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How to Cut Back on Spending

If it often feels like more money flows out of your bank account than flows in, or you’re saving for a large upcoming expense, you may be looking for ways to cut back on spending.

You may also be dreading the process.

But the truth is, cutting back doesn’t have to be painful. There are all kinds of ways to slash expenses that don’t require much, or any, sacrifice, from trimming back some of your recurring bills to making a few minor tweaks in your daily spending habits.

Ready to improve your cash flow? Here are 20 simple budget-cutting ideas to try.

1. Canceling Subscriptions

There’s a decent chance that you are leaking money on a subscription service that you are not getting much value from.

Even if the fee is small, if you’re paying it every month (or even every year), those drips can add up.

Consider scanning your checking account and credit card statements for things you’re paying for on a recurring basis, and consider cancelling anything you don’t really need.

That might be magazines or newspapers you rarely read, online software you aren’t using, streaming services you don’t find yourself watching very often, and/or shopping services and other memberships that aren’t worth it anymore.

If you’re looking to save money faster, you might consider getting rid of a subscription that you do enjoy in the name of cutting back on spending. If you get Hulu, Amazon and Netflix, for example, consider if it’s possible to use just one or two, instead of three.

2. Cutting the Cord

If you’re paying a high price for cable each month, you may also want to think about switching to a streaming TV service. This budget-cutting move could save $40 to nearly $100 per month.

If you are not quite ready to cut the cord, you may still be able to shrink this monthly line item just by calling your cable service provider and asking for a better deal.

Before you reach out, it can help if you arm yourself with some information about what exactly you are paying for, and what the competition is charging.

3. Revisiting Your Cell Phone Plan

Another way to significantly cut monthly spending is to take a closer look at what you’re paying for your cell phone service, and exactly what you are getting.

You can then compare this with the competition and, if you see a better deal, call your provider and see if they will match it.

If you don’t see much wiggle room, you might consider going with one of the smaller MVNOs (mobile virtual network operators) that lease coverage from the major carriers, such as Cricket Wireless, Metro, and Visible.

Or, if you just need a basic plan, you can look into Consumer Cellular or H20 Wireless, which often offer affordable cell phone plans for individuals.

Before switching carriers, however, it’s a good idea to make sure that the carrier has strong coverage in your area. Saving money is great, but may not be worth it if you don’t get quality service.

4. Getting Into the Meal-Planning Habit

An easy way to cut back on food spending is to make a meal plan and a firm shopping list before you go to the grocery store. To cut spending even more, you can check your store’s weekly ads and plan meals around what’s on sale that week.

You don’t have to be a pro at meal-planning. It can be as simple as picking a few basic recipes that you want to make throughout the week. You may want to try a meal planning app, such as MealTime, that offers recipe ideas and then creates your shopping list.

When you shop without a plan or a list, you may be tempted to buy things that look good but you don’t need or can’t use.

Meal planning can also automatically reduce your take-out and restaurant bills, since you already have what you need to throw a lunch or dinner together at home.

5. Actively Paying Down Credit Cards

If you’re currently only paying the minimum on your credit cards, a big chunk of your payment is likely going towards interest and you may be doing little to chip away at the principle.

Doing this every month can increase the amount of time you’re in debt, and increase the total amount of interest you’ll end paying.

If you can swing it, consider putting more than the minimum payment towards your bill each month.

The faster those credit cards are paid off, the faster you can reallocate money that was going into interest–and essentially out the window–into your pocket (or, even better, into a savings account).

6. Renewing Your Library Card

If you’re a reader and love books, a fun and easy way to cut your spending is to fish out that old library card, or if you don’t have one, stop into your local branch and apply for a card.

The library can be a great resource for more than books. For example, you can often access magazines, newspapers, DVDs, music, as well as free passes to local museums.

These days, you can often get many of the benefits being a card-holder without even going to a library. You can often get audio books and e-books, as well as access to online publications, all from your computer or phone.

7. Pressing Pause on Purchases

When you see something you want to buy, consider giving yourself 24 hours before you pull the trigger.

During that time you can shop around for something similar, but less expensive, decide to wait for your target purchase to go on sale, or may lose interest in the item altogether.

If it’s an expensive item that is more of a “want” than a “need,” you might want to give yourself 30 days. A month later, you may decide you can easily do without it.

