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So you need expensive dental work, and you’re wondering how to pay for it. After getting a quote from your dentist and learning how little your insurance will cover, you may be thinking, This can’t be right. I must be missing something.

We’ve got good news and bad news. Bad news first: Despite insurance, dental work can cost a lot out-of-pocket. The good news: While there’s no simple and obvious solution to covering the bills, there are many tricks you can use to make your dollar stretch farther (and get a tax break while you’re at it).

We’ll explain all the ways you can save a little here and there on dental work. Altogether, they can add up to quite a discount off your dentist’s quote.

8 Ways To Pay for Dental Work

Many people cover their dental work by combining several of the strategies below. It’s tough to avoid paying out-of-pocket entirely, but you can get a hefty discount off the original quote.

1. Medical Insurance

Dental work isn’t typically covered by medical insurance, but certain procedures may be covered if they’re deemed “medically necessary.” For instance, oral surgery potentially can be billed as a medical procedure. Before you move forward with any dental work, it’s a smart idea to talk to your medical insurance company to find out what may be covered.

Recommended: Beginner’s Guide to Health Insurance

2. Dental Insurance

You should know that there’s a difference between a dental office that takes your insurance and a dental office that is in-network. A dentist may take your insurance even though they are out-of-network.

When a dentist says that they take your insurance, that likely means that they will file an insurance claim for you. But if your insurance doesn’t cover a procedure or service, the price will generally be set at your dentist’s discretion — and you’ll typically be responsible for paying the costs out-of-pocket.

Generally, using an out-of-network dentist means your insurance will cover less and you’ll pay more. Being in-network, on the other hand, usually means that your insurance company has pre-negotiated the fees with the dentist and they generally can’t charge more than that. So you’ll usually pay less with an in-network dentist.

Recommended: Budgeting as a New Dentist

3. Payment Plans

Paying a bill on a weekly or monthly basis can be much more manageable than paying it in a lump sum. That’s why many dental offices offer payment plans for procedures not covered by insurance.

Payment plans can be offered directly through your dentist’s office, or by third-party services like CareCredit. Ask about the specific terms of any payment plan offered. For example:

•   What procedures qualify for a payment plan?

•   Will they charge interest? And if so, how much?

•   Do they have to check your credit first?

Asking these questions beforehand can help keep you from getting blindsided by unexpected costs.

4. Flexible Spending Account

A Flexible Spending Account (FSA) is a special savings account offered through some employer benefit plans. FSAs allow employees to pay for certain out-of-pocket medical and dental costs with tax-free money.

The typical taxpayer saves about 30% in federal, state, Social Security, Medicare, and Unemployment taxes. That translates to a 30% discount off all eligible medical and dental expenses.

FSA rules cap the amount of money that can be placed in the account each year ($3,050 for 2023), and also dictate which types of expenses are FSA-eligible. Most routine dental work and orthodontia qualify: cleanings, X-rays, fillings, crowns, extractions, implants, and Invisalign.

FSAs can’t be used for any procedure that is considered “cosmetic,” including teeth whitening and veneers. But in some instances, if a typically cosmetic procedure is deemed medically necessary — as with some veneers — you may be able to use your FSA. Talk to your dental insurance company for more information.

One drawback of FSAs is that any funds that are unused at the end of the plan year are forfeited — so make sure you don’t leave any money on the table. In the plus column, because FSAs are funded with pre-tax dollars, they reduce your taxable income, which is always nice.

5. Health Savings Account

A Health Savings Account (HSA) is similar to an FSA in several ways:

•   Both are funded with pre-tax dollars

•   Both are used to cover healthcare expenses

•   Both can be established through your employer, and funded with payroll deductions

But there are also key differences between an FSA and HSA:

•   HSAs must be used with a High Deductible Health Plan (HDHP)

•   The 2023 HSA funding cap is $3,850 for individuals, $7,750 for families

•   HSA funds roll over from year to year

•   You can set up an HSA through some health insurance companies and banks, making them a good option for the self-employed

If you don’t have access to an FSA — and you are currently covered by a high-deductible health plan — you can open an HSA at any time.

