Tips for Financially Surviving a Layoff

Tips for Financially Surviving a Layoff

When you are out of work, it can be difficult to navigate this new financial reality. It’s a surprisingly common occurrence, however: In a recent month, 1.3 million employees lost their jobs permanently and more than 827,000 endured a temporary layoff.

It’s easy to feel stressed since there’s uncertainty around where and when you will find a new source of income. The thoughts that are running through your mind may include: How can you survive without a job? How will you pay your bills? How long will this situation last?

Take a deep breath, and arm yourself with knowledge. When and if unemployment becomes a reality, there are likely adjustments you can make and resources you can tap to weather this temporary challenge. Read on to learn:

•   How to budget when laid off

•   How to file for unemployment benefits

•   How to prioritize debt

•   How to bring in income

Preparing Financially for a Layoff

Not having a steady income after a layoff can increase anxiety about how you’ll pay your daily expenses. Until you find another stream of income, it’s important to keep your budget in order and learn to live within your means. Being financially prepared means having a clear understanding of what your expenses are so you can stay on track, especially with debt, if you have it.

A common strategy is to build up an emergency fund prior to an event like job loss. It’s a way of preparing for a layoff before it happens. An emergency or rainy day fund is typically a savings account that you’ve been adding to on a weekly or monthly basis. Having roughly three to six months’ (or more) worth of monthly expenses is helpful. That sum can tide you over at a moment of job loss and give you peace of mind. Think of it as a form of financial self care.

The emergency fund should only be accessed for emergencies, as its name suggests. (No fair dipping into this kind of savings account when there’s an amazing sale at your favorite store!) If you have the opportunity to contribute more than usual, do boost your emergency savings because you never know when you will need to tap into that account.

Budget, Budget, Budget

If you have an inkling that your company is preparing to lay off some employees or if you lose your job, it’s wise to know what your budget is. This means separating your necessary spending from your discretionary spending. Necessary expenses include things like rent or a mortgage, utilities, food, and health insurance. Discretionary spending may include traveling, dining out, new clothes, and entertainment.

It can be helpful to focus on how much you need to spend each month for necessary expenses (some people refer to this as their monthly “nut.”) Make a list of these basic living expenses and see what they total. Then, pre-layoff, you’ll also see how much you can allocate for activities that you want to do. It’s probably not the best idea to spend every penny each month. You want to have extra money at the end of the month to put toward saving for the long-term. Knowing your budget is the ideal starting point for how to manage your mandatory and discretionary expenses.

Then, if and when a layoff hits, you’ll be aware of what it will cost to keep your basics up and running. Obviously, you will be focusing on necessities and minimizing your discretionary spending (more details below). You can tweak your budget when you’re unemployed to, say, cut back on some long-term savings to get you through this current time when money is tight.

Filing Unemployment Benefits

If you lose your job, you may be able to qualify for unemployment benefits. This can get some funds flowing your way to help tide you over until you land a new job. First, read the eligibility requirements to see if your situation aligns with the rules for unemployment. The eligibility requirements are likely to vary from state to state and may be determined on a case by case basis; payment amounts will vary as well.

Filing for unemployment benefits will allow you to receive payments if you are out of a job due to no fault of your own. (There is a possibility that those who are fired because they don’t meet job qualifications may receive funds as well.)

Generally, to qualify for unemployment benefits, you should be able and available for work, as well as be looking for employment. The job search should entail reaching out to at least two potential employers on a weekly basis. Keep a list of which job prospects you reached out to because the department of employment services may ask you to provide these details. If you quit your job, you are probably not eligible for unemployment benefits.

Once you’ve determined your eligibility, it’s time to file. This can be done at your state’s official government office of unemployment compensation website. To get started, have personal information ready, including your Social Security number, home address, phone number, email, and direct deposit bank information. You will also need to provide your former employer’s information and the reason for leaving. The site should give you guidance on when to expect benefits.

Asking About Severance Packages

Severance pay can be provided for employees after they are no longer employed at a company. Severance is based on the duration of employment, but your employer is not required to provide severance upon termination. If you were terminated through no fault of your own, employers may pay, for example, two weeks of salary for each year of employment. Severance may also include health insurance benefits and even services to help you find a new job. These can be very helpful supports when you have lost your job.

Using Credit Cards for Emergencies

If you become unemployed, it’s wise to stop using credit cards to make purchases. Paying with your credit card creates debt that comes with high interest rates (often approaching 20%), making them one of the least economical payment methods when unemployed. At such high interest rates, debt can really snowball.

Also, when you are out of work, it can be challenging to pay an existing credit card balance. Furthermore, if you manage to pay the minimum balances of your credit card debt rather than paying in full every month, the credit card debt may cost you more over time since you also have to factor in added interest. If you find yourself in this kind of a bind with credit card debt, take action. Consider transferring your balance to a card that offers no or very low interest rates for a period of time or speaking with a debt counselor from a nonprofit organization like the National Foundation for Credit Counseling (NFCC).