If you do still want it, however, that’s a good sign that this purchase will add substantial value to your life, and isn’t just a fleeting desire. If you can make room for purchase in your budget, then go for it.

Pressing pause helps you make spending decisions from a slower, more thoughtful place, and can be a huge help in cutting back on spending.

8. Carrying Cash

There’s something about plastic that can make it feel like you are not really spending money.

That’s why an effective way to cut back on spending is to take out enough cash at the beginning of the week to cover your daily expenses for that week and then leaving your credit and debit cards at home.

Or, you might try the envelope system, where you designate an envelope for each expense category, then put enough cash inside to get you through the week. When you run out, you can’t spend anymore.

Using cash not only places a harder limit on your spending, but helps you become more aware of your choices.

When you can literally see your money going somewhere, you may find yourself becoming much more intentional in the way you spend it.

9. Eliminating Bank Fees

Unless you’re vigilant about checking your statements, you might not even notice the fees your bank may be charging every month for your checking and savings accounts.

They might include service fees, maintenance fees, ATM fees (if you don’t use their machines), minimum balance fees, overdraft or insufficient funds fees, and/or transaction fees. And all those little nips can take a toll over time.

If you see that your bank is hitting you with one or more monthly fees, you may be able to cut your monthly spending by switching to a less expensive bank, or going with an online-only financial institution, which tend to offer low or no fees.

10. Clicking Unsubscribe

If your favorite retailers fill your inbox with tempting sales alerts, one effective way to cut back on spending is get off their e-mailing lists.

Sales and great deals are happening all the time, and generally the best time to purchase something is when you really need it.

If the enticement to spend doesn’t constantly land in your inbox, you’ll be less likely to click through and buy, and you won’t even know what you are missing out on.

11. Consider a 30-Day Spending Freeze

One quick way to change your spending habits is to put yourself on a 30-day nonessential spending freeze.

Or, if that seems too tall an order, you might pick a category (such as clothing or wine) to stop spending on for a month, or agree to entirely avoid a specific retailer for that period.

A spending freeze can immediately pay off by leaving more money in the bank (or fewer bills) at the end of the month.

And, once you start seeing the payoff of not giving in to impulse buying, you may find yourself spending less even after the freeze is over.

12. Keeping Your Tires Properly Inflated

A simple way to cut weekly spending on gas is to stop into a local station that offers free air once a month, and do a quick air pressure check on your car tires.

If they aren’t inflated to the optimal PSI, you’ll want to fill each one to the maximum recommended amount (as stated on the tire or in your manual).

Every two PSI of air you’re able to add to your tires can improve your gas mileage by 1%.

13. Working Out at Home

Instead of paying for a monthly gym membership, consider free exercise options, such as going for a walk, run, or bike ride around your neighborhood.

You can also find at-home cardio routines, resistance workouts, yoga classes and more for free online (YouTube is a great source). If you’re missing the social aspect of the gym, you always invite friends or neighbors over to work out with you.

There are also a number of free workout apps that can help keep you motivated, such sa Fitness Blender, 7 Minute Workout, Freeletics, Nike Training Club, and FitOn.

14. Saving Before You Spend

One of the best ways to cut monthly spending is to siphon off some savings before you even have a chance to spend it.

You can do this by setting up an automatic transfer from your checking into your savings account on the same day each month, possibly right after your paycheck gets deposited.

And it’s fine to start small. Whatever the amount, since it’s happening every month, it will build up before you know it.

15. Turning Clutter Into Cash

Clutter can actually cost money, since it takes up square footage in your home (if you’re paying for a storage unit, even more so). And by getting rid of it, you may be able to clear a fair amount of cash.

Luckily, it’s easier than ever to sell your unwanted items, thanks to sites such as ThredUp, Poshmark, eBay, and Facebook Marketplace.

You may be surprised at what some items turn out to be worth. A simple Google search for the brand name and product can steer you in the right direction for pricing.

If you have a lot of stuff to get rid of, consider having a yard sale.

16. Reviewing Home and Auto Insurance

If you own a car or a home, you’re most likely making monthly insurance payments. You may be able to considerably cut your spending just by taking some time to shop around and compare prices.

Many insurance companies also offer a good discount if you bundle your homeowners and auto policies together. If you currently use two separate insurers, it can be worth asking what kind of discount each would offer if you bundled the policies together.

