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Wouldn’t it be great if there were a super simple way to budget; say, no more than three figures you had to keep in mind to take control of your finances? That’s exactly what the 50/30/20 budget rule (aka the 50 30 20 rule) can do for you. It’s a simple and effective way to manage your money, allocating 50% of your take-home income to “musts,” 30% to “wants,” and 20% to saving for your future.

For anyone who has ever felt that budgeting was too complicated and headache-triggering to take on, this guideline can make things clear and easy. Here, you’ll learn:

•   What is the 50/30/20 budget rule?

•   Where does the 50-30-20 budget come from?

•   How do you set up the 50 30 20 rule for your finances?

•   What are tips for implementing the 50/30/20 budget?

What Is the 50/30/20 Budgeting Rule?

The 50/30/20 budget or “rule” is a budgeting framework that can be relatively easy to create and implement. It’s one potential way to help keep your finances on track and help you work towards your goals.

The 50/30/20 numbers refer to percentages of your take-home income that you would allocate to three main categories: ”needs” or “musts” (essentials), “wants” (nonessentials), and saving (financial goals), respectively.

The primary goal of the 50/30/20 rule is to learn to prioritize saving money by making it a key part of your spending plan.

Everyone’s financial needs and goals are different, however. And, while these percentages can be a great starting point, you may find that you need to tweak these exact numbers to better suit your needs and current financial situation.

Where Did the 50/30/20 Rule Come From?

The 50/30/20 budget rule gained popularity when Sen. Elizabeth Warren explained it in her book, “All Your Worth: The Ultimate Lifetime Money Plan,” which was first published in 2005.

The simplicity of the concept (and the math) contributed to its appeal. The idea of dividing one’s money into three instantly understandable buckets proved to have staying power.

How the 50/30/20 Rule Works

In the 50/30/20 budget, you allocate your take-home (or after-tax) income into three main categories or buckets according to percentages. Here’s the breakdown:

50% to “Needs”

These are things you cannot live without and the bills you cannot avoid paying. Consider them the “musts;” the items that you need to survive or that would leave you in a difficult situation if you didn’t pay them.

Here are some examples of typical needs:

•   Rent or one of the different kinds of mortgage payments that are possible (in a nutshell, your housing costs)

•   Utilities, including electricity, WiFi, and water

•   Car payments and/or other transportation expenses (say, to get to work)

•   Groceries (but not that pricey takeout salad)

•   Basic clothing (what you need to wear in daily life, at work, and/or to stay warm; not the latest style of jeans just because they’re cool)

•   Insurance payments

•   Healthcare costs

•   Debt payment, such as the minimums on student loans and/or your credit card

The “needs” category does not include items that are extras, such as Netflix, dining out, and clothing beyond what you need for work. Those fall under the next category.

30% to “Wants”

Also known as personal, discretionary, or nonessential spending, these are the things you buy that you could technically live without. This includes:

•   Dining out or takeout food

•   Going to the movies, a show, or a concert

•   Vacation/travel costs

•   Streaming channel subscriptions (unless they are somehow vital for your work)

•   New clothes, simply because you feel like buying them

•   Electronics that are cool but not vital to your job

•   Spa treatments

•   Ubers or taxis instead of public transportation.

Wants are all the little extras and upgrades you spend money on that make life more fun.

20% to Savings

This is the money you save for future financial goals. This category often provides a means to financial security. This includes:

•   Money put into an emergency fund

•   Saving for a downpayment on a home

•   IRA or other retirement contributions

•   Extra payments to help pay off your loans sooner (minimum payments are part of the “needs” category).

Even though the budget is written as 50/30/20, the purpose of this system is to prioritize the saving aspect, this 20%. (It may be more appropriately named the 20/50/30 budget.) The goal here is to get people to save for tomorrow rather than just spend today.

The idea is to make space for the 20% without laboring over the rest. The minutiae of where your fun money is going ($5 for a latte here, $10 for an appetizer there) isn’t super important if you’re saving enough to meet your financial goals.

Another point to note: If you aren’t saving 20% of your income right now, that’s okay. The process of setting up the 50/30/20 budget will help you find out where your money is going so that you can make adjustments. After completing your budget breakdown, you can address the areas where you’d like to cut back.

Benefits of the 50/30/20 Budget

The 50/30/20 rule may be a minimalist budget, but it can pack the same powerful benefits you would get with a more labor-intensive budget.

Some of the payoffs of setting up and following a 50/30/20 include:

•   Knowing where you stand. As a popular adage goes, “what gets measured gets improved.” It can be hard to start spending less and saving more if you aren’t clear on how much and where you are currently spending.

•   Identifying easy ways to cut back. As with any budgeting process, the 50/30/20 budget can reveal opportunities to cut back on spending. Simply going through the process – and seeing exactly where your money is going each month – can help to motivate you to make some relatively pain-free adjustments.

•   Reducing financial stress. While building a budget may seem like a stress-inducing exercise, it can ultimately relieve a lot of financial worry. It can add structure and clarity to your spending. Instead of angsting over every purchase, you’ll have built-in boundaries that allow you to spend freely within your budget.

•   Simplifying the budgeting process. By having fewer categories than a traditional monthly budget, the 50/30/20 rule of thumb can be easy to set up and to maintain. It can also be simple to track a 50/30/20 budget digitally.

•   Achieving your savings goals. By making saving a priority and setting some money aside before you start spending, a 50/30/20 budget can help you work effectively towards your financial goals. Whether that’s creating an emergency fund, making a downpayment on a home, or going on a great vacation is your decision.

Tips for Implementing the 50/30/20 Budget

Want to give the 50/30/20 budget a try? If you decide to go this route, or you’re just looking for some budgeting basics, here are some steps you can take to get started.

Gathering Your Financial Records

To get started with any kind of budget, it’s helpful to collect the last three months or so of bank and credit card statements, pay stubs, receipts, and bills.

Calculating Your Monthly Income

You can use your statements to figure out exactly how much money you are bringing in each month after taxes are taken out. You can think of after-tax dollars as the pot of money you have to siphon into the three budget categories each month.

