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5 Conversations to Have Before Combining Finances with Your Partner

One of the most nerve-wracking parts of navigating a serious relationship can be figuring out how to manage money as a couple. Whether you have each been splitting every bill exactly down the middle, one partner has been paying for most of the expenses, or something in between, many couples eventually decide that it is time to fully combine their finances.

Whether it is because you are moving in with a significant other, getting married, or you’re just ready to take a new step in your relationship, combining finances can help simplify monthly bills and set you and your partner up for a strong financial future together.

1. Have a Debt Reality Check

Are you paying off a six-digit graduate school loan or dealing with credit card debt? Conversations about debt might not be your favorite subject, but it’s important to get it out in the open when combining finances. When you combine finances, your total income may have to pay two sets of loans, two credit card bills, and still cover household expenses.

Instead of getting sticker shock when it comes time to pay the bills from a joint account, having an honest conversation about debt in advance of combining finances can help couples set realistic expectations and whether the stress of paying off debt. One other benefit of hashing out individual debt loads is that you also have the opportunity to re-evaluate if either person would benefit from a new loan repayment strategy like refinancing.

2. Evaluate Your Incomes

You probably have at least a general idea how much your partner makes, but combining finances requires more than being able to guess their tax bracket. Before you combine bank accounts and intermingle your finances, couples may want to share their annual income and their take-home pay.

Knowing exactly how much your partner makes, and when they expect to get paid each month is important so that you have a realistic view not only of how much money will be deposited into your shared accounts each month but also when that money will hit. For example, you might find that you and your partner are on different pay schedules and that you can expect a paycheck from one of you to be deposited each week.

Or, you might find that you are both paid bi-monthly and that you will need to be careful about how you manage money between the 15th and 31st of each month. Regardless of how it all shakes out, the important thing is to use this information to create a joint budget, set up joint savings, and make plans for the future.

3. Balance Your Budget

One wrinkle when moving in with a significant other or otherwise combining finances can be confusion or even resentment about how your partner spends money. Whether you can’t live without weekly vegan meal prep deliveries while your partner would rather drive to the discount grocery store, or you can’t agree on whether your new sofa should be $500 or $5,000, all couples sometimes clash about money.

That’s why it is important to lay out your financial priorities in advance of combining finances with your partner. This means that you not only need to make an accurate list of your monthly fixed expenses like rent, bills, and transportation, but you also need to evaluate and budget for the realities of how you actually spend money.

Do you pay child support? Does your partner rely on a fancy gym membership to stay sane at work? Do you have standing Friday night drinks with friends? Does your partner have an incurable book-buying habit? Discussing these financial factors upfront can help avoid resentment and help you plan realistic monthly budgets that don’t leave either person feeling resentful about expenses.

4. Solidify Your Savings Goals

In addition to planning for known expenses and creating a healthy budget, one important part of combining your finances is setting up savings. Whether you both already have healthy savings accounts or are starting from scratch, figuring out exactly how much you plan to save and how you plan to do it is crucial.

The first step should be figuring out exactly what you’re saving for. Are you prioritizing saving for a down payment on a home together, or are you first focused on stashing away an emergency fund?

Sitting down together to come up with some savings goals will not only make sure that you and your partner are on the same page but can be an opportunity to imagine and plan for what your lives together will look like. Whether your dream is to renovate an old farmhouse in wine country in 10 years, or retire early and take a round-the-world trip at 50, your success may depend on whether you start saving now.

In addition to deciding how much to save and what you are saving for, couples should also discuss how you plan to save. Are you planning on sticking dollar bills in a coffee can on top of the fridge, or do you want to open a joint savings account? Some couples choose to keep some cash in an easily-accessible joint savings account and invest the rest.

Products like SoFi Invest® can take the hassle out of online investing and help even newbie investors save for long-term goals like a down payment on a house or retirement. Plus, the SoFi planning team can help couples make smart investing plans to meet their goals.

5. Look Forward to the Future

In addition to planning your savings strategy, it is important for anyone moving in with their significant other to have an honest talk about what they expect the future to hold. Whether you and your partner are planning for no kids or want six, family plans can make a huge difference in your joint financial strategy.

Don’t forget about your parents, either. Do you expect that you will need to provide financial support or housing help to your parents as they age? Are you dedicated to living in a tiny house or do you dream of a five-bedroom overlooking the ocean?

