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Q: How Does the Fear and Greed Index Fare Against History?

As mentioned, the Index does appear tocapture investor sentimentwith some degree of accuracy. The past few years — which have been rife with uncertainty due to the pandemic — have shown pockets of fear.

Q: Is the Fear and Greed Index a good indicator?

It can be a 'good' indicator in the sense that it can be helpful when used in conjunction with other indicators to make investing decisions. That said, it shouldn't be the only indicator investors use, and isn't necessarily going to be accurate in helping determine what the market will do next.

Feb

2025

How to Use the Fear and Greed Index To Your Advantage

Guide to the Fear and Greed Index

By Inyoung Hwang | Growing Wealth, invest, Investing | Comments Off

The Fear and Greed Index is a tool developed by CNN (yes, the news network) to help gauge what factors are driving the stock market at a given time.

If you’ve ever taken a look at how the market is doing on a given day and wondered just what the heck is going on, the Fear and Greed Index may be helpful in deciphering the overall mood of the markets, and what’s behind it.

Key Points

• The Fear and Greed Index, developed by CNN, measures market emotions.

• The scale of the index ranges from 0 to 100, with 50 indicating neutral sentiment.

• Seven stock indicators are used to gauge market sentiment.

• The purpose is to help investors make informed decisions, and to try to avoid overvaluations or undervaluations.

• Investors should consider economic growth, company performance, and other sentiment indicators.

What Is the Fear and Greed Index?

CNN’s Fear and Greed Index attempts to track the overriding emotions driving the stock market at any given time — a dynamic that typically toggles between fear and greed.

The Index is based on the premise that fear and greed are the two primary emotional states that influence investment behavior, with investors selling shares of stocks when they’re scared (fear), or buying them when they sense the potential for profit (greed).

CNN explains the Index as a tool to measure market movements and determine whether stocks are priced fairly or accurately, with the logic that fear drives prices down, and greed drives them up, or is used as a signal of when to sell stocks.

There are specific technical indicators used to calculate the Fear and Greed Index (FGI), and strategies that investors can use to inform their investment decisions based on the Index.

Understanding the Fear and Greed Index

The Fear and Greed Index uses a scale of 0 to 100. The higher the reading, the greedier investors are, with 50 signaling that investors are neutral. In other words, 100 signifies maximum greediness, and 0 signifies maximum fear.

To give some historical context, on Sept. 17, 2008, during the height of the financial crisis, the Fear and Greed Index logged a low of 12. On March 12, 2020, as the pandemic recession set in, the FGI hit a low of 2 that year.

Seven different types of stock indicators are used to calculate the Fear and Greed Index.

CNN tracks how much each indicator has veered from its average versus how much it normally veers. Then each indicator is given equal weighting when it comes to the final reading. Here are the seven inputs.

1. Market Momentum: The S&P 500 versus its 125-day moving average. Looking at this equity benchmark relative to its own history can measure how the index’s 500 companies are being valued.

2. Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange, the largest of the world’s many stock exchanges. Share prices of public companies can signal whether they’re getting overvalued or undervalued.

3. Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining. Market breadth can be used to gauge how widespread bullish or bearish sentiment is.

4. Put and Call Options: The ratio of bullish call options trades versus bearish put options trades. Options give investors the right but not the obligation to buy or sell an asset. Therefore, more trades of calls over puts could indicate investors are feeling optimistic about snapping up shares in the future.

5. Junk Bond Demand: The spread between yields on investment-grade bonds and junk bonds or high-yield bonds. Bond prices move in the opposite direction of yields. So when yields of higher-quality investment-grade bonds are climbing relative to yields on junkier debt, investors are seeking riskier assets.

6. Market Volatility: The Cboe Volatility Index, also known as VIX, is designed to track investor expectations for volatility 30 days out. Rising expectations for stock market turbulence could be an indicator of fear.

7. Safe Haven Demand: The difference in returns from stocks versus Treasuries. How much investors are favoring riskier markets like equities versus relatively safe investments or assets, like U.S. government bonds, can indicate sentiment.

The Fear and Greed Index page on the CNN website breaks down how each indicator is faring at any given time. For instance, whether each measure is showing Extreme Fear, Fear, Neutral, Greed, or Extreme Greed among investors.

“Stock Price Strength” might be showing Extreme Greed even as “Safe Haven Demand” is signaling Extreme Fear.

Tracking the Fear and Greed Index Over Time

The Fear and Greed Index is updated often. CNN says that each component, and the overall Index, are recalculated as soon as new data becomes available and can be implemented.

Looking back over the past several years, the Index has tracked market sentiment with at least some degree of accuracy. For example, prior to the COVID-19 pandemic, the market was seeing a bull run and hitting record levels — the Index, in late 2017, was nearing 100, a signifier that the market was driven by greed at that time.

Conversely, the Index dipped into “fear” territory (below 20) during the fall of 2016, when uncertainty was on the rise due to the U.S. presidential election at that time. Note, too, that midterm elections can also affect market performance.

How Does the Fear and Greed Index Fare Against History?

As mentioned, the Index does appear to capture investor sentiment with some degree of accuracy. The past few years — which have been rife with uncertainty due to the pandemic — have shown pockets of fear. For example, the Index showed “extreme fear” among investors in early 2020. That was right when the pandemic hit U.S. shores, and absolutely devastated the markets.

However, over the course of 2020, and near the end of the year, the Index was scoring at around 90, as the Federal Reserve stepped in and large-scale stimulus programs were implemented to prop up the economy.

Interestingly, the Index then dipped down into the “fear” realm in late 2020, likely due to uncertainty surrounding the outcome of the U.S. presidential election. It likewise saw a fast swing toward “greed” in the subsequent aftermath. Similar dynamics were seen in 2024.

Again, these largely mirror what was happening in the markets at large, and economic sentiment.

How Does the Fear and Greed Index Fare Against Other Indicators?

While the Fear and Greed Index does fold several indicators into its overall calculations, it is more of an emotional barometer than anything. While many financial professionals would likely urge investors to set their emotions aside when making investing decisions, it isn’t always easy — and as such, investors can be unpredictable.

That unpredictability can have an effect on the markets as investors may panic and engage in sell-offs, or conversely start buying stocks and other investments. Ultimately, it’s really hard to predict what people and institutions are going to do, barring some obvious motivating factor.

With that in mind, there are other market sentiment indicators out there, including the American Association of Individual Investors (AAII) Sentiment Survey, the Commitment of Traders report published by the CFTC (one of several agencies governing financial institutions), and even the U.S. Dollar Index (DXY), which can be used to measure safe haven demand. They’re all a bit different, but attempt to capture more or less the same thing, often with similar results.

