Pros & Cons of the F.I.R.E Movement

Most people dream of the day they clock in for the very last time. Of course, in most cases, we imagine that’ll be when we’re a little more gray around the ears. What if you could take the freedom and independence of retirement and experience it, say, thirty years earlier?

That’s the basic principle of the F.I.R.E. movement, a community of young finance people who aim to put themselves in a position to retire in their 30s or 40s rather than their 60s and 70s.

And while it may sound like the perfect life hack, attempting to live out this dream does come with some serious challenges.

This article will review the basic tenets of the F.I.R.E. movement and talk about the tactics people take to achieve their goal of early retirement.

Let’s dig into some of the pros and cons, so those interested can see if they’re able to incorporate any elements of the F.I.R.E. movement into their financial lifestyles.

What Is the F.I.R.E. Movement?

F.I.R.E stands for “financial independence, retire early,” and it’s a movement wherein people attempt to gain enough wealth to retire far earlier than the traditional timeline calls for.

The movement can trace its roots to a 1992 book called “Your Money or Your Life” by Vicki Robin and Joe Dominguez, and started to gain a lot of traction, particularly amongst millennials, in the 2010s.

In order to achieve retirement at such a young age, F.I.R.E proponents devote 50% to 75% of their income to savings.

They also use dividend-paying investments in order to create passive income streams they can use to support themselves throughout their retired lives.

Of course, accumulating the amount of wealth needed to live up to 60 years without working is a considerable feat, and not everyone who aims at F.I.R.E. succeeds. The F.I.R.E. retirement timeline differs significantly from the conventional one most working people expect to take on, and making up the difference in time can be a challenge.

F.I.R.E. vs. Traditional Retirement Timelines

Before diving more thoroughly into the F.I.R.E. approach, let’s take a moment to review the traditional retirement timeline.

Most working people expect to retire sometime around the age of 65 or so, which is also when traditional retirement accounts and benefits start to kick in. For those born after 1960, Social Security benefits can begin at age 60, but full Social Security benefits don’t kick in until age 67.

Specialized, tax-incentivized retirement accounts, like 401(k)s and IRAs, also carry age-related restrictions which have a de facto impact on most folks’ retirement age; for example, 401(k)s generally can’t be accessed before age 59 ½ without incurring a penalty, but account holders are required to begin making withdrawals from these and other retirement accounts by age 70 ½. These obligatory withdrawals are also known as “required minimum distributions,” or RMDs.

Even a traditional retirement timeline can be difficult to keep up with. In fact, recent data shows that approximately a quarter of Americans have no retirement savings whatsoever.

Online calculators and budgeting tools can you figure out the answer to the question, “Am I on track for retirement?”—and are customizable to your exact retirement goals and specifications.

Retiring Early

Given the challenge of saving enough for retirement even by age 60 or 70, what kinds of lengths do the proponents of the F.I.R.E. movement go to?

Some early retirees blog about their experiences and offer tips to help others follow in their footsteps. For instance, Mr. Money Mustache is a prominent figure in the F.I.R.E. community, and advocates achieving financial freedom through, in his words, “badassery.”

His specific advice includes reshaping simple (but expensive) habits—like eliminating smoking cigarettes or drinking alcohol, and limiting dining out.

Of course, the basic premise of making financial freedom a reality is simple on its face: spend (much) less money than you make in order to accumulate a substantial balance of savings.

Investing those savings can potentially make the process more attainable by providing, in the best-case scenario, an ongoing passive income stream.

However, it’s important to note that many people who achieve F.I.R.E. are able to do so in part because of generational wealth or special privileges that aren’t guaranteed.

For instance, Mr. Money Mustache and his wife both studied engineering and computer science and had “standard tech-industry cubicle jobs,” which tend to pay pretty well—and require educational and professional opportunities not all people have equal access to.

And in almost all cases, pursuing retirement with the F.I.R.E. movement requires a lifestyle that could be described as austere, foregoing common social and leisure expenses like restaurant dining and travel.

Financial Independence Retire Early: Pros and Cons

Although financial independence and early retirement are undoubtedly appealing, getting there isn’t all sunshine and rainbows.

There are both benefits and drawbacks to this particular approach to finances that should be weighed before undertaking the F.I.R.E. strategy.

