Oct
10
2024
How to Open Your First IRA

How to Open an IRA: Beginners Guide

By | Budgeting & Goals, Building Your Career, Growing Wealth, invest, Investing | No Comments

Saving for retirement may be the biggest financial goal many of us will ever set. So it makes sense to explore all retirement savings options, including an IRA, or individual retirement account. Individual retirement accounts are tax-advantaged tools that can be opened by virtually anyone with earned income, unlike employer-sponsored 401(k) plans. The sooner you open your first IRA, the more opportunity your savings have to grow over time, potentially leading to a nice nest egg upon retirement.

There are other benefits to opening an IRA. For one, it can deliver attractive tax perks — either up front or in retirement — and it can be especially attractive to individuals who don’t have an employer-sponsored 401(k) plan, or have maxed it out already.

This article will walk you through the steps of opening an IRA — whether a traditional, Roth, or SEP IRA.

Key Points

• Opening an IRA provides a tax-advantaged way to save for retirement, allowing individuals with earned income to benefit regardless of employer-sponsored plans.

• Selecting the right investing style, either through a robo-advisor for automation or an online broker for hands-on management, is crucial when setting up an IRA.

• Different types of IRAs, including Traditional, Roth, and SEP IRAs, offer various tax benefits and contribution limits based on income and employment status.

• The process of opening an IRA involves providing personal information, identification, and selecting beneficiaries, followed by funding the account through transfers or rollovers.

• Choosing the right investments within an IRA, such as stocks, bonds, or target date funds, should align with individual risk tolerance and retirement goals for optimal growth.

How to Open an IRA

1. Choose Your Investing Style

When setting up an IRA, you have the option to select the investing style that aligns with your preferences and goals. You can choose between two primary methods: using an online broker for self-directed investing or opting for a robo-advisor for automated investing.

•   Consider a robo-advisor for a hands-off approach: If you find the array of investment choices daunting or you’re unsure where to begin, a robo-advisor might be the ideal solution. This option allows you to take a more hands-off approach and automate your investments. Simply share your retirement and investment objectives, and the robo-advisor will create and maintain a tailored portfolio specifically designed to meet your needs.

•   Choose an online broker to take control of your investments: For those who prefer to be more involved and make their own investment decisions, using an online broker for self-directed investing is the way to go. This method allows you to directly manage your investments and typically comes with the benefit of commission-free trades. This is a great choice for individuals who want to actively participate in the management of their IRA investments.

2. Choose Where to Open Your IRA

You can open an IRA at a brokerage, a bank, mutual fund company, or other financial services provider. Typically, the more personal care and advice you get, the higher the account fees will be. A robo-advisor, for instance, might charge lower fees than a brokerage.

Get a 1% IRA match on rollovers and contributions.

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.1

1Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.

3. Choose the Type of IRA You Want to Open

Traditional IRA

If you have earned income, you can open a traditional IRA regardless of how much you make per year. An IRA can be a good next step if you’ve maxed out your 401(k), for instance.

One notable difference between traditional and Roth IRA accounts is that traditional IRAs allow you to deduct your contributions on your tax returns now, meaning you pay taxes on distributions when you retire. You’ll pay a 10% penalty tax (in addition to regular income tax) on any money you withdraw from a traditional IRA before age 59 ½, with a few exceptions.

It may be better to go with a traditional IRA if you think you’ll be in a lower tax bracket after retirement. This is because you’ll be saving on a higher tax rate now (vs. the lower rate you’d be paying later, since you’d be in a lower tax bracket in retirement).

Roth IRA

Unlike traditional IRAs, there are income limits on who can open a Roth IRA. For 2024, individuals can only contribute the full amount — $7,000, with an additional $1,000 for people age 50 or over — to a Roth IRA if their income is below $146,000 for single filers. Those earning more than $146,000 but less than $161,000 can contribute a reduced amount. For married people who file taxes jointly, the limit is $230,000; those who earn up to $240,000 can contribute a reduced amount.

Roth IRA contributions are made with after-tax income. While that doesn’t offer any tax advantages now, it does mean that when you withdraw money upon retirement, you won’t have to pay taxes on it. As such, a Roth IRA may make sense for eligible individuals who typically get a tax refund and expect to be in a similar or higher tax bracket when they retire (for example, if they plan to have substantial income from a business, investments, or work).

SEP IRA

A SEP IRA, or simplified employee pension, can be set up by either an employer at a small business or by someone who is self-employed.

Employers get a tax deduction when they contribute to their employees’ IRAs, and they’re also allowed to contribute on a “discretionary basis” (meaning the employer doesn’t have to contribute in years where it’s not as financially feasible for the company.) For employees, this option may allow you to contribute a greater amount than other IRAs, depending on your income.

4. Open an IRA Account

Once you decide where to open an IRA, you’ll need to follow through with doing so. The process to open an IRA can vary a bit from provider to provider, but it’s generally pretty straightforward.

