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When you first take out student loans after graduating high school, it’s hard to truly feel the weight of that debt. You’re young and looking forward to the best years of your life. It’s not until you’ve finished your undergraduate degree, that you begin to realize just how much money you actually owe.

If you’re pursuing a graduate degree you may feel motivated to avoid taking out additional loans to finance your education. Perhaps your goal is to finish your Master’s degree without borrowing a single penny.

It won’t happen easily, and you might need to sacrifice your comfort and free time to make it happen, but people do it every year. These tips could help you become one of them.

Become an In-State Resident

If you’re applying for graduate school, after taking a few years off to work you might be surprised to find how costs have changed since your undergraduate days. Tuition has been rising for decades, and a bachelor’s degree now costs two-and-a-half times what it did in 1988 after adjusting for inflation.

Graduate students interested in a public university can save tens of thousands of dollars by becoming in-state residents. As just one example, at UCLA graduate students who qualify for in-state tuition pay $16,847 a year while out-of-state students pay almost double the cost—$31,949.

Each state has different requirements for determining residency, so if you are planning on relocating to attend grad school be sure to look into the requirements for the state the school you are planning to attend.

Certain states require only one year of full-time residency before you can qualify for in-state tuition, while others require three years. During that time, you can work as much as possible to save money for graduate school.

Apply for Work-Study

Work-study is a type of financial aid available to students who qualify based on their financial need. You can apply for the program when you fill out your FAFSA form. If you qualify for work-study it will be part of your financial aid award.

After you receive your work-study award you’ll still have to find a job that qualifies. Many schools have online databases where you can look for and apply to jobs.

Typically, financial aid is awarded on a first-come, first served basis, so the earlier you file your FAFSA the better chance you’ll have of securing work-study as a part of your award.

Become an RA

You probably remember your undergrad Resident Advisor (RA). They were the ones who helped you get settled into your dorm room, showed you how to get to the nearest dining hall and yelled at you for breaking quiet hours.

RAs may be under-appreciated, but they’re compensated handsomely for their duties. Students are typically compensated for a portion or all of their room and board. Some schools even include a meal plan and sometimes even reduced tuition or a stipend.

The compensation you receive will depend on the school you are attending, so check with your residential life office to see what the current RA salary is at your school.

While there are plenty of perks to being an RA, don’t underestimate the responsibility that comes with the position. It can be a time-intensive position, requiring round-the-clock supervision.

Still, the perks of being an RA may be measured in saving money each year. By having a free place to live and a free meal plan, you can save and eat a diet that doesn’t just consist of Ramen and stale pizza. RAs rarely have to share a room, so you’ll also have more privacy than you would in an apartment.

Because RAs receive so many benefits, competition for the job can be fierce and selective. Polish your resume and hone your interview skills before applying. The difference between working as an RA and having to take out loans for rent could affect your life for years to come.

Apply for Grants and Scholarships

Like undergraduates, grad students have to submit the Free Application for Federal Student Aid (FAFSA) in order to qualify for federal grants. Many universities use FAFSA information to determine their own financial aid, so applying for it is mandatory.

The average graduate student earned $9,290 in grants during the 2016-2017 academic year. Grants and scholarships are a great source of financing for graduate school because they don’t need to be repaid.

Grants are available from both the federal and state governments, as well as from the university itself. Some companies provide their own grants or scholarships, and many private organizations sponsor grants.

It never hurts to apply for a grant or scholarship, no matter how small it might seem. Think of it this way—every dollar received is one less dollar you need to borrow or earn.

Find a TA Position

If you’re a graduate student, you can often find a position as a Teaching Assistant or Research Assistant for a professor. The position will be related to your undergrad or graduate studies and often requires grading papers, conducting research, organizing labs or prepping for class. You probably had several TAs during your undergraduate classes and didn’t even realize they were students too.

TAs can be paid with a stipend or through reduced tuition depending on which school you attend. Not only can the job help you to potentially avoid student loans, but it also gives you networking experience with people in your field.

