6 Examples of When to Use Your Emergency Fund

There are times when urgent, vital expenses pop up that lead you to dip into your emergency fund. Maybe you were laid off and rent is due, or you get into an accident and wind up with a pile of medical bills.

But at other times, it can be hard to know what exactly qualifies as a rainy day and gives you license to dip into your emergency savings. What about a great deal on a used car, which you could really use? Or the opportunity to replace your old fridge at a steep discount? Do those qualify as reasons to dip into your savings? Learn more here.

What Are Things to Avoid Spending My Emergency Savings on?

If you’ve done a good job stashing cash in an emergency fund, you likely want to know what types of expenses are valid uses of the money sitting in your savings account. Here are examples of when not to withdraw funds:

•   Fun purchases. If you want but don’t need something and it isn’t in your budget, don’t pull from your emergency fund. Entertainment, dining out, tech gadgets, and designer clothes (even if on final sale) are all examples of wants, not needs. Set aside some funds for such buys if you like, but don’t deplete your emergency fund savings. It’s always best to ask questions before making an impulse buy. Spend time thinking about a purchase carefully before making it. You may find that new bike you thought you desperately needed doesn’t seem so vital a day or two later.

•   Vacations. It’s very tempting to get away for a little R&R when things get tough, but a vacation isn’t a worthwhile emergency fund expense. If you want to have that week at the beach, go ahead and create a savings plan and a separate savings account to make it a reality. But it’s not a wise spending strategy to pull the money out of your rainy day funds.

•   Debt. Paying down debt is a great goal. It’s also a smart use of any extra money you may have, but not at the expense of draining an emergency fund completely. If you’re chipping away at debt, keep at it but continue to keep some emergency funds aside. If you lose your job or an unexpected expense hits and you don’t have emergency savings, you might end up turning to more expensive forms of credit as a result. This underscores the importance of having an emergency fund.

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How to Know When an Expense Counts as an Emergency

Now, it’s time to consider when to go ahead and use that money you saved for a rainy day. If you’re on the fence about whether an expense counts as an emergency, ask yourself the following six questions to determine if you should tap your emergency funds.

1. Is This Absolutely Necessary?

There’s a difference between things you want and things you need. If you start a new job and have to buy a uniform for it, that’s a necessity. If, however, you begin a new job and simply want some new outfits, that isn’t a necessity. Similarly, pining for a new stove with a commercial-style cooktop is a want; replacing a stove that conked out is a necessity.

2. Is This the Only Way That I Can Pay for This?

Before pulling money from this account, consider if the emergency fund is the only source of money that can cover this expense. Would it be possible to wait a week until payday and use your income instead? Gift cards, coupons, and sale discount codes can make it easier to pay for purchases without draining your emergency fund.

Your goal here is to determine the lowest possible price for a purchase and then see if there’s another (non-emergency fund) way to pay for it.

3. Is This an Unexpected Event?

Emergency funds can be a great way to cover unexpected and necessary purchases, but they aren’t supposed to replace poor planning. If you know a major expense is coming your way (say, the hot-water heater is coming to the end of its lifespan), it’s best to save for it instead of reaching into your rainy day fund.

4. Is This Urgent or Can It Wait?

Even if an expense feels like something that must be dealt with at the moment, there’s a good chance it can be put off. Ask yourself if it can wait until you have saved enough money to pay for it without accessing emergency funds.

5. How Much of My Emergency Fund Will I Be Using?

An emergency fund exists as a safety valve when you unexpectedly need funds. However, before pulling money from an emergency fund, it can be helpful to consider just how much of the emergency fund the purchase will take up. If it’s going to drain the fund and the purchase can wait, it’s likely best to wait. Or maybe you can buy a less pricey version of the item in question.

6. How Long Will It Take To Rebuild My Savings?

If the purchase will take up a big chunk of the emergency savings fund, it can be a good idea to map out how long it will take to rebuild those savings. If it will take more than six months, then it may be best to hold off on making that purchase until the emergency fund is more substantial. It may be better to cut back on spending to cover this expense now without having to touch emergency savings.

Of course, sometimes an emergency is really an emergency, and you can’t hold off. If you are hit with, say, a major medical bill, you may have to use up that emergency fund and work hard to rebuild it later. But it will have done its job and seen you through a tough time.