What You’ll Need to Open an IRA

•   A copy of your government-issued ID

•   Personal information, including contact information and Social Security number

•   Details on intended beneficiaries

5. Fund Your Account

Once your account is opened, you’ll receive guidance on funding an IRA. If you want to fund your account through an electronic transfer, you’ll be asked to provide banking information. It’s also possible to roll over existing retirement accounts — and yes, it is possible to open an IRA if you have a 401(k) already.

As of 2024, you can contribute up to $7,000 a year to a traditional or Roth IRA, or up to $8,000 if you’re 50 or older. If you take home more than the maximum earnings allowed for a Roth IRA but still prefer a Roth IRA over a traditional account, you might be able to contribute a reduced amount of Roth IRA contribution limits. An IRA contribution calculator can help you get an idea of how much you can contribute this year.

In many cases, it’s a good idea to invest as much as you can up to that amount each year to take full advantage of the power of compound growth.

A retirement calculator can help you figure out whether you’re on track for retirement. A quick rule of thumb: By the time you’re 30, it’s typically good to have the equivalent of one year’s salary saved.

Rolling Over a 401(k) into an IRA

If you’re leaving a job with an employee-sponsored retirement plan, you can roll over your 401(k) into a traditional IRA. When you roll money over from a 401(k), there’s no limit to how much you can add to an IRA at that time. Going forward, additional contributions will be capped at the typical IRA contribution limit.

Bonus Step: Choose Your Investments

Investors can choose to invest in stocks, bonds, mutual funds, low-cost index funds, or exchange-traded funds (ETFs) — or a combination thereof – through a financial institution.

One popular type of investment fund geared toward retirement savings is a “target date fund.” A target date fund is calibrated to the year you plan to retire, and it’s meant to automatically update your mix of assets, like stocks and bonds, so they’re more aggressive earlier in life and more conservative as you approach retirement.

Ultimately, the mix of investments in your IRA should depend on your personal risk tolerance, lifestyle, and retirement goals.

Investing in Your Retirement

Once you’re familiar with how to open an individual retirement account, the process itself is pretty straightforward — possibly the biggest lift involved is deciding which IRA suits your personal situation and retirement goals best: a traditional, Roth, or SEP IRA. From there, you’ll need to decide where to start a Roth IRA or other type or IRA, then go through the formal process of starting an IRA, which includes providing certain information, funding the account, selecting a contribution amount, and deciding where to invest your funds.

That can all sound like a lot, but getting started on saving for your retirement doesn’t have to be difficult. SoFi Invest makes opening an IRA simple — it’s possible to sign up in less than five minutes. You can be as involved in the investment process as you want to be — either with hands-on investing or our automated investing technology, in which our algorithm will recommend an appropriate mix of investments based on your age and retirement goals.

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

How much money is required to open an IRA?

There’s no universal minimum amount required to open an IRA. That being said, some providers will have minimum requirements.

Can you open an IRA all on your own?

Yes, it’s definitely possible to open an IRA on your own. The process is simple, similar to opening a bank account, and you can do so at most banks, brokerages, or other financial institutions. Often, it’s possible to start an IRA online.

Can you open an IRA at a bank?

Yes, many banks offer IRAs. You can also open an IRA at credit unions, brokerages, and investment companies.

About the author

money management guide for beginners

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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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.
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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.

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.

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Oct
10
2024

How Much Money Should I Save a Month?

By | Budgeting & Goals, Financial Independence, money | Comments Off on How Much Money Should I Save a Month?

You likely already know it can be wise to save money every month. Whatever your income or age, putting money aside for the future can help you maintain financial stability and achieve your goals.

But how much of your paycheck should you save each month? Financial professionals often recommend putting at least 20% of your monthly take-home income into savings for future financial goals, such as buying a home and funding your retirement.

Exactly how much you should save each month, however, will depend on your income, current living expenses and financial obligations, as well as your goals.

Here are some guidelines to help you figure out how much of your income you may want to set aside each month, plus some simple ways to jump start (or build) your savings.

Key Points

•   Financial advisors often suggest saving at least 20% of your monthly take-home income for future goals.

•   A common budgeting technique is using the 50/30/20 rule: putting 50% of income toward essentials, 30% toward non-essentials, and 20% toward savings.

•   One easy way to increase savings is to automate recurring transfers from checking to savings accounts.

•   Funneling windfalls into savings and using roundups – a tool that autosaves the difference between a purchase price and the nearest dollar — can also boost savings.

•   One of the most effective ways to save money is to determine your near-term and long-term financial goals and to track spending and progress in a budget.

Knowing What You’re Saving For

It can be difficult to know how much money you should save each month without having a sense of what you are saving for. Setting a few financial goals can also help motivate you to save, rather than spend all of your income.

There are some savings goals that can make sense for everyone. If you don’t already have at least three to six-months worth of living expenses stashed in an emergency fund, for example, that can be a good place to start. By this measure, many Americans don’t have enough emergency savings, according to SoFi’s April 2024 Banking survey of 500 U.S. adults.