Making Sure Emergency Funds Are in Order

Emergency funds are an important part of a financial plan and can be a lifesaver for someone who is unemployed. If you are in a situation where you unexpectedly don’t have a stream of income until you find another job, you’ll be more at ease if you have built up an emergency fund over time, as mentioned above.

In this case, you can dip into your emergency fund for mandatory expenses to fulfill your short-term needs. An emergency fund is for unplanned life events and is the exact life line you need in a scenario where you are laid off. If you don’t have emergency funds, unemployment benefits become that much more important. Borrowing from a close friend or a family member might also be an option.

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Practical Tips for Saving Money After a Job Loss

Saving money after a layoff can certainly be difficult. You don’t have the usual cash infusion to pay your bills and buy groceries. That is why you need to proceed with caution and learn how to economize when you lose your job. Here are strategies for making ends meet during this difficult time.

Get Back on LinkedIn and Start Networking

If you’re job-hunting, Linkedin can be a great tool for networking. You can gradually build your network by connecting with professionals in your industry. The platform is set up so you can find and interact with former colleagues, alumni from your college, and professionals at companies you aspire to work for. Start commenting on people’s Linkedin posts and have conversations with existing connections. Build up your profile so recruiters know your job history, your professional skills, and that you are looking for work. These steps can lead to job opportunities.

Prioritizing and Negotiating Any Debts if Needed

Continuing to pay down debt while unemployed should still be a priority. One strategy to pursue is paying off debt that has the highest interest rate. Debt with higher interest rates cost more, so paying this off first will have you saving money in the long-term.

But how can I pay down debt if I don’t have income, you are probably wondering. One answer: Try to negotiate your debt. It can be possible to work with your credit card company to negotiate interest rates, payment amounts, and the terms on your credit card debt. This might also include adjusting a payment date or requesting a temporary payment reduction. Have a conversation with your credit card company to see which options may be available for you.

Avoiding Luxuries Temporarily

Being unemployed can be a frightening experience. You no longer have a steady flow of income and may not feel financially prepared to weather short-term expenses. To ease this burden, work to eliminate spending on luxuries. You may feel as if you need a pick-me-up, but it’s best not to go for a massage or a nice meal out. That can wait until you have cash coming in. Now might be a good moment to downsize streaming services and other subscriptions. Also eyeball what expenses you have on the horizon: If you had booked a vacation house or a cruise for a few months down the line, it may make good financial sense to investigate getting a refund. That money could be allocated toward your everyday expenses as you job-hunt.

Looking at Investments and Retirement

If you are temporarily out of a job, do your best to keep your hands off your retirement funds. You worked hard to save that money, and it’s there to fund a long-term financial goal. That said, some people do tap their retirement accounts as a last resort when unemployed. When you withdraw from your retirement account before the age of 59 ½, you will incur a penalty tax. However, there are some cases where you may be able to withdraw funds when unemployed without paying this. You may be able to set up what’s known as a substantially equal periodic payments (SEPP) over five years or until you hit age 59 ½, whichever is greater. However, if you do receive this kind of distribution, it will likely count as income and may therefore lower any unemployment benefits you may be receiving. Talk with your plan administrator to learn more.

Getting a Side Hustle

You might consider starting a side hustle to bring in some extra cash while looking for full-time work. There are many ways to earn more money. You could rent out an extra bedroom in your home or apartment, sell unwanted items, drive for Uber or Lyft, or market your professional skills on online service platforms such as Fiverr or Upwork. These are viable avenues to get some money coming in until you lock down a new job.

Managing Finances With SoFi

Figuring out how to manage your finances when you are in between jobs can be stressful and overwhelming. But the best way to get through it is by preparing way before you’re in that position.

A smart step is to open an online bank account to save emergency funds ASAP. At SoFi, we make this easy and help your money grow super fast. When you open our Checking and Savings with direct deposit, you’ll earn an amazing 2.00% APY, and your money won’t be eaten up by account fees because you don’t pay any!

Bank better with SoFi.

FAQ

How do you manage the emotional impact of getting laid off?

Getting laid off or fired from your job is a tough challenge. You may feel angry and ashamed. Acknowledge those feelings, and remind yourself that millions of others are navigating this situation. You are not alone. Also, taking action can foster feelings of control and personal agency. Updating your resume, networking, reworking your budget, and engaging in self-care rituals (like exercise) may also be positive steps.

​How do you recover after being laid off?

Recognize the shock and upsetting feelings that you are likely experiencing. Then, take steps to improve your situation: Seek unemployment benefits, apply for jobs, start a side hustle, cut some expenses, and perhaps volunteer to build new skills and fill free time. These moves can help you move forward from your job loss.

Is it better to be fired or laid off?

