College is a transformative phase of life filled with opportunities, challenges, and self-discovery. But between classes, social activities, and newfound independence, college can also be an overwhelming experience. There are numerous opportunities to better yourself, but where do you start?
To get the most out of your time in school, it can be helpful to set and achieve some specific goals. These goals can serve as guideposts, providing direction, motivation, and a sense of purpose during your college years. And, your goals don’t have to be all centered around academics — they can encompass personal development, financial stability, and preparing for the professional world.
Read to learn about the importance of setting goals in college, types of goals to consider, and how to set yourself up for success with S.M.A.R.T. goals.
Good Goals to Complete in College
Setting goals in college can help you identify what you want to achieve academically, personally, and financially, providing a roadmap to follow. Whether you’re just starting school or have a few semesters under your belt, here are some goals you might consider.
Academic Goals to Achieve
Earning a good GPA: At the top of many students’ minds is getting top grades. There are plenty of positives to achieving a high GPA, including more potential for scholarships or landing on the dean’s list. It might be a great resume-builder, too. You could aim for a certain GPA, or work on improving your number from last semester.
Increasing professor facetime: Along with earning good grades, actually making an effort to get to know your professors could go a long way. Using your instructors’ office hours to clarify confusing topics might help you understand class concepts better. And who knows, their references might lead you to a really cool internship down the road.
Completing challenging courses: Rather than choosing the path of least resistance, you might aim to conquer challenging courses that align with your academic interests and career aspirations.
Paying for college: There are all kinds of ways to cover the cost of college, including scholarships, grants, work-study, federal student loans, and private student loans. You’ll want to find the best combination, plus look for ways to save money in college.
Setting up a budget: Establishing a budget might seem pointless when you have little money to work with, but learning how to set up and stick with a simple spending plan can serve you well during your lean college years — and beyond.
Finding an internship: A key objective in college is to get a degree so you can get a great job in your chosen field. One great way to set yourself up for a job that pays well after you graduate is to land an internship related to your major.
💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.
Personal Goals to Set in College
Signing up for extracurricular activities: College can be a great time to discover new interests. Curious to learn Japanese? There might be a club for that. Want to blow off some steam on a basketball court? There could be an intramural team for that. You could check with your college’s campus life department to see what’s available.
Improving communication skills: Consider engaging in activities that help develop communication skills, such as public speaking or writing for publications. No matter what your major, these are skills that can take you far in your career and life.
Exploring a new country: Whether you choose to spend a semester in Rome or Rio de Janeiro, studying abroad in college can do more than give you a change of scenery. It can provide the opportunity to expand your cultural views and learn more about people across the world.
Should You Set More Than One Goal in College?
It’s not only okay, but recommended to set more than one goal in college. Pursuing diverse goals allows for a well-rounded college experience and personal development. However, it’s crucial to strike a balance between ambition and feasibility. Setting too many goals simultaneously might become overwhelming and lead to decreased effectiveness in achieving any one of them.
The key to setting — and achieving — multiple goals in college is to:
• Prioritize It’s important to identify the most crucial goals and allocate more time and resources to them.
• Break goals into manageable tasks You’ll want to divide larger goals into smaller, actionable steps to avoid feeling overwhelmed.
• Manage your time Try to manage your time efficiently by creating schedules and allocating specific time blocks for each goal.
What Is a SMART Goal?
S.M.A.R.T. is an acronym that provides a framework for creating well-defined goals. This acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Here’s a breakdown of each component:
• Specific Goals should be clear and precise, answering the questions of what, why, and how. Specific goals provide a clear focus, avoiding ambiguity.
• Measurable Goals should have quantifiable criteria for tracking progress and determining when they’ve been achieved. This helps in monitoring advancement and staying motivated.
• Achievable Goals should be realistic and attainable within your capabilities and resources. They should challenge you but remain within the realm of possibility.
• Relevant Goals should align with your values, aspirations, and long-term objectives. Ensure that pursuing a goal contributes meaningfully to your overall vision.
• Time-bound Goals should have a deadline or a timeframe for completion. Setting a timeframe creates urgency and helps in planning and prioritization.
SMART Goal Example for Students
If you really want to get down to business on your goals in college, you could use the S.M.A.R.T criteria to start building them out. For example, what if you’re a commuter student who wants to be more involved on campus? The goal of “being more involved” by itself would not fit the S.M.A.R.T. criteria—it’s too vague.
To be more specific, you could re-word your goal by stating, “I want to join two campus organizations this semester and be on the leadership team for one of them.” In this way, you have specifically called out your goal.
It’s also measurable because the goal requires joining two organizations and serving on the leadership team for one. The goal is attainable because you have access to campus organizations. And, it’s relevant to your college experience.
Then you could break down your S.M.A.R.T. goal into mini-milestones. Going along with this example, you might make a goal to check out the activities fair during school. You could also research campus organizations online and narrow your list down to the two you want to become involved with the most.
