Financial Topics Archives | Page 443 of 791

Sep

2023

What Is Asset Allocation?

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Asset allocation is the practice of investing across asset classes in a portfolio in order to balance the different potential risks and rewards. The three main asset classes are typically stocks, bonds, and cash.

Asset allocation is closely tied with portfolio diversification. Diversification means spreading one’s money across a range of assets. In a general sense, it’s like taking the age-old advice of not putting all your eggs in one basket. An investor can’t avoid risk entirely, but diversifying their investments can help mitigate the risk that one asset class poses.

In addition to stocks, bonds and cash, some investors also allocate money into real estate, a range of commodities, private-equity or hedge funds, as well as even cryptocurrencies. Determining what kind of asset allocation makes the most sense for you depends on personal goals, time horizon, and risk tolerance.

Here’s a deeper dive on how asset allocation works.

Common Assets

The most common assets you can invest in are:

• Stocks: Stocks can be volatile, with the market going up and down, but they can also offer a higher return than bonds over the long run.

• Bonds: Bonds, such as Treasuries or municipal bonds, can be lower risk because they’re backed by government entities, but they also offer lower returns. There are higher-yield corporate bonds, which have greater returns and risk, but also tend to be less volatile than stocks.

• Cash or cash equivalents :This includes money in savings accounts or money market accounts, as well as certificates of deposit or Treasury bills. Obviously, the returns on these are very low but they’re also very secure. The biggest concern with cash investments is if inflation outpaces the return, then you technically could be losing money (e.g. future purchasing power).

What Factors Determine Your Asset Allocation?

There are three basic factors that will affect your asset allocation — your goals, your risk tolerance, and your time horizon.

• Goals. Your goals may be short term, such as adopting a child, starting a business, or saving for a down payment on a house in the next year or two. Or they may be long term, like planning ahead for that child’s education or saving for your retirement.

• Risk tolerance. Your risk tolerance is how much volatility — or ups and downs in the market — you can tolerate. This factor is important to get right. If you take on more risk than you’re comfortable with, and the market starts to drop, you might panic and sell investments at an inopportune time.

• Time horizon. Finally, your time horizon is the amount of time you have to invest before you need to achieve your goal. This factor can help you determine how much risk you’re comfortable with and influence your portfolio allocation. For example, if you have a long horizon there is more time to ride out the ups and downs in the market, and as a result, your risk tolerance may be higher.

You can see how these three factors come together to determine your asset allocation. If you have a short-term financial goal and will need your money relatively quickly — for example, if you’re about to buy that house you’ve been saving for — your risk tolerance will likely be lower, as you don’t want a market downturn to take a bite out of your investments just when you need to cash them out.

On the other hand, if you have a greater tolerance for risk — and if you think you may need more money for a down payment — you may choose a more aggressive allocation (for instance, tilting toward stocks) — in the hope of seeing more growth.

What’s a Good Asset Allocation Strategy?

The best asset allocation to meet your financial goals depends on a number of factors, most importantly your timeframe and your risk tolerance. For example, if you’re very far away from retirement, then you may be able to handle more risk in your retirement portfolio. But if you’re investing for your teenage kids’ college education, then that’s a shorter time frame and you probably shouldn’t take as many risks.

Your risk tolerance will also affect how you react to ups and downs in the market. Multiple studies have correlated the frequency with which you check your portfolio to losses over time — the more you stress over it, the more likely you are to pull your money out when you should just wait and stick with it.

So if you’re going to be someone who worries about every little blip in your investment portfolio, then you might need less risky investments. No investment is without risk, but you can spread the risk out across different assets and asset classes. But in general, higher-risk investments often have higher returns.

The 100 Rule

A common rule of thumb is known as The 100 Rule: Subtract your age from 100 and that’s the percentage of your portfolio that should be invested in stocks. For example, if you’re 25, then the 100 rule would suggest that 75% of your portfolio be in stocks and 25% in safer investments, like bonds, Treasurys, cash or money market accounts.

Target date funds are funds that more or less follow this style of rule — automatically adjusting the make-up of stocks vs. bonds as you near your target retirement date.

However, there are some caveats to this rule of thumb — people are living longer, every person’s situation may be different, and this is really only an asset allocation suggestion for retirement, not other financial goals you might have. Some financial advisors have even adjusted it to “The 110 or 120 Rule” because of increases in life expectancy.

What Is Risk Tolerance–Based Asset Allocation?

Risk tolerance–based asset allocation involves shaping your portfolio based on the level of risk you’re most comfortable with. For example, if you fit into the aggressive investor risk tolerance profile, that means you may commit a larger share of your portfolio to stocks and other higher-risk investments.

On the other hand, you may have a smaller asset allocation to stocks if you lean more toward the conservative end of the spectrum. The style of investor you are will likely shift throughout your lifetime. As discussed above, different life stages bring new concerns and priorities to mind, and this will naturally change how you view your asset allocation.

One thing that’s important to understand when basing asset allocation on risk tolerance is how that aligns with your risk capacity. Your risk capacity is the amount of risk you must take to achieve your investment goals. This is important to understand for choosing assets based on risk tolerance to find the right portfolio allocation.

If you have a low risk tolerance, but a higher risk capacity is required to achieve the investment goals you’ve set, then you may be at risk of falling short of those goals.

