount you actually borrowed.

Private Loan Interest Rates at a Glance

Loan Type Interest Rates
Fixed rate 3.34% to 14.99%
Variable rate 1.04% to 11.99%

The wide variation in interest rate ranges is due to two factors: different lenders offering different rates, and the fact that the rate you’ll get is impacted by your credit and other factors.

As mentioned above, fixed interest rates tend to have higher rates on paper, but you don’t have to worry about that rate increasing on you, which is a very real possibility with variable-rate loans.

Loan Refinance Interest Rates at a Glance

Loan Type Interest Rates
Fixed rate 2.59% to 9.15%
Variable rate 1.88% to 8.9%

If your credit is good, it’s possible to refinance your existing student loan to get a lower interest rate. This is not always possible, but it can be an option worth exploring. These refinanced interest rates can themselves be lower than “normal” private rates, so it can be an option worth exploring.

How Student Loan Interest Rates Are Determined

Although federal and private loans are technically different, they often follow similar trends. In other words, when federal student loan interest rates go up, private rates are likely to do the same. Likewise for when they go down. Let’s look at what actually goes into determining federal and private interest rates.

Federal Student Loan Interest Rates

These student loan interest rates are set each year by Congress, based on the high yield of the 10-year Treasury note auction in May. The new rate applies to loans disbursed from July 1 to June 30 of the following year.

Federal student loan rates are always fixed. This means that they won’t change during the life of the loan — whatever interest rate you get when you take out the loan is what you’ll keep until it’s paid off (it changes with student loan refinancing).

Private Student Loan Interest Rates

These loans are funded by banks, credit unions, and other private lenders. As such, interest rates vary between the different lenders, and it’s worth shopping around whenever possible.

Private lenders usually offer both fixed-rate and variable-rate loans. Fixed-rate means that your interest rate remains the same over the life of the loan. It can neither increase nor decrease.

A variable interest rate, on the other hand, means that your interest rate can fluctuate with the market. Sometimes you can get lucky and have it go down for a period of time. However, the risk with variable-rate loans is that the interest rate goes up significantly and you end up paying much more than anticipated.

It’s important to keep this in mind when selecting a loan. It may be worthwhile to take a slightly higher fixed interest rate rather than assume the risks of a variable rate.

The Impact of COVID-19 on Student Loans

The interest rate cuts in 2020 had a major ripple effect on student loan interest rates. Despite the slowly recovering economy, interest rates remain lower than they’ve been in years, for federal student loans and private fixed-rate and variable interest rate loans. This is excellent news for student loan borrowers, and we hope to see these rates remain low in the coming year.

Currently, all federal student loan debt is frozen until Sept. 1, 2022. This means that rates are set to zero and no payments are due until that date. This loan repayment freeze originally began in March 2020  at the outset of the pandemic and has been extended six times at this point.

The Pros and Cons of Federal Student Loans vs. Private Student Loans

Let’s explore the pros and cons of the two major classes of student loans — federal and private. Neither is perfect, as we’ll see. Rather, each is suited to particular situations and types of borrowers.

Federal Student Loans


  • Flexible repayment plans. Federal loans are eligible for income-based repayment plans and loan forgiveness. These can be a huge help if you find yourself in a tough financial spot.
  • Much lower requirements. It’s almost always much easier to qualify for a federal loan than it is a private student loan, particularly if you want a good interest rate.
  • More affordable overall. Most of the time you’ll end up paying less on federal student loans than on a private student loan.


  • Origination fees. Federal student loans are subject to small origination fees, which aren’t part of a private student loan. This means your loan disbursements are usually going to be smaller.
  • Borrowing limits for undergraduates. This means some students may actually need to take out a small private loan in addition to the federal loan to cover their full college costs.
  • Can’t choose your loan servicer. Federal student loans are turned over to a loan servicer to handle the payments and administration of that loan. Some of them have sketchy reputations

Private Student Loans


  • Larger loans. If you know that you’ll need a certain amount of money, and it’s more than federal loans can offer, it might make more sense to simply go private.
  • Potentially lower rates. A private loan may have lower rates, particularly with student loan refinancing. That said, you’ll need an excellent credit score to get these lowest rates.
  • No origination fees. Private student loans don’t have the origination fees that come with federal student loans.


  • More difficult to qualify for. Private loans have stricter requirements, particularly around credit histories. Federal student loans are almost always easier to qualify for.
  • Generally higher interest rates. Unless your credit is outstanding, you’ll almost always get a better interest rate with a federal student loan.
  • Less flexibility in repayment options. Some private lenders are willing to work with borrowers on this, but there’s no law or regulation forcing them to, and thus, no guarantee.

Frequently Asked Questions (FAQs) About Student Loan Interest Rates

If you still have questions about student loan interest rates, don’t worry — we’ve got answers. Here are some of the most common questions.

What is the Interest Rate on Student Loans Right Now?

Student loan interest rates range from a low of 1.04% to a high of almost 15%. The rates depend on whether you’re looking at federal or private, which type of loan, which private lender you go with, your credit history, and more. 

That said, here’s the quick bullet list:

  • Federal direct for undergraduate students: 3.34%
  • Federal unsubsidized for grad students: 5.28%
  • Federal Direct PLUS for parents and graduate students: 6.28%
  • Private fixed-rate loans: 3.34% to 14.99%
  • Private variable-rate loans: 1.04% to 11.99%

Will Student Loan Interest Rates Go Up in 2022?

This is a hard question to answer. They are expected to remain fairly low for the foreseeable future, but this can always change. For the 2021-2022 school year, federal rates did increase, but they are still a good bit lower than they were prior to the pandemic.

Are Student Loan Rates Dropping?

Rates increased for the 2021-2022 school year, but remain lower than they were prior to the COVID-19 pandemic. So while they didn’t drop this year, they have dropped significantly compared to a few years ago.

What’s the Difference Between a Subsidized and Unsubsidized Federal Student Loan

A subsidized federal student loan is one in which interest is paid by the U.S. Department of Education Department while you’re enrolled at least half-time in college. An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school.

Subsidized student loans have a six-month grace period after graduating. During this time, no payments are due, and the Education Department continues to pay the interest on the loan.

An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school. The student is responsible for this interest. Unsubsidized loans still have a six-month grace period after graduation, but interest continues to accrue during this time. The interest then capitalizes, which means it gets added to the original loan amount.

When Do Student Loan Interest Rates Start?

Federal student loan rates are set each spring and go into effect July 1, running until June 30 of the following year. At that point, the new interest rate will take effect.

What is Student Loan Refinancing?

Student loan refinancing is a way to decrease the amount of interest paid on your loan. Essentially, when you refinance, the new lender pays off your existing loan and gives you a new one with new terms.  

Not everyone can refinance — there are fairly strict rules to evaluate your credit and income to determine eligibility. Additionally, you generally reset the length of your loan term when you refinance, so it can sometimes end up costing you more money. 

Finally, while you can refinance a federal loan, you lose the extra benefits they come with, including income-based repayment options.

What is Income-based Repayment?

This is a special repayment option available to federal borrowers that lets you tailor your monthly payments to your income. These plans are typically based on a percentage of your monthly disposable income. This can be quite a bit lower than you’d otherwise pay. The tradeoff is that it can take much longer to pay off the loan. 

Additionally, loans on these repayment plans are automatically forgiven after 20-25 years of payments.

Penny Hoarder contributor Dave Schafer has been writing professionally for nearly a decade, covering topics ranging from personal finance to software and consumer tech.




What Is IRS Tax Form 1098 (Mortgage Interest Statement)?

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Additional Resources

In an effort to help make filing taxes easier this year, we are breaking down the various IRS tax forms to help you know if you need them, and how to use them.

There’s nothing like a love letter from your mortgage lender with an IRS tax form to make you swoon with joy.

As tax forms go, the 1098 ranks among the simplest as you prepare your tax return. But there are some things you need to know about Form 1098 and how to use it in your tax return.

What Is IRS Tax Form 1098, Mortgage Interest Statement?

The IRS Form 1098 informs you how much interest you paid on your mortgage loan for the last tax year. 

Mortgage lenders send you this document in case you want to itemize your deductions on your tax return. They also send a copy to the Internal Revenue Service for their records, so don’t get any ideas about taking liberties with your interest deduction. 

Far fewer taxpayers itemize their deductions since the standard deduction jumped in the Tax Cuts and Jobs Act of 2017. That makes Form 1098 less relevant to the average American than it once was, though it does contain information you may need.

However, the form remains relevant to real estate investors, who deduct mortgage interest on Schedule E of their tax return. Mortgage interest is an expense for investment properties and comes off their taxable profit. Deducting it from your investment property profit doesn’t require you to itemize your deductions. 

Who Should File Form 1098?

Property owners don’t file Form 1098 as part of their federal tax return. They simply list the amount of mortgage interest in the appropriate place on their return: Schedule A for homeowners, Schedule E for investment property owners.