Recommended: Emergency Fund Calculator

The Takeaway

Before pulling savings from an emergency fund, it’s important to determine if the purchase is truly urgent or simply something you really want. Sometimes, real emergencies do crop up, and you’ll be glad you have money saved. Other times, you may realize that the expense isn’t really so vital. Emergency savings can be a real lifesaver, so you want to protect those funds and make sure you use them properly.

One way to build up an emergency fund faster is to put your money in a savings account that earns a competitive interest rate.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What should you ask yourself before using your emergency fund?

Before you pull money from an emergency fund, ask yourself questions like, Is this expense absolutely necessary? Is this the only way I can pay for it? Is it urgent or can it wait? How much of my emergency savings will I be using up? The answers should guide you towards whether or not it’s worth tapping into your emergency fund.

What should you spend your emergency fund on?

What constitutes an emergency purchase for one person may look quite different for another. That being said, it’s usually best to only spend emergency fund savings on necessities, not wants. Financial emergencies are usually unexpected and may include home repairs, medical bills, and car repairs — or day-to-day expenses after, say, a job loss.

What should you not put in your emergency fund?

While it’s a good idea to put extra money towards an emergency fund instead of spending it frivolously, there are some types of savings it’s best to leave out of an emergency fund. For example, it’s not a good idea to use 401(k) contributions or other retirement savings to build an emergency fund. Saving for retirement is crucial, and employers may match 401(k) contributions, which is basically like getting free money. In this scenario, it may be wise to focus on maxing out retirement contributions before building an emergency fund.


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



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Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

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*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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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Student Loan Debt Statistics in 2024

Student Loan Debt Statistics in 2024

Pursuing higher education is a worthwhile act no matter the cost, but the cost does play a role. Student loan debt statistics point to a total outstanding balance of $1.745 trillion.

Knowing how much student loan debt is potentially on the way can help students and their parents better prepare to manage the costs of higher education. So, how much student loan debt is normal? Let’s take a look at some statistics about student loan debt that can shed some light for potential borrowers.

Key Points

•   U.S. student loan debt has reached over $1.7 trillion in 2024, continuing to be a significant financial burden for millions of borrowers.

•   The average student loan debt for a bachelor’s degree graduate is around $29,400.

•   Many borrowers struggle with repayment, as over 8% of student loans are in default, highlighting ongoing financial stress among borrowers.

•   Student loan debt delays major life decisions for many young adults, such as buying homes, starting families, or saving for retirement.

•   Student loans shouldn’t scare students away from attending college, but should instead motivate the student to find creative ways to pay for college. Students can apply for scholarships, grants, and/or work a part-time job. As a last resort, students can apply for federal and private student loans.

Overview of Student Loan Debt in America

Before we dive into American student loan debt statistics, it’s important to note that these numbers are just averages. How much student loan debt someone stands to accumulate depends on many different factors such as school choice, living arrangements, and the type of student loan they take out.

Total Outstanding Student Loan Balance

Let’s start our examination of statistics on student loan debt in America by getting an idea of the bigger picture. As noted earlier, American borrowers amassed over $1.745 trillion worth of student loan debt as of June 2024, according to the Federal Reserve.

Average Student Loan Debt per Borrower

The College Board found that as of March 2023, 32% of federal loan borrowers had debt under $10,000. Another 21% held student loan balances between $10,000 and $19,999, and 22% held balances between $20,000 and $39,999.

Student Loan Debt by Education Level

The type of degree a student pursues can influence how much they spend on their education and how much they need to borrow. These statistics for student loan debt by degree can help students determine how far they want to take their education or how much they need to save to avoid student loan debt based on their degree goals.

Bachelor’s Degree Debt Statistics

Many students choose to start and stop their higher education journey with a bachelor’s degree.
For the 2021-22 school year, 51% of bachelor’s degree recipients from public and private nonprofit four-year institutions graduated with debt, averaging $29,400 per borrower.

Among public four-year institution graduates, 49% had federal loans with an average debt of $20,700, while 52% of private nonprofit institution graduates had federal loans, averaging $22,200.

The average private student loan debt is $34,600 per borrower at public four-year institutions and $44,600 at private nonprofit institutions.

Master’s Degree Debt Statistics

Once students choose to pursue a degree higher than a bachelor’s, the student loan debt begins to mount. For students in class of 2019-20, 13% of master’s degree recipients borrowed $100,000 or more to finance their undergraduate and graduate education.