Amount in emergency savings

 People who have saved that amount
Less than $500 45%
$500 to $1,000 16%
$1,000 to $5,000 19%
$5,000 to $10,000 9%
More $10,000 10%

Source: SoFi’s April 2024 Banking Survey of 500 U.S. adults

Without a solid contingency fund, any financial set-back -– such as a job layoff, large medical bill, or costly home or car repair — can throw you off balance and cause you to rely on high interest credit cards.

Many people will also want to save for retirement. At the very least, savers may want to take advantage of company matches offered in their workplace retirement plan by contributing the maximum amount the company matches.

After emergency savings and retirement, goals may start to look different from person to person. One person may want to save up for a down payment on a home, another may want to save up to start a business, and yet another may be interested in college savings. Fifty-two percent of the respondents to SoFi’s survey said they are using their savings accounts to save for a specific goal.

Goals People Save For in a Savings Account

Short-term and long-term goals 40%
Short-term goals like a vacation or holiday spending 35%
Long-term goals like a child’s college education or a house 26%

Source: SoFi’s April 2024 Banking Survey of 500 U.S. adults

How Much to Save Each Month

A rule of thumb that is sometimes used in personal financial planning is a spending/saving breakdown of 50/30/20. Using this guideline, you would spend 50% of your take-home income on essentials (including minimum payments towards debts), 30% on nonessential (or “fun”) spending, and 20% on savings goals, including debt payments beyond the minimum.

To use the 50/30/20 method to determine how much you should save, you can simply calculate 20% of your monthly after-tax pay. For example, if you earn $3,000 each month after taxes, $600 would go towards savings or other short term financial goals.

You may want to keep in mind that your 20% savings goal can include the money you’re saving for retirement. You can determine how much you’re putting toward retirement each month by looking at your pay stub or electronic payment record. If your employer is automatically depositing money into your 401(k), you may be able to put less into savings each month.

While the 50/30/20 can be a helpful guideline, how much you should — and can afford — to save each month will ultimately depend on your individual circumstances, such as your current income, monthly expenses, and future goals.
If the cost of living is high in your area, for example, you may not be able to swing 20% savings each month.

On the other hand, if you make a significant amount more than you need to live on each month, you may want to put away more than 20%, especially if you’re working towards a large short-term savings goal, such as buying a home in the next couple of years.

Recommended: Cost of Living by State Comparison

Where Should You Put Your Savings?

The best account for building savings will depend on what you are saving for.

If you are saving up for retirement, for example, you’ll likely want to use a designated retirement account, like a 401(k) or IRA, since they allow you to contribute pre-tax dollars (which can help lower your annual tax bill).

You may want to keep in mind, however, that there are annual contribution limits to retirement funds.

For an emergency fund or other short-term savings goals (within three to five years), you may want to open a separate savings account, such as a high-yield savings account, money market account, or a checking and savings account. These savings vehicles typically offer more interest than a traditional savings account, yet allow you to easily access your money when you need it.

Easy Ways to Boost Savings

Below are some strategies that can help make it easier to start — and build — your monthly savings.

Automating Savings

One great way to make sure you stick to a money-saving plan is to automate the process. You may want to set up a recurring transfer from your checking into your savings account on the same day each month, perhaps the day after your paycheck clears. Even setting aside just a small amount of money each month now can, little by little, add up to a significant sum in the future.

Putting Spare Change to Work

There are apps that will automatically round-up any amount paid on a credit or debit card and then put that little bit of extra money into savings accounts or even invest it. This “pocket change” can add up over time.

Using Windfalls Wisely

If a lump sum of cash, such as a bonus or monetary gift, comes your way, you may want to consider funneling all or part of it right into savings.

Or, if you get a percentage raise on your salary, you might want to boost your automatic monthly transfer from your checking account to your savings account by the same percentage.

Reviewing Your Budget

If you feel like your budget is too tight to save anything at the end of the month, you may want to review your monthly and habitual expenses. You can do this by combing through your checking and credit card statements and receipts for the past few months. Or, you may want to actually track your spending for a month or two.

You can then come up with a list of spending categories and determine how much you are spending on average for each.

There are online tools that can help make this process easier — in fact, 23% of people use budgeting tools offered by their bank, SoFi’s survey found. And of the 20% of respondents who have used AI to help manage their finances, 31% have used automated budgeting suggestions.

Once you can see exactly where your money is going each month, you may find places where you can fairly easily cut back, such as getting rid of streaming subscriptions you rarely watch, quitting the gym and working out at home, or cooking more and getting take-out less often.

The Takeaway

The right amount to save each month will be unique to you and includes factors such as your financial goals, how much you earn, and how much you spend each month on essential expenses.

One of the most important keys to saving is consistency. No matter how much of your income you choose to set aside each month, depositing small amounts regularly can build to a large sum over time to achieve your goals.

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

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


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

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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

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

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

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

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Oct
09
2024
How Can I Use Pharmacy School Loans?