For instance, while the Fear and Greed Index showed a state of fear in mid-March, the AAII Sentiment Survey likewise showed a majority of investors with a “bearish” sentiment as well during the same time frame.

And, of course, there are a number of other economic indicators that you can use to inform your investing decisions, such as GDP readings, unemployment figures, etc.

Dos and Don’ts of Using the Fear and Greed Index

Why is the Fear and Greed Index useful? The same reason that any sort of measurement or gauge has value. In this case, measuring sentiment can help you determine which move you want to make next as an investor, and help you ride investing trends to potentially bigger returns.

Are you being too greedy? Too fearful? Is now the time to think about herd mentality?

Also generally, some investors often try to be contrarian, so when markets appear frothy and the rest of the herd appears to be overvaluing assets, investors try to sell, and vice versa.

Dos

Use the Index to realize that investing can be emotional, but it shouldn’t be.

You can also use it to determine when to enter the market. Let’s say, for instance, you’ve been monitoring a stock that becomes further undervalued as investor fear rises, that could be a good time to buy the stock.

Don’ts

Don’t only rely on the Fear and Greed Index or other investor sentiment measures as the sole factor in making investment decisions. Fundamentals — like how much the economy is growing, or how quickly companies in your portfolio are growing revenue and earnings (which will be apparent during earnings season) — are important.

For instance, the FGI may be signaling extreme greed at some point, with all seven metrics indicating a rising market. However, this extreme bullishness may be warranted if the economy is firing on all cylinders, allowing companies to hire and consumers to buy up goods.

Recommended: Using Fundamental Analysis on Stocks

What Is the Crypto Fear and Greed Index?

While CNN publishes and maintains the traditional Fear and Greed Index, there are other websites that publish a similar index for the cryptocurrency markets.

The Crypto Fear and Greed Index operates in much the same way as CNN’s Index, but instead, focuses on sentiment within the crypto markets. The Crypto Fear and Greed Index is published and maintained by Alternative.me.

The Takeaway

The Fear and Greed Index is one of many gauges that tracks investor sentiment, and CNN’s Index focuses on seven specific indicators to measure whether the market is feeling “greedy” or “fearful.” While it’s only one indicator, in recent years, it has served as a somewhat accurate barometer of the markets, particularly regarding major events like elections and the pandemic.

But, as with anything, investors shouldn’t rely solely on the Fear and Greed Index to make decisions, though it can be used as one of many tools at their disposal. As always, it’s best to check with a financial professional if you have questions.

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FAQ

Is the Fear and Greed Index a good indicator?

It can be a “good” indicator in the sense that it can be helpful when used in conjunction with other indicators to make investing decisions. That said, it shouldn’t be the only indicator investors use, and isn’t necessarily going to be accurate in helping determine what the market will do next.

Where can you find the Fear and Greed Index?

The Fear and Greed Index is published and maintained by CNN, and can be found on CNN’s website.

When does it make sense to buy, based on the Fear and Greed Index?

While you shouldn’t make investing decisions solely based on the Fear and Greed Index’s readings, generally speaking, the market is bullish when the Index produces a higher number (greed), and is bearish when numbers are lower (fear).

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For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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

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Feb

2025

25 Ways to Cut Costs on a Road Trip

By Diana Kelly Levey | Budgeting & Goals, Financial Independence, money | Comments Off

Road trips are a popular vacation idea, and there are plenty of ways to cut costs when taking to the open road. Whether you are heading to a national park or a local lake, on a wine-tasting getaway or just to hang with your college roommate, you can do a little bit of planning to bring down costs.

Learn how to minimize expenses on a road trip here.

Key Points

• Road trips can be a fun and affordable way to take a vacation.

• Choose a fuel-efficient car to save on gas.

• Drive at or below the speed limit to avoid speeding tickets.

• Prebook hotels for better rates, and sign up for loyalty programs for discounts.

• Eat lunch at special restaurants to save.

1. Choose a Fuel-Efficient Car

If you have a choice of cars to take, you may want to go with one that is large enough to be comfortable but also gives you the best gas mileage. This is true whether you are using your own wheels or renting a car.

You can use FuelEconomy.gov’s Trip Calculator to determine which car will cost you the least in gas. This tool helps estimate fuel consumption and how much it will cost for a particular route using a specific car.

2. Drive at or Below the Speed Limit

This cautionary measure can help you save money in two ways. For one, you’ll be less likely to get pulled over and slapped with an expensive speeding ticket.

For another, observing the speed limit can actually reduce your gas consumption. In fact, according to the U.S. Department of Energy, every five miles you drive above 50 miles per hour is akin to paying an additional $0.27 per gallon.

3. Pack Your Car Wisely

You can also cut your gas costs by placing items inside the car or trunk rather than piling them on your roof. By reducing drag, this tactic can increase your fuel economy by 5% on highways according to one benchmark study.

4. Set a Road Trip Budget

When you first start talking about the road trip, you may want to roughly map out where you want to go, how long it’ll take to get there, and if you’ll need hotels or motels. From there, you can calculate the approximate cost of gas (FuelEconomy.gov can help) and tolls (try Tollsmart ), as well as food and fun.

Once you’ve established an overall budget for the trip, you start creating a travel fund.

Tip:

A smart place to keep your fund is in a high-yield savings account, often found at online banks. These can help grow your money faster, thanks to favorable interest rates and no or low fees.

5. Bring Your Own Food and Supplies

Packing a cooler with water bottles, drinks, hand-held snacks, and sandwiches before leaving home is a proven frugal traveler trick. You can end up saving a sizable chunk of cash by not having to buy drinks and snacks at rest stops, vending machines, and drive-throughs.

You’ll also have a quick solution the next time someone in the car wants to pull over because they’re hungry.

6. Sign up for an Electronic Toll Account

The money-saving shift to electronic tolling is well underway. If you haven’t yet done so, getting a quick pass (or transponder) for your car can be a smart move. In New York, for example, drivers with EZ-Pass can save up to 75% on tolls.

7. Avoid Tolls Altogether

When your road trip isn’t on any set schedule, you may want to take the scenic route and completely avoid tolls. You can do this by setting your GPS app to “avoid tolls.”

If you’re in a location with pricey bridges and highways, your savings could really add up. You may want to make sure, however, that avoiding tolls doesn’t take you so far out of your way that you’re spending a lot more on gas.

8. Look for Hotels that Offer Free Breakfasts

If you’re comparing lodging options in a similar price and quality range, one way to save on hotel costs and on road trip expenses in general is to choose the hotel with a free breakfast.

Not only will you probably get a large, filling meal, but you might even be able to take a piece of fruit or cereal box as a snack for later on in the trip.