Another S.M.A.R.T. goal example for students could be paying for college. Breaking it down using the S.M.A.R.T. criteria, for example, could look something like this:
Specific: I need to come up with $10,000 for college tuition by next year. Measurable: I can measure this by figuring out how much money I have and how much I need. Attainable: I can achieve this because there are a variety of resources I can use to help me pay for college. Relevant: The total amount needed is the same cost as one year of tuition at my school. This will help me continue going to school to get my degree. Time-bound: This needs to be completed in 12 months so I can deliver the funds to the financial aid office.
💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.
The Takeaway
Setting goals in college can be pivotal for personal, academic, and financial development and success. By adopting the S.M.A.R.T. goal framework, you can effectively plan and pursue objectives that lead to a fulfilling college experience and pave the way for a successful future beyond your college years.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).
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.
Cheers! Here you are again at the start of the New Year. It’s a fresh start and a great time to think about your goals for the 365 days ahead and how to meet them.
For many people, that may mean taking control of their finances and maximizing their money. There are, of course, all kinds of ways to do this, from bringing in more income to spending less to saving and investing well.
Read on to learn 37 smart, creative ideas that can help you enrich your bank account and net worth in 2024. Try one or a bunch, and see how they can contribute to your financial health this year.
Smart Financial New Year’s Resolutions
Start 2024 by getting on the path to financial wellness. Here are 37 money-saving resolutions to help you maximize your cash in the year ahead.
1. Save 20% Every Month
Here’s our first New Year’s resolution: Consider ramping up your savings by following the 50/30/20 budget rule. This wise formula says to save 20% of your income every month. The other 50% of your money should go toward your needs (housing, food, utilities, debt), and 30% can go toward discretionary items, or the wants in life.
2. Try a Weekly Budget
With so many transactions coming in and going out (and so many of them being automated these days), keeping a monthly budget can seem intimidating. How do you track and manage all of the credits and debits? Are you going to overdraw your account?
There are many different budget methods, but with a weekly vs. monthly budget, the amounts you have to track are smaller and more manageable, and you may be more likely to stick to them. Try making a spreadsheet of all your weekly income and expenses, and then decide where you can cut back to save money.
3. Decrease Discretionary Spending
Has your once-a-week matcha latte habit become a daily thing? And exactly how many streaming platforms do you subscribe to? Spending money on entertainment, takeout, coffee, and other wants can add up quickly. So when you create your budget, figure out ways that you can reduce spending on things you don’t actually need. Put the savings towards a goal like creating an emergency fund or saving for that trip to Croatia.
4. Switch Up Your Budget Cuts
Is one of your New Year’s resolutions to reduce your spending, as noted above? If so and you try to slash everything at once, you can wind up feeling deprived and losing motivation. Instead, you might try cutting back on, say, those fancy coffees one month and on movies the next. You’ll still save money, but the rotating nature of cuts and the challenge of “no flat whites this month” can keep it interesting.
💡 Quick Tip: Tired of paying pointless bank fees? When you open a bank account online you often avoid excess charges.
5. Stop Storing Your Credit Card Information
Yes, adding your credit card details to your online accounts makes it super easy to check out, which is exactly the problem. That simplicity can also lead to increased spending on impulse purchases. Instead, remove those saved cards and force yourself to manually type in your credit card number when you want to purchase something. If you have to get up to find your card, that can be a way to reflect for a moment and potentially avoid impulsive purchases that you don’t actually need.
6. Find a Savings Buddy
Economizing can be easier when you have a kindred spirit to support you. If you have a friend or relative who is also trying to save money or has succeeded at doing so in the past, recruit them to help you. The two of you can text when you need advice on a big purchase you are contemplating or when bills pile up and then stay strong together.
7. Schedule Automatic Transfers
When your paycheck hits your checking account, it likely makes you feel flush and ready to splurge a little. Instead, pay yourself first. Make it a 2024 resolution to set up automatic transfers from your checking to your savings account. All you have to do is set the amount and the date you want the recurring transfer to occur.
Or you can likely send part of your paycheck’s direct deposit into your savings (ask your HR team how to set this up). Either way, you can watch your savings blossom automatically.
8. Earn Credit Card Rewards
If you’re not already earning rewards with your credit card, make 2024 the year to do so. With credit card rewards, you can get cash back when you make purchases. Then, once you reach a certain amount, like $25, you can transfer it into your savings account or to pay down your balance. As long as you don’t overspend and wind up with debt issues, credit cards can be helpful in this way when it comes to reaching your savings goals.
9. Round Up Prices
If you haven’t already tried a round-up app, consider doing so this New Year. These work by, say, charging you $7 for a purchase that really cost you $6.35, and depositing the additional 65 cents into savings or putting it towards your debt. Acorns is an example of this kind of app, but there’s a good chance your bank offers this feature as well. Rounding up can help move you towards financial security.