Meanwhile, having a higher risk tolerance but a lower risk capacity could result in taking on more risk than you need to in order to achieve your investment goals. Finding the right balance between the two is key when using a risk tolerance based asset allocation strategy.

How to Rebalance Asset Allocation

The other factor to consider is when to rebalance your portfolio in order to stay in line with your asset allocation goals. Over time, the different assets in your portfolio have different returns, so the amount you have invested in each changes—one stock might have high enough returns that it grows and makes up a significant portion of your stock investments.

If, for example, you’re aiming for 70% in stocks and 30% in bonds, but your stock investments grow faster until they make up 80% of your portfolio, then it might be time to rebalance. Rebalancing just means adjusting your investments to return to your desired portfolio make-up and asset allocation.

There are many rebalancing strategies, but you can choose to rebalance at set times — monthly, quarterly, or annually — or when an asset changes a certain amount from your desired allocation (for example, if any one asset is more then 5% off your target make-up).

In order to rebalance, you simply sell the investments that are more than their target and buy the ones that have fallen under their target until each is back to the weight you want.

The Takeaway

The effect of asset allocation has been studied over the years and while the findings varied, one thing has remained constant—how you allocate your money to different assets is vitally important in determining what kind of returns you see.

However, it’s more than just diversifying within each asset class—it’s also about diversifying your entire investment portfolio across asset classes and styles. In general, for instance, stocks are considered riskier than bonds—though there are also different kinds of bonds.

There are many different kinds of funds with different asset allocation, and a fund doesn’t guarantee diversification—especially if it’s a fund that invests in just one sector or market. That’s why it’s important to understand what you want out of your portfolio and find an asset allocation to meet your goals — which may require professional help.

SoFi Invest® offers Automated Investing for those who need help finding the right mix of assets in their portfolio. Investors who want to pick and choose stocks, ETFs and fractional shares themselves can take advantage of the Active Investing platform.

Get started with a SoFi Invest account today.

FAQ

How often should I review and rebalance my asset allocation?

You can review and rebalance your portfolio and asset allocation at any time, but you may want to set regular check-ins, whether they’re quarterly, biannually, or annually. One general rule to consider is rebalancing your portfolio whenever an asset allocation changes by 5% or more.

What factors should I consider when determining my asset allocation?

There are three main factors that will affect your asset allocation. First are your goals and whether they’re short term like saving for a house, or long term like retirement. Second is your risk tolerance, or how many ups and downs in the market you can live with. Risk tolerance is important because you’ll want to take on only as much risk as you can tolerate. Otherwise, you might panic during a market downturn and sell investments at a loss. The third factor to consider for asset allocation is your time horizon, or the amount of time you have to invest before you need to achieve your goal. This factor can help you determine how much risk you’re comfortable with.

How can I assess my risk tolerance and align it with my asset allocation strategy?

With risk tolerance–based asset allocation, you shape your portfolio based on the level of risk you’re most comfortable with. That said, the type of investor you are will likely change through the decades. Different life stages come with new priorities, and those will influence how you view your asset allocation.

When you base your asset allocation on risk tolerance, it’s important to understand how it aligns with your risk capacity, or the amount of risk you must take to achieve your investment goals. For instance, if you have a low risk tolerance, but a higher risk capacity is required to achieve your investment goals, you might fall short of your goals. Finding the right balance between the two is critical when you’re using a risk tolerance based asset allocation strategy.

Probability of Member receiving $1,000 is a probability of 0.028%.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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.

SOIN0523079

Read more

Sep

01

2023

Beginner’s Guide to Health Insurance

By Walecia Konrad | Life & Career, money | Comments Off on Beginner’s Guide to Health Insurance

Medical expenses can get very large very quickly, especially if you get sick, are in an accident, or have an ongoing health issue. In fact, medical bills are one of the leading reasons why people go into debt and file for bankruptcy.

One way to help protect both your health and your financial well-being is to purchase health insurance.

While these plans also have costs associated with them — in the form of premiums, deductibles, copays, and other fees — buying coverage can often be worth the investment.

Finding the right plan for your needs and budget, however, can sometimes be daunting. And, if you’re shopping for health insurance for the first time, it may seem like these companies are speaking an entirely different language.

Fortunately, we’re here to help guide you through all the health insurance basics you need to know when shopping for insurance plans, whether it’s through the federal marketplace, an employer, or directly through an insurance company.

What Does Health Insurance Cover?

The Affordable Care Act (ACA), also known as Obamacare, made covering certain health care services a requirement for all health insurance plans available to consumers.

These required services are known as the 10 health essential benefits. These 10 categories of services include:

•  Ambulatory patient services (outpatient care that you can receive without being admitted to a hospital)
•  Emergency services
•  Hospitalization for surgery, overnight stays, and other conditions
•  Pregnancy, maternity, and newborn care
•  Mental health and substance use disorder services
•  Prescription drugs
•  Rehabilitative and habilitative services and devices (treatment and devices that help people gain mental and physical skills after an injury or chronic condition)
•  Laboratory services
•  Preventive and wellness services
•  Pediatric services, including dental and vision coverage for children

Different Types of Private Health Insurance

Unless you qualify for insurance administered by federal or state governments such as Medicaid, Medicare, and the Children’s Health Insurance Program (CHIP), you will be in the market for private health insurance, which refers to any health care plan offered by a health insurance company.