Setting a Savings Target

You may want to begin with the most important category, which is the 20% (savings). Since the goal for this budget is to turn the 20% into a nonnegotiable part of the plan, you’d calculate 20% of your monthly after-tax income and set that figure aside for things like debt repayment, cash savings, retirement investing, and any other financial goals that you have.

Even if you don’t feel it’s realistic for you to put 20% into saving right now, you might run the exercise assuming that you will. You’ll be able to tinker with the numbers later.

Calculating Essential Monthly Expenses

Next, you may want to make a list of all of your monthly essential or fixed expenses, such as rent/mortgage, utilities, groceries, and insurance.

Currently, do essential items absorb more than 50% of your take-home income each month? If so, what percentage do they comprise? And, is there any way to reduce any of these monthly expenses?

Building a Hypothetical Budget

After adding up savings and essentials, what is left over is what can be allocated towards discretionary spending, or the “wants” outline above.

It can be helpful to keep in mind that the 50/30/20 numbers are just a guideline. If the cost of living is high where you live, for example, it may not be feasible to keep essentials to 50% of your take-home income. In this case, you may need to reduce spending on wants.

Or, you may decide that at this point you can’t quite afford to put 20% into savings. There are variations on the 50/30/20 theme that accommodate these situations, such as the 70/20/10 rule, which acknowledges that for some people, a hefty 70% will be needed for the “musts” of life.

Recommended: Cost of Living by State Comparison

Once you see your numbers in black and white, you can play with the percentages and come up with a workable plan for roughly how much you can spend on nonessentials, or fun, each month.

Putting Your Plan into Action

Now that you have a basic guideline of how much money you will put into one type of savings account each month and how much cash you can spend each month on wants, it’s time to give your budget a try.

You may want to plan on tracking your spending for two to three months to start. You can do this by saving receipts and logging expenses according to the three categories at the end of the day. Or, you could use a budgeting app that makes it easy to track and categorize expenses.

Another tip: Try automating your finances and having money transferred from your checking account to your savings right after payday. That way, you won’t see the cash sitting in checking and think it’s there for the spending.

Making Some Tweaks

After tracking your spending for several months, you’ll probably have enough data to refine your original 50/30/20 budget. From there you can adjust the categories based on your actual spending, not just your projected spending.

You may also find that you need to adjust your spending. Discretionary spending is typically the easiest place to do some trimming.

You may decide you need to cook at home (rather than get takeout) a few more times a week, save on streaming services by dropping a channel you rarely watch, or ditch the gym membership and work out at home.

it may also be possible to pare back some of your fixed monthly expenses. Reducing utility bills, saving on gas, and, if possible, rent, could free up more money for fun spending.

After making some adjustments, you can execute your new and improved budget. You may want to continue to track spending in a method that works best for you until spending according to your budget becomes second nature.

The Takeaway

The 50/30/20 rule of thumb is a set of easy guidelines for how to plan your budget. Using them, you allocate your monthly after-tax income to the three categories: 50% to “needs,” 30% to “wants,” and 20% to saving for your financial goals.

Your percentages may need to be adjusted based on your personal circumstances and goals. But using this simple formula can be a good way to get a better handle on your finances, and to start working more effectively towards your goals.

You may find that technology can make sticking to a budget simpler. If you open a bank account online with SoFi, you’ll have features and perks that can help make the most of your money. Our Checking and Savings offers a competitive annual percentage yield (APY) and charges you no account fees. Plus you’ll spend and save in one convenient place, be able to track where your money goes, and use Vaults and Roundups to boost your savings.

Better banking is here with up to 4.00% APY on SoFi Checking and Savings.

FAQ

Is the 50/30/20 rule a realistic goal?

For many people, the 50/30/20 rule is a realistic way to budget for essentials, discretionary expenses, and savings contributions. For others, it may not be realistic. If you are just starting your work life, earn a lower salary, live in an area where housing is very expensive, or have considerable debt to manage, you might do better with a different budget guideline.

Is the 50/30/20 rule weekly or monthly?

When budgeting, people typically work with their monthly expenses, since that is how housing costs, utilities, and other payments (say, student loans and credit card debt) are assessed. You could, however, apply the 50/30/20 guideline to your weekly spending and see how your finances are tracking.

What is the 60/30/10 rule budget?

The 60/30/10 budget is a different version of the 50/30/20 rule that can work well for super savers. It allocates 30% more for the “musts” of life and 10% for discretionary spending. The remaining 60% is for saving, investment, and paying off debt.

What is the 70/20/10 rule for money?

The 70/20/10 rule is a budgeting system that allocates 70% of one’s take-home income towards needs (minus debt) and “wants” (discretionary spending), 20% to saving and investing, and 10% towards debt repayment or donations.

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SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK0123023

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Who doesn’t love depositing cash into their account and seeing that new pumped-up balance? Fortunately, there are lots of ways to conveniently add funds to your bank account.

Whether you bank at a local brick-and-mortar location or have an online account, you have options. And whether you like to do things the old-fashioned way (such as handing your money to a teller) or prefer to use newer technologies, like mobile deposit, there are ways to get your money where you want it.

Here, you’ll find a guide to the different techniques of moving money into your bank account, including:

•   Ways to deposit cash into a local bank account

•   Ways to deposit cash into an online bank account

•   How to deposit cash into an ATM

•   How long it usually takes for money you’ve deposited to become available

5 Ways to Deposit Cash in a Local Bank Account

Wondering how to put cash into your local bank account? We can help. There are numerous ways you can do this, including:

•   Direct deposit

•   Account transfer

•   External transfer

•   Wire transfer

•   Peer-to-peer transfer

Here, we’ll take a closer look at each, and, a bit later, how to use ATMs to deposit cash.

1. Using Direct Deposit

How to deposit cash into a bank account? First, consider how technology can do this without any dollar bills (or tens or twenties) changing hands. Direct deposit may be the simplest and easiest way to get cash into your bank account. Typically, how this works is you fill out a form with your banking information (such as your account and routing numbers and possibly a voided check), and then the payor, which is usually your employer or the government, can electronically transfer funds straight into your bank account. They are available for use almost instantly.

