A stipend is a fixed amount of money given to offset expenses or provide financial support while you’re engaged in a service or contributing to a project. A stipend may be paid in one lump sum, or it might be paid in a series of smaller amounts.

Budgeting & Goals Archives | Page 120 of 186

Aug

2023

What Is a Stipend?

By Anna Davies | Budgeting & Goals, Financial Independence, money | Comments Off

Wondering what a stipend is? It’s a fixed amount of money designed to offset expenses or provide financial support when you’re performing a service or contributing to a project. For instance, some gigs when you are in college may pay a stipend in one lump sum or it might be doled out in a series of smaller payments.

As you’re looking through employment opportunities, you may come across certain positions or experiences that don’t offer a salary but do offer a stipend. Stipends are also common in academia, where a stipend may be offered to grad students to TA classes, assist with research, or conduct research projects on their own.

Here, you’ll learn how a stipend works, whether you can negotiate the amount of a stipend, and how accepting this type of payment may impact your taxes.

How Does a Stipend Differ From a Salary?

A stipend is a fixed sum of money that may be used by an organization to incentivize employees, interns, researchers, teachers, and volunteers. It’s usually meant to help offset expenses for a specified period of time, such as one year or one semester.

Typically, stipends are used in internships or apprentice situations, where the recipient of the stipend is receiving training that benefits them more than an employer.

However, some employers may offer stipends to their employees as one-off payments to help offset work-related expenses, such as travel/commuting, meals, home office expenses, cell phone, professional training, or education.

A salary, on the other hand, is an annual amount agreed upon between a company and an employee that is paid out in regular increments, either monthly, bi-monthly, bi-weekly, or weekly.

A salary may also include benefits such as vacation, insurance, and other benefits within the overall compensation package.

Recommended: What is a Good Entry Level Salary?

Who Receives a Stipend?

Historically, stipends were primarily used as part of an internship or fellowship package. These days, however, it’s not uncommon for employers to use a stipend as a “fringe benefit” added to your overall compensation package.

The stipend may be earmarked for certain expenses and your employer may ask for specific records or notekeeping to access it. Fringe benefit stipends may include:

• Transportation stipends

• Travel stipends

• Education stipends

• Clothing stipends

• Entertainment stipends

• Food stipends

The type of stipends offered usually depends on the nature of your work. For example, if you have to travel frequently for your job, your employer may give a travel stipend to allow you to have flexibility in making your travel plans.

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Are Stipends Taxable?

Stipend checks aren’t considered wages so you won’t pay Social Security or Medicare taxes on them. However, you may still have to pay some taxes on a stipend.

If you are offered a stipend for an internship or work in academia, it might be called a “living” stipend, which means it is being given to you to help pay for expenses.

Though taxes will not be taken out, this stipend is likely considered taxable income and you will need to set aside some of your stipend money to pay any taxes owed at the end of the year.

In some academic settings, however, a stipend may be what is considered a scholarship and earmarked for educational purposes only (rather than living expenses). In this case, the stipend may not be taxable.

If you’re offered a stipend for academic work, it can be a good idea to speak with a financial professional or your financial aid office to understand how the stipend is meant to be used and how it will be treated tax-wise.

Stipends offered by companies to their employers may or may not be taxable — it depends on how the company structures the stipend.

In order to keep a stipend non-taxable, a company must set up a reimbursement plan in which employees complete expense reports proving that all business-related expenses are being reimbursed through the payment of the stipend.

For example, if you’re given a travel stipend to go to a client meeting, then the stipend may not be taxable if you provide adequate expense documentation of how the stipend was used and how each payment was an acceptable business expense.

If expenses are not documented — or if the stipend is a “perk” of working at the company, such as a commuting stipend or stipend for in-office meals — then the stipend may be taxable.

If your company is offering you a stipend, it can be a good idea to ask your employer, as well as a tax professional, about any tax implications.

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How to Use a Stipend

If you accept an internship or other position that offers a stipend to help cover expenses, it can be a good idea to consider how the money will be spent and set up a budget for basic living expenses.

Unlike a salary or wages, you may need to make a stipend stretch several months. A good first step is to assess your monthly expenses, including:

• Housing

• Food

• Transportation

• Amount set aside for potential taxes

• In case of emergency expenses

A stipend is not generally expected to cover all of the expenses you may incur, so you may need to find ways to stretch your money, such as moving in with a friend or relative, or bring in extra income by getting a side gig or part-time job.

Can You Negotiate a Stipend?

There may be some wiggle room, but how much (if any) will depend on several factors, including what the stipend is for, the field you’re in, and the reason for asking for an increased stipend.

For example, if you are a student who received a stipend to do international research, you may find that the cost of travel and lodging is more than the organization or school offering the stipend anticipated. This could be something you could bring to the organizer’s attention, to see if there’s any wiggle room in allocating more dollars.

In addition to assessing your expenses (to see if the stipend will be enough), you may also want to look at similar positions and review what their stipends are. If other positions are offering more, you may want to consider asking for that amount.

In some cases, however, a school, organization, or company may not have wiggle room to access more money and may offer the same stipend to interns or apprentices across the board.

Doing some research and framing the conversation respectfully can be helpful as you navigate the next steps and whether or not the stipend package makes sense for your financial needs. It can be wise to research salary negotiation tips in advance so you know good ways to phrase your request, if you do try to get a higher sum.

The Takeaway

A stipend is a predetermined amount of money that is often paid to certain individuals, such as trainees, interns, and students, to help offset some of their expenses. Stipends can have financial implications, so it’s wise to learn how the stipend may be taxed and what records are necessary for any incurred expenses during the stipend.