These options typically include:

Employer-Sponsored Insurance

Also sometimes referred to as “group insurance,” employer-provided health insurance plans are private plans purchased and managed by your employer.

Employer-sponsored plans need to follow the same rules as other private insurance plans and cover the 10 essential benefits listed above.

Because employer-sponsored health insurance covers a large group of people, premiums are generally more affordable than a comparable individual plan. Plus, in many cases, employers cover a portion of your premium costs, which can make this option even more affordable.

Recommended: Choosing an Individual Health Insurance Plan

Exchange-Based Insurance

While federal and state governments oversee the ACA exchanges, the insurance is offered through private health insurance companies. As a result, exchange-based coverage is considered private insurance.

Depending on your income, however, you may qualify for premium assistance through your state or the federal government when you purchase insurance through an exchange.

Exchanged-based insurance is divided into four metal tiers: bronze, silver, gold, and platinum. The tiers do not necessarily reflect quality of service in the plans, but rather how much you’ll pay in premiums and other out-of-pocket costs.

With bronze plans, for instance, you’ll typically pay higher deductibles and copays but lower premiums. Platinum plans generally charge the highest premiums, but you’ll usually pay the least in out-of-pocket costs. Silver and gold tend to land somewhere in between.

Off-Exchange Insurance

This is a health care plan provided by a private insurance company that is sold separate from the exchanges. It may be purchased through an insurance broker or agent or directly from the insurance company.

Off-exchange plans must cover the 10 essential benefits and follow other rules dictated by the ACA — meaning you don’t have to worry about any loopholes or “gotchas” on off-exchange plans.

With off-exchange insurance, however, there are no government-funded premium subsidies. Also, insurers don’t have to offer a plan at every metal tier. They can offer just one type of health insurance plan.

Short-Term Health Insurance

Short-term plans are designed to provide temporary emergency coverage when you are between health plans or outside of enrollment periods.

Depending on what state you live in, short-term coverage can last up to 12 months, sometimes with the possibility of renewal for up to 36 months.

Short-term plans do not need to be ACA compliant. As a result, these plans do not have to provide essential coverage, most notably, coverage for preexisting conditions. Deductibles and out-of-pocket costs can also be significantly higher than traditional health plans.

Short-term health insurance may still be worth buying to cover a short coverage gap of one or two months if, say, you’re looking for a new job or a new job has a waiting period before your health insurance kicks in. Many large health insurers offer short-term options.

Understanding the Different Types of Plans

Whether you get insurance through your employer, through an exchange, or directly through a health insurance company, you will likely be able to choose between several different types of plans.

You’re also likely to encounter some confusing acronyms while shopping, like HMOs, PPOs, EPOs, or POS plans. Understanding what these letters mean can be important. The kind of plan you choose can have a big impact on your out-of-pocket costs and which doctors you can see.

Here’s a rundown of the various forms of health insurance.

Health Maintenance Organization (HMO)

These plans generally limit coverage to healthcare providers who are under contract with the HMO.

You typically need to have a referral from your primary care doctor to receive care from a specialist or other provider in the HMO network. Care from providers out of the HMO network is generally not covered, except in the case of an emergency.

HMO plans typically have cheaper premiums than other types of private health insurance plans.

Preferred Provider Organization (PPO)

PPOs are typically less restrictive than HMOs when it comes to accessing your network of providers and getting care from outside the plan’s network.

You will likely have the option to choose between an in-network doctor, who you can see at a lower cost, or an out-of-network doctor at a higher cost. Usually, no referrals are necessary to see a specialist.

PPO plans typically have more expensive premiums than HMOs.

Exclusive Provider Organization (EPO)

EPO plans are usually a mix between HMO plans and PPO plans.

EPO plans typically give you the option of seeing a specialist without a referral. However, they generally do not cover out-of-network physicians.

EPO plans tend to have more expensive premiums than HMOs, but may have less expensive premiums than PPOs.

Point of Service (POS)

POS plans are another hybrid of HMO and PPO plans. Plan members typically pay less for care from network providers. Like an HMO, you may need to get a referral from your primary care doctor to see a specialist.

POS plans typically have more expensive premiums than pure HMOs, but may have less expensive premiums than PPOs.

High-Deductible Health Plan (HDHP)

This is a health plan that charges a high deductible (such as $1,400 or more for an individual or $2,800 or more for a family). This is what you would have to pay for health care costs before insurance coverage kicks in.

In return for higher deductibles, these plans usually charge lower premiums.

Often, you can combine an HDHP with a tax-advantaged health savings account (HSA). Money saved in an HSA can be used to pay for qualified medical expenses.

You can deduct HSA contributions from your taxes. Plus, earnings typically grow tax-free in the account, and withdrawals used to pay for healthcare are generally not subject to federal taxes.

Recommended: How Do I Start a Health Savings Account?

Catastrophic

These health plans are typically designed to cover only dire circumstances. They tend to have very high deductibles and lower premiums than other plans.

Catastrophic plans can help if you get seriously ill or injured, but you’ll usually pay a large chunk out of pocket for all other healthcare costs.

Catastrophic plans on the exchanges are only available to people under age 30 and people of any age with a hardship or affordability exception.

💡 Quick Tip: Next time you review your budget, consider making room for additional insurance coverage. Think of it as an investment that can help protect you from a major financial loss.

Key Features That Determine How Much You Pay

When you shop for a health insurance plan, it’s important to know which features decide how much you’re actually going to pay for health care.

