SoFi

Are you a little obsessed with planning your next big trip? We hear you! The excitement of seeing new places — whether that means a faraway tropical island or a neighboring state — is a powerful lure. But there’s one thing that may get in the way: Money.

Let’s be real, travel can be expensive. Even if you’re hopping in the car for a short weekend road trip, the cost of gas, food, entertainment, accommodations, and more can get a bit overwhelming. Fortunately, with a little bit of planning, you can make your travel dreams a reality. And it can all begin by creating a travel fund.

What Is a Travel Fund?

A travel fund is exactly what it sounds like — a fund exclusively used for gallivanting around the world. It’s a place to stash some cash that you don’t use for rent, bills, repaying student loans, or any other monthly financial obligations. This fund is just for your passion in life. And your passion is clearly traveling.

How to Fund Traveling

Unfortunately, a travel savings account will not grow by magic. If only! You’ll need to find ways to funnel some cash towards your travel plans. There are a variety of ways to do this. Perhaps you got a raise recently (nice!) and can put that amount directly towards travel. Or, maybe you can automatically whisk $25 or $50 per paycheck into your savings. Or, you might give up concert tickets or takeout food for a while to allow some wiggle room in your budget that goes towards paying for your next getaway. There are many options — some of which we’ll explore below.

Recommended: 15 Easy Ways to Save Money

Setting Up a Dedicated Travel Savings Account

There are a few options for where to keep your travel fund. Yes, you could keep your vacation fund in the same account as your day-to-day savings, but separating the fund could provide even more clarity.

Keeping your travel fund in a separate account can make it easy to see how close you are to reaching your travel goal. It allows you to see exactly how much money you’ve saved for the cause with ease. Having the money in a separate account also allows you to set up automatic contributions, just as you might already be doing with your other accounts.

Automating your savings towards travel means you can eliminate another task from your to-do list. You’ll be making progress toward your dream of cruising down the Nile without even having to think about it. And since it’s stashed separately, you don’t need to worry that you’ll use it on, say, entertainment or new shoes without realizing it.

Tips on Selecting an Account to Use

When it comes to setting up a dedicated travel fund, the first order of business is usually to pick an account type. There are a variety of options to choose from. Part of what will likely influence your decision is how long you plan on saving. If you want to take a trip in just a few months, a savings account may be a good vehicle. You can easily contribute to it, and you’ll earn some interest.

To help your travel fund grow faster, you may want to go with a high yield savings account. These accounts typically pay a much higher annual percentage yield (APY) than traditional savings accounts, giving you the ability to earn more on your money while still enjoying the security of a federally insured account. These days, many high-yield savings accounts offer APYs of up to 5% or more — many times more than the average national rate of 0.46%.

Some of these accounts may come with certain restrictions, like a limited number of withdrawals a month or maintaining a minimum balance, so be sure to read the fine print on each account you might be considering.

Another is a certificate of deposit (CD), which locks up your money for a particular term, typically from six months to a few years. This type of account can sometimes offer a more competitive interest rate than a traditional savings account but comes with withdrawal restrictions. If you choose to withdraw the money before the term ends, you’ll likely have to pay a penalty or fee.

Yet another option is to use a cash management account with a brokerage firm. These accounts are meant as an option for your uninvested money. They can also be great for putting away some extra money to save, but again — do read the fine print. Fees may be involved, plus commissions if a broker steps in to help you with your investments. Make sure that these won’t cut into your savings.

All of these options will allow you to keep your vacation fund separate from your checking account, emergency savings, or regular savings account. You may even be able to give it a unique name like “travel fund” or even more specific like “Tahiti fund.” It’s much more exciting to watch “dream trip to Bali fund” grow than just “account: 3283052.”

Growing Your Travel Fund

After you’ve created your unique travel fund, it’s time to put in some savings work. And that begins with your budget. If you already have a budget, that’s great. All you need to do is add in “travel fund” as a new line item and shift as much money as you feel comfortable moving to this new account each month.

But, if you’re starting from scratch, that’s OK too. Trying to save for the trip of a lifetime is just as good an excuse as any to start budgeting.