In both scenarios, you don’t have a job, but if you are fired, it is typically due to a performance issue. That means you weren’t able to do the work as needed. Financially speaking, with a layoff, you will likely be able to file for unemployment and you may receive severance pay from your employer. When you are fired, you may or may not be able to receive unemployment funds and you will probably not be eligible for severance.


Photo credit: iStock/skynesher

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 2.00% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 2.00% APY is current as of 08/12/2022. 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 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.
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.
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What Is a Depository Institution?

Guide to Depository Institutions

There are a lot of financial terms that are important to understand when managing one’s money. Knowing banking vocabulary can boost our financial savviness, smooth the learning curve, and ease transactions.

For example, what are depositories? A depository institution, to put it most simply, is a financial institution into which consumers can deposit funds and where they will be safely held.

Keep reading for more insight into what depository institutions are, including:

•   What is a depository institution?

•   How do depository institutions work?

•   What are the pros and cons of depository institutions?

•   What are depositories vs. repositories?

•   What are depositories vs. non-depositories?

What Is a Depository Institution?

A depository institution is a place or entity — such as a bank — that allows consumers and businesses to deposit money, securities, and/or other types of assets. There, the deposit is kept safely and may earn interest.

To share a bit more detail, depository institutions are financial institutions that:

•   Engage in banking activities

•   Are recognized as a bank by either the bank supervisory or monetary authorities of the country it is incorporated in

•   Receive substantial deposits as a part of their regular course of business

•   Can accept demand deposits

In the U.S., all federally insured offices of the following are considered to be depository institutions:

•   Commercial banks

•   Mutual and stock savings banks

•   Savings or building and loan associations

•   Cooperative banks

•   Credit unions

•   International banking facilities of domestic depository institutions

Recommended: What Is a Community Development Financial Institution?

How Do Depository Institutions Work?

A depository can receive funds from consumers and businesses via such means as:

•   Cash

•   Direct deposit

•   Teller or ATM deposits

•   Checks

•   Electronic transfers

The depository institution holds these funds, and they are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per type of account, per financial institution. If the institution is a credit union, funds will be similarly protected by the National Credit Union Administration, or NCUA.

Funds are accessible on demand (aka demand deposits rather than time deposits), and the depository institution is required to keep a certain amount of cash in its vault to ensure it has funds available for clients.

Customers are able to earn interest on different types of deposits. The depository institution also earns interest; it’s one of the ways financial institutions make money. It does so by lending money on deposit to their customers in the form of different types of loans. (For instance, some of the money on deposit might earn the account holder 1% interest, while the bank then uses the funds for a mortgage that charges 5% interest. There’s a good profit margin there for the depository institution.)

Types of Depository Institutions

What are depositories? To better understand the purpose depository institutions serve, let’s look at some examples.

Credit Unions

Credit unions may offer many of the same services as banks, but they are owned by account holders, who are also sometimes called members. These institutions are not non-profits. The profits that the credit union earns are paid to members in the form of dividends or are reinvested into the credit union. To put it another way, the depositors are partial owners of the credit union.

Commercial Banks

Commercial banks are what many of us visualize when we hear the term “bank,” whether we are thinking of a major bank with hundreds of bricks-and-mortar branches or an online-only entity. They are usually owned by private investors and are for-profit organizations.

Commercial banks tend to offer the most diverse services of all depository institutions, from personal banking to global banking services such as foreign exchange-related services, money management, and investment banking. The offerings may depend on how large the institution is and which customer segments it serves (say, consumers and different types of businesses).

Savings Institutions

Savings institutions are the banks that serve local communities and loan institutions. Local residents deposit their money in these institutions, and in return, they can access credit cards, consumer loans, mortgages, and small business loans.

It’s possible to set up a savings institution as a corporation or as a financial cooperative. The latter makes it possible for depositors to have an ownership share in the saving institution.

Recommended: What Is an Intermediary Bank?

Depository Institutions vs Repositories

Repositories and depositories are two different things despite the fact that their names sound almost the same. Here’s some of the key differences.

•   Depositories hold cash and other assets, but repositories hold abstract things such as intellectual knowledge, files, and data.

•   Depositories are usually credit unions, banks, and savings institutions, while repositories are typically libraries, data-storage facilities, and information-based websites.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 2.00% APY on your cash!


Depository Institutions vs Non-Depositories

Unlike depository institutions, non-depository institutions don’t accept demand deposits. These are some of the differences between these two types of institutions:

•   Depository institutions accept deposits and store them for safekeeping. Non-depository institutions, on the other hand, provide financial services but can’t accept demand deposits for safekeeping.

•   Depository institutions are FDIC- or NCUA-insured, while non-depository institutions can be SEC-insured or have another type of insurance.

•   Credit unions and banks are commonly depository institutions. Non-depository institutions are often brokerage firms and insurance companies.