Recommended: How to Live with Student Loan Debt

Doctoral Degree Debt Statistics

A doctoral degree is another option students have for continuing their college education. Like the master’s students, 13% of doctoral degree recipients needed to borrow $100,000 or more to cover the total costs of their college education.

Repayment Challenges and Delinquency Rates

Based on how much student loan debt borrowers have on average, it’s easy to see why some borrowers may struggle with repaying their student loans on time. A delay in payments can lead to delinquency. Student loan delinquency occurs when a borrower fails to make a scheduled payment on their loan by the due date. If the payment is late for an extended period, the loan can default, leading to more severe financial consequences, such as a hurt credit score or the debt entering collections.

Percentage of Borrowers in Delinquency

How many borrowers find themselves struggling with student loan payments? In October 2023, student loan payments that were paused during the pandemic resumed. According to the Department of Education, at that point about 30% of borrowers were past due on student loan payments (this accounts for about $290 billion in loans).

Factors Contributing to Delinquency

Avoiding delinquency is easier when the borrower understands what it means to be delinquent on a loan account. If a borrower fails to make payments on time (whether this is payment number one or the final one), the loan eventually falls into default.

Many borrowers struggle to keep up with student loan payments while juggling other important expenses like housing, groceries, and transportation. With federal student loans, it’s possible to sign up for a repayment plan based on your income (and to enjoy other perks like student loan forgiveness programs). These income-driven repayment plans can make it easier to stay on budget, as they tend to result in smaller monthly loan payments.

A word of warning — income-based repayment plans often mean a longer loan term, which leads to the borrower paying more in interest overall. Whenever possible, paying off a student loan early can lead to major interest savings.

Private student loan lenders tend to be less flexible when it comes to repayment, but if a borrower is struggling to make payments on time, it’s always a good idea to ask for support.

Impact of Student Loan Debt on Life Milestones

When a borrower has to manage student loan debt payments, their monthly budget has less room in it to support their other financial goals — many of which can affect when they can achieve certain important life milestones.

For example, the National Association of Realtors found that 40% of consumers with student loan debt don’t have an emergency fund of $500. It’s easy to see how that level of financial strain can push back meeting goals like buying a home or getting married.

Homeownership Rates

Speaking of buying a home, 46% of student loan borrowers delayed moving out of a family member’s home after college, and more than half (51%) put their goals of buying a home on hold.

Delayed Marriage and Children

Family planning in particular becomes more tricky when navigating repaying student loan debt. Because of their student loan debt burden, borrowers reported delaying:

•   Having a long-term partner (12%)

•   Getting married (12%)

•   Starting a family (14%)

•   Adding to their existing family (10%)

Retirement Savings and Planning

Retirement may feel eons away to college students and new graduates, but it’s never too soon to start saving for a happy retirement. Unfortunately, 26% of student loan borrowers reported they haven’t been able to afford to contribute to a retirement account at all.

The Takeaway

Student loan debt doesn’t need to scare anyone away from pursuing higher education if that is something they dream of pursuing. That being said, knowing what that debt burden can look like can help students make more strategic decisions about where they go to school, how much they borrow, and how they plan to pay it off.

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.

What is the average student loan debt for bachelor’s degree holders?

Over half (51%) of bachelor’s degree recipients from public and private nonprofit four-year institutions have student loan debt, with an average debt of $29,400. Specifically, graduates from public four-year institutions had an average federal debt of $20,700, while those from private nonprofit institutions averaged $22,200.

Which degree level tends to have the highest student loan debt?

Borrowers who pursue a professional degree tend to borrow the most. According to the Education Data Initiative, the major with the largest median debt is Doctor of Pharmacy at $310,330.

How do student loan debt statistics vary by region or state?

Student loan debt statistics show significant variation by region and state. For instance, in New Hampshire, the average student loan debt is $39,928, with 70% of borrowers having debt, while in Utah, the average is $18,344, and 39% of borrowers carry debt.

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Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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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.


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.

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 .


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



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States That Offer Free College Tuition Programs

States That Offer Free College Tuition Programs

It’s no secret that college can be expensive. What’s not-so-widely known is that there are a number of states that offer eligible residents free tuition for both two- and four-year degree programs.

While many of these programs only cover tuition (not room and board and other expenses), they can be a huge help if you are looking for an affordable way to get a college degree. Read on to learn more about how free college programs work, where to find them, and how to fill in any remaining financing gaps.

What Are Free College Tuition Programs?