To build a budget, you’ll want to start by figuring out your average monthly take-home income (what you earn after taxes are taken out). Next, it’s good to create a list of all your monthly expenses. You’ll want to include all the basics like rent or mortgage, car payments, student loans, credit card statements, food, gas, insurance, gym memberships, streaming accounts, and any money you currently put towards saving and investing. Make sure to get as granular as possible about your spending.

Next, subtract your average monthly expenses from your average monthly income to see how much you have leftover. If it’s more than $0, that’s excellent news! You can put the excess towards your travel fund. If not, you’ll need to find some places to cut back on spending.

Recommended: How to Make a Budget in 5 Steps

Finding Extra Cash for Your Travel Account

If you’d like that leftover number in your budget to be higher, maybe it’s time to take a look at both your spending and your current income level. Perhaps you can see where changes can be made.

One of the potentially easiest ways to create more cash for your travel fund is to look deeply at your monthly spending. Are you still subscribing to that streaming service you never (or rarely) watch? Are you signed up for the premium version of that social media platform you haven’t been on in months?

What about that gym membership? How’s that going for you? Go ahead and get rid of things that aren’t bringing you joy or are dispensable. Then, refocus those funds in your travel fund.

If there’s no room for cuts, then it might be time to increase your income. Of course, you could always ask for a raise at work, but if that doesn’t come through, explore some other options — like a side hustle. A side hustle is a gig you take on outside your normal work to make some extra money. If you can, pick something you really enjoy doing so it feels less like “work.” For example, if you love dogs but aren’t ready to own one, maybe walking dogs before work would be fun for you.

If you are a handy person who likes to fix things, creating a listing on a site like Thumbtack or TaskRabbit may be a good idea. If you have other talents like photography, writing, or graphic design, you might do some networking to see if you can drum up some freelance work. That way, you can get paid for what you love to do and save for what you love too.

Recommended: How Families Can Afford to Travel on Vacation

SoFi: Your Partner in Creating a Travel Fund

By now, you’ve committed to adjusting your budget and setting aside cash in a new fund. The only thing left to do is find the best place to stash your cash.

When choosing where to put your travel fund, you’ll want to find an account that pays a competitive yield, keeps your money safe, and allows you to easily access your funds when it’s time to set off for your next adventure.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

FAQ

How much should I keep in my travel fund?

To come up with a travel savings goal, you’ll want to determine how much you’ll need for your trip and when you want to take it. From there, you can determine how much you’ll need to transfer into your travel fund each month to reach your goal. For example, if your trip will cost $2,500 and you plan to travel in six months, you’ll need to set aside around $33 a month.

How do I set up a travel fund?

Setting up a travel fund can take only a matter of minutes. It can be as easy as opening a savings account online and then directing money towards it. You can also go into a brick-and-mortar bank to set up an account.

How can I save money on a travel fund?

To save money on a travel fund, look for a savings account that doesn’t charge monthly fees and offers a competitive interest rate. These two factors will help boost your savings and get you on your dream vacation as quickly as possible.

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Your mind and body may be ready for a sunny beachside spring break in Cancun, but if you’re living that broke college kid life, you may imagine your spring break looking more like a week at home, scrolling through Instagram and binging Netflix.

However, it is possible to plan a spring break trip on a limited budget. And yes, even a college student’s budget can be stretched for spring break fun! If you’re wondering how to plan a spring break trip without living off instant noodles for the next month, we have some tips to help you get a well-deserved vacation from those long nights spent studying in your dorm room.

Keep reading for some of our best tips on making your spring break trip dreams happen on a budget.

1. Start Planning Early

Waiting until the last minute to plan a trip could mean missing out on cheaper flights, hotels, and even popular ticketed attractions. If you’re going to a hot destination during a peak travel season, which includes spring break for many destinations, then you could blow your travel budget on the flight alone, leaving you without enough money for food and lodging.

2. Make a Budget & Stick to It

Before you even leave for your destination, it’s smart to create a travel budget. What can you reasonably afford to spend on accommodations, transportation, entertainment, meals, and shopping? Having a budget could help you avoid splurging on expensive dinners or overspending at local shops.

