While a college education can help prepare students for life, taking advantage of the professional network college offers can help launch your career. Whether trying to land a summer internship, get that first job out of college, or apply to graduate school, a letter of recommendation from a professor can be helpful.
Although requesting this is common practice, it can still feel nerve wracking to broach the subject. Keep reading to learn helpful tips to receive a glowing letter of recommendation from a professor.
1. Asking a Professor Who Knows You and Your Work
There are several factors to consider when deciding who you’ll ask for a letter of recommendation. Taking stock of which professors actually know your interests and goals, not just your name, is something to consider right away.
A strong letter of recommendation can involve praising a student’s personal character and highlighting their goals and ambitions. For this reason, choosing a professor you’ve personally interacted with, whether through class discussions or during office hours, could be beneficial.
If you’ve taken several courses with a professor, they may be able to showcase how you’ve grown throughout your time in college.
Since a professor will also be attesting to your academic merit, it can be helpful to start by identifying who has seen samples of your strongest work throughout college. For example, a personal essay or in-person presentation that earned a strong grade might indicate that a professor valued your work.
2. Choosing a Professor Who Specializes in Your Field
Although a letter of recommendation is foremost about your own skills and attributes, also of benefit can be a professor’s own credentials within an industry or academic field you are targeting.
A letter of recommendation from an esteemed and notable professor could help you stand out in a competitive group of applicants.
Many professors have built up extensive networks from academic conferences and working with faculty at other universities and in the private sector.
Though they may not have contacts at the company, organization, or university you’re applying to, their advice and connections in a specific sector or academic discipline could prove valuable as you begin your job search. As academic professionals, they may have insight on the return on education for different graduate degrees and careers.
Often, jobs or graduate school applications require submitting more than one letter of recommendation. Choosing a combination of references who can highlight your strengths and character and carry respect in your desired field could further enhance your candidacy.
3. Asking in Person, if Possible
Given the importance of the request, asking in person can show that you’re serious about your future and respectful of a professor’s time.
For students currently enrolled in school, finding time to ask a professor for a letter of recommendation may be as simple as making an appointment during their office hours.
If you’re studying abroad or have already graduated, reaching out via email may be your only feasible option for starting the conversation. To further demonstrate your commitment, you might ask to arrange a phone or video call.
4. Making a Personalized and Specific Request
The average college has a student to faculty ratio of 14-to-1, so it’s not uncommon for professors to have several students ask for letters of recommendation each year. Still, that doesn’t mean every request is guaranteed a response or agreement to receive a recommendation.
Out of consideration for a professor’s busy schedule, making a request that’s tailored to them and clearly outlines what you need may increase your chances of success.
To personalize the request, consider reminding them which of their courses you took, a key project or assignment, and how they influenced your academic and career goals. Next, providing a concise explanation of the position or program you’re applying for and what it means to you is an opportunity to convey your own professionalism and passion.
Since writing a letter of recommendation is a favor, sending a courteous request that allows a professor to opt out could help avoid a lukewarm reference. A well-crafted request makes it easy for the professor to quickly decide if they have enough knowledge about you and the position to write a letter of recommendation.
5. Providing Information to Write the Recommendation
Even if you have a strong relationship with a professor, the quality of the recommendation can benefit from supplemental information. For instance, providing a resume, college transcripts, personal statement, and a sample of work can help jog their memory and give them a blueprint of your experience and accomplishments to draw from.
It can be helpful to include a job description or, for a graduate program, admissions information. This could help a professor connect your academic knowledge and experience to the job or program’s desired qualifications and skills.
This is also the time to provide information and guidance for submitting a letter of recommendation. Some typical considerations to include are where to send the letter, any relevant deadlines, and to whom it should be addressed.
6. Giving Plenty of Notice
Asking your professor several weeks, if not months, before the recommendation is due can convey respect and appreciation for their time and effort and help ensure submission deadlines are met. Also, it can give you time to regroup and consider other options if a professor or two declines.
7. Keeping Them Updated Though the Process
Professors typically have busy schedules, so probably won’t keep thinking about your job search or grad school application after the letter of recommendation has been written and sent. Letting them know when you have interviews and other updates can help them be prepared should they receive a call from an employer or admissions office.
8. Saying Thanks and Staying in Touch
Besides creating good karma, thanking a professor is another opportunity to foster a good relationship with them. They might become a mentor to you, especially if you’re pursuing a job or education in the same field.