And you don’t have to wait until your current policy is up for renewal to change insurance providers. With most companies, you can leave at any time without having to pay for the remainder of the policy.

If you find a better deal, you can also give your current insurer a chance to match their quote.

17. Drinking More Water

Getting plenty of water can not only help you stay healthy, but it can also help you cut back on spending.

When you’re food shopping, for instance, you can skip over sodas and even bottled water in exchange for free tap water at home. (If you don’t like the taste of your tap water, consider getting a pitcher with a water filter.)

Even when you’re out to eat, you can save by not ordering a beverage in exchange for free water. You may also want to drink a glass of water before you go–this can help fill you up, so you end up ordering less.

It’s a good idea to take a refillable water bottle with you whenever you go out.

18. Using Apps to Earn Cash Back

You can cut your spending even after you’ve made your purchases by keeping track of your receipts and using a cash back app, such as Ibotta, Fetch Rewards, or Shopkick.

While each app works a little differently, you can generally use cash back apps to download digital coupons, purchase specific items, and then scan receipts to claim your cash back.

You may also be able to add your store loyalty card number and avoid the need to submit a receipt.

19. Shutting off the Lights

A super easy to cut monthly spending is to simply turn off the lights whenever you leave a room or leave your home.

You may not notice the impact immediately, but the savings on energy costs can add up over time.

It can also be helpful to unplug any unused electronics. Older devices and cable boxes can actually use a fair amount of energy if they are left plugged in even when they’re not being used.

20. Cutting Back on Bigger Expenses

If you’re looking to substantially cut back on spending, you may want to address the biggest expenses in your overall budget.

Since where you live is a major expense, downsizing or moving to a more affordable area could make a huge long-term difference financially. Or, if you’re seldom home, you might consider getting a roommate.

If your car payment is more than 10 to 15 percent of your monthly income, you might want to consider trading in your car for one with a lower monthly payment. Or, you might want to think about buying a less expensive vehicle with cash.

The Takeaway

Cutting back on spending doesn’t have to involve a complete overhaul of your lifestyle.

You can get started by looking at all of your recurring expenses and seeing if you can reduce or, if possible, eliminate, at least some of them. Even if the amounts are small, they add up simply because they come every month without fail.

You can also cut back on unnecessary spending with a few behavior changes, such as waiting before you make purchases, carrying only cash, shutting off the lights, and getting into the meal-planning habit.

To make it easier to stay on top of your spending, you may also want to consider signing up for a SoFi Money® cash management account.

With SoFi Money, you can easily see your weekly spending on your dashboard in the app, which can help you keep track of your expenditures and help you stay within your budget.

SoFi Money also doesn’t have any account fees, monthly fees, or many other common fees. And, withdrawing cash is fee-free at 55,000+ ATMs worldwide.

Ready to start saving money? Check out SoFi Money today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
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.
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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Three House Siding Ideas

With the right home siding ideas, the exterior of a structure can be dramatically improved and the value of the home can potentially increase. When it’s time to replace siding on a house, there are plenty of siding ideas to consider at a variety of prices and returns on investment.

Eco-Friendly Options

Google saw search interest in “how to live a sustainable lifestyle” increase by more than 4,550% from 2019 to 2020. One way to live this type of lifestyle is by choosing eco-friendly siding options to reduce the carbon footprint of the project, either to replace siding on a house or as part of its overall green construction.

More specifically, using recyclable siding materials is one way to be more environmentally friendly, as is selecting material known to be more energy efficient.

Wood can be a good choice because it’s a renewable and sustainable material that can be sourced locally. Manufacturing processes of wood siding can be more environmentally friendly, as well.

Aluminum or steel siding can be a green choice when made from recycled materials. It’s also considered to be an energy-efficient option because of how metal reflects the sun’s rays, unlike some materials that absorb them. Low maintenance associated with metal siding is a plus.

Fiber cement siding is eco-friendly, crafted from natural materials. Although vinyl siding isn’t formed from the most environmentally friendly materials, there is little waste with this type of siding, with insulated options being energy efficient.

Colors with Curb Appeal

Siding color plays a big part in a home’s curb appeal. Combinations of colors and textures can evoke certain feelings, such as using green siding with wood accents to create a natural feel to a home.

In addition, darker colors draw attention to parts of a home while lighter ones can help to de-emphasize areas.

When selecting a color scheme personal taste enters in, but an overall goal might be a compromise between that and looking good in the home’s broader neighborhood.