6. Talk With Your Dentist

The cost of dental work can actually be negotiable, depending on your dentist and your situation. First, have your dentist walk you through the treatment plan. Ask lots of questions, including:

•   Are all the procedures they’re suggesting equally urgent? Can some be postponed?

•   Can you get a discount by paying cash or the entire cost upfront? Some dentists give a percentage off for this.

•   If you don’t have insurance, ask if you can score an uninsured rate.

Some dentists will be flexible, and the worst that can happen is they say no. Another thing you can do is to have an honest conversation with your dentist about your financial situation. If your budget has no breathing room, see if they are open to giving you a discount, or if they are willing to push out your bill for a few months.

If the planned dental work is important but not super urgent, you may be able to schedule your appointments so they straddle two plan years. For example, if your plan year is January-December, you might schedule half the appointments for December, and a half for the following January. That way, you can take advantage of two annual benefit maximums for insurance and two years’ worth of FSA or HSA funds.

7. Credit Cards

In some circumstances, a credit card can be a suitable payment option for dental bills. If you have a card that offers rewards or cash back, it can also provide some benefits in return.

You might also consider looking for a medical credit card. These cards are issued by banks, credit unions, and other lenders and can only be used for healthcare and within a specific provider network.

Some medical credit cards defer interest for a period of time after your healthcare charges are incurred — much like 0%-interest cards. No interest is charged so long as those charges are paid off in full before the interest-free period expires. Late payments or balances that have not been fully paid before the deferment period ends can incur interest charges.

Speaking of 0%-interest cards, they’re another option to finance expensive dental work. By law, these interest-free promotional financing offers must last at least six months. But the most competitive offers go well beyond this to offer 0% introductory APR financing for 14 months or longer.

Before you commit to a new card, it’s a good idea to shop around for the best terms and make sure dental work meets the requirements for any rewards.

8. Personal Loan

A personal loan is an unsecured loan that you can use for almost anything. Because of this flexibility, many people use personal loans to pay for out-of-pocket medical expenses.

Using a personal loan to finance dental work might be a better option than a credit card. The lower the interest rate, the lower your monthly payment. And personal loans tend to have lower interest rates than credit cards. Credit cards currently have an average interest rate of 22.4%, but online lenders such as SoFi offer personal loans with lower interest rates to qualified borrowers.

How much you can borrow is also flexible, and getting approved for a personal loan can be done entirely online. In short, a dental loan might be a good option to cover additional dental needs, from basic fillings to more complex, high-cost procedures.

Recommended: Secured vs. Unsecured Personal Loans

The Takeaway

There is no one perfect solution for financing expensive dental work. But there are a number of resources and tricks you can call upon to stretch your dollar. Discuss your options with your dentist to find out what discounts and payment plans they may offer. Avail yourself of an FSA or HSA to pay with pre-tax dollars — an effective discount of 30%. Another option is to pay your bill with a 0% interest credit card, rewards card, or medical credit card that defers interest for six months or more. And you can maximize your insurance and FSA/HSA benefits by scheduling your appointments so they straddle two plan years.

Another option is to finance your dental work with a personal loan. SoFi offers personal loans with low fixed rates, no fees, and flexible repayment terms. From a simple whitening treatment to a complicated root canal, SoFi loans help cover the costs that insurance won’t.

FAQ

What can I use as financial assistance for dental work?

To finance expensive dental work, you may have to employ a few different tricks. First, if you have an FSA or HSA, paying your bills with pre-tax funds will net you an effective 30% discount. You can also schedule work to straddle two plan years so that your dental insurance and FSA/HSA cover twice the annual amount. If you’re uninsured, explain your financial situation to your dentist to see if they’ll offer a discount. And consider taking out an unsecured personal loan.

Can I use a personal loan as financial assistance for dental work?

Yes, a personal loan can be a great option for covering expensive dental work, compared to high-interest revolving credit. Shop around for the best rate and terms, and watch out for hidden fees.

Is it hard to get financial assistance for dental work?

It will take some work on your part, but financial assistance is available for low-income patients through dental schools, clinical trials, United Way, Medicare, and Medicaid. Find out what kind of assistance you may be eligible for on the U.S. Department Health & Human Services website at HHS.gov.

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPL0722003

Many drivers choose liability-only car insurance to save money. The average annual premium is $1,070, according to the Insurance Information Institute. However, this type of coverage is not a good fit for everyone.