You might apply to another job or a graduate program in the not-so-distant future and want to ask for another recommendation from the same professor.
Instead of starting from scratch each time you apply for a new job, you may want to periodically update academic and professional references along your career path and as your goals change.
Not only can this make for an easier request and stronger recommendation next time around, it may lead to more professional opportunities and meaningful relationships.
The Takeaway
Keeping up with former professors can be a pleasant way to reminisce about college years. Another not-so-pleasant reminder can be student loans.
Like many students, you may have taken out loans to pay for college and/or graduate school. Refinancing your student loans may be an option to help with repayment.
Keep in mind, however, refinancing federal student loans with a private loan means the borrower forfeits all federal loan benefits, such as income-driven repayment plans, loan forgiveness programs, access to deferment or forbearance, and other forms of federal student loan debt relief.
On the flip side, refinancing federal student loans might offer lower interest rates or a shorter term.
With SoFi, student loan refinancing could reduce the overall cost of your student loans and get you out of debt sooner when refinancing to a shorter term. Applying online is free and can be done in a matter of minutes.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.
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.
Gearing up for a Master of Business Administration program involves a lot of prep, especially when it comes to taking the GMAT™ — The Graduate Management Admission Test. It’s a standardized test that assesses potential business school students.
The GMAT was created by the Graduate Management Admission Council (GMAC) and is now the most widely used assessment for graduate management admissions.
It’s available in more than 100 countries and taken by more than 100,000 students annually.
The exam is important for prospective MBA students because it may carry a lot of weight in the application, with some experts estimating it accounts for up to 22% of admissions decisions.
Because of this, getting prepared for the GMAT is crucial to getting into an MBA program.
Important Facts About the GMAT
There are four sections in the GMAT: quantitative, verbal, integrated reasoning, and analytical writing. These sections are meant to test a student’s general knowledge — they’re not specific to business knowledge.
The total score a student can receive for this exam will fall somewhere between 200 and 800. This score is a combination of verbal and quantitative questions.
Students will also be given scores for each individual section. The section scores for the verbal and quantitative sections range from zero to 60.
The integrated reasoning score, which ranges from one to eight, requires students to analyze graphs and tables.
The analytical writing section is scored from zero to six and is based on how well students can analyze and write about an argument given in a provided text.
There is no set score that students must achieve to be accepted into a program, but students can figure out an estimate of how well they need to do by researching the average score accepted students got on their GMAT exam.
This can give prospective students a good idea of what score they should aim to receive to be considered for acceptance to a particular program.
Making a Study Plan
Making a GMAT study plan depends on when applications are due, which will differ by school.
It’s recommended that students take the exam at least three to four months before their application deadline. This will give students enough time to retake the test if necessary. It can be taken up to five times within twelve months, with a lifetime limit of eight times.
Once students know their application deadline, they can make a plan for when they want to take the exam. Exams are available year-round, and students can register to take it in person or online at mba.com.
Each student will have to determine how much preparation is right for them, but usually, it’s recommended to spend three to six months preparing for the GMAT.
According to GMAC, the makers of the exam, students who studied 60 hours or more scored 500 or higher.
Studying more isn’t a guarantee of a high score, but it seems to help a majority of students find success. With this information, students can create a study plan that suits them and their timeline best.
With 60 or more hours of preparation recommended, how can students best spend those hours?
Here are some tips on how to study for the GMAT that may help students make the best of their prep time.
Taking Practice Exams
Familiarity with the format of the test means there are few surprises. Students will be familiar with each section of the test, the order of the sections, and how the instructions are worded.
Studying the content is important, but so is knowing what to expect when test day comes.
The most effective way to use practice tests is to take one first and use it as a baseline so it’s easy to see where improvements need to be made and how much progress is being made after each consecutive practice test.
When taking practice tests, students should try to reproduce the test experience as closely as possible, in a similar environment and with the same time constraints that the real test has.
The time allowed depends on whether the test is taken in person or online. The online exam takes two hours and 45 minutes, whereas the in-person exam takes three hours and seven minutes because it includes the analytical writing assessment.
Taking practice exams is also a good way for students to learn how to pace themselves through each section of the test.
Strategies recommended are keeping a consistent pace throughout the entire exam, keeping in mind how many questions are in each section, and estimating how much time is allotted for each question.