Pros of the F.I.R.E. Approach

Benefits of the F.I.R.E. lifestyle include:

•   Having more flexibility with your time. Those who retire at 35 or 40, as opposed to 65 or 70, have more of their lifetimes left to spend pursuing and enjoying the activities they choose.
•   Building a meaningful, passion-filled life. Retiring early can be immensely freeing, allowing someone to shirk the so-called golden handcuffs of a job or career; when earning money isn’t the primary energy expenditure, more opportunities to follow one’s true calling can be taken.
•   Learning to live below one’s means. “Lifestyle inflation” can be a problem amongst many working-age people, who find themselves spending more money as they earn more income. The savings strategies necessary to achieve early retirement and financial independence require its proponents to learn to live frugally, which can help them save more money in the long run—even if they don’t end up actually retiring early.
•   Less stress. According to a survey by BlackRock , money is one of the leading worries for many Americans. Gaining enough wealth to live comfortably without working would thus wipe out a major cause of stress, which could lead not only to a more enjoyable, but also a healthier, life.

Cons of the F.I.R.E. Approach

Drawbacks of the F.I.R.E. lifestyle include:

•   Unpredictability of the future. Although many people seeking early retirement map out their financial plan well, the future is unpredictable. Social programs and tax structures, which may figure into future budgeting, can change unexpectedly, and life can also throw wrenches into the operation. For instance, an expense like a major illness or unexpected child could wreak havoc on even the best-laid plans for financial independence.
•   Some actually find retirement boring. While never having to go to work again might sound heavenly to those who are on the job, some people who do achieve financial independence and early retirement struggle with figuring out what to do with themselves. Without a career or any specific non-career goals, the years without work can become difficult to fill.
•   Finding oneself unable to rejoin the workforce. If someone achieves F.I.R.E. and then learns it’s not right for them—or is compelled back into the workforce due to an extenuating circumstance—they may find themselves facing a challenging reintegration. Without continued in-office experience, one’s skill set may not match the needs of the economy… and job searching, even in the best of circumstances, can be difficult.
•   F.I.R.E. is hard! Even very dedicated proponents of the financial independence and early retirement approach acknowledge that the lifestyle can be difficult—both in the extreme savings strategies necessary to achieve it and in the ways it changes day-to-day life. For instance, extroverts may find it difficult to forego the consistent human interaction facilitated by an office job. Others find it challenging to create a sense of personal identity that doesn’t revolve around a career.

Investing for F.I.R.E.

An important part of achieving financial independence is investing. Investing allows F.I.R.E. proponents—and others—earn income in two important ways.

Dividend income is earned by shareholders when companies have excess profits. They’re generally offered on a quarterly basis, and all one has to do to earn them is simply hold shares of a stock.

However, because dividend payments depend on company performance, they’re not guaranteed, so other income sources (including substantial savings accounts) should be in place to back up this income stream for early retirees.

Investors can earn profit through market appreciation when they sell stocks and other assets for a higher price than they paid for them in the first place.

Even for those who seek retirement at a traditional pace, investing is one of the most common tactics used to create the kind of exponential growth over time that can build a substantial fund to draw off for the remainder of one’s life. There are many accounts built specifically for retirement investing, such as 401(k)s, IRAs, and 403(b)s.

However, these accounts carry age-related restrictions and contribution limits which means that those interested in pursuing retirement on a F.I.R.E. timeline will need to explore additional types of accounts and saving and investing options.

For example, brokerage accounts allow investors to access their funds at any point—and to customize the way they allocate their assets in such a way to maximize growth.

How SoFi Invest Can Help You Get Started on Your F.I.R.E. Journey

Whether you’re hoping to shorten your retirement timeline from 30 years to only 15 down the road or you’re just hoping to do the traditional timeline justice—or even if you’re just looking to grow your wealth in preparation for a major, shorter-term financial goal, like buying a new car—investing can be one of the most effective way to reach your objectives.

And if you’re looking for a way to start investing from scratch on your own terms, SoFi’s active investing platform could be the perfect way to do so.

SoFi Invest® allows members to learn the ropes as they go, joining a community of other people interested in finance who are doing the exact same thing—and who are invited to gather at exclusive events and educational experiences.