These conversations may not always be easy, and you and your partner may disagree on priorities or future plans. An important part of starting a healthy financial life together is being able to honestly and openly discuss money.

You can always change your saving strategies, your future goals, or even decide that you can give up that meal delivery service after all, but the financial strategies you develop together now can last you a lifetime.

Ready to start investing? Learn how SoFi Invest can help you plan for your financial future.


The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile.
Advisory services offered through `SoFi Wealth LLC. An SEC registered investment advisor.
SoFi Securities LLC, member FINRA / SIPC .
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Budgeting for Your Honeymoon

The last thing any engaged couple wants is to start their new life together by going into debt. And yet, the costs can easily add up fast. First, there’s the wedding and all the events leading up to the big day. Then, there’s finding a place to live and making it your home.

Next, there’s the honeymoon—your chance to really relax and enjoy yourselves before married life gets real. You should remember this trip for the rest of your lives because it was a wonderful time spent together—not because you’re still paying for it. Here are some tips to make financing your honeymoon the least of your worries:

Setting a Limit on How Much You Can Spend

Maybe you’ve saved up for this dream trip, or Mom and Dad have floated you some cash. Boom. You’re done.

If not, you’ll have to come up with a realistic number and make it work. Sit down with your betrothed and have a frank discussion about what you want to do and how you’re going to pay for it. Talk about whether you’re willing to take on some debt, if necessary, and how you’ll pay it back if you do.

Looking for a place to house your honeymoon budget? SoFi Checking and Savings is a checking and savings account that earns you interest on all your cash. Plus, with SoFi Checking and Savings you are your +1 can easily merge your finances and get no account fees. We work hard to give you high interest and charge zero account fees. With that in mind, our interest rate and fee structure is subject to change at any time.

Setting Priorities & Making Trade-offs

For example: Would you be willing to cut the trip short a few days if it meant you could stay at a nicer resort? Would you be willing to pass on a day at the spa if it meant you could go snorkeling or skydiving? Can you do without room service breakfasts so you can have dinner at the Eiffel Tower?

Breaking Down Your Expected Costs on a Budget Worksheet

You can use Excel or any other spreadsheet program, or a simple checklist could do. Just keep in mind that your costs will start before you ever leave for your trip. You may need a passport or specific vaccines if you’re traveling overseas.

You might want new clothes or better luggage. Also consider where you’ll stay, how you’ll get around, what you’ll eat and drink, things you’ll do for fun—and don’t forget about taxes and tip.

Finding Ways to Save

If you have enough set aside in your honeymoon fund to pay for everything you want, good for you—start making reservations. But what if you’ve got a shortfall?

Before you start arguing, crying, or crossing off some of the most appealing plans on your list, start searching for savings:

Talking to a Travel Agent: A good travel agent can help you find honeymoon destinations on a budget and steer you to experiences that will make your trip special without costing a fortune. Yes, you could do hours of research online and book it all yourself, but don’t you have enough on your plate?

Booking early: Not only will you have a chance at better choices for cruise cabins, hotel rooms, and airline seats that fit within your budget, you can stop sweating those details.

Considering an all-inclusive resort: If you don’t have time to hunt down individual deals, consider searching for all-inclusive resorts or cruises, which usually include lodging, meals, soft drinks, gratuities, and some activities and services in the price.

Go on a “mini-moon”: If your honeymoon budget just can’t handle a blowout trip, plan a shorter excursion, maybe closer to home. You can still go luxe with spa days and gourmet dinners at a five-star hotel; just tighten up on other details.

You can always take a longer honeymoon later, when your financial reserves (and vacation days) have had a chance to replenish.

Promoting You Are On Your Honeymoon: Whenever you make a call, be sure to mention this is for your H-O-N-E-Y-M-O-O-N. It might get you a better room, a better table, a free bottle of champagne or some extra attention from staff. If they don’t offer a discount or freebies, ask.

Making a Plan for How You’ll Pay

When you’ve done all you can to close the gap between what you want and what you can afford, it’s time to figure out how you’ll cover the difference.

Creating a honeymoon registry: You can use all the cash gifts you receive to augment your vacation stash, or you can set up a registry (like The Knot’s Newlywed Fund ), where wedding guests can contribute to a general honeymoon fund or make a gift of specific honeymoon activities.