10. Pay Off High-Interest Credit Cards
Credit card interest rates are notoriously high, with rates topping 20% on average at the end of 2023. If you’re not careful, you could be spending hundreds of dollars every month on credit card interest. Create a plan to become debt-free for 2024, and prioritize paying off your high-interest credit cards. For example, you could use the debt avalanche method, where you pay off the card with the highest-interest rate first and then move on to the card with the next highest interest rate, and so on.
11. Sign Up for a Balance Transfer Credit Card
If you have credit card debt, you may want to pay it down faster as a New Year’s resolution for 2024. Signing up for a balance transfer credit card could help. You’ll typically pay 0% interest on your debt for a certain period of time (say, six to 18 months), before your interest shoots back up.
Just make sure you pay off your balance before that introductory period is over, or else you’ll be right back where you started. And if the interest rate is higher than your current credit card, your situation could be made worse if you don’t pay it off in time.
12. Recycle
Yes, it’s more convenient to toss cans and bottles in the trash. But each one probably could net you five to 10 cents if you redeem them, which is typically easily done at your local supermarket. Plus it’s good for the planet. While it may not yield the down payment for a house, every little bit of cash put into savings can help, especially when compound interest kicks in.
13. Find a Side Hustle
If you have any free time at night or on the weekends, then you can freelance or work some other sort of side hustle. Whether it’s tutoring school children or driving for a rideshare service, those extra dollars can make a serious impact on your savings. There are plenty of low-cost side hustles to consider. Even renting a room in your house on Airbnb could put hundreds or thousands of extra dollars in your account as the months go by.
Decluttering your home may be another New Year’s resolution you have for 2024. How about merging that resolution along with a money-saving resolution? There are plenty of places to sell your stuff, from clothing to electronics to cookware, whether it’s gently or never used. Consider sites like eBay, Craigslist, and Facebook Marketplace.
15. Save for Retirement
If you’re young, you may feel like you don’t have to worry about retirement just yet. But the truth is that time is likely to pass faster than you think it will. Plus, if you start saving right away, you’ll make more money on your investments through the power of compound interest. Take advantage of your company’s 401(k) matching policy, if they have one, and beef up your retirement savings in the New Year.
16. Create an Emergency Fund
If you were to lose your job tomorrow, would you have enough money to last you until you found something new? What if you had a medical emergency or your house suddenly flooded? Having at least three to six months’ worth of savings in an emergency fund will help you cover any sudden, unexpected expenses, and help ensure that your budget and financial goals won’t be derailed.
17. Use Coupons for Groceries
If you’re not a couponer already, 2024 is a great time to start saving this way. Check websites like Coupons.com and P&GGoodEveryday or your weekly newspaper for the latest deals and discounts at your local grocery stores and other retailers. It can be an easy way to make sure you aren’t leaving money on the table.
18. Buy Generic
Did you know that generic products might be the same as name-brand products you love but without the fancy label? Whether you’re at a grocery store or a pharmacy, look into buying those store-brand and generic products instead, because you could end up saving money while still purchasing high-quality products.
19. Choose a Day to Review Your Finances
In order to stay on top of your financial goals in 2024 (or any year, in fact), it’s helpful to set aside one day a week to go over your spending. Pay your bills and check your accounts on this day as well to ensure you’re meeting your benchmarks.
20. Create an Investment Portfolio
The average interest you’ll earn on a traditional savings account is only 0.61% as of the end of 2023. But if you research different investments like stocks and bonds, you’ll see that the market historically earns 10% annually on average, though past performance is no guarantee of future returns.
Perhaps 2024 is a good year to invest in the market or invest more if you are already in the market. Just make sure you invest according to the risk you are willing to take. For instance, if you don’t have much to invest, then you might stick to investing in high-performing, more established and stable companies. But if you have money to spare, you may try investing in riskier, smaller and newer companies.
21. Look Into a High-Interest Savings Account
A high-interest savings account is going to give you more bang for your buck when it comes to your savings. The rates frequently fluctuate, but you may find annual percentage yields between 4% and 6% as of December 2023 — significantly higher than the rate of a standard savings account rate.
Get up to $300 when you bank with SoFi.
No account or overdraft fees. No minimum balance.
Up to 3.80% APY on savings balances.
Up to 2-day-early paycheck.
Up to $2M of additional FDIC insurance.
22. Use Cash Instead of Credit Cards
If you use cash instead of credit and debit cards, you may be less likely to spend money in 2024. Credit and debit cards can make it easy to swipe and tap without thinking about the consequences. Paying $100 in cash for your groceries can often have much more of a psychological effect than simply swiping your card, and it can help encourage you to save more money.
23. Look Into a New Bank
Are you aware of all the monthly bank fees you’re paying just to keep your account open? If you overdraft your account, do you get charged a hefty fee? Does your bank charge you to use an ATM outside of their network? Examine all the fees you are currently paying and then look into competitors to see if they charge lower fees — or perhaps no fees at all. Online banks vs. traditional banks typically charge fewer (or no) fees and pay higher interest rates.