Investors can start their investing journey without worrying about any account minimums, and we don’t charge annoying transaction fees you may run into at other brokerages.

Invest account holders with SoFi also have access to a suite of investing tools that can help them become more knowledgeable investors, including a personalized stock watchlist.

You’ll also have the ability to buy fractional shares, so you can get access to major companies’ assets even if you’re just getting started.

SoFi also offers members access to SoFi Financial Planners who can provide personalized insight and help investors plan for their unique financial goals at no cost.

Want to learn more about how SoFi’s Invest® could help you on the way to early retirement—or another important personal financial goal? Learn more today.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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.
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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The Cost of Driving vs Flying

Whether you’re heading to Vegas for a wild weekend adventure or trekking across the country to celebrate the holidays with your in-laws, chances are you spend a lot of time in transit.

After all, millennials love to travel. But before you book your next plane ticket or gas up your car for a road trip, it might be worth it to consider the pros and cons of driving vs flying.

After all, flying might get you there faster, but driving lets you see the sights. Flying might be more expensive, but driving can be more work. So which one is right for your trip?

Pros and Cons of Driving vs Flying

It can be easy to assume that the main benefit of flying is saving time and the main advantage of driving is saving money, but it’s not quite so simple. In fact, the pros and cons of driving vs flying depend on the type of trip you’re taking, your priorities, and your personal preferences.

For example, if you’re taking a business trip to attend a crucial half-day meeting in another city, your highest priority might be the speed of flying in and out. If, however, you’re planning a family vacation to a national park, you might want to pause before booking that plane ticket if you’ll have to rent a car when you get there anyway.

And if you’re six foot six and aren’t interested in spending five hours with your knees touching your chin, you might be more inclined to ride out the trip in the car—where you can stop to stretch as often as you need.
But beyond personal preferences, there are some additional pros and cons to flying and driving.

Unless you’re a college student taking a tour of America, road trips can get a bad rap, replete with images of dingy rest stops and greasy fast food bags stinking up your car with stale french fry smell.

But the truth is, traveling by car can have some benefits. First of all, it can be cheaper to travel by car than by air, especially if you’re going with a large group of people. After all, six people flying to Vegas will each need their own ticket, but they can all pile into the same minivan.

And about that road trip food? You’re not limited to burgers and fries, in fact, traveling by car means you can more easily access any type of food your heart desires, not just what’s available in the airport.

Some people even plan their road trip routes to go through foodie cities around dinner time to take advantage of world-class cuisine.

Let’s not forget the sightseeing—traveling by car offers flexibility so you can see the sights you want, whether that’s a quick detour through a national forest on your way across the country or planning a route that takes you from the Air and Space Museum in Washington D.C., to the National Blues Museum in St. Louis, to the Buffalo Bill Museum in Colorado.

One other benefit? Science shows us that the anticipation that builds in advance of a trip may lead to a happiness boost before the trip and could even help you enjoy the vacation more. That means that a long drive to get to your vacation destination might make the trip even sweeter when you finally do arrive.

Driving has its downsides, too, however. One of the more significant disadvantages, of course, is that you can’t just sit back and relax while you’re driving—you’re the one responsible for making sure the car gets there safely!

It also can take more work to plan a trip, as you have to choose what route you’ll take, where you’ll stay, and whether you’ll be hitting drive-throughs from California to New York or making reservations at noteworthy restaurants along your route.

And we can’t forget one of the main reasons many people choose to fly instead of drive: it takes a whole lot longer to drive cross-country than it does to hop a red-eye from Los Angeles to New York.

That time-saving advantage is one of the biggest pros when it comes to choosing to fly. A trip that could take days of driving might only take hours in the air. And since you’re not the one flying the plane, you’re free to close your eyes and snooze away the hours until you arrive at your final destination.

There’s no question of what route to take, where to stop, and when you’ll leave and arrive—the airline has that all figured out for you.

You can take off from New York and wake up in L.A. ready to roll, without the exhaustion of a multi-day road trip holding you back.

Of course, you’ll pay a premium in exchange for a speedy arrival and the convenience of flying. It is often more expensive to fly than to drive. You might also have to sacrifice a little personal space and dignity.