Free college tuition programs are typically state-sponsored programs that offer free tuition to eligible students. To qualify, you typically need to be a resident of the state and, in some cases, demonstrate financial need. Some states will also award free tuition to students that come from communities that are underrepresented in college attendance​ or who are first generation college students.

Often, tuition-free programs only cover the cost of tuition, which means you may still have other expenses to cover, including fees, supplies, and room and board. However, there are some free college tuition programs that will cover school fees or provide stipends for necessary expenses like textbooks.
​​

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

States With Free College Tuition

What follows is a roundup of states that offer free tuition to two-year, four-year, and/or certificate programs.

California Promise Program

The California College Promise Grant waives fees for nearly half of students in the California Community College system , while others only need to pay $46-per-unit fee. For example, if you’re a California resident enrolling in 12 units, you would pay $552 each semester. Students that live out of state pay more.

Indiana 21st Century Scholars Program

The 21st Century Scholars Program encourages Indiana students in the 7th and 8th grade to stay in school and keep up their grades by promising them money for college if they meet program requirements.

Oklahoma’s Promise

To qualify for the Oklahoma’s Promise scholarship program, Oklahoma students must be enrolled in the 8th, 9th, or 10th grade and their parents’ federal adjusted gross income can’t exceed $60,000 (with one or two dependent children) or $70,000 (with three or four dependent children).

New York Excelsior Scholarship

Through the Excelsior Scholarship , New York families and individuals that make up to $125,000 a year will qualify to attend college tuition-free at all CUNY and SUNY two- and four-year colleges in New York State.

Washington College Bound

In the state of Washington, students can apply to participate in the College Bound scholarship program, which gives eligible students public college tuition, or an equivalent amount for an approved private college or career school. Students must apply for financial aid and attend a participating college in Washington.

Recommended: In-State Tuition: a Look at Establishing Residency

Arkansas Future Grant

The Arkansas Future Grant covers the cost of tuition and fees for certain certificate and associate degree programs at public education institutions in Arkansas.

Delaware SEED Program

The Delaware SEED Program gives scholarships to Delawareans of all ages who would like to pursue an academic degree (including an associate or bachelor’s degree) or a workforce training certificate at Delaware Tech.

Hawai’i Promise Scholarship

The Hawai’i Promise Scholarship provides free in-state tuition to students with financial needs who attend the University of Hawai’i Community College. This program covers direct education costs including tuition, books, supplies, transportation, and school fees.

Kentucky Work Ready Kentucky Scholarship Program

The Work Ready Kentucky Scholarship Program assists Kentucky college and high school students in paying for tuition as they work towards earning an industry‐recognized certificate or diploma.

Maryland Community College Promise Scholarship

Students who are pursuing certificates, vocational certificates, or associate degrees may qualify for the Maryland Community College Promise Scholarship if all other aid options are exhausted and they are enrolled in select Maryland community college programs.

Minnesota MnSCU Two-Year Occupational Grant Pilot Program

Minnesota students may qualify for financial assistance through the MnSCU Two-Year Occupational Grant Pilot Program if enrolled in qualifying career and technical programs at MnSCU two-year college.

Missouri A+ Scholarship

Missouri students who attended A+ designated high schools may qualify for the Missouri A+ Scholarship if they attend a select public community college, vocational school, or technical school.

Montana Promise Act

Students attending a two-year institution of the Montana university system and taking select courses may qualify for the Montana Promise Act . To be eligible, students must be enrolled in a Montana community or tribal college, or other Montana university system two-year institution at least part-time.

Recommended: What Is the Cost of Attendance in College?

Nevada Promise Scholarship

The Nevada Promise Scholarship is a last-dollar scholarship that can cover up to three years of tuition and mandatory fees not covered by other forms of gift aid for Nevada high school graduates to attend community college.

The Oregon Promise Grant

Oregon students seeking assistance paying for college should consider applying for the Oregon Promise
Grant
which covers the tuition costs at any Oregon community college for students who recently graduated high school or passed the GED test.

Recommended: What Are College Tuition Payment Plans and How Do They Work?

Rhode Island Promise

The Rhode Island Promise program allows recent Rhode Island high school graduates to obtain an associate degree at the Community College of Rhode Island tuition-free.

Tennessee Promise

The Tennessee Promise program is a scholarship and mentoring program for students attending any of Tennessee’s 13 community colleges, 27 colleges of applied technology, or other select eligible institutions.