The professor you work with can recommend you for a job, bring you to conferences, and serve as a reference.

Being a TA may help boost your resume, especially if you apply for a Ph.D. program or want to be a professor someday. According to PayScale.com, the average TA earns $12.17 an hour, or about $1,000 a month before taxes.

Similarly to a job as an RA, securing a TA position can be competitive. Apply early and get to know the professors who will make the decisions.

Refinance Your Undergrad Loans

If you currently have loans from your undergraduate program, you can refinance them to get a lower monthly payment. That will free up more money to put towards grad school.

Refinancing your student loans at a lower interest rate can also help you pay less interest over the loan’s lifetime. That may not seem like such a big deal now, but you’ll be thankful when you’re saving up for a down payment on your first house.

Switching to a lower monthly payment gives you more flexibility in your budget, which is perfect for a time when money is tight. Once you finish grad school, you can start making extra payments and repay your loans ahead of schedule.

Paying for grad school without student loans is possible, but only if you plan ahead, apply for every opportunity and make decisions carefully. Many professions don’t care where you went to grad school, only that you have a master’s degree. Pick an affordable university and you’ll never regret your decision to go back to school.

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.

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.

That master’s degree in art history may help you understand cubism, but is it going to help you buy a Picasso one day? While material gain is not the only driving factor in most people’s decision to pursue higher education, it is worth considering, especially as more Americans become conscious of graduating with large outstanding student loan debt.

Lifetime Earnings by Education

When you’re considering graduate school, you have a lot to think about, including which programs best fit your interests, where the school is located, how much it costs, and how you’ll pay for it. The price of some grad programs can be dizzying: One year at Harvard Business School may set you back over $109,000.

A potentially hefty price tag means you have to consider whether a degree is worth the cost, especially if you have to take out student loans to help you get there. One way to help you do this is to examine the ratio of the cost of obtaining a new degree relative to the income it will help you generate once you graduate.

This measure is very much like return on investment—the ratio between net profit and cost from an investment of resources.

Your time and tuition can be considered your investment resources, and your future income is your profit. For the purposes of this article, we’ll call this measure a return on education, or your ROEd. And of course, your ROEd depends on how much of a boost you get by going for a graduate degree and how much money you put into securing the degree.

So what graduate degrees are yielding students a high ROEd? Unfortunately, a grad degree in the humanities may provide a relatively small boost in income.The average salary for a graduate with an MA in the
humanities is $68,000. Other degrees—especially professional degrees like JDs, MDs, and MBAs—can provide a significant boost to your post graduation prospects. Stanford University Class of 2018 MBA grads have an average starting salary and bonuses of nearly $174,000, the highest in the country.

It’s clear that in some cases a graduate degree can have a huge impact on your lifetime earning potential, offering a high ROEd. Yet, this isn’t always the case, and with a low ROEd, you’ll want to weigh the benefits of a degree carefully.

Weighing a Graduate Degree

Your ROEd and other factors can help you decide whether a graduate program is worth it before you apply to graduate school.

Determining need: Determine whether or not you need a graduate degree to advance in your field. If you want to go into academia, you’ll likely need a PhD. However, if you have an undergrad engineering degree, you may not need more school to rise through the ranks of your company.

Factoring in your undergrad degree: not all undergrad degrees are created equal. Some undergrad degrees, like business, engineering, and mathematics degrees, are relatively lucrative out of the starting gate. Will a grad degree really produce a significantly higher salary? If you asked a Magic 8 ball this question, it would say “signs point to yes”: Someone with a bachelor’s in business can expect to earn an average entry-level salary of $56,720, whereas an MBA can earn a projected starting salary of $78,332.

Considering job prospects: When you achieve your graduate degree, will it be easy for you to find a job? With a PhD in an obscure subject, you may be competing for very few available positions. More general degrees may give you more job options and flexibility to grow.