This way, family and friends know where their money is going, and you get to go horseback-riding on the beach or shushing down the slopes in Aspen.

Pillaging your credit card points: If ever there was a time to use up every credit card point and frequent flier mile you’ve ever earned, this is it. If you plan ahead you could get strategic—use cards that earn you points to pay for wedding expenses, then use the points you just earned for the honeymoon, flights, upgrades and more.

Be sure you can make the monthly payments on those cards as you go—or better yet, pay off the balances. Otherwise, you’ll be racking up interest.

Looking into a personal loan: Maybe your finances are temporarily flagging because of the wedding, but you and your spouse-to-be both have a good credit record, excellent salaries, and the wherewithal to make payments on time. If your shortfall will be short-lived, taking out a personal loan might help.

Sure, you could pile those travel costs onto a credit card. But think about it: If the interest rate is high or variable and you can’t pay off the balance on your card as soon as you get back home, you could ultimately be spending far more for every souvenir and spa visit than you planned.

With a personal loan, you can borrow just what you need at a competitive rate and make manageable payments. Knowing upfront what you’ve borrowed could even help you keep better control of what you spend.

Another plus: You can sign on as co-borrowers and have the funds delivered to a joint account, so the loan will belong to both of you—you won’t have to fret or fume about who’s paying for what.

Personal Loans with SoFi

Arguing about finances can put stress on many a relationship—but that doesn’t have to be you.
If a vacation loan sounds like a good option, shop for the best deal you can get. SoFi’s Personal Loans offer competitive rates, great member benefits, and customer service that’s there whenever you need it.

You can pay back the loan early if you like—there are no prepayment fees. And as a SoFi member, you’ll also have access to the financial services you’ll need in the future, from home loans to investing.
If you plan well, cut costs where you can, and borrow wisely if needed, you can start your life together on sound financial footing.

In need of some extra funds for your honeymoon? See if a SoFi vacation loan is right for you.


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Neither SoFi nor its affiliates is a bank.
SoFi Checking and SavingsTM is offered through SoFi Securities, LLC, member FINRA / SIPC . Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.

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10 Tips to Help Break The Debt Cycle

Just like visiting the dentist or having your car towed, the debt cycle can add unwanted stress to your life.
Taking on some debt can be beneficial, allowing you to invest in your future by getting a college education or buying a home. But every debt you borrow will eventually need to be repaid. In some cases, the repayment process can seem daunting.

Mortgages, student loans, and car loans can add up to a considerable portion of your monthly expenses. Add in credit card debt and unexpected financial emergencies, and it could feel like your debt is ever-growing. But don’t fear, with a few tips and some strategic planning, you can organize your finances and help to break the debt cycle for good.

Avoiding Credit Cards

Credit cards can be a great tool to earn rewards points and track your spending, but only if you are paying them off in full every billing cycle. Credit cards can make it easy to spend money you don’t have, since you don’t feel the immediate effects of the money leaving your account or the cash leaving your hand.

You don’t have to cancel your cards, since that may negatively impact your credit score . You can store them somewhere you won’t have easy access to them, or even cut them up so you’re not tempted to use them. If you’ve been using your credit cards to pay for your daily expenses and not paying the bill at the end of the month, it may be time to review your spending and see if there are places you can cut back.

Considering Interest Before Charging Purchases

When you’re shopping it can be easy to get swept up in finding a great deal and put it on a credit card. Before you do, you may want to pause and think about what it might cost you in interest.

If you aren’t able to pay off your credit card bill at the end of the month, your sweet deal could end up costing you a lot more than what you originally paid for it.

Before you swipe your card, consider taking the time to evaluate the purchase, the price, and what it may cost you in interest for as long as it will sit on your credit card. You can use a tool like our credit card interest calculator to estimate how much interest you will pay on your credit card debt.

Revisiting Your Shopping Habits

It might be time to take a look at your shopping and spending habits. You can start by reviewing how much money you are spending each month on things like food, clothes, and entertainment. Be honest with yourself and see if there is any opportunity for you to cut back.

One way to create more structure when you hit the store is to shop with a list. While your top of mind association may be grocery shopping, being prepared with a list doesn’t have to apply to just that. Planning ahead could help you save money in all areas of spending.

When shopping for the holidays, birthdays, or other events, set a list of what you plan to buy and a budget to match. This can help you get exactly what you need without going overboard.