• The quantitative section includes 37 questions over 75 minutes.
• The verbal section gives test takers 75 minutes for 41 questions.
• The 12 integrated reasoning questions average two minutes and 30 seconds each for the section’s time allotment of 30 minutes.
Students may choose to use official GMAT exam prep packages, which vary in cost (one is free).
Hundreds of quantitative and verbal questions, as well as integrated reasoning questions can be accessed through these official packages.
Students can also purchase unofficial GMAT practice tests if they need more resources.
Tutoring and Peer Study Groups
For students who want extra help preparing for the GMAT, getting a private tutor, taking a prep course, or finding a study group may be options to consider.
A benefit to these strategies is the addition of regular feedback and accountability, which can help students stick to their GMAT study plan.
For students with a tighter budget, finding a GMAT support group and free practice exams may be more affordable routes.
Staying Healthy
Performing well during a stressful examination can be made easier by maintaining good physical and mental health. It’s recommended that students get plenty of rest in the days before the exam, as well as keep up a healthy diet.
Both rest and nutrition can impact physical wellbeing. Going into the GMAT in good physical condition can help students reduce stress and build confidence.
During practice tests, students can practice stress management techniques, which may make it easier to use them during the official test.
Test-taking anxiety is a common phenomenon, and each student may want to learn which coping techniques work best for them.
What About Finances?
Students who are considering an MBA program may be shocked when they see the high cost of tuition. According to Education Data Initiative, the average cost of an MBA program is $71,880. However, this can range from $22,000 to well over $100,000 depending on the school.
Options for decreasing the cost of earning an MBA may be getting a master’s degree online or getting financial aid to help cover the cost.
Filling out the Free Application for Federal Student Aid (FAFSA®) as a graduate student means the aid is given based on the student’s income, not their parents’. This could help students receive more federal aid than they did as undergraduates.
After submitting the FAFSA, students will receive their Student Aid Report (SAR), which provides information about their federal student aid eligibility.
The schools to which a student has applied and been accepted will send a financial aid package offer letter, and the student can decide whether to accept or decline the offer.
Federal student financial aid can come in the form of work-study, grants, or loans. Grants usually don’t need to be repaid, but loans do. Graduate students are not eligible for subsidized student loans, only unsubsidized, so interest will start accruing as soon as the loan is disbursed.
Work a Part- or Full-time Job
Another option may be working while getting an MBA, with some employers helping to pay for tuition. There are more part-time and online MBA options than there used to be, making it easier for students to work while finishing school.
Apply for Scholarships
Students can also apply for scholarships through the school they are attending, as well as from private or professional organizations. Scholarships usually vary in their eligibility requirements, and it’s recommended that students seek out and apply for all they may be eligible for.
Use Private Student Loans
Another option for funding an MBA program may be private student loans. Private student loans do not come with the same benefits and protections that federal loans do, like income-driven repayments and student loan forgiveness. The interest rates and repayment options vary by lender, so students are encouraged to do their research carefully before considering this option.
The Takeaway
Students who already have student loans from their undergraduate education may want to consider refinancing their student loans, which could mean a lower interest rate or a repayment plan that works better for their particular financial situation.
The choice to refinance student loans depends on many factors, like whether those loans are federal or private and whether or not the new loan will be beneficial to the borrower. Figuring out how to prepare for and pay for graduate school can feel overwhelming, but help is available for both.
Keep in mind, though, that refinancing federal student loans means you’ll no longer be eligible for federal benefits, including income-driven repayment plans and student loan forgiveness. If you’re currently using or plan on using federal benefits, it’s not recommended to refinance your federal student loans.
If, however, refinancing makes sense for your financial situation, consider SoFi. With just one application, SoFi compares rates and lenders for you, all in a matter of minutes.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
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.
SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Senior year in college is often filled with mixed emotions — excitement for all the fun you’re going to have with your friends, eagerness to be done (a.k.a., senioritis), and anxiety about what you’re going to do after you graduate and what the future holds.
While leaving your college years behind can be bittersweet, it’s important to remember that the fun doesn’t stop after you return your cap and gown. By making the most of your senior year, you’ll have the perfect ending for these incredible four years and be ready to tackle life’s next chapter.
Below are key things to keep in mind as you focus on graduation, next steps in building a career, and finally living out your dreams.