These out-of-pocket expenses can typically be grouped into five major features of your health insurance plan. These include:

Premium: This is the amount of money you pay to your health insurance company each month to stay enrolled in your plan and keep your coverage.
Deductible: This is how much you need to pay for health care services out of pocket before your health insurance kicks in. Your plan may have a family deductible in addition to individual deductibles. You may want to keep in mind that the deductible and out-of-pocket maximum are two different things (more on that below). Plans with lower premiums tend to have higher deductibles.
Copayment: Often shortened to “copay,” this is a fixed amount that you pay for a specific service or prescription medication. Copayments are one of the ways that health insurers will split costs with you after you hit your deductible. You will pay copayments until you hit your maximum out-of-pocket amount.
Coinsurance: This is another way that health insurers will split costs with you. Unlike a copay, coinsurance usually isn’t a fixed cost. It’s typically a percentage of the cost that you pay for covered services. For example, if you have a coinsurance of 20%, you’ll pay 20% of the cost of covered services until you reach your out-of-pocket maximum.
Out-of-pocket maximum: This refers to the most you’d ever have to pay for covered health care services in a year. Payments made towards your deductible, as well as any copayments and coinsurance payments, generally go toward your out-of-pocket limit. Typically, monthly premiums do not count.

How to Buy Health Insurance

If you are employed and your benefits include health insurance, you may be eligible to buy coverage through your employer, either at your date of hire, during open enrollment season, or if you experience certain qualified changes of status such as a marriage or birth of a child.

Another option is to buy insurance through the exchanges at Healthcare.gov . Here, you can also determine if you qualify for a premium subsidy. You may also be given the option of purchasing a plan through your state’s exchange.

You can sign up for exchange coverage during the annual open enrollment period, which typically runs from November 1 through January 15. (Some states have longer enrollment periods.)

Or, you may qualify for a special enrollment period, which allows you to purchase coverage at any time. Loss of employer-based insurance or a move to another state are examples of situations when you might qualify for a special enrollment period.

You can also buy private insurance plans directly from insurance companies. You can research individual and family plans on insurance company websites or work with an insurance broker who specializes in private coverage. Online insurance brokers are also a place to compare plans and prices.

The Takeaway

Health insurance can protect you from large medical bills should you or a member of your family experience an illness or accident. You may be offered health insurance through your employer. Or, you might choose to buy health insurance through the federal health insurance marketplace or directly from a private health insurer.

When looking for a plan that fits your situation and budget, it’s a good idea to review all costs involved. This includes deductibles, copays, and coinsurance, in addition to premiums. You’ll also want to ensure the network of providers and services that each plan covers fit with your health needs. After all, having the right coverage in place can help you maintain your health and preserve your financial security.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOPTO0823138
Read more

Aug

31

2023

7 Easy Ways to Improve Your Gas Mileage

By Kelly Boyer Sagert | Budgeting & Goals, Financial Independence, money | Comments Off on 7 Easy Ways to Improve Your Gas Mileage

At the end of summer 2023, a gallon of regular gas cost just a hair under $4: perhaps not the worst you’ve ever seen, but not exactly a bargain basement price either.

According to J.D. Power, Americans spend about $5,000 on gas a year, a not insignificant figure.

If you’re looking for ways to save on this expense, this guide can help. It shares seven easy ways to boost your gas mileage, meaning you’ll go farther on a tank’s worth. Read on to learn how to save.

How to Improve Gas Mileage

Gas mileage is measured in miles per gallon (mpg). If a vehicle gets 25 mpg, this means that, on average, it can be driven for 25 miles for every gallon of gas pumped into it. Overall, miles per gallon is typically higher for a vehicle during highway driving than on city streets where speeds are slower and vehicles idle at stop signs and traffic lights. Vehicles can, in fact, typically get five more mpg with highway driving than with city driving.

Fortunately, there are ways to improve gas mileage no matter where you’re driving, many of them reasonably simple. To help, here are seven money-saving ideas for better gas mileage and two busted myths.

1. Reduce the Weight

Get rid of excess weight in the vehicle by removing unnecessary items in the trunk and backseat to lower fuel consumption. Every 100 pounds added to a car boosts fuel consumption by 2%. Think carefully about what to remove. Maybe those golf clubs don’t have to perpetually stay in your trunk. Taking out a toolbox full of tools, however, might reduce the weight being carried, but those items might be sorely missed in an emergency.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

2. Watch Your Speed

In general, the mileage a driver gets from a gallon of gas decreases pretty quickly when traveling more than 50 miles per hour, according to the U.S. Department of Energy (DOE). Lowering your speed by five to 10 mph can raise fuel efficiency by 7% to 14%. Why? Higher speeds decrease fuel economy because of two factors: air resistance and tire rolling resistance.

3. Keep Tires at Optimal Pressure

The DOE reports that keeping your tire pressure in the sweet spot can enhance your gas mileage. If your tires are underinflated, you can lower gas mileage about 0.2% for every drop of 1 psi (pressure per square inch) in the pressure of the tires. Overall, proper inflation can boost your mileage by up to 3%, which can add up at the pump.

4. Monitor Your Driving

Using a trip computer, drivers can receive immediate feedback about the impact that an action, such as the rapid acceleration of a vehicle, has on gas usage. These real-time, personalized insights into how to improve fuel economy, fuel consumption, maintenance reminders, and more.