Airplane seats are getting smaller and more and more people are packed onto flights, which means that you can pretty much count on being kind of uncomfortable while you engage in a silent but cutthroat battle with your seatmate over who gets to use the single armrest.

And if you’re a nervous flyer, the anxiety of flying might outweigh the benefit of getting to your destination sooner.

Driving vs Flying: The Cost

For many people, the decision of whether to fly or drive may come down to cost. While you may be tempted to merely compare ticket prices to gas prices to decide which one is cheaper, don’t forget to take into account extra costs like eating out, luggage fees, and hotel rooms.

Here are a few travel costs of driving to consider:

•   Gas
•   Hotel Rooms
•   Eating Out
•   Car Maintenance
•   Tolls

And for flying:

•   Ticket
•   Seating choice
•   Luggage fees
•   Eating out
•   Transportation to and from the airport
•   Airport parking
•   Car rentals

Luckily, in this day and age, you don’t need a map and a calculator to figure out which transportation method will be more cost-efficient.

You can easily use an online calculator like this one from Travelmath or this one from BeFrugal to get an idea of how travel costs may compare whether you are driving or flying.

One thing to keep in mind is all the little costs that can add up while traveling, like unexpected purchases, annoying tolls and convenience fees and out-of-network ATM fees that rack up whether you drive or fly.

SoFi Money® is a cash management account where you can withdraw cash fee-free at 55,000+ ATMs worldwide, which means that you can pay for your vacation without shelling out for additional fees each time you want to grab cash.

No more running to the airport news kiosk store to buy a five-dollar bottle of juice you don’t need in order to get cashback. No more sighing when you finally find an ATM in a new city only to realize it’s for the wrong institution.

Learn more about how SoFi Money lets you take control of your cash.


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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank.

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DINK: Living the Dual Income No Kids Lifestyle

More and more Millenials and Gen Xers are deciding to wait to have kids, or not have kids at all. This choice is partly financial. Having children can increase a couple’s expenses by 10% to 20%.

In the United States, a middle to high-income couple can expect to spend anywhere from $284,570 to $454,770 on a kid from birth to age 17, according to the most recent study completed by the United States Department of Agriculture in 2015.

There are a few reasons this trend is growing in popularity, and a number of upsides for couples who choose to live the kid-free lifestyle.

What Does DINK mean?

DINK is a slang term short for “dual income, no kids.” It refers to households where there are two incomes and no children.

The two incomes can either come from both partners, or one partner having two incomes.

Some couples are opting to wait longer before having kids, so they fall into the DINKY, or “dual income, no kids yet” category.

The Significance of Dual Income, No Kids

Without the added expense of children, DINK couples might potentially have more disposable income available for spending and investing. Marketing campaigns for luxury vacations, homes, and other high-end items are often targeted towards DINK couples.

However, just because a household has two incomes doesn’t automatically mean they have more money or more disposable income.

If their two incomes are not very high, they live in an expensive area, or they have spending habits that eat up a large portion of their income, their spending ability can be affected.

Why are More Couples Choosing the DINK Life?

One of the main reasons couples are choosing to wait or forego having children is financial. When the Great Recession hit in 2009, a lot of Millenials were just graduating from college or starting their careers.

The recession made it challenging to get jobs and begin investing for the future. Gen Xers lost 45% of their wealth during this time. On top of recovering from the recession, nearly half of Millenials and a third of Gen Xers have a significant amount of student loan debt.

These factors have made it difficult for young people to achieve financial milestones and start families.
Some couples choose to wait a few years before having kids after they get married. They can use this time to travel, make financial and life plans, and enjoy married life as a couple.

Structuring a DINK Household

There are many costs associated with having children, including clothing, food, healthcare, and education. Partners who don’t have children might instead choose to splurge on themselves or save up for an early retirement.

DINK couples with disposable income have many options for how to spend or invest their money. Some couples may choose to buy nice cars, while others may enjoy going out to eat.

They also potentially have more free time to travel and spend money. In general, clothing, food, or travels that may have been too expensive for couples with children can be accessible for DINK couples.

In terms of housing, a couple with no children doesn’t need as many bedrooms or as much space. They can either choose to save money by renting or buying a smaller place to live, or they can choose to use the extra space for other purposes, such as a home gym, art studio, or office.