24. Start a Coin Jar
Why not go old-school in 2024? Put all your loose change into a coin jar, and then at the end of the month, take it to your bank to cash it in. This is better than using a Coinstar machine, which will typically take 11.9% of your money when you convert it into cash. Note: You may have to roll the coins before depositing at the bank, but this can be done while listening to your favorite podcast. Or consider it a mindfulness moment.
25. Use Financial Apps
Financial apps are an easy way to keep track of your spending in the New Year. All you have to do is link your financial accounts to these apps to see how much you’re spending and what you’re spending your money on. These apps will even give you suggestions on how to save money and improve your finances, as well as remind you when bills are due. Your bank is likely to offer a tool like this, which can be especially convenient as you track your spending and pay bills.
26. Negotiate Your Bills
Think you’re spending too much on cable? Is your cell phone company ripping you off? Be a savvy consumer, and tackle it in 2024 to save more. Call your service providers, and try to negotiate a lower monthly rate. If you aren’t successful, you could always use services like Trim to negotiate your bills down so you can save more every month.
27. Do Meal Prep
You know how it goes: Suddenly, it’s 7pm, you’re starving, and haven’t even started to think about dinner so you wind up ordering in. Avoid that in the New Year by preparing your meals in advance. That way, you will have food in the fridge when you’re hungry, and you won’t be tempted to eat out. It’s also a good idea to bring lunch to work so that you won’t be tempted to purchase pricey food on your break with coworkers.
28. Cancel Automatic Subscriptions
Go through your bank statements to see if there are any automatic subscriptions you don’t need or remember signing up for. Cancel them immediately. If a company was charging you without your knowledge, you may be able to request your money back.
29. Decrease Energy Costs
Not having an energy-efficient home can be costly. You may be wasting hundreds of dollars each month because you’re leaving the lights on or running the heater or A/C for hours on end. You can make a few changes like sealing up drafty windows and attics to start saving money on your utility bill in 2024.
30. Unsubscribe from Email Lists
If you have a problem with making impulse purchases, then unsubscribe from your favorite retailers’ email lists. That way, you won’t be as tempted to spend because you’ll no longer receive news about flash sales or buy-one-get-one offers.
31. Trade in Your Gas-Guzzling Car
Gas prices have fluctuated considerably lately but can still be quite high. Trading in your SUV for a more efficient vehicle could be a smart move. Hybrid and electric vehicles are good options as well. Though you may pay a premium for them up front, you’ll save a lot on gas in the long run.
32. Ask for Discounts
Here’s a New Year’s resolution to adopt: Whenever you’re purchasing tickets, booking a hotel, or going to an event, ask if there are any discounts. You may be able to snag a discount if you’re a student, a senior, a member of the military, a resident of the state, or even an AAA member.
33. Stop Buying Retail
When you go to retail stores, you’re going to pay full price. Instead, when reasonable, look for used items on sites like eBay and Facebook Marketplace (though be wary of fraud and scams that can happen when purchasing this way). Flea markets and thrift stores may also have the goods you might need (cookware, lamps, you name it) at steeply discounted prices.
34. Join a Warehouse Club
Enlist a friend to join, too, and then share the spoils of buying in bulk. Since the likes of Costco and BJ’s tend to have mega-sizes and packs, you can split the low-cost food and other items you purchase. Say, you buy a dozen burgers and keep half; your friend buys the same number of buns and gives you six. It’s a win-win.
35. Go on a Spending Freeze
Don’t spend any “out and about” money for a week and see how you feel. This means you’ll need to brew your own morning coffee and eat homemade meals. You’ll also need to avoid downloading movies, but at the end of the week, you should be able to more easily distinguish your wants from your needs. This can help make budgeting that much easier.
36. Save Your Tax Refund
What to do with your tax refund? If you get one this year, instead of spending it on a new mobile device or a vacation, put it into your savings. It’ll accrue interest, and you can then put it toward a larger purchase or goal down the line.
37. Work Out at Home
This one is a double whammy if you want to get fit in the New Year, too. Purchase some weights online, and tune into your favorite trainers on YouTube to start burning fat and gaining muscle. You can cancel your expensive gym membership and forget pricey personal trainers while feeling better about yourself in 2024.
Looking Into SoFi Checking and Savings
Here’s another good New Year’s resolution: Make sure you’re happy with your banking partner.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.
SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
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.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
When you think about your health, your mind likely goes first to your physical health and then maybe your mental and emotional health. But there is another key component to your overall well-being, and that’s your financial health.
While you may never discuss it with your doctor —- and may go months or years ignoring it —- your financial wellness has a significant impact on your daily life, as well as your future. What’s more, having poor financial health can in turn affect your physical and mental health.
But what exactly is financial health? How do you measure it? And, more importantly, how do you achieve it? Read on to learn all about financial health, from how to assess it to how to improve it.
Understanding Financial Health
Financial health is defined as the current state of your monetary situation, such as your credit, debt, savings, investments, and income. Being financially healthy means you can meet your monthly financial obligations, are on track to achieve your financial goals, and have enough cash in the bank to be able to absorb a financial setback.