Recommended: How to Save for a Vacation: Creating a Travel Fund

3. Find Off-Season Destinations

If Cancun for spring break is too pricey for your college student budget, don’t stress. There are a number of great destinations that are off-season in the spring, ranging from the more rugged Jackson County, North Carolina to the Big Apple.

4. Only Travel as Far as You Can Drive

It’s about the journey, not the destination, right? You can make that (semi) true by taking a road trip with a few friends. On a road trip, you don’t need to follow any set schedule. Since there’s no flight or train to catch, and often no hurry to reach a destination, you can make spontaneous decisions and discover hidden gems along the way.

5. Avoid Tourist Traps

Doing spring break on a budget generally means skipping touristy destinations like Miami, New Orleans, and Cabo. However, there are plenty of cheaper alternatives to these locations that can save you money and that will probably be far less crowded, too.

6. Reach out to Friends & Family

If you have friends or family in another city, reach out and ask if they’d be willing to host you. If they agree, you could get some free lodging and meals out of it. Plus, you’d be connecting with locals who could guide you through the city and give some tips on cool and free stuff to do that you might not have found otherwise.

Recommended: How to Balance the Urge to Travel and the Need to Save

7. Ditch the Plane Ticket

Planes and cars aren’t the only way to land at your tourist destination. You can do spring break on a budget by hopping on an Amtrak train or a Greyhound bus, both of which have destinations all over the country. The best part? You can catch up on some work, sleep, or relaxation while you enjoy the ride.

8. Don’t Forget about Cruises

You could spend a fortune going to just Miami or Los Angeles. Or, you could check out some cheaper cruise options that could potentially take you all over Alaska, the Caribbean islands, or a slew of other destinations for less. There are even cruise options designed specifically for college students.

9. Consider Pitching a Tent

Do you get motion sickness in cars or boats? With camping, your feet will be firmly planted on the ground, and your budget will also likely stay down to earth. You can camp out in many destinations across the U.S. and even abroad, be it under the stars near a national park or near a great fishing hole in the Carolinas.

10. Look For a Deal

Sites like Groupon and LivingSocial offer a number of travel and hotel deals both for individuals and for group travel. Checking out which hotels are offering promotions could help you save when booking accommodations. You can also find deals on attractions near where you’re vacationing, too.

11. Sign Up for a Spring Break Volunteer Experience

Many colleges offer a program called “alternative break,” which allows students to travel and volunteer during their spring break. If your college doesn’t offer any alternative break trips, you can still find some opportunities through organizations like Habitat for Humanity and United Way.

12. Be a Tourist in Your Own State

If airfare is out of the question for your spring break budget, a budget-friendly alternative could be touring your own state. You can take a spring break road trip around your state or even take multiple day trips, the latter of which could allow you to have most of your meals at home with no hotel needed.

13. Fly on Unpopular Days

No, it’s not just your imagination: There are some days that are cheaper to fly on than others. If you’re not tied to a set departure and/or return date, use the flexible date search on a travel or airline site. This can help you find the cheapest travel dates for your trip.

14. Sign Up for Price Alerts

One helpful way to ensure you’re getting the best possible deal on your trip is to sign up for price alerts, a free service offered by several travel companies, such as Kayak, Skyscanner, and Google Flights. These sites track prices daily and alert you in real-time when the price changes for a flight, hotel, or rental car you want.

15. Ask for Extra Snacks

If you’re flying to your destination, be sure to grab the airplane snacks. And if you like the snacks, ask for seconds! You may be able to snag a free snack to help tide you over between meals when you land. The worst thing that can happen is that they say no.

16. Consider Airbnbs or Hostels

For those looking for the best tips on how to plan a spring break trip, one not-so-obvious one may be skipping hotels altogether. Staying at an Airbnb or hostel could be a cheaper travel hack than even a budget motel, especially if you don’t plan on spending much time in your room anyway.

17. Use Public Transportation

While Uber may be one of the handiest apps to have while traveling, relying on ridesharing and taxis could end up costing you a small fortune, especially if you’re traveling in a big city. Using public transportation could cost you a fraction of the price of an Uber, plus it will allow you to explore more of your destination as you navigate around subway and bus stations.