If you are paid by cash or check, however, the old-school version of “direct deposit” would involve going into your bank branches or to an in-network ATM. You can then directly deposit cash into a bank account. Since this is not an electronic process, it may take some time for the funds to be processed and cleared for your use.

2. Deposit Cash Using an Account Transfer

Let’s say you have more than one account at your bank (there are often incentives to do so, which many people take advantage of). It can be quite convenient to move money between accounts. You might complete a one-time transfer at the bank or online to shift money from savings to checking to cover a large, unexpected expense.

Perhaps you want to set up recurring automatic transfers on payday to whisk 10% of your salary into savings. Or, say you’ve accumulated a chunk of change in one account and want to open a certificate of deposit (CD) to lock in your interest rate. An account transfer could help make that happen, too.

3. External Transfer

Maybe you don’t want to keep all your eggs in one basket, so you have more than one financial institution where you keep your money. No worries if you want to move money between banks. Some financial institutions allow you to link accounts held elsewhere. The how-to’s: Complete what’s necessary to link the accounts (this can involve just inputting an account’s routing and account number), and you can easily transfer money between them.

A couple of points to look into: This process may take a bit of time and fees could possibly be charged. There might be transfer limits (that is, no more than a certain amount of money can be moved) as well. Ask for more info from the banks involved.

4. Wire Transfer

Wire transfers can electronically move funds between banks. Your bank or credit union may offer this service, or you might go to a provider like Western Union.

The good news is that wire transfers are fast, as money arrives pretty much immediately. However, whether you are sending or receiving a wire transfer, you are likely to pay a fee, which could be between $10 and $30, depending on the specific transaction and the amount of the funds being moved. (Some premium account holders may have the fees waived.) Do a little research first to avoid any surprises.

5. Peer-to-Peer Transfer

Today, many people are familiar with money-transfer apps or platforms like PayPal, Zelle, or Venmo. A friend can pay you back for their share of the dinner tab or someone who employs you as a gig worker can tap and send you your fee. How P2P transfers work is that you can receive money either directly into your account or into the money-transfer app and then transfer it to your bank account. Bills and coins aren’t changing hands in a literal way, but you can deposit cash in a bank in this way.

Worth noting: Sometimes you may pay a fee for an instantaneous financial transfer versus one that takes a day or two. There can be other costs and transaction limits involved as well, so familiarize yourself with the specifics of the platform you are thinking of using.

4 Ways to Deposit Cash in an Online Bank Account

If your accounts are at an online bank, you may wonder how best to deposit your cash. After all, there isn’t a bricks and mortar branch to stroll into, and no one wants to mail cash. But don’t worry; you have plenty of options:

•   Mobile deposit

•   ACH transfer

•   Prepaid cards

•   Money orders

In addition, ATMs may accept your deposit, which will be explored later.

1. Using a Mobile Deposit

You can deposit your checks remotely. It’s super simple and you don’t have to leave home, which is one of the benefits of mobile deposits. All you need to do is take a picture of the front and the back of the check and deposit it via your bank’s mobile app.

2. ACH Transfer

You can also get money deposited directly into your account by what are known as ACH (or Automated Clearing House) transfers, which typically fuel direct deposits. These can be set up to go into your account on a recurring basis, too. For example, you can have your HR department deposit your paychecks into your account, and you can do the same with government benefits if you enroll in the program to get your money this way.

Explore how to set up direct deposit, as it might just be a game-changer for you if you’re not already using it. Not only do you not have to run around with a paper check to deposit, your financial institution may even give you early access to your funds.

3. Depositing Cash Using a Prepaid Card

There’s another option if your online bank account: a prepaid debit card that’s linked to your account. With a prepaid card, you can load money on it in a variety of ways. For example, you can go to participating retailers to deposit cash. Then you could transfer the money from the prepaid debit card to your linked online bank account.

But of course, there can be a downside. You may be charged fees to get the card, deposit cash, or withdraw funds. Do the math. If you don’t need to do it frequently, it might be worth it. But if you use this technique often, the additional costs might be a deal-breaker. Shop around for a card that suits your needs.

4. Using a Money Order to Deposit Cash

In certain circumstances, you might want to buy a money order and use that to move your money around. Perhaps you have a pile of single dollar bills you’d like to deposit, or you got paid in cash for helping a friend of a friend move.

A money order can be purchased at a post office or businesses like CVS and Western Union, among others. You’ll likely pay between a couple of dollars and about $5, though the fee depends on the vendor and the amount of the money order. You can mail the money order to your online bank rather than having to worry about what to do with your cash. Just double-check that the bank accepts money orders for deposits.

Recommended: How to Send and Receive Money From Someone Without a Bank Account

Can You Deposit Cash in an ATM?

Here’s another way to deposit cash into a bank account: by using an ATM. Most ATMs accept cash, though a few do not. Check with your bank or look carefully at the ATM you are planning to use to see whether a cash deposit is an option. You might also want to see how long it typically takes for funds to clear when using this technique.

Points to know:

•   If you bank at a local brick-and-mortar financial institution, you may have no problem depositing money into your account this way.

•   If you keep your account at an online bank, you may need to use an in-network machine to deposit cash at an ATM.

Be sure, however, that you know your financial institution’s policies when you make a deposit at an ATM. Unlike an in-person deposit where your money is typically available immediately, your funds may not be available right away with an ATM deposit (especially if it’s not your bank’s ATM).

Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

When Does a Deposit Typically Appear in Your Account?

There can be a variation in how long a direct deposit takes as well as other kinds of deposits. Know, however, that federal law establishes the maximum length of time a bank or credit union can make you wait.

Some specifics:

•   Cash, as you might guess, tends to clear most quickly. If deposited in person to your checking or savings account, it may become available the same day or the next day. If you deposit it to an ATM in your bank’s network, it could be available immediately or within a day if you use a no-envelope machine. However, it might take until the second business day to clear; if you use an out-of-network ATM, that can take five business days.