Examining opportunity cost: The value of one choice relative to another alternative is known as opportunity cost. This concept is particularly relevant when you consider the financial opportunities you might lose by taking a few years off from working while you’re in school.

In other words, you won’t be getting a salary while you’re hitting the books. And if you’re already working at a relatively lucrative position, your opportunity cost could be high. You might want to factor this cost in when considering ROEd.

Note: There are ways to offset opportunity cost, such as working while you’re in school. Some employers will offer to pay for part of your schooling in exchange for an agreement that you will work for them for a given period of time.

Making conservative estimates: When calculating your own ROEd, being conservative with how much you think you will earn when you graduate, especially in your first years out of school, can be a big help. A conservative estimate helps keep you from overestimating your ROEd and can give you a better chance of arriving at a decision that’s financially beneficial to you.

Tipping the Balance

One way to improve your ROEd is by lowering the amount you pay for your degree. Look for scholarship programs that can help you pay for your tuition. Also, some degree programs offer full rides to students, often in exchange for teaching undergrad classes.

Sadly, help with tuition can be a rarity for degree programs that typically lead to high-paying jobs, such as MBAs, law degrees, and medical degrees.

If you need to take out student loans to pay for your degree, being smart about terms and interest rates can help you keep your costs down. When you’re considering student loans, shop around for lenders who offer low interest rates, low fees, and favorable terms.

You can refinance your student loans through lenders such as SoFi to help secure lower interest rates or a more flexible loan term. Doing so can be a good idea if you have a better financial profile than when you originally took out your loans.

Lowering the interest rate on your loan can reduce the amount you’ll pay over the life of the loan, helping to improve your ROEd. You can also refinance for a longer loan term—that would get you a lower monthly payment, but wouldn’t help your ROEd because it ultimately might mean paying more interest on your loan overall. Keep in mind that if you do refinance, keep in mind that you’ll lose access to federal loan benefits when refinancing for a private loan.

Also, don’t forget to look into student loan forgiveness programs. If you plan to find employment with a nonprofit or a government organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness program after you make 10 years worth of qualifying monthly payments.

You may also want to consider looking for employers who will help you pay back your loans as part of the benefits package they offer to employees.

Intangible Benefits

Though money is an important part of your decision about whether to go to grad school, it isn’t everything. There are lots of benefits that can’t be pegged to a dollar amount, including social connections and whatever extra skills you acquire that aren’t directly related to your degree.

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.

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.

College students are graduating with tens of thousands of dollars in student loan debt, which can make it difficult to make monthly student loan payments, let alone get by financially each month.

For those looking to get some help, the federal government offers some potential options, including income-driven repayment plans and the Public Service Loan Forgiveness program. Or refinancing your student loans can also help you potentially lower your interest rate or your monthly payment.

One option you may not be aware of is to apply for repayment program “grants.” These grants function similarly to scholarships in that you don’t have to pay them back, at least not monetarily. Instead, post-graduation, you’ll typically agree to work in a certain field for a set period in exchange for the help.

There are several student loan repayment programs that act like grants but don’t technically refer to themselves as such. You might consider them grants to pay off student loans, however, because they don’t require you to pay back the money plus interest.

Here are a few repayment programs to look into:

National Health Service Corps Loan Repayment Program

Qualifying health care providers can receive up to $50,000 if they agree to a two-year commitment to work in a Health Professional Shortage Area (HPSA).

You can apply if you’re a licensed primary care physician, nurse practitioner, certified nurse-midwife, physician assistant, dentist, dental hygienist, or a qualifying behavioral and mental health provider.

In addition, to be eligible for this grant you must have qualifying student loan debt and also be:

•  A U.S. citizen or national

•  As applicable, a provider or be eligible to be a provider in Medicare, Medicaid, or the State Children’s Health Insurance Program

•  Fully trained and licensed to practice

National Institute of Mental Health Loan Repayment Program

If you work or plan to work in biomedical, behavior, social, or clinical research, you may qualify for a grant to pay off student loans up to $35,000. You can apply the award to qualifying undergraduate, graduate, or medical school loans.