18. Bring Your Own Food

Grocery costs may be on the rise, but the cost of dining out can really wreak havoc on your spring break budget. If you want to try the local cuisine, you can typically do so much cheaper by going to a local grocery store and buying premade meals there or, better yet, making your own meals using fresh, local ingredients. This option may only be available if you’re staying at an Airbnb or hotel with a kitchenette, though.

19. Eat Out for Lunch, not Dinner

Eating out for dinner will often cost you far more than eating out for breakfast or lunch. And if you decide to eat out for dinner still, skip the drinks and desserts. These items typically have higher markups than other items on the menu. Plus, when it comes to desserts, the quality (and quantity!) may not be worth it — many restaurants don’t even make the desserts they serve.

20. Ask About Complimentary Hotel Meals

Students looking for spring break trips on a budget won’t want to miss out on this tried-and-true travel budget saver: Before booking your hotel, ask if they have any complimentary meals, such as a continental breakfast. It may not be as fancy or Instagram-worthy as the hottest brunch spot in town, but it will likely be a lot better for your budget.

21. Use The Free Hotel Coffee

Most hotels offer free coffee either in the lobby in the mornings or through small coffee makers in your room. It may not be as fancy as your usual Venti Coconutmilk Latte with two pumps of salted caramel, but it won’t cost you anything.

22. Look out for Free Samples

Looking to score some more free snacks? Add local farmers’ markets to your itinerary. Many markets are full of free samples, so you may even be able to scrounge together a free lunch. You may also be able to score free swag, like t-shirts and reusable bags, from local vendors and businesses, your hotel, or the local visitor’s center.

23. Prioritize Free Activities

Sure, you can spend $50 for a museum ticket. Or, you could search online for some free museums nearby. Many hot spring break destinations offer free walking tours, free museum days, and a plethora of other free activities, such as parks and beaches.

24. Find a Travel Buddy (or Four!)

You’ll find that going on a budget-friendly spring break trip can be a lot easier if you team up with friends. Pooling your college budgets together may even help you to afford nicer accommodations or a more far-flung destination.

25. Cash in Credit Card Rewards…

If you have a rewards or cashback credit card, you may want to save up your points to help fund your epic spring break. Having a travel rewards card can be an easy way to save on travel, especially if you’re able to use that card on purchases before heading out on vacation, which could help you build up even more rewards points.

26. …And Earn More Rewards While Traveling!

Using your rewards credit card on vacation may not help you save for your current trip. But if you rack up more rewards during your trip, you’ll already have a new vacation fund started before you even come back from spring break.

27. Research Student Discounts

Catching a movie or eating out during spring break? Ask about a student discount! You may be able to score some sweet savings even before your vacation, as companies like Expedia often offer student-only travel deals. You can also try StudentUniverse , which helps students get discounts on hotels, airfare, and more.

28. Ask About Membership Discounts

A ton of college discounts exist, but don’t rule out membership discounts you could get from family members. For instance, Costco, Sam’s Club, AAA, and AARP all offer travel discounts to their members. It may be worth asking some relatives about their memberships to save big on your spring break trip.

29. Avoid Transaction Fees

Transaction fees can be a real budget-killer if you’re traveling abroad. And even if you’re stateside, ATM fees can also put a dent in your spring break savings. So you may want to ask your card issuer about fees and plan accordingly to make sure you have enough cash on hand to avoid them.

30. Use Hotel Toiletries

TSA-approved toiletries can be overpriced, and buying them when you arrive at your destination may also mean overpaying for toiletries that you have loads of at home. The best alternative? Decant your own shampoo and conditioner into smaller bottles you can snag at The Dollar Store. Or, better yet, just use the hotel toiletries. They may not be what you’re used to, but your budget will thank you.

The Takeaway

Wondering how to plan a spring break trip on a budget? It may not be as hard as you think. If you’re willing to try off-peak destinations and hunt for discounts, you can save a ton of cash. Spring break trips on a budget don’t have to be a drag, either. You can still go to popular destinations if you create (and stick to) a spring break travel budget. Using rewards and cashback cards can also help you save on airfare and other travel expenses.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

Photo credit: iStock/onurdongel

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Getting a credit card for the first time comes with a unique set of challenges. A lack of a credit history can make it harder to qualify, and you’ll have a learning curve when it comes to how to choose and use your first credit card responsibly.