Dotting I’s and Crossing T’s
Early in the fall, it’s a good idea to meet with your college counselor to make sure you have all of your ducks in a row in order to graduate. A lot can happen in three years — switching majors, adding minors, and studying abroad — so it can’t hurt to double-check that all of your requirements will be met by the end of the year.
Failing to earn all your required credits can mean delayed graduation, even adding on an extra semester. The finish line is close, but you’ll want to make sure that you stay on track. Also keep in mind that your last year in college is a last chance to take any out-of-the-box classes you’ve always wanted to take but never had time. You may finally have room in your schedule to add some fun electives.
If you’re planning to attend graduate school, you’ll also need to focus on finishing up any required testing and meeting application deadlines. Much like senior year of high school, you’ll begin an anxious time as you wait for acceptance letters to arrive.
Your senior year in high school was all about preparing for college. Your senior year in college is all about preparing for life after college, a.k.a the real world.
It’s no secret that college graduates flood the job market each June, so getting ahead of the pack can make your search a little easier. Applying for jobs as early as the fall can mean less competition and improve your chances of having a job lined up when you graduate.
Even if launching a full-blown job search during school isn’t possible, it’s a good idea to take some steps toward the professional world.
Consider stopping by the career center to see what resources it can provide. Part of your tuition goes to funding your college’s career services center, so why not get your money’s worth? Most career professionals are ready to help students prepare their resumes and perfect their cover letters, and they typically have job postings from companies looking to hire recent graduates.
Some career centers may offer mock interviews so students can hone those skills, or they may provide support when issues arise during a job search. Popping by between classes to see what services are offered will only take a few minutes.
In addition to your resume and cover letter, you’ll also want to start working on your LinkedIn profile and, if relevant, a portfolio of work samples. Having these resources in a good place during senior year can make it easy to start applying for jobs during school or right after graduation.
As a student, building a professional network may feel impossible, but you’re likely building one in school without realizing it. One easy way to get a head start on a job search, without doing too much work during a hectic final year of school, is to tap into that network, namely your advisors or mentors.
Professors can be great resources to have as you prepare for the unknown of post-grad life. They can provide insights into what positions are available in your field, what you should look for in an employer, and good questions to ask in an interview. You might also ask a professor to look over your resume.
You might also look for a professional mentor through your college’s alumni network or mentor programs and set up an informational interview. Finding a mentor senior year of college can not only help you find your first job, but it can also pay career dividends for years to come.
Whether you start applying for positions while you’re still in school or right after graduation, you may need to provide a list of at least three references. These can be people like internship managers, your thesis professor, your part-time job supervisor, and others who can speak to your skills and work ethic. Now is a good time to reach out and ask potential referees if they would be willing to serve as references.
You may also want to attend and engage in networking at career fairs, career workshops, and other informational events taking place on campus.
Preparing to navigate life after college can be overwhelming, especially when it comes to finances. No one wants to think about student loan payments, but it can be helpful to start making repayment plans before graduation day.
You can begin the planning process by simply looking up the current balance for each student loan you hold, including both federal and private student loans. Take note of when the lender expects payment. Some or all of your student loans could have a six-month grace period before you need to start repaying. This is ideal because it gives you time to get a job after graduation and make sense of your income before you have a new bill to pay.
Lenders typically provide repayment information during the grace period, including repayment options.
With federal student loans, your servicer will automatically place you on the Standard Repayment Plan (a 10-year fixed payment repayment plan). However, you can request a different repayment plan at any time. Typically, you can pick from repayment plans that base your monthly payment on your income or that give you a fixed monthly payment over a set repayment period.
An income-driven repayment plan may be a smart choice if you’re looking to lower your payment. However, these plans also extend the payoff timeline to 20 or 25 years. The Federal Student Aid website has a loan simulator tool that lets you compare all the available repayment options and helps you choose the best one for your specific situation.
For private student loan repayment, it can be best to speak directly with the loan originator about repayment options. Many private student loans require payments while the borrower is still in school, but some offer deferred repayment. After the grace period, you will need to begin making principal and interest payments. Some lenders offer repayment programs with budget flexibility.
Whether you or your parents chose to take out federal or private student loans (or both) to cover school costs, reviewing all possible payment plan options can help make the transition to repayment easier.
💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.
One Loan, One Monthly Payment
As you enter the repayment phase of your student loans, you might also consider refinancing or consolidating your student debt.