Some communities may have homes with more subdued hues while others boast more color.

Colonial homes may look best in a single classic color while cottage-style homes may provide a homeowner with more freedom of expression.

Realistic Textures

In the past, siding materials could look “plastic,” rather than mimicking natural grains and textures. Today, though, siding materials often look more attractive and realistic.

When on a budget, today’s vinyl siding can masterfully imitate wood siding at a lower cost with a greater ease of installation. If on a mid-range budget, an option might be fiber cement siding, which combines sand, cellulose and cement, comes in a variety of colors and can be imprinted with designs.

Plus, shingles come in a variety of sizes to help create a personalized appearance. With a bigger budget, stone and brick veneers are an option, as are stucco and new materials that mimic stucco. These choices can give a home a distinctive appearance.

Mixed textures can be eye-catching, whether that includes mixing materials or the width of the siding boards themselves. Metal touches can also be attractive.

Costs of Home Siding

Costs can be approximated, but each project is unique and older homes may have additional issues that will need to be addressed during a home renovation process.

Plus, if a home is old enough to be designated as historic, there will likely be guidelines that need to be followed, which can add to the price tag of improvements.

Costs can range significantly, anywhere from $1,700 for stucco to $125,000 for stone, with an average siding job costing $10,300. Besides considering the materials used, the size of a home is a key factor.

Other factors can include the shape of the house, with those having multiple stories or with eaves and turrets typically being more expensive than a home with a more streamlined structure.

Another factor can be the time of year when the siding is installed, with peak seasons usually more expensive than off-season projects.

Costs of a square foot of siding, not including installation, vary by material, with these as averages:

•   Vinyl: $3 to $12.
•   Engineered wood: $4 to $9.
•   Aluminum: $2 to $5.
•   Wood: $2 to $5.
•   Fiber cement: $5 to $13.50.
•   Brick: $9 to $28.
•   Stucco: $5 to $6.
•   Steel: $4 to $8.
•   Stone: $35 to $50.

It can make sense to get a customized quote for a siding project because there are so many factors that can affect the price.

It may be helpful, too, to compare quotes received to what it costs to paint the exterior of a home.

On average, painting a home’s exterior ranges from $1,734 to $4,120. Although painting is typically less expensive, siding can last for decades, while the exterior of homes often need to be painted every five to ten years.

Siding ROI

According to the National Association of Realtors® (NARI) 2019 Remodeling Impact Report , new vinyl siding is included in the top eight remodeling projects that appeal to buyers, ranking number three.

Plus, this type of siding is ranked number five when it comes to increasing a home’s value for resale. Meanwhile, new fiber cement siding is ranked number five in appealing to buyers and third in increasing a home’s value.

NARI estimates the cost of new fiber cement siding to be $19,700, with $15,000 of the cost recovered at the time of sale. This means that this renovation has a 76% return on investment (ROI). As far as vinyl siding, the estimated cost is $15,800, with a return of $10,000 (63%).

Paying for House Siding

If cash for the project is readily available, perhaps in a savings account, then paying cash might be an option.

If paying off a credit card balance quickly—ideally before interest can accrue—is possible, using a credit card can also be a savvy solution, especially if using a rewards card.

If planning to use a credit card and then make payments, though, compound interest can really add up.

The Takeaway

Another option to pay for new siding on a home might be a home improvement loan. An unsecured SoFi personal loan, with low rates and no fees, is quick and easy to apply for online.

Using a personal loan for home improvements means there will be a fixed end payment, unlike using the revolving debt of a credit card. And since SoFi home improvement loans are unsecured, the equity in a home isn’t affected.

Considering financing options for a home improvement? Learn more about personal loans from SoFi.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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.
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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When Should I Start Saving for My Child’s College?

It’s hard to find anything close to the pride and joy having kids can bring you. And one of the best gifts we can give them is a solid education. That means reading to them when they’re toddlers, helping them with homework, and paving the way to college.

It’s a good idea to begin putting a college plan in place as soon as you can.

As the end of high school nears, not only are grades and school involvement important, but here comes the potential expense of entry into college. Waiting until then to look at the cost of attendance could be jaw-dropping.

Whether you plan to foot the whole bill or cover just a portion, you may want to start thinking about how much you can save monthly to hit your target.