Differentiating Between Wants and Needs

Is that new pair of shoes a want or a need? Latest video game? A night out on the town? As you’re trying to get ahead of the debt cycle, you might want to evaluate your wants against your needs. For example, before you make a purchase, carefully think about whether you need it, or if it’s just a want. If it’s something you can live without, maybe holding off is wiser.

Breaking out of a long-term debt cycle requires discipline and determination. While skipping out on wardrobe upgrades or the newest tech gadgets now can seem like a huge sacrifice, when you start making headway on your debt repayment, odds are you’ll feel the reward.

Saving an Emergency Fund

One of the biggest reasons people fall into the debt cycle is their failure to plan ahead. You can’t predict the future, but you can do your best to prepare for it. For example, say your car breaks down and you’re unable to pay for repairs upfront.

Deferring the cost on your credit card can send you deeper into the debt cycle. On the other hand, having an emergency fund on hand can help you prepare for unexpected costs and events.

If you don’t have anything saved up, you can try starting with a windfall—like a bonus at work or your tax refund. You can put this money in a dedicated emergency fund savings account (or another cash equivalent, if you prefer).

Need a place to put your emergency fund? Learn more about opening a SoFi Checking and Savings checking and savings account.

Then each week, you can try to save a specified amount of money in your emergency fund. Even saving just $10, $15, or $20 a week can help you be more prepared when a financial emergency strikes. It can be good to aim to save somewhere between three and six months’ worth of living expenses in your emergency fund.

Reviewing Your Credit Card Statements and Setting a Budget

Credit card debt prevents many people from breaking the debt cycle. Taking action by printing out your credit card statements and reviewing them closely can be a great first step toward getting credit card debt under control. You can also make note of your expenses and see exactly where all of your money is going.

Are you spending hundreds of dollars a month on take-out? Have you been giving in to the convenience of Amazon Prime? Are there a few subscriptions you enrolled in but have since stopped using? Be honest with yourself as you review your spending habits. Note any areas where you can adjust or cut back your spending.

After you’ve had a reality check on your spending, you might want to set up a new budget. You can start by tallying your monthly income and your monthly expenses. Don’t forget to include saving in your budget and set up new limits for your discretionary spending.

Accelerating Your Repayments

If you’re paying off debt, one way to speed up your repayment is paying more than the monthly minimum. Making additional payments on your debt each month could not only help you eliminate your debt more quickly, it could also potentially reduce the money you spend in interest in the long term. Even just $25 a week could have an impact on your repayment.

There are a couple of debt repayment strategies that could help get you back on track. First, there is the debt snowball method. This method encourages you to start focusing on your smallest debt, regardless of the interest rate. While making the monthly minimum payments on all of your debts, you would throw as much extra money as possible toward the smallest debt.

Once it’s paid off, you’d take the minimum payment you were paying on that first debt and add it to the minimum payment on your next-smallest debt. Repeat the process and let the snowball work its magic. While this method may not reduce the money you spend in interest, the rewarding feeling of seeing your debt dwindle could encourage you to stick with your repayment plan.

Another debt repayment strategy is the debt avalanche, or debt-stacking method. Unlike the snowball method, which is structured around behavior and motivation, the avalanche method is about streamlining your debt repayment so that you save the most money on interest. It can require more discipline, but keeping track of how much you are saving in interest can be a great motivator.

With the debt avalanche method, you would make a list of all your debts by order of interest rate, highest to lowest. While making your minimum monthly payments on all the debts, “attack” the highest interest rate loan with as many extra payments as you can. For extra motivation, you can use an extra payment loan calculator to keep track of how much you’re saving in interest.

Living within Your Means

With all the fancy gadgets, cutting-edge technology, constant advertisements, and the rise of social media, it can be easy to get swept up in having the best and fanciest of everything. But living in debt to sustain that can ultimately add stress to your life. You can rise above this by living within your means.

Conventional wisdom is pretty straightforward: don’t borrow more than you can afford. Before you borrow, review your budget and understand how much you can realistically afford to spend on a given item.Then stick with what you already determined you can pay.

Getting a Side Hustle

Another great way to help end the debt cycle: find some extra income by getting a side hustle. You could use money you earn from your new side gig to make extra payments on your debts. Not sure where to start? Sometimes it’s a straightforward as taking a look at your skills and interests and seeing where you may be able to find an extra job or make some passive income.