In return, you’d “agree to engage in at least two years of qualified research funded by a domestic nonprofit organization,” according to the National Institute of Mental Health .

NURSE Corps Loan Repayment Program

The Health Resources and Services Administration provides this program to registered nurses (RN), advanced practice registered nurses (APRN), and nurse faculty with nursing debt that meets the program’s qualifications. To qualify, you must also:

•  Commit to working at least two years in an eligible Critical Shortage Facility (CSF) in a high-need area or an accredited school for nursing

•  Have received your nursing education in an accredited school of nursing in the U.S.

If you qualify, you may receive up to 85% of unpaid nursing debt over three years—that’s 60% over the first two years with an option to extend to a third year for an additional 25%.

Indian Health Service Loan Repayment Program

This grant is for health professionals who agree to work in an American Indian or Alaska Native community for at least two years. In exchange, you can receive up to $40,000 in grants to help pay off student loans.

Recipients also have the option to extend their contract each year until their debt is completely paid.

Veterinary Medicine Loan Repayment Program

If you’re a veterinarian working in an area designated by the National Institute of Food and Agriculture as a “shortage area,” you may be eligible to receive up to $25,000 each year for a (minimum) three-year service commitment. The grant is reserved only for veterinary school student loan debt, however.

John R. Justice Student Loan Repayment Program

This program provides assistance to local, state and federal public defenders, and state prosecutors. To qualify, you would agree to work as a prosecutor or public defender for at least three years.

In return, you may be eligible to receive up to $10,000 in assistance per year up to a total of $60,000.

Department of Justice Attorney Student Loan Repayment Program

If you agree to a three-year service obligation with the Department of Justice as an attorney, you may be able to qualify for loan repayment assistance of up to $6,000 per year in matches based on your payments.

To be eligible, you must have at least $10,000 in qualifying federal student loan debt. The maximum amount you can possibly qualify for is $60,000 in total.

Armed Forces Repayment Programs

Each major branch of the military offers free grants to help enlisted service members pay off student loans. Here’s a high-level overview of some of the notable programs:

•  Army Student Loan Repayment Program (College Loan Repayment Program): If you meet specific qualifications and are active duty, Army Reserve, or Army National Guard Soldiers, you can get up to $65,000 of your student loans repaid by the Army.

•  National Guard Student Loan Repayment Program: If you enlist for a minimum of six years and satisfy other requirements , you can receive up to $50,000 in assistance.

•  Navy Student Loan Repayment Program: With a three-year commitment, you may be eligible to receive up to $65,000 in repayment assistance over that time.

•  Air Force JAG Student Loan Repayment Program: Once you’ve completed one year of service as a JAG officer , you may be eligible to receive up to $65,000 in grants to pay student loans over a three-year period.

State-Based Grants

Several states offer free grants to help pay student loans for borrowers who agree to live and work in the state, usually in a specific field. Here are some examples:

•  New York State Young Farmers Loan Forgiveness Incentive Program: Eligible college graduates pursuing a career in farming who agree to operate a farm in New York state for at least five years can receive up to $10,000 per year to help pay their student loans.

•  North Dakota Science, Technology, Engineering, and Mathematics (STEM) Student Loan Program: Qualifying college graduates who work in STEM-related fields in North Dakota may be eligible to receive up to $1,500 per year and up to $6,000 total student loan forgiveness.

•  Pennsylvania Primary Health Care Loan Repayment Program: If you’re a physician, dentist, or another practitioner who commits to two-years in an underserved area in Pennsylvania , you may be eligible to receive between $30,000 and $100,000 in student loan repayment assistance.

•  California Bachelor of Science in Nursing Loan Repayment Program: RNs living in California who agree to a one-year service commitment may receive up to $10,000 to help repay their student loans. They can also renew that commitment for up to two more years and receive up to $10,000 each year they qualify.