As you plan for life with a stipend, it can be a good idea to set up a budget and track your expenses to make sure you don’t run out of money mid-program. Your bank may offer a tool to help with this.

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 4.00% APY on SoFi Checking and Savings.

Photo credit: iStock/Mykola Sosiukin

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% 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 4.00% 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 4.00% 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.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

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.

SOBK0823003

Aug

2023

How Can I Pay My Bills When I Lost My Job?

Paying Bills When You’ve Lost Your Job

By Sarah Li Cain | Budgeting & Goals, Financial Independence, Life & Career, money | Comments Off

Figuring out how to pay your bills when your usual income stream is interrupted by job loss can be a difficult task. You probably know to cut back on dining out and movie nights, but what can you do about bills for your rent, student loans, and other vital expenses?

Plenty of people confront this situation, and there are ways to navigate this challenge. If you are wondering how to pay bills when you lose your job, it’s a matter of knowing how to recognize the most pressing bills, organize your assets, and seek additional income and assistance if needed.

Here, learn more, including:

• Which bills to prioritize if you lose your job.

• How to develop a survival budget.

• Where to access funds until you find your next job.

What Bills Should I Prioritize?

If you’ve lost your job, you may feel as if you can’t pay all your bills. In this situation, it’s crucial to prioritize certain ones to make sure you can meet your basic necessities. This means looking at your list of bills and determining ones that should be at the top of your list (or close to it).

In addition to the bills that keep your daily life running, you also want to consider the damage unpaid charges can do to your credit rating. The goal is to balance these factors with the funds you do have available.

Bills you should probably prioritize include:

Rent

Having a roof over your head is important for you and those who live with you, so contact your landlord as soon as possible to discuss alternative payment arrangements. Perhaps you can negotiate lower payments for a window of time. Otherwise, if you don’t communicate and don’t pay, you could find yourself facing eviction.

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Mortgage Payments

If you have a home loan, falling behind on payments can have serious consequences, one of which is foreclosure. Non-payment can lead to default and the bank has the right to recoup their property (aka the home) and sell it to attempt to make back the money it lost.

If you’re wondering what to do about loans when you’ve lost your job, contact your lenders as soon as possible. Many offer forbearance or alternative repayment programs.

Student Loans

Falling behind on student loans could mean you’ll go into default. In some cases, the lender may have the right to garnish your wages. If you’re handling student loans during a job loss, consider applying for an income-driven repayment plan for federal student loans or contacting your private lender to see what options are available.

Car Loans

You’ll most likely need your car to run errands or look for work. Staying on top of payments for your loan or lease can help ensure you won’t risk having your vehicle repossessed.

Insurance

Non-payment could result in denial of coverage, which might not be helpful if you need to see medical treatment or are in a traffic accident, for instance.

Utilities

Not paying these types of bills can result in your electricity, water, phone, and internet being shut off. These are obviously vital for daily life and, in terms of connectivity, job hunting.

How to Create a Survival Budget

If you’ve lost your job, it’s important to create a survival budget to help prepare for the lean times ahead. This type of budget only takes into account the bare necessities with whatever savings or income sources like unemployment benefits you currently have.

The main goals of a survival budget: to ensure you and your family are taken care of, and then turn your attention to any creditors as necessary. What this means is that even without a job, you pay the bills that will ensure you can survive first — such as food and housing.

Taking Stock of Your Expenses

To start, look at all of your current expenses and eliminate anything that isn’t really and truly a necessity.

• You can’t get rid of your food expenses, but you can temporarily cut back on dining out. Cook your meals instead, and ditch your takeout coffee habit for now.

• If you have a cell phone, you can consider downgrading your service for a cheaper plan to save some money.

Look at the funds you have available for the next couple of months as you job hunt. Deduct the priority expenses, and then evaluate what is left and how you can budget those funds. Be strict with yourself: Now is the time to unsubscribe from all those streaming services and save your money for what’s vital.

If you’re not sure if you have enough cash to pay for the necessities and debt payments, it’s best to seek options like forbearance and deferment — negotiate with your lenders to see what you can do.

Where Can I Turn for Money?

Here are some income sources you can turn to when you’re unemployed. It’s hard to pay bills with no job, but these resources may get you through a tough time:

Credit Cards

Using credit cards or even taking out a personal loan when unemployed can be a quick source of funds if you need to make purchases such as groceries and gas. While the interest rates tend to be high, you’ll have a grace period before your balance is due, giving you a buffer to get another income source.

Otherwise, you can make the minimum payment for the time being and make a plan to pay it back once you’re employed again.

Also, see if you can negotiate with your card’s issuing company; you might be able to delay credit card payments. You may also want to explore balance transfer credit card offers, which give you a window of low or no interest.

Retirement Accounts

Tapping into a retirement account like a 401(k) or an IRA is typically seen as the last resort because the downsides typically outweigh the benefits. However, if you’re running out of resources and you have a decent chunk in there, you may not have another choice.

You can choose to tap into your retirement accounts in the following ways:

• Take out a 401(k) loan: Depending on the terms of your 401(k) plan, you may be able to borrow up to a certain amount — usually up to $50,000 or half of your vested amount — and pay it back within a predetermined amount of time (in most cases, five years). Keep in mind you could face additional penalties if you don’t pay back the loan, such as the loan amount being subject to taxes. In addition, loan and management fees may apply.

• Withdraw from your retirement accounts: If you have an IRA or taxable brokerage account, you can make withdrawals. Keep in mind with IRA accounts, you may be subject to a penalty and taxes on the amount you withdraw.

Government Assistance

You’ll want to find out how unemployment works if you lose your job; it can help get some cash flowing your way. Those funds can help you pay for your necessities as you seek other work.