We’ll discuss exactly what liability-only insurance is, what it covers, and whether it’s the right choice for your needs.

What Is Liability Car Insurance?

Liability-only car insurance is a type of policy that provides the minimum protection that’s legally required by your state. More specifically, it covers the cost of bodily injury and property damage for other drivers and vehicles, up to a set limit, if you’re found at fault in a car accident. A liability-only policy is usually the most affordable car insurance you can get.

What Does Liability Car Insurance Cover?

There are two kinds of protection for liability-only car insurance: property damage and bodily injury coverage:

•   Property damage: Pays for others’ medical bills, lost wages, and expenses due to pain and suffering if the policyholder is found at fault. It can also cover legal bills if you’re sued over the accident, also up to the policy limit. (Find out how much car insurance goes up after an accident.)

•   Bodily injury: Pays for damages to another person’s vehicle and property if the policyholder is found at fault.

How Does Liability Car Insurance Work?

Liability car insurance will pay up to a certain dollar limit. If damages or bills exceed that limit, you’re responsible for the remainder. While it’ll cover things like medical bills and car repairs for others, this type of policy won’t pay for repairs to your own vehicle or your medical bills.

Recommended: Insurance Tips for First-Time Drivers

Liability Car Insurance Coverage Requirements by State

Most states require car insurance, though the minimum coverage requirements vary. See below for a state by state breakdown.

Data courtesy of the Insurance Information Institute

How Much Is Liability Only Car Insurance by State

Data courtesy of the Insurance Information Institute

Liability Car Insurance vs Full Coverage

How much auto insurance you need depends partly on whether you can afford to repair or replace your car. Full coverage will pay for your car repairs and medical bills after an accident, no matter who is at fault.

It also covers repairs or replacement of your vehicle for covered “perils” (an auto insurance term) like theft, fire, flood, collisions with animals, vandalism, and falling objects. Because of the additional features, full coverage car insurance tends to cost much more than liability insurance.

When To Drop Comprehensive and Collision Coverage

Because your insurance needs change over time, it makes sense to reevaluate those needs on a regular basis with a personal insurance planning session. In some cases, you may find that it makes sense to drop comprehensive and collision coverage:

•   You’re not currently driving your vehicle: If your car is parked in a garage or at home and you don’t intend to drive it, comprehensive coverage doesn’t make sense. However, you may want to keep collision coverage because it protects against perils such as theft, fire, and vandalism.

•   Your car has a low market value: If your car is worth less than a few thousand dollars, getting pricey repairs — after you pay your deductible — may not be worth it. (Learn about the different types of insurance deductibles.)

Recommended: How to Save Money on Car Maintenance

How To Shop for Liability-Only Car Insurance

The first step in getting car insurance is determining how much you need. You must purchase the minimum coverage required by your state. If you want more financial protection — especially if you’re worried about medical bills and car repairs for expensive vehicles — then consider a higher coverage limit to give you more peace of mind.

Then it’s time to shop around on online insurance sites to get a sense of the going rates. Factors to look for include what is a covered peril and the insurer’s customer reviews.

The Takeaway

Liability-only car insurance is best suited for drivers with low-value vehicles who want to save money. Keep in mind that liability policies don’t cover your own medical bills or vehicle after an accident. If you want this protection, you may be better off paying more and purchasing full coverage.

Shopping around is the best way to find a policy that suits your needs. SoFi makes it easy by helping you compare rates from top insurers in just minutes.

FAQ

Do I need liability insurance when renting a car?

You don’t need to have your own auto insurance policy when renting a car, as rental car companies typically have their own coverage. However, you can purchase collision or comprehensive insurance while renting a vehicle if you want additional coverage.

At what point is full coverage not worth it?

Full coverage auto insurance typically is not worth it if your vehicle has a low value or you don’t intend to drive your vehicle for a long period.

When should I go from full coverage to liability?

Going from full coverage to liability requires careful consideration. In most cases, if your vehicle is worth less than what your deductible will cost, it might be time to drop down to liability coverage.