There could be a ton of different opportunities to find a side hustle that fits your skills and works with your current schedule.

From driving for a rideshare to freelancing as an editor, or even selling your crafts at an online marketplace, with a little legwork, you could find a side job that you love, while also speeding up your debt repayment.

Consolidating Credit Card Debt with a Personal Loan

If you’re currently living in debt, it can feel like there is no way out—but with some strategic planning and a bit of discipline, you may be able to get out from under it. One option to help you repay your debt is a consolidation loan.

A debt consolidation loan is type personal loan you could use to consolidate other sources of debt, such as credit card debt. If you’re repaying a number of high-interest debts, a consolidation loan could help you get your repayment plan on track, and lower your overall interest rate which could reduce the amount you spend in interest, depending on your loan term.

When you take out a debt consolidation loan with SoFi, there are no origination fees or prepayment penalties. If you’re ready to see how a debt consolidation loan from SoFi can help you break the cycle of debt, you can apply easily online and get a rate quote in less than two minutes.

Learn more about SoFi personal loans today!


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.
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.
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 .
SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Neither SoFi nor its affiliates is a bank.
SoFi Checking and SavingsTM is offered through SoFi Securities, LLC, member FINRA / SIPC . Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.

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Average Moving Costs and How to Cover Them

No matter how excited you might be about moving—whether it’s for work, to be near family, to get a bigger house in a better neighborhood, or just for a new adventure—the logistics of getting your stuff from the old place to the new can be daunting.

Just timing everything so that you’re out of one home and into the next when you need to be is stressful enough. But you also have to figure out how you’re going to move all your belongings, how much it will cost, and how you’re going to pay for it. Even if your company is offering a relocation package, you may want to be prepared to pay a few bills along the way.

The challenging thing about making a big move is that it’s usually never just about getting your goods from Point A to Point B. Before you go, you’ll probably want to get all of your financial ducks in a row.

If you’re leaving family and friends behind, you may need extra time to say goodbye. And if you’re bringing a roommate, spouse, or kids with you, you’ll want to be sure they’re squared away and happy. Depending on your budget, your timeframe, and your desire to DIY, you have a few basic options for how you can choose to move:

•   You can pack everything yourself, load a truck, drive to your destination, and unload your belongings in your new home.
•   You can pack everything yourself, load it into a portable moving container and have it delivered to your destination, then unpack it yourself.
•   You can pack everything yourself, hire a moving company to load a truck, get your stuff to your new home and unload it, then unpack your boxes yourself when you have time.
•   Or you can hire a moving company to pack everything for you, transport it all to your new place, then unpack it for you.

DIY Moving Costs

How much any of those options might cost will be based on several factors—from the packing materials you use (recycled boxes and old newspapers vs. the pros’ higher-end and job-specific supplies), to how much stuff you’re moving, and how far you’re going. If you need to store some things temporarily, that also will add to your bill. Even a DIY move can add up by the time you pay for gas and insurance.

Full Service Moving Costs

If you decide a full-service move best meets your needs, you’re probably going to want to gather some estimates, so you can nail down the details and be ready when it’s time to go. Booking your truck four to eight weeks in advance is typically a good rule of thumb—maybe even further out if you’re moving in the busy summer months.

Professional moving companies can give you an estimate based largely on how many rooms of furniture you have. Most have websites, so you can often get a quick estimate online.

According to the American Moving and Storage Association , the average cost of a local, or intrastate, move is about $2,300 (for four movers at $200 per hour).

The average cost of moving cross-country is about $4,300 (for a distance of about 1,225 miles). Both averages are based on moving approximately 7,400 pounds of furniture, appliances, and boxes. Oversized or extremely heavy items might cost you extra—as could lots of stairs, or things that need to be taken apart and put back together.

Of course, the farther you’re moving, or the more stuff you have, the more expensive your move could be. If you’re single and just starting out, you might not have accumulated much furniture yet—or you may be ready to leave what you have behind. But if you’re going with a partner, maybe kids, and all that entails, your household moving costs could be much higher than the average.

Extra Moving Costs to Think About

Then there are the extras that go along with getting out of one place and into another.