Indications of Financial Health
Below are six signs that your finances are in good health:
• You make enough money to cover your monthly expenses
• You pay all of your bills on time
• You have no debt or have debt that is manageable and being repaid on schedule
• You’re saving enough to meet your short- and long-term goals
• Your credit score is strong enough to help you qualify for whatever loans you might need at low rates
• You feel comfortable with your financial situation
💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.
Metrics and Measurements
There are several core components of financial health. Here’s a look at how to measure the current state of your finances and discover areas where you may need improvement.
• Your debt-to-income ratio: Carrying too much debt can be harmful to your financial health. Lenders use a calculation called debt-to-income ratio (DTI) that compares a person’s monthly debt payments to their monthly gross income to determine how manageable someone’s debt load is. Lower is generally better. Lenders often like to see DTI ratios of 36% or less.
• Your credit score: Having a strong credit score is an indicator of good financial health. Factors that impact your score include amounts you owe on your debt accounts, repayment history, your credit mix, and the length of credit history. FICO® Scores range from 300 to 850. Having a score above 700 is generally considered good credit, while above 800 is considered excellent.
• Your emergency fund: A key measure of financial health is having enough cash in the bank to weather unexpected setbacks like a medical emergency, car breakdown, or job loss. Experts generally agree that you should have an emergency fund with three to six months’ worth of living expenses saved.
• Your retirement savings: Because there are so many variables, it’s hard to know exactly how much you need to save for retirement. One rule of thumb is to aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Check how your savings compares to ideal retirement savings by age to know if you’re on track or if you need to catch up.
Improving Financial Health
You might feel that achieving optimal financial health is a long way off. Don’t get discouraged. The good news is that implementing just a few good financial habits — such as tracking your spending and saving at least something each month -– can boost your financial well-being right away, and even more so over time.
Below are seven practical tips to help you move forward.
Get up to $300 when you bank with SoFi.
No account or overdraft fees. No minimum balance.
Up to 3.80% APY on savings balances.
Up to 2-day-early paycheck.
Up to $2M of additional FDIC insurance.
1. Get on a Budget
When it comes to money in and money out each month, many of us leave it to chance — and hope that the numbers work out. Taking some time to actually crunch the numbers and set up a monthly budget, however, can help ensure that you are living within your means, spending in line with your priorities, and working towards your future goals.
A simple way to get started is to collect the last few months of financial statements and calculate the average amount coming in (after taxes) each month, and average amount going out each month. Subtract the latter from the former and see what you get. If you’re spending more than you are bringing in, or it’s so close there is little left over for saving, you may want to take a closer look at your spending.
There are many different types of budget but one simple guideline you might consider is the 50/30/20 budget. With the approach, you divide your monthly take-home income into three categories: 50% goes to needs (essentials), 30% goes to wants (nonessentials), and 20% to savings and debt repayment (beyond the minimum payment).
2. Track Your Spending
Keeping tabs on how much you are spending each month, and on what, is crucial to financial wellness. Indeed, tracking spending can be both eye-opening and motivating. You might notice, for example, that you’re spending more than you think for certain things, or that your spending is out of line with your priorities. You might also spot some immediate areas for improvement.
One easy way to track spending is to put a budgeting app on your phone (many are free for the basic service). Budgeting apps typically connect with your financial accounts (including bank accounts, credit cards, and investment accounts), track spending, and categorize expenses so you can pinpoint exactly where your money is going.
3. Create a Plan for Debt
Credit cards and similar high-interest consumer loans can drag down your financial health by making it harder to meet your monthly expenses — and even harder to save for future goals. Paying off high-interest debt is an important investment in your financial future.
If you have multiple balances racking up high interest charges, here are two popular strategies that can help you whittle them down to zero.
The snowball method: With the snowball method, you list your debts by size then put an extra monthly payment towards the loan with the smallest balance, while continuing to pay the minimum on the others. Once the smallest debt is paid, you put your extra payment towards the next smallest balance, and so on.
The avalanche method: Using the avalanche method, you list your debts in order of interest rate then focus extra payments towards the debt with the highest interest rate, while continuing to pay the minimum on the others. Once that debt is paid off, you put your extra payments to the debt with the next-highest interest rate, and so on.
4. Look for Ways to Cut Expenses
Trimming back your expenses helps you increase your disposable income, giving you more money to put toward your goals. It also makes it easier to stick with your budget and avoid going into debt.
You might comb through your expenses to look for some easy ways to cut back. While you may assume your “needs” costs are fixed, it may be possible to shop around for a better price on certain monthly essentials, like insurance or a phone plan. Or, maybe you don’t need to drive to work but could spend less by taking public transportation or carpooling with a coworker.
It’s often even easier to find places to cut back in your nonessential sending. For example, you might decide to get take-out less often and cook more nights a week, get rid of streaming services you rarely watch, and/or jog outside instead of going to a gym. Every dollar you save is one more you can put towards saving and debt repayment.
