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While the cost of a new house depends on multiple factors, the sticker price might jump based on the finishes a buyer add, a financial advisor says.
To save on costs with a new build, it may be in a potential buyer’s best interest to hire a contractor later on to add desired finishes, experts say.

Peter Cade | Stone | Getty Images

Buyers of newly built homes can come across a number of sticker shocks.
In February, the median sale price for new construction sold in the U.S. was $400,500, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

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But the value of a newly built house will depend on multiple factors, including the finishes that are added, said certified financial planner Veronica Fuentes, a wealth management advisor based in Washington, D.C.
“They want to know what kind of windows you want, flooring, siding, window panels, what kind of doors, where you want the outlets, what kind of light switches do you want. Depending on what you’re picking, they’re adding up the tab,” Fuentes said.
To save on costs with a new build, it may be in a potential buyer’s best interest to hire a contractor later on to add desired finishes, experts say.
“Think about those elements that could be easily added at a later date,” said Angie Hicks, home expert and co-founder of Angi, an online marketplace that connects homeowners with professional contractors for home maintenance or renovations.

How to save on construction costs

While multiple elements contribute to the overall cost of a newly built house, one way to keep the price within range is by deferring elements for future renovations or upgrades, experts say.
To that point, homeowners spent on average $13,667 across 11.1 projects in 2023, a slightly higher level compared with 2022, according to the State of Home Spending by Angi. The survey polled 6,400 consumers between Oct. 22 and Oct. 23.
Almost half (46%) of homeowners used cash from savings to cover renovations. About 20% used credit cards, while a minority, 7%, refinanced an existing loan and 5% used a home equity line of credit loan.
“I tell my clients to be very conservative,” said Fuentes, as buyers can always change the knobs, the flooring and the paint on the walls through hired contractors.
To that point, experts recommend focusing on the structural elements.
While costs range depending on materials, labors and location, most homeowners paid between $14,611 and $41,440 to remodel a kitchen in 2024, Angi found. Meanwhile, bathroom remodels can range from $6,629 to $17,536.
If you know you will be upgrading features in the house, go with the basic or lowest priced features for now, Hicks said.

“There’s no reason to finish it out right when you build the house necessarily,” Hicks said. “Those are things that can be added later and can potentially save you in the near term.” More

The Biden administration released its new proposal to forgive student debt for millions of Americans.
It hopes the plan will survive legal challenges this time.

US President Joe Biden gestures after speaking about student loan debt relief at Madison Area Technical College in Madison, Wisconsin, April 8, 2024. 
Andrew Caballero-Reynolds | AFP | Getty Images

The Biden administration has published its new student loan forgiveness proposal, putting it on the path to start clearing debt for millions of borrowers this fall.
The public has 30 days, through May 17, to comment on the details of the revised aid package.

Since the U.S. Supreme Court rejected President Joe Biden’s first attempt at wide-scale loan cancellation last summer, his administration has been working on this do-over plan.
Biden wants the program to survive legal challenges this time. To that end, the U.S. Department of Education has made the relief more targeted and turned to the regulatory process. The president initially attempted to forgive student debt through an executive action.
Outstanding federal education debt in the U.S. stands at around $1.6 trillion, and burdens Americans more than credit card or auto debt. More than 40 million people hold student loans.
Here’s what to know about Biden’s new relief plan.

What the revised plan calls for

While Biden’s previous relief plan forgave student debt for most borrowers, this aid package targets specific groups of people, and the interest on the loans.

It calls to cancel “the full amount” of someone’s debt that has grown from their original balance when they first entered repayment. To qualify for this provision, these borrowers would also need to be enrolled in one of the Education Department’s income-driven repayment plans and to earn under a certain amount, including $120,000 or less as a single filer.
Regardless of their income, borrowers would be eligible for up to $20,000 in cancellation on the portion of their debt that is unpaid interest.
Consumer advocates have long criticized the fact that interest rates on federal student loans may exceed 8%, which can make it tough for borrowers who fall behind or are on certain payment plans to reduce their balances.
More than 25 million federal student borrowers owe more than they originally borrowed, according to the Biden administration.
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Borrowers who have been in repayment for 20 years or longer on their undergraduate loans, or more than 25 years on their graduate loans, would get full debt cancellation.
The plan also erases the debt of people who are already eligible for that relief but haven’t received it or applied for it. Such stories are common.
Lastly, it delivers relief to borrowers who enrolled and took out debt to attend low-financial-value schools and programs or institutions that failed to provide sufficient financial value.
The Education Department left out from its relief proposal, for now, the group of borrowers experiencing financial hardship. Previously, its plan was expected to include people in this situation.