Pharmacy School Loans: Here’s What You Should Know

By | Debt Payoff, Going to College, Student Loans, student_loan | Comments Off on Pharmacy School Loans: Here’s What You Should Know

Pharmacy school student loans are one way for potential pharmacists to subsidize some or all of the costs associated with attending pharmacy school. Knowing the pros and cons of pharmacy school loans can help you decide if this route is right for you.

Keep reading to learn how much it costs to attend pharmacy school, different ways to pay for it, what a pharmacy school loan covers, and the ins and outs of pharmacy school student loans.

Average Cost of Pharmacy School

The average cost of attending pharmacy school spans anywhere from $30,000 to $250,000.

It’s a wide range but, generally speaking, in-state, public schools are on the lower end of the scale, costing around $5,000 to $30,000 per year, while pharmacy programs at private institutions can run between $20,000 and $95,000 per year.

Average Student Loan Debt Pharmacy School

The American Association of Colleges of Pharmacy (AACP)’s 2023 survey of pharmacy school graduates found that 82.2% of PharmD degree holders had to borrow money to get through school.

And the average student loan debt for pharmacy graduates, according to that same report, is $167,711.

There’s good news, though: The return on investment can be promising for pharmacists, whose median pay is around $136,030 per year, according to the Bureau of Labor Statistics.

What Can You Use a Pharmacy School Student Loan on?

There are several ways a student loan can be used to cover the cost of a pharmacy school education:

Tuition

As evidenced above, tuition is one of the biggest pharmacy school expenses that can be covered by a pharmacy school student loan. Since it can cost upwards of $250,000 to complete a pharmacy program, student loans can be helpful in covering that cost.

Fees

The fees associated with attending pharmacy college vary based on the type of program the student attends, how many credit hours the student completes, and whether they’re an in-state or out-of-state student. In some cases, a pharmacy school may charge “comprehensive fees” that cover tuition, fees, and room and board.

Books and Supplies

Pharmacy school student loans can be used to pay for books, supplies, and other education-related expenses. To acquire the funds for books and supplies, pharmacy school student loans are first applied to a student’s tuition, required fees, and room and board bills. Then, any remaining funds get refunded to the borrower, either in the form of a check or through direct deposit. From there, the money can be used to pay for books and supplies.

Recommended: How to Pay for College Textbooks

Living Costs

Room and board is another expense that can be paid for with pharmacy school loans. Students can use their borrowed funds to pay for student housing — whether that’s in a dorm room or an off-campus apartment with roommates.

Pharmacy School Student Loans: Pros & Cons

Pros of Using Pharmacy School Student Loans

 Cons of Using Pharmacy School Student Loans
Help people pay for pharmacy school when they don’t otherwise have the financial resources to do so. Can be expensive to repay.
Open up more possibilities for the type of pharmacy school a person can attend, regardless of the cost. Can put borrowers into substantial amounts of debt.
Cover a wide range of expenses — including tuition and fees, school supplies, and room and board. Borrowers might have to forego other financial goals to pay off pharmacy school student loans.
Paying off pharmacy school student loans can help build credit. Late payments or defaulting on a pharmacy school student loan can damage credit.

Pros of Using a Pharmacy School Student Loan

Using a pharmacy school loan comes with some pros, including:

Student Loans for Pharmacy School Can Be Forgiven

In terms of pharmacists student loan forgiveness, there are several options for newly graduated pharmacists who need some help paying off their pharmacy school loans.

Typically, these forgiveness programs are available on a state or federal level.

A few different pharmacy student loan forgiveness options include:

•   Public Service Loan Forgiveness (PSLF)

•   HRSA’s Faculty Loan Repayment Program

•   National Institutes of Health Loan Repayment Programs

•   Substance Use Disorder Workforce Loan Repayment Program

•   State-based student loan forgiveness programs

Salary

As mentioned above, the median pay for a pharmacist is $136,030 per year. For a pharmacy school graduate with student loan debt, this salary range could mean the difference between paying off loans and still having money left in the budget for living expenses, an emergency fund, and other types of savings.

Credit Score

Paying off pharmacy school student loans can be one way for a borrower to build their credit score. When building credit history, making on-time payments is a prominent factor, which can potentially have a beneficial effect on a borrower’s credit score. Although their credit score could face a minor dip right after paying off the loan, it should subsequently level out and eventually rise.

Cons of Using a Pharmacy School Student Loan

Pharmacy school student loans can also come with cons, including:

Debt

Since a pharmacy school loan is an installment loan, it’s considered a form of debt. As such, potential pharmacists are signing a long-term contract to repay a lender for the money they borrow. Should they find themselves on uneven financial ground, they may end up missing a payment or defaulting on the loan altogether, which could have a damaging effect on their credit report.

Late Payment Penalties

Many pharmacy school student loan lenders dole out fees for late payments. The terms of the loan are outlined by the lender before the borrower signs the agreement, but it’s important to read the fine print. Loan servicers can charge a late payment penalty of up to 6% of the missed payment amount.

Interest Rates

Student loans for graduate and doctoral degrees like pharmacy school have some of the highest interest rates of any type of student loan.