5. Plan Your Gas Stops

Using a combination of strategies for how to improve gas mileage can help to reduce fuel costs. Having to fill up at a pricey pump, though, can negate all of that hard work. So, when out on the road, especially when away from home in unfamiliar territory, consider using apps like Gas Guru or GasBuddy. They can help you to find the most affordable gasoline in town, wherever you are when it’s time to fill up.

Recommended: 25 Ways to Cut Costs on a Road Trip

6. Road Trip Wisely

If you’re planning a trip and have a choice of cars to drive, some factors to consider are the car’s size (you want enough room to be comfortable as you travel as well as any luggage you bring) and its gas mileage. Using a trip calculator can estimate fuel consumption for each car so you can pick the one that will cost the least in gasoline.

7. Cold Weather Strategies

When thinking about how to get better gas mileage, take a look at the thermometer, and plan your winter driving carefully. FuelEconomy.gov states that the miles per gallon can be 15% lower, more or less, at 20°F than at 77°F. Since most of us can’t hibernate all winter long, money-saving suggestions include warming up your car for 30 seconds only and then driving gently to allow the vehicle to warm up in a more cost-efficient way. Also, combine trips whenever possible — especially in the winter.

Myths About Gas Mileage

Some strategies to improve gas mileage are tried and true, but there are still some myths that continue to be perpetuated. Here are a couple of common myths that don’t prove to be true when it comes to saving money daily on gas.

1. Refueling When Cool

Some people buy gasoline in the morning when temperatures are cooler, believing that this will help them get better gas mileage. The theory behind this idea is that cooler gas is denser, so you’ll get more bang for your buck in the mornings. However, consumer watchdogs say this won’t make any practical difference though, especially since most gas stations store the gasoline underground where temperatures are pretty stable.

2. Changing the Air Filter

In the past, people believed that dirty air filters reduced fuel economy because of lowered air intake. While studies have shown that a vehicle’s acceleration was lessened when an air filter change was overdue, swapping it out probably won’t boost fuel economy in most cars. Wondering what changed? Engine computers have the ability to compensate for the reduced airflow to maintain the right ratio between air and fuel.

💡 Quick Tip: Your money deserves a higher rate. You earned it! Consider opening a high-yield checking account online and earn 0.50% APY.

Budgeting for Gasoline and More

How much can you afford to pay for gasoline each month? If you aren’t really clear about that, making a monthly budget can help. Basic steps of creating a budget include:

•   Gathering all of your financial documents together

•   Figuring out your monthly take-home pay

•   Adding up monthly fixed and variable expenses

•   Using this information to create a workable budget

While creating your budget, consider how much gas is used for needs (such as getting to work) and how much for wants (driving around town while trying to decide what restaurant to pick). One popular personal budgeting method involves dividing expenses into needs and wants and then also having a category for savings. Called the 50/30/20 rule, this method divides after-tax income in this way:

•   50% towards needs

•   30% towards wants (or discretionary expenses)

•   20% towards savings

This isn’t the only way to create a personal budget, though. There are plenty of budgeting resources to help you find the method that works best to manage your money.

The Takeaway

Gas prices can take a chunk out of the budget but by understanding a few important principles, you can help improve your gas mileage and make the most of the money you spend at the pump. Doing so can be part of taking control of your finances and managing your money well.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

Photo credit: iStock/FG Trade

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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

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.

SOBK0823010
Read more

Aug

31

2023

10 Signs You’re Living Beyond Your Means

By Diana Kelly Levey | Budgeting & Goals, Financial Independence, money | Comments Off on 10 Signs You’re Living Beyond Your Means

Living beyond your means can easily happen. Typically, it’s a case of your spending outstripping your earnings. This in turn means it’s hard to pay off debt and save for your financial goals.
Sound familiar? If you find yourself running out of money before the next payday, you could be leaving above your means.
Here, learn more about this issue and the warning signs. Then you can begin to ake action and take control of your money.
What Does “Living Beyond Your Means” Mean?
Simply put, ”living above your means” means that you are spending more money than you are earning. People are able to do this by relying on credit cards, loans, and pior savings to cover their expenses. However, the process is not sustainable, and eventually overspending is likely to catch up to you.
Living beyond your means can also mean that you’re spending everything you bring in, and, as a result, don’t have anything left over for saving or investing, such as building an emergency fund, saving for a short-term goal like buying a car or a home, or putting money away for retirement.
Here are ten red flags that you’re living a lifestyle you simply can’t afford — and tips for how to get back on track.
1. You Live Paycheck to Paycheck
If most or all of your paycheck is spent immediately on bills, and you don’t have anything left over at the end of the month to put into savings, you are likely living over your means and may need to make some adjustments.
If your current lifestyle has become a habit, you may feel there is no place to cut back. However, if you get out your monthly statements for the past three months and take a close look at where all your money is going each month, you will likely find places where you can cut back on spending. This might be ditching cable, cooking (instead of ordering take-out) a few more times per week, or quitting the gym and working out at home.
💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure online banking features.
2. Your Credit Score Has Dropped
If you’ve been putting a lot of your expenses on your credit card and/or don’t always pay your bills on time, you may see your credit score take a hit.
This number is important because it can be accessed by anyone considering giving you new credit and may be used to determine the interest rate you’ll pay on a home or car loan, and also new credit cards.
If you aren’t sure what your credit score is, you can get a free copy of your reports from all three credit bureaus at www.annualcreditreport.com .
Looking it over can help you understand why your credit score has dropped, and help you take the necessary steps to repair it.
For example, you might set up automatic payments for the minimum amount due on credit card bills and loans, so you never miss a payment.
You may also want to pay down your balances on your credit cards and lines of credit. This can lower your “credit utilization rate” (how much of your credit limit you are using), which is factored into your score.
Recommended: What Is Considered a Bad Credit Score?
3. You’ve Stopped Your Retirement Contributions
If money is feeling a little tight, you may feel that now is not the time to worry about retirement. But you likely won’t be able to work forever, so it can be wise to make saving for retirement a priority and to get started early.
Thanks to compounding interest (which is when the interest you earn also starts earning interest), the earlier you start investing in a retirement fund, the easier it will be to save enough money to retire well.
You don’t have to contribute a lot. Even just putting aside a small amount of each paycheck into a 401(k) or IRA each month can help you build wealth over time. This move can get you on track to meet your financial goals.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.20% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.