•   The typical time period for checks and money orders to clear is between two and five days. According to the Consumer Financial Protection Bureau (CFPB), generally, if you deposit a check or checks for $225 or less in person to a bank employee, you can access the full amount the next business day. If you deposit checks totaling more than $225, you can access $225 the next business day, and the rest of the money the second business day.

   However, if you deposit a certified check, a check from another account at your bank or credit union, or a check from the government, the full amount should be available on the next business day.

Knowing these timeframes can be very helpful as you stay on top of your money and work to make sure you know your approximate balance and don’t bounce any checks.

Recommended: How to Transfer Money From One Bank to Another

The Takeaway

There are many options in terms of depositing cash into your bank account, whether you use a traditional or online bank. You’ll find options from going to a brick-and-mortar branch to using an ATM to mobile and ACH deposits and more. The timeframes for all of these deposits will vary, so check your bank’s policies. You want to be sure you don’t draw on your funds before they are fully available. It’s an important move to keep your account in good standing and avoid the fees many banks charge for overdrafts.

Hate fees? Want access to your money faster? We hear you. Why not open an online bank account with SoFi? We offer all kinds of perks for those who sign up with direct deposit. You’ll earn a competitive annual percentage yield (APY) and pay no account fees, which can help your money grow faster. Plus you’ll have access to the global Allpoint Network of no-fee ATMs, and qualifying accounts get paycheck access up to two days early.

Better banking is here with up to 4.00% APY on SoFi Checking and Savings.

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Photo credit: iStock/JoeLena

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK0123024

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The question was popped, the answer was yes, and now you’re ready to plan your dream wedding. Which means it’s probably time to set up a meet-and-greet between your vision board and your bank account.

Wedding costs can add up quickly, and if you’re just winging it, it’s easy to get carried away. Using a wedding cost calculator as you work through the planning process can help you manage your money better and create a more realistic budget.

Read on for a breakdown of the costs you can expect as you prepare for your big day.

How Much Will My Wedding Cost?

The cost of a wedding depends on several factors, including where you live, your wedding date, and the size of your guest list. If you go all-out with a big bridal party, designer duds, and a reception for 200-plus, the wedding website Zola.com estimates your bill could be $40,000 or more. If you decide to go with a simple ceremony at City Hall, on the other hand, followed by a modest dinner with a few friends, your total spend will likely fall way below the average wedding cost.

What Does the Average Wedding Cost?

After surveying thousands of engaged couples, Zola estimates the average cost of a wedding and reception in the U.S. will be around $29,000 in 2023. (Up about $1,000 from 2022.) But again, that number can vary widely.

The popular wedding website The Knot says couples who live in the South typically spend a bit less on their wedding, while those who live in bigger cities, particularly in the Northeast, can expect higher costs. Trying to match or exceed the standards set by others in your social group can also affect your bottom line.

Recommended: Is It Smart to Finance a Wedding?

What Goes into a Wedding Cost Calculator?

A wedding cost calculator uses average wedding costs to help couples break down the expenses they can expect to encounter as they plan their wedding. This budgeting tool can assist couples and their families in prioritizing how they want to spend their money. (Is a designer dress a must? Is a buffet or sit-down dinner a better choice? How many guests can you really afford?)

You also can use a wedding calculator/budget as a checklist to ensure you’ve covered all the details, so there aren’t any surprises (or unexpected wedding expenses) as you close in on the big day.

How to Calculate Wedding Costs

To keep things in perspective and set reasonable priorities, you may want to start by designating a certain percentage of your overall budget for each cost category. A $2,000 dress, for example, would be 10% of a $20,000 budget. A $10,000 reception (venue, catering, music, etc.) would take up 50%. That would leave you 40%, or $8,000, for the rest of your costs (the tux, flowers, photography, etc.).

Knowing the average costs for various categories can also help you fine-tune your budget and save for your wedding. Here’s a look at some of the most common wedding expenditures.

Before the Big Day

You can count on racking up some wedding bills long before you hear wedding bells. (Which is why it can be helpful to use a spending app as soon as you start planning.) Here are some costs you may incur early on in your preparations:

Save the Date Cards: If you want to let your guests know waaay ahead that your big day is coming up, sending “save-the-date” alerts can help. Postcards generally cost 20-55¢ each; refrigerator magnets can range from 30¢ to $1.60. (Costs per item typically go down when you order more.)

Invitations: Two major factors will affect the cost of sending out wedding invitations: An elaborate invitation or one that’s designed just for you will cost more than a standard design. And, of course, you’ll pay more for invitations and postage if you have a large guest list. (Don’t forget to put stamps on the RSVP cards included in each invite.) You could end up paying from $2 to $10 for each invitation and postage.

Wedding Planner: How much would you be willing to pay to hand over some of the stress of planning your wedding to a professional? U.S. couples spend an average of $1,500 for their wedding planner’s services, but your price may vary depending on your planner’s expertise and level of involvement, and the size of your wedding.

Marriage Ceremony

Though it’s what the big day is all about, and the reason friends and family have gathered, it can be easy to overlook the actual wedding ceremony when budgeting. Here are some costs to keep in mind:

Marriage License: This document, which authorizes a couple to marry, can cost anywhere from $20 to $150. You can get your exact cost by calling the issuance office in the county where you plan to marry. In some states, you may be able to lower the cost by taking a marriage preparation course.

Officiant Fee: The officiant is the person who is legally authorized to perform your ceremony. It can be the minister at your church or someone who performs weddings as a full-time or side gig. Officiant fees can vary from about $250 to $800.

Ceremony Venue: Unless you exchange vows at the same location as your reception, you’ll likely have to budget a separate amount for this venue, whether it’s your church, the beach, a private garden, or a public park. The cost will depend on the location and how long you use the space. (Even if it’s a public place, you may have to pay for a permit to hold your ceremony there, or a by-the-hour rental fee.)

Churches typically ask for a “donation,” which can be a mandatory amount or pay-what-you-wish deal. Unless you’re headed to the courthouse, be prepared to pay between $300 to $1,000-plus for a ceremony venue.