9. Pack Reusable Water Bottles for Everyone

You’ll no doubt get thirsty while driving and sightseeing, especially in summer, and buying water or drinks can put a major dent in your road trip budget.

Making sure everyone in the car has a large reusable water bottle (or two) to fill up at rest stops and in restaurants can help you avoid spending money on drinks, and also create less plastic waste.

10. Buy a National Park Pass

If you’re going to be road-tripping across the U.S. and visiting a few national parks, you may want to consider getting an America the Beautiful pass.

The pass (which costs $80 per year and $20 for seniors) covers entrance, standard amenity, and day use fees for a driver and all passengers in a personal vehicle (up to 4 adults) at more than 2,000 federal recreation sites.

Just remember that summer is primetime for many parks, from Yosemite in California to Acadia in Maine. If you need lodging, book early.

Recommended: How to Make Money Fast

11. Hit the Grocery Store

Once you’ve run out of your cooler meals and snacks, consider restocking at a local grocery store while en route so you don’t have to resort to fast food or a pricey local restaurant for the rest of your trip. That can be a good way to save on food costs.

This is also a good strategy if you’re going to be staying at a hotel for a few nights. Making good use of a hotel kitchenette and fridge can help you avoid having to eat out for every single meal.

12. Prebook Your Hotels

Spontaneity is great, but if you’re looking to save money on accommodations, it can be wiser to book ahead of time and stick to your plan. You can often secure a better rate by booking in advance (and online), than by showing up without a reservation or booking last minute.

13. Look Beyond Hotels

Your first thought when looking for roadside accommodation may be cheap hotels or motels. But you sometimes find a better deal (or a nicer option for the same price) using a home rental site, such as Airbnb, VRBO, or FlipKey, especially if you’re staying for more than one night.

When booking lodging, it can be smart to use a travel credit card or a cash back rewards credit card, since every swipe can help you earn points, miles, or cash back that you might apply to future trips.

14. Plan to Visit Free Attractions

Part of the fun of a road trip is to enjoy the journey and scenery while en route to your final destination.

To cut spending while still enjoying your travels, you may want to research free attractions, such as a hike, walk on a beach, or a free museum, on your route for times when you need to stretch and take a driving break.

You can also look for festivals and local events by checking out the online events calendar for the towns you’ll be visiting that day. You might also check out Meetup.com and see what kinds of local groups are gathering for experiences and outings.

15. Plan Gas Stops in Advance

Getting stuck in a big city with the tank close to empty can be costly (and driving in circles looking for a gas station when you’re en route to the beach is no fun either). To avoid overpriced gas, you may want to use a gas app like Gas Guru or GasBuddy, which can help you compare prices and find affordable gas no matter where you are. This hack is an easy way to lower your gas costs.

16. Set a Daily Spending Limit

You can use your overall budget to get a rough idea of how much you can spend on the road trip each day. This can help you avoid blowing the money you’ve saved, wherever you may keep your travel fund, before the end of the trip.

A spending plan can also let you know when you can splurge a bit and when you’ll have to reign it in with a meal, activity, or lodging. You may also want to set aside some of your budget for the unexpected, such as the car getting a flat and needing to be towed, or discovering the cheap hotel you planned to stay in is actually a total dump. Also factor in some summer road-trip treats: You’re likely to be stopping for ice cream here and there and maybe even a lobster roll.

17. Entertain the Kids on the Cheap

Road trips can help you afford a family vacation since you sidestep pricey plane tickets. But remember that kids have a tendency to get bored, tired, and antsy on a road trip. To avoid giving in to impulse toy purchases, you may want to bring along their favorite toys and also pick up a variety of new ones at the dollar store before you leave.

Good choices include coloring books and games they can play in the car that won’t create a mess. You might also consider borrowing audio books from the library to give yourself an hour or so of peace and quiet.

18. Search Online for Local Coupons and Passes

It can be worthwhile to research online coupons and discount codes for local attractions and restaurants at some of your scheduled stops.

Consider checking Groupon or LivingSocial for deals and steals. Sometimes booking online ahead of time saves you money, and it’ll give you a reason to try to reach a specific destination by a certain day.

19. Save on Alcohol

Sipping a cold beer or glass of wine at a local bar at the end of your long drive might sound like the perfect way to unwind.

But alcohol costs can quickly add up on a road trip vacation. Consider buying a few local beers or a small bottle of wine that’s native to that area to enjoy in your hotel room. You’ll save money on tipping too.

20. Volunteer at a Festival

Yes, you read that correctly. Some festivals and special events offer discounts or free admission to volunteers. You can look up events taking place in the town you’ll be visiting and reach out to the event organizer to see if they need help. Summer is full of events like these, from concerts to craft fairs to food festivals.

21. Sign up for a AAA Membership

An auto club like AAA can save you time, money, and hassle should you run into car trouble during your trip. What’s more, a membership (often starting at around $6 a month) gives you access to discounts at loads of hotels, restaurants, and many retailers nationwide.

22. Travel During the Off-Season

Yes, summer can be the most welcoming time of the year to hop behind the wheel. But visiting national parks when kids are back in school can often help save money on lodging and activities. Planning a road trip to a destination like Disney World or Disneyland? You’ll likely find better deals if it’s not during a spring break or other school vacation.

You can often also save money by visiting warm weather locations during “shoulder seasons.” This is the period in between a destination’s low and high seasons of tourism, when prices for hotels tend to be lower, and crowds tend to be smaller, at popular attractions.

23. Do Some Camping

Outdoorsy road trippers might enjoy setting up a tent at a free or low-cost public campsite. You can find out more on the Bureau of Land Management site.

This can end up saving you a lot of money on hotel costs, provided you don’t go out and buy a lot of expensive camping equipment.

If you don’t have any camping gear, you may want to consider renting equipment from an outdoor specialty store or asking a friend who regularly goes camping if you can borrow their equipment. As noted above, summer can be prime time for basking in some of America’s natural beauty, so book your campsite early.

24. Eat Out for Lunch Instead of Dinner

If there are special restaurants you want to try without breaking the bank, consider going there for lunch. You might get a slightly smaller portion than you would if you ordered it off the dinner menu, but you’ll likely save on dining out.

25. Take Advantage of Loyalty Programs

Booking with the same hotel chain as often as possible and signing up for their member loyalty (or “points”) program may net you a free night after a few stays.

Travel booking services, such as Expedia, Travelocity, or Hotels.com, may also offer discounted rates and free nights for loyal customers.