Mortgage lenders need to file Form 1098 with the IRS if the borrower paid more than $600 in a given year and send you a copy — which you can frame if you so choose. They typically send the form in February with the total mortgage interest paid in the previous year.

How to File IRS Form 1098

While you don’t need to file Form 1098 as a borrower, it helps to be able to read it. 

The most important information lies in Box 1: the amount of mortgage interest paid in the previous year. However, the form contains other useful information, including:

  • Box 2: Outstanding mortgage principal (your remaining loan balance)
  • Box 3: Mortgage origination date (your loan start date)
  • Box 4: Refund of overpaid interest (if applicable)
  • Box 5: Mortgage insurance premiums (if you paid private mortgage insurance for a conforming loan or mortgage insurance premium for a Federal Housing Administration loan, it appears here)
  • Box 6: Points paid on the purchase of the principal residence (you may be able to deduct these as well)
  • Boxes 7-11: Identifying information about your loan, such as the property address

You’ll also find identifying information about yourself, such as your name and Social Security number.

Other 1098 Forms

While the mortgage interest statement is the most common type of 1098 form, it’s not the only brat in the pack. You may also come across the following 1098 forms.

Form 1098-C, Contributions of Motor Vehicles, Boats

If you donated a vehicle — including boats or airplanes — to a charitable organization last year, you’ll receive a 1098-C from the charity. 

Charities often give these vehicles to individuals in need or sell them at below-market rates and use the profit to fund programs. Alternatively, the charity might auction the car to raise money for their cause.

Form 1098-C confirms you weren’t part of that transaction. However, if you donated a beater worth less than $600, you may not receive one of these forms. Read the instructions for Form 1098-C for more information.

Form 1098-E, Student Loan Interest Statement

You may feel like you’ll be paying off your student loans for the rest of your life, but at least you get a tax break. Maybe. 

Each year, you’ll receive a 1098-E detailing how much interest you paid to each loan servicer if it exceeded $600. You can deduct the interest from your taxable income on your 1040 without itemizing your deductions as long as you meet the income requirement.

You can deduct up to $2,500 in student loan interest for loans used to pay for qualified expenses while you were in school. However, the deduction does phase out if your modified adjusted gross income (MAGI) falls between $70,000 and $85,000 (between $140,000 and $170,000 if married filing a joint return). You cannot take a student loan interest deduction if your MAGI exceeds $85,000 or more ($170,000 or more if you file a joint return). 

If you paid less than $600 in student loan interest last year, the servicer may not send you a 1098-E, but you can still deduct this interest as long as you have a record of how much you paid. If you don’t know, ask your servicer and record it in your tax file.

As a bonus, if your parents or someone else pays student loans in your name for you, the IRS considers the money a gift, and you can still deduct the interest on your own taxes. However, if the loan is in someone else’s name, that person is entitled to take the interest deduction as long as he or she is the one paying on it.

Form 1098-T, Tuition Statement

If you or one of your dependents is currently in school, the school will send an IRS Form 1098-T at the end of the year detailing all fees you paid for qualified tuition and other related expenses. Calculate all education-related tax deductions and credits, such as the tuition and fees deduction, the lifetime learning credit, or the American opportunity tax credit.

The amounts on the form encompass all money you paid to the school, even if you paid in advance — the payment appears on the tax form for the year in which you actually paid it. 

For example, if you pay your spring semester tuition in December of the previous year, it will show up on the prior year’s 1098-T. These amounts include any money used from loans to pay for tuition and education expenses and list financial aid like college scholarships and grants separately.

Some expenses, such as college textbooks and school supplies, are not generally reported on the 1098-T, but you can still claim them for higher education tax credits or deductions so long as they’re classified as qualified expenses by the IRS.

Form 1098 FAQs

If you still have burning questions about 1098 tax forms, these answers to frequently asked questions can help clear them up.

How Do I Get a 1098 Form?

Your mortgage lender sends you a Form 1098, Mortgage Interest Statement. If you haven’t received it by late February, blow off some steam by yelling at your lender. (Just kidding. Be nice. They literally still own part of your house. But thinking about yelling at them should make you feel better.)

Form 1098-C comes from the charity you donated a vehicle to, while Form 1098-E comes from your student loan servicer. Form 1098-T comes from your college or university. 

Do I Need to File Form 1098 With My Tax Return?

No, you don’t. You need only include the information in the appropriate field on your tax return.

When in doubt, ask your accountant or tax advisor. Alternatively, you can use an online tax preparation service, which will ask you for the amount you paid and fill it into the right field for you. 

What Happens if I Don’t File a 1098 Form?

The IRS doesn’t require borrowers to file a 1098 form at all. But if you ignore them, you might miss out on valuable income tax deductions and make an involuntary donation to Uncle Sam. 

If you are a lender, charity, student loan servicer, or university, you are required by law to both send a 1098 form to the payer and file it with the IRS. Failure to do so will result in your immediate execution — no, not really, but the IRS may penalize you, audit you, or otherwise make your life unpleasant. 

Final Word

With a higher standard deduction these days, most Americans don’t have to stress over documenting and itemizing every single deduction anymore. It makes filing your tax return that much simpler.

However, homeowners who itemize their personal deductions do still want to include their mortgage interest among them. And the mortgage interest deduction offers another way for real estate investors to lower their taxes while leveraging other people’s money to build their portfolio of properties. Get tax advice from a qualified tax professional if you have any questions about these tax benefits.

Whether you deduct mortgage interest on your tax return or not, keep your 1098 forms in your tax records for at least three years after filing. You never know when Uncle Sam will pay you a nasty visit with an audit, and every deduction could help if he does. 

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

G. Brian Davis is a real estate investor, personal finance writer, and travel addict mildly obsessed with FIRE. He spends nine months of the year in Abu Dhabi, and splits the rest of the year between his hometown of Baltimore and traveling the world.


Why You Might Not Want to Get Too Excited (or Nervous) About a Housing Crash

As mortgage rates continue their ascent toward 6%, more and more folks are talking housing market crash.

But high interest rates aren’t really a catalyst for a crash, especially if the high rates aren’t really high.

Emphasis on “real,” as in inflation-adjusted. Everything has gone up in price, and wages should also be rising.

This means a higher mortgage rate isn’t even a roadblock, or really as bad as it seems.

And because rates remain historically low, once you factor inflation, they could still be seen as a screaming deal.

High Mortgage Rates Don’t Crash Housing Markets

I’ve said it countless times, and I’ll repeat it again. Higher mortgage rates don’t automatically lower home prices. Or lower them at all.

If one goes up, the other doesn’t go down. And vice versa. It’s possible both can move in tandem, or opposite one another, based on many other factors.

So those who have been watching 30-year fixed mortgage rates absolutely surge from below 3% to nearly 6% must be beside themselves.

How could home prices not fall, or at the very least, not continue to rise? This makes no sense.

Why would home buyers continue to pay such outrageous prices now that interest rates aren’t at record lows?

Part of the answer is they want/need shelter, so they’re willing to pay “top dollar” for it.

Another reason is it’s still not that expensive once you factor in inflation and growing wages for these home buyers.

The other key factor continues to be a supply/demand imbalance, with way too little inventory available to satisfy demand.

Oh, and there are lots of buyers paying all-cash for their home purchase, which has nothing to do with mortgage rates.

All of these things have kept the housing market humming through spring, seemingly defying the expectations of housing bears and naysayers.

Don’t Compare Today’s Housing Market to the One Preceding the Great Recession

There’s a saying that history doesn’t repeat itself, but it rhymes. The origins of that quote or similar are hard to determine.

But the general idea is that we use the past to predict what will happen in the future. And we use a similar event for direction.

When it comes to the housing market, anyone who is skeptical of right now is looking back to the Great Recession.

Specifically, the housing market from around 2006 to 2008. Unfortunately, that’s a very extreme comparison, hence its name.

The Great Recession took place between 2007 and 2009, while the Great Depression occurred between 1929 and 1939.

These were both severe economic downturns, and as such, were spaced well apart from one another.

This means the chance of another event of that magnitude anytime soon is pretty low.

Still, we’ve enjoyed many fruitful years lately, so a recession or downturn of some kind is certainly in the cards.

The question is how bad will it be this time around?

Should We Look at the Late 1970s and Early 1980s for Future Guidance?

year over year mortgage rate change

Instead of comparing today’s housing market to the one that preceded the Great Recession, we might want to look back a bit further.

The housing market in 2006 was fueled by an abundance of stated income and no-doc adjustable-rate mortgages, tons of cash out mortgages, and zero down mortgages.

None of that is present today, though relatively harmless hybrid ARMs like the 5/1 ARM are beginning to make more of an appearance.

Now if we go back a lot further in history, we might find a better example for our history “rhyme.”

I’m talking about the late 1970s and early 1980s, when inflation was super high and mortgage rates spiked.

The old timers love talking about how high mortgage rates were back then. They scoff at your 6% mortgage rate today.

And they have good reason to scoff – the 30-year fixed climbed as high as 18.45% in October 1981, per Freddie Mac data.