Considering the Future Costs

As you think about saving for college, consider the potential cost of when your child will actually attend rather than focus on what it costs now.

There’s the matter of tuition and fees, usually reported as one figure. The averages for the 2020-2021 academic year, according to CollegeData:

•  $10,560 at public colleges (for in-state residents)
•  $27,020 at public colleges (for out-of-state residents)
•  $37,650 at private colleges

“Cost of attendance” for a year includes that figure and, usually, room and board, books, supplies, transportation, and personal expenses. For the 2020-2021 academic year, CollegeData put the average cost of room and board alone at:

•  $11,620 at public colleges
•  $13,120 at private colleges

Living and eating at Mom and Dad’s obviously will reduce those costs.

The average price of books and supplies for students at both public and private colleges came to $1,240.

Now let’s say you want to estimate what college costs might be years later, when your child sets off for college. Assuming 15 years until your child starts as a freshman and a 5% increase in costs per year, here’s the estimate per year 15 years down the road for tuition, fees, room, and board.

•  Cost today at a four-year public college, in-state rate: $22,180
•  In 15 years: $46,111

•  Cost today at a four-year public college, out-of-state rate: $38,640
•  In 15 years: $80,330

•  Cost today at a private four-year school (average): $50,770
•  In 15 years: $105,547

Keep in mind that most college students take more than four years to get a bachelor’s degree. In fact, most take five or six years, according to the National Center for Education Statistics.

Those are big numbers, but every student who meets eligibility requirements can get some type of federal student aid, says the Federal Student Aid office. And then there’s merit aid, or merit scholarships, which are based on academic achievement or other talents or skills. Merit-based aid does not have to be paid back.

College Savings Vehicles to Consider

There are several options and accounts to help you with saving for your child’s college education. Some have tax benefits and others offer flexibility, should your child decide to forgo college, so you should explore the plan that best fits your specific needs.

Ways to save for college include:

•  A 529 plan, which breaks down into two categories: educational savings plans and prepaid tuition plans.
•  Coverdell Education Savings Account
•  UGMA/UTMA accounts

The difficult part in deciding when to start saving for college isn’t always as simple as picking out a savings plan. It might be less about “when” and more about “how”—finding room in your budget to meet education expenses and all your other financial goals.

Balancing College Savings With Retirement Savings

If you’re like many young parents, you may be wondering how to juggle college savings with all of your other expenses, including debts and retirement contributions. Drawing up a savings plan that doesn’t jeopardize your retirement planning or send your household finances into a nosedive is a great place to start.

Scholarships and student loans may be accessible to help pay for your child’s education, but the same cannot be said for your retirement nest egg. You would do well to consider how long you’ll need money in retirement and how that compares with four to six years toward a bachelor’s degree.

To get a better handle on how much money you will need to retire, the AARP advises asking four key questions : How much will you spend? How much will you earn on your savings? How long will you live? How much can you withdraw from savings each year?

One study found that the combined income and savings of parents and students makes up for nearly half (47%) of the funding families use to cover the entire cost of school. It also found that parents pay 10% of the total amount due by borrowing, and that students cover 14% with student loans and other debt-forming sources.

Parents deciding when to start saving for college might not want to think of it as an I-must-pay-for-it-all prospect. If you’re still stumped on how to balance both goals, it’s OK. At the end of 2019, before the financial repercussions of COVID-19, many non-retirees were struggling to save, the Federal Reserve found.

These eight tips for finding “hidden” money could help you get started thinking about funding retirement and college at the same time.

As college enrollment time gets closer, you could have a family discussion on how much student loan debt you and your child are willing to take on, if necessary.

What If I Still Have Student Loan Debt?

Many parents who wonder when to start saving for their child’s college may also be asking how they can reduce their own college debt. U.S. student loan debt has ballooned to $1.71 trillion, the Fed reported. That’s an average of $37,700 in loans each for 45 million Americans.

If you find yourself with student loan debt while also saving for your child’s college education, there are at least four options that might help you to free up more money:

•  Federal student loan consolidation
•  Federal student loan forgiveness
•  Federal income-driven repayment plans
•  Refinancing private and/or federal student loans through a private lender

With refinancing, depending on your credit history and income, you could qualify for a lower rate than the one you currently have on your student loans.

This could mean savings over the life of the loan, depending on the repayment term you select. But know that if you refinance federal student loans, you’ll lose out on any repayment plans or protections offered by the federal government, like Public Service Loan Forgiveness and income-driven repayment plans.