Photo credit: iStock/Antonio_Diaz

Insurance not available in all states.
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SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPT1022002

It’s possible to short Bitcoin using a handful of different strategies. And as the crypto markets remain tumultuous, knowing how to short Bitcoin and other cryptocurrencies can be useful to investors.

Shorting is a way of profiting from an asset’s falling price. Volatile assets like Bitcoin can provide an opportunity for this type of trading. But be warned: Short selling is a more advanced trading strategy as it requires exact timing and can involve much more risk than just buying or selling something. Here, we’ll cover how to short sell Bitcoin, some places it can be done, and what risks to keep in mind.

Can You Short Bitcoin?

Yes, it is possible to short Bitcoin. Shorting Bitcoin is effectively the same as shorting a stock, as an investor is making a bet that the asset will lose value.

There are a handful of different ways that an investor can choose to short Bitcoin. Generally, the idea behind shorting is that you would borrow a certain amount of Bitcoins, and sell them at their current price. Then, in the future, you’d purchase Bitcoins to repay the loan — at which point, theoretically, the price would have dropped. So, you’d be paying back the loan with Bitcoins that were cheaper than the ones you borrowed.

You would then profit off of the difference between the two prices when the Bitcoins were sold and repurchased. It’s similar, in some ways, to cryptocurrency arbitrage.

The benefit to shorting Bitcoin is that it allows investors to generate a profit in a down market. The drawback is that shorting involves more risk and is more complex than just buying or selling something.

💡 Take a step back: Learn more about Bitcoin, its origins, and how it works.

Example of Shorting Bitcoin

Here’s how shorting Bitcoin may look in a practical sense:

You anticipate that the price of Bitcoin will fall in the coming days or weeks. So, you plan to short sell five Bitcoins. You borrow those Bitcoins, and sell them for, say, a total of $100,000 ($20,000 each). Two weeks later, the value of Bitcoin has fallen 20%, and BTC is now trading at $16,000.

You would then repurchase the five Bitcoins you sold, spending a total of $80,000 ($16,000 each). You repay the lender the five Bitcoins, and pocket the difference. Effectively, by shorting, you’ve netted $20,000.

How to Short Bitcoin: 5 Different Ways

There are several different methods for shorting Bitcoin. Here are some of the most popular among crypto investors.

Shorting Bitcoin on Exchanges

Perhaps the most straightforward way to short Bitcoin would be to create an account on a crypto exchange that offers this feature. These exchanges make it easy for users to borrow Bitcoin, sell it short, then buy it back at a lower price. Some exchanges that allow for this include Kraken, Bitmex, Bitfinex, eToro, and Binance.

But note that not all exchanges allow users to short crypto. In that case, they may have to turn to other methods to short Bitcoin.

Does Coinbase Allow Shorting?

Coinbase users asking the question “can you short cryptocurrency” will find that the answer is no.

Shorting Bitcoin with Futures Contracts

A futures contract is an agreement between two parties to buy or sell something at a certain price on a specific date. These can be used to trade Bitcoin, and Bitcoin futures contracts have been around for several years now. Using futures, a trader can short Bitcoin by buying a contract with a lower Bitcoin price at some point in the future.

Again, this would help an investor profit if they were anticipating a fall in Bitcoin’s price. They could then exercise the contract and purchase Bitcoin at a lower price than market value. It’s important to keep in mind, though, that futures are an advanced trading method and come with high risk.

Shorting Bitcoin with Options Contracts

Options are similar to futures in that they are both forms of derivatives — financial instruments that derive their value from an underlying asset.

Options contracts give holders the option, but not the obligation, to buy or sell an asset at a certain price during a specific period of time.

There are several different options trading strategies out there, too.

Bitcoin put options could be used as a way to short Bitcoin. At the time of purchase, an investor only has to risk the premium (essentially, a purchasing fee) for buying the option contract, which is typically a small amount. Still, options are complex and can lead to large losses for traders unsure of what they’re doing.

Shorting Bitcoin with Leveraged Bitcoin Trading

There are some financial intermediaries that offer leveraged trading products like spread betting and contracts for difference (CFDs). These might be the riskiest of all possible ways to short sell Bitcoin, because they involve making leveraged bets.

Leverage involves betting with more money than you actually have. This can lead to increased gains for positive-yielding trades, but can also lead to investors losing much more than they risked, and falling into debt when trades don’t go their way.