Just a few years earlier, it was as low as 9.01%, so mortgage rates literally doubled. And did so at very high levels.

While our mortgage rates are still ridiculously low by comparison, they’ve nearly doubled as well in just a matter of months.

Additionally, demographics are very favorable for home buying, with 45 million Americans hitting the first-time home buyer age of 34 between 2017 and 2027.

This is similar to what was happening back then, as Bill McBride of Calculated Risk points out.

As you can see from his chart above, there’s been a very similar year-over-year change in mortgage rates on a percentage change basis.

The one big difference between then and now might be inventory. I say might because he doesn’t have the data, nor do I.

But we know housing inventory is at record lows today, so chances are today’s housing market is even more insulated than the late 70s/early 80s market.

So what will happen to home prices? Will we finally get our big, overdue crash?

Real Home Prices May Fall, But Nominal Prices May Not

real house prices

Okay, so it might be better to compare today’s housing market with the one seen in the late 70s/early 80s.

That makes sense given the inflation and interest rate environment, though remember history doesn’t repeat itself, it merely rhymes.

This provides us with clues as to what happens next, but nothing definitive.

McBride’s take, based on analyzing that time period, calls for a decline in both housing starts and new home sales.

We may also see an increase in housing inventory, though as mentioned, it’s currently at record low levels.

Here’s the kicker – nominal home prices might not even go down during the next “housing bust.”

By nominal, I mean prices that aren’t adjusted for inflation. So that overpriced $500,000 home might be worth $550,000 in a couple years.

That’s pretty wild when you look at how much home prices have already risen.

However, real home prices (those adjusted for inflation) may decline, as they did from 1979 (when they peaked) until 1982.

Back then, they fell 11% in real terms, but nominal prices “increased slightly” due to inflation.

In other words, you may want to temper your expectations with regard to a massive housing market crash.

Yes, home prices are “crazy high,” but so is the price of everything else.

And millions of Americans are enjoying very low, fixed housing payments that are only getting cheaper as prices and interest rates rise.

So a flood of distressed sales and foreclosures likely isn’t in the cards as it was a decade ago.

For those of you waiting on the sidelines looking for a fire sale, it may not happen.

And those who simply want to buy a home may also not see any major relief.

This isn’t to say you should panic-buy a house, but waiting for some big price cut might not be a great strategy either.


Will Gas Prices Ever Go Down?

As it becomes increasingly painful to fill up your gas tank, you might well be wondering: Will gas prices go down at some point?

Fuel prices feel like they’ve been on a never-ending ride higher of late. A year ago, the national average price of regular unleaded was $2.96 per gallon, according to travel website AAA. A month ago, it was $4.12. Today, it’s $4.33. And it’s probably heading higher still this spring.

We recently looked at the reasons why gas prices are so high: global oil demand rebounding from the pandemic faster than production. The war in Ukraine. Efforts in the U.S. to transition the economy away from reliance on fossil fuels. Energy companies’ reluctance to invest in more oil production.

Now, we’ll try to answer the question undoubtedly on many drivers’ minds: Will gas prices go down soon – and if so, what will do the pushing?

Fuel Tax Relief?

A few states have tried to ease the financial burden on their residents by suspending their state fuel taxes for a short period. But are gas prices doing down because of those moves?

Not really.

For instance, Connecticut suspended its 25-cent-per gallon state levy on fuel for April, May and June. But according to AAA, the average price of regular unleaded in the Nutmeg State today is $4.32, up from $4.13 a week ago. Increases in crude oil prices can swamp the effect of suspending a state’s gas tax. And when those state taxes are paused, the savings don’t all go in the driver’s pocket. Fuel sellers keep some portion of them.

Could the federal government give drivers nationwide a tax cut by suspending the 18.3-cent-per-gallon federal tax on gas? Unlikely, report my colleagues at The Kiplinger Letter, who regularly speak with lawmakers on Capitol Hill to assess which bills have a chance of passing.

In the case of a proposed suspension of the federal gas tax, Democrats, the majority party, can’t agree among themselves to do it.

More Oil on the Way

Here’s a little good news: More crude oil should be reaching the global market later this year, which means more gasoline and other refined fuels. Eventually, that should help push gas prices down, or at least keep them from rising so fast.

In the U.S., energy companies are slowly putting more rigs to work drilling new wells, even as they prioritize returning cash to investors via share buybacks and dividends. Oilfield services company Baker Hughes reports on the number of working rigs in the U.S. each week, and most weeks lately, the tally has risen a bit. Meanwhile, OPEC announced last week that it will continue with its plan to gradually restore the oil exports it cut in 2020 when prices plunged, which means adding about 400,000 barrels of daily exports each month.

The bad news: Neither domestic oil output nor OPEC’s sales are rising fast enough to push oil prices down now. And that means gas prices are unlikely to take a breather soon, either.

So, when can we expect gas prices to go down?

Gas Prices Could Go Down During Autumn

A good bet for when gas prices will go down is the fall, if seasonal patterns hold up this year.

Before COVID-19 scrambled those patterns, gas prices would typically rise in spring, peak sometime around Memorial Day, ease a bit but stay high during the summer, then pull back sometime after Labor Day.

As post-pandemic life gets back to normal, that pattern could return this year. Heavy summer travel and the resulting heavy demand for gas are likely to ebb by late summer or early fall as kids go back to school. By then, the Federal Reserve’s interest rate hikes will have had some time to slow the overall economy, which should weigh on oil demand, too. OPEC should be pumping more oil then, as will the U.S., continuing the slow rebound in production from the pandemic-induced slump.

That might not be much comfort to motorists as they pay for expensive fill-ups this spring and summer. But unless an economic recession comes along soon and crimps demand for fuel in painful fashion, high gas prices probably won’t go down anytime soon.


25 Cheap Mother’s Day Gifts Under $20 Including Shipping

Away from Mom this Mother’s Day?

Whether you live across the country or state from dear old Mom and can’t treat her to brunch, you likely want to send more than a text.

Whatever’s keeping you and Mom apart this Mother’s Day, May 8, there are plenty of ways you can show her you love and miss her. Not only that, but you can do it all while going easy on your wallet.

To help, we’ve put together a list of 25 Mother’s Day gifts under $20 you can order online. And that $20 includes shipping — free for some items.

Mother’s Day Gifts That Will Help Her Get Outdoors

Fresh air, exercise and flowers — all three are a nice way to celebrate Mom. Well, exercise if she likes that sort of thing!

1. Pickleball Glove for Mom

Pickleball is the hottest team sport these days. If your mom is seriously into this sport, you can pick her up a brand-name pickleball glove on Amazon for somewhere between $18 and $20. If you have Prime membership, shipping is free, keeping you under budget.

2. Annual Flower Bulbs

Does Mom love gardening?  Give her a gift that keeps on giving with annual bulbs. Plant these flowers once, and they will bloom year after year. Bulbs that need a freeze to bloom (iris, daffodils, tulips) are typically put in the ground in the fall before it gets too hard for digging so that they blossom in spring. The following bulbs can be planted in the spring to bloom in the summer.

Gladiolus Flower Bulbs

Gladiolus are beautiful and you can get a lot of them even on a budget. You can pick your color, ordering a bag in white or purple for  $13.95 on Walmart’s platform. Shipping is free.

Lily Flower Bulbs

You can get about three lily bulbs for under $20. Some options from Walmart sellers include Pink Tiger Lilies and Sumatra Oriental Lilies.

These options run between $13.95 and $15.99 and come with free shipping.

3. Gift Certificate to a Local Garden Center

Maybe Mom doesn’t have space for a garden, but does love having flowers and plants around. In this case, consider getting her a gift certificate to her local garden center for $20.

There’s an added bonus to sending your card on Mother’s Day; when she goes shopping after the holiday, excess inventory will be marked down dramatically, giving her more bang for her buck.

4. Twisted Mandala Planters

Perhaps Mom’s got all the plants she needs. What she could really use is a planter — especially for indoor use.

The Geometric Twisted Mandala Planter from FunctionalAM on Etsy is a beautiful option. You can get sizes from 3 inches to 6.5 inches for $8-$20 depending on which option you choose. And shipping is free.

A blue butterfly stands out amongst a group of red butterflies.
Getty Images

5. Butterfly Habitat

Butterfly habitats may be marketed towards children, but Mom can enjoy one, too! This kit from Target is $19.99, and comes with a habitat and voucher for live caterpillars — which ship separately. Your order should qualify for free shipping.

Mom will be able to watch the caterpillars as they build their chrysalises and grow into butterflies, eventually releasing them into the wild. Bonus points for sending a card with a cheesy analogy about how she helped you grow into a butterfly, and what a great job she did.

Sweets & Culinary Mother’s Day Gifts

Mother’s Day is a great time to shower your mom with sweets. Or, if Mom’s great in the kitchen, it’s a fun time to celebrate those skills with gifts.

6. Personalized Recipe Cards

Mom’s a great cook. Everyone’s always asking her for recipes. Pick her up a set of personalized recipe cards on Etsy so she’ll get full credit when she shares her skills. This set costs $9 and costs $4 to ship to the U.S.