•  Maine Alfond Leaders Program: If you live in Maine and work in a STEM-designated job, you may qualify for repayment of up to half of your outstanding student loan debt, with a $60,000 maximum.

What to Do While You’re Waiting for Your Grant Money

If you qualify for a grant or student loan repayment based on your career or where you choose to work and live, the assistance can make a world of difference for your student loan repayment strategy.

But in the meantime, you’ll still have to make regular payments on your loans. One way to potentially get a lower payment or interest rate is student loan refinancing.

Depending on the terms you qualify for, you could significantly reduce the amount of money you pay in interest over the life of the loan. Or you could extend your loan term and potentially reduce your monthly payments, but that would mean you’d pay more in interest overall (longer term=more payments).

One thing to keep in mind, though: If you’re applying for grants that only apply to federal loans, you may want to hold off on refinancing, because you’ll lose your federal loan benefits when you refinance.

If you qualify to refinance with SoFi, there are no origination fees or prepayment penalties. You can even use our convenient student loan refinancing calculator to compare your current loan with a SoFi loan to get an idea of how refinancing could help you accelerate your student loan repayment.

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.

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.

A lot of things keep us up at night. Finances. Dealing with family during the holidays. Finances. An awkward interaction with a coworker. Finances. An argument with a partner. Finances.

You get it.

Specifically, student loan interest rates could be causing your finance-related insomnia. But what is a high student loan interest rate, and how can you tell if yours is too high? To learn this, it’s important to understand the factors that influence interest rates in the first place.

What Are Interest Rates?

Without interest, lenders have no way of making a profit off of what you borrow. In their minds, everyone wins: you get the money you need, they eventually get their money back. And the interest yields earnings for the lender.

Interest rates can vary drastically depending on the type of loan, the lender, the amount you borrow, and often your credit history or financial profile.

Are Your Interest Rates Fixed or Variable?

Fixed interest rates are interest rates that don’t change over the life of the loan. Variable interest rates fluctuate based on market indexes . This means that the interest payment you pay one month might not be what you pay the next month. Sometimes, variable interest rates start out lower than their fixed interest rate counterparts.

The choice you make for your loan might depend on a number of factors. If you’re the type to feel more comfortable knowing you’re paying the same rate no matter what, a fixed interest rate might be the better option for you. If you’re willing to take a risk, a variable interest rate could be the way to go. But again, it’s a risk: your rate could increase based on how the market is doing.

You may want to check your loan terms to see which type of rate you have. If you have more than one student loan, make sure to review them all.

Federal vs Private Student Loan Interest Rates

Federal student loans come with fixed interest rates. And those interest rates are set by Congress. If you take out a federal student loan, the fixed interest rates will not change for the life of the loan. Interest rates for federal student loans are based on the 10-year treasury note and are set annually, and go into effect each July for the coming school year. (You can learn more about federal student loan interest rates here .)

While federal student loan interest rates are set by Congress, private student loan rates are set by each individual lender. Additionally, the rate you get is often determined by your creditworthiness. If you’re new to borrowing money, lenders might not see you as responsible with credit—because you haven’t proved you are yet. And if you’ve proven to be “bad” with credit in the past (aka having a lower credit score, for example), lenders may be less confident about loaning money to you.

For private student loans, there are a few things that determine your interest rate, like your credit score and credit history. Each lender has different credit standards to determine what is best for each borrower.

Student Loan Consolidation

If you’ve got federal student loans, you may be eligible to consolidate your student loans through the federal government with a Direct Consolidation Loan. Consolidating your student loans this way is essentially combining all of your loans into one with a new interest rate and term.

Your new interest rate under a Direct Consolidation Loan is the weighted average of your old loan rates, rounded up to the nearest one-eighth of 1%. Only federal student loans can be consolidated under a Direct Consolidation Loan.