If you have federal student loans, you may qualify for a federal Direct Consolidation Loan after you graduate, leave school, or drop below half-time enrollment.
Consolidating multiple federal loans into one allows you to make just one loan payment each month. In some cases, the repayment schedule may be extended, resulting in lower payments. Keep in mind, though, that increasing the period of time to repay loans usually means making more payments and paying more total interest.
Refinancing, on the other hand, allows you to convert multiple loans — federal and/or private — into one new private loan with a new interest rate, repayment term, and monthly payment. Refinancing can potentially save you money, but generally only makes sense if you can qualify for a lower interest rate than you currently have. For example, refinancing might be a good solution for working graduates who have higher-interest federal loans, such as unsubsidized Direct Loans and Graduate PLUS loans, or who currently have a high-interest private student loan.
You’ll want to keep in mind, however, that refinancing federal student loans with a private lender means giving up federal protections, such as income-driven repayment plans, loan forgiveness for public service, and deferment options.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
About one out of four U.S. consumers report living paycheck to paycheck, with no money left at the end of the month to save or invest, according to a survey conducted in 2024.
With so many people barely paying their bills, you may wonder if living below your means — or spending less money than you make — is even possible. The answer is yes, with a sound budget, determination, and some smart strategies. Learn the details here.
Financial experts say the chances of living on less than you make increase if you haven’t yet bought a house or started a family, but don’t stop reading if you’re already in the thick of those responsibilities. Even with those commitments, you can still live below your means, gaining financial freedom with the right mindset and goals.
Key Points
• Living below your means you spend less money than you earn every month.
• You can live below your means with a sound budget, determination, and smart money-management strategies.
• Financial freedom can be achieved by living below your means, even with commitments like a house or family.
• Living below your means can allow you to save for emergencies and larger purchases, as well as have more financial freedom and confidence.
• Living below your means can also lead to less stress about money and the ability to build wealth.
What Does ‘Living Below Your Means’ Mean?
If you live below your means, you get by on less money than you earn every month. For example: If your household income is, say, $40,000, but you make ends meet by spending $5,000 less than that amount, you’re left with money to put in your savings account or invest for important goals.
In other words, you aren’t having to borrow money to pay your rent, nor are you building up high-interest credit card debt to cover your monthly spending.
How Much Money Qualifies as Living Below Your Means?
No set amount of money qualifies as living below your means vs. living beyond your means. No matter what your income, living below means is defined as spending less than you earn. If you earn $4,000 every month, but only spend $3,500, then you are living $500 below your means. This makes it possible to build wealth. If you spend $3,900 per month, then you are living $100 below your means.
Any little bit of a cash cushion in your checking account can qualify you as living below your means.
Benefits of Living Below Your Means
Living beneath your means can be a wise financial move — one that pays off in an array of ways. Here are a dozen good reasons to start living on less than you make so you can enjoy the benefits of financial independence.
1. Being Prepared for Emergencies
If you have wiggle room in your finances, you can start putting money into an emergency fund every month and build a safety cushion. This gives you peace of mind when unexpected expenses arise, such as a flat tire, broken washing machine, or a major dental bill.
Planning a family beach vacation or girls’ weekend away? Will you need a new laptop soon? If you live below your means (for example, driving your trusty old car rather than financing a new model), you will have more breathing room in your budget to save for key expenses. Ordering takeout for your family’s dinner every two weeks vs. every week could add up to $100 or more in monthly savings, which could be better used elsewhere.
3. More Financial Freedom and Confidence
A major benefit of living below your means is gaining financial freedom. When you aren’t living paycheck to paycheck, you won’t feel that money stress. You won’t watch your credit card debt continue to climb upwards. You may, however, see your savings grow.
Living beneath your means can help you be a responsible spender and saver. Achieving this financial discipline will give you a feeling of control and confidence, and it can also open the door to more possibilities.
4. Having a Healthier Lifestyle
Living below your means typically gives you the room to be more mindful about both your spending and your lifestyle. When you watch your pennies, you’re more likely to make meals at home, which can be healthier and have more reasonable portion sizes than, say, a stuffed pizza or bucket of fried chicken delivered to your door.
You may also avoid high-priced gas or Ubers and walk or bike more, which is better for you and the planet.