Even federally subsidized Grad PLUS Loans have a fixed interest rate of 9.08% for the 2024-25 school year, which could cause a pharmacy school student loan balance to climb high over time.

Average Interest Rates for Pharmacy School Student Loans

Pharmacy students have a variety of student loan options available to them. This table details the interest rate on different types of federal student loans that might be used to pay for a portion of pharmacy school.

Loan Type

Interest Rate for the 2024-25 School Year
Direct Loans for Undergraduate Students 6.53%
Direct Loans for Graduate and Professional Students 8.08%
Direct PLUS Loans for Graduate Students 9.08%

Private student loans are another option that may help pharmacy students pay for their college education. The interest rates on private student loans are determined by the lender, based on factors specific to the individual borrower, such as their credit and income history.

Paying for Pharmacy School

Before looking into an undergraduate student loan option or a graduate student loan option, potential pharmacists might be able to secure other sources of funding to help them pay for pharmacy school.

Scholarships

Scholarships are funds used to pay for undergraduate or graduate school that do not need to be repaid to the provider.

They can be awarded based on many different types of criteria, including grade point average (GPA), athletic performance, community service, chosen field of study, and more. Scholarships might be offered by a college or university, organization, or institution.

For potential pharmacy school students, there are several available options for scholarships through their individual states and other providers. The American Association of Colleges of Pharmacy (AACP) is a great resource for finding a pharmacy school scholarship.

Grants

Unlike scholarships or loans, grants are sources of financial aid from colleges, universities, state/federal government, and other private or nonprofit organizations that do not generally need to be repaid.

The AACP breaks down grants and awards for health profession students and government subsidized grants for pharmacy school students on their website.

Recommended: The Differences Between Grants, Scholarships, and Loans

State Pharmacy School Loans

Some potential pharmacists may be eligible to participate in a state student loan program. The cost of attending a state pharmacy school will vary depending on whether or not the student lives in the same state as the school, so researching the accredited pharmacy programs by state can help them determine how much they’ll need to borrow.

Federal Pharmacy School Loans

The U.S. Department of Education offers Direct Subsidized and Unsubsidized Loans to undergraduate and graduate pharmacy school students. The school will determine the loan type(s) and amount a pharmacy school student can receive each academic year, based on information provided by the student on the Free Application for Federal Student Aid (FAFSA®) form.

PLUS Loans are another federal pharmacy school loan option, eligible to graduate and professional students through schools that participate in the federal Direct Loan Program.

Private Pharmacy School Loans

A private student loan is another way for students to pay for pharmacy school. When comparing private student loans vs. federal student loans, it’s important to note that because private loans are not associated with the federal government, interest rates, repayment terms, and benefits will vary. For this reason, private student loans are considered an option only after all other financing sources have been exhausted.

When applying for a private pharmacy school loan, a lender will usually review the borrower’s credit score and financial history, among other factors.

Income-Driven Repayment Plans

Income-driven repayment plans may help borrowers qualify for lower monthly payments on their pharmacy school loans if their total debt at graduation exceeds their annual income.

These plans aim to make payments more affordable by capping them at a percentage of discretionary income. After 20-25 years of qualifying payments, the remaining loan balance may be forgiven.

•   Income-Based Repayment (IBR

•   Pay As You Earn (PAYE)

•   Revised Pay As You Earn (REPAYE)

•   Income-Contingent Repayment (ICR)

The Takeaway

Roughly 82% of pharmacy school graduates have student loans, according to the AACP. Pharmacy school loans can be used to pay for tuition and fees, living expenses, and supplies like books and required lab equipment.

Federal student loans can be used in combination with any scholarships and grants the student may qualify for.

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.

FAQ

How long does it take to pay off pharmacy school loans?

Depending on the type of pharmacy school loan you take out (private vs. federal) and when the funds were distributed, it can take between five and 25 years to repay a pharmacy school student loan.

How can I pay for pharmacy school?

There are several ways to pay for pharmacy school, including federal student loans, private pharmacy school loans, scholarships, grants, and personal savings.

What is the average student loan debt for pharmacy school?

According to the American Association of Colleges of Pharmacy, the average student loan debt for pharmacy graduates is $167,711.

Photo credit: iStock/Vaselena

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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 .

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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Oct
09
2024
Guide to Improving Your Money Mindset

Guide to Improving Your Money Mindset

By | Budgeting & Goals, Financial Independence, money | Comments Off on Guide to Improving Your Money Mindset

Achieving your financial goals in life isn’t just about how much you earn; it’s also about your money mindset. Some of our most deeply held beliefs are about money. What does financial success look like to you? Do you think of yourself as a spender or a saver? Do you avoid talking or thinking about money? The answers to these questions all reflect your money mindset. Changing these ideas can be challenging but worth it.

To create a solid financial future, it’s essential to have a strong, positive money mindset. So, if your financial habits need a little (or a lot of) work, here’s how to change your money mindset. Read on to learn:

•   What is a money mindset?

•   What is a negative money mindset?