•   Transportation—If you’re taking your car across the country, you’ll probably want to get a tune-up before you go. And then there’s gas, hotel stays, and eating on the road. Having a car transported instead of driving it yourself could cost anywhere from $700 to $2,000. If you’re in a hurry and decide to fly, that’s another expense. And if you’re taking a pet, you may have to add a little bit more to your overall bill, depending on the mode of transportation you choose for your furry friend.
•   Getting into your new home—Don’t forget about deposits you might have to make at your new location. That could be anything from first and last month’s rent and a pet deposit at a new apartment, to utility deposits at a new house.
•   Home repairs and cleaning—Be ready to pay for some repairs on both ends of your move. You may have to make some quick fixes to get out of your rental without losing the deposit, or maybe even major repairs if you’re selling a home. When you get to your new location, you could find some unexpected problems. Or you may just want to hire someone to come in and clean so you can cross that off your ever-growing moving to-do list.
•   Starting out fresh—You’ll possibly want to buy some things to make your new home your own, like curtains, bedding, or towels. Then there’s that fridge to fill. All those little costs can add up.
•   Looking good—Okay, this doesn’t have anything to do with moving your stuff, but if you’re relocating for a new job, you’re likely going to want to start off with at least a few new work clothes. (Maybe buy them in the new city, though, so you don’t have to move them.)
•   Cash for tips—Tips for the movers. Tips for the handyman or housekeeper who helps you get things in shape. Tips at your hotel. Tips for waitstaff at the restaurants you’ll be eating at until you get your new place up and running—or at the very least, tips for the pizza delivery guy.

Financing Your Move

If you have enough room on multiple credit cards, you could go that route, but should you? Or would a personal loan make more sense for you to cover all those costs, big and small?

Remember, even if you’ll be reimbursed by your employer or plan to take some moving deductions when you file your tax return, it’s very likely you’ll be paying at least some moving costs up front. And the longer those expenses sit on a credit card, the more interest racks up.

But if you qualify for a personal loan, your interest rate may be lower than a credit card, which can free up some cash for tips, gas, and food. Because when it comes to bargaining, cash is king.

With an unsecured personal loan from SoFi, you can find your rates in minutes and apply online. You can also set up manageable payments and there are no prepayment penalties or hidden fees.

When you borrow with SoFi, you get all kinds of perks, including complementary career coaching that could help make your transition to a new job go more smoothly.

When you’re weighing the pros and cons of moving expenses—and wondering if your budget is built to pay for what you need and want—a personal loan could help. Having the cash you need on the front end can potentially help give you the flexibility and the freedom to focus on your future success.

Ready to make your move? See how a relocation loan from SoFi can help you manage your finances as you get ready for your new life.


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.
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.
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 about bankruptcy.

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Changing Your Spending Habits: A Guide

Everyone has their own spending vices. Some people may buy groceries, but eat out instead or spend too much on shoes or gadgets.

We all have bad money habits. And within reason, having the occasional money splurge is totally okay. Everyone is allowed to treat themselves on occasion, and no spending is automatically “bad.”

It is when bad spending habits compound on top of one another or spiral out of control that it becomes a problem. Spending should be done reasonably and with a plan, in a way that doesn’t exceed income.

Almost no one can afford to buy everything that they want. Period. But exhibiting self-restraint and cultivating good spending habits is not as easy as it sounds. Frankly, humans aren’t very good at this.

If you are looking for ways to cut spending habits, let’s begin by taking a look at the way our brains make it hard for us to succeed in money. With this foundation of understanding our built-in biases, we can discuss ways to improve good spending habits while creating some barriers against the bad ones.

With a little hard work, accountability, automation, and dedication to ongoing education, changing bad spending habits might come easier than you think.

Breaking Bad Habits: Examine Your Biases

Behavioral economics is a field that studies the intersection of money, behavior, and psychology. Said another way, it looks at the ways that we are inclined to behave in certain ways with our money. As you can imagine, humans have a wide range of cognitive biases that play out in our money behaviors.

That’s right: Maybe some of our bad money tendencies aren’t because we lack willpower, but because our brains are hardwired or socially conditioned to behave in less than desirable ways. The only way to combat these biases is to identify and question these behaviors as they make themselves visible to us.

One such bias is called “herd mentality .” Humans are naturally herd creatures, and we assimilate to the behaviors of those around us. We also have the strong, innate desire to be an accepted member of a larger group.

The herd mentality manifests in our spending in plenty of ways, such as spending money on material possessions that we think will make us look cool to our peers or rushing to buy a “hot stock.”