7. Heart-Shaped Pan

Check out this heart-shaped pan from Ecolution on Amazon. Whether your mother’s making pancakes or eggs, she’ll appreciate that Ecolution’s products are eco-friendly yet durable. You’ll appreciate that it clocks in at just $11.93 and ships free with Prime membership.

8. Fruit Infusion Pitcher

This fruit infusion pitcher is great for making mimosas and flavored water alike. It is $19.99 on and ships free with Prime membership.

9. Chocolate

Believe it or not, you can get a fair amount of good chocolate for under $20. The G-Cube from Godiva comes with an assortment of 22 flavors, and costs $12. With shipping, you can expect to pay around $19.95.

10. Delivery from a Local Bakery

Ask your mom about her favorite local bakery recommendations. Then, place an order for delivery with them on Mother’s Day. This allows you to not only get mom a gift, but also support small businesses in her community.

If the delivery fee would put you over budget you can find another way. You could request curbside pickup or she could take a quick trip inside to pick up her present.

Self-Care Gifts for Mother’s Day

We all need a little more self-care. Help Mom relax with these soothing Mother’s Day gift ideas until you can see each other again.

11. Comfortable Sleep Mask

Help Mom get some better shut eye. These cute, silk satin sleep masks from Beyarina from Walmart not only comes in under budget at $13.95, for a total of $19.98 after shipping.

12. Amethyst Yoni Soap Bar

This Amethyst Yoni soap bar from Organically Bath & Beauty is pH balanced for sensitive skin costs about $15.30 to send to Mom after accounting for shipping costs.

13. Best Mom Ever Sugar Body Scrub

This cute product from Joon X Moon will help remind mom that she’s the best ever, all while basking in the glow of champagne-scented exfoliation. It’s available at Target for $10, and there are a few ways you can get it to her. Shipping isn’t really an option as it only ships with orders of $35+.

But, you can purchase it at the Target near where Mom lives through Target’s Pickup or Drive Up services. Or, if you already have a Shipt membership, you can get it delivered to Mom’s house from her local store for just $7, bringing your total to $16.99.

Need more ideas to celebrate your mom? We’ve got two dozen DIY spa ideas to help her relax and rejuvenate. 

A woman puts cucumbers over her eyes as she sits up with a charcoal facial mask on her.

Getty Images

14. Luxe Face Masks

Charmed Bath & Body offers several different face masks available via Etsy. You can choose from:

  • Matcha
  • Rose clay.
  • White clay
  • Charcoal
  • Turmeric

It should cost you around $15.79 in all to purchase and ship one of these mask powders for Mother’s Day.

15. Aromatherapy Humidifier

If Mom’s really into essential oils, consider this aromatherapy humidifier on Amazon. You can pick between one that’s LED lit or one that’s wood printed. Prices range from $14.99-$19.99, and shipping is free for Prime members.

16. Mother’s Day Coloring Book

Give Mom an opportunity to de-stress with this Mother’s Day coloring book from Amazon. Each page comes with intricate drawings to color in and encouraging and cute quotes about motherhood.

This book is $14.99 and ships free for Prime members.

17. Blue Light Glasses

All of our devices — phones, PCs, TVs — give off blue light. Staring at blue light can cause migraines, damage our vision and even throw off circadian rhythms, our natural sleep-wake cycles.

Help Mom out with some self-care she didn’t even know she needed with these blue light blocking glasses from Nordstrom. They’re only $15 and shipping is free.

18. White Noise Machine

If her circadian rhythms are messed up, a white noise machine can help Mom get to sleep easier. Sharper Image’s Sound Soother Revo is available at Target for $14.99. While the $5.99 shipping fee may take you slightly over budget, you can get free shipping if you purchase with your Target RedCard. Plus you’ll save 5% off your order.

19. Essential Oil Diffuser Bracelet

This Jack & Rose diffuser bracelet will set you back just $15 and the shipping is free with Amazon Prime. The locket-style bracelet comes with eight color pads that can be changed to match an outfit or a mood. If she’s already into essential oils, all she has to do is squeeze a few drops on the cotton pads and be surrounded by that aroma when she wears the bracelet.

Does she need essential oils? A three-pack starter set of eucalyptus, lavender and tea tree oils is often on sale on Amazon for $5.99. That may put you a tad over your budget, but isn’t she worth it?

Sentimental Mother’s Day Gifts

These sweet, mom-centric products will highlight your relationship as you take a trip down memory lane.

20. Tell Me Your Story Book (Grandma Edition)

This is a cute idea if your mom has grandkids. Have them gift her this memory journal. It’s available for $7.96 on Amazon with free shipping for Prime members.

21. Tell Me Your Story Book (Mom Edition)

Don’t have kids, but love the memory book idea?

Fear not. There is a version of these products for children to give directly to their moms — no procreation required. This daily journal of childhood memories will run you $12, once again with free shipping for Amazon Prime members.

22. You & Me Mom Journal

Want to make the memory journal thing a two-way street?

This journal from Uncommon Goods can be sent back and forth between you and your mother. Each page has prompts encouraging the two of you to reflect on your life memories and love together over the years. It will run you $13, and should come in just under $20 after accounting for shipping costs.

23. Photo Book

There’s nothing moms love more than pictures of their kids and grandkids . Photo books can often be cumbersome to create, or come with deceptive discounts and “deals” that don’t account for exorbitant shipping costs.

You can get around all that by creating a book with Google Photos. You can easily import all the pictures already on your Google account, and can create a 20-page, soft-cover photo book that’s sure to put a smile on her face for just $14.99 without any shipping charges.

24. Photo Puzzle

Two things moms love in one: Photos and puzzles! Pick your image, and NannyGoatsCloset on Etsy will send you your own puzzle for $13.99 plus $3.95 for shipping.

25. And Then There’s … Cash

You’re shopping on a tight budget, so your wallet is probably thin right now. She might not want to admit it, but money might be tight for your mom, too.

Instead of buying her physical presents, consider sending her the cash in the form of a gift card or a check, not an actual bill. Be sure to send a card or heartfelt note along with it.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder.


What is a Pell Grant – And How Do You Apply?

Students unable to finish studies due to the closing of their school or who received the Borrower Defense Loan Discharge may also be eligible.
Robert Bruce is a senior writer for The Penny Hoarder. 
As of the 2021-22 school year, the minimum Pell Grant award a student can receive is 0 per year (July 1 to June 30) and the maximum is ,495. Your EFC number will determine where you fall in that range.

What Is a Pell Grant?

The takeaway: Always fill out a FAFSA! You never know what you could be eligible for.
Students with a parent who died in the line of duty – as a military veteran or public service officer – may also be eligible if they are under 24 and enrolled at least part-time in a college or career school.
To qualify for a Pell Grant, you need to have a minimum GPA (2.0)  and demonstrate exceptional financial need.
A Pell Grant is a form of federal student financial aid that, unlike a loan, doesn’t need to be repaid. The U.S. Department of Education awards federal Pell Grants to low-income students who qualify. The grants cover tuition, room and board, and other educational fees and expenses.

Who Is Eligible for a Pell Grant?

College students who struggle to afford tuition and other expenses have an avenue to help pay for their education that doesn’t involve federal loans: the federal Pell Grant.

  • Demonstrate “exceptional financial need” on the FAFSA application.
  • Be a U.S. citizen or eligible non-citizen.
  • Have yet to receive a bachelor’s, graduate, or professional degree.
  • Maintain a minimum GPA of 2.0. Note: Individual institutions may have different GPA requirements.

Pell Grant funds are available at 6,000 educational institutions in the country. To be eligible, you must:
The numbers say that more than 2 million students would have been eligible for the Pell Grant in the 2015-2016 school year, but they didn’t fill out a FAFSA. Further, 1.2 million would’ve qualified for the maximum Pell Grant amount.
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The Pell Grant is a need-based program that, unlike federal student loans, never has to be repaid. With total student loan debt in the U.S. reaching nearly .75 trillion in 2022 affecting more than 43 million borrowers, this federal grant is an attractive alternative for students who qualify.

How Much Money Can I Receive From a Pell Grant?

Is the Pell Grant the same as the FAFSA?
A federal Pell Grants is just that – a grant. It’s not a loan so you don’t need to pay it back – with a few caveats.  If you withdraw from courses, change your enrollment status, or fail to meet GPA requirements after having received your award, you may have to pay it back. That could also have tax implications, so it’s not a good idea all around.  Federal student aid administrators also factor in your school’s cost of attendance and your enrollment status.
How many times can I receive a Pell Grant?
If you fit in those categories, here’s what you need to know.

Incarcerated individuals may be eligible for aid through the Second Chance Pell experiment – created in 2015 by the Obama administration to provide “education opportunities for thousands of justice-involved individuals who have previously been unable to access federal need-based financial aid.” The program expanded in the 2022-23 school year to include 200 colleges and universities now offering their prison education programs with support from the Pell Grant program.

How Do I Apply for a Pell Grant?