Finding Ways to Pay for College

Free tuition programs may not be available to all students. In that case, paying for college may require compiling together a few different sources of financing.

Students can fill out the Free Application for Federal Student Aid (FAFSA®) each year to apply for federal aid, including scholarships, grants, federal student loans, and work-study programs.

If college students need help covering the costs of pursuing higher education and don’t receive enough financial aid to do so, they have the option of applying for private student loans. Unlike federal student loans, which are issued by the U.S. government, private loans come from private institutions, such as banks, credit unions, and online lenders.

Generally, students will want to exhaust federal student loans first, as they come with government-backed benefits such as low fixed interest rates and income-driven repayment plans that are not available with private student loans.

While private student loans can cost more than federal student loans, you can often borrow up to the total cost of attendance (including room and board), which gives you more borrowing power than you can get with the federal government.


💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

The Takeaway

Some states offer free tuition programs that provide residents with resources to help cover their tuition costs. For those that qualify, these programs can provide much-needed financing to help them pursue their education goals.

Sometimes, state and federal aid isn’t enough to cover a students’ college costs. In that case, some students may explore private student loans. Though these loans may lack some of the borrower protections available for federal student loans, they can be an option for filling in funding gaps. When shopping for private student loans, it can be helpful to compare potential interest rates and fees with different lenders to find the best deal.

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.


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



Photo credit: iStock/Vimvertigo

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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. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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


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.

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Common Signs That You Need to Make More Money

Common Signs That You Need to Make More Money

If you’re working hard at your job and being reasonable with your spending, you may still find it’s hard to make ends meet and hit your savings goals.

One question to ask yourself is whether you’re making enough money. Can you really afford to keep plugging along at your current salary? Here, you’ll learn some helpful ways to tell if you should be making more money and, if you should, how to get there.

10 Red Flags That Signal That Your Income Is Too Low

Do you frequently ask yourself whether you should be making more money — or feel as if you’re not making money work for you? If so, it’s possible you aren’t making enough or managing it optimally. Here are some signs that you need to be earning more in order to thrive financially.

1. Not Being Able to Pay Your Bills

As long as you aren’t renting a luxurious penthouse or leasing a fancy car you truly can’t afford, you should be making enough to pay your basic bills. Yes, it can be difficult to save money with a low income. But if you’re working full-time to cover things like rent, car payment, health care, and utilities, without any shot at saving for your future, that’s a sign you need to earn more money.

2. Using Your Credit Card for All Expenses

There’s nothing wrong with using a credit card to pay for expenses if you can afford to pay your credit card bill off in full when your monthly statement arrives. That’s a great way to earn cash back and credit card rewards.

A problem arises if you need to use a credit card in order to cover expenses because you don’t earn enough to buy essentials, like food and personal care items.

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

3. Not Being Able to Have an Emergency Fund

Having an emergency fund can help you be prepared for the unexpected, such as a major medical or dental bill or getting laid off. Ideally, you would have three to six months’ worth of basic living expenses covered by the money in an emergency fund. If you’re living paycheck to paycheck, however, and can’t even start building a fund with perhaps $25 per pay period, you likely need to earn more.

4. Paying Only the Minimum on Debts

As mentioned, turning to a credit card to cover essential purchases can be a sign of not making enough money. This can lead to high-interest credit card debt, which can be hard to pay down without making extra payments.

If you can’t afford to make extra payments on a credit card or other form of debt, increasing your income can make it possible to minimize how much you owe and those interest payments.

5. Not Being Able to Cut Anything Else

If you take a cold, hard look at your budget and realize you can’t cut any more expenses because you are only paying for essentials, then that’s a sign you need an income increase. Living on such a tight budget isn’t sustainable long-term, and there should ideally be room in a budget for some small fun purchases, too.

Recommended: 7 Different Types of Budgeting Methods

6. Not Being Able to Build Savings

Even if you are motivated to save money, if you’re not able to save for retirement or other long-term goals, it could be a sign that you’re not earning enough.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

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7. Making the Same Wage Despite Company Growing

If your company is growing and flourishing, in part because of contributions made by you and other workers, you may deserve to earn more than you’re currently making.

8. Not Being Able to Reach Financial Goals

If you are earning enough money and sticking to a budget, then in theory you should be able to make slow but steady progress toward your financial goals. Failing to do so could mean you’re coming up short on salary.