Pros of Depository Institutions

Depository institutions have a few benefits to note:

•   Money is safe and FDIC- or NCUA-insured

•   Accounts can earn interest on time deposits such as certificates of deposit (CDs) and possibly other deposits

•   Helps keep the economy healthy by allowing depository institution to lend out deposits and earn interest

•   Reduced risk of assets being lost or stolen

Cons of Depository Institutions

There are a few downsides to depository institutions. Consider these points:

•   Limited growth potential of deposited funds compared to investments, money market accounts, and CDs

•   Banks, credit unions, and savings institutions may charge fees for holding funds

•   Minimum account balance may be required

Tips for Choosing a Depository Institution

When it comes time to choose a depository institution, it can help to keep the following things in mind when comparing different options.

•   Type. Carefully consider if a credit union, saving institution, or commercial bank is the right fit. Some commercial banks have bricks-and-mortar locations, while others offer all of their services online. Online banks usually pay higher interest rates on savings and charge fewer and/or lower fees, since they don’t have the overhead associated with operating branch locations. Credit unions also tend to offer higher interest rates and lower fees as they are not-for-profit as commercial banks are.

•   Features. Look for a depository institution that offers perks and services that suit your needs. Special features may include high interest rates, early access to direct-deposit paychecks, cash-back deals, fee-free ATMs, and free access to credit scores.

•   Fees. Shop around to see which depository institution has the lowest and/or fewest fees, such as account maintenance fees and overdraft fees. As noted above, credit unions tend to charge lower and/or fewer fees than commercial banks, as do online banks.

•   Convenience. If you like to bank locally and know your bank tellers and officers, choosing an institution that has branches in your neighborhood is a wise move. If you prefer the seamlessness of banking 24/7 by app, however, you might opt to open an online savings account.

Banking With SoFi

Commercial banks, credit unions, and savings institutions are all examples of depository institutions. Depository institutions safely store funds that can then easily be accessed. Funds will be insured by either the FDIC or NCUA up to their usual limits of $250,000 per depositor, per account type, per institution.

Looking for a place to deposit your money that pays a great interest rate? Consider opening a SoFi bank account online with direct deposit. With our Checking and Savings, you’ll earn an amazing 2.00% APY and don’t have to pay any account fees.

Watch your money grow faster with SoFi.

FAQ

What is the difference between a bank and a depository?

There is no difference between a bank and a depository. A bank is a type of depository institution. Credit unions and saving institutions can also be depositories.

What are the types of depository institutions?

There are three main types of depository institutions. Commercial banks, credit unions, and savings institutions are all types of depository institutions.

Are commercial banks depositories?

Yes, commercial banks are one kind of depository institution where consumers can securely stash their money.


Photo credit: iStock/Mikhail Bogdanov
SoFi members with direct deposit can earn up to 2.00% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 2.00% APY is current as of 08/12/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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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Guide to Financially Downsizing Your Life and Saving Money

Guide to Financially Downsizing Your Life and Saving Money

Are you thinking about how to downsize and simplify your life? If so, you’re not alone. Many people are considering how to lower their expenses, ditch some stress, and save more as part of the bargain. Navigating the “new normal” after years in an historic global pandemic has tightened the focus on comforts that got us through: Nesting with family and friends, working from home, shopping local. Paring down the extras to highlight the essentials.

Fortunately, learning to downsize your life is pretty straightforward. From reading books instead of subscribing to an array of streaming platforms to embracing the tiny-house movement, options abound.

You can cut your expenses, which is an important point right now. In a United States Census Bureau survey during the pandemic, 34.4% of American adults reported having difficulty paying their usual home expenses. What’s more, you can put some of the money you save towards long-term goals, and you’ll likely enjoy greater peace of mind.

Read on for advice on how to downsize and simplify your life, including:

•   The financial benefits of downsizing your lifestyle

•   How to live happily with less

•   How to remove non-essential items from your budget

What Does Downsizing Mean?

Downsizing generally means moving from a bigger home to a smaller one, whether an apartment, condo, or house. People usually start wondering “Should I downsize my house?” when they are empty nesters, they realize maintenance is becoming too much work, or they want to lower their housing expenses, such as their mortgage and property taxes.

But the term downsizing can also be about streamlining your life in general, beyond your home. You might opt for a smaller car or a clean-green electric one that doesn’t give you sticker shock at the gas pump. Reprioritizing life could mean phasing out a long commute that takes a toll on mind, body, time, and wallet and working remotely.

In addition, many consumers, whether singles or families, strive to declutter day-to-day life by downsizing. Some are even true minimalists, paring their possessions down to a minimum to free up physical and mental space, plus room in their household budget. Overall, downsizing can wind up improving your financial situation.