Recommended: 50/30/20 Budget Calculator

The Takeaway

Planning a summer vacation? A car trip might sound much more affordable than traveling by plane. However, gas, food, and accommodations can add up.
One of the best ways to cut road trip expenses is to plan out your trip and research deals, coupons, and discounts ahead of time. Packing wisely and loading up on drinks, snacks, toys, and activities can also help cut costs once you’re out on the road. It’s part of optimizing your financial wellness.

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FAQ

How can I make road trips more affordable?

Some ways to make road trips more affordable include bringing your own snacks, driving at or under the speed limit, and booking hotels or motels ahead of time.

How can I save money when traveling by car?

You can save money when traveling by car by using a gas card and taking other steps that can help you save on tolls; using electronic tolling or avoiding tolls; and bringing snacks and drinks with you vs. buying them on the road.

How can I spend time when on a road trip?

Ways to spend time on a road trip include going to local and national parks, looking for activities at a discount on Groupon or LivingSocial, and checking out any interesting gatherings that might be happening on Meetup.com.

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

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Feb

2025

If I Refinance My Home, Can I Keep My HELOC?

By Rebecca Lake | Home Ownership, Money & Life, mortgage | Comments Off

Refinancing replaces your current mortgage with a new one. That’s something you might consider if you’d like to get a lower interest rate or different repayment terms. Having an open home equity line of credit (HELOC) can add a wrinkle to the refinancing process.

Here’s some comforting news for those who are wondering, If I refi my home, can I keep my HELOC? Yes, if your lender agrees to subordinate the line of credit. What, exactly, does that mean? Read on for what you need to know about refinancing with HELOC debt (or refinancing with an open line of credit).

Key Points

• When refinancing, a subordination agreement makes it possible for a homeowner to refinance with a HELOC.

• Subordination maintains the HELOC in a junior lien position, keeping it open.

• Retaining a HELOC may lead to a higher interest rate and monthly payment on the new mortgage.

• Advantages include flexible credit access and avoiding reapplication; disadvantages involve higher interest rates and increased debt risk.

• Steps to navigate refinancing with a HELOC include financial assessment, using a refinance calculator, and securing a subordination agreement.

Understanding Refinancing and HELOCs

Refinancing replaces your existing mortgage with a new home loan. You may refinance with your current lender or a different one. It’s a fairly straightforward process if you have just one mortgage to refinance. You compare mortgage rates from different lenders, go through the mortgage preapproval process, and apply for a loan. The lender appraises your home’s value and checks your credit to determine whether to approve you.

Do you have to pay off a HELOC if you refinance? Not necessarily. Whether you get to keep your HELOC after refinancing depends largely on the lender.

If you need an in-depth HELOC definition or want to better understand how this type of credit line works, read our detailed HELOC loan guide.

Impact of Refinancing on an Existing HELOC

Refinancing with HELOC debt opens up some different possibilities for how your line of credit is handled. It helps to understand what could happen before applying for a mortgage refinance loan.

Subordination of the HELOC

Subordination refers to the way debts are ranked in order of priority for payoff, from highest to lowest.1 When you get a loan to buy a home, the home secures the property. This creates a lien, which allows the lender to make a legal claim to the property if you don’t repay what you owe. This mortgage is a first or senior lien. A HELOC, on the other hand, is a secondary or junior lien.2,3

Here’s what that means in simple terms. If you refinance your home, your first mortgage takes precedence for payoff. Once that loan is paid off with the proceeds from the new loan, your HELOC moves into the first loan position.

If you were to sell the home or fall into foreclosure, the HELOC would take priority for repayment which poses a risk to the lender who provides your new mortgage. If there isn’t enough money from the sale or auction of the home to cover the refinanced mortgage debt, the lender could take a financial hit.

Paying Off the HELOC

You could pay off your HELOC in full prior to refinancing, either with cash on hand or money from the refinance loan. Once you pay your line of credit off, your lender may close the account. If you’d still like to have access to a credit line for emergencies or other purposes, you’d need to apply for a new HELOC.

Whether that makes sense can hinge on how much equity you have in the home and what you’ll pay for a new HELOC in interest and fees. If you’re refinancing your first mortgage because rates dropped, for instance, you may be able to qualify for a low rate on a new home equity line of credit.

Closing the HELOC

HELOC rules prevent lenders from closing your account as long as you continue making payments. So you wouldn’t be able to shut your line of credit down without paying the balance off first.4

If you’re refinancing your HELOC debt into the new mortgage (borrowing enough to cover what you owe on your home plus what you owe on your HELOC), the new loan would pay off the balance on your line of credit and close the account. Once your HELOC is closed you wouldn’t be able to make additional withdrawals from your credit line.

Options to Retain Your HELOC During Refinancing

Keeping your HELOC when refinancing may take a little effort on your part. Here’s how to navigate this part of the refinance process.

Requesting Subordination from Your HELOC Lender

A subordination agreement is a legally binding agreement specifying that your HELOC will take a second lien position when you refinance. If you have a HELOC with one lender and plan to refinance with another, all the lenders involved in the transaction would need to agree to subordination.

You can reach out to your lender directly to ask if subordination is an option. If so, you’ll need to complete whatever paperwork the lenders require. A lender may have a standard subordination form you’ll need to fill out.5

Subordination allows you to keep your HELOC open after refinancing. You may, however, have to pay a fee to the lender to get them to agree to subordination of your line of credit.

Refinancing with the Same Lender

If you plan to refinance with the same lender that you have your HELOC with, it may be easier to have your subordination request granted. Keep in mind that:

• New draws from your HELOC may be temporarily prohibited until refinancing is complete

• Your new loan may come with a higher interest rate if the lender is concerned about your risk profile

• A higher rate on your refinance loan could result in a higher monthly payment

If you’re considering this option, talk to your lender about how refinancing with a HELOC would work and the ways it might impact your new loan.

Refinancing Without Paying Off the HELOC

Subordination allows you to refinance your first mortgage without having to pay off your HELOC or close your HELOC account. The main consideration is whether you’ll be able to afford the monthly payments on your HELOC and your new mortgage payment.

Running the numbers is relatively easy if both your refinance loan and your HELOC have a fixed rate. It’s a little more challenging if you have a variable-rate HELOC.

With a variable-rate HELOC, your rate is tied to an index or benchmark rate, like the prime rate. If the benchmark rate goes up or down, your rate — and your payments — can move the same way.6

Pros and Cons of Keeping Your HELOC When Refinancing

Keeping your HELOC open when refinancing has pros and cons. Weighing both sides can help you decide if it’s right for you.

Advantages

Here are some of the benefits to keeping your line of credit open when you refinance.

• HELOCs offer flexible access to credit when you need it, whether it’s for an emergency or a large purchase.