4. A Big Portion of Your Income Goes to Housing
Keeping your rent or mortgage below 30% of your monthly pre-tax income is sometimes recommended because it can leave you with enough income left over to save, invest, and build wealth in general.
Staying below 30 percent can be difficult, however, if you live in a region of the country where the cost of housing is high.
Nevertheless, spending a lot more than a third of your income on housing can leave you “house poor,” and put your other financial obligations at risk.
If you find that your housing costs are taking too large a chunk of your monthly paycheck, you might consider downsizing, taking on a roommate, or finding a way to increase your income with a side hustle.
5. Your Savings Account Isn’t Growing
Another sign you may be living beyond your means is that your savings have stagnated.
Making regular deposits into your savings account–in addition to your 401(k) or IRA–allows you to work towards your short- and medium-term financial goals, such as putting a downpayment on a home or a car or going on vacation.
💡 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.
6. You’ve Been Charged an Overdraft Fee More than Once This Year
An overdraft fee — or “non-sufficient funds fee” — is charged when there’s not enough money in your account to cover a check or debit card payment.
Mistakes happen, and a one-off overdraft isn’t necessarily an indicator of overspending. But repeat offenses can be a sign that you are living too close to the edge and don’t have a clear picture of how much money is going into your account and how much is going out.
You may want to start tracking your spending and keeping a closer eye on your spending account to make sure you always have enough to cover your electronic payments.
Recommended: Using a Personal Cash Flow Statement
7. You’ve Never Set a Budget
Many people think making and following a budget will be too complicated. But having a budget can actually simplify your spending decisions by letting you know exactly what you can and can’t afford.
Having a budget also helps to ensure you have enough money to cover essentials, fun, and also sock some away in savings.
If you’ve never set financial parameters for yourself, you may want to consider taking an honest inventory of how much you are bringing in each month and how much is going out each month.
Once you get a sense of your own patterns and habits, you can work toward building a realistic budget that allows you to spend and save more wisely.
8. You’re Leasing a Car You Can’t Afford to Buy
Leasing a vehicle you would not be able to purchase outright or finance can be a major financial red flag. Leasing lets you rent a high-end lifestyle, but many people end up with leases they really can’t afford.
You might be covering your monthly payments, but if you can’t do that while meeting your other expenses and also putting money into savings, then your car is likely too expensive.
You may want to consider downgrading your vehicle or saving up enough money to buy a car — either outright or by making a solid downpayment so your monthly payments are low.
9. You’re Only Making Minimum Payments on Credit Cards
It’s fine to use your credit card to pay for everyday expenses and the occasional big purchase. But if you can’t pay off most of the balance each month, you’re likely living beyond your means.
Rather than give over part of your paycheck just to interest each month, you may want to cut back on nonessential spending and divert that money towards paying off your balances.
10. You Don’t Have an Emergency Fund
Not having a stash of cash you can turn to in a pinch can be a sign that you’re overspending. You may be gambling on the fact that nothing will go wrong. But life is unpredictable, and getting hit with an unexpected expense you can’t pay for can lead to a financial crisis.
Instead, you may want to build an emergency fund that can cover three to six months worth of living expenses. That way, you’ll be covered should something happen, such as an illness or injury, job loss, housing issue, or any other expensive personal matter should come up.
The Takeaway
Unfortunately, living beyond your means is all too easy to do. And while a few weeks or months of spending more than you earn may not be a major problem, overspending on a regular basis will likely catch up to you in the form of high debt and neglected savings.
Creating (and sticking to) a spending budget can help ensure that you can afford your bills and basic expenses, and still have money left over to save for the things you want in the future.
Ready to get better control of your spending? The right bank can help.
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 4.20% APY on SoFi Checking and Savings.
Photo credit: iStock/urbazon
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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.
SOBK0823004
Read more

Aug

31

2023

How to Become a Digital Nomad: 25 Things to Consider

By Stacey Leasca | Budgeting & Goals, Financial Independence, money | Comments Off on How to Become a Digital Nomad: 25 Things to Consider