Financial Benefits of Downsizing Your Life

The payoff for downsizing your life can help you reach financial goals. Among the rewards may be:

•   Less (or no) debt

•   Improved credit score

•   Reduced monthly shelter costs

•   Lower utility expenses

•   Ability to create a substantial emergency fund

•   Ability to afford travel dreams

•   Knowledge of how to make a financial plan and live on a budget

•   Extra funds to save or invest, for retirement or other goals

•   Economic security

•   Improved credit score

Financially Downsizing Your Life

If you are ready to start downsizing financially, getting rid of excess stuff, and living leaner, take the next step. Consider the following ideas:

Selling Items

If you have items you no longer or never used, chances are, you can sell them. This will free up space in your home and send some cash towards your bank account. Whether it’s a set of silver cutlery you inherited, that exercise bike you no longer use, or brand-new makeup you bought in the wrong shade, why not see if someone else wants to purchase your unwanted items? You could sell them on eBay, Etsy, Poshmark, or other sites. Or try Facebook Marketplace, which can make the process super simpler; shoppers can pick up items from your doorstep.

Declutter by Using Automatic Payments

Part of downsizing your financial life involves easing the time and energy it takes to deal with your money. Signing up for automatic payments (sometimes called autopay) can be a terrific step. Just think, no more billing statements and envelopes to pile up. (It’s kinder to the trees, too.)

Many businesses, from utilities to mortgage companies, offer paperless billing. You can set up automated electronic payments from your bank account. The other perk to this is it helps ensure that you’re paying bills on time, which can boost your credit score. Timely payments are the single biggest contributor to a solid score.

Moving to a Smaller Space

Downsizing your home could have a positive ripple effect on your finances. Relocating to a more compact space or a less expensive neighborhood can save you major money. Beyond your rent or mortgage payment decreasing, any property taxes should similarly declinem as well as maintenance costs. In addition, you’ll have less space to heat in the winter and to cool in the summer, so your utility bills may be lower.

If you’ve been in a place with a home office to get through the pandemic work-from-home mandate, now might be the time to look for a house or apartment that doesn’t include that extra room. If you still need a place to work at times, you might pay a daily or monthly fee at a cowork location. With many companies offering remote workdays now, you might even ask if your employer will cover the bill.

Donating or Giving Away Items

If you are moving to a smaller home or simply want to declutter, you can do so by offering up your extras. In many areas, nonprofit organizations welcome donations of clothing and household items in good condition. Some charities will even take your car, which is immensely helpful when you are downsizing and have a nonworking vehicle to be towed away (free of charge). With any of these donations, be sure to get an IRS tax-deductible donation receipt. That can help at tax time; you might even see a refund.

Some neighborhoods have online “curb alert” sites (search using your town’s name on Facebook) to list items people put out on the curb for giveaway. You could have just what another family needs, from a baby jogger to a cat carrier. It’s a good way to reduce, reuse, and recycle.

Letting Go of Luxury

Sure, we all deserve a treat now and then, but often, the occasional reward becomes a regular thing. From opting for a luxury car, frequent massages and restaurant meals, high-end vacations, or designer clothes, splashing out on purchases can inhibit your ability to save or even afford the basics. It traps you in a situation of living beyond your means and potentially winding up chronically in debt.

Review your credit card and debit purchases to see where you may be overdoing it in your quest for the good life. Is it a weakness for the latest model mobile device or sports car? Does your one-week, lavish summer vacation take you a year to pay off? Do some course-correcting.

Anyone who wants to downsize should seek ways to save money versus overspending. Reorganize and rediscover your clothing, shoes, and handbags so you can “shop your closet” to help curtail fashion splurges. Book an Airbnb off season (seaside towns in the Northeast after Labor Day, for instance) to save money while still having that getaway you crave.

Removing Non-essential Items From Budgets

A key step in downsizing financially is to learn and respect the difference between wants and needs. Ubering everywhere when you could walk or take public transportation is what you want, not need to do. Subscribing to all kinds of food clubs or streaming services: Again, a want, not a need. Look at your spending through this lens, and see where you can economize.

Changing Your Financial Planning to Downsize

Now is the ideal time to review and reevaluate what are the basic expenses of living. These will impact how and whether you hit your financial and lifestyle goals. By reducing some of your expenses (especially high-interest debt, like credit card debt), you should be able to free up funds that can be applied to longer-term goals, whether that means the downpayment for a home, retirement savings, or another purpose.

Here’s another way to look at your money when thinking about downsizing: You may have heard of the 50/30/20 budget rule. This recommends spending 50% of after-tax income on must-haves and must-dos (housing, utilities, etc.), 30% on things you want, and 20% on savings and debt repayment.

When you figure out how to downsize your life, you may discover that you need less than 50% of your income for must-haves in your new chapter. Then you can use the extra funds you have freed up to pump up your savings, squash debt, and include more IRA and 401(k) contributions. This can be especially easy (and pain-free) if you set up automatic transfers to whisk money out of your checking account on payday and into savings. When you don’t see the money reflected in your checking balance, you likely won’t be tempted to spend it.