• You pay interest only on the portion of the credit line you use, so you can control your costs to a degree.

• Keeping your HELOC open means you don’t have to apply for a new one (and get another ding on your credit).

Disadvantages

When is keeping your HELOC open after a refi not the best move? Here are the downsides.

• Subordinating your HELOC could mean paying a higher interest rate on your refinance loan, which can add to your cost of borrowing.

• You risk losing the home if your refinance and HELOC payments become unaffordable.

• An open HELOC could be a temptation to spend unnecessarily, leading to more debt and more interest that you’ll have to repay.

Recommended: How Often Can You Refinance Your Home?

Steps to Refinance Your Home While Retaining Your HELOC

Refinancing with a HELOC takes some planning and it helps to understand what you can expect. Here’s an overview of how refinancing with a HELOC typically works.

Assess Your Financial Situation

Your credit and finances carry weight in refinancing, as lenders want to see that you have a good credit history and reliable income. Before you start shopping for a lender, take time to:

• Check your credit reports and scores

• Review your monthly budget and income, including how much of your pay currently goes to debt repayment

• Consider the long-term and how your income or expenses might change over time

• Use a refinance calculator to estimate the monthly payments on a new loan

If you’re still in the draw period of your HELOC, you might be making minimum or interest-only payments. Once repayment begins, your principal plus interest payments could be much higher. Thinking ahead can increase the odds of being able to manage your HELOC and refinance loan payments.

Communicate with Both Lenders

Communication can make refinancing with a HELOC a much smoother process. If you plan to refinance with a lender that’s different from the one you have your HELOC with, you’ll need to talk to both of them about subordination.

This is an opportunity to explain why you want to keep your HELOC open and ask questions about the subordination process. Ultimately, it’s the HELOC lender that must agree to remain in the second lien position. Be prepared to explain the terms of the refinance loan to the HELOC lender and the HELOC terms to your refinance lender.

Understand Subordination Agreements

Subordination agreements may not be lengthy; they just need to include the key details of the transaction and the signatures of the parties involved. However, it’s still important to review the agreement carefully so you know what you’re agreeing to.

The agreement should include:

• Names of the subordinating and refinance lenders

• Your name

• The date each mortgage was taken out

• An acknowledgment by the HELOC lender that the HELOC will stay in the second lien position

If you’re having trouble decoding your subordination agreement, don’t hesitate to ask the lender to explain it in more detail.

Prepare Necessary Documentation

Your lender should handle preparation of the subordination agreement. You may need to provide the HELOC lender with documentation for the refinance loan, showing how much you plan to borrow.

For the refinance itself, your lender may ask for:

• Recent pay stubs

• Bank and/or investment account statements

• Tax returns

• A profit and loss statement if you’re self-employed

You’ll need to go through a hard credit check and get an appraisal of the home. The refinance lender may schedule an in-person, drive-by, or virtual appraisal. Once approved, you’ll just need to review and sign the closing paperwork and pay closing costs. Those are the basic steps for how to refinance a home loan, with or without a HELOC.

The Takeaway

Refinancing with a HELOC makes things a little more complicated, but it’s possible to keep your line of credit through a process called subordination. You’ll have to communicate both with your new mortgage company as well as with the lender who gave you the HELOC. Alternatively, it may be possible to pay off your HELOC with your new mortgage, or pay it off with funds from other sources before you undertake a refi.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

FAQ

Is it possible to refinance both my primary mortgage and HELOC simultaneously?

It’s possible to refinance a primary mortgage and HELOC at the same time using a cash-out refinance. You’d get a new mortgage loan and pull your equity out in cash, then use that money to pay off the HELOC. You’d then have one mortgage payment to make going forward.

Will my HELOC lender agree to subordinate their lien during refinancing?

The answer to this question depends on the lender. Subordination moves the HELOC into a junior lien position, but that’s where HELOCs ordinarily go when you have a primary mortgage. Talking to your lender can give you an idea of whether subordination is something they’ll agree to.

How does the combined loan-to-value ratio impact refinancing with an existing HELOC?

Combined loan-to-value (CLTV) measures all of the outstanding mortgage debt you have against your home’s value. If your CLTV ratio is too high, that could affect your ability to qualify for a refinance loan. The lender may limit the amount you can borrow or deny you altogether.

Are there additional costs associated with subordinating a HELOC during refinancing?

Lenders may assess a fee to enter into a subordination agreement. The fee may be lower or higher, depending on the lender. Talking to your HELOC lender is the best way to find out whether subordination is allowed and if so, what fees you might pay.

Can I draw from my HELOC during the refinancing process?

Your lender may limit new draws while you’re in the middle of refinancing. Once the refinance is complete and the subordination agreement has been signed, you should be able to resume withdrawing from your credit line.

About the author

Rebecca Lake

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

Photo credit: iStock/ljubaphoto

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SOHL-Q125-056

Feb

2025

What Is a Draw Period on a HELOC?

By Rebecca Lake | Home Ownership, Money & Life, mortgage | Comments Off

A home equity line of credit or HELOC is a revolving credit line secured by your home. HELOCs have two phases: a draw period and a repayment period.

Your HELOC draw period is the window of time in which you can access your credit line before you must begin repaying what you have borrowed. A typical HELOC draw period is five years, though yours may be shorter or longer, depending on the terms of your borrowing agreement.

Here’s a closer look at how a home equity line of credit draw period works.

Key Points

• A HELOC is a revolving line of credit secured by your home.

• During your HELOC draw period, you can use your credit line to consolidate debt, pay for home repairs, or fund other financial goals.

• Interest may accrue during the draw period and your lender may expect you to make interest-only or minimum monthly payments.

• Once the draw period ends, you can’t make further withdrawals from your credit line.

• You can pay a HELOC off during the draw period but your lender may assess a prepayment penalty or early termination fee.

Understanding the Draw Period

What is a HELOC draw period? Simply put, it’s when you’re allowed to access your credit line. During the draw period, you can spend up to your credit limit and make payments to reduce the outstanding balance. That’s similar to how a credit card works.

Your choice of lender can influence how long your HELOC draw period lasts. Some lenders offer HELOCs with a five-year draw period; others extend it up to 10 years. Comparing HELOC options can help you decide which line of credit best suits your needs. Examine mortgage rates and consider getting preapproved for a HELOC to see what you might qualify for. Look for HELOC lenders that offer mortgage preapproval with no impact on your credit.

Recommended: HELOC Definition

How the Draw Period Works

The draw period on a home equity line gives you freedom and flexibility to spend, up to your credit limit. There are a few key details to know, however, about how a HELOC draw period works.