If you’ve been unemployed for a while or face mounting pressures on things like an unexpected medical expense, you may be able to seek other forms of government assistance. These sources can be helpful if you feel as if you’ve lost your job and can’t pay your bills. To see what you may qualify for, you can search on Benefits.gov , your local state or municipal office, and even local charity organizations and churches.

How Setting Up a Bank Account Can Help You When You Are Not Working

When you’re unemployed, setting up a bank account (if you don’t already have one or one you love) may seem like the last thing on your mind, but doing so can help. For one, it can help you to keep track of your finances and apply for products such as credit cards and loans if you need these sources of income.

Plus, many banks offer tools to help you budget your money, a useful feature considering you need to watch your money more carefully. These pros of opening an account can make this moment of unemployment a good one to explore your options.

How to Budget and Save with a Bank Account

Here are some ways in which you can make a budget and save using a bank account when you are unemployed and navigating the job market:

• Divide money into multiple checking or savings accounts for each type of expenses so you can ensure you have enough money for necessities as well as bills.

• Set up automatic transfers so you can ensure you’re setting aside money from any income to save or pay bills on time.

• Set up direct deposit for unemployment benefits or government assistance.

• Set up card controls or features from your bank to restrict spending.

• Turn on balance alerts to notify you when your account falls below a certain balance, so you can decide to pause or delay certain purchases.

• Earn interest with a high-interest savings account.

Alternative Sources of Possible Income

For some people, the above options for money won’t be a good fit; for others, additional funds will be needed. If you have learned how to apply for unemployment and taken other steps to get money but are still seeking other sources of income, consider these options to get cash flowing:

• Borrow from friends and family.

• Look for work on freelance marketplace sites like Upwork and Fiverr.

• Sell things you own or make online via eBay, Etsy, or other sites.

• Participate in paid market research.

• Look locally for jobs like dog-walking.

• Explore passive income ideas, including renting out your car or your tools.

Protecting Your Finances from Future Job Loss

There are also steps you can take to bring in income and prepare for any future financial setbacks you may endure. Consider these options:

Starting a Side Hustle

A side hustle is a gig you start that doesn’t have to be full-time but fits into pockets of time you have available. One of the key benefits of a side hustle is bringing in income.

Side hustles can include anything from driving a rideshare to delivering food. You might sell your nature photography online or help local businesses with their social media part-time.

Building an Emergency Fund

Starting an emergency fund can help protect your finances if you were to lose your job. This involves saving money so it’s there if you are laid off or encounter an unexpected expense, such as a major car repair or dental bill.

In terms of how much money should be in an emergency fund, aim for three to six months’ worth of basic living expenses. Of course, it’s fine to build that up over time versus coming up with the whole amount. Even putting aside $20 a month is a start. And by keeping the funds in a high-interest savings account, you’ll help it grow.

It’s important to know when to use an emergency fund. Losing one’s job is an emergency; it’s exactly what the money is there to pay for. However, the opportunity to travel at a deeply discounted rate or buy designer shoes for 50% off are not good reasons to tap this account.

Starting a Budget

Developing a budget and following it can help you get through challenging financial moments and thrive in good times. A budget helps you balance the money you have coming in, your spending, and your saving. It helps you get a better handle on your financial situation and make adjustments in real time.

• One popular budget is the 50/30/20 budget rule. This says that, of your take-home pay, 50% should go to basic living expenses, 30% to spending on your wants (such as eating out), and 20% should go to savings and debt payments beyond the minimum.

• If you have lost your job, you can minimize the 30% by trimming back your spending on wants as much as possible and then attributing more to the basic living expenses and debt payments.

• The 20% saving figure can be a way to plump up that emergency fund that can help sustain you during a job loss.

The Takeaway

Paying bills when you lose your job can feel stressful, but it’s not impossible. Some key steps may include prioritizing your bills and focusing on budgeting for the bare necessities. It’s also wise to negotiate lower or delayed payments where possible and look for other interim streams of income while you look for your next job.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

What happens to debt when you lose your job?

Your debt does not go away when you lose your job. You want to keep paying at least the minimum due. However, you may be able to negotiate a way to lower your interest rates or defer payment while you are out of work. Contact your creditors and see what can be worked out.

What bills should I pay first?

When you are unemployed and need to pay bills, prioritize basic living expenses, such as housing, food, and healthcare. It’s also important to stay current on loans, such as student or car loans.

How do you budget if you are unemployed?

If you are unemployed, focus your budget on paying for your basic living expenses (food, shelter, healthcare, etc.) and paying the minimum on your debt. Trim down your discretionary spending; negotiate with creditors to keep debt manageable; and look into borrowing or earning additional funds.

Photo credit: iStock/Delmaine Donson

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% 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 4.00% 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 4.00% 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.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

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.

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.

SOBK0223050

Aug

2023

Guide to Budgeting as Couples

By Julia Califano | Budgeting & Goals, Financial Independence, money | No Comments

When you partner up, it’s likely that you are focused on building a home together and merging lifestyles: morning person vs. night owl, how to accommodate both of your vinyl and book collections, and so forth.

But there’s another important consideration: setting up a budget for two. You may choose to combine some, all, or none of your funds, But many people do want to mix at least some of their money and get on track for shared budgeting, spending, and saving.

This guide can help you explore your options and make the right decisions. You’ll learn such points as:

• Why to budget as a couple

• How to budget as a couple

• Pros and cons of budgeting as a couple.

How to Budget as a Couple

Here are some steps to take when you budget as a couple.

Decide How Much You Want to Combine Your Money

Depending on how much you want to combine finances as a couple is a key part of budgeting as a couple. Each of you will have your own money style and potentially money issues, so a frank discussion on how comfortable you are merging your money and sharing, say, your spending habits is a wise first step.