Managing Your Finances With SoFi

A SoFi high yield bank account can make it simple to stay on budget with downsizing plans. You can do all of your banking in one streamlined place and eliminate a paper trail, thanks to our website and phone app. And SoFi can help your money grow faster. When you open our Checking and Savings with direct deposit, you’ll earn an amazing 2.00% APY while paying zero account fees.

Bank smarter with SoFi.

FAQ

What is a good age to downsize?

Retirement age has generally been considered a good time to downsize. Moving to a smaller home when kids are grown can make life more manageable and free up funds to pursue travel and personal goals. However, many people of all ages are embracing “small living” or “the new minimalism” and want to spend and consume less.

Does it make sense to downsize?

While housing prices are high, it can make sense to downsize to a smaller space. You can potentially increase cash flow, lower bills, and spend less on maintenance. Also, given the period of high inflation we have been in, downsizing can free up funds to use on your usual expenses. It’s worthwhile to look at your finances and see how you might economize and gain some financial freedom.

How do you know it’s time to downsize?

If you have trouble keeping up with bills and feel as if you have too much stuff to maintain and manage, it might be time to let go. Paring down your life and costs can be financially freeing.


Photo credit: iStock/lechatnoir

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 2.00% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 2.00% APY is current as of 08/12/2022. 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 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.
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38 Daily Money Affirmations for Financial Abundance

39 Daily Money Affirmations for Financial Abundance

If you’re finding it hard to be optimistic about increasing your riches, you may want to start adding financial affirmations to your everyday routine. Affirmations specifically targeting money have the power to change self-defeating or negative self-talk when it comes to your finances. And when you start replacing a pessimistic mindset about earning, spending and getting out of debt with a positive one, you’re more likely to take the needed steps to attract the wealth you want — or so the thinking behind daily affirmations goes.

Reciting affirmations may seem awkward at first and the truth is, some people won’t find daily money mantras a game-changer. The good news is, daily money affirmations don’t cost anything and you control the story. Here’s the lowdown on financial affirmations so you can decide if they’re right for you:

What Are Money Affirmations?

Money affirmations are positive words, phrases, and sentences designed to turn discouraging thoughts about money into positive ones. The hope is by regularly speaking these uplifting statements to yourself, either in your head or out loud, you’ll reprogram your brain. When you swap out the old notions for the new thoughts and they become your new truth, you can get busy putting them into action.

The types of financial affirmations vary depending on what your money goals are. For example, you can create statements about increasing your income, getting out of debt, saving money, as well as expressing gratitude for the financial abundance you already have.

Creating your own personal affirmations are all about dealing with your specific money issues or blocks and how you can move forward.

While there’s no set rule on how many times a day you should verbalize your money affirmations, it helps to be consistent so it becomes a habit. A good start might be picking one powerful affirmation and repeat it throughout the day. Or you could choose three to five affirmations that you recite for five minutes or several times in a day.

Be forewarned that taking on too many at once may feel overwhelming and scatter your focus. Once you get the hang of it and it feels more doable, you can try adding more.

Optimizing Your Money Affirmations

Positive affirmations may work better if you put them in present tense, such as “I can,” “I am,” or “I have” instead of using language such as “I will,” “I should” or “I could.” Why? Statements promising future outcomes suggest you could be a certain way instead of dealing with the reality of where you are now.

It can take a while to retool your thinking, so try not to get discouraged if in the beginning, progress seems slow or non-existent. Remember, it took years to shape your current beliefs so it can take some time to adjust to new ones.

Pros and Cons of Money Affirmations

As mentioned earlier, affirmations don’t always appeal to or work for everyone. Depending on your current state of mind and life circumstances, financial affirmations may seem trivial, frivolous, or simply not a priority. If you’re experiencing some stressful times or financial hardships, you may not have the emotional or mental bandwidth to take them on.

On the flip side, many people find the daily practice empowers them, provides clarity, and motivates them to take more financial control and responsibility.

Before you take the plunge, here’s some pros and cons to consider:

Pros of Using Money Affirmations

•   Give you a wider perspective on your core values surrounding your finances

•   Assist in setting personal boundaries

•   Help in creating a realistic budget

•   Cultivate a positive relationship with money

•   Keep you focused on your vision and financial goals

•   Home in on your strengths

•   Boost your self-image and confidence

•   Celebrate past financial successes and current achievements

•   Encourage problem-solving

•   Allow you to explore other possibilities to expand your wealth

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Cons of Using Money Affirmations

•   Can feel inauthentic if they fail to align with your personal core beliefs or you don’t believe what you’re saying

•   Put too much self-applied pressure to transform your financial picture quickly

•   Can be time-consuming and easy to let slide if you’re busy

•   Require daily financial discipline, commitment, and persistence

•   May not cause any positive shifts in your thinking and so lead you to feel you’ve wasted valuable time