Decorations: The cost of decorating for your ceremony will depend on how elaborate you want to get — and what your venue will allow. Keeping it simple with a flower arrangement at the altar could be $60 to $450. But adding ribbons and flowers to the pews, petals in the aisle, or a flowered archway can bump this portion of your floral budget to over $1,000.

Ceremony Music: You’ll likely want to have some kind of live music at your ceremony — maybe a soloist, the church organist, a quartet, or a band. The cost for music can vary significantly depending on how big you go, and can range from $200 to $400 per hour.

Reception

The reception is typically the largest wedding expense and can include several subcategories — from food and entertainment to decorations and, of course, the cost of renting the venue where guests will gather to celebrate. According to WeddingCalculator.com, the average reception ranges from $4,000 to $20,000.

Some all-inclusive venues charge one price for catering, decorations, and more. If you have to hire multiple vendors, though, you’ll need to keep these separate costs in mind:

Venue: Depending on the size and location of the hall, country club, restaurant, etc., you can expect to pay $2,500 to $7,500 just to rent the space for your party.

Catering: The cost of feeding your guests will depend on what you serve (appetizers or a full meal) and how it’s served (buffet or by a waitstaff). Costs generally range from $30 to $80 per guest. You may have to pay extra to rent serving equipment or pay waitstaff at some venues.

Drinks: If you decide to offer an open bar with unlimited alcoholic beverages, you can expect to pay $10 to $20 per person per hour, or more.

Entertainment: Couples often argue over whether to hire a DJ or band — and cost can be the deciding factor. A DJ might charge $450 to $1,250, depending on their popularity, equipment, and how long they’re expected to keep the party going. A live band generally charges a bit more, from $750 to $1,500 for about two hours. (You may have to pay more if you have to rent sound or lighting equipment.)

Decorations: If you decide to add decorations to the venue (with ribbons, confetti, balloons, etc.), you will likely have to pay extra — from $100 to $1,000. A floral centerpiece for each table might incur a separate cost, so it’s important to be clear about what’s included in your package.

Recommended: Wedding Gift Etiquette

Wedding Cake

The cake you choose for your wedding is about much more than dessert. Cutting the cake is a fun tradition and it can be a great photo opp. Design, size, the number of tiers, and delivery can all impact the cost, but plan to pay $3 to $8 per person. The average cost of a cake is about $500.

Photographer/Videographer

If you’re hoping to capture the best moments of your wedding, you may want to make the photographer, and maybe videographer, one of your budget priorities. Depending on the package you choose, you can expect to pay from $1,500 to $3,000 for wedding photos. A videographer can cost $1,000 to $2,500.

Flowers

We covered the cost of using flowers to decorate for the ceremony and reception above. Here are some other costs to consider:

Bridal Bouquet: The bride’s flowers are in the spotlight throughout the day — in photos, during the ceremony, and even at the reception. For the bouquet of your dreams, you can expect to pay anywhere from $50 to $350.

Boutonnieres for the Guys: If the groom will be wearing a suit or tux, a boutonniere is almost a must, and it will run from $10 to $50. Multiply that price by the number of men in the wedding party if Dad and the other guys will get them, too.

Bridesmaids Bouquets: These smaller bouquets typically cost $25 to $100 each.

Corsages: Corsages, which can be a nice way to recognize special family members and friends, may cost $15 to $30 each.

Petals for Flower Girl: A bundle of rose petals for the flower girl to scatter can cost $20 to $25.

Bride’s Wedding Outfit

The bride’s ’fit — the dress, veil, shoes, jewelry, and more — often takes up a significant amount of the wedding budget. The bride’s wedding dress alone can cost, on average, $1,000 to $4,000. And that’s before alterations (typically $125 to $250).

Groom’s Wedding Outfit

The groom’s gear generally reflects the formality of the wedding, but most men still wear a tux or suit. Purchasing a new tux can cost $500 to $1,000. And tailoring may cost extra. Renting a tux can cost $200 or more.

Wedding Party Costs

Traditionally, members of the wedding party pay for their own outfits, but there may be other expenses you decide to cover if you want to help out with the cost of being in your wedding.

For example, if you’re hiring someone to do the bride’s hair and makeup (average cost: $300), and you choose to include the bridesmaids, you can expect to pay about $150 per person. As with most wedding-day costs, however, you’ll likely encounter a wide range of prices.

Transportation

If you and your wedding party hope to travel in style on your wedding day, you want to look into renting a limo, horse-drawn carriage, party bus, or some other type of transportation. Couples spend an average of $750 for wedding day transportation, but costs will vary based on location, how many vehicles you need, and how many hours you need them.

Wedding Insurance

Once you start budgeting for your wedding, you may decide it makes sense to purchase insurance to protect your investment. Wedding insurance can cover you for several worse-case scenarios. The cost of this type of special-event coverage depends on what you decide to include in your policy. The average cost of a wedding insurance policy is $275.

Total Wedding Cost Example

Until you start making calls and getting price quotes, it will be challenging to get even a rough estimate of how much your wedding will cost in total. But the sooner you start filling in some of the blanks on your budget, the sooner you’ll be able to prioritize where you want your money to go — and get a better idea of what the final bill will be.

Here’s an example of what a couple with a budget of $14,000 and a guest list of 50 might come up with.

	Cost	Percent of Budget
Invitations	$420	3%
Ceremony:	$560	4%
Ceremony Venue	$310
Officiant Fee	$250
Reception:	$6,020	43%
Venue with Wine Bar	$3,000
Buffet Dinner	$2,220
DJ with Equipment	$800
Bride’s Costs:	$1,820	13%
Dress	$1,070
Alterations	$100
Shoes	$200
Jewelry	$200
Hair & Makeup	$250
Groom’s Tuxedo Rental with Shoes & Tie	$420	3%
Cake	$560	4%
Flowers:	$2,100	15%
Bride’s Bouquet	$300
Bridesmaids’ Bouquets (2)	$200
Boutonnieres for Wedding Party (5)	$100
Corsages for Family (6)	$200
Flowers for Ceremony & Reception	$1,300
Photos	$1,540	11%
Limo Rental	$560	4%

How to Save Money on Your Wedding

How can you keep your dream wedding from totaling up to a nightmare cost? Here are a few ways to lower the bottom line:

Ask Friends and Family for Help

Do you know someone who’s great at taking photos? Is your cousin an amazing singer? What about a friend who’s a talented baker and cake decorator? If you can find people you trust to take the place of pricier pros, you may be able to reduce some costs — or avoid them entirely.