The Takeaway

When to start saving for a child’s college education? The sooner, the better. First, though, it’s best to make sure you are on steady financial footing, and then, if possible, find money here and there to save for your children’s college.

If you happen to still have student loans of your own, you may want to look at the flexible terms and fixed or variable rates SoFi offers to refinance student loans into one new loan with one monthly payment. There are no application or origination fees, and checking your rate takes two minutes.

Learn more about refinancing your student loans with SoFi.


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SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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.
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 the Average Savings by Age?

There are lots of reasons—and lots of ways—to save. However, for those looking for a benchmark of just how much they should’ve saved by a specific age, things get tricky. Average savings by age is a tough metric because there are so many variables that go into a number like that.

The Importance of Saving for the Future

Life can happen fast. For example, the average cost of just having a new baby can run anywhere from $5,000 to $14,500, let alone the cost of raising a child for the rest of their life.

And, if that baby wants to get a college degree, you’re looking at a whole new ballpark of savings, as the cost of a college education can run from about $40,000 to well past $100,000.

There’s one other big reason to save for the future: People are living longer. According to a 2019 survey by Aegon Center for Longevity, Transamerica Center for Retirement Studies and Instituto de Longevidade Mongeral Aegon in Brazil, just 36% of American workers are “very confident they will be able to retire comfortably.” Globally, that number is just 29%.

A Savings Shortfall

The number of Americans who would be able to cover an unexpected $1,000 expense has held steady at between only 37% and 41% since 2014, according to Bankrate’s annual surveys.

The Federal Reserve notes that 30% of all Americans don’t have enough cash in savings to cover even a $400 emergency. And Bankrate’s most recent survey shows that nearly one in five Americans have no money saved at all to cover an emergency expense.

Snapshot of the Typical American Household’s Savings

The Fed’s 2019 Survey of Consumer Finances shows that the typical American household has $5,300 in a savings account at a bank or credit union. But, this number varies greatly by age and number of people in a household.

Average Savings for Those 35 and Younger

Americans under the age of 35 had an average savings account balance of $11,200, according to the Fed’s survey .

Because this is such a large age bracket that can skew from teenagers just graduating high school to recent college grads to young professionals well into a decade’s worth of work, it’s tough to nail down age-by-age where the average may be.

It is typically suggested to have three to six months of expenses in an emergency account. At the very least, aiming to have $1,000 handy in a savings account for unexpected expenses is recommended.

Employer-sponsored retirement funds such as an IRA or a 401(k) may be good options for people who are ready to set long-term retirement savings goals.

Minimally, contributing the amount the company will match is a good way to ensure potential future savings, thanks to compound interest. For reference, the average 401k savings for someone between the ages of 20-29 in 2019 was $10,500.

Average Savings by Age: 35 to 44

The 2019 Federal Reserve Survey of Consumer Finances found that Americans between the ages of 35 and 44 had an average savings account balance of $27,900. Those in this age bracket are now well into adulthood. At this stage of life, it’s prudent to save up that three-to six-month savings account, to cover the cost of everything from an accident to a lost job.

Now may also be the time to think about diversifying a financial portfolio and possibly investing in the stock market or in real estate.

Again, for reference on where a person may want to be at for retirement savings goals, the average 401k savings for someone between the ages of 30 and 39 in 2019 was $38,400.

Average Savings by Age: 45 to 54

People between the ages of 45 and 54 had an average savings account balance of $48,200, according to the Fed’s 2019 survey.

At this point, common financial advice dictates that a 50-year-old should have at least six times their annual salary if their intention is to retire at 67.

And, by the age of 40 to 49, a person may want to hit the average retirement savings, which sits at $93,400.

Average Savings by Age: 55 to 64

The 2019 Fed survey found that Americans between the ages of 55 and 64 had an average savings account balance of $57,800.

As this is the time when most Americans are staring down retirement in a few years it’s typically a good idea to kick up savings, specifically retirement savings, into high gear.

That’s because while younger people are capped at contributing $19,500 a year to a 401(k) account, those over the age of 50 are allowed to contribute an additional $6,500.This is known as a catch-up contribution.
The average retirement savings account for a person between the ages of 50 and 59 in 2019 was $160,000. It’s important to note that taking out cash before the age of 59 and a half could mean tax penalties.