Calculate Your Combined Income

If you have decided on merging at least some of your funds, take a look at your shared income to know what amount you are working with. Consider if you are on salary, freelance, have side hustle income, or dividends/passive income to come up with the right number.

Determine Shared Expenses

Next, look at where that income will go. You likely have shared housing, food, utilities, transportation, insurance, and healthcare expenses in terms of necessities. You may have varying debt payments to make as well.

Perhaps one of you has more in the way of student loans or credit card debt than the other. Discuss what feels fair in terms of paying that down.

You will also probably want to take a look at your usual discretionary spending, such as what you pay towards dining out, travel, entertainment, yoga classes, clothing, and the like.

You may decide you are more comfortable keeping some of your money separate rather than have full transparency regarding every dollar spent. It’s your call.

Figure out Future Goals

Then, turn your attention towards saving. Perhaps you two want to buy a home in a couple of years, start a family, begin a business, or pad out your retirement account. Or all of the above. You’ll want to factor in those savings for tomorrow.

Make Your Budget

With this information in hand, you’re ready to create a budget. It can be wise to review a few different types together, such as the popular 50/30/20 budget rule, the envelope budget system, and the zero-dollar method.

Recommended: Check out the 50/30/20 budget calculator to see the breakdown of your money.

Create Joint Accounts

At this point, if you have decided to merge some of your money, you may want to open shared accounts, such as a joint checking and savings.

💡 Quick Tip: Bank fees eat away at your hard-earned money. To protect your cash, open a checking account with no fees online — and earn up to 0.50% APY, too.

7 Reasons to Budget as a Couple

Budgeting as a couple vs. budgeting as two individuals can have its pros. Consider the following.

1. Controlling Your Spending as a Team

One of the basics of budgeting is to prioritize your spending. Once you, as a couple budgeting, have decided where your money must go every month — toward groceries, utility bills, car payments, rent, and other essential expenses — you’ll have a better idea of how much will be left for discretionary expenses.

And instead of being restrictive, your budget could give you some spending flexibility. You’ll know if you need to cut back and when you can loosen up a little, and you’ll be accountable to each other.

Sometimes, one person in a couple budgeting is better at finances or just enjoys it more. It might be a good fit for that person to be in charge of managing the bills. But it’s also a good plan to come together for regular budget reviews so both of you know where the money is going and there will be some balance in the financial decision making.

Leave room for some splurges, or the spender in the family probably won’t be too happy. And be proactive about big purchases: Identify a threshold for how much each of you can spend so there are no surprises. Or, of course, you can keep some discretionary spending separate if this feels too stressful for the two of you.

2. Being Honest About Money Problems

This can be the time to talk about any hidden debts, bad habits that cost money, or if you can’t trust yourself not to overspend when there’s a credit card in your wallet.

Then you can start tackling those issues by setting spending limits, cutting up some of those credit cards, perhaps getting financial therapy, and, of course, incorporating those looming debt payments into your budget.

3. Being Prepared for Emergencies

A common recommendation is to have three months’ worth of living expenses set aside in emergency savings in case you lose your job or are sick or injured and can’t work. An emergency fund can also be used for unexpected costs such as home or car repairs or a medical procedure.

Not only can a couple budgeting determine how much to set aside each month to build that emergency fund, you can also choose which expenses to put off or do without if you don’t have enough in your fund when a crisis strikes.

Some budget ideas for couples who need to cut back on spending are reducing the number of date nights you had planned or putting your tax refund toward a bill instead of taking a spring vacation.

Having a budget can help you replace panic with a plan, and having a financial tool like SoFi can help you keep tabs on your cash flow and spending habits.

4. Creating Goals

If there’s a “fun” part of working together as a couple budgeting, this is it: deciding your priorities for the future.

Whether it’s saving for a home, having children, taking a cruise, starting your own business, or all of the above and more, your budget will help you focus on the things that are most meaningful to you as a couple.

Your strategy can help you set aside the money to reach those goals, aka turning the dreaming into doing. And you’re more likely to stay on track if you’re checking in on your spending each month.

5. Deciding How Much to Combine Finances

You will likely want to tackle the question of whether to have joint bank accounts vs. separate bank accounts or even a little of both. Making the right call can strengthen your bond financially and holistically.

You may decide to completely merge your bills and bank accounts, or you might want to keep your own accounts and divvy up the bills. There are pros and cons to each approach in budgeting for married couples or cohabiting couples.

Combining accounts can simplify your finances and build trust. But if you feel strongly about financial independence — or you’ve been burned in the past — you may feel more secure if you have your own money. Negotiating an agreement that’s comfortable for both parties can be a real win-win.

6. Reducing Financial Stress

Here’s a solid upside to merging your money: Once you get the numbers down on paper instead of just swirling around in your head, you may feel more in control of your finances. Even if the situation is shaky, you can take steps to do something about it. What’s more, you are likely on a path to making your money work harder for you.

7. Having Something to Talk About

Here’s another benefit: Once you create your couples budget, you’re going to want to revisit it on a regular basis. You can discuss how your various budget categories are holding up and if you need to make adjustments. Or how to tweak your budget so you can afford that destination wedding. You’ll be able to sync up as a team.

It’s a good idea to go over any upcoming expenses that aren’t in the budget or only come up occasionally. And you can talk about how you’re doing with your short-term financial goals as well as your long-term ones.

An example of longer-term money aspirations? You can take a closer look at how college expenses for your future kids are trending. Or what might be a good monthly retirement income for a couple.

Are There Any Downsides to Budgeting as a Couple?