“As President Biden said last week, our Administration is working as quickly as possible to deliver relief to as many borrowers as possible,” an Education Department spokesperson said in a statement.
As a result, while it continues to create a proposal for those struggling financially, it moved forward “with these proposed rules today so we can begin delivering relief to borrowers as early as this fall,” the spokesperson said.

And what comes next …

After the 30-day public comment period, the Biden administration needs to review the feedback it received for its plan. It will then release its final rule, probably at some point this summer. Soon after, it could begin reducing and eliminating borrowers’ balances.
However, legal challenges could disrupt that timeline.
After Biden first touted his revised relief program on April 8, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that the president “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.

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Investors in Trump Media are betting on the former president, one expert says.
The stock’s volatility may lead to investors who either bet on it by buying shares or against it by shorting it to get burned.

A screen displays trading information about shares of Truth Social and Trump Media & Technology Group outside the Nasdaq MarketSite in New York City on March 26, 2024.
Brendan Mcdermid | Reuters

Trump Media has become the latest stock to watch.
But rather than a meme stock — an investment that becomes popular for individual investors through social media — the company is more of a personality stock, according to John Rekenthaler, vice president of research at Morningstar.

“The reason that people own this stock is because, in one way or another, they support Donald Trump,” Rekenthaler said.
“It’s an act of faith,” he said.
The former president is the majority shareholder in Trump Media, which trades under the initials of his name, DJT, on the Nasdaq. The stock got off to a rocky start this week, with two straight days of losses, though it was up more than 20% on Wednesday afternoon.
The company’s mission statement is to end “Big Tech’s assault on free speech by opening up the internet and giving the American people their voices back,” according to its website.

The closest company comparison to Trump Media is Tesla, according to Rekenthaler. He said investors backed Tesla because they believed in Elon Musk, which helped send the company to its peak value in 2021.

A key difference is that Tesla was a “much larger company,” according to Rekenthaler, who on April 10 wrote an op-ed criticizing Trump Media’s valuation.
Trump Media is currently a $4 million business through social media, he said. Meanwhile, the company is currently valued at more than $3 billion, down from around $9 billion when it came out.
“The problem is there is still more room to fall,” Rekenthaler said.
Like investors in any publicly traded company, Trump Media’s shareholders are hoping to eventually redeem their shares for more than they paid. However, there is no guarantee of that happening, Rekenthaler said.
Other investors have chosen to bet against the stock through short selling. That, too, can be “dangerous,” Rekenthaler said.
“This stock is just so unpredictable,” Rekenthaler said. “It certainly could go up in the short term and hurt the shorts.”
The company responded to a request for comment by referring to its frequently asked questions webpage. Trump Media outlined the risk factors to its business in a recent filing with the Securities and Exchange Commission tied to its public stock listing. Among them are risks related to the former president, including his reputation and popularity; the possibility of his death, incarceration or incapacity; or the possibility that his relationship with the company could be discontinued or limited.
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Investing in a company that is tied to a prominent celebrity carries certain risks, noted Preston D. Cherry, PhD, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin.
The alignment with a well-known figure can lead you to trust a company more as a result, said Cherry, who’s also a certified financial planner. But if the celebrity and company part ways — as with Adidas and Ye, also known as Kanye West, or Weight Watchers and Oprah — that can affect the investment prospects.
Moreover, investors may get caught up in the enthusiasm around a newly public stock, Cherry said.
“Retail investors have a sense of FOMO or fear of missing out specifically with popular IPOs [initial public offerings],” Cherry said.
That can lead to those companies becoming overvalued when they come out as a result of that hype, he said.
Because the early-stage company’s stock may be highly volatile, average investors may face a lot of danger if they’re tempted to day trade or short it, said CFP Ted Jenkin, CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
“These kinds of stocks are speculative at best,” Jenkin said.
Both Cherry and Jenkin are members of the CNBC FA Council.