•   How can I change my money mindset?

•   Why is reshaping my money mindset important?

What Is a Money Mindset?

Your money mindset is your approach to handling money. It determines your spending and saving habits as well as your motivations for your financial management.

Whether you are aware of it or not, everyone has a money mindset — a collection of beliefs starting from childhood that shape what you do with your money. (Your money mindset could even be, “I never think or talk about money.”)

Your money mindset can lead to both positive and negative financial decisions.

For example, have you automated your savings, or do you think saving isn’t something you need to or can focus on just yet? Do you use a budget? Can you treat yourself occasionally, or is buying a $5 coffee not a part of your financial plan? Your money mindset characterizes your relationship with money, and so it is essential to understand and possibly tweak it.

What Is a Negative Money Mindset?

A negative money mindset is a set of unhelpful financial beliefs that can lead to poor resource management. It often involves a constant feeling of stress or guilt regarding money or simply disorganization. It may also involve the belief that “if I just made more money, things would change or all my problems would be solved.” While a higher salary or inheritance might help you toward your financial goals, having more money won’t necessarily change your financial mindset.

While it may seem counterintuitive, your income level doesn’t automatically determine your sense of financial freedom. Additionally, it’s worth noting that your money mindset exists whether you’re conscious of how it influences your behavior or not.

Here are some examples of the ways in which a negative money mindset might have a bad influence on your life:

•   You might spend too much money due to comparison with others. You see a friend or colleague renting a pricey apartment and think you should too. That can be an aspect of lifestyle creep, in which your spending increases as your income grows, preventing you from saving and acquiring assets.

•   You might not save for long-term goals, like a house or retirement, because your parents never wanted to talk about money when you were growing up.

•   Because money stresses you out, you might fail to set financial goals, like paying off your student loans on time.

If it feels like you’re in this negative zone when it comes to your finances, know that you are not saddled with it for life. We’ll explore how to develop a money mindset that’s more positive and productive later in this article.

How Your Beliefs on Money Affect Your Finances

Your primary, most powerful beliefs about money most likely come from your parents and your childhood. Children typically absorb financial beliefs from the most influential people in their life. Then, as they grow older and begin handling money, they live out those financial beliefs, for better or worse.

For example, if your parents modeled money as a way to pamper yourself, you may find that you impulse-shop when life becomes challenging. Your money mindset is that spending equals financial self-care.

On the other hand, you may have a reputation among your friends as “cheap” because you grew up in a penny-pinching household that considered luxuries a waste of money. In both cases, your money mindset puts your financial habits into motion.

These examples underscore that children tend to mimic the behaviors of their parents and adopt their money habits in their own adult life. But in some cases, it’s the opposite. Some people will go to great lengths to not be like their parents. For example, if your parents refused to buy anything that wasn’t on sale when you were growing up, you may make a point of never looking at price tags as an adult.

Why Reshaping Your Money Mindset Is Important

It’s crucial to address negative money mindsets. Otherwise, you’ll likely continue to act on the same faulty beliefs, which can keep you from building the balance in your savings account and reaching your financial goals.

Recognizing an unproductive facet of your money mindset gives you the power to change it. By asking yourself questions about how you currently treat your money and how you’d like to change, you can reorient yourself and create a long-term financial plan. In fact, reshaping your money mindset may include setting financial goals for the first time in your life.

By changing your money mindset you can take full control of your finances, break bad spending habits, and reach your goals.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


How to Change Your Money Mindset

While your upbringing and core experiences impact you in significant ways, you have the ability to recast your money mindset or create an all-new one. When reshaping your money mindset, the following tips can help you transform unhelpful financial behaviors into life-changing, literally enriching habits.

Success With Money Is a Possibility

One key to changing your money mindset is to increase your confidence in your abilities. Don’t count yourself out because of your background or financial circumstances — it’s possible to change these patterns.

Whether you’re working up the courage to sit down and make a beginner’s budget, tackle lingering debts, or give yourself permission to make a fun but totally unnecessary purchase, believing it’s possible is crucial for your success. Perhaps saying affirmations will help you, or maybe reading about others who have attained what you are dreaming of will work best. The right technique is a personal decision.

Understanding Why You Feel This Way

Money is emotional for everyone. Feeling anxious, worried, or excited about your money is normal. Our emotions are rooted in beliefs; therefore, you might feel elated or stressed on payday depending on the beliefs you’re associating with your money. You might crave the feeling of going shopping or you might wake up in the middle of the night worried about your car payments.

Delving into how much money you have coming in and going out can help you better manage your funds. If you have a financial plan that allows you to sock money away and also treat yourself a few times a month, getting paid might create feelings of satisfaction or confidence. Hence, your money mindset is creating positive emotions for you. However, if your paycheck reminds you of your mounting bills, it’s probably time to identify where these feelings are coming from. This way, you can start shifting your money mindset to elevate the stress and anxiety.

Additionally, the more you avoid money, the more intimidating it can feel. Even people with plenty of income might run from figuring out their living expenses because it sparks negative emotions.