However, the actual process of applying for a credit card for the first time isn’t all that complex if you are armed with a bit of information. Read on to learn how to get your first credit card.

Qualifying for a Credit Card

When someone applies for a credit card, the credit card issuer will take a number of factors into consideration, including their credit score and income, when deciding whether to approve their application. It’s also necessary to make sure you’re old enough to get a credit card — you usually must be at least 18 years old.

Someone’s credit score can indicate how likely they are to pay back their credit card on time. The higher someone’s score is, the more creditworthy they appear. Income is also a major factor that’s considered, especially when figuring out someone’s credit card limit. Applicants under the age of 21 who can’t show independent income generally must get a cosigner.

Additionally, those applying for a certain type of credit card, such as a student credit card, will have to make sure they meet that card’s particular requirements. While a student credit card may be available to those with no or limited credit, the cardholder generally must be enrolled in a qualifying educational program.

Recommended: Charge Cards Advantages and Disadvantages

How to Apply for a Credit Card With No Credit History

It can be difficult to qualify for a credit card before you’ve built a credit history, given what a credit card is. The catch? It takes credit to build credit. Thankfully, there are a few credit card options that consumers can consider if they don’t yet have a credit history at all or only have a limited one.

Starter Credit Card

Starter credit cards are a type of credit card designed for consumers who have no credit history or a very limited credit history. Starter credit cards help cardholders build a credit history when they use the card responsibly. If they make on-time payments each month, they’ll see their credit score rise over time and will start to build a solid credit history.

Generally, starter credit cards don’t come with the best rates and terms, but when used to make purchases someone can afford to pay off each month, they can be a very helpful financial tool. Student credit cards are an example of starter cards that can help someone establish a credit history.

To apply for a starter credit card, you generally must provide the following:

•   Social Security number

•   Sources of income

•   Monthly housing or rent costs

Those under the age of 21 who do not have your own source of income will need to get an adult cosigner who’s over the age of 21. For those who are applying for a student credit card as their choice of starter credit card, the credit card issuer may request information such as the name of your school or program, your major, and your expected year of graduation.

Secured Credit Card

Another credit card option for those who are new to credit is a secured credit card. With a secured credit card, the cardholder must deposit money to use the card.

The amount they deposit will act as their credit limit, and they’ll then borrow against that deposit. For example, if they deposit $500, they can make up to $500 worth of purchases anywhere that accepts credit card payments. Once they pay off their card balance, they can spend up to $500 again.

When at least the credit card minimum payments are made on time, the cardholder will build a credit history. Functionally, a secured credit card works more similarly to a debit card but helps to build credit.

Applying for a secured credit card requires much of the same information as applying for an unsecured credit card. This includes your name, address, Social Security number, and income information. Additionally, it’s necessary to have the cash on hand to make the security deposit. Depending on the card, there may or may not be a credit check required.

Often, after using a secured credit card responsibly, the cardholder can graduate to a standard unsecured credit card.

How to Choose Your First Credit Card

When shopping around for a credit card, it’s a good idea to compare the fees, interest rates, and cardholder benefits of multiple credit cards. Here’s why these factors matter when choosing a first credit card:

•   Credit card fees. From annual fees to foreign transaction fees to late fees, all credit cards have some fees that cardholders need to be aware of. Certain transactions, such as buying a money order with a credit card, can also involve fees as well. Being aware of the fees a card may charge and finding a credit card with low fees can help save money.

•   Interest rates. If a cardholder carries a balance, they’ll need to make interest payments. Credit cards interest rates are displayed as annual percentage rates (APRs) and the higher someone’s APR is, the more they’ll pay in interest. What’s considered a good APR for a credit card will vary depending on someone’s credit profile as well as the type of card they’re applying for, but it’s generally below the average rate, which is around 24%.

Also pay attention to the different rates that may be charged. For example, if you take a cash advance on a credit card, the rate is typically higher than the standard rate.

•   Rewards. From cash back to travel points to discounts at major retailers, credit cards can come with some pretty cool rewards. It’s worth comparing the rewards offerings of multiple credit cards to see where it’s possible to benefit more from good credit habits. Keep in mind, however, that the top rewards cards are usually reserved for those with solid credit histories.