Eliminate Some of the Extras

If you can do your own hair and makeup, get yourself to the wedding, and/or design and print your own invitations (or go paperless), you may be able to cut some costs without asking for help.

Downsize the Guest List

This can be a tough one, but trimming your guest list is a sure way to trim costs. Consider asking your friends to leave their kids at home, or gently telling your guests that you’re keeping the plus-ones to a minimum.

Go Off the Beaten Path

Choosing an off-peak wedding date; an unusual (and therefore more affordable), wedding venue; or a wedding dress from a department store or consignment shop can save you big bucks.

Recommended: Free Credit Score Monitoring

The Takeaway

Wedding costs can get out of hand quickly, so it’s a good idea to start your planning with a realistic budget. Then, as you go through the planning process, you can use your budget tracker to stay on top of your actual costs — and stay in sync with your other financial goals. In our example above, wedding costs totaled $14,000 for an event with 50 guests. That number covered the invitations, ceremony, reception with wine bar and buffet dinner, DJ, flowers, cake, and the bride’s and groom’s formalwear.

With the SoFi Insights money tracker app, you can set budgets, categorize your spending, monitor your credit score, and keep an eye on any upcoming bills — all for free.

Say “I do” to SoFi Insights for help planning and tracking your wedding budget.

FAQ

What is a realistic budget for a wedding?

A realistic wedding budget will be different for every couple. The average wedding cost is about $29,000, but that amount can vary significantly depending on the size of the wedding, the location, and other factors.

Is $10,000 a reasonable wedding budget?

You may have to be pickier about splurges than a couple with more to spend, but by setting your priorities early and using a budget tracker, you can get a strong start on sticking to your $10,000 wedding goal.

How do I pay for a wedding I can’t afford?

There are a few different ways you can pay for a wedding if you don’t have enough cash in the bank. One popular option is to take out a personal loan to pay for wedding expenses. Another is to apply for a credit card with a 0% introductory interest rate, which will allow you to pay off the balance interest-free for up to 18 months. Or you might consider waiting until you’ve saved enough to pay all your costs without borrowing.

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Photo credit: iStock/Arisara_Tongdonnoi

SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
*Terms and conditions apply. (Must click on the link to be eligible.) This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the Rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed into SoFi accounts such as cash in SoFi Checking and Savings or loan balances, Stock Bits, fractional shares and cryptocurrency subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
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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Having multiple credit cards brings certain benefits. On average, Americans use four credit cards at a time, often to take advantage of various perks and rewards programs. Another reason to own multiple credit cards is they can boost your credit score when managed sensibly.

That said, juggling credit lines can get out of hand, and it’s easy to fall behind with payments and face hefty interest charges. Here’s a guide to managing multiple credit cards: when to use certain cards, how to know if you have too many, and more.

Recommended: Free Credit Score Monitoring

Steps for Managing Multiple Credit Cards

Here’s how to manage your credit cards wisely and the steps to take to avoid unnecessary interest charges and fees.

Keep Track of Terms

Know what you are signing up for when you apply for a credit card. While a card may offer perks like sign-up bonuses, free vacations, and 0% interest rates initially, it may also charge high fees and exorbitant interest rates later on. Every credit card has different terms and conditions that are often buried in the small print.

Before applying for a new credit card, check the interest rate, or APR. Also look for penalty APRs, purchase APRs, and cash advance APRs. A penalty APR is charged if you don’t comply with the card’s terms and conditions. A purchase APR is the interest rate charged for purchases or carrying the balance over to the next month. A cash advance APR applies if you use your credit card to borrow cash.

A card may also offer an introductory 0% APR, for a limited period. However, once that period is over — or if you miss a payment — the interest rate can skyrocket. Many cards also charge an annual fee for card ownership, a maintenance fee, cash advance fees, foreign transaction fees, returned payment fees, and late payment fees.

If a card offers cash back, find out how much you need to spend to accumulate points or cash back. Check the fine print to find out what types of purchases are qualified and if there are any caps on earning cash and points. Also, read the rules on redeeming rewards, such as when they might expire or be forfeited.

For a sign-up bonus, you might be ineligible if you have owned the same card previously or another family member has the same card.

Pay on Time and in Full

You will likely incur fees if you miss payments due on your credit card. Also, if you make only the minimum payment on your credit card, you will increase your debt and pay unnecessary interest. But if you pay off your balance in full each month, you are in effect getting a free loan.

If you have multiple credit cards to juggle, it will take dedication to monitor the balances and due dates to avoid late payments, interest charges, and fees. However, managing credit cards responsibly can build your credit history.

Recommended: What Is a Fair Credit Score?

Set Up Autopay

Once you understand the terms, conditions, and payment due dates of your various credit cards, set up automatic payments to avoid missing a payment. Missing a payment will mean that you are charged interest, and depending on the balance on the card, the interest payments can be steep.

Set Reminders

Managing multiple credit cards may require setting reminders. For example, if you signed up for a card with an initial period of 0%, you should know when that period ends. Also, keep track of when rewards expire, and when you should redeem points or rewards.

Recommended: What Is a FICO® Score?

Simplify Your Payment Due Dates

You may want to change the payment due dates for your cards to make budgeting easier. For example, if the payments for multiple cards all fall on the same day or week, it can be difficult keeping enough cash on hand.

Consider scheduling due dates close to a payday or soon after a direct deposit. It might take one or two billing cycles for your request to take effect.

Recommended: Budget Planner and Spending App

Know When to Use Each Card

There’s little point juggling multiple credit cards if you don’t use the right card for the right purpose. That’s why studying each card’s terms and conditions is crucial to optimizing the benefits of your cards. For example, some travel cards come with travel protections that will reimburse you if a trip has to be canceled, and co-branded airline cards may offer free checked bags or upgrades.