5. Less Stress and Worry About Money
A recent survey found that 73% of Americans said their number-one worry was, not too surprisingly, money. When you are living below your means, you may well eliminate some of this stress. Having some room in your budget means you don’t have to break out your plastic to buy groceries or see your checking account balance head towards negative territory. Phew!
6. Spending Less Money on Consumerism and Materialism
When you are focused on living beneath your means, you may recognize that constant consumerism is bad for the planet and your pocketbook. More and more of us are embracing the minimalist way of life, bypassing new jeans in favor of thrift-shop pairs. Same goes for cookware, furniture, and books.
Reduce, reuse, recycle is a mantra that’s been gaining ground. Too often, our need for new goods is short and they end up in a landfill, where they never die. Buying used can help prevent this while padding out your savings.
7. Having Funds for a Rainy Day…or a Sunny One
Maybe your favorite armchair’s upholstery rips. Wouldn’t it be nice to have funds available to fix it without feeling money anxiety? Or perhaps the kids would love an overnight stay at a lodge with a water park. If you have been living below your means and setting aside some cash, this may be your moment to forge ahead.
That’s where your rainy day fund or splurge savings come in. Neither of these situations are good uses of an emergency fund, but they can be worthwhile expenses drawn upon other cash cushions.
When you live below your means, you have a surplus of cash that you can invest to build wealth. One smart move: If your employer has a 401(k) program, sign up. Money will be swept from your paycheck (before you even see it) into a retirement investment account. This is an example of paying yourself first and is also one of the best ways to build future wealth.
Another idea: If you get a raise (nice work!), invest it rather than amping up your spending to account for the extra money, which is called lifestyle creep. Also, if you are not living paycheck to paycheck, when you get a windfall (say, a tax refund), you can also invest that, rather than using it to buy necessities.
10. Developing a Stronger Money Mindset
How do you think about money: with shame, because of debt burdens? Or with pride and contentment, knowing you have cleared the deck and are even socking away some money by living below your means? The more you take control of your finances and improve your money mindset, the better your outlook on life is likely to be.
11. Having Financial Security
When you live below your means, you know you can handle bills without worry and dread over late notices, collection agency phone calls, fees, and service interruptions. Living on a leaner budget also means you can save extra dough for unexpected expenses that pop up. These might include, for example, new clothes for your college roommate’s wedding or fees for a professional class you really want to take.
By living below your means, you are likely taking a giant step or two toward achieving financial security and not feeling on the brink of money trouble.
12. Being Able to Invest Your Money
This is empowering. When you have some extra cash, contact a financial advisor (ask friends and relatives for a referral or see if your bank has one on the team) and consider investing in the stock market, which can be both fun and financially wise.
Historically, the market returns approximately 10% per year, which can boost your long-term savings, such as your retirement fund. Some risk is involved, though.
If you are risk-averse, you might prefer to put some funds into a high-yield savings account that’s insured by the Federal Deposit Insurance Corporation (FDIC). Your money will grow, thanks to the power of compound interest.
Tips for Living Below Your Means
If you’re convinced of the value of living beneath your means, the next step can be to take action to do so. Here are some strategies to make that happen.
Tracking All of Your Spending
Recording where your money goes is the first step to living below your means. For one month, track every dollar that leaves your wallet, from a tip at the coffee place to a gift for your sister. Not just rent and gas, but also pharmacy co-pays, the juice you got on your way to work, and parking meter charges. Look into a free budgeting app to help you stay on task; many financial institutions (such as online banks) provide these for their clients, or there are plenty of third-party options available online.
Budgeting
Once you know what you spend in a given month (including debt payments), compare this to your take-home income. Re-evaluate what you truly need and what can be eliminated in your quest to live below your means.
Some expenses are fixed, like a monthly mortgage or commuter fare. But others are more variable. Take a close look at grocery bills, streaming services, dining out, and shopping. Consider a town library card vs. buying books; making your own iced tea vs. spending $4 to have the barista pour one; and perhaps give up your gym membership in exchange for free online-taught workouts or jogging in a local park.
Take time to consider your lifestyle and goals; you can do this solo or with a financial planner. Things to consider are your short-, medium-, and long-term aspirations (from funding a wedding to building a robust retirement fund), boosting an emergency savings fund, having an investment portfolio, and possibly an estate plan.
When you trim expenses and live below your means, you can sock money away to achieve all this and more.