These past few years have proved that plenty of people can work from anywhere, which has further fueled the digital nomad movement.
Digital nomadism is a “have laptop, will travel” lifestyle for both freelancers and those who work full-time but can do so remotely. It means you can travel and do your job from wherever, enjoying new experiences and scenery as you globetrot.
But before you decide that travel plus remote work is the right situation for you, read the following 25 considerations.
They’ll help you understand if this is the right fit for you and how you’ll need to prepare before you start packing your bags.
What Is A Digital Nomad?
Digital nomads are professionals who work fully remote jobs and move locations frequently. They are able to do this either because they are self-employed, or because their company allows for a more transient lifestyle.
The number of people who are digital nomads is estimated to be more than 20 million in America and 35 million all around the world.
💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.20% APY, with no minimum balance required.
How Much Do Digital Nomads Make?
It seems that many digital nomads make high salaries; perhaps this earning power allows them to call the shots and travel when and where they see fit.
One 2023 study found that 36% of digital nomads around the world earned between a $100,000 salary and $250,000 per year. Only 6% of those surveyed reported earning less than $25,000 per year.
Common Jobs for Digital Nomads
Among the most popular fields for digital nomads include:
• Writing
• Education & Training
• Administrative
• Customer Service
• Art & Creative
• Computer & IT
• Consulting
• Data Entry
• Marketing
• Project Management
25 Things to Know Before Becoming a Digital Nomad
If you’re trying to decide if the digital nomad life is right for you, here are a number of things you may want to consider.
1. You’ll Be Able to Learn About Different Cultures
As a digital nomad, you get to choose where you spend your time. Maybe you’ve always wanted to know what it’s like to live on the Greek island or in the Peruvian Andes. Or, maybe you want to learn more about your ancestors. You can do that as a digital nomad. Making a list of the things you really want to see, do, and learn in your lifetime can help you start formulating a plan.
2. You Could Learn a New Language Along the Way
Beyond meeting new people, you can also choose to learn new things as a digital nomad. Living and working in a place can significantly improve your language skills. So if you want to learn Spanish, you may want to plan on living in Spain for a few months.
3. You Can Enjoy Winter or Summer All Year Long
Hate winters? They can be a thing of the past. As a digital nomad, you get to choose where you live and work, so if you want to summer in the states, then summer again in Australia or South America, or anywhere else where the temperatures are right for you, you can do it.
4. Having a Plan B, and Maybe Even C, Is Prudent
As a digital nomad, you will likely be moving around a lot, which means you may hit more snags than if you were staying in one place. Because of this, it is a good idea to always have a backup plan, like a second accommodation option in case your first one doesn’t fit the bill, multiple options for reaching Wi-Fi, as well as a starting an emergency fund.
5. Making Close Friendships Can Be a Challenge
If you’re not staying in one place for very long, it can be difficult to create deep connections with people you meet. However, if you’re willing to put time and effort into making and keeping new friends, these relationships can last for as long as you want.
6. There’s a Massive Global Network Waiting to Welcome You
Fortunately, if you decide to dip your toe in the digital nomad waters, you will not be alone. There are millions of others around the globe who are currently living the digital nomad life, and plenty of Facebook, Instagram, and chat groups to help you connect with them.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.20% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.