Recommended: What is The Difference Between Transunion and Equifax?

Keep a Record of Your Credit Card Features

Organization is the key to managing multiple credit cards. You can use a notebook, spreadsheet, or a personal finance app — whatever it takes for you to be able to access the information you need easily.

Some key data to have at your fingertips are the interest rate, credit limit, issue date, annual fees, and payment due dates, the balance from month to month, and the key facts about the rewards program (minimum spending limits, expiration dates, qualified items).

Give Each Card a Purpose

Allocating a purpose for each card will tell you what type of card you might want to get next. For example, you might have a card that offers travel rewards, another card for cash back on groceries, but you might want to also get a card that offers rewards for buying gas. Keep a record of which card serves what purpose.

Carry Only the Cards You Use

Don’t carry all your cards with you all the time. You risk losing them, and it will make your wallet uncomfortable! There’s no need to carry an airline card that you only use to book flights. Make sure you know which cards charge an inactivity fee, and set up reminders to use the card to avoid such penalties.

Recommended: Find Out Your Credit Score for Free

Use an App to Track Your Card Balances

It’s a good idea to use an app to track your card balances. Apps are particularly useful because they alert you when a payment is due or delinquent. Some apps perform free credit monitoring, help you find a credit card for a specific merchant, and track your loyalty programs.

Signs You Have Too Many Cards

How many cards is too many? That depends on how well you manage them. Here are some indicators that you should consider closing some accounts.

You Can’t Pay the Balance Off Each Month

If you can’t pay off all the balances on your cards each month, you are in danger of falling deeper into debt and having to pay interest. You also risk increasing your credit utilization ratio. When your ratio gets too high, credit card companies may turn you down and credit checks for future employment may be affected..

You’re Missing Payments

If you find it hard to keep track of your credit cards, miss payments, or lose rewards, it’s a sign you might have bitten off more than you can chew. Simplify your financial management by choosing three or four of the most advantageous cards for your lifestyle and cancel the rest.

You’re Earning Too Few Rewards

If you rarely redeem rewards, it might not be worth keeping the card. Not only are you paying a fee for a card that gives you little benefit, but you also have the hassle of keeping track of the card’s features and balance. It might be best to nix these credit cards.

Which Cards Should You Stop Using?

When deciding which credit cards to stop using, list out the benefits of each card. Look at your spending history with that card over the past year and look at what you have gained. If you have spent little and gained little, it’s time to lose the card.

Similarly, if a card charges high annual fees and provides few benefits, don’t keep the card. Also look at the interest rate. If you have a balance on a high-interest card, pay off that debt and close down the card.

When Does It Make Sense to Close a Card?

It makes sense to close a card when you only use it to avoid an inactivity fee, if it provides few benefits, if the fees and interest rate are high, or if you are having trouble paying off the balance each month.

The Takeaway

Having various cards can be advantageous because you can benefit from rewards and loyalty programs, build your credit history, and take advantage of interest-free credit if you pay off the balance each month. However, each credit card charges various fees, and managing multiple credit cards can be a headache.

When opening a new credit card, make sure the fees, rewards, limitations, and penalties that come with the card make sense for you. Also consider if you can manage the card and pay off the balance each month on time. Lastly, review your portfolio of cards regularly in case it makes sense to close down an account.

SoFi’s Insights is a money tracker app that simplifies and manages your credit cards, credit score, payments, and more — all in one place and at no cost.

FAQ

How do I manage multiple credit cards?

Managing multiple credit cards comes down to organization. Keep track of all your cards and their various features, including due dates, what you should use them for, the rewards they offer, balances, interest rate, and penalties and fees. There are apps that help you to manage cards and monitor your credit score.

What is the 15/3 credit card rule?

The 15/3 credit card rule is a strategy to lower your credit utilization ratio. A credit utilization ratio of 30% or below makes you more attractive to lenders. Most people make one credit card payment a month by the due date, but with this strategy, a cardholder makes two payments each month, which reduces your credit utilization ratio significantly. Even if you regularly pay your credit card balance in full each and every month, you may still be carrying a large balance throughout the month, and your credit score may be affected.

How many credit cards is too many?

How many credit cards you should have depends on your lifestyle and how well you manage them. Feeling overwhelmed and making mistakes like not paying off balances on time are indicators that you cannot keep track of your cards. Other indicators that you may have too many credit cards are that you are not seeing much benefit in the way of rewards but are paying high fees, or you have a significant balance on a card with a high interest rate.

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Photo credit: iStock/Sitthiphong

SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
*Terms and conditions apply. (Must click on the link to be eligible.) This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the Rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed into SoFi accounts such as cash in SoFi Checking and Savings or loan balances, Stock Bits, fractional shares and cryptocurrency subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website .
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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Free money for college sounds too good to be true, but it’s a real thing. It comes in the form of scholarships and grants, which almost never have to be repaid.

Families may need to put in effort to find scholarships and grants, but the hustle can pay off.

Free Money for College‽

Yes, that’s right. Scholarships and grants are gifts that reduce the need to take out student loans.

The average student loan debt loads, rounded up, are as follows, according to EducationData researchers:

•   $37,700 for undergraduate students

•   $80,500 for master’s degree holders

•   $132,300 for doctorate holders

Depending on your perspective, that might seem like a lot or might seem manageable. But let’s say a borrower was eligible for free money and left it on the table: That, unfortunately, does happen.

Here are details about the two types of financial aid gifts.

What Are Scholarships?

The many types of scholarships include merit scholarships, which are not based on financial need.

Academic and athletic scholarships are well known, but merit aid also may be determined by community involvement, dedication to a field of study, or your ability to do a killer duck call or create promwear from duct tape.

Scholarships can also be based on a specific trait, like your race, ethnicity, or gender, if you’re a first-generation college student, or where you live.

Scholarships are awarded by companies, nonprofits, states, religious groups, employers, individuals, and professional and social organizations. A big source of merit scholarships is colleges themselves.