Kids also take up a lot of time and have fairly rigid schedules with school and extracurricular activities. DINK couples may choose to take more time off for travel and leisure, or others might choose to work longer hours.

In addition to purchasing and leisure options, dual income couples have the opportunity to invest their extra money. They might purchase stocks, bonds, or real estate, or explore other opportunities.

Money Management Tips for Couples

Learning about each other’s financial habits and goals so that couples can be on the same page and have productive conversations about finances is a common suggestion.

Establishing open and honest communications before kids are in the picture may make things easier in the long run.

There are some crucial areas for couples to work on if they want to live a successful DINK lifestyle or get their finances set up before having children:

Paying Off Debts

Before setting off on a lavish vacation, it might be smart for DINK couples to pay off high-interest debts such as credit cards and student loans.

Without kids, home loans, and other monthly bills, couples may have more available funds to tackle their debt and then use the extra money they’ve saved from monthly interest payments to invest or spend elsewhere.

Creating Sustainable Spending Habits

Whether a DINK couple is waiting to have kids or doesn’t ever plan on having them, practicing sustainable spending habits is crucial for financial success. If a couple is always broke and in debt, having kids probably isn’t going to change that.

Similarly, not having kids could make it tempting to go out to eat or travel a lot. Having conversations about the type of lifestyle each person wants, as well as ong-term and retirement goals, typically helps make day-to-day spending choices easier.

Traveling Smart

Travel is a huge draw for many DINK couples, but it can quickly get expensive. If couples want to travel a lot, they might consider staying in less expensive places and skipping the luxury trips.

If luxury is important to a couple, they might think about only going on one big trip a year. Taking advantage of points credit cards and other offers might maximize their ability to see the world.

Planning Ahead and Investing Early

The more couples can figure out what they want in life and get their finances organized, the easier their financial planning has the possibility to be. If they plan to have kids in the future, they might consider saving now for college and other child-related expenses that may come later.

Factoring in future raises, inheritances, and other additional income or expenses is also useful.

Even if couples don’t start out with high incomes, the earlier they can start saving the more their portfolio has time to grow.

Consolidating

Just as couples without kids may not need to live in a large home, they may not need as much other stuff as well.
DINK couples might choose to only have one car or bicycle, and there might be other items that each person has been buying for themselves that could be shared.

Acquiring New Skills

Couples without kids may choose to invest some of their time and money into additional training and education. If they plan to have kids in the future, this might help them move up the career ladder and possibly be able to afford more for their families.

Getting Wise About Taxes

DINK couples can make smart financial choices in order to minimize their taxes. Contributing to an HSA, putting pre-tax income into a 401K, or putting money into a commuter plan can all help reduce the tax burden. Owning a home may provide tax breaks to some homeowners.

The Pros and Cons of a DINK Lifestyle

There is nothing dinky about the DINK lifestyle, and not having kids or waiting to have kids presents a huge opportunity for couples. However, if they aren’t smart about their savings and spending, couples may risk running into financial trouble.

DINK couples might find some pros to remaining childless:

•   More free time and money to travel for work or pleasure.
•   Ease of mobility—moving or traveling to a new house, city, or country is easier without kids.
•   Disposable income to spend on cars, clothing, food, or other items.
•   Save money by living in a smaller house and not paying for children.
•   Opportunity to save and invest extra income.

There could also be cons to remaining in DINK status:

•   Potential for overspending and splurging on travel and luxuries rather than saving and investing.
•   DINK couples may be in a higher income bracket and have to pay more taxes.
•   There may be less family support for caregiving as they age.

Planning for a Life Without Children

Life without kids might be a great decision for many couples. The extra free time and money can be used in many meaningful ways.

However, it’s important for couples to be on the same page about whether they want kids, and there are some things to keep in mind about a childless future.

Couples will need to figure out how they’ll spend their retirement years, who will come visit or take care of them when they’re older, and who they will leave their money and assets to after they die.

Saving up extra money for caregivers, retirement, and unforeseen circumstances can be a smart strategy for DINK couples.

Key Financial Baselines to Keep in Mind

When doing financial planning for the future, a few things are certain. Couples will have to pay taxes, and they’ll need food, shelter, and basic necessities.

Beyond that, there are some baselines couples can look to as they plan for retirement, investing, home buying, and any kids they might plan to have.