Now that you know the positives, consider these potential negatives whether you are marking a married couple budget or budgeting as a couple living together:

• A partner could feel as if they have less control over their money, which could be uncomfortable.

• A person could feel as if their partner’s spending habits are challenging.

• The full transparency of merging finances could be a problem for some people who don’t like sharing their financial life.

• There could be more time and effort and potentially banking fees involved as you set up joint accounts and find a new way to operate as a team.

Budgeting and Saving with SoFi

The good news, especially for those who dig technology, is that there are plenty of online tools and apps that can help you put together a budget and manage your money as a couple.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

What is the best way to budget as a couple?

A key decision will be how much of your money to merge, looking at shared income and expenses, determining goals, and then finding a budget that works for both of you. Regular check-ins to see how you are managing your money are important too.

How do you split finances as a couple?

This will vary from couple to couple. Some will want to pool all of their resources and pay everything 50-50. Others may have circumstances (such as one partner having considerable credit card debt) that indicate a different arrangement may be necessary.

How much should a couple save per month?

How much a couple should save per month will depend on a variety of factors such as income, cost of living, and debt. However, many financial experts suggest saving 20% of one’s income is a good guideline.

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Aug

2023

Top 10 Most Valuable Types of Collectibles You May Have at Home

By Rebecca Lake | Budgeting & Goals, relay | Comments Off

Selling things from around the house that you no longer need can be an easy way to make some extra money. If you have some valuable collectibles on hand, you might be able to turn them into more than just pocket change.

Some of the most valuable collectibles include vintage comic books, baseball cards, and toys. Taking a look through your attic, basement, garage, or closets might turn up some items that you could potentially sell for top dollar.

Table of Contents

What Are the Most Valuable Types of Collectibles?
What Types of Collectibles Gain the Most Value?
How to Sell Valuable Collectibles
What Might Be Considered a Collectible in the Future?
The Takeaway

Key Points

• The most valuable types of collectibles include rare coins, stamps, sports memorabilia, fine art, and vintage cars.

• Rarity, condition, and demand are key factors in determining the value of collectibles.

• Collectibles can be a potential investment, but it’s important to research and understand the market.

• Collectibles should be properly stored and insured to protect their value.

• Working with reputable dealers and experts can help ensure authenticity and maximize the value of collectibles.

What Are the Most Valuable Types of Collectibles?

Some collectibles tend to be more valuable than others, and it’s helpful to know which ones might command the most (or least) money. As you’re sorting through your stuff, here are 10 of the highest-value collectibles to keep an eye out for.

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1. Vintage Comic Books

Comic books are one of the most popular collectibles because of how much they can appreciate in value over time. Devoted comic book fans who want to grow their collections may be willing to drop hundreds or thousands of dollars on a single edition. Even if you’re not getting that much for old comics, you can still sell them to make a little money on the side.

What Makes Vintage Comic Books Valuable?

Rarity and condition usually determine how valuable a vintage comic book ends up being. First editions, limited runs, or editions that introduce a character for the first time are all examples of comic books that may sell for a lot of money. Comic books that are in mint or near-mint condition are usually priced higher, which makes sense as collectors may be willing to pay more for a book that has limited wear and tear.

What Is the Most Valuable Comic Book?

The most expensive private sale of a comic book on record involved an edition of Superman No. 1. The comic reportedly sold for $5.3 million in January 2022, making it the most valuable comic book in recent years.

2. Baseball Cards

Baseball cards are in-demand collectibles that you might be able to sell online, at sports memorabilia conventions, or at local hobby shops. Along with baseball cards, you might be able to sell other sports memorabilia, such as baseball bats, gloves, jerseys, pennants, miniature helmets, or figurines.

What Makes Baseball Cards Valuable?

How much are my baseball cards worth? The answer can depend on the age, rarity, and condition of the card. Of those factors, scarcity can have the biggest influence on what a baseball card will sell for. The fewer there are of a particular card, the more money you might be able to get for it if there are collectors actively seeking it out.

What Is the Most Valuable Baseball Card?

The most valuable baseball card of all time is a Honus Wagner card. Specifically, it’s the 1911 American Tobacco Company T206 card, which sold for $6.6 million at auction in 2021. Nicknamed “The Flying Dutchman,” Wagner is also among the first inductees to the Baseball Hall of Fame.

3. Vintage Bakeware

You might not give much thought to your mother or grandmother’s collection of casserole dishes, but they could be worth a fortune, depending on which ones they have. Vintage CorningWare and Pyrex dishes in particular can have a decent resale value if you’re able to find buyers who are looking for missing pieces to add to their collections.

What Makes Vintage Bakeware Valuable?

The value of CorningWare and Pyrex pieces is usually tied to their age, condition, and rarity. The actual design can also make a difference, as some patterns are considered to be more desirable by collectors than others. Pieces that feature patterns with limited runs or that are several decades old may command higher prices than ones that are more widely available.

What Is the Most Valuable Vintage Bakeware?

One of the most noteworthy examples of high-value vintage bakeware is the Lucky in Love line from Pyrex. A single bowl featuring the hearts and shamrocks design that the line is known for sold on eBay in 2022 for a winning bid of $22,100.

💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

4. Rare Coins

If you have a collection of old coins gathering dust, you might be sitting on a literal goldmine without realizing it. Coins are one of the most popular and most valuable collectibles, with many of the rarest editions fetching thousands at auction. While their face value may be relatively low, their collectible value can sometimes be astonishing.

What Makes Rare Coins Valuable?

The value of coins is typically tied to three things: age, rarity, and condition. The older and rarer a coin is, the more it’s going to be worth in most cases. Its condition plays a part, however, as two coins from the same period may not have the same value if one is in better condition than the other.