•   May make you feel foolish, self-conscious, or uncomfortable reciting them

•   May bring up painful emotions about money you may not be ready to address even with with financial therapy

•   Create self-doubt or self-defeating feelings if you’ve chosen affirmations that aren’t realistic or attainable

•   May overwhelm you and zap your emotional energy, especially if you’re going through difficult times

•   Probably won’t provide instant gratification if you want or need a quicker mental money fix

39 Ways to Think Your Way to Being a Millionaire

Want to give daily affirmations a try? Reciting any of these to yourself daily may help transform negative thoughts into positive ones:

1.    I choose to only have positive thoughts about money.

2.    I release my fears around money.

3.    I have the power to create and build the wealth that I desire.

4.    I am open to receiving financial abundance.

5.    I’m worthy and deserving of a wealthy life.

6.    If others can be wealthy, so can I.

7.    Prosperity is drawn to me.

8.    I trust I’m on a path to becoming more financially solvent.

9.    I believe I can achieve my financial goals.

10.    I am capable of handling money.

11.    I’m working to build a strong money foundation and achieve financial wellness.

12.    I find the positives in my current financial situation.

13.    My debt doesn’t control me, I can manage it, and I can become debt free.

14.    I overcome all obstacles that lie in my way of financial success.

15.    I want more money and that’s OK.

16.    Saving money is a positive challenge.

17.    I can make my dreams a reality by sticking to a budget.

18.    Starting an emergency fund to protect myself is something I can do.

19.    Every dollar saved puts me closer to financial freedom.

20.    Each day is an opportunity for me to change my money story.

21.    Money well-spent is a source of good and positive things.

22.    The more I give, the wealthier I become.

23.    I use money to improve my life.

24.    Wealth flows into my life consistently.

25.    There are countless ways I can bring more money into my life.

26.    Everything I need to build wealth is available to me right now.

27.    I choose to focus on money coming to me with ease.

28.    My income can exceed my expenses.

29.    I deserve to increase my income.

30.    There are no limits to the amount of money I can make.

31.    I can profit off of my skills.

32.    I’m happy to pay my bills for all they provide me.

33.    I’m grateful for the money I have now and the money that’s on its way to me.

34.    Money can expand my life opportunities and open me up to new experiences.

35.    The money I earn and spend makes me happy.

36.    My net worth is not my self-worth.

37.    I move from poverty thinking to financial abundance thinking.

38.    My life is full of riches beyond money and my happiness is surging.

39.    I have a millionaire mindset. I think like a millionaire. I act like a millionaire, I feel like a millionaire, I am a millionaire.

The Takeaway

Changing long-held, entrenched beliefs about money can be challenging. Incorporating a regular routine of financial affirmations offers the possibility of changing your mindset to a positive and hopefully productive one. While these affirmations may not appeal to everybody, if you feel stuck and want to take some baby steps toward improving your money picture, affirmations may be worth a try.

On the road to improving your money situation, you may want to keep better track of it with a money tracker app. SoFi Relay helps you do this, all in one place. It makes it easy to know where you stand, what you spend, and how to hit your financial goals.

Get credit score monitoring, spending breakdowns, financial insights, and more – all in one app and at no cost.

FAQ

How do you write affirmations for manifestation money?

A review of affirmations on the internet found that they generally have two things in common: they often start with “I” and they are in the present tense. Some people feel money mantras should be short (mo’ money!); others think they just need to resonate with the people who recite them.

How do you attract the abundance of money?

Of course, the idea of attracting something like the abundance of money is based more on belief than anything else. If you believe you can attract it, that belief may lead you to take action – perhaps, to start a business or at least to make a plan. So to attract the abundance of money, you may want to start by believing that you are capable of becoming rich.

How do I get a millionaire mindset?

The first step is probably ridding your mind of self-defeating thoughts. But just being positive isn’t enough. You likely want to develop attitudes associated with successful people: being open to learning, not fearing failure, and being proactive.


Photo credit: iStock/atakan

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.
SoFi’s Relay 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.
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2022 IRS Tax Refund Dates and Deadlines

2022 IRS Tax Refund Dates and Deadlines

According to the IRS, approximately 90% of tax refunds are issued in under 21 days. However, some tax returns require more attention, which can lengthen the process and push back your tax refund date.

If you requested an extension, the deadline for filing 2021 tax returns is Monday October 17, 2022. Keep reading to learn more about deadlines for 2021 and 2022 tax returns, and how to track the progress of your tax refund.

Tax Refund Process, Explained

The process begins when you submit your return to the IRS. The IRS then breaks down the process into three steps: return received, refund approved, and refund sent.

If you file electronically, you should receive an email confirming that your return was received within 24 hours. Paper return filers will have to wait longer.

After the IRS processes your return and confirms the information, your refund will be approved and a tax refund date will be issued. This takes about 3 weeks for electronic filers. Taxpayers who file a paper return by mail will wait at least four weeks.