Accessing Funds

HELOC lenders can offer multiple ways to access funds during the draw period. Your options might include:

Paper checks

• An ATM card or debit card

• ACH transfers to a linked bank account

• In-person cash withdrawals (if you opened your HELOC at a local bank)

Your HELOC lender should provide monthly statements showing your transaction activity, including how withdrawals were made, the amount, and the date. Keeping track of draws can help you calculate what your repayment installments may be later on.

Payment Structure

Your lender may require monthly payments during your HELOC draw period. The payment may be a set minimum dollar amount, or a payment equivalent to the interest only.

HELOCs typically accrue interest daily. Here’s how to find your daily interest accrual.

• Divide your annual percentage rate (APR) by 365 (number of days in the year)

• Multiply the result by your balance to find your daily interest accrual

For example, say you owe $50,000 to a HELOC at an annual APR of 5.00%. If you plug in the numbers, the math looks like this:

0.05/365 = 0.0001369863 x $50,000 = $6.85

Note that some lenders might use 360 instead of 365 to find your daily interest rate. That number assumes that every month has 30 days.

Your loan agreement should specify whether you’re required to make interest-only payments or a flat minimum payment. Keep in mind that if you can pay more than the minimum due, that’s usually a good idea. The bigger dent you can make in your balance during the draw period, the less you’ll have to repay later.

Have questions about home equity lines work in general? Explore our in-depth HELOC loan guide.

Interest Rates

HELOCs may have fixed or variable rates. A fixed interest rate stays the same for the life of the loan; variable rates, meanwhile, can increase or decrease over time based on changes to an underlying index or benchmark rate.

Variable-rate HELOCs can use the prime rate, LIBOR, or Treasury bill rate as their index rate. The prime rate is common, as it represents the rate at which banks lend to their most creditworthy customers. Lenders may charge a prime rate + a margin rate to set your HELOC rate.

Recommended: Understanding the Mortgage APR

Transitioning from Draw to Repayment Period

If you’re asking what is the draw period on a HELOC, it’s also important to ask what comes after. As you get closer to the end of your draw period, you’ll need to begin preparing for the repayment phase.

End of Draw Period

The end of your HELOC draw period is determined by the lender at the outset. Again, you may have five years, 10 years, or somewhere in between to spend with your credit line. Once the draw period ends, you can’t make any more withdrawals.

Your loan agreement should specify the end date of your draw period and when you’re expected to make your first regular monthly payment.

Can you extend a HELOC draw period? Maybe. Your lender might offer the option to renew your draw period so you have more time to access your credit line. You might pay a fee for the convenience.

The other option would be to refinance your HELOC into a new HELOC. That would give you a new draw period, followed by a new repayment term.

Repayment Terms

HELOC repayment may last anywhere from 10 to 30 years — it depends on the terms of your loan agreement. During the repayment period, you’ll make payments to the principal (meaning the amount you originally borrowed) and the interest.

HELOC repayment is amortized the same as other home loans, such as FHA loans or VA loans. Your lender should give you an amortization schedule showing how many payments you’ll make total and how much of each payment goes to principal vs. interest.

Can you pay off a HELOC during the draw period? Yes, if your lender allows you to do so. Be aware, however, that your lender might assess a prepayment penalty for an early HELOC payoff. Prepayment penalties allow lenders to recoup some of the interest they lose out on collecting when a borrower pays a loan off early.6

Impact on Monthly Payments

How much will you have to pay monthly to your home equity line of credit? It’s an important question to ask when planning your budget once the draw period ends.

Your HELOC payment amount is determined by:

• Your principal balance

• Interest rate and fees

• Repayment term

If you have a fixed-rate HELOC, your monthly payments will be the same for the entirety of your repayment term. If you took out a variable-rate HELOC, your payments could change over time if your rate rises or falls.

Strategies During the Draw Period

Your HELOC draw period is for spending, but there are some things you can do to minimize what you’ll have to repay later. Here are a few tips for managing your home equity line of credit during the draw period and beyond.

Making Principal Payments

You may be obligated to make minimum or interest-only payments during the draw period, but consider whether you could make payments to the principal as well. For example, you might:

• Apply your tax refund to the principal

• Use a year-end bonus to wipe out some of the balance

• Make biweekly payments or micropayments toward the principal

• Double up on your regular monthly payments

Reducing your principal balance can shrink the amount of interest that accrues. And it can lower your monthly payments once you enter the repayment period.

Monitoring Interest Rates

If you have a variable-rate HELOC, it’s a good idea to keep an eye on interest rates. If you anticipate a rate hike sometime in the future, you may want to explore HELOC refinancing options.

Refinancing a variable-rate HELOC into a fixed-rate line of credit can offer some predictability with monthly payments. You don’t have to worry about your rate — and your payment — going up over time. You could also consider using a fixed-rate personal loan to pay off your HELOC debt. The advantage of this approach is that personal loans aren’t tied to your home. So if you lose your job or get sick and can’t work, you don’t have to worry about losing your home if you fall behind on the loan payments.

Monitoring Interest Rates

If you have a variable-rate HELOC, it’s a good idea to keep an eye on interest rates. If you anticipate a rate hike sometime in the future, you may want to explore HELOC refinancing options.

Planning for Repayment

Your regular monthly HELOC payments may be significantly higher than your minimum or interest-only payments. So it makes sense to look at your budget to make sure you can afford what you’ll be expected to pay.

A HELOC repayment calculator is a helpful tool for estimating monthly payments and the total interest paid. You can just plug in your HELOC balance, rate, and repayment term to see how your payments might add up.

The Takeaway

What is a draw period on a HELOC? It’s your window to spend before repayment begins. The tips we’ve shared here can help you make the most of your draw period. If you’re still in the “shopping for a HELOC” phase, do your research: Look at different lenders’ interest rates, find out what is a HELOC draw period at various lenders, and inquire about prepayment policies and annual fees to find a lender whose offerings fit your needs.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

FAQ

Can I make principal payments during the draw period?

Yes, you should be able to make principal payments during the draw period if your lender allows it. You can review your loan agreement or contact your lender to ask if principal payments are allowed and how to make them. Paying down the principal during the draw period can reduce what you have to repay later and potentially save you money on interest.

What happens if I don’t use my HELOC during the draw period?

One of the great things about a HELOC is that you only pay interest on the amount of your credit line you use. If you don’t use your HELOC during the draw period, there would be nothing to repay with interest later. You may still be responsible for paying annual maintenance fees or other fees associated with your line of credit.

Are there fees associated with the draw period of a HELOC?

HELOCs can come with a variety of fees, including annual or membership fees. If your lender charges an annual fee, you’ll pay it yearly during the draw period and the repayment period. The same goes for membership fees, which should all be explained in your loan agreement.7

How does the draw period affect my credit score?