What Is the Most Valuable Rare Coin?

One of the most valuable coins in the world is the Saint-Gaudens Double Eagle, which was minted between 1907 and 1933. These coins are highly valued for their beauty and rarity — the 1933 Double Eagle coin is estimated to be worth up to $20 million.

5. Vintage Toys

Hanging onto old toys is something people may do if they hold sentimental value. But certain toys may have monetary value if they’re deemed to be collectibles. Examples of collectible toys can include dolls, action figures, and board games. Trendy and retro toys can also grow in value over time if collectors are giving them special attention.

What Makes Vintage Toys Valuable?

Whether a vintage toy is considered to be valuable or not can depend on things like its rarity, uniqueness, and age. A toy that was manufactured as a special or limited edition, for example, may become sought after by collectors if there are only a few of them to be had. Versions of toys that include manufacturing flaws that distinguish them from other versions may also prove valuable.

What Is the Most Valuable Vintage Toy?

Excluding a 2010 special edition Barbie, which technically doesn’t qualify as vintage, the most expensive toy sold at auction is a 1963 G.I. Joe prototype. Featuring hand-sewn clothing and a hand-painted face, the figure sold for $200,000 in 2003, before being donated to the Library of Congress in 2018.

6. Stamps

Collecting stamps is a popular hobby, and if you happen to inherit a collection from a parent or grandparent, you might be wondering what it’s worth. The answer could be anywhere from a few dollars per stamp to more than seven figures.

What Makes Stamps Valuable?

Stamps are assigned value based on a few things, starting with their rarity. For example, some of the most valuable stamps are ones that are the result of a misprinting. Their value is tied not only to the printing error but the fact that only a handful of them exist.

As with other collectibles, the condition of the stamp also matters. The more pristine a stamp is, the higher its value is likely to be.

What Is the Most Valuable Stamp?

One of the most valuable — and notable — stamps is the Inverted Jenny, issued in 1918. The stamp features an image of an upside-down Curtiss JN-4 biplane, and it’s believed that most of them have been destroyed or lost over the years. In 2019, a set of four sold at auction for $1.74 million.

7. Vintage Magazines

Vintage editions of popular magazines could easily be worth a few hundred or a few thousand dollars, depending on which ones you have. At the lower end, old magazines might sell for $5 to $20 per copy, which isn’t bad if you’re hoping to clear out clutter in your home and make a few dollars while you’re at it.

What Makes Vintage Magazines Valuable?

The value of a vintage magazine usually hinges on its age, rarity, and condition. A magazine that’s in mint or near-mint condition, for example, is likely to be worth more than one that has a torn or wrinkled cover, or is missing some pages. Editions of a magazine that’s now out-of-print may also be worth more than editions of a publication that’s still in operation.

What Is the Most Valuable Vintage Magazine?

One of the most valuable vintage magazines might surprise you. In 2021, a rare first edition of The Shadow No. 1 sold to a bidder for $156,000, making it the most expensive pulp magazine ever sold.

8. Antique Furniture

Antique furniture tends to be valued for both its age and its craftsmanship. A bed frame that’s hand carved, for example, is typically viewed as being more valuable than one that’s mass produced in a factory. Some of the most valuable furniture is associated with a specific style, such as Chippendale or Rococo.

What Makes Antique Furniture Valuable?

There are several factors that can make antique furniture valuable, including its:

• Age

• Construction

• Materials

• Hardware

• Finish

Furniture that’s associated with a particular designer or stylistic movement can also be collectible. Authentic Shaker furniture, for instance, can easily sell for several hundred or several thousand dollars per piece. A professional appraisal is usually the best way to tell whether a particular piece of furniture is valuable.

What Is the Most Valuable Antique Furniture?

If you’re going by auction prices, the most valuable piece of antique furniture sold in recent years is The Badminton Chest. The chest, constructed in Florence and once believed to have been owned by the third Duke of Beaufort, sold at a Christie’s auction in 2004 for $36.7 million.

9. Jewelry

Jewelry, and related items like watches, are valuable collectibles to have simply because of their staying power. When you buy jewelry that is well made and features a classic design, it stands a better chance of withstanding the test of time. Necklaces, bracelets, brooches, rings, earrings, and pendants all have the potential to be considered collectible.

What Makes Jewelry Valuable?

Jewelry’s value is based on several factors, including the materials used to create the piece, the maker or designer, and its age. The rarer the materials or the more renowned the designer, the more a piece might be worth. The same is true for jewelry that features diamonds or precious stones. The higher the stone’s grading and the larger it is, the more value it may hold.

What Is the Most Valuable Jewelry?

As anyone who has purchased an engagement ring knows, jewelry can be pricey. The most valuable jewelry pieces are the ones that are either exceptionally rare or have some type of historical importance. Some of the world’s most expensive jewels include the Hope Diamond, the Cullinan Diamond, and the Koh-i-Noor Diamond, all of which have associations with royalty, and all of which are estimated to have valuations surpassing $100 million.

10. Antique, Classic, and Vintage Cars

Antique, classic, and vintage cars and other vehicles can also prove to be highly valuable, as these items tend to see strong demand from serious collectors. How much is my car worth? That’s a question an appraiser would likely need to answer, though you might be able to do some preliminary research using online valuation tools for vintage, antique, and classic vehicles.

What Makes Old Cars Valuable?

Valuations for antique, classic, and vintage cars can depend on several factors, including the vehicle’s age, condition, and mileage. How much of the original parts remain can also be a factor for vehicles that have been rebuilt or restored.

What Is the Most Valuable Antique, Classic, or Vintage Car?

