mother holding her baby

Common Financial Mistakes First-Time Parents Make

As a first-time parent, there’s a lot on your plate. You’re responsible for raising a tiny human into a smart, kind, and successful member of society. Mistakes, even when it comes to money matters, are inevitable.

Still, thoughtful planning can help you meet your financial goals and give your kids the support they need.

And they will need all kinds of support: Consider that the cost of raising a child born in 2015 to a middle-income couple until the age of 17 is nearly $285,000, with projected inflation costs factored in, data from a federal survey shows. And that doesn’t include college. (Not surprisingly, the higher a family’s income, the more is spent on a child.)

To make sure you’re starting off on the right foot, here are common money mistakes first-time parents make and how you can try to avoid them.

1. Overspending on Baby Gear

As a first-time parent, you likely have quite a bit of work to do before the baby arrives. You may need to create and furnish a nursery for your child, and stock up on diapers, bottles, clothes, toys, and so much more.

As you’re setting up your new life with a baby, it can feel like buying everything brand-new is the only option, but that can be costly. You might consider taking advantage of used or gifted items.

You can buy a lot of items secondhand at a lower cost through online marketplaces or at brick-and-mortar used-goods and consignment stores.

And if you have friends, family, or neighbors that already have children, they may be looking to unload some of the gear their children no longer use. Things like cribs, playpens, toys, books, and clothes are all great for passing down.

2. Living Without a Safety Net

As a new parent, you’re about to incur all sorts of costs you may have never thought of.

Now that you have a child or one is due, having an emergency fund is even more important. You’re now responsible for all of their needs, and there may be unplanned costs that pop up along the way.

Saving for an emergency is a process, and it’s okay to start small—even just $25 a week will add up over time. Some people opt to store their emergency fund in a savings or checking account, or a digital cash management account.

3. Avoiding a Budget

Before you had children, maybe you cooked the majority of your meals at home, did all of the house cleaning weekly, prepped meals, and meticulously shopped for groceries to stay on budget.

The first few months with a newborn can be a blur, complete with sleep-deprived nights and exhaustion. You may not have as much time to cook and clean, or keep up with the other activities you were handling before the birth of your child.

You could hire a housekeeper, get take-out meals, enroll in a subscription meal-delivery service, or have your groceries delivered every week—but all of those conveniences come at an added cost, obviously.

A new monthly budget can help prepare you for the extra expenses.

As your child grows, there can be more and more new costs. Maybe they need braces or want to participate in a sport, art classes, dance lessons, or music lessons. Thinking about these costs now may make planning for them easier.

4. Putting Off Saving for Retirement

Another financial mistake some new parents make is failing to save for retirement.

Learning to pay yourself first isn’t easy for a lot of parents to do, but you could consider prioritizing retirement while helping your child as much as possible and educating the child on smart practices for student loan borrowing.

For retirement saving, one way to start is by enrolling in your company’s 401(k) plan if one is offered. Some employers will match your contribution, up to a certain percentage, and you’ll be able to have your contribution taken directly from your paycheck. If your employer doesn’t offer a 401(k), you could open an IRA instead.

It’s never too early to start saving for retirement.

5. Not Saving for College

As mentioned, you may not want to focus solely on saving for your children’s tuition and let retirement planning fall by the wayside. But that doesn’t necessarily mean you can’t try to save for both.

While a standard savings account may seem like the easy choice, there are other options available that are designed to help you or grandparents save for a child’s education.

One is a 529 college savings plan . There are two types: education savings plans and prepaid tuition plans.

With an education savings plan, an investment account is used to save for the child’s future qualified higher education expenses, like tuition, fees, room and board, computers, and textbooks. Earnings used for qualified expenses are not subject to federal income tax or, in many cases, state income tax.

With a prepaid tuition plan, an account holder purchases units or credits at participating colleges and universities for future tuition and fees at current prices for the beneficiary. Most of the plans have residency requirements for the saver and/or beneficiary.

A Coverdell education savings account may also be worth looking into. In general, the beneficiary can receive tax-free distributions to pay for qualified education expenses.

Contributions to a Coverdell account are limited to $2,000 per year. The IRS sets no specific limits for 529s.

6. Missing Out on Tax Breaks

When you have a child, you may be eligible for certain tax benefits. It might be worth reading up on the Child and Dependent Care Credit, the Child Tax Credit, and, for lower-income parents, the Earned Income Tax Credit.

There’s also an adoption tax credit, which offers tax incentives to cover the cost incurred if you adopted a child.
Consult a tax professional to see if you qualify.

7. Not Teaching Your Kids About Money

If kids aren’t taught the basics of financial literacy at a young age, they may struggle to balance a checkbook, make a budget, or save money when they’re older. Helping your children learn what it means to manage money by teaching them to save and spend their earnings can help set them up for financial success in the future.