5. Automate Saving
Tackling financial health can feel overwhelming, and it’s not likely something you want to be thinking about all the time. Fortunately, it’s easy to put one of the best financial health-boosters — saving at least something each month — on autopilot.
There are two ways to do this: One is to have a portion of your direct deposit go right into a savings account. The other is to set up a recurring transfer from your checking to your savings on the same day each month (ideally, right after you get paid). You can’t spend what you don’t see. And, chances are, you won’t even miss it.
To help your savings grow faster, consider putting this money in an online savings account. Since online institutions generally have lower overhead than traditional brick-and-mortar banks, they tend to offer better rates and low (or no) fees.
💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.
Build Your Emergency Fund
Without an emergency cash cushion, an unexpected expense (like a car repair or large medical bill) or loss of income can quickly derail your finances. You may be forced to rack up expensive credit card debt. This can put you in a debt spiral that can be difficult to get out of, and take a long-term toll on your financial health.
Even if you do have an emergency fund, it’s wise to periodically check in to make sure it’s sufficient. A good rule of thumb is to keep at least three- to six-months’ worth of living expenses in the bank. (If you’re self-employed or work seasonally, you may want to aim for six- to 12-months worth of expenses.) Ideally you want to keep this money in a savings account that earns a competitive rate but allows you to easily access your money when you need it.
Invest More of Your Income
If you’re putting just a small percentage of your paycheck into your 401(k), or other retirement fund, consider stepping it by 1% or 2% right now. While 1% is a small percentage of your annual earnings today, after 20 or 30 years it can make a big difference in your account balance when you retire. That’s because the longer you give your money a chance to grow, the better.
You might also ask your employer to automatically increase your contribution by a set percentage each year. As your income increases, those extra percentage points of income likely won’t be missed — but they’ll have a big impact on your retirement savings. Your future self will thank you.
Just as with your physical health, establishing and maintaining good habits is key to achieving good financial health.
Some habits that can significantly boost financial wellness include setting up a simple budget, tracking spending, automating savings, building an emergency cash reserve, paying down expensive debt, and investing more of your earnings.
No matter what your income or current state of financial health, putting some smart money habits into place now can go a long way toward boosting your financial security, reducing stress, and building wealth over time.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.
SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
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.
A deck can turn your backyard into a dream destination. But the reality is, building one isn’t cheap.
A new 320-square-foot wood deck can set you back around $19,248, according to the latest estimates from Remodeling Magazine’s Cost vs. Value Report. A composite deck of the same size runs around $24,677. On average, a typical homeowner will spend between $30 and $60 per square foot to have a deck professionally built, according to Angi. But project costs can vary based on where you live, the materials you use, the size of the deck, and other factors.
Whatever your deck plans entail, you’ll want to make sure you’re financially prepared. Here’s a closer look at the factors that can impact how much you could pay to have a professionally built deck added to your home.
Get an Idea of Labor Costs
No matter what kind of deck you’re building, count on labor taking up a big chunk of the budget. Generally speaking, it’s around 50% of the overall project costs, though some estimates put that figure closer to 70% (The rest of the budget typically goes toward covering the cost of materials and other smaller expenses.)
One way to get a rough idea of how much you’ll pay for labor is to use the rule of two. This method involves estimating the total cost of the project (labor plus materials) and dividing that amount by two. The result is the estimate of labor costs.
The rule of two also works the other way around. Let’s say you get a quote from a contractor who will be building your deck. To get an idea of the total cost of the project, simply multiply the labor cost you’ve been quoted by two.
While this method can provide a solid starting point as you plan your budget, it doesn’t factor in any unexpected costs that may crop up as your deck is being built.
💡 Quick Tip: With home renovations, surprises are inevitable. Not so with SoFi home improvement loans. There are no fees required, and no surprises.
Consider the Decking Materials
Another important factor to consider is the material you want to use for your deck. More durable decking material will likely cost you more, but could save in the long run with minimal upkeep or less-expensive repairs. Here’s a look at the average cost of common materials, according to Angi:
• Pressure-treated wood: $15 to $25 per square foot
• Composite decking: $4 to $12 per square foot (materials only) or $25 to $54 per square foot (for an installed deck)
• Bamboo: $3 to $10 per square foot
• Cedar: $4 to $9 per square foot
• Redwood: $5 to $35 per square foot
• Metal: $15 to $20 per linear foot
Of course, price is just one factor. You’ll also want to think about the climate where you live. Do you get a lot of snow in the winter? Is it very humid in the summer? Be sure whatever decking material you choose can stand up to the environment.
Choose a Design That Fits Your Budget
After materials and labor, the actual design of a deck can influence the overall cost of the project. To help keep prices low, you may want to stick with a simple design, traditional, squared-off corners, or even a smaller deck.
One affordable option? A ground-level deck, which sits within 30 inches from the ground. Because it’s so low, this type of deck requires fewer materials and structural reinforcements. And you won’t need to add a railing or stairs, which can be additional savings.