Short-Selling Strategies for Crypto

When engaging in sophisticated trading methods like shorting, it’s a good idea to have a plan going in. Making trades without some kind of strategy or plan is more akin to gambling than serious investing.

When it comes to short selling, the goal is to be as certain as possible that prices won’t rise in the near-term, since this could lead to substantial losses. Therefore, it’s important to recognize when bullish factors are not present in the market, rather than only looking for bearish factors that are present.

Here is a list to consider when considering to short sell Bitcoin using different shorting strategies.

Technical Analysis

There are many different ways to use technical analysis (TA) to find shorting opportunities. Some common indicators include:

•   Relative Strength Index (RSI): This indicates when an asset might be overbought or oversold. A reading above 80 is thought to indicate overbought conditions, meaning prices could fall soon.

•   Bollinger Bands: These indicate when an asset is poised for a big move in one direction or the other. If Bollinger Bands tighten to a narrow range on a chart during a time when other bearish developments are occurring, prices could be getting ready to head lower.

•   Moving Averages (MAs): When they cross each other in certain ways, moving averages can indicate bearish or bullish sentiment. For example, when the 50-day MA moves above the 200-day MA, this is referred to as a “golden cross,” and is thought to be bullish. Conversely, when the 200-day MA moves below the 50-day MA, this is referred to as a “death cross,” and is thought to be bearish.

Sentiment Analysis

This method is less formal. It involves trying to gauge the market’s overall mood, or market sentiment. For instance, there are some websites that aggregate the total amount of negative and positive tweets about different cryptocurrencies. While this is not an exact science by any means, it’s thought that the values of assets tend to rise in price when there’s more positive social media chatter about them.

Again, this isn’t an exact science, and market sentiment can often be wrong. With that in mind, tread carefully when trying to read the minds or moods of the market.

Fundamental Analysis

Using fundamental analysis for Bitcoin looks a little different than using fundamental analysis for stocks and other assets. Here are a few key metrics to keep in mind when it comes to Bitcoin.

•   How’s the network activity? Are there a lot of new users coming into the market, creating wallets and buying coins? If so, this could be a bullish signal.

•   What are miners doing? Are miners holding coins or selling them right away? When miners hold coins, it means they think prices are going to rise, indicating bullish sentiment. It could be helpful to understand how bitcoin mining works in this regard, too.

•   Are coins moving toward or away from exchanges? Many crypto-oriented media outlets often report on the volume of coins leaving or entering exchanges. When people move large amounts of crypto off exchanges, it means they plan on holding for the long-term, which could be bullish.

If one or more of these bullish factors are present, it might not be the best time to try to short Bitcoin.

When Should You Consider Shorting Bitcoin?

In the simplest terms, investors who are willing to assume the risks associated with short-selling should do so when they think that an asset’s value will fall. It may be helpful to think of shorting as “making a bet against,” and as such, if you were under the impression that Bitcoin’s value was going to decline in the days, weeks, or months ahead — after doing lots of research, of course — that might be the time to short it, if it aligns with your investment objectives and risk tolerance.

Conversely, if you were anticipating Bitcoin’s value rising in the future, perhaps because it is currently undervalued by the market, you would not short it. Instead, that may be the time to engage a buy-and-hold investing strategy in an effort to earn a return.

Is Shorting Bitcoin Risky?

Shorting anything involves substantial risk. Perhaps the most important thing that investors should understand about shorting is that it can result in unlimited losses.

This can occur because there’s no upward limit on the price of Bitcoin. After having entered a short position, traders take a loss if the underlying asset goes up. The more the price rises, the more losses pile up. In this way, an investor who is short Bitcoin can lose all of their investment quickly if the price doesn’t retreat. This risk can be hedged using a stop-loss, which will automatically close out a trade at a specific price level.

The Takeaway

Investors can short Bitcoin, but it’s often an involved and complicated process. Not to mention risky — short-selling any asset is generally riskier than other investing activity, and it can be difficult to turn a profit even for experienced traders. But by shorting on exchanges through margin, or using futures and options contracts, intrepid crypto investors can short Bitcoin.

Photo credit: iStock/MUUSU

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