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The annual rate for Series I bonds could fall below 5% in May based on inflation and other factors, financial experts say.
That would be lower than the current 5.27% interest on I bond purchases made before May 1, but higher than the 4.3% interest offered on new I bonds bought between May 1, 2023, and Oct. 31, 2023.   
However, the fixed rate portion of I bond interest can be harder to predict, experts say.

Jetcityimage | Istock | Getty Images

The annual rate for Series I bonds could fall below 5% in May based on the latest inflation data and other factors, experts predict.  
That would be lower than the current 5.27% interest on I bond purchases made before May 1, but higher than the 4.3% interest offered on new I bonds bought between May 1, 2023, and Oct. 31, 2023.    

Despite the expected rate decline, I bonds are “still a good deal” for long-term investors, according to Ken Tumin, founder and editor of DepositAccounts.com, which closely tracks these assets.  
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Meanwhile, short-term investors currently have higher-yield options, such as Treasury bills, money market funds or some certificates of deposit.
Backed by the U.S. government, demand has soared for I bonds amid higher inflation, particularly after the annual rate hit 9.62% in May 2022. Next month, the rate could drop to around 4.27%, some experts predict. 

How the I bond rate works

The U.S. Department of the Treasury adjusts I bond rates every May and November. That yield changes based on a variable and fixed portion.

The Treasury adjusts the variable part every six months based on the consumer price index, which is a key measure of inflation. The agency can change the fixed portion or keep it the same.
The fixed portion of the I bond rate stays the same for investors after purchase. The variable rate portion resets every six months starting on the investor’s I bond purchase date, not when the Treasury Department announces rate adjustments. You can find each rate by purchase date here.

Currently, the variable rate is 3.94% and the fixed rate is 1.3%, for a combined rounded yield of 5.27% for I bonds purchased between Nov. 1 and April 30.
The 1.3% fixed rate “makes it very attractive” for investors who want to preserve purchasing power long term, according to Tumin.

How the fixed rate could change

Since the variable rate for I bonds is based on six months of inflation data, experts agree it will fall from 3.94% to 2.96% in May. The fixed portion is harder to predict because the Treasury does not disclose its formula for changes.
David Enna, founder of Tipswatch.com, a website that tracks Treasury inflation-protected securities, or TIPS, and I bond rates, expects the fixed rate will be 1.2% or 1.3% in May.
But “1.4% is not out of the question,” he said.
Enna looks at a half-year average of real yields for 5- and 10-year TIPS to predict fixed rate changes. The real yield reflects how much TIPS investors earn yearly above inflation until maturity.
A possible fixed rate change from 1.3% to 1.4% “isn’t enough to make a huge difference,” but investors always prefer the higher rate, he added.

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President Joe Biden and Vice President Kamala Harris on Monday released their 2023 tax returns.
The president and first lady Jill Biden reported a joint adjusted gross income of $619,976 for 2023, which was 7% higher than 2022.
Harris and her husband, Douglas Emhoff, showed an adjusted gross income of $450,299, which was slightly lower than their 2022 earnings.

President Joe Biden and Vice President Kamala Harris deliver remarks about healthcare in Raleigh, North Carolina on March 26, 2024.
Peter Zay | Anadolu | Getty Images

President Joe Biden and Vice President Kamala Harris released their annual tax returns Monday, and there are lessons within for average Americans, according to tax experts.
The president and first lady Jill Biden reported a joint adjusted gross income of $619,976 for 2023, which was 7% higher than in 2022. They paid federal income taxes of $146,629, and their effective tax rate was 23.7%.

Vice President Kamala Harris and her husband, Douglas Emhoff, showed an adjusted gross income of $450,299, which was slightly lower than their 2022 earnings. Their federal taxes were $88,570, and their effective tax rate was 19.7%.
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Interest income can be a ‘big surprise’

In 2023, both couples earned most of their income from salaries, with federal and state taxes withheld from employers.
Both couples also had interest income, which can cause a “big surprise” at tax time, without increased paycheck withholdings or quarterly estimated tax payments, explained David Silversmith, a certified financial planner and senior tax manager at Eisner Advisory Group in New York.
That’s why investors need to track taxable activity — such as dividends or fund distributions — in brokerage accounts, said Silversmith, who is also a certified public accountant.