Factor In Additional Costs
While labor, materials, and design are the major players in a construction budget, there are other costs you’ll want to consider.
Permits are one example. Most towns and cities require permits for additional structures like decks. Deck contractors are usually well-versed in this process, and most will include the price of permits in their quotes.
If you’re building the deck yourself — or your contractor won’t pull a permit — you’ll need to handle the red tape yourself. Start by calling your local building department and explaining the project to them. If a permit is required, they can explain how the process works and provide you with the correct application form.
It’s also a smart move to factor in any costs you may incur once the deck is built. For instance, the new addition could increase your home insurance premiums. (Your agent can explain what changes, if any, you’ll need to make to your policy.)
You may also be hit with a higher property tax bill, since the addition of a permanent fixture like a deck typically increases a home’s value. To get an estimate of the change, contact your local building and tax departments.
Comparison Shop
Construction is similar to plumbing or automotive repair in that if you aren’t an expert, it can be hard to gauge the price. Whether you’re hiring a contractor or a carpenter, it can help to ask for bids from a few local professionals to ensure you have the right person for the job — and your budget. Ask potential candidates to provide photos of their projects and names of previous clients you can call.
For a long-term investment like a deck, going with the cheapest option might not be the best strategy. While there are ways to potentially lower the cost of a new deck, be sure you’re not sacrificing quality for price. After all, this is something that you and your family will hopefully be using for years.
Ways to Pay For a New Deck
While a deck brings comfort and enjoyment, the cost of building one can be significant. Here are some common financing options to explore.
Personal Loan
If you need to access funds quickly, don’t want to use your home as collateral, and can afford to make the monthly payments, consider a personal loan.
With this type of loan, you borrow a lump sum from a lender, which you’ll pay back with interest. The money can be used for almost anything, including paying for a new deck. Personal loans are usually unsecured, which means they don’t require collateral. Instead, a lender will consider a borrower’s creditworthiness.
Most lenders offer a personal loan amount of $50,000, though some lenders, including SoFi, offer lending amounts up to $100,000. Repayment terms are usually two to seven years, and interest rates are typically fixed.
💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.
Fixed-Rate Home Equity Loan
If you’ve built up equity in your home and have a one-time cash need, you may want to look into a fixed-rate home equity loan.
This loan type is fairly straightforward: You receive a lump-sum payment from the lender, which you’ll repay over a period of time with a set interest rate. The term of these loans typically spans five to 15 years, and the amount you borrow must be repaid in full if you sell your home. If you’re unable to make the payments, you could risk losing your house.
Note that the closing costs may be similar to the cost of closing on a home mortgage. As you’re comparison shopping, be sure to ask about the lender’s closing costs so you can prepare your budget accordingly.
Home Equity Line of Credit (HELOC)
If your deck addition turns into an ongoing project, and you want some flexibility to pay as you go, then a home equity line of credit (HELOC) may be a good fit.
A HELOC is revolving debt, meaning that as you pay down the loan balance, you can borrow it again during the draw period. That’s when you can use, or draw, funds against the line of credit, typically 10 years. After that, you can no longer draw funds. (Another important time period to keep in mind? The repayment period, which is the amount of time you have to repay the loan in full.)
Note that unlike a fixed-rate home improvement loan, a HELOC’s interest rate is variable. This means it changes to reflect the current interest rate, which could cause your monthly loan payment amounts to vary.
No-Interest Credit Cards
With a no-interest, or 0% APR, credit card, you won’t be charged any interest on your purchases for a set period of time. Some cards also extend the temporary 0% APR to balance transfers.
A no-interest credit card comes with low borrowing costs, which could make it an attractive way to finance a new deck. But qualifying for one of these cards can be difficult. And when the promotional period ends, a potentially high APR will start accruing on the remaining balance.
The Takeaway
Adding a deck onto your home can be a great way to enjoy your backyard and add to the value of your home. When budgeting for the cost to build a deck, you’ll want to factor in labor, materials, design, and extra expenses like permits, insurance premiums, and property taxes. Enlisting the help of a reputable, licensed contractor or carpenter can help ensure you get the deck you want, at a price you can afford.
There are some common ways to finance a new deck, and each has its own set of pros and cons. With a personal loan, you may be able to get a lump sum fairly quickly. A fixed-rate home equity loan may have lower rates and longer repayment terms than a personal loan, but you’ll need to use your house as collateral. A HELOC allows you to pay as you go, which could be handy if the construction project runs long. And a no-interest credit card offers low borrowing costs, but a potentially high APR kicks in once the promotional period ends.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
When you’re in college, you don’t have a lot of control over the interest rates on your student loans. With federal loans, the U.S. Department of Education sets the rate each year for all borrowers. And if you get private student loans, a limited credit history can make it hard for young people to score favorable terms.
But once you graduate, there are a few things you can try to save money on interest. Here are a few tips that may lower your interest rate on student loans.