How to Apply for a Credit Card

The process of figuring out how to apply for a credit card online for the first time is usually pretty straightforward. When it’s time to apply for a credit card, the applicant generally needs to supply the following information as a part of the credit card issuer’s application process:

•   Identification (such as a Social Security number)

•   Source of income (such as pay stubs or W-2s)

•   Credit score (generally a score starting in the mid 600s is required, though you may find a number of options if your score is between 580 and 669, which is considered a fair score)

Further information may also be requested, as the process can vary somewhat from issuer to issuer.

Once you’ve submitted your credit card application, you’ll wait to get an approval or a denial. It may take just minutes to get a response, or it may be a few days or even a few weeks. The creditor must send a decision within 30 days at the most.

If you’re approved, you’ll then receive your new card in the mail. You won’t have to worry about replacing it until your credit card expiration date, at which point the issuer will send you a new card.

How to Use Your First Credit Card

Here are some pointers for using your credit card:

•   The key to using your first credit card is to limit charges to those that you can afford to pay off — and then making sure you do so in a timely manner. Doing so will ensure you never miss a payment, which will boost your credit score, and avoid late payment fees and interest payments.

•   Paying off your balance at the end of each month (or more often) will help keep credit utilization rate low. Credit utilization measures how much credit someone is using in comparison to how much they have available. The lower someone’s credit utilization, the more their credit score will benefit.

For instance, a potentially good way a student could use their first credit card is to limit their purchases to their textbooks for a semester. This will rein in their spending as they learn to budget and stay on top of their credit card statements.

•   Educate yourself on credit card safety best practices. For instance, be on the lookout for credit card skimmers, which are devices attached to credit card readers designed to steal your information.

Also be wary of sharing your credit card information, such as the CVV number on a credit card, with anyone.

What Should You Do if Your Application Is Denied?

If someone’s credit card application is denied, the best thing they can do to move forward is to work on building their credit score. This will improve their creditworthiness, and thus their odds of getting approved in the future. Here’s some advice:

•   Making on-time payments and keeping a low balance on an existing credit card are both ways to improve a credit score.

But if someone can’t qualify for any credit cards, how can they improve their credit score? In this scenario, one option is to become an authorized user on a family member’s credit card, such as a parent’s.

•   When someone is an authorized user, their score will improve as the main account holder makes on-time payments. However, both the account holder and authorized user’s credit scores are at risk if either party makes purchases they can’t afford, so it’s important that everyone has a plan for paying off the bill at the end of the month.

Recommended: When Are Credit Card Payments Due

Things You Need to Know as a First-Time Credit Card User

When someone is a first-time credit card user, it’s important that they understand the basics of how a credit card works. Specifically, they’ll need to know what interest rates and fees they may end up paying by using their credit card (especially if they plan to carry a balance).

Using a credit card can feel like shopping with free money, but at the end of the month, the cardholder needs to be prepared to pay their balance off in full. Otherwise, they risk paying more for the purchases they already made in the form of interest and fees. Once debt starts racking up, it can become hard to get rid of.

What If You Are Not Ready to Apply for a Credit Card?

Applying for a credit card for the first time is a big responsibility. If someone isn’t ready to take on the responsibility, they do have the option of using a debit card to gain some of the convenience that comes with a credit card.

A debit card is attached to a bank account and allows the account holder to make payments without keeping cash on hand. Debit cards don’t involve borrowing money, so interest rates aren’t a concern.

However, debit card holders will still need to look out for potential fees. Additionally, debit cards don’t have quite the level of protections that credit cards offer, such as the option to request a credit card chargeback.

The Takeaway

Applying for a credit card online is a relatively straightforward process, requiring some basic information about you and proper ID. The challenging part can be getting approved for the first time since you may have a thin or non-existent credit history. If you are approved, try to use your new card wisely by only making purchases you can afford and by paying off your balance in full each month. This can help you avoid high-interest payments and late fees and also may make it easier for you to get approved for other cards in the future.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is a good credit limit for a starter credit card?

The credit limit for a starter credit card is usually low, perhaps $1,000. With a secured credit card, the limit is the amount of the security deposit that the cardholder makes.