Average Savings by Age: 65 and Older

This is when savings really peaks for the average American. The 2019 Federal Reserve Survey of Consumer Finances found that Americans between the ages of 65 and 74 had an average savings account balance of $60,400.

However, that savings number does drop over time. According to the survey, Americans above the age of 75 had an average savings account balance of $55,600.

This drop illustrates the importance of creating a retirement budget and sticking to it in an effort to have enough savings for as long as needed.

But, before retirement, try to hit the average retirement savings number of 2019 for those aged 60 to 69, which was $182,100.

Once you reach retirement age, you may be thinking about your life insurance options. SoFi Protect via Ladder offers term life insurance to have a solid plan in place for your loved ones.*

Saving a Little Bit More

Reaching specific savings goals doesn’t have to be complicated. It just means doing a bit of homework, strategizing and staying diligent about personal finances.

The first step in saving more is to analyze current expenses to see what can be cut back on or cut out altogether to make more room for saving. This means creating a monthly personal budget and tracking current personal spending.

To track spending, a person could create an excel spreadsheet and list all expenditures by categories like groceries, phone bill, car expenses, housing, medical, entertainment and others over the course of a month, filling it in with every single dollar spent to see where the money is going.

To make this process a little easier, SoFi offers SoFi Relay, which allows users to connect all their accounts to one mobile dashboard and track spending habits in real time.

After the month is up, the next step is to look back on the expenditures list. Was there anything that surprised you? Going to coffee shops more often than needed? How about that gym membership—did it actually get used? This is the time to get a little ruthless.

After figuring out what’s left, try implementing a general financial outline like the 50/30/20 rule. This means typically 50% of after-tax income goes toward essential expenses like food and rent, while 30% goes toward discretionary expenses like nights out at the movies or concerts. The last 20% belongs to savings and retirement account goals.

Now, it’s time to get creative about saving even more for the future. This can be done by simply direct depositing more cash into a savings or retirement account right from a paycheck. That way, it’s like the cash never existed in the first place.

Those looking to save a few more bucks every month could also do so by getting rid of unnecessary expenses like recurring payments on apps they may not even use anymore. But, instead of pocketing that cash for fun, consider directing that cash right to savings.

Still feeling the pinch and don’t really have room to save more from a budget? Nearly 69% of Americans live paycheck to paycheck and may want to consider finding ways to earn extra income if there’s nothing left to cut from the budget.

Working part-time via an app like Uber, Lyft or Taskrabbit allows people to set their own hours and earn extra income based on how much time they can dedicate to the part-time work. Other options might include freelance work in photography, writing or other creative arts.

Making Your Savings Work Even Harder

There’s one more way to start making more money for your savings account and future, and it takes barely any work at all: Signing up for online investing with SoFi Invest®.

With the account, users can trade stocks and ETFs, trade crypto or even start an automated investing program to make things quicker and easier than going it alone.

And, for those feeling a bit squeamish about diving headfirst into investing, that’s okay. SoFi Invest gives users the option to invest in smaller amounts like buying fractional shares, which gives users the ability to buy and sell fractional shares.

And investing a little now can go a long way in saving for tomorrow, next year and your happy retirement to come.

SoFi Invest can help your money work toward your long-term financial plans.


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

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Ladder policies are issued in New York by Allianz Life Insurance Company of New York, New York, NY (Policy form # MN-26) and in all other states and DC by Allianz Life Insurance Company of North America, Minneapolis, MN (Policy form # ICC20P-AZ100 and # P-AZ100). Only Allianz Life Insurance Company of New York is authorized to offer life insurance in the state of New York. Coverage and pricing is subject to eligibility and underwriting criteria. SoFi Agency and its affiliates do not guarantee the services of any insurance company. The California license number for SoFi Agency is 0L13077 and for Ladder is OK22568. Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other. Social Finance, Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderLifeTM policies. SoFi is compensated by Ladder for each issued term life policy. SoFi offers customers the opportunity to reach Ladder Insurance Services, LLC to obtain information about estate planning documents such as wills. Social Finance, Inc. (“SoFi”) will be paid a marketing fee by Ladder when customers make a purchase through this link. All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.
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.
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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Three Ways to Help Pay Off Debt Faster

Whether you have credit card, student loan, medical, mortgage, or other debt, the repayment process can seem never-ending.