•   $1.5 million: The average amount of money required to retire at age 70, according to AARP .
•   $402,300: The average price for a new home in the United States

Although these numbers may sound like a lot of money, couples with two incomes and no children have the opportunity to start saving some of their extra cash and take advantage of compound interest over time.

If they start early and are smart about their savings and spending, couples can potentially retire early and enjoy more free time for travel and personal pursuits.

Smart Planning for the Ultimate DINK Lifestyle

Going kid-free has many upsides, but it’s important to be money smart, plan ahead, and work together to create a successful and secure future.

There are many helpful tools and resources available for couples interested in financial planning and investing for their futures.

SoFi offers a full suite of investing and money management tools. SoFi Invest® can be used to set up manual or automatic investing.

The SoFi app lets you keep track of your budget, investment accounts, favorite market assets, and goals all in one place. SoFi also has a team of professional financial advisors available to help you get started and reach your goals.

Learn more about SoFi’s investment options and get your future started today.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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How to Save Money for a Trip

Every year, you likely earn at least a few paid vacation days at your job. However, if you’re like many Americans, you rarely ever take them.

As the U.S. Travel Association reports, each year, more than half of Americans leave vacation time on the table. All that unused time accumulated to 768 million missed vacation days in 2018.

Of course, it’s easy to understand why many people simply forgo taking time off. After all, traveling can be expensive.

It’s all too easy: bills can pile up, professional duties can get in the way, and life events can take hold, all letting you leave those vacation days unused. However, there are ways to not only build vacations into your routine but to also save for vacations too.

With a little planning and a small amount of work vacations can be yours again. Here are a few ways you could work saving money for a trip into your financial routine so you never miss another vacation day again.

5 Tips For Saving For a Trip

1. Deciding Where You Want to Go and For How Long

To properly plan for how much you need to save for your trip, you first must decide when and where you want to go. Would you like to stay domestic or go international? Somewhere warm and by a beach, or cold and in the mountains? The choice is yours.

Once you make your choice, you could do a little calculating and add up the costs of transportation, accommodations, food, and entertainment for each member traveling with you. This way, you’ll have a ballpark number to save up to.

Here’s a vacation pro tip for you: If your vacation math comes out to be a little too high for your liking, you could look into your intended destination’s “shoulder season.”

Shoulder season is a professional travel term for the time between the high and low seasons. In other words, it’s a seemingly less desirable time to visit a place.

For example, the shoulder seasons in the Caribbean are in the late spring and early fall. During this time, visitors will still experience warmer temperatures, crystal blue waters, delicious Caribbean foods, and more.

But the early fall, classified here as September to November, also falls at the tail end of the hurricane season, making travel to the Caribbean a bit of a gamble. During that time, flights, hotels, and activities can be much cheaper as there are fewer tourists to fill the seats, rooms, and space.

2. Checking Out Your Current Finances

Once you decide where you want to go and just how much it will cost, then you could take a look at your current financial situation.

You might want to assess whether you have enough money to take a vacation right now, need to postpone until more fruitful times or have the ability to save up for a vacation later in the year.

If you’re not feeling like your finances are quite in the right place to take a trip soon, that’s OK, as there are ways to save so you can still use your vacation days. And that could begin with a budget.

3. Making “Taking a Vacation” a Line Item on Your Budget

If you already have a budget in place, that’s wonderful news. The only thing you might want to do is add in “travel” as a budget item and start socking away a little cash for that each month.

But, if you’re new to budgeting, that’s OK as well. Now might be a great time to start.

To begin, you could gather all your income statements and any outgoing recurring bills such as student loans, credit card bills, mortgage payments, or other debts.

Then, you could create a list of all your monthly expenses, including everything that comes out of your bank account each month, like rent, car payments, student loan payments, credit card statements, food, gas, insurance, gym memberships, streaming accounts, and more. Anything you spend money on, you could make a line item.

Next, you could compare your after-tax income against your debts and see how much you have left over. Any cash left over could go into your vacation fund.

However, if you have nothing left over at the end of your budgeting homework, you might want to take a cold, hard look at your spending and income level to make room for travel.

The simplest place to start might be by reconsidering your monthly spending. Are you still subscribing to that streaming service, and do you really use that gym membership?