Student Loan Refinancing

Student loan refinancing is similar to consolidation, but is handled differently. Refinancing is offered via private lenders, not the federal government. And instead of combining all your loans and averaging out the interest rate, you can get one new loan to replace all of your old ones, along with a new interest rate.

Your interest rate isn’t based on the interest rates of your former loans. Instead, it’s based on your current creditworthiness and other factors that vary by lender. For example, you may qualify for a lower interest rate when you refinance if you have a solid credit score and history, and can demonstrate you’re responsible enough to pay back your loan.

With SoFi, you can even refinance both federal and private student loans. If you have both, you might want to consider refinancing to see if you can lower your interest rate.

Income-Based Repayment

Income-Driven Repayment (IDR) plans are available to federal student loan borrowers who are looking to manage their payments. For an income-driven repayment plan, monthly payments are based off your discretionary income and the size of your family.

This can be helpful because if you’re not making as much as you’d expect while also financially supporting others, IDR plans help make payments more manageable, allowing you to continue making payments you might otherwise be missing.

Missing payments can cause you to become delinquent or eventually default on your student loans, which could crush your credit score.

There are different IDR plans to choose from. But if you’re still making payments after 20 or 25 years—depending on the plan —the remainder of your loan may be eligible for forgiveness. (Note: if you refinance your federal loans with a private lender, you will no longer be eligible for IDR plans and other federal student loan benefits.)

Getting a Cosigner

When you’re looking to refinance your loan, you may not have top-notch credit to land you an awesome interest rate. If that’s the case, you might want to explore cosigner options.

A cosigner can be anyone that agrees to pay your loan in your place if you fail to do so. Does this sound like a major responsibility and an even more significant ask? It is. Making a cosigner liable for you is a big deal. Failing to pay back your loan will still hurt your credit score. But with a cosigner, it will also hurt their credit score.

Whoever your cosigner is—a partner, a friend, a family member—having a plan in place to repay your new loan, including contingencies for potentially coming up short and needing immediate assistance, can provide reassurance to them.

You’ve graduated from college, degree in hand, and are headed into the workforce. After countless applications, phone screens, and in-person job interviews, you’ve done it—you’ve secured your first, full-time job as an adult.

As you experience the thrill of getting your first paycheck, it can be tempting to splurge on a celebratory dinner or a new outfit for work. But before you spend your paycheck on something indulgent, it could be worth thinking about how to spend it more wisely. Here are our best tips for spending your first paycheck as you start your new job.

Set Up Your 401(k)

You’ll learn pretty quickly that you’ll end up losing a decent chunk of change to taxes. One way to offset that is to invest money in tax-advantaged accounts, including a 401(k). As a part of your offer package, you will likely receive information on the company’s benefits—including any healthcare and 401(k) options. It can seem easy to brush this information off as you get started in your career, but reviewing it closely is an important part of deciding whether to accept a job in the first place.

A 401(k) is an employer-sponsored retirement plan that allows both you and, depending on your plan, your employer to contribute to the account. Employers may offer a contribution match of a certain percentage or specific amount. Each employer offers contribution matches at their discretion, so if you’re not sure what your company offers, check with HR or consult company policy.

It’s never too early to start saving for retirement. The earlier you begin making contributions, the more time you give yourself to take advantage of compounding. Basically, the interest you earn can then be reinvested, allowing your money to grow over time.

Consider investing at least enough to take advantage of your employer match. If your employer matches 6%, contribute 6%. That way you’re not leaving any money on the table. (Once you set it up, the money you contribute will probably be taken directly out of your paycheck.)

Set Up a Checking and Savings Account

Before you get your first paycheck, set up a checking and savings account. If you already have these types of accounts, now is a good time to assess whether they are still a good fit for your current financial needs. Take the time to review interest rates at various banks and online financial companies.