What Are Grants?

Grants are awarded by the federal government, state government, private companies, and nonprofits.

Almost all federal and state grants for college are need based, but some nonprofit and for-profit organizations offer need- or merit-based grants.

Students who plan to attend a community college, career school, or four-year college are smart to complete a FAFSA application each year. Information in the Free Application for Federal Student Aid determines what kinds of federal financial aid they qualify for, including grants.

Most states and schools use FAFSA information to award non-federal aid, so even higher-income families may benefit from submitting an application.

How Much Does Free Money for College Help?

Scholarships and grants can make a big difference in lightening the college debt load.

Take a look.

How Families Pay for College
Average college expenditure in the 2021-22 academic year	$25,300
Parent and student income and savings	54%
Scholarships and grants	26%
Borrowed money	18%
Relatives and friends	2%
Source: Sallie Mae “How America Pays for College 2022” report

Finding Scholarships and Grants

With federal and institutional grants, you are automatically considered for need-based financial aid when you submit the FAFSA.

Finding private scholarships can take more time and effort.

Federal Student Aid recommends that students start researching scholarships the summer after their junior year of high school. An ambitious few start before that.

Researching Scholarships

Here are ideas to look for scholarships:

•   Consider using a database like Scholarships.com that lets you create a profile with all of your information, which could help you match with scholarships and grants.

•   Use the Department of Labor’s CareerOneStop site to sort more than 9,000 opportunities for financial aid.

•   Try more than one scholarship search tool. The nonprofit College Board also offers one.

•   Ask college financial aid offices about their scholarship availability and process.

•   See if your employer or your parents’ employers offer college aid.

•   Look for scholarships offered by foundations, religious or civic groups, local businesses, and organizations related to your field of interest.

You don’t have to be a scholar or standout athlete to get a scholarship. Students may have success finding non-academic scholarships for, like, an awesome duck call.

Finding those private scholarships and completing the essay and application will take time, however.

Recommended: Search Grants and Scholarships by State

Researching Grants

Grants are typically awarded in a federal financial aid package.

In addition to federal grants, schools may award institutional grants.

It’s a good idea to take a shot at free money by submitting the FAFSA each year when it becomes available or soon after.

The Sallie Mae “How America Pays for College” report found that 75% of families were not aware that the FAFSA is available on Oct. 1 and that 36% did not file an application because they thought their income was too high to qualify for aid.

Other Options to Help Pay for College

There are many ways to pay for school, and students and their parents may use a combination of methods to cover the cost of attendance, an estimate of the total cost of attending a particular college for one year.

Paying for College With Student Loans

Most students leave school with debt, thanks to all the costs of college, which go well beyond tuition and fees.

When it comes to private vs. federal student loans, most students first go for federal student loans.

For one thing, an undergrad might qualify for Direct Subsidized Loans. The government pays the interest on those loans as long as the student is enrolled at least half-time. The interest is also covered for six months after the student leaves school, graduates, or enters a period of deferment.

For another, borrowers may qualify for an income-based repayment plan, Public Service Loan Forgiveness, or federal deferment or forbearance down the road.

Not all students or parents will be able to rely solely on federal aid to cover all their bases, though, and that’s where a private student loan could come in handy.

Private student loans don’t come with all the borrower protections and programs that federal student loans do, but they can be used to cover any remaining school-certified costs, here or abroad, from transportation to books and lodging.

The interest rate may be competitive with federal student loan rates. Also, most federal student loans have loan fees — a percentage of the total loan amount — whereas a private student loan may have no fees.

Federal Work-Study

The federal work-study program allows students to earn money that can be used to pay day-to-day expenses. Students who demonstrate financial need may be eligible for jobs on or off campus.

Not all colleges participate in the program.

Does a Student Ever Have to Repay a Grant?

Federal Student Aid says the only time you might have to repay all or part of a federal grant is when:

•   You withdrew early from the program for which the grant was given to you.

•   Your enrollment status changed. If, for example, you switch from full-time to part-time enrollment, your grant amount will be reduced.

•   You received outside scholarships or grants that reduced your need for federal student aid.

•   You received a TEACH Grant, but you did not meet the service obligation. In that case, the grant could be converted to Direct Unsubsidized Loans.

If you don’t meet the expectations of a scholarship, such as GPA or credit-hour minimums, you could lose the gift and have to pay out of pocket.

When it comes to sports, the head coach decides whether an athletic scholarship will be renewed. Injury or poor academics can sack an athletic scholarship.

NCAA Division I and II colleges alone award more than $3.7 billion in athletic scholarships each year. But only a tiny fraction of high school students are offered athletic scholarships, and an even tinier number get a full ride.

Recommended: FAFSA Tips and Mistakes to Avoid

So Who Wants Free Money for College?

Changes to the federal application for student aid are afoot. What hasn’t changed is the benefit of filling out the FAFSA on or soon after Oct. 1 for the next school year. Funding is limited and often doled out on a first-come, first-served basis.

And, to reiterate, other student aid programs piggyback off the FAFSA.

The FAFSA considers student income, parent income and assets, and family size to calculate the expected family contribution (EFC).

The EFC is used to determine whether a student qualifies for federal grants like the Pell Grant, for low-income families; federal student loans; or work-study. The maximum Pell Grant award for the 2023-2024 year is $7,395.

Some FAFSA changes will be launched this year. Starting with the 2023-24 award year, for example, students incarcerated in federal and state correctional facilities will be eligible for Pell Grants.

The “Student Aid Index” will replace the “expected family contribution” starting with the 2024-25 award year, to clarify the misunderstood EFC.

The Takeaway

Free money for college is a real thing. Grants and scholarships are worth seeking out because they reduce the need to take out student loans. But if you still need to borrow, there’s no shame in that game. Most students do.

If you’re a student or parent and don’t anticipate being able to cover every cost of college in any given year, consider a SoFi Private Student Loan.

SoFi offers undergraduate, graduate, and parent student loans — with a variety of repayment options and no fees whatsoever.

Get your rate on a private student loan within three minutes.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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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