What are the requirements to apply for a credit card?

To apply for a credit card, it’s usually required that the applicant provide proof of income and identifying information such as a Social Security number. They will also need to have an acceptable credit score to qualify.

Photo credit: iStock/Demkat

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.

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

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The United States is more than a little dog crazy: The percentage of households with a canine stands at 44.6%, meaning almost one out of two have a pooch. Owning a dog can be one of life’s great pleasures, whether you choose a tiny Chihuahua puppy or a mega, full-grown Great Dane as your new best friend.

But amid imagining all the cuddles and sloppy kisses, many prospective dog parents aren’t fully prepared for the expense of owning a pet.

This can indeed be an important question because not only can dog ownership be a major personal commitment, it can also be a considerable financial investment,g too. The initial first-year investment has been estimated at between $1,135 and $5,155.

If you’re considering bringing home a new pooch, here’s the information you need to know about budgeting for a dog and how much it’s likely to really cost.

8 Costs of Owning a Dog

It’s easy to fall in love with an adorable dog and feel as if you just must make it yours ASAP. But it’s wise to do a little research first about potential bills before bringing home your pooch.

Doing so can not only prepare you for the costs of pet ownership but potentially save you money on your pet as well. Knowing the expenses involved can help you budget, prioritize, and comparison-shop as you move ahead with getting your new best friend. Read on for eight costs that are likely to crop up.

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1. Adoption Costs

The initial cost of adopting a dog can vary greatly depending on if the dog comes from a shelter or purchased from a breeder. As a range, however, Animal Humane Society sets its standard dog and puppy adoption fees between $255 to $414.

The fee cost varies, as some dogs (such as purebreds) are in higher demand and the organization needs to cover the cost of caring for animals who may take longer to adopt out (such as older dogs).

At many pet rescues, adoption fees also cover the cost of extra services, like a pet physical exam, deworming, spaying or neutering, or common vaccinations.

Adoption vs Buying

If you’re wondering how adoption costs compare to buying a dog, consider that purchasing a Goldendoodle from a breeder costs an average of $2,200. What’s more, buying a pet from private breeders often does not come with the extra services that some non-profit rescues cover. So, if an owner is considering the breeder route, the out-of-pocket cost of future medical visits may be one more dollar sign to add to the eventual pet budget. This can help you know how much to allocate towards your new companion so you can avoid ending up with credit card debt.

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2. Food and Treats

Some of the tiniest puppies can morph, in just a few months or years, into heftier eating machines. Young puppies can grow quickly. And, all that fast growth can mean they’ll eat…A lot.

So, food and treats can also play a significant role in your personal budget when you bring home a furbaby. Individual dog budgets can vary based on the size of the pooch and type of food each owner opts to feed their pet. Food choices might include dry kibble, wet food, a raw food diet, or some mix of each.

What to feed a dog is all a personal choice between the owner and their veterinarian. However, if someone is looking to estimate the potential cost of feeding a new dog, estimates range from $250 to $700 for food and treats. This will vary with what kind of food you buy (organic? bulk?), where you live, and how much your pet eats.

Recommended: Ways to Save Money on Food

3. Toys

Toys may seem like a silly little add-on, but they can play an important role in puppy development and adult dogs’ mental stimulation.

Toys can help dogs fight boredom when they are left at home alone and comfort them if they’re agitated. (With toys to gnaw on, dogs may be less likely to turn to shoes for a midday distraction.) Rather than investing in pricey toys, a simple tennis ball will satisfy many dogs. And, a dog owner can grab a can of three, fun-to-chase tennis balls on Amazon for about $4.

However, the cost here can also depend on just how quickly an individual dog chews through the balls. Some doggos do a great job of tearing them apart. So, a pet owner may want to budget a small amount, say $50 or $75 a year or so, to buy their pooch some toys.

4. Pet Sitters or Walkers

Taking a vacation with a pet? Then pet sitting isn’t an expense. But for many people who work outside the home or travel without Fido, it may be a good idea to consider a dog walker or pet sitter. This person can be a trusted friend or family member, a neighbor, a kid down the street, or a professional service.