Individual grant amounts depend on a student’s Expected Family Contribution (EFC), an index number that determines eligibility for federal student aid. The number originates from the financial information provided when you complete the FAFSA.
Graduate students aren’t eligible for the Pell Grant, though some students working on a post-baccalaureate teacher certification may qualify.
You can also apply for the “year-round Pell Grant” if you attend summer school. In this situation, you would be eligible for the same award amount you received in the fall and spring. So if your annual award amount is ,000, and you’ll receive ,000 in the fall, ,000 in the spring – then you would be eligible for an additional ,000 if you attend summer school.

Other FAQs About Pell Grants

The application process is simple enough. To apply for a Pell Grant, students must fill out the Free Application for Federal Student Aid form (FAFSA). From there, financial aid administrators will determine whether the student is eligible and, if so, set the Pell Grant award amount.
Also, you’ll need to reapply for the grant using the FAFSA every academic year, meaning your Pell Grant aid can change annually based on your current financial situation.
Created in 1972, it is named after U.S. Sen. Claiborne Pell of Rhode Island and is the largest education grant program offered by the federal government.
Grant recipients risk losing eligibility if they withdraw from courses, change enrollment status, or fail to meet their college or university’s GPA requirements.
Like other federal student aid options, to apply for a Pell Grant students need to fill out the Free Application for Federal Student Aid (FAFSA) form.
Colleges and universities disburse the award funds into the student’s account balance and are reimbursed by the federal government. The timing of the disbursement varies by institution – some may make monthly payments while others might distribute all of the funds before classes begin.

Do you have to pay back a Pell Grant? <!–


No. The FAFSA is simply a form you fill out when applying for federal student aid programs – everything from federal student loans, work-study and grants, including the Pell Grant. 

Save Big Bucks By Being A One-Car Household

Have you ever considered being a one-car family? If you are single, have you ever thought about living without a car of your own?

Certainly, there was a time when neither of those scenarios would have been considered feasible, reasonable or popular. Owning a car was our birthright and what so many of us worked toward after getting a driver’s license as a teenager. A car is often the first big-ticket item we own — or go into debt for.

But owning a car is expensive, and getting more so. There is the price of gas, the cost of insurance and constant concern about maintenance. When you own a car you pay licensing fees plus parking costs either at your workplace or for parking when you go out to eat or attend a sporting event.

During the early stages of the pandemic when so many people stayed home, the roads were empty. No one went anywhere, so no one had to drive anywhere. News stories abounded about the improved environmental conditions of the world at the time.

But, now we are crawling back to a normal life. Does a normal life necessarily mean you need to have a second car at your disposal at all times?

4 Factors to Consider to Become a One-Car Household

Here are some considerations that make it possible to be a one-car family, and reasons why you might want to consider it. Use this list to assess your family’s situation.

1. Number of Drivers

This may be the No. 1 consideration. A home with two adult drivers is likely the best scenario for going to one car. It will be easier to sync schedules. More than two, and you will need increased  patience and cooperation.

For example, if you live in a household with two adults and two driving teenagers, one car would be a nightmare unless you live in a city with excellent public transportation. That being said, working together and keeping track of schedules could allow you to go from three to two cars.

2. Driving to Work and School

If everyone in the household has a job or school that requires them to leave the house, and the locations are far enough away that walking or public transportation is not an option, then perhaps you need to be a two-car family.

But if one or more family members are working from home or studying solely online, the number of cars needed can become a topic of discussion. You might be able to become a one-car family.

3. Location of Key Services

Other than going to work, where do you absolutely need to go on a regular basis? The grocery store, naturally. Is there anywhere else that you must go to on a daily or weekly basis? Are any of those places within walking distance? Think about the possibility of the person working from home driving you to an appointment on a lunch break.

Check to see how much a round-trip Uber or Lyft ride would be from the places you regularly visit. Perhaps that will be a better deal than the prorated price of gas, insurance and maintenance. Keep in mind, though, that rideshare rates, like everything else, have gone up in recent months.

4. Occasions When Two Cars Are in Use

On a regular basis, how much time is spent when both members of your household are using a car? Or, looked at from the opposite direction, how much time is spent in a normal week with at least one car in the driveway, not being used?

The Price of Owning a Car

It’s more expensive today than ever to own a car, for a variety of reasons. The pandemic has pushed the average price of a new car to about $40,000. The price of used cars has gone up by 40%. And that’s just the start of the expenses.

The price of owning a car could be one reason that you are thinking about getting rid of one. Or the temptation of making some money on the used car market could also help make a decision.

The following chart includes 2021 information from about how much it cost a year to own a car. The average across the country is $5,265 for payments, fees, gas and maintenance. These are the costs in the top five and bottom five states.

Annual Cost of Car Ownership at a Glance

State Cost
Michigan $9,304.28
Florida $6,765.22
Texas $6,670.51
Delaware $6,404.80
Minnesota $6,317.65
Massachusetts $4,480.48
Kansas $4,531.79
Alabama $4,610.43
Tennessee $4,639.37
Vermont $4,642.13

Car Payment

Are you paying off a car loan on one or both of your vehicles? Each one is likely costing you a monthly payment somewhere around $500 if the cars are new, and one of the car loans may be costing you more than the other. Selling one of those cars is a quick way to save money.

Gas Prices

The price of gasoline is at an all-time high in the spring of 2022. In early April, the U.S. government decided to release millions of gallons of gas from the federal oil stockpile to relieve gas prices, but that is not a behavior that is long-lasting. Ask yourself:

  • What is your gasoline budget per week?
  • How often do you fill up?
  • Would you save money if you only had to worry about filling up one car per week?


Depending on your age and driving history, automobile insurance is one of the more expensive necessities in your budget. Americans pay an average of $1,655 annually for full automobile coverage, averaging a monthly payment of $138. While the average price per car drops when you insure multiple cars, it is still more expensive to insure two cars than it is to insure one.


Regular maintenance means oil changes and tire replacement, mostly. Wiper blades and brakes are also regular expenses. AAA says the average annual cost of regular maintenance on a vehicle is $792, depending on how much you drive.  That does not take into consideration any major repairs needed on older cars that have outlived their warranty.


For many states, license plate renewals are an easy way to raise revenue, and raising the rate for renewal is an easy way to increase revenue. Oregon has the highest car registration fees, between $268 and up to $637 for new cars. Florida follows with a new registration fee of $225. Registration fees are just a fraction of this in Arizona.

Renewal rates range depending on the state you live in, but states are also charging higher license plate charges for electric or hybrid cars than for gasoline-powered ones. Many communities in America also charge a fee for an annual vehicle sticker to residents, a charge that can reach $100 in some communities.


If you own or rent a single-family home, you don’t pay to park your car. But if you live in a situation where you are paying for the use of a garage, that is another cost consideration. Then, when you leave home in your own car, you may be going somewhere that requires you to pay for parking.

Toll Fees

These days you are almost forced to have an automatic payment device attached to your windshield if you live in a state that has toll roads and bridges. There is usually a one-time fee for purchase of the device and then you have to make automatic payments to refill that account balance. How often you have to pay to use the roads increases your costs of driving.

Two women laugh in the backseat of a vehicle.
Getty Images

The Price of Ride Shares and Car Rentals

The cost of ride shares with Uber or Lyft are dependent upon where you live and how far you want to travel. When determining whether you can live without that extra vehicle, you need to figure out how often you would be calling for a car to pick you up, and how far you anticipate traveling.

That being said, you would need to take a lot of rides to equal the annual cost of owning that extra car.

Depending on where you live, you can also consider renting a car for longer trips. According to Kayak, the average cost of a rental car per day jumped to $81 as of December 2021. What is your daily average expense for the extra vehicle you have? How often are you likely to need to rent a car?

The Price of Delivery Services

An entirely new topic in the issue of automobile ownership is the availability, cost and flexibility offered by delivery services, especially groceries.

How many times do you use that second car to pick up something that you could have delivered? Yes, delivery costs money but if it’s nominal it might play into your ability to go down to one car.

The Availability of Public Transportation

Whether it is a bus or a train, public transportation is likely to go to or near to where you need to go on a regular basis.

The U.S. Census Bureau reports that most public transportation commuters travel by bus, followed by subway or elevated rail, train or commuter rail, then streetcar (where available).

For some people, especially those in suburban locations traveling to other suburban locations, the only true public transportation available is a bus, which is inconvenient because of spread-out bus stop locations and schedules.

The Value and Price of Convenience

The Irish writer and poet Oscar Wilde told us that “a cynic is someone who knows the price of everything and the value of nothing.”  We have looked at the price of owning a car vs. depending on ride shares and public transportation. Now, let’s talk about the perceived value of those options.

Do you like having a car sitting in your driveway or in your designated parking spot, ready to take you wherever you need to go whenever you need to go? Now think about how much you pay for that convenience. Is it worth it?

Cars have an environmental impact and while it’s true that one less car on the road will not have a great impact, it might have an impact on how you feel about yourself. Perhaps you want to eliminate one car as your contribution to the environment.