For example, SoFi Checking and Savings is a checking and savings account that earns you more and costs you nothing. You can easily access your money online or withdraw cash fee-free from 55,000+ ATMs worldwide.

Once you’ve set up your checking and savings accounts, consider setting up direct deposit. That way you don’t have to worry about depositing a check every time you get paid and you can start earning interest on that money as soon as it is payday.

You can also consider keeping your spending money in a checking account and setting up automatic transfers to your savings account. It’s an easy way to force yourself to save some cash at the beginning of your career.
An interest-bearing savings account is a great place to store your emergency fund. Conventional wisdom suggests saving anywhere from three to six months of living expenses to cover emergency expenses, such as unexpected medical bills or car repairs.

We know you just got started at your new job and may not be ready to think about these scenarios, but, in the event that you get laid off or the company goes out of business, having an emergency fund will allow you to stay afloat until you find your next gig. Even contributing $50 per paycheck to your emergency fund can help set you up with a little safety net should something unexpected happen.

Make Payments for Student Loans

Another important expense you should factor into your first paycheck is student loan payments. Even if you start your new job during your student loan grace period, you should probably consider your monthly payments and start setting the money aside. If you have unsubsidized loans, use the money to make interest-only payments on your loans.

If you have subsidized loans, it’s possible to save some, then use the money you have saved to make a lump-sum payment on the loans when your grace period ends. Both of these options can help set you off on the right foot when it comes to student loan repayment. By factoring your student loan payments into your budget upfront, you get used to not using that money for casual spending on things like dinner out or drinks with friends.

It’s also a good time to review your repayment plan on your student loans. If you have federal student loans there are a variety of repayment plans to choose from, including the standard 10-year repayment plan and four income-driven plans. If you have a combination of private student loans and federal student loans, you could consider refinancing them with a private lender, like SoFi, in the hopes of securing a lower interest rate.

With a lower interest rate you could potentially reduce the money you spend on interest over the life of the loan. This could be a great option if you are on a standard repayment plan and are interested in securing a lower interest rate.

If you’re taking advantage of federal programs like deferment, forbearance, income-driven repayment, or Public Service Loan Forgiveness, refinancing your student loans may not be for you, as you will no longer qualify for those programs.

To see how much refinancing could impact your loan, take a look at SoFi’s student loan refinance calculator. When you refinance with SoFi there are no prepayment penalties or origination fees.

Start an IRA

Even if you’re already contributing to a 401(k), setting up an IRA could be beneficial. There are two kinds of IRAs, traditional and Roth. When you contribute to a traditional IRA, the contributions are deducted from your taxes, meaning you’ll pay taxes on distributions when you retire.

When you contribute to a Roth IRA, your contributions are taxed upfront but can be withdrawn in retirement tax-free—and that includes any capital gains you’ve earned.

You can contribute up to $6,000 to either type of IRA annually. If you are over the age of 50, you can contribute an additional $1,000 as catch-up contributions.

An added benefit to opening a Roth IRA: You could use it to fund part of a down payment on the future purchase of a home. As long as the Roth IRA has been open for five years, you’re allowed to withdraw $10,000 from your Roth IRA to buy your first home without any taxes or penalties. This could be a good start for saving for retirement or for your first house.

Still Have Money Left? Treat Yourself

If after paying your monthly expenses and contributing to your various savings goals you still have money leftover, you can use it to splurge on something you’ll really enjoy like trying out a new restaurant, buying tickets to a concert or a sports game, or having a night out on the town.

Or, you could use the additional money to save up toward another short-term goal—maybe an international adventure, a TV, or a new bed frame. Or if you’re feeling frugal, use the extra money to make an additional payment on your student loans.

Paying more than the monthly minimum is one of the fastest ways to accelerate your student loan repayment. At the end of the day, you’re working to earn money to live your best life, so make sure you are enjoying it and saving for your long-term financial goals at the same time.

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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
SoFi Checking and Savings®
SoFi Checking and Savings is offered through SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates are a bank.

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