Based on recent auctions, the most expensive collectible car is a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe. The vehicle sold for $143 million at a 2022 auction held at the Mercedes-Benz Museum in Stuttgart, Germany.

What Types of Collectibles Gain the Most Value?

Collectibles that gain the most value are typically ones that are rare and in demand. In addition to the examples mentioned above, other valuable collectibles can include:

• Vintage golf clubs

• Vintage children’s books

• Vinyl records

• Retro gaming sets

• Artworks

• Fine wines and liquors

• Shoes

• Handbags

• Clothing

• Perfumes

• Old photographs

• Vintage electronics

• Antique firearms

• Antique or vintage kitchen appliances

• Vintage tools

• Musical instruments

Keep in mind that there are distinctions between items that are antique, vintage, and retro. Something is usually considered to be antique if it’s 100 years old or older. For vintage items, the threshold is typically 40 years, while retro items are 20 years old. The time frames may be different for vehicle valuations, as collectors may assign an additional category of “classic.”

As a general rule, the older an item is the more valuable it tends to be.

Recommended: What Is a Financial Asset?

How to Sell Valuable Collectibles

Selling valuable collectibles begins with understanding what your items are worth. Getting them appraised by someone who’s knowledgeable about the type of item you have can give you an approximation of its fair market value. For example, if you have a collection of antique watches, then you might take them to a jewelry appraiser for a professional valuation.

Following an appraisal, you may want to take the additional step of getting your items certified as collectible. Having a certificate of authenticity or collectibility can prove to interested buyers that your item is the real deal.

When you’re ready to sell your items, you can research different outlets for doing so. Where you decide to sell can depend largely on what you have to sell. Some of the options for selling collectibles include:

• eBay

• Etsy (for vintage items)

• Local antique buyers

• Consignment stores

• Craigslist

• Facebook Marketplace

• Local comic book stores (for vintage comic books and other pop culture collectibles)

• Sports memorabilia dealers

• Flea markets

• Auction houses

Pawn shops are another option for selling collectibles if you need money in a pinch. Keep in mind, however, that you likely won’t get the full value of your item if you’re selling to a pawn shop.

Recommended: 27 Weird Ways to Make Money

What Might Be Considered a Collectible in the Future?

It’s difficult to say what may or may not become a collectible, as it can depend largely on trends and how value is assigned to different types of items. Collectibility can depend on several things, including:

• An item’s novelty or rarity

• Demand for that item

• Whether the item has any special historical or social significance attached to it

Applying those tests can help to identify collectible items that have the best odds of growing in value. Examples of items that may be considered collectible in years to come include:

• Funko Pops

• Gaming consoles

• First editions of books that are being published now

• Trending toys

• Autographed memorabilia, which may increase in value once the signer passes away

In general, the value of a collectible item largely rests on how many there are to collect and the condition of each one.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

If you’re looking for alternative types of investments to add to your portfolio, valuable collectibles are one option you might consider. It’s possible that you may have a treasure trove of collectibles that could be worth some serious cash sitting right under your nose at home. And while you’re looking for collectibles to sell, consider what else you can do to make the most of the money you already have.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

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FAQ

Are valuable collectibles considered a financial asset?

What is a financial asset? In simple terms, it’s something that has positive value; assets are things you own, like real estate, cars, or bank accounts. Since collectibles typically appreciate in value, they could be considered a type of financial asset.

How do I know if my old items are valuable?

Getting a professional appraisal is usually the best way to determine whether old items are valuable. An appraiser can look at the item to assess its age and condition and then use their knowledge and expertise to give you an estimation of its value.

What is the 100-year rule for antiques?

The 100-year rule for antiques assumes that in order for an item to be considered an antique, it must be 100 years old or older. Vintage items, meanwhile, typically earn that label if they’re at least 40 years old, while retro items are usually at least 20 years old.

Photo credit: iStock/Kemal Yildirim

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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.

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Aug

2023

Is it Possible to Take Online Classes While Working?

By Kevin Brouillard | Budgeting & Goals, Building Your Career, Going to College, Student Loans, student_loan | Comments Off

Table of Contents

Pros of Taking Online Classes
Cons of Taking Online Classes
Strategies for Taking Online Classes
Paying for Online Classes

College can be one of life’s biggest investments. And, earning a degree or certificate is an important step forward down many career paths.

Many students work to cover expenses and gain on-the-job experience while furthering their education. Balancing the competing demands of coursework and a job, however, can be a challenge. For some learners, taking online classes while working is one way to fit school into an already packed schedule.

Online classes allow you to study virtually anywhere, not just colleges or trade schools located in your area. In addition, pre-recorded classes enable you to fit your coursework into evenings, weekends, or whenever your work schedule allows.

However, the quality of online programs can vary widely. And, getting a degree online may not allow you to make as many professional and personal connections as an in-person college experience.

Read on to learn more about taking online classes while also working full-time, including the pros and cons, and strategies for juggling the demands of schooling alongside holding down a job.

Pros of Taking Online Classes

Given the time and financial investment that earning a degree can require, it can be helpful to weigh different schooling options before deciding whether to pursue an in-person education, online classes, or some hybrid of the two. Online classes can have some distinct advantages.

Here’s a look at some potential pros of working towards a degree or certificate online.

Having a Flexible Schedule

Traditionally, college and graduate school courses meet once or multiple times per week throughout a semester or summer/winter session. The length of class time varies too. For example, large lectures may only span one hour, while once-per-week seminars could run for two or three hours.

If you’re taking a full-time course load, which usually constitutes a minimum of twelve credit hours, you’ll have to coordinate these blocked-out class hours around your existing work schedule.

As a result, in-person learning (where students are expected to be in class at a set time each week) is not always feasible if you plan to work and study at the same time.