There certainly is a psychological price to pay if you give up that second vehicle. There is a perceived lack of freedom. But, if you are environmentally concerned, there is also a psychological price of being a two-car family when only one vehicle would suffice.

The Possibility of Sharing a Car

There is another consideration. Hopefully, you paid attention in grade school when you were taught about sharing.

In order to make a vehicle downsize work, you need to create a schedule of regular driving trips. The needs of both drivers should be considered. Is the car going to belong to one person and be borrowed by the other? A definite discussion of the ownership and use of that one vehicle needs to occur before you become a one-car family.

You might have to log in doctor and hair appointments, plus work obligations, into a shared calendar on your smartphones through Google calendar or another app. Or maybe you’ll use an old-school paper calendar hung on the fridge with a magnet. Either way, having one car will force you to get organized.

Frequently Asked Questions (FAQs) About Going to One Car

We’ve collected the answers to some of the most common questions about down-sizing your family’s number of cars.

Is It Possible to be a One-Car Family?

It is, depending on the size of your family. But it requires scheduling, sharing, the willingness to use public transportation or ride-sharing services, and the willingness to walk when possible. If you cannot employ any of those tactics, it is going to be difficult. The more urban your living situation, the easier it is going to be to be a one-car household because of the availability of public transportation.

Is It Expensive to Own Two Cars?

It certainly is more expensive than owning one. You must insure both cars (although most insurers offer multiple-car discounts), you must maintain them both, and you must license them both. If you are paying off car loans on both cars, that is obviously a double expense. However, If you only use one car at a time, expenses like gas, parking and road toll costs do not double. 

How Much Insurance Can You Save If You Only Have One Car?

While most insurers offer multiple-car discounts so that the average cost per car is lower, you are still going to pay more to insure two cars than you pay to insure one. It will not be double and, as always, the rates depend on year and make of car, its usage and your location. Cars used in large metro areas are often higher to insure than cars driven in small towns.

Does Having Two Car Loans affect Your Credit Score?

It may cause your score to drop temporarily because applying for a second loan will trigger a hard credit check. Having two car loans impacts your debt-to-income ratio, which is a factor in determining your credit score.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.


The 15 Best Value Stocks to Buy Right Now

In 2022, the old rules of investing have mostly gone out the window, but one thing hasn’t changed: Wall Street’s best value stocks continue to be an attractive place for investors to plunk down their money for the long term.

The S&P 500 is down roughly 10% year-to-date. War continues to rage in Ukraine and disrupt energy markets. And significant changes in interest-rate policy continue to upend investment strategies that have been profitable for several years running.

But that’s the thing about investing. If you want to get ahead, it’s important to think beyond the obvious opportunities and consider a holistic approach that will generate returns even in even challenging environments. That involves looking beyond fashionable growth investments to value stocks that might been roughed up of late but still offer long-term upside.

In hopes of finding the best value stocks for investors right now, we looked for:

  • Companies with a minimum market value of about $1 billion
  • Those with forward price-to-earnings (P/E) ratios below the broader market (for reference, the S&P 500’s forward P/E is currently at 18.8)
  • Those with price/earnings-to-growth (PEG) ratios below 1 (PEG factors in future growth estimates, and anything under 1 is considered undervalued)
  • Strong analyst support, with at least 10 Wall Street experts covering the stock and the vast majority of those issuing ratings of Buy or Strong Buy

A few of these companies have admittedly seen trouble lately, hence their sagging stock prices, but even then, their underlying businesses are sound. And considering the broader challenges to every company on Wall Street, it’s important for investors to focus on high-quality picks over the latest flashy growth narrative, regardless of recent performance.

Here are 15 of the best value stocks to buy now.

Share prices and other market data as of April 25. Analyst ratings courtesy of S&P Global Market Intelligence. Stocks are listed by analysts’ consensus recommendation, from highest score (worst) to lowest (best).

1 of 15

Boot Barn Holdings

rows of boots on shelvesrows of boots on shelves
  • Market value: $2.8 billion
  • Dividend yield: N/A
  • Forward P/E ratio: 16.8
  • Analysts’ ratings: 6 Strong Buy, 1 Buy, 4 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.82 (Buy)

Even if you’re the kind of person who wouldn’t be caught dead wearing a cowboy hat in public, don’t let your personal tastes get in the way of understanding the fundamentals that make Boot Barn Holdings (BOOT, $94.71) one of the most attractive value stocks in 2022.

Shares have soared roughly 800% over the past five years. That’s in response to a top line that has soared from just under $630 million in the fiscal year ended spring 2017 to what is projected to be nearly $1.5 billion at the end of this fiscal year.

Say what you want about cattleman hats, but you can’t disparage results like that.

But growth has become harder to come by in this niche retail model. More recently, that has weighed on shares, which are down about 30% from their 52-week highs in late 2021. With the worst of COVID-19 behind us, however, and given Boot Barn’s loyal customer base, there’s every reason to expect this retailer to keep putting up big numbers – including a stunning growth outlook of more than 60% revenue expansion this fiscal year.

That might make this recent pullback a chance to get in on one of Wall Street’s best value stocks, now that BOOT’s valuation is more in line with peer specialty retail stocks despite outsized growth projections.

It’s also worth noting that, unlike down-market goods, Western wear is a decidedly luxury category, despite what many might think. Quality boots and hats can run $500 or more. And history has shown that these kinds of purchases keep churning along even amid high inflation and other consumer pressures.

2 of 15

Tempur Sealy International

a Tempur Sealy buildinga Tempur Sealy building
  • Market value: $5.1 billion
  • Dividend yield: 1.4%
  • Forward P/E ratio: 8.3
  • Analysts’ ratings: 6 Strong Buy, 1 Buy, 4 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.82 (Buy)

The pandemic changed many behaviors and expectations, and among those were many consumers thinking hard about housewares for the first time in a few years. Since nobody could travel and we were all spending so much time in our homes and apartments, it was natural to finally pull the trigger on furniture upgrades that hadn’t seemed particularly urgent before COVID-19.

Mattress leader Tempur Sealy International (TPX, $28.70) rode that wave in a big way, watching shares rise more than four-fold from March 2020 through fall of last year. However, many investors have abandoned the stock lately on the idea that the upgrade cycle is over; indeed, TPX has lost nearly half its value since September 2021.

That has created a big opportunity for value investors. The 2013 mash-up of some of the biggest mattress brands on the planet gives this company deeply entrenched relationships with retailers. And while many folks are buying mattresses online these days, there’s one thing that TPX has that these e-commerce brands don’t: a massive hospitality business, which continues to look very strong as hotels look to an important summer travel season after the pandemic.

In fact, even though TPX stock is down more than 40% on the year, Wall Street is actually anticipating double-digit revenue growth and continued earnings improvement. While perhaps things got a bit overheated in this stock thanks to the “stay at home” trade, continued growth coupled with a more reasonable price now makes this mattress leader look like one of 2022’s best value stocks to buy right now.

3 of 15


A Carter's/OshKosh retail storeA Carter's/OshKosh retail store
  • Market value: $3.7 billion
  • Dividend yield: 3.3%
  • Forward P/E ratio: 9.9
  • Analysts’ ratings: 6 Strong Buy, 0 Buy, 4 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.80 (Buy)

When it comes to durable retail spending categories, it’s hard to find a store that is more reliable than Carter’s (CRI, $89.72). This go-to brand is focused on children’s clothing under its own nameplate, as well as under associated brands like iconic OshKosh overalls.

Kids keep growing and keep needing clothes no matter what, and upscale fashions make Carter’s stores a go-to destination for moms and grandmas everywhere.

Admittedly, the growth outlook is relatively modest here. Revenues are projected to expand by merely single digits both in 2022 and 2023. However, Carter’s is expected to squeeze plenty of blood from that stone, with earnings per share estimated to jump by 14% this fiscal year and another 11% in fiscal 2023 if current projections hold.

CRI has been investing heavily in e-commerce over the past few years, and in fact, its international segment posted an impressive growth rate of nearly 30% this last fiscal year in part because of digital successes.

OK, sure, international sales account for just 13% of total revenue. But this is exactly the kind of under-the-radar narrative that investors should look for in value stocks: outsized growth in a small business segment that will ensure strong operating results in the future, even if there’s no disruptive innovation on the horizon set to deliver instant gains.

Children’s wear is a durable spending category, and CRI remains one of the top brands in the space. With shares trading at a forward P/E of just about 10 right now, it might be worth looking at this retailer as a potential bargain stock.

4 of 15


A Target store on a sunny dayA Target store on a sunny day
  • Market value: $111.7 billion
  • Dividend yield: 1.5%
  • Forward P/E ratio: 16.4
  • Analysts’ ratings: 15 Strong Buy, 7 Buy, 7 Hold, 1 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.80 (Buy)

Big-box shop Target (TGT, $241.66), at more than $110 billion in market value, is one of the largest U.S. retailers out there. But although Target takes great pains to offer higher-quality furnishings and more fashionable apparel than its down-market competitors, this big box giant is itself being discounted in 2022 – creating an ideal opportunity for those seeking out value stocks to buy right now.