While both couples made extra tax payments, they each incurred a small estimated tax penalty, based on underpayments from each quarterly deadline and interest. The Bidens paid a penalty of $285, while Harris and her husband owed $451.

Tax planning for self-employment income

Over the years, the Bidens have reduced self-employment taxes by receiving some wages through their companies, which are structured as S corporations.
After paying “reasonable compensation” to shareholders, S corporation owners can take distributions without paying 15.3% for Social Security and Medicare taxes.
While the couple only made $4,115 in royalties for 2023, the structure has previously offered significant savings for the couple’s book deals and speaking gigs.  
However, working-age taxpayers with self-employment income would need to consider how lower wages could impact future Social Security income, said Catherine Valega, a certified financial planner and the founder of Boston-based Green Bee Advisory, who is also an enrolled agent.
Why that matters: The calculation for Social Security benefits uses up to 35 years of wages to calculate the monthly payments, she said.

Work with a tax professional

Typically, filers get a tax refund when they overpay levies throughout the year. Conversely, there’s generally a tax bill when filers don’t pay enough. Both tax returns showed the couples were fairly close on total taxes paid vs. owed.
When filing returns, “plus or minus $500 [for a refund or balance] is magical,” said Valega. “Both of them were spot on with that.” 
If you’re a higher earner with “a little bit of complexity,” such as multiple sources of income, she recommends working with a tax professional to “dive into each piece of the pie.”

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The Biden administration released the draft text of its revised student loan forgiveness plan.
Here’s what borrowers need to know.

U.S. President Joe Biden speaks as he announces a new plan for federal student loan relief during a visit to Madison Area Technical College Truax Campus, in Madison, Wisconsin, U.S, April 8, 2024. 
Kevin Lamarque | Reuters

The Biden administration on Tuesday released the draft text of its new student loan forgiveness proposal, which could reduce or eliminate the balances of millions of borrowers.
The proposed rules should be formally published in the Federal Register on Wednesday and will be followed by a 30-day comment period.

“Today’s announcement shows that the Biden-Harris Administration is continuing to fulfill our promises to fix a broken higher education system,” said U.S. Secretary of Education Miguel Cardona in a statement.
The regulatory text comes about a week after President Joe Biden revealed the details of his Plan B for student loan forgiveness.
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The administration has been working on that do-over since the U.S. Supreme Court rejected Biden’s first attempt at loan cancellation last summer.
After the U.S. Department of Education reviews comments from the public, it hopes to finalize the new rules and start canceling borrowers’ debts in the fall, it said.

What’s changed in the draft rules

At an April 8 event in Madison, Wisconsin, Biden said his new relief plan targets specific borrowers, including those who:

Are already eligible for debt cancellation under an existing government program but haven’t yet applied.
Have been in repayment for 20 years or longer on their undergraduate loans, or over 25 years on their graduate loans.
Attended schools of questionable value.
Are experiencing financial hardship.

The Biden administration also said that, if its new plan is enacted as proposed, borrowers will get up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income.
The draft text echoes much of that announcement. However, the Education Department left out from its relief plan, for now, the group of borrowers experiencing financial hardship.
The department said it will release a second draft rule concerning people in this situation “in the coming months.”
This is breaking news. Please check back for updates. More

YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

The American Dream — which for many people involves some combination of owning a home, getting married, having kids and making enough after expenses to save for retirement and spend on leisure — is becoming increasingly expensive.
“The benchmark of a six-figure salary used to be the gold standard income,” Sabrina Romanoff, a clinical psychologist, told CNBC. “It represented the tipping point of finally earning a disposable income and building savings and spending based on your wants, not just your needs.”

More than half (52%) of Americans say they would need at least $100,000 a year to feel financially comfortable, with 26% saying they would need a salary in the range of $100,000 to $149,000 per year, according to a 2023 CNBC Your Money survey conducted by SurveyMonkey.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

“Unfortunately, what has happened is that wages haven’t kept up with the cost of living, by and large, for the last 50 years or so,” said Elise Gould, senior economist at Economic Policy Institute.
“It becomes increasingly hard for many families to be able to attain that sort of middle-class lifestyle, that American Dream,” Gould said.
Consumers using the popular 50-30-20 budget guideline aim to spend 50% of their income on essential expenses, with another 30% for discretionary spending and the remaining 20% for savings.
A new report from GOBankingRates used that framework to analyze how much money a family of two adults and two children would need in each state to own a home, a car and a pet. The report tallied estimated annual essential expenses for such a family and then doubled that figure.