Even if it’s a friend, a new pet owner may want to budget in some dollars to pay this person. Doggie daycare can run $40 or more per day (higher in certain areas, such as major cities), so it can be helpful for owners to know how many days each month they might need a dog sitter.

Also, if you are taking a vacation and aren’t traveling with your pet, know that a typical pet sitter will charge at least $30 a day to attend to your pup.

5. Incidentals

A lot of smaller expenses can come with owning a dog. Incidentals to budget for include things like, collars, leashes, dog beds, cleaning supplies, crates, pet bath products, and the all-important groomer. Many pet owners like buying their dogs clothes, which can add up as well. It can be wise to build in another cushion in a pet budget to cover the above-mentioned items, too.

Pet I.D. tags and registering a pet with the city are extra costs to bear in mind. (For reference, it can cost between $8.50 and $34 a year to obtain a dog license in New York City.)

💡 Quick Tip: An emergency fund or rainy day fund is an important financial safety net. Aim to have at least three to six months’ worth of basic living expenses saved in case you get a major unexpected bill or lose income.

6. Medical Visits

Dogs, like humans, need regular medical check-ups, so “How much will it cost?” is a wise question to ask when budgeting. Just like a human exam, dogs need blood drawn to check for diseases, routine vaccinations to prevent disease, and a general physical exam once a year to make sure their health is in working order.

The cost of health care for a dog can vary greatly depending on where the person and the pup live (and the age or breed of the dog). Recent estimates say routine visits can cost anywhere from $50 to $250, and overall vet costs can run from $700 to $1,500 or more per year.

Beyond vet visits, pet parents may also want to add in a budget for preventative medicine. Depending on where an owner lives, a veterinarian could recommend a monthly flea and tick medication, along with regular heartworm medication, to prevent the dog from becoming afflicted. Flea and tick meds can range from $40 to $200 a year while heartworm medication averages $5 to $15 a month, and treatment, if your pet is diagnosed, can cost $400 to $1,000.

7. Pet Insurance

While pet insurance won’t cover routine veterinary visits, it could come in handy if an emergency occurs with the pup.

For example, a new dog could eat something that causes it to get sick — like, ingesting pieces of a chew-toy or snatching food with bones in it off an owner’s plate (or street).

Many pet insurance plans will cover a portion of medicines, treatments (including surgeries), and medical interventions that aren’t tied to a pre-existing condition.

Paying monthly for pet insurance, while the dog is young, could save an owner hundreds or thousands of dollars as a dog continues to age as well. (Generally, pet insurance costs less when a dog is younger). This kind of policy typically costs between $38 and $56 per month.

Pet insurance may cover things like ingesting harmful items or food, accidents, urgent care, and — in some cases — preventative medicine. The cost of pet insurance can vary significantly by your pet’s breed, age, and any other health history.

8. Emergency Fund

It can be wise to save up an emergency fund for pet-related expenses. Things just tend to happen with dogs around. They can accidentally knock things over with their tails, swallow objects. and need an emergency vet visit. Dogs can do a lot of damage in a short amount of time (ahem, chewed up leather shoes).

But, guess what? Having some financial discipline can be worth it for a lick on the face, a little playtime, and coming home to a happy dog. Planning ahead for a pet budget can help new owners focus on those tail-wagging moments with Fido instead of stressing over canine costs.

The Takeaway

More than 44% of US households have dogs as pets, which shows how beloved they are. But before you get a pet, it’s important to know the costs involved (which can add up to thousands per year) and budget wisely. Saving in advance can make adopting and then caring for a dog easier. You might look for a high-yield checking and savings account to help your money grow for this purpose.

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.

FAQ

How much does it cost to buy a new dog?

Costs can vary tremendously. Adoption fees are often estimated at between $255 to $414, and buying a dog from a breeder can run into the thousands.

What is the monthly cost of owning a dog?

The costs of owning a dog can vary greatly, from $40 to $290 a month, depending on factors such as the dog’s breed, age, health, and your location.

Can pet insurance save me money?

Pet insurance can save you money, but it really depends on your particular pet, the policy, and your specific situation. If the premiums and out-of-pocket insurance costs exceed what you expect to spend on your pet’s care, it may not be a wise buy.

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