Downsizing
Could you consider downsizing? Moving to a smaller space or more affordable city, trading in your gas guzzler for a greener car? These moves can reduce the cost of your monthly needs and deliver the wiggle room in your budget you seek.
You might also consider selling things you no longer want or need, whether that’s gently worn clothing, furniture sitting in your basement, or an iPad you haven’t touched in months. Depending on the item, you might be able to sell it on eBay, Etsy, Facebook Marketplace, Poshmark, or ThredUP, among others.
Eliminating Unnecessary Expenses
Get serious about axing unnecessary expenses. In addition to ditching a cappuccino-a-day habit, scroll through your monthly credit card statement and cancel any excess services. You may have forgotten how many streaming services you signed up for during the early days of the pandemic, or perhaps you are paying for a fax or postage service you almost never use, or a meal-kit plan that keeps raising its prices. Keep what you cannot part with, and trim the extras to bring your spending in line. It’s a key aspect of living within your means.
Having Multiple Streams of Income
While cutting costs is one way to help live beneath your means, another tactic is to increase your income. More money coming in, minus your current spending, should yield some spare cash. Perhaps you could take in a roommate for a while, or start a part-time gig (whether dog-walking or website design) in your free time. One of the benefits of a side hustle in bringing in extra funds.
Organizing Bills and Monthly Expenses
Above all, when learning to live below your means, stay organized at tracking money in and money out. As noted above, use an online finance tool (easy to find from your bank, in the app store, or online). This can help you always know where you stand financially as unexpected expenses and bills pop up.
Improving Your Money Mindset
Take stock of, and pride in, what you do day by day to live below your means. Recognize your progress, no matter how minor. Every dollar you don’t spend is helping you live below your means.
Hopefully, you can bid farewell to money shame (which can lead to overspending and still more money shame), FOMO spending, and splurge-related regrets. You will be more aware of where your money goes and hopefully on a path to building wealth.
The Takeaway
Living below your means, or spending less than you earn, is possible with the right budgeting steps and a healthy money mindset. Following a trimmer budget on your existing income can help you put away funds for important milestones, such as the down payment for your first house. It can also help you get past living paycheck to paycheck and accumulating credit card debt.
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 considered living above your means?
Living above or beyond your means is defined as spending more money than you earn. Three signs of this pattern: Running out of money and having to use credit cards to get through the month; not having an emergency fund; and not having money in savings.
Why is it important to live below your means?
Living below your means is important for your mind and your finances. Instead of overspending, you’ll be able to set money aside for tangible goals, from a savings cushion to a college fund. When you conserve money rather than blowing it, you can reap the reward of watching it grow, building your wealth, and reducing your financial stress.
Does living below your means deprive you of fun?
Living below your means does not deprive you of fun. You can save for and budget for splurges like vacations and dining out; the important part is making that intentional and not going into debt. You’ll also find plenty to see and do for free or at a low cost, from bike rides to free town concerts.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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.
College is a transformative phase of life filled with opportunities, challenges, and self-discovery. But between classes, social activities, and newfound independence, college can also be an overwhelming experience. There are numerous opportunities to better yourself, but where do you start?
To get the most out of your time in school, it can be helpful to set and achieve some specific goals. These goals can serve as guideposts, providing direction, motivation, and a sense of purpose during your college years. And, your goals don’t have to be all centered around academics — they can encompass personal development, financial stability, and preparing for the professional world.
Read to learn about the importance of setting goals in college, types of goals to consider, and how to set yourself up for success with S.M.A.R.T. goals.
Good Goals to Complete in College
Setting goals in college can help you identify what you want to achieve academically, personally, and financially, providing a roadmap to follow. Whether you’re just starting school or have a few semesters under your belt, here are some goals you might consider.
Academic Goals to Achieve
Earning a good GPA: At the top of many students’ minds is getting top grades. There are plenty of positives to achieving a high GPA, including more potential for scholarships or landing on the dean’s list. It might be a great resume-builder, too. You could aim for a certain GPA, or work on improving your number from last semester.
Increasing professor facetime: Along with earning good grades, actually making an effort to get to know your professors could go a long way. Using your instructors’ office hours to clarify confusing topics might help you understand class concepts better. And who knows, their references might lead you to a really cool internship down the road.
Completing challenging courses: Rather than choosing the path of least resistance, you might aim to conquer challenging courses that align with your academic interests and career aspirations.