But there are ways to make the payoff process less painful–and go faster. The key to getting on the right path is to take a moment to assess your current debt and budget, and then pick a repayment plan that works with your financial situation.

Ready to start knocking down those debts? Read on for strategies that can help you get out of the debt faster.

1. Figuring Out Your Budget

The first step to solving any debt problem is to establish a budget. A budget is essentially a summary that compares and tracks your income and expenses for a period of time, typically one month. A budget also allows you to plan how much you will spend and save each month.

You’ll want to first gather all of your bank and credit card statements for the last three or more months. You can then use them to figure out your monthly income (after taxes) and also list all of your monthly expenses. (You can do this using pen and paper, a spreadsheet or a budgeting app.)

You may want to group expenses into categories (such as insurance, groceries, eating out, insurance), and also divide them into essential vs. nonessential spending. From here, you can total your average monthly income and average monthly spending, see how they line up, and then consider making some shifts in your spending.

You might consider the 50/30/20 budget as a simple way to reorganize your finances. This budget allocates 50% of your income for essentials, like rent and bills, 30% toward nonessentials or “wants”, and 20% for savings and debt repayment.

If you need to free up more money to put towards debt repayment, you may want to look at your nonessential spending to find ways to cut back, such as ditching your cable bill, cooking more and getting take-out less often, and cancelling your gym membership and working out at home.

Decreasing spending tends to be the easiest way to generate a monthly surplus. That surplus can then be used to pay off your debt faster.

If you find that you’ve been spending more than you earn by using credit cards, you may also want to make a plan to stop using those cards while you go after lowering your outstanding debt.

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2. Choosing The Right Repayment Plan

Once your budget is set up, a great next step is to list all of your debt (with amounts owed) and in order of interest rate, and then come up with a manageable plan to pay them off.

Some options that can help you pay off debt faster include:

The Snowball Method

The snowball method is where you focus on paying off your debts in order from smallest balance owed to largest.

You can do this by paying the minimum on all your debt and then allocating any extra money you have to the debt with the smallest balance. Once the smallest debt is paid off, you can take the money you were putting toward that debt and funnel it toward your next smallest debt instead.

You then continue the process until all your debts are paid.

The key benefit of this method is that it allows you to experience a series of small successes at the beginning. This can give you more motivation to pay off the rest of your debt.

The Avalanche Method

Another effective debt elimination strategy is the avalanche method (also known as debt stacking). With this approach, you would pay off your accounts in order from the highest interest rate to the lowest.

To do this, you would make the minimum payment on all of your accounts, then put as much extra money as possible toward the account with the highest interest rate.

Once the debt with the highest interest is paid off, you can start paying as much as you can on the account with the next high interest rate. You would continue the process until all your debts are paid.

Putting Extra Cash Toward Debt-Reduction

Once you have an emergency fund (that can cover three to six months of living expenses) in place, you may want to funnel any extra income you receive right into your repayment plan in order to pay off debts faster.

That extra might be a bonus you receive at work, your tax refund, any side job income, or cash earned from selling items you don’t need—all of this money could go directly toward your debt payoff.

Putting this money toward your debt, instead of saving it for a new car or spending it on a vacation, can help you pay off your debt quicker so you can eventually shift your financial focus to more fun goals.

3. Looking Into Debt Consolidation

Another option you may want to consider is rolling multiple debts into one payment (ideally with a lower interest rate) through debt consolidation.

This can make your debt easier to manage (because you’ll only have one monthly bill) and less expensive overall. The less you have to pay in interest, the more money you can put towards reducing the underlying debt.

One way to consolidate debt is to get a 0% interest balance transfer credit card and then transfer all your debts onto this card. Another option is to get an unsecured personal loan. In this case, you would use the money from the loan to pay off your debt, then pay back the loan in installments over a set term.

The Takeaway

If you’re looking to pay off your debt faster, it’s a good idea to take a look at your spending and income, find some ways to reduce your non essential spending, and then funnel any money you free up towards your debt repayment plan.

By keeping to your budget and payoff plan, you may soon be taking all the money that you are now spending on interest and instead putting it into saving up for things you really want, and then being able to buy them without going into debt.

Ready to tackle your debt head on? With a personal loan from SoFi, you may be able to consolidate your debts and get them paid off in a way that works better for your income, budget, and timeline. SoFi offers personal loans with low rates and no fees.

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External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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