If there are things in your current budget that can go, now could be the time to cut them. Then, you could reallocate that money to your travel budget instead.

4. Taking on a Side Hustle to Pay for Vacation

Of course, cutting back isn’t always an option. If you’re serious about saving for a trip, now may be the perfect time to take on a side hustle.

A side hustle is a part-time job outside your normal work. If you decide to go this route to fund your travels, you might want to think deeply about what you’re passionate about so it feels less like a second job and more like fun.

For example, if you simply adore meeting new people, maybe driving for a ride-sharing service is a good fit for you. If you’re a night owl, perhaps picking up a few shifts here and there as a bartender is good.

Or, if you like dogs, you could try signing up for a dog-walking service to bring in a little more money.

If you’d like to flex a little muscle with your other talents like photography, writing, or graphic design, you might try reaching out to a few places as a freelancer, which could both bring in a little more money and make you feel good at the same time.

5. Creating a Dedicated Space for Your Travel Savings

Now that you’ve done all the hard work of deciding where to go, how much it will cost, and how it fits into your budget, it’s time for a fun item: creating a dedicated savings account for your trip.

After all, it’s way more fun to put your vacation money into a savings account called “oh yes vacation time” rather than simply “account 3045766.”

And, you could take things a step further by making your travel account work for you by opening a cash management account that offers no account fees, like SoFi Money®.

SoFi Money has a vaults feature where you can create an individual vault for a specific goal within your overall SoFi Money account.

Plus, you can use your SoFi Money card during your adventure at any ATM around the world.

So, what are you waiting for? Now that you know how to plan, the world is truly your oyster.

Have a few vacation days at the ready? Start saving with a SoFi Money account and get going on your vacation sooner.


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.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank.

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Is Mobile Banking Safe?

People are increasingly relying upon mobile banking apps. A study shows how they are among the most widely used apps in the United States today, along with social media ones and apps providing weather reports.

Mobile usage in North America has climbed over the past year, with nearly 57 million consumers saying they use mobile banking. This is an even more common practice for Millennials.

However, another research shows that almost one third of Americans distrust mobile banking. And, younger Americans are nearly as worried as older generations with hacking and malware as two of the top concerns.

So, is mobile banking safe? Are mobile banking apps secure? How concerned should you be when banking online? Are all apps equally safe/unsafe? How can you improve your online security when you conduct transactions? Are mobile banking and online banking the same? If not, which type is safer to use?

This post will dive into these types of questions. But, first, no—not all banking apps are the same or come with the same degree of security sophistication. Some choices, then, are safer than others.

How is Mobile Banking Different from Online Banking?

At its simplest, mobile banking occurs when a person makes a financial transaction through the use of a mobile device, such as a cell phone or tablet.

Transactions range from pretty simple ones, like signing up to have your bank send you informational text messages, to bill paying, sending money to other people in the United States or internationally, receiving funds, and so forth.

Traditional, brick-and-mortar financial institutions are increasingly offering internet-based services, and there are now mobile lenders that don’t even have an actual building for customers to use. Their mobile devices and apps are their branches.

Here’s something else to consider. Not all internet-based banking transactions are mobile ones. Mobile banking is a form of online banking, but it’s not the only type. You could, for example, conduct financial transactions on your home computer. That’s online banking, but it’s not mobile banking.

Is Mobile Banking Safer?

Some may believe that mobile banking is safer than online banking, while others disagree.

Ways in which mobile banking can be safer include how well-designed apps don’t store data, which makes that data harder to illegally obtain.

Plus, you’re less likely to need to deal with a smartphone virus than a computer one. And, overall , “Mobile phones have more security natively…the apps are more protected than the open website experience.”

To toss in another factor when comparing safety, not all banks use the same security procedures across channels. For example, some financial institutions may use multi-factor authentication technology on their mobile apps, but they don’t use the same level of security on their websites.

Protecting Yourself

A couple of quick and easy things you can do to protect yourself include to:

•   create a strong password for your accounts
•   avoid conducting transactions on a public computer
•   avoid using public WiFi for your transactions
•   make sure your bank is FDIC-insured
•   keep your phone updated to take advantage of the latest security measures available

The good news is that technology continues to improve in ways that boost security. A security measure being used by many financial institutions today is two-factor authentication, also called 2FA, or two-step verification. In authentication processes, there are typically three factors:

•   something you know (your password, for example)
•   something you have (such as your smartphone)
•   something you are (which could be your fingerprint, face, or retina)

In two-factor authentication, users must provide at least two forms of ID, such as the password and a fingerprint.