9. Consistently Struggling to Make Ends Meet at the Beginning of the Month

Many people start to run out of spending money at the end of the month. That’s because they’ve paid all their bills and are waiting for the next cash infusion from their paycheck. If, however, you are consistently struggling to make ends meet at the beginning of the month, when payday has arrived, this indicates you aren’t making enough to pay your essential bills.

10. Worrying About Money Consistently

Everyone deserves a good night’s rest, not lying awake worrying about how to pay the bills. If you are consistently worrying about money and trying to figure out how to tackle financial anxiety and stress, that can be a major sign you aren’t earning enough money.

Tips for Negotiating a Higher Wage With Your Employer

If you feel you need and merit more money, it can be wise to have a conversation about a raise. These tips can help.

•   Research salary data. Before an employee asks for a raise, they need to get an idea of how much workers in similar roles at other companies earn. Luckily, there are tons of online resources where workers share their job titles and salaries. It can also help to look at the salaries listed on current job postings similar to your position.

•   Make a list of accomplishments. Workers should approach the boss with the facts about how good they are at their jobs and why they deserve to earn more. Make a list that specifies some of your major contributions and use that to back up your ask for higher pay.

•   Have an alternate ask. Sometimes a company truly can’t afford to give a good employee a raise. In that case, is there something they can do to make your life easier? Can they make it possible to work remotely and save on commuting? Can they give you more PTO or a flexible schedule to help cut down on daycare costs?

Recommended: Good Paying Jobs Without a College Degree

The Takeaway

If you are working hard and watching your spending but are living paycheck to paycheck and are unable to save, you may not be earning enough money. Asking for a raise, with documentation of why you are worth it, is one path forward. Or you might decide to change jobs or career paths or even move somewhere more affordable.

It can also be a smart move to ensure the funds already in your bank account are working hard for you.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

How do I know if I’m being underpaid?

Do salary research online to see what workers in similar roles and industries are earning. You can likely find this information everywhere from the Bureau of Labor Statistics to job search sites.

How much money must I earn to feel it is enough?

Having “enough” money depends on your unique perspective. That being said, you need to be able to comfortably pay your bills and cover essential expenses without having to worry that you’re running out of money each month. Also, being able to save for long-term goals (such as a down payment on a house or retirement) is also important.

How can I save if I don’t make enough money?

It can be hard to save money if you don’t earn much more income than you require to get by. Consumers can always scrutinize their budget to see where they can cut back spending in order to save more. Too many streaming services? Or pricey lunches? Try starting there.


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



Photo credit: iStock/nensuria

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

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The Ultimate College Senior Checklist

Senior year in college is often filled with mixed emotions — excitement for all the fun you’re going to have with your friends, eagerness to be done (a.k.a., senioritis), and anxiety about what you’re going to do after you graduate and what the future holds.

While leaving your college years behind can be bittersweet, it’s important to remember that the fun doesn’t stop after you return your cap and gown. By making the most of your senior year, you’ll have the perfect ending for these incredible four years and be ready to tackle life’s next chapter.

Below are key things to keep in mind as you focus on graduation, next steps in building a career, and finally living out your dreams.

Dotting I’s and Crossing T’s

Early in the fall, it’s a good idea to meet with your college counselor to make sure you have all of your ducks in a row in order to graduate. A lot can happen in three years — switching majors, adding minors, and studying abroad — so it can’t hurt to double-check that all of your requirements will be met by the end of the year.

Failing to earn all your required credits can mean delayed graduation, even adding on an extra semester. The finish line is close, but you’ll want to make sure that you stay on track. Also keep in mind that your last year in college is a last chance to take any out-of-the-box classes you’ve always wanted to take but never had time. You may finally have room in your schedule to add some fun electives.

If you’re planning to attend graduate school, you’ll also need to focus on finishing up any required testing and meeting application deadlines. Much like senior year of high school, you’ll begin an anxious time as you wait for acceptance letters to arrive.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

Getting a Jumpstart on a Job Search

Your senior year in high school was all about preparing for college. Your senior year in college is all about preparing for life after college, a.k.a the real world.

It’s no secret that college graduates flood the job market each June, so getting ahead of the pack can make your search a little easier. Applying for jobs as early as the fall can mean less competition and improve your chances of having a job lined up when you graduate.

Even if launching a full-blown job search during school isn’t possible, it’s a good idea to take some steps toward the professional world.