Using that framework, GoBankingRates found that all 50 states require more than a $100,000 annual income, according to the report, with 38 states needing more than $140,000.

Jason Reginato | CNBC

Economists have suggested that debt growth has become a substitution for income growth. Student loan debt reached an all-time high of $1.77 trillion in the first quarter of 2023 and Americans collectively owe $1.13 trillion on their credit cards as of the fourth quarter of 2023. This debt can have a ripple effect, especially when entire generations are starting their adulthoods with thousands of dollars in debt.
“Now people making well over six figures are still living paycheck to paycheck,” Romanoff said. “So what used to symbolize financial freedom is now keeping people stressed about making ends meet.”
Watch the video above to learn how much families in the U.S. need to make to achieve the American Dream.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

Americans’ “magic number” savings goal for retirement has increased by over 50% since 2020.
But experts say the secret to building true wealth is having a high savings rate.

Aleksandarnakic | E+ | Getty Images

When it comes to retirement, Americans have a new number in mind — $1.46 million — for how much they think they will need to live comfortably, according to new research from Northwestern Mutual.
That estimate is up 53% since 2020, when Americans said they would need $951,000, as the cost of living has surged in recent years. It is also up 15% from last year, when respondents said they would need $1.27 million.

For many savers, that goal may sound daunting, particularly as U.S. adults have an average of $88,400 currently saved toward retirement, the study found. Likewise, a recent CNBC survey showed that 53% of Americans feel like they are behind on their retirement savings.
However, experts say having a “magic number” in mind should not be a priority when planning for your retirement.
“The number isn’t the emphasis,” said John Roland, a certified financial planner and private wealth advisor at Northwestern Mutual’s Beyond Financial Advisors.
“That retirement number is really just a starting point for a broader conversation on how to make clear, competent decisions in that phase of your financial life when you’re distributing money versus when you’re accumulating money,” he said.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

Fidelity Investments, the nation’s largest provider of 401(k) savings plans, has moved away from providing broad estimates for what is needed to retire, said Rita Assaf, vice president of retirement products at Fidelity.

“There is no one size fits all,” Assaf said.
She said your income likely differs from other people’s. Other factors — such as how much of your income you hope to replace in retirement, where you plan to live, the lifestyle you plan to have, your health-care costs, and longevity — will all impact the actual number you will need.
“It really depends on your personal situation,” Assaf said. “We do think having a retirement plan helps with that, but it’s got to be a personal retirement plan.”

The number experts say to focus on

Financial advisors agree that having a high savings rate, along with appropriate asset allocations, is one of the most significant components of building wealth. That’s the number to focus on, they say.
Fidelity provides a framework for evaluating your retirement savings progress based on your age.
The framework includes saving your salary by age 30, which then increases to twice your salary by age 35, three times by 40 and continues to go up until the goal of 10 times by age 67.
“That may or may not be feasible depending on where you’re at,” Assaf said of the savings goals. “But it just gives an easier view of what to do.”
The framework assumes that the investor will start saving at age 25 and save 15% annually.

Recent retirement research from Vanguard recommends that workers ramp up their annual retirement savings rate to 12% to 15% of their incomes and invest in an appropriate asset mix for their ages. Doing so can help improve their sustainable investment rate — the highest level of pre-retirement income they can replace.
“I would much rather have clients that save 15% of their income and get a 5% rate of return than save 1% of their income and get a 15% rate of return,” Roland said.

He said that to save money, you need not spend it, a concept emphasized in the book “The Millionaire Next Door.”
“Many people who have significant wealth, you would never know because they don’t look visibly wealthy,” Roland said.
“Those are the people that, as they save and accumulate wealth, oftentimes have accumulated more than they ever anticipated,” he said.
If setting your retirement savings deferral rate to 15% now feels like too much of a financial stretch, you may instead try to boost your contributions by 1% per year. Experts say incremental increases can make a big difference in the long run.

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