Right now, Target’s market value is slightly below its projected revenue for next year, while competitors like Costco Wholesale (COST) are trading at a premium on this metric. TGT stock is also being discounted compared with earnings, with a forward P/E of 16.4 right now compared with a reading of almost 19 for the broader S&P 500 Index.

It’s also worth noting that while COVID-19 disruptions took their toll on many retailers, Target is actually riding a broader tailwind for its business thanks to the fact that is has adapted to the “omnichannel” approach of a digital age. Total sales are up almost $30 billion since 2019 thanks to a robust e-commerce presence, curbside pickup and an agile approach to compete in a digital age.

The dividend yield might not burn down the house – at 1.5%, it’s better than the broader S&P 500 but worse than 10-year T-note. But Target is a Dividend Aristocrat that has strung together half a century’s worth of uninterrupted payout growth – and with annual payouts just totaling $3.60 per share and earnings set to approach $16 per share next fiscal year, there’s more than enough headroom for increased dividends down the road.

And for those concerned with environmental, social and governance (ESG) traits, note that Target also has earned a place among our Kiplinger ESG 20.

5 of 15

D.R. Horton

A D.R. Horton home is under constructionA D.R. Horton home is under construction
  • Market value: $26.3 billion
  • Dividend yield: 1.2%
  • Forward P/E ratio: 4.5
  • Analysts’ ratings: 11 Strong Buy, 4 Buy, 6 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.76 (Buy)

A $26 billion homebuilding company, D.R. Horton (DHI, $74.19) has a pretty easy-to-understand business. It acquires land, builds residential homes on the sites, then sells the finished houses for a hefty profit.

It operates under the D.R. Horton brand, as well as Express Homes, Emerald Homes and Freedom Homes. It also offers mortgage financing and related services to help put buyers in their new homes.

If you own a home or are shopping for a home right now, chances are you’re attuned to the ever-rising values in most markets. But to give newcomers an example, home prices in March surged 15% year-over-year to set yet another record, proving this red-hot sector is far from cooling off.

DHI, however, has rolled back as investors have gone “risk off” in 2022, with shares now off about 35% from 52-week highs set in November. Part of the reason is because folks are afraid that higher interest rates could result in higher mortgage costs and thus scare off potential homebuyers.

At least so far, that has not been the case. No small wonder. Consider that the National Association of Realtors estimated that in March the inventory of homes actively for sale on a typical day in March decreased by 19% compared with the prior year. There is simply not enough supply for the buyers that are out there, and interest rates aren’t rising enough to make enough of those buyers reconsider.

That adds up to a compelling story for DHI. Couple that with a bargain valuation, including a forward price-to-earnings ratio that is below 5 right now, and it’s worth considering staking your claim to one of today’s best value stocks in the housing space.

6 of 15


worker spraying waterproof layer on concreteworker spraying waterproof layer on concrete
  • Market value: $7.3 billion
  • Dividend yield: 2.5%
  • Forward P/E ratio: 8.6
  • Analysts’ ratings: 10 Strong Buy, 3 Buy, 5 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.72 (Buy)

Chemicals company Huntsman (HUN, $34.19) produces products worldwide including polyurethanes, dyes, epoxies and other materials. It’s not a particularly glamorous business, making these raw materials for end-users to craft their own finished goods. However, Huntsman’s chemical operations are incredibly reliable, and they’re seeing strong demand across the board as the global economy recovers in the wake of the pandemic.

As proof: A few months ago, Huntsman posted Street-beating sales and earnings for the fourth quarter of 2021, and it provided strong guidance for 2022. That’s not just because of improving demand broadly, but also because of higher prices it can command as a result of the current inflationary environment.

Thanks in part to these strong results, HUN also has been blessed by a Standard & Poor’s upgrade to its credit rating in April that will help the chemicals company access financing at better rates going forward.

Value investors will be interested to learn that Huntsman is incredibly committed to its shareholders. It recently doubled its stock buyback program to $2 billion in the wake of recent success, and it has already bought up more than $100 million under that authorization. It also recently increased its dividend by 13%, to 21.25 cents per quarter – that’s 70% from the 12.5-cent quarterly payout it provided as recently as late 2017.

And with payouts at less than 20% of next year’s earnings, there is ample upside for future dividend increases, too.

7 of 15


Glass similar to that made by CorningGlass similar to that made by Corning
  • Market value: $29.1 billion
  • Dividend yield: 3.1%
  • Forward P/E ratio: 14.4
  • Analysts’ ratings: 7 Strong Buy, 4 Buy, 3 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.71 (Buy)

Although it got its start as a specialty glass company was back in 1851, Corning (GLW, $34.42) has a long history of high-tech partnerships – from working with Thomas Edison on his early lightbulbs to leading the charge on cathode ray tubes that powered the first generation of televisions to modern fiber optic cable and touch-screen displays.

In fact, its chemically strengthened Gorilla Glass is currently the gold standard for mobile devices. It is designed to be thin, responsive and damage-resistant – all must-have characteristics for phones and tablets. 

Corning has been a slow-and-steady performer compared with some of the flashier names in technology. But there is definitely still growth here. GLW produced an outsized spurt in 2021, with revenues up nearly 25% year-over-year. Looking forward, estimates are still for mid- to high-single-digit sales improvement over the next couple years. And promisingly, Corning has largely sidestepped most of the supply-chain issues plaguing many manufacturers; indeed, CEO Wendell Weeks said earlier this year that its biggest problem wasn’t supplies or labor, but capacity to meet high demand!

On top of that, GLW offers a decent dividend north of 3%. That dividend is growing, too, up to 27 cents quarterly at present compared with 10 cents per quarter back in late 2014. And with annual earnings per share of more than $2.60 projected next fiscal year, that dividend isn’t just sustainable but also ripe for future increases down the road.

When looking for the best value stocks – those that can perform over the long run – a stock like Corning is a great example of taking an alternative approach to fashionable trends to avoid some of the volatility. Nobody thinks of this glass company first when plotting investments in tech, and that allows for moments like this when shares are more reasonably priced than some other assets out there.

8 of 15

Wells Fargo

Wells Fargo bankWells Fargo bank
  • Market value: $173.7 billion
  • Dividend yield: 2.2%
  • Forward P/E ratio: 10.6
  • Analysts’ ratings: 13 Strong Buy, 8 Buy, 5 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.69 (Buy)

Among financial stocks, the $180 billion financial powerhouse Wells Fargo (WFC, $45.83) in many ways was, for a time, in a class by itself. However, the company has piled up a number of black marks on its corporate record in recent years that have caused many investors to think twice about putting their money behind WFC stock.

One of the biggest challenges started in late 2016, with news that some Wells employees were opening checking and savings accounts for clients without their consent. There was also word that Wells was misleading businesses on corporate credit card fees, followed by a 2018 move by the Federal Reserve announcing it would restrict the bank in response to “widespread consumer abuses and compliance breakdowns.”

Understandably, some folks have abandoned WFC stock in recent years – including even Warren Buffett, who exited almost all of his stake last year. And that’s not without cause. But as with so many things, the race for the exit has created a buying opportunity for value-minded investors.

WFC stock currently trades for a price-to-book ratio of just 1.1, compared with closer to 1.3 for Bank of America (BAC) and 1.5 for JPMorgan Chase (JPM), and 1.7 for “super-regional” U.S. Bancorp (USB). So while Wells remains one of the biggest banks in the U.S., it’s still treated as an also-ran compared to large peers.

But with interest rates on the rise, creating a tailwind for most lenders, it’s worth considering whether the negativity around past transgressions has turned Wells Fargo into one of the banking industry’s best value stocks to buy.

9 of 15


deepwater oil rig for drillingdeepwater oil rig for drilling
  • Market value: $118.8 billion
  • Dividend yield: 1.6%
  • Forward P/E ratio: 8.9
  • Analysts’ ratings: 14 Strong Buy, 9 Buy, 3 Hold, 1 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.67 (Buy)

Everyone who has filled up their car with a tank of gas recently knows all too well how inflationary pressures have gripped the energy sector in a big way over the last year or so. And as a result, many oil and gas stocks have seen strong performance as well.

With crude oil prices at around $100 per barrel presently, that has created continued tailwinds for Big Oil names such as ConocoPhillips (COP, $91.66). It’s not the biggest firm in the oil patch, but it’s still a major player at nearly $120 billion in market value and a global energy business that explores, develops and produces oil and natural gas worldwide. And unlike the big integrated energy giants, COP mostly operates in “upstream” operations (exploration and production), meaning it’s uniquely positioned to make the most of the current environment.

Case in point: As a result of inflationary pressures across all energy commodities these days, the company is plotting revenue growth of more than 25% this fiscal year.

An investment in ConocoPhillips certainly carries risks, insofar that a significant rollback in oil prices would likely disrupt the stock the same way we saw rising prices create better performance. However, COP is making big structural moves lately that should ensure shareholder value for many years to come.