Refinancing Your Student Loans
Scoring discounts with your current servicer can help you get a lower student loan interest rate, but there is another option to consider. Depending on your financial profile, you may qualify for a lower student loan interest rate than what you’re currently paying with student loan refinancing.
There are multiple advantages to refinancing student loans. You can potentially lower your interest rate by bundling several loans (federal and private) into one new loan. And if you shorten your loan term, you may be able to pay off your student loans much faster and pay less in interest over the life of your loan.
Student loan refinancing is ideal for borrowers with high-interest student loans who have good credit scores and know they won’t use any of the federal loan benefits, like student loan forgiveness. (All federal loan benefits, including income-based repayment, will be lost if you refinance.)
Here are a few things that can help you improve your chances of getting a lower student loan interest rate with refinancing:
• A high credit score: Lenders typically have a minimum credit score requirement, so the higher your score, the better your chances of getting a low rate usually are.
• A low debt-to-income (DTI) ratio: Your income is also an important factor that lenders consider, especially as it relates to your overall debt burden. If a smaller portion of your monthly income goes toward debt payments, it shows you may have more income to dedicate to your new loan’s payments.
• A co-signer: Even if your credit and income situation is in good shape, having a co-signer with great credit and a solid income might help your case.
• A variable rate: Some student loan refinance lenders offer both variable and fixed interest rates. Variable interest rates may start out lower but increase over time with market fluctuations. Fixed rates, stay the same over the life of the loan. If you’re planning on paying off your student loans quickly, a variable rate might save you money.
• The right lender: Each lender has its own criteria for setting interest rates, so it’s important to shop around to find the best lender for your needs. Some lenders, including SoFi, even allow you to view rate offers before you officially apply.
💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.
Take control of your student loans.
Ditch student loan debt for good.
Consolidate Your Student Loans
Have multiple student loans floating around that you’d love to combine into one? Consider loan consolidation, where you’ll merge all your student loans into one easy monthly payment with a single interest rate. Here’s the rub, though: Consolidation alone does not necessarily get you a lower student loan interest rate. It just offers you one payment instead of multiple.
When consolidating federal student loans, you can use a Direct Consolidation Loan. Your new interest rate is simply the weighted average of all your current student loan interest rates. The weighted average might be a smidge higher than the interest rates you were paying previously. Often folks utilize consolidation to stretch out the life of their student loan, which lowers your payments but may increase the amount you owe over time.
Even though consolidation itself is not a direct way to get a better rate on your student loans, it can be helpful if you’re having trouble keeping track of your monthly payments. Consolidation may also be useful if you want to merge non-direct federal loans (like Perkins loans) with direct loans, in order to qualify for income-driven repayment and/or loan forgiveness programs.
By the way, the term “consolidating” is often used interchangeably with “refinancing,” but they technically mean different things. When refinancing student loans, you also happen to be consolidating, but it is done with the goal of achieving a more favorable interest rate on your student loans.
Many student loan servicers — both federal and private — offer an interest rate discount if you set up autopay on your account. Depending on the servicer, you can lower your student loan interest rate. SoFi, for example, offers a 0.25% autopay discount.
The reason servicers offer this discount is that by setting up automatic payments, you’re less likely to miss payments and default on the loan.
In addition to getting a lower student loan interest rate, you’ll also (hopefully!) have peace of mind knowing that you won’t accidentally miss a payment. If you feel you’re putting a little too much money toward student loans, check with your loan servicer to see whether they offer an autopay discount.
To get an idea of how a change in interest rate would impact your loan, take advantage of a student loan refinance calculator to see what your new payments could be.
💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private student loans.
Choose the Right Repayment Plan
If you don’t choose a specific repayment path, you’re typically opted into the Standard Repayment Plan. In this plan, your payments are generally based on a 10-year timeline. But this one-size-fits-all plan is not the best option for everyone.
The federal government also offers four income-driven repayment (IDR) plans — Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) — where the monthly payments are based on your income and family size. While choosing one of these plans may lower your monthly payments, it will likely not alleviate how much interest you pay over time. In fact, you might even pay significantly more.
After 20 or 25 years, depending on the IDR plan, any remaining balance is forgiven. However, the amount forgiven may be considered taxable income by the IRS. So even though your student loan debt goes away, prepare yourself for a big tax bill that year.
Another money-saving repayment option for federal student loans is the Public Service Loan Forgiveness (PSLF) program. If you work in a qualifying public service job — for the government or a nonprofit organization — you might be eligible to have your student loans forgiven after 10 years of service.
You can confirm whether your work qualifies here. You’ll want to submit an Employment Certification as soon as possible to be sure that you’re on track to qualify.
There are several ways to get a lower student loan interest rate. It can be as easy as calling your servicer to find out what discounts are available. You can also choose a new repayment plan, consolidate your federal loans, or refinance federal and private loans. With refinancing, you may secure a lower interest rate if you have a high credit score, low debt-to-income ratio, a cosigner, or a variable interest rate. Just know that when refinancing federal student loans, borrowers lose federal protections and forgiveness.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FOREFEIT YOUR EILIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