Another mighty bias is called the “present bias ,” and it describes our natural attraction to instant gratification. Often, the desire for something right here and right now comes at the cost of saving money for the long-term. No surprise here, but this makes long-term financial planning extremely difficult.

Before you are about to spend money, take a moment to ask yourself a few questions about the purchase: “Am I trying to impress somebody with this purchase?” “Do I believe that this purchase is going to improve my life?” (In many cases, it won’t.) “Will I love this purchase in a year? In two years?” Slowing down to examine the reasons you want to buy something may alone be enough to stem some spending.

Ways to Cut Spending Habits

Track Your Spending

Changing spending habits can be difficult if you don’t know exactly what is coming in and what is going out. At the very least, you should use tracking software via an app, like Mint or You Need A Budget, or you can create your own excel sheet.

Some financial institutions also provide budget tracking and forecasting tools that you can access for free. SoFi Checking and Savings®, an online-only checking and savings account, has a built-in money tracker that provides weekly spending updates.

If you’ve never budgeted before, start by tracking your spending over the next two or three months. Tracking your cash inflows and outflows is the first step to building a realistic budget. It is very hard to set up budget categories if you don’t actually know how much money you’re spending in each category.

After tracking your spending for a few months, you might be shocked at what you find. A monthly cash flow report will help you to determine what categories you’ll want to pare back in.

Accountability Partner

People often grow shy when it comes to discussing money. That’s because there is a lot of shame surrounding money in our culture. If you have a friend that you feel comfortable talking money with, ask them if they would like to be accountability buddies .

Exactly how this looks can take a couple of different forms, but a weekly or monthly check-in online, in person, or over the phone could be just the inspiration you need to make better money decisions.

Not only does peer pressure help when tasks are complex and ambiguous, but repetition of education and action is a requisite to being good with money. Put a recurring time on a calendar with a friend to discuss ideas and to create achievable short-term and long-term goals. Oh and the more specific your goals, the better.

Automate Your Saving

Seriously, you’re so busy: Why leave saving up to chance?

Get that money out of the spending vortex that is the checking account. Automate your saving so money is whisked from your checking account and into your savings account immediately. The way it works is pretty simple: If the money isn’t there, we can’t spend it. The more you can systematize saving, the better.

There are two main ways you can automate your savings. The first is by using a retirement account that you have set up through work. This is the easiest way—you just chose a percentage of your salary and the money is taken straight from your paycheck.

The second option is to set up your own savings account to house your money. This can be a regular savings account at a commercial bank, online IRA, or an online-only account that offers a higher rate of interest.

Once you have that account set up, establish a transfer from your checking account to your savings account two or three days after payday (in case of a delay).

Of course, this strategy is only going to work if you are not at risk of overdrafting your account. To make sure you don’t overdraft, start with a small amount to be sent to your savings account each month.

Monitor your spending throughout the month to make sure that you aren’t cutting it too close. Once you’re comfortable with that routine, you can slowly increase the amount.

Waiting Period

Some bad spending habits can be curbed by something as simple as instituting a waiting period for all purchases. Whether online or in the store, always commit to waiting at least 24 hours before buying.

A week would be even better. After the initial “swoon” has worn off, you might be surprised to see how many potential purchases that you not only no longer want, but you think were terrible ideas in retrospect.

It is very easy to get caught up in the moment, and that desire for instant gratification takes over our reasoning capabilities. A waiting period helps us combat the desire for instant gratification.

Good Spending Habits Require Lifelong Work

A study by the Consumer Financial Protection Bureau found a common trait shared between people who have achieved “financial wellness”—they are all committed to ongoing education about money and personal finance.

For most people, learning about money is not a one-time thing, but is a practice that must be worked at over time. In this way, it is very similar to physical fitness or mental health.

There are many ways to do this. One easy way is to commit to reading articles, blogs, and books that focus on financial education. Another is to listen to financial podcasts. Follow financial educators on social media, and join communities of like-minded people.

For example, the #debtfreecommunity on Instagram provides a bounty of inspiration, education, and accountability for people actively getting out of debt. Surround yourself with as much positive encouragement as you do temptations to spend.

Being good with money requires both thought and action. Simply wishing to eliminate bad money habits will never be enough. But with a little practice and effort, you can help bust those bad money habits.

Ready to ditch those bad habits and start earning? Spend, save, and earn all in one place with SoFi Checking and Savings.



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

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