Specifically, COP plans to return 30% of operating cash to shareholders with a predicted outlay of $65 billion back to shareholders from 2022 through 2031. That follows a $1 billion boost to its stock buybacks last year.

These are significant figures that should make any value investor a believer in this stock.

10 of 15

General Motors

General Motors' Hummer electric vehicle is built in a GM ZERO plantGeneral Motors' Hummer electric vehicle is built in a GM ZERO plant
  • Market value: $57.9 billion
  • Dividend yield: N/A
  • Forward P/E ratio: 6.0
  • Analysts’ ratings: 12 Strong Buy, 7 Buy, 4 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.65 (Buy)

Traditional automakers have struggled for a host of reasons in recent years.

For starters, younger generations of Americans simply aren’t as concerned with driving or car ownership. Then there’s the electric vehicle revolution that has put many legacy brands behind the 8-ball when it comes to innovation. And to top it all off, major disruptions to semiconductor supply chains have created bottlenecks, preventing car manufacturers from tapping into pent-up demand.

However, these circumstances have also scared off many investors who do not see the underlying value in car stocks such as General Motors (GM, $39.82).

GM currently trades for just six times earnings estimates – more than three times lower than the typical S&P 500 stock right now. Furthermore, it trades for a slight discount to book value and at half next year’s projected revenue. These kind of metrics are a value investor’s dream.

To be clear, GM’s bargain price isn’t because of, say, disturbing growth projections that warrant this discount. Rather, GM is projected to see an impressive 23% growth in the top line this year. And while earnings are set to take a hit in fiscal 2022, they are forecast to make up all the lost ground and then some in fiscal 2023.

The automotive market assuredly is full of risk and uncertainty. However, GM has a long history and strong brand recognition that should serve it well, especially as the company shows that it’s willing to be flexible.

At these prices, GM stock could be one of the sneakiest value stocks to buy now.

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Skechers shoes are shown behind the window of a storeSkechers shoes are shown behind the window of a store
  • Market value: $6.3 billion
  • Dividend yield: N/A
  • Forward P/E ratio: 13.6
  • Analysts’ ratings: 8 Strong Buy, 2 Buy, 3 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.62 (Buy)

Skechers U.S.A. (SKX, $39.24) is a roughly $6 billion footwear company that continues to connect with consumers and build on its already impressive brand.

But what really makes Sketchers one of the best value stocks to buy now is its direct sales operations that continue to boost margins and drive real results for shareholders. In February, for instance, Skechers reported that its direct-to-consumer segment posted more than 30% year-over-year gains during the fourth quarter.

And looking forward, the brand continues to explore new products via its “comfort technology” and predicts yet another record year in 2022 as it rides growth trends even higher.

SKX stock has struggled over the past year. Shares are off by about 25% over the past 12 months as some investors have questioned whether recent growth trends can continue. Well, the pros are projecting low-double-digit revenue growth in each of the next two years – and similar expansion on the bottom line next year before a 24% explosion in profits in 2023.

Meanwhile, Skechers is helping its own cause, authorizing a $500 million stock buyback program in February to help prop up its shares.

Despite all this, SKX stock still trades for a slight discount to annual sales and a forward price-to-earnings ratio of about 13 right now – significantly lower than both the S&P 500 as well as other top consumer discretionary stocks. With continued growth ahead and continued investment in the high margin direct-to-consumer arm of its business, there’s good reason to expect Skechers has what it takes to succeed going forward.

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Lowe's storeLowe's store
  • Market value: $132.5 billion
  • Dividend yield: 1.6%
  • Forward P/E ratio: 14.8
  • Analysts’ ratings: 18 Strong Buy, 4 Buy, 7 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.62 (Buy)

While Home Depot (HD) might be the go-to name in home improvement, investors would be wise to not sell short its competitor Lowe’s (LOW, $200.38). Consider that while Home Depot has roughly 2,300 locations in the U.S., Lowe’s commands roughly 2,000 locations of its own. However, HD is valued at $315 billion while Lowe’s market capitalization is almost a third of that, at $130 billion or so.

And as long as we’re comparing, Lowe’s boasts a forward price-to-earnings ratio of less than 15 and a price-to-sales of about 1.4 while HD has a forward price-to-earnings ratio of about 19 and a price-to-sales ratio of 2.1.

In other words, Home Depot might be the larger DIY chain, but that’s in part because investors are paying a significant premium for shares.

And this discount comes despite the fact that Lowe’s has delivered better returns across most timeframes, including a 159% total return (price plus dividends) over the past five years versus 124% for HD. Helping that total return is one of the most consistent dividends on Wall Street – Lowe’s is another Dividend Aristocrat, having raised its payout annually for 59 consecutive years.

If you’re looking for value stock picks, Lowe’s is the better buy among DIYs.

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Air Lease

An airplane like the ones Air Lease leases out to customersAn airplane like the ones Air Lease leases out to customers
  • Market value: $5.0 billion
  • Dividend yield: 1.7%
  • Forward P/E ratio: 9.5
  • Analysts’ ratings: 4 Strong Buy, 4 Buy, 0 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.50 (Strong Buy)

Air Lease (AL, $43.76) is an aircraft leasing company concerned with the purchase and leasing of aircraft worldwide. Right now, it owns just shy of 400 planes and is benefiting from a resurgence in air travel now that the coronavirus pandemic is on the wane.

The fundamentals of Air Lease are looking up thanks to improving air travel trends, as evidenced by a projection of 15% revenue growth this fiscal year and then roughly 18% growth the following year.

But despite this tailwind (pardon the pun), AL stock is still reasonably priced with a forward price-to-earnings ratio of about 9 right now. That’s less than half the S&P 500 average at present.

In February, Air Lease said that its lease utilization rate for both 2021’s fourth quarter and full year was an amazing 99.8%. There is no better metric of success for a company like this, proving that its existing resources are in high demand. Additionally, the triple-net lease model of Air Lease requires that the users of its planes pay for the taxes, insurance, and maintenance regardless of whether those planes are grounded or flying. All of this means a higher likelihood that money will continue to roll in for the foreseeable future.

With COVID-19 on the wane and an uptrend in air travel trends this year, the stage is set for AL stock to finally take off after years of stalling. But the time to buy should be soon, while it’s still one of Wall Street’s top value stocks.

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Signature Bank

Skyscrapers in a big citySkyscrapers in a big city
  • Market value: $16.4 billion
  • Dividend yield: 0.9%
  • Forward P/E ratio: 13.2
  • Analysts’ ratings: 10 Strong Buy, 7 Buy, 0 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.41 (Strong Buy)

Signature Bank (SBNY, $261.06), a roughly $16 billion regional bank stock, is riding the tailwind that has benefited most financial firms in the last several months: namely, higher interest rates that have lifted margins on loans. 

Signature boasts about $120 billion in assets under management, mostly in major metro areas including New York, Charlotte and San Francisco. The company primarily serves local consumers and businesses through conventional offerings including checking accounts, real estate loans and lines of credit. But beyond that, SBNY also is a major player in high-growth areas like cryptocurrency trading via its Signet platform, as well as slow-and-steady business lines such as insurance that help ensure strong long-term performance.

Thanks to the uptrend in operations lately, SBNY is projecting big-time increases in its operating metrics, including a nearly 45% jump in revenue this year. The bottom line is expected to expand by just as much.

Many segments of Wall Street that can wax and wane, and financials are no exception. But Signature Bank’s wide and sustainable footprint will serve it well in the current rising-rate environment. It’s not as large as other diversified financials, but it’s trading at levels that put it among the top value stocks to buy right now.

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Micron Technology

  • Market value: $78.3 billion
  • Dividend yield: 0.6%
  • Forward P/E ratio: 6.1
  • Analysts’ ratings: 26 Strong Buy, 7 Buy, 4 Hold, 0 Sell, 0 Strong Sell
  • Analysts’ consensus recommendation: 1.41 (Strong Buy)

Data storage leader Micron Technology (MU, $70.12) is a company that has deep roots in the modern digital economy. Founded back in 1978 – in Idaho, of all places – Micron carved out a niche in semiconductor design that has ultimately kept it at the cutting edge of the tech sector for more than three decades.

Nowadays, Micron specializes in data storage technologies, including for graphics and servers, as well as mobile-focused solutions known as dynamic random-access memory (DRAM). And it’s this sustained growth in the memory market that looks to provide the biggest tailwind for MU stock in the years to come.

Just look at the numbers. Micron is projected to enjoy more than 20% revenue growth in both fiscal 2022 (the current year for MU) as well as 2023. And that will more than filter down to the bottom line. The pros are looking for 50%-plus growth in earnings per share this fiscal year, then another 30% growth in 2023.

Yes, semiconductor stocks are up against the ropes right now. And yes, there are perhaps more interesting stocks in the space than MU. However, with a forward price-to-earnings ratio of just over 7 right now and strong growth projections for the next two years, it might be worth looking to this unsung chip play at its current bargain valuation.