7. You May be Able to Set Your Own Hours
Because you are no longer working in an office, it may be possible to create your own working hours. This can be a major perk for many who do not like to adhere to the nine-to-five lifestyle. For example, you could choose to work early in the morning and take the afternoons off or vice versa. If your working situation allows this, it’s totally up to you.
8. Your Entire Day Will Likely Depend on WiFi Availability
If connecting to the internet to conduct work and communicate with clients or employers is important for your job on a regular basis, it can be a good idea to choose destinations with reliable WiFi. You can also take advantage of websites, such as WiFi Map, that help you track down free WiFi wherever you are in the world.
9. Investing in a VPN Could Be Smart
Depending on where you decide to travel, internet access could become an issue. That’s because the internet is censored in certain destinations. To help you access the websites you want or need for work, you may want to download a VPN (virtual private network) prior to departure. This can help you get around any censorship issues and help protect your privacy online. The cost of a good VPN service is around $10 per month.
10. You’ll Likely Become a Coffee Shop Connoisseur
Cafe life can be clutch for digital nomads. Not only are coffee shops typically welcoming to those who need to use WiFi, but they can also be excellent places to chat with locals, make new friends, or simply soak up the local culture.
11. Maintaining a Routine Can Be a Challenge
If you’re traveling on your own, and have the freedom to set your own work hours, your routine will be entirely up to you. For some people, this can become a challenge because they have little structure to their day. As a digital nomad, it can be a good idea to come up with your own daily schedule, such as walking in the morning, working in the afternoon, and taking an exercise class at night, no matter where you are.
12. It May Be Hard to Maintain Connections With Old Friends
Just as your life is moving on in a new direction, so are the lives of those you left behind. If you want to stay connected, you are likely going to have to make an effort. You may want to set reminders for yourself to send text messages, make phone calls, or go the old-fashioned way and write letters to those you hold nearest and dearest.
13. You’ll May Need to Learn Global Visa Rules
If you want to become an international digital nomad, you will likely have to learn a lot of the rules of entry into different countries and make sure you have all the necessary documents in advance. For example, some countries require all travelers to have visas, while others only require them for stays longer than 90 days.
14. You’ll Need to Take Stock of Your Finances
The good news: Being a digital nomad doesn’t have to be expensive. You can save money by spending time in a nation where goods cost less, or you might forgo a car and take public transit, or even couch surf when you can. No matter how you choose to travel and live, it’s a good idea to figure out a budget beforehand, and keep track of your spending as you go so you don’t run out of funds while you’re still a long way from home.
Recommended: How to Save for a Vacation: Creating a Travel Fund
15. You’ll Want to Have Easy Access to Your Money
Traveling the globe, you will want to make sure you can access your money wherever and whenever you need it. And while you can do that with many U.S. banks, many will charge you foreign transaction fees, as well as ATM fees, which could make it expensive to access your own cash. It’s a good idea to read the fine print before you set out and, if necessary, choose a different financial institution and change banks.
💡 Quick Tip: Want a new checking account that offers more access to your money? With 55,000+ ATMs in the Allpoint network, you can get cash when and where you choose.
16. You’ll Want to Check Your Phone and Insurance Plans
It’s a good idea to check your cell phone contract to find out what the coverage is while traveling. Ideally, you want a phone plan that allows for unlimited data while traveling internationally. It’s also a good idea to find out what your cell phone protection plan will cover if you need care in another part of the country, or in a different country.
17. Hiring a Tax Professional Can Be a Smart investment
Depending on your employment situation, you may need to pay quarterly income taxes. You may also need to pay taxes on income earned while living abroad. Since this can get complicated, it may be worthwhile to hire a tax professional who can help you navigate the ins and outs of tax law and even complete your tax return for you, giving you one less thing to worry about on the road.
18. The Right Housing Can Be Hard to Find
As a digital nomad, you may not have the luxury of getting to see a property before renting it. That means you may get there and realize you made a mistake. If possible, you may want to avoid committing to (and paying upfront) a long-term stay before you see the place. It can also be a good idea to have a backup accommodation plan in case things don’t look quite as good as they did online.
19. Storage May Become an Issue
Depending on how long you plan to travel around the globe, you may need to store your items along the way. When doing so, it can be a good idea to store items in facilities or places that a friend or family member is able to access. That way, if you need something important while you’re on the other side of the world, they can get it and send it to you.
20. You May Want to Start Journaling
As a digital nomad, you will likely be making incredible memories. Even if you’ve never kept a journal, you may want to start keeping a notebook where you jot down a few lines at the end of each day or week, and document things you saw or experienced or simply what you’re feeling. You’ll likely enjoy looking back on this later. And, knowing what worked and didn’t work can also help you plan your next adventure as a nomad.
21. “Vacation” May Take on New Meaning
Because you can live and work from anywhere in the world, “vacation” may no longer mean the same thing as it used to. It can be important as a digital nomad to still ensure you are taking time off to rest and relax and recharge from your work routine. What’s great is that you can now take a vacation without having to hop on a plane to get away from it all because you’re already there.
22. Longer-Term Stays Tend to Work Best
When transitioning to a digital nomad lifestyle, it can be tempting to hop around from one place to the next in quick succession. However, this can wreak havoc on your routine and become exhausting. It also makes it hard to get to know a place or make new friends. Instead, you may want to plan for longer stints of time, such as several months, in each destination.
23. Being Alone Can Be Challenging
If you are taking up the digital nomad lifestyle on your own, you will likely be spending more time than ever before solo. And, you’ll no longer have co-workers to chat with during the day. While this can be a welcome relief for many, others may struggle with loneliness. To help combat feelings of social isolation, it can help to join meetup groups, head to events solo where you can meet new people, or join a co-working space.
24. You May Get Homesick
Yes, getting to explore the world and go wherever you wish as a digital nomad is a gift. But, the reality is that, at one point or another, you will likely miss home. It may be that you are missing family, friends, or that bit of normalcy you once had. It can help to know that this is normal and expected, and you may even want to give in to it by calling home and letting it out.
25. You May Find Out It’s Not the Right Life for You
The digital nomad lifestyle can sound wildly appealing. After all, we often see people living their best nomad life on social media. However, there are difficulties and challenges that come with the nomad lifestyle. You may try it and decide it’s not the right choice for you, which is perfectly fine. Sometimes you don’t know what you’ll like until you try it.
Pros and Cons of Being a Digital Nomad
First, consider the pluses:
• Being a digital nomad can bring personal and professional freedom. You’ll no longer have to deal with everyday office politics or have to go to the same place every weekday.
• Instead of only having a couple of weeks to travel each year, you can see and experience new places all year long.
In terms of negatives, prepare for the following:
• Being a digital nomad can also be a lot of work. If you’re going freelance or starting your own business, it can take a lot of time, effort, and hustle to start making real money.
• Depending on your budget, you may also have to put up with less than glamorous accommodations.
• For some, the nomad life can get lonely.
The Takeaway
The digital nomad lifestyle can be an exciting way to travel and live in new places while working, rather than being limited to a brief week or so away.
The nomad life can take more work than some are willing to put in, including finding new routines, more personal accountability, and dealing with details like getting visas and finding the best cell phone and health insurance plans.
However, this life-work choice can pay off, both in terms of seeing the world and earning money. Ready to hop on a plane and become a digital nomad? Make sure you have your banking squared away first.
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 4.20% APY on SoFi Checking and Savings.
Check out all the benefits of SoFi Checking and Savings today.
Photo credit: iStock/Vasil Dimitrov
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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

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.

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.
SOBK0823006
Read more

Page 443 of 791« First «...10 20 30...441 442443444 445...450 460 470...»Last »