Paying for college: There are all kinds of ways to cover the cost of college, including scholarships, grants, work-study, federal student loans, and private student loans. You’ll want to find the best combination, plus look for ways to save money in college.
Setting up a budget: Establishing a budget might seem pointless when you have little money to work with, but learning how to set up and stick with a simple spending plan can serve you well during your lean college years — and beyond.
Finding an internship: A key objective in college is to get a degree so you can get a great job in your chosen field. One great way to set yourself up for a job that pays well after you graduate is to land an internship related to your major.
💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.
Personal Goals to Set in College
Signing up for extracurricular activities: College can be a great time to discover new interests. Curious to learn Japanese? There might be a club for that. Want to blow off some steam on a basketball court? There could be an intramural team for that. You could check with your college’s campus life department to see what’s available.
Improving communication skills: Consider engaging in activities that help develop communication skills, such as public speaking or writing for publications. No matter what your major, these are skills that can take you far in your career and life.
Exploring a new country: Whether you choose to spend a semester in Rome or Rio de Janeiro, studying abroad in college can do more than give you a change of scenery. It can provide the opportunity to expand your cultural views and learn more about people across the world.
Should You Set More Than One Goal in College?
It’s not only okay, but recommended to set more than one goal in college. Pursuing diverse goals allows for a well-rounded college experience and personal development. However, it’s crucial to strike a balance between ambition and feasibility. Setting too many goals simultaneously might become overwhelming and lead to decreased effectiveness in achieving any one of them.
The key to setting — and achieving — multiple goals in college is to:
• Prioritize It’s important to identify the most crucial goals and allocate more time and resources to them.
• Break goals into manageable tasks You’ll want to divide larger goals into smaller, actionable steps to avoid feeling overwhelmed.
• Manage your time Try to manage your time efficiently by creating schedules and allocating specific time blocks for each goal.
What Is a SMART Goal?
S.M.A.R.T. is an acronym that provides a framework for creating well-defined goals. This acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Here’s a breakdown of each component:
• Specific Goals should be clear and precise, answering the questions of what, why, and how. Specific goals provide a clear focus, avoiding ambiguity.
• Measurable Goals should have quantifiable criteria for tracking progress and determining when they’ve been achieved. This helps in monitoring advancement and staying motivated.
• Achievable Goals should be realistic and attainable within your capabilities and resources. They should challenge you but remain within the realm of possibility.
• Relevant Goals should align with your values, aspirations, and long-term objectives. Ensure that pursuing a goal contributes meaningfully to your overall vision.
• Time-bound Goals should have a deadline or a timeframe for completion. Setting a timeframe creates urgency and helps in planning and prioritization.
SMART Goal Example for Students
If you really want to get down to business on your goals in college, you could use the S.M.A.R.T criteria to start building them out. For example, what if you’re a commuter student who wants to be more involved on campus? The goal of “being more involved” by itself would not fit the S.M.A.R.T. criteria—it’s too vague.
To be more specific, you could re-word your goal by stating, “I want to join two campus organizations this semester and be on the leadership team for one of them.” In this way, you have specifically called out your goal.
It’s also measurable because the goal requires joining two organizations and serving on the leadership team for one. The goal is attainable because you have access to campus organizations. And, it’s relevant to your college experience.
Then you could break down your S.M.A.R.T. goal into mini-milestones. Going along with this example, you might make a goal to check out the activities fair during school. You could also research campus organizations online and narrow your list down to the two you want to become involved with the most.
Another S.M.A.R.T. goal example for students could be paying for college. Breaking it down using the S.M.A.R.T. criteria, for example, could look something like this:
Specific: I need to come up with $10,000 for college tuition by next year. Measurable: I can measure this by figuring out how much money I have and how much I need. Attainable: I can achieve this because there are a variety of resources I can use to help me pay for college. Relevant: The total amount needed is the same cost as one year of tuition at my school. This will help me continue going to school to get my degree. Time-bound: This needs to be completed in 12 months so I can deliver the funds to the financial aid office.
💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.
The Takeaway
Setting goals in college can be pivotal for personal, academic, and financial development and success. By adopting the S.M.A.R.T. goal framework, you can effectively plan and pursue objectives that lead to a fulfilling college experience and pave the way for a successful future beyond your college years.
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.
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.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