HELOCs can affect your credit scores in the draw period in two key ways: payment history and credit utilization. Making the required monthly payments on time and keeping your HELOC balance low, relative to your overall credit limit, are the simplest ways to keep your credit score in good standing. Once you enter the repayment period, you’ll just want to continue making monthly payments on time.8

Can the draw period be extended?

Your HELOC lender may allow you to extend your draw period by renewing your line of credit. You may pay a fee to do so. If your lender doesn’t offer renewal, you might look into refinancing your line of credit into a new HELOC with a new draw period.

About the author

Rebecca Lake

Photo credit: iStock/milorad kravic

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q125-055

Feb

2025

What Is Zero-Based Budgeting?

By Janet Siroto | Budgeting & Goals, money | No Comments

Zero-based budgeting is one method that can help you account for every dollar so you better understand your cash flow situation. This in turn can help you better manage your money and hit your financial goals.

You may be among those people who feel as if your money disappears as you pay for groceries, gas, utility bills, dining out, student loans, and everything else on your plate, without really knowing how much you earned or how much you are spending. That’s where a budget like the zero-based budgeting method can help.

A budget provides a framework to see how much is coming in and what it’s being spent on. It gives you the chance to recalibrate so you can, say, put more into savings. Here, learn more about zero-based budgeting and whether it would be a good fit for you.

Key Points

• Zero-based budgeting allocates every dollar of income to specific expenses, savings, or debt payments.

• Steps in zero-based budgeting include listing income, identifying fixed expenses, and allocating remaining funds.

• When using zero-based budgeting with an irregular income, maintain a buffer and adjust budgets based on monthly earnings.

• Compared to the 50-30-20 budget method, zero-based budgeting is more detailed but can be time-consuming.

• Zero-based budgeting may be made faster and easier with tech tools and apps.

How Zero-Based Budgeting Works

When building a zero-based budget (sometimes referred to as 0-based budget), your income minus your expenses should equal zero. In other words, with zero-based budgeting, every dollar of your income has purpose.

This doesn’t mean you won’t have any money in your bank account, since you might want to allocate some of your budget to savings. Rather, using this method could help you know exactly how much you will spend, save, and invest in any given month. And depending on your monthly needs, these figures may change or stay the same.

Recommended: How to Deposit a Check

How to Build a Zero-Based Budget

As with most budgeting techniques, you might want to start the zero-based budgeting process by making a list of your expenses.

• Start with your fixed and necessary expenses first, such rent, utilities, groceries, transportation, insurance payments, and debt payments. You know that these payments have to be covered each month, so you could allocate income to each necessary expense.

Tally these expenses and subtract them from your total income. The resulting figure could be the amount available for discretionary expenses.

• Next, you could allocate those remaining discretionary funds. You might consider such spending as dining out, gym memberships, travel, and entertainment.

• Also consider savings. That could include money that you pay to yourself to save for short-term goals such as an emergency fund. Or you might target longer-term goals such as stocking an online retirement account or saving for the down payment on a house.

• Keep in mind that some expenses might be seasonal, such as vacations or holiday gifts. You might want to determine how you’d like to save for these expenses. You may choose to allocate funds in a single month, or it may make sense to set aside a small amount over each monthly period.

It might take a little bit of extra planning to figure out how much you’ll need and how to divide up the cost. When doing so, don’t forget about one-off expenses, such as paying for an annual homeowners insurance premium.

• Some expenses may also be variable — for example, say you’re hit with an unexpected bill when your car needs a new transmission — and these can be tricky to deal with. One way you could build them into the budget is to have a line item such as “savings for variable expenses” to help you cover them. This line item would be different from your other savings. You could keep the funds in a high-yield savings account so it earns some interest.

A simple example of a zero-based budget for someone who makes $6,000 a month might look like this:

Rent/Housing	$3,500
Utilities	$200
Car payment	$300
Gas	$200
Groceries	$400
Savings	$750
Eating out	$200
Entertainment	$150
Student loan payments	$200
Credit card payments	$100
Total	$6,000

In this example, the person’s income less their total expenses — $6,000 minus $6,000 — equals $0. As mentioned above, every dollar has a job to do.

Finally, remember that with a zero-based budget every dollar should have a purpose. So if at the end of figuring out your expenses, you find yourself with some extra cash, it needs to go somewhere. You might want to put a little extra toward savings or pay off some debt quicker.

But if you don’t allocate the funds, they might get spent. The problem is you may not know where you spent that money, and keeping track of it is the whole point of this exercise.

Tracking Your Budget

You might want to keep an eye on your spending throughout the month to make sure you’re sticking to your budget. This process could be dynamic, meaning it shifts in real time. If you find that you don’t need to spend as much on one budget item one month, you could shift that extra cash into another category the next month.

• If you find yourself needing extra money in your checking account to cover an expense, you could look for places to save.

• If you find yourself with little wiggle room in your budget and need to add to or boost your existing expenses, you might want to increase your budget with extra sources of income, like a side hustle.

Tools and Tips for Tracking a Zero-Based Budget

There are several tools that can make it easier to manage a zero-based budget. A few ideas to consider.

• There are various online calculators for different budgeting tasks, such as emergency fund calculators. Search and find one that could help you with the math for your zero-based budget.

• To better track your spending, see what tools your bank offers. Many have budgeting apps and/or trackers that can help you understand where your money is going.

• You might also investigate third-party budgeting apps. Some are available for free; others require payment.

• Tech tools can also help with managing your money when budgeting, from direct deposit to facilitate receipt of your paycheck to online bill pay to cover expenses seamlessly.

• Some people will like to manage their budget with pencil and paper (a ledger-style pad can be helpful) or an online file, such as Excel or Google Sheets. It’s your choice.

A Zero-Based Budget on an Irregular Income

Many people earn a variable income, whether that means being a seasonal worker or a freelancer whose earnings ebb and flow. A variable income can pose some challenges to building a zero-based budget, but they’re not insurmountable.

Adapting Zero-Based Budgeting for Inconsistent Income

First, you could consider maintaining a buffer of cash, or a cash cushion, to help cover your expenses as your income varies.

You could then use your previous month’s budget as a base for the current month, using the buffer to cover any shortfalls. You might want to replenish this buffer when you have extra money in a month. You may also try building your budget based on a low estimate of your monthly income to increase the odds that you’ll be able to stay within your budget.

An irregular income means that you might spend more time adjusting your budget as your income fluctuates. You might need, say, multiple budgets. A seasonal worker could have, say, a high season and a low season budget that they use at various points during a typical year.