The last step is when your tax refund is sent out. For filers who provide direct deposit information, your refund should appear in your account almost immediately. Taxpayers who do not include their bank information will have to wait for a paper check to arrive by mail.

Factors Impacting How Long a Tax Refund Takes

Several factors can affect the timing of your tax refund — including your financial organization skills and the accuracy of the information you provide. If you don’t receive your tax refund within 21 days, your return is likely being manually reviewed due to a mistake or complication.

The following factors can also affect your 2022 tax refund date.

How Early You File

Filing early is essential if you want to get your tax refund early. Ideally, you should be able to compile all your tax documents by the end of January. Forms such as W-2s, 1099-Rs, 1098-Es, and 1098s will provide the income information you need to file.

Filing early means submitting your tax return before the official deadline of Monday April 18, 2022, for your 2021 tax return. The deadline for 2022 tax returns is Saturday April 15, 2023. Since many taxpayers file their returns on the official deadline, filing early allows you to beat the rush.

Similarly, if you requested an extension, filing “early” means before the October deadline. The deadline for 2021 returns is Monday October 17, 2022; the deadline for 2022 returns is Monday October 16, 2023. However, taxpayers can file anytime before October. This way, you’ll avoid the bottleneck that inevitably occurs on the deadline itself.

If You Are Claiming Certain Credits

Claiming certain credits on your tax return can push back your 2022 tax refund date. These include:

•   Earned Income Tax Credit

•   Additional Child Tax Credit

•   Injured Spouse Allocation

•   Child Tax Credit, if you claim the wrong amount

•   Recovery Rebate Credit, if you claim the wrong amount

E-filed or Sent By Mail

Whether you do your own taxes by hand, use software to assist you, or hire an accountant or tax preparer, it’s best to opt for electronic filing. E-filed taxes are accepted by the IRS within a day or two, while mailed paper returns can take weeks to arrive.

Existing Government Debt

Some taxpayers owe the federal or state government due to unpaid child support, taxes from years past, or student loan payments. Taxpayers facing these issues will receive a reduced refund or none at all, and any refund can take longer than the standard 21-day timeframe after e-filing. Covid-19 stimulus payments will not diminish or delay your tax return.

How to Track the Progress of Your Refund

If you’re like most taxpayers, it won’t take long until you start wondering, Where is my tax refund? Getting hold of a live IRS representative by phone is possible but challenging during tax season. Fortunately, the IRS’s Refund Status tool (https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp) provides updates on your 2022 tax refund date just 24 hours after you submit your 2021 taxes electronically.

The tool shows taxpayers one of three statuses: return received, refund approved, or refund sent. After the refund is approved, the IRS will give you a tax refund date. If you mailed your return, you’ll have to wait about four weeks for the tool to provide information on your refund.

What to Do Once Your Refund Arrives

How should I spend my tax refund? is a perennial question for taxpayers. Top choices include paying down debt, saving for a vacation, and investing. The important thing is to plan ahead so you don’t spend it all on frivolous or impulsive purchases.

One popular option is to treat your refund like regular income. You can budget the majority of the money for “needs,” by setting up an emergency fund or paying down your mortgage. The rest can be set aside for “wants,” such as a year’s worth of dining out.

An online budget planner can help you decide the appropriate percentages for needs and wants. Likewise, a debt pay off planner can show you how much sooner you’ll be debt-free after depositing some or all of your refund.

What Happens If You Can’t File Income Taxes by the Deadline

Each year, taxpayers unable to file their return on time (usually April 15) can ask the IRS for an extension. The IRS’s Free File tool (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) allows you to electronically submit a request to change your filing deadline to October.

Be aware that taxpayers who want an extension must make an educated guess about the taxes they owe and pay the IRS that amount.

How to File Form 4868 for a Tax Return Extension

Another way to file for an extension is to complete form 4868. You can submit the form electronically or by mail.

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The Takeaway

While you cannot predict your exact tax refund date, filing electronically early in the tax season can help you get your refund faster. The IRS sends out most refunds within 21 days of receiving the return. If you requested an extension, the deadline for filing a 2021 tax return is Monday October 17, 2022.

SoFi’s money tracker app, Relay, can help you take control of your finances and make next year’s tax season much less stressful. In addition to helping you better manage your money, SoFi Relay offers everything from credit score monitoring to financial insights, and it doesn’t cost a thing.

Tracking your money like a champion just got easier with SoFi Relay.

FAQ

When should I expect my 2022 tax refund?

Typically, you can expect to receive your refund within 21 days of filing your return. However, mistakes and special tax credits can slow down the process.

What days does IRS deposit refunds in 2022?

The IRS deposits refunds Monday through Friday, except for holidays.

How long does it take the IRS to approve a refund in 2022

Most refunds are issued in 21 days or less from when the IRS accepts your return. However, if there are issues with the return, it may take longer.


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.
SoFi’s Relay 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.
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