If you work full-time, online classes can come with added flexibility. After all, online courses are often facilitated through pre-recorded lectures, streaming video tutorials, self-guided activities, and reading that can be done on a student’s timeframe.

In some cases, online classes do still include a certain number of live lectures or learning activities (typically hosted via streaming video) that enrolled students are expected to attend.

In those scenarios, you might need to arrange your work schedule so you’re not on the job during the times when live online classes convene.

Naturely, most online classes still assign homework, so you’ll also need to consider when you’ll fit in independent reading, projects, and studying. However, online degree programs and classes often offer a higher level of scheduling flexibility, allowing you to “attend class” and study at times when you’re not working.

Maintaining Location Independence

There are thousands of colleges and universities across the United States, but probably only a handful near your home or place of work. While taking classes as a commuter student might be logistically possible, sticking to programs hosted by local universities can limit your choice of faculty and subject areas.

Additionally, it’s possible that local options aren’t the top-ranked in a given field — and might not even offer specific degrees or pre-professional certificates.

On the flip side, the only location required for taking online classes while working full-time is a reliable internet connection and a comfortable study space. Online classes also save time traveling to and fro a campus, giving you more time to juggle post-secondary studies alongside your regular job.

Possibly Lower Living Expenses

Tuition is only part of the equation when calculating the total cost of attending college. Some universities may require students to live on campus for one or more years, which could carry dining hall and other fees (in addition to the base cost of living in a dorm).

Students attending four-year public universities can expect room and board to run, on average, $11,520 a year, according to the Education Data Initiative. Opting for an online degree program can help bypass some of these additional expenses.

💡 Quick Tip: Private student loans offer fixed or variable interest rates. So you can get a loan that fits your budget.

Cons of Taking Online Classes

In addition to online learning’s merits, there are some potential cons to think through when evaluating taking online classes while working full time.

Not Every Degree or Major is Available

Colleges across the U.S. offer a wide array of majors and types of degrees. Online programs, on the other hand, tend to be more limited. So whether or not you can take online classes while working will depend, in part, on your chosen field of study.

For online bachelor’s degree programs, majors focused on business and health professions are among the most commonly available. Students interested in earning a master’s degree online in business or healthcare are in luck as well. There are also opportunities to enroll in graduate programs in education, engineering, criminal justice, and various social sciences entirely online.

Other majors and degrees, especially those that require in-person lab time or hands-on apprenticeship, such as culinary arts or chemistry, might not translate as well to an online format.

Limited Networking Opportunities

Attending college in person can provide opportunities to make friends and build relationships with professors. Building a deep social and professional network while in school can help you find internships and jobs after school ends.

Taking online classes, however, can make it more challenging to connect with professors and fellow students. That being said, it’s still possible to make a strong impression on professors and peers through course assignments, presentations (whether individual or group), and written correspondences.

If you are planning on taking online classes while also working full-time in the same field (e.g., a nurse or a teacher studying for an extra certification in those professions), this potential networking disadvantage may be less of a concern — since you can still connect with fellow professionals on the job.

Strategies for Taking Online Classes

Whether you just graduated high school or are returning to the classroom after years of working, being prepared can help you get the most from your online classes — and, ideally, help to create a healthier work-life balance. Here are some key ways to prep for working full time and going to college.

Making a Schedule and Sticking to It

The flexibility of online classes can feel liberating, but those readings, online discussions, and assignments still need to be completed. Keeping your work schedule in mind, it can be helpful to block out some non-work hours during the week or weekend just for studying and school assignments.

It may also be helpful to think about when to get school work done. If you’re not a morning person, it’s likely you won’t be cracking the textbooks at sunrise. If you find out that your present work-school schedule is hard to sustain over time, it’s perfectly okay to go back to the drawing board.

The important thing is to find a time-management system that works for the duration of the time you’re both working and studying full time.

Starting Small

Even if you feel confident and excited about returning to the classroom (virtual ones count, too), taking online classes while working full time may be a big adjustment.

Some online degree programs allow you to enroll as a part-time student, which can be a “trial-run” opportunity — allowing you to understand how demanding juggling school and studies can be (before paying full tuition).

Understanding how much time each online class will demand can help you to be realistic about how many classes you can take each semester without burning out.

Setting Goals and Rewarding Progress

Creating achievable goals at the beginning of each class or semester is one way to stay on track, grow as a student, and measure success. Attaching a reward to these periodic goals can help many learners to stay driven and engaged.

Whether you passed your first online class, completed a big group project, or got a key certification, you deserve to celebrate achieving your educational accomplishments.

💡 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.

Paying for Online Classes

For some students, the cost of online education (after subtracting dorms, dining plans, and transportation) can be an additional determining factor. The individual cost of online degrees and certificates will vary significantly from school to school — including price differences between public and private university programs.

In some cases, online-only programs may cost less for enrolled students. In others, online classes are priced similar to their in-person counterparts.

Whether you opt to work and go to college at the same time, how to pay for college is likely a big question. Making a plan for financing your education is one step in figuring out how to take online classes while working full time.

Completing the Federal Application for Federal Student Aid (FAFSA) can help you determine how much federal student aid (such as grants, scholarships, and federal loans) you are eligible to receive. You can also explore scholarship opportunities through universities, nonprofit organizations, and private foundations for additional funding.

Many students also borrow money through private loans to pay for advancing their education. These are available through banks, credit unions, and online lenders and often may come with flexible repayment plans, allowing you to find a loan that fits your budget and financial plan. (It’s worth noting that federal student loans come with baked-in benefits, like income-driven repayment or public service loan forgiveness, that are not guaranteed by private lenders).

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.

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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. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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