Recommended: How to Transfer Money

Other Budgeting Strategies to Consider

There are other budgeting methods that may be worth a try. One rule of thumb, called the 50-30-20 rule, allocates percentages of your income to different categories. When using this rule, 50% of income goes to necessities, like housing, utilities, and food. The next 30% of income goes to discretionary spending, and the final 20% is allocated to savings or additional debt payments.

You may also consider a budgeting system known as reverse budgeting, in which you focus on savings goals rather than expenses. To use this method, you might want to determine your short- and long-term savings goals, such as a down payment on a house, paying down student loan debt, and retirement.

You could figure out how much you need to save for those goals and then automate the savings. The money could be taken from your checking account and put into a savings account each month. You might use the money left in your checking account to pay for necessary expenses first, and the rest you could use however you’d like.

Comparing Zero-Based Budgeting to Other Methods

Finding the right budget to fit your needs is an important process, and it may take some trial and error. It can be wise to experiment with a couple of techniques to find one that feels like a good fit.

For example, some people may find the granular “every dollar has a job to do” approach of zero-based budgeting suits them. They may find it very helpful to know every single expense that occurs during a week or a month. Other people may prefer, say, the 50/30/20 budget rule, since they only need to stay focused on three key buckets of spending their money.

Pros and Cons of Different Budgeting Styles

Here are some points to consider as you decide whether zero-based budgeting is right for you.

• Pros: For a personal budget, a zero-based budget can provide insight on expenses and spending habits which can help a person manage their money better. In a business context, this budget can also be used, allowing managers to delve into their operations and cost savings and maximize their resources.

• Cons: No doubt about it, zero-based budgeting can require considerable time and effort. It may be too detailed for some people’s tastes. They might prefer a simpler approach or to use tech tools to manage their finances.

Recommended: Money Management Guide

The Takeaway

Zero-based budgeting is a technique in which every dollar you earn has a job to do. By managing your money this way, you can have a very in-depth understanding of your finances and your spending and saving habits. However, this technique can be time-consuming and may not suit an individual’s needs. Budgeting in general, though, is an important way to see where money is going and to fund the things you care about most. Your bank may offer valuable tools that can assist with this process.

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FAQ

How much time does zero-based budgeting take each month?

The amount of time it takes to manage zero-based budgeting each month will vary depending on each person’s situation, needs, and speed with organizing their financial details. That said, it may initially take several hours per month to establish this kind of budget, and then a few hours per month to keep it running.

What tools can simplify zero-based budgeting?

There are a variety of tools that can simplify zero-based budgeting. For some people, using a ledger pad or an online file (such as Excel or Google sheets) can be helpful. Others may want to use an online budget calculator, tools provided by their bank, or third-party apps to track and optimize their spending and saving.

Are there challenges to maintaining a zero-based budget?

There are challenges for most budgets, and the zero-based system is no exception. Some people may find tracking their expenses and accounting for every single dollar earned to be a very involved process that takes too much time and effort. In addition, those with a fluctuating income (such as seasonal workers) may find zero-based budgeting to be a challenging technique.

How can I stay consistent with a zero-based budget?

Staying consistent with zero-based budgeting requires diligent tracking of your income, spending, and savings. It can be a detailed process, and it can involve re-evaluating the figures on a regular basis, especially if you earn a fluctuating income. While this sounds as if it must be a time-consuming pursuit, there are tech tools that can help automate this process somewhat.

What should I do if I exceed my budget in a category?

If you exceed your budget in a category, there are a couple of options. You could cut your spending in that category, or you could borrow funds from another category and economize there. For instance, if your spending on dining out is running high, you can either rein it in or borrow funds from, say, your entertainment or travel spending to cover it.

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

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

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SOBNK-Q125-080

Guide to the Fear and Greed Index

What Is the Fear and Greed Index?

Understanding the Fear and Greed Index

Tracking the Fear and Greed Index Over Time

How Does the Fear and Greed Index Fare Against History?

How Does the Fear and Greed Index Fare Against Other Indicators?

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Dos and Don’ts of Using the Fear and Greed Index

Dos

Don’ts

What Is the Crypto Fear and Greed Index?

The Takeaway

FAQ

Is the Fear and Greed Index a good indicator?

Where can you find the Fear and Greed Index?

When does it make sense to buy, based on the Fear and Greed Index?

25 Ways to Cut Costs on a Road Trip

1. Choose a Fuel-Efficient Car

2. Drive at or Below the Speed Limit

3. Pack Your Car Wisely

4. Set a Road Trip Budget

5. Bring Your Own Food and Supplies

6. Sign up for an Electronic Toll Account

7. Avoid Tolls Altogether

8. Look for Hotels that Offer Free Breakfasts

9. Pack Reusable Water Bottles for Everyone

10. Buy a National Park Pass

11. Hit the Grocery Store

12. Prebook Your Hotels

13. Look Beyond Hotels

14. Plan to Visit Free Attractions

15. Plan Gas Stops in Advance

16. Set a Daily Spending Limit

17. Entertain the Kids on the Cheap

18. Search Online for Local Coupons and Passes

19. Save on Alcohol

20. Volunteer at a Festival

21. Sign up for a AAA Membership

22. Travel During the Off-Season

23. Do Some Camping

24. Eat Out for Lunch Instead of Dinner

25. Take Advantage of Loyalty Programs

The Takeaway

FAQ

How can I make road trips more affordable?

How can I save money when traveling by car?

How can I spend time when on a road trip?

If I Refinance My Home, Can I Keep My HELOC?

Understanding Refinancing and HELOCs

Impact of Refinancing on an Existing HELOC

Subordination of the HELOC

Paying Off the HELOC

Closing the HELOC

Options to Retain Your HELOC During Refinancing

Requesting Subordination from Your HELOC Lender

Refinancing with the Same Lender

Refinancing Without Paying Off the HELOC

Pros and Cons of Keeping Your HELOC When Refinancing

Advantages

Disadvantages

Steps to Refinance Your Home While Retaining Your HELOC

Assess Your Financial Situation

Communicate with Both Lenders

Understand Subordination Agreements

Prepare Necessary Documentation

The Takeaway

FAQ

Is it possible to refinance both my primary mortgage and HELOC simultaneously?

Will my HELOC lender agree to subordinate their lien during refinancing?

How does the combined loan-to-value ratio impact refinancing with an existing HELOC?

Are there additional costs associated with subordinating a HELOC during refinancing?

Can I draw from my HELOC during the refinancing process?

What Is a Draw Period on a HELOC?

Understanding the Draw Period

How the Draw Period Works

Accessing Funds

Payment Structure

Interest Rates

Transitioning from Draw to Repayment Period

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