Avoid Comparing Yourself to Peers or Social Media Standards

Parents aren’t the only ones who influence your money mindset. Peers and mainstream culture send messages about what success looks like or how to best manage your money.

But what others do or think is irrelevant to your money situation. Also, what works for someone else may or may not work for you, especially if you have different goals. Plenty of general financial principles are worth adhering to, but even those aren’t set in stone. For example, a common guide for budgeting is the 50/30/20 rule, which advises dividing up your take home income like so: 50% on necessities, 30% on wants, and 20% for savings and debt repayments beyond minimum. If you live in a high-cost area, however, earmarking 50% of your income for your needs may not be enough, since you may need to put a large portion of your income towards housing. So, you may need to adjust certain “rules” to fit your situation

Overcoming Your Financial Fears

Change can be scary, and so can money, so cut yourself some slack if you’re afraid of changing your money mindset. It can be comfortable to settle back into the familiar, even when it’s not working.

However, overcoming financial anxiety and developing a positive money mindset is possible. Forge ahead at your own pace, and explore your money mindset: What are the things that worry you about money? Where are your biggest fears coming from?

As you unpack that, remind yourself of your motivation to change. Keep your goals at the forefront, and encourage yourself to take a step in that direction. Taking a small but concrete action toward your goals is how to develop resilience, a key characteristic for succeeding in life.

Recommended: Should You Pay Off Student Loans or Invest?

Avoid Dwelling on the Past

As you attempt to change your money mindset, there may be errors from the past sticking in your mind, reinforcing the idea that you are bad at financial management. Dwelling on the past can stop you from creating a different future. The failures, mistakes, and traumas from the past are real — but they don’t have to define you. For example, if you’ve endured a romantic breakup, that doesn’t mean you can’t date again and find love. In the same way, just because you had too much credit debt recently doesn’t mean you can’t get that issue wrangled.

It’s a good idea to jettison this kind of looking-back viewpoint. Instead, try putting your efforts toward what you can change in the present and strive to achieve in the future.

The Takeaway

Your money mindset is the attitude and beliefs that form your relationship with your personal finances, and it drives your financial habits. Since most people pick up unhealthy financial habits along with healthy ones, it’s crucial to recognize the financial beliefs that aren’t serving you. Then you can set about changing your money mindset and shifting your behavior to better achieve your goals.

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


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

FAQ

How do I get rid of a money scarcity mindset?

The belief that you never have and never will have enough money is part of your money mindset. To change that belief, identify where the mindset came from and make a positive change, such as setting a small savings goal and achieving it.

What is a poor money mindset?

A poor money mindset consists of unproductive beliefs about money that lead to negative financial decisions and habits. An unhealthy relationship with money when growing up or having made past financial mistakes can create a poor money mindset.

How is a money mindset formed?

You form your money mindset through the financial beliefs you hold as true. Your childhood, peers, and financial successes and failures help define your money mindset.

Photo credit: iStock/gorodenkoff

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

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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

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

*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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Oct
09
2024
16 Ways to Reward Yourself Without Breaking Your Budget

16 Ways to Reward Yourself Without Breaking Your Budget

By | Budgeting & Goals, Financial Independence, money | Comments Off on 16 Ways to Reward Yourself Without Breaking Your Budget

You know how important it is to budget and save. But every once in a while it’s okay to reward yourself for a job well done. Whether you got through a stressful week, completed a tough work project, or did a good deed for a friend or neighbor, it’s important to pat yourself on the back. And there’s room in almost any budget for a little reward. Low-cost and free treats can serve as positive reinforcement without launching you on that slippery slope of overspending.

Why Treating Yourself Is Essential

Treating yourself is a form of self-care, which is a way of showing yourself kindness by doing things that make you feel good. Studies on self-care have found it can help reduce or eliminate anxiety and depression, manage stress, and increase happiness.

Treats or self-rewards are a way of recognizing that you’re doing a good job and meeting goals. Fortunately, there’s room in almost any budget for them. Whether it’s an occasional bouquet of supermarket roses or a TGIF beer with friends, these purchases are unlikely to wreak havoc on your finances or trigger a situation in which you can’t stop overspending.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

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Up to 2-day-early paycheck.

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Rewarding Yourself: 16 Different Ideas

Maybe you asked for and got a raise at work, buckled down on your budget, finally cleaned out your closets, or just feel you need a lift after a draining week. It’s time to treat yourself. Consider these free or low-cost rewards:

1. Drop in for a Single Yoga Class

Yoga provides a plethora of physical and mental benefits, such as helping to relieve back and neck pain, improve sleep quality, and reduce stress. Many yoga studios offer drop-in classes, with the average price about $15 to $25 a class. If that’s a bit steep, YouTube features an array of free yoga videos led by experienced instructors.

2. Get a Cup of Fancy Coffee

Making coffee at home saves tons of money, but there’s nothing like the occasional barista-made cappuccino or flat white from your favorite coffee shop. Whether you have one as Monday motivation to start your week off right or reward yourself on a weekend AM, it can be a low-cost bit of self-care.