Consider stopping by the career center to see what resources it can provide. Part of your tuition goes to funding your college’s career services center, so why not get your money’s worth? Most career professionals are ready to help students prepare their resumes and perfect their cover letters, and they typically have job postings from companies looking to hire recent graduates.

Some career centers may offer mock interviews so students can hone those skills, or they may provide support when issues arise during a job search. Popping by between classes to see what services are offered will only take a few minutes.

In addition to your resume and cover letter, you’ll also want to start working on your LinkedIn profile and, if relevant, a portfolio of work samples. Having these resources in a good place during senior year can make it easy to start applying for jobs during school or right after graduation.

Recommended: Jobs that Pay for Your College Degree

Making Connections

As a student, building a professional network may feel impossible, but you’re likely building one in school without realizing it. One easy way to get a head start on a job search, without doing too much work during a hectic final year of school, is to tap into that network, namely your advisors or mentors.

Professors can be great resources to have as you prepare for the unknown of post-grad life. They can provide insights into what positions are available in your field, what you should look for in an employer, and good questions to ask in an interview. You might also ask a professor to look over your resume.

You might also look for a professional mentor through your college’s alumni network or mentor programs and set up an informational interview. Finding a mentor senior year of college can not only help you find your first job, but it can also pay career dividends for years to come.

Whether you start applying for positions while you’re still in school or right after graduation, you may need to provide a list of at least three references. These can be people like internship managers, your thesis professor, your part-time job supervisor, and others who can speak to your skills and work ethic. Now is a good time to reach out and ask potential referees if they would be willing to serve as references.

You may also want to attend and engage in networking at career fairs, career workshops, and other informational events taking place on campus.

Recommended: How to Get Involved on Campus in College

Paying Back Student Loans

Preparing to navigate life after college can be overwhelming, especially when it comes to finances. No one wants to think about student loan payments, but it can be helpful to start making repayment plans before graduation day.

You can begin the planning process by simply looking up the current balance for each student loan you hold, including both federal and private student loans. Take note of when the lender expects payment. Some or all of your student loans could have a six-month grace period before you need to start repaying. This is ideal because it gives you time to get a job after graduation and make sense of your income before you have a new bill to pay.

Lenders typically provide repayment information during the grace period, including repayment options.

With federal student loans, your servicer will automatically place you on the Standard Repayment Plan (a 10-year fixed payment repayment plan). However, you can request a different repayment plan at any time. Typically, you can pick from repayment plans that base your monthly payment on your income or that give you a fixed monthly payment over a set repayment period.

An income-driven repayment plan may be a smart choice if you’re looking to lower your payment. However, these plans also extend the payoff timeline to 20 or 25 years. The Federal Student Aid website has a loan simulator tool that lets you compare all the available repayment options and helps you choose the best one for your specific situation.

For private student loan repayment, it can be best to speak directly with the loan originator about repayment options. Many private student loans require payments while the borrower is still in school, but some offer deferred repayment. After the grace period, you will need to begin making principal and interest payments. Some lenders offer repayment programs with budget flexibility.

Whether you or your parents chose to take out federal or private student loans (or both) to cover school costs, reviewing all possible payment plan options can help make the transition to repayment easier.


💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.

One Loan, One Monthly Payment

As you enter the repayment phase of your student loans, you might also consider refinancing or consolidating your student debt.

If you have federal student loans, you may qualify for a federal Direct Consolidation Loan after you graduate, leave school, or drop below half-time enrollment.

Consolidating multiple federal loans into one allows you to make just one loan payment each month. In some cases, the repayment schedule may be extended, resulting in lower payments. Keep in mind, though, that increasing the period of time to repay loans usually means making more payments and paying more total interest.

Refinancing, on the other hand, allows you to convert multiple loans — federal and/or private — into one new private loan with a new interest rate, repayment term, and monthly payment. Refinancing can potentially save you money, but generally only makes sense if you can qualify for a lower interest rate than you currently have. For example, refinancing might be a good solution for working graduates who have higher-interest federal loans, such as unsubsidized Direct Loans and Graduate PLUS loans, or who currently have a high-interest private student loan.

You’ll want to keep in mind, however, that refinancing federal student loans with a private lender means giving up federal protections, such as income-driven repayment plans, loan forgiveness for public service, and deferment options.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.


With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.




SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FOREFEIT YOUR EILIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers.
Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


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

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.

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