Or, the secondary authentication could be a numeric code that the user requests and receives via text. This code can only be used one time, preventing it from having value to hackers in the future.

Activity monitoring or user activity tracking can also boost security. In general, this involves software that monitors user behavior on devices to identify suspicious behavior.

Then, risk management can take place to help prevent data breaches or minimize damages. Another security measure is the ability to freeze an account if malicious activity is suspected.

If you’re unsure about what measures your bank takes to protect your data, it’s reasonable to ask the question. If you’re not satisfied with the answer, it can help to explore other options.

Online-Only Account Options

Traditional banks, credit unions, and so forth often provide internet-based services for customers. This section, though, will take a look at the pros and cons of online-only banking, meaning online institutions with no physical locations.

When there are no brick-and-mortar locations, banks can keep overhead costs low—which, in turn, allows them to offer perks over traditional banks, such as higher savings account rates.

Often, though, these online savings accounts limit how many transactions a customer can make a month, which is another way that online banks may cut costs. Limits vary by institution.

Traditional banks may require minimum balances, or require automatic deposits. If those conditions aren’t met, they may charge you a monthly fee. Some online financial institutions, though, don’t make that a requirement.

Online banks have convenient hours, typically open 24 hours a day. This can be helpful for people who can’t necessarily bank during regular hours. Typically, online banks participate in a network of ATMs, perhaps Allpoint or MoneyPass.

These ATMs usually don’t have fees. And, if an online bank isn’t part of an ATM network, the institution may offer to refund related fees up to a certain amount.

With mobile banking, you can deposit a check into your account using your smartphone or tablet camera. Usually, you need to endorse the check, and take a photo of the front and back—some institutions may have additional requirements.

Mobile depositing can be quite convenient, and you can generally use the service 24/7, with deposits typically showing up that day or the next, depending upon the bank’s rules and the time of your deposit.

This service saves you from making as many trips to ATMs—you can deposit checks from anywhere you have a mobile device, and funds are available quickly.

Banks may have limits on how much you can deposit in a day or month, and they will have a funds availability policy that will help you to know how long the institution will place a hold on a particular check, either partial or in total.

Although most online banks provide a customer service line, they usually don’t provide access to a personal banker who can help you to set up accounts, apply for loans, or discuss an issue you’re having. Another challenge associated with many online banks: They keep fees low by limiting the range of services offered, and may not offer checking accounts.

Finding a Mobile Banking Solution

SoFi Money is a cash management account has no account fees. With SoFi Money you can spend, save, and earn all in one place. We work hard to charge zero account fees. With that in mind, our fee structure is subject to change at any time.

Additionally, SoFi takes protecting your account seriously. If you see unusual or suspicious activity on your account, or lose your SoFi Money card, you can freeze your card instantly online or by using the app. If unauthorized activity takes place, simply contact us and we’ll help you to resolve the situation.

•   Each card chip generates a unique transaction code—making it hard to copy.
•   We provide two-factor authentication. To sign into your account, you’ll need your passcode, along with either a security code or fingerprint recognition.
•   We provide activity monitoring. If there is suspicious account activity, we’ll contact you and, if needed, restrict the account until the concern is addressed.
•   If you travel, you can set a notice to help prevent usage interruption. To set the travel notice, simply call SoFi Money® Customer Service at 1-855-456-7634, one-two days ahead of your travel, and let us know the location and timeframe of your travel.

Getting started with SoFi Money is fast and easy!


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.
Each business day, cash deposits in SoFi Money cash management accounts are swept to one or more sweep program banks where it earns a variable interest rate and is eligible for FDIC insurance. FDIC Insurance does not immediately apply. Coverage begins when funds arrive at a program bank, usually within two business days of deposit. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank). If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be lower. For more information on FDIC insurance coverage, please visit www.FDIC.gov . Customers are responsible for monitoring their total assets at each Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits in SoFi Money or at Program Banks are not covered by SIPC.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank.

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