3. Pick up a Bouquet of Flowers

Treat yourself to some colorful blooms from your local grocery store. Research has shown flowers can improve mood and increase happiness.

4. Buy Yourself Your Favorite Ice Cream

Many of us have cheered up a kid with an ice cream cone. Why not do the same thing for yourself? Mint chip, strawberry, and good old vanilla just begin to describe the possibilities.

5. Go for an Inexpensive Mani-Pedi

Many nail salons offer weekly specials that include a manicure, pedicure, and perhaps a short massage. It can be an affordable way to help you look and feel good. Go ahead and pamper yourself on a budget.

Recommended: 15 Creative Ways to Save Money

6. Take a Nap

Few things feel as good as a power nap. A snooze of 30 to 60 minutes can refresh you, improve your mood, and increase alertness. It’s also a great way to treat yourself without spending money. Just beware of sleeping more than an hour though; it can leave you feeling groggy and interfere with your nighttime slumber.

7. Stream Some Shows

Heard about a great show but don’t subscribe to the service it’s on? Many streaming channels offer free trial periods ranging from a week to a month. That could be enough time to binge-watch those shows you’ve been hearing about without necessarily signing up for a monthly subscription.

Recommended: 7 Ways to Achieve Financial Self-Discipline

8. Camp Out

Camping for a night or two is typically an inexpensive pursuit. Being out in nature all day and looking up at the constellations at night can be a wonderful treat and spirit-reviver. Not for you? How about an afternoon of “forest bathing” near your home? All that means is spending time in nature, focusing on the sights, sounds, and smells of the woods.

9. Visit a Local Museum

Whether you look at classic paintings or challenging avant-garde works, a museum visit can immerse you in beauty and open you up to refreshing new perspectives. Many museums either have specific days or times when entry fees are free or reduced.

10. Get Crafty

Having a creative outlet is not only a way to relieve stress, it’s also fun. A good self-reward can be to spark your creativity with anything from an adult coloring book to a ceramics lesson.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

11. Have a Nice Lunch or Dinner Out

If you’ve been working hard, you might treat yourself to a meal at a restaurant you’ve been wanting to try or a type of food you don’t usually eat. Invite a friend you’d like to catch up with; that can make it more memorable. To make your outing more affordable, check out special offers, like a prix fixe lunch menu or half-price cocktails before a certain hour.

12. Spend a Day at the Beach

Sun, sand, and surf have a way of restoring one’s spirits. If you live near the shore, consider making a day trip, even if it’s off-season. You might have to pay for parking, but otherwise, this outing can be a very low-cost way to treat yourself.

Recommended: Easy Ways to Save Money

13. Visit a Thrift Shop or Flea Market

Shopping second-hand can be a fun and a low-cost way to reward yourself, even better if the proceeds go to a charitable organization. Treat yourself to some inexpensive clothing, jewelry, books, cookware, or maybe even the perfect acoustic guitar. You’re also helping the environment since thrifting keeps items out of landfills.

Recommended: A Guide to Ethical Shopping

14. Take a Mental Health Day

It may take some planning and organization, but gifting yourself a day off to rest and recharge can help prevent burnout and reduce stress. Spend it however you like — lazing on the couch, taking nature photos, or visiting a friend you haven’t seen in a while.

Recommended: Making Money Through Social Media

15. Listen to Live Music

Sure, you could splurge on a major concert, but local bars, beer gardens, and other spots often have live music without any sticker-shock tickets. Whether it’s folk, Zydeco, or classic-rock covers, you’re likely to feel better for it. Music has been shown to reduce anxiety and improve one’s mood.

16. Buy a Good Book

A good story can transport you away from daily life. Why not treat yourself to one? You can stop by the bookstore and purchase that book you’ve been wanting. Or, you might borrow an audiobook from the library and listen to it while you’re taking a walk, driving, or relaxing at home.

The Takeaway

Everyone needs and deserves a treat now and then: a reward for saving money, getting kudos at work, or finally organizing your coat closet. Self-care can boost your mental health and keep you motivated with your goals. There are endless ways to treat yourself, and plenty of ways to do so without busting your budget. With the ideas described here, you can reward yourself and stay on track money-wise, which is a win-win.

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


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

FAQ

What is it called when you reward yourself?

People use a variety of terms, including a treat, self-reward, self-care, positive motivation, and positive reinforcement.

What if I feel guilty when rewarding myself?

Some people feel guilty when rewarding themselves. This may be because they were raised in a household that felt people should work hard without reward or because they believe rewards will make them “soft” and unmotivated. However, rewards can actually help people recharge, achieve more, and enjoy life more, so try giving yourself permission.

How do I not go overboard when rewarding myself?

It’s wise to have your self-rewards as a line item on your budget to avoid going overboard. That “fun money” doesn’t have to be a lot: Many treats are low-cost or even free.

Photo credit: iStock/Prostock-Studio

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

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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

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

*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.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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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