You may want to introduce your children to money at a young age—kids love to play store, and by exchanging goods for money, they’re already beginning to understand the basic principles of commerce.

As they get older, you may want to try giving them an allowance in exchange for chores or homework completion.
You could even have them make a budget with their earnings, and encourage them to spend, save, and donate.

The Takeaway

New parents are often too overwhelmed to think a whole lot about managing money, but trying to avoid common financial mistakes could help the whole family, at first and much later.

If you’re a first-time parent and aren’t sure how to plan your finances, a money-tracking app could help. SoFi Relay tracks all of your money, all in one place—at no cost—and provides credit score updates.

Stay on target to reach your goals. Start tracking your money with SoFi Relay.

SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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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.
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.
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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Should You Sign a Cohabitation Agreement With Your Partner?

If you’re one of the many people living with a romantic partner but are not married, you might want to consider creating a cohabitation agreement.

While you may not be married, sharing a space with a partner is still an important life milestone, and one that comes with its own financial risks and complications.

A cohabitation agreement is designed to protect your legal interests and ensure that you and your significant other are on the same page about how living together will work and what would happen if you split up.

Here are some key things to know about cohabitation agreements, and why you and your partner may want to consider getting one.

What is a Cohabitation Agreement?

Also known as living together agreement, non-marital contract, or “no-nup”, a cohabitation agreement is a legally binding contract signed by two people who live together or are planning to move into the same home.

Like a prenup or postnup agreement, a cohabitation agreement is designed to address the variety of personal and financial issues you and your partner may face in the event of an emergency or a breakup, such as who will retain ownership of property acquired before the relationship started and who will keep property purchased together.

This formal agreement not only protects assets that you bring into the relationship, but can also be a way to ensure clarity during your relationship and help you and your partner start talking about money.

Your cohabitation agreement might, for example, detail how living expenses will be divided or whether your money will be kept separate, fully combined, or partially combined.

A cohabitation agreement can also include health care directives and address issues involving your children or children from previous relationships.

Who Should Get a Cohabitation Agreement?

People who are older, and therefore tend to have more assets and more complex financial lives, may be more likely to benefit from the protection provided by a cohabitation agreement than those who are younger and just starting out.

However, any couple can benefit from a cohabitation agreement because your lives automatically become financially intertwined when you move in together.

When you live with someone, you will likely both be responsible for paying the rent or mortgage/taxes and for paying any bills, such as utility bills. And, both of your names may be on the lease or the mortgage.

Plus, you’ll both be counting on this as a place to live. You also may join other aspects of your lives, such as buying furniture together, getting a pet together, or having children together.

A cohabitation agreement can spell out how you will share responsibilities during the time you are living together. It can also help you in the event that you decide to part ways and need to determine who gets what. It can be easier to discuss and agree on these issues when you’re in love than during a potentially difficult separation.

How Do I Get A Cohabitation Agreement?

Because cohabitation agreements are legal contracts, it can be a good idea for each partner to get an attorney to help negotiate and draft the agreement. Getting legal help ensures that the contract will be enforceable and that each party knows his or her rights.

If you’ve already discussed and agreed on most of the parameters, hiring a lawyer to draft the document shouldn’t be all that costly (and can save you a great deal of money if a dispute arises down the line).

If you’d prefer not to hire a lawyer, you can find free templates for cohabitation agreements online. You can also write your own contract, but you may want to keep in mind that this may make it less likely the agreement would be legally enforceable. The contract can still be useful, however, if you’re both willing to abide by it.

Regardless of how you choose to create your agreement, here are some things you may want to consider including in your cohabitation agreement:

•  Whether one or both names will be on the lease.

•  How rent will be divided.

•  Whether owned property will have both names on the deed and who will be responsible for paying the mortgage.

•  Who will pay bills, utilities, insurance, and other household expenses.

•  Whether you will keep finances completely separate or create a joint account.

•  How shared purchases, such as furniture, will be made.

•  Who will remain in the home in the event of a breakup and how the other partner would be compensated.

•  What property is considered separate and what property is considered joint and will be divided in the event of a breakup.

•  Who will assume responsibility for any pets if a breakup occurs.

•  Who is responsible for debts incurred by the couple during cohabitation.

•  Who is responsible for debts incurred prior to cohabitation

•  Whether a higher-earning partner will be responsible for paying any support to the other partner after a breakup.

•  Whether or not the agreement will remain in effect if you get married.

•  What happens to shared property if either party passes away.

If you have children and/or are planning on having children together while cohabitating but not married, there may be additional issues you will want to address in your agreement. In this case, getting legal advice can be a wise idea due to the added complexity of your situation.

Once the agreement is written, each partner will need to sign it and keep a signed copy for themselves. It can also be a good idea to have your signatures notarized. While notarization won’t guarantee that a court will find your agreement legal, it will make it easier to prove that both of you signed and agreed to it if you ever have to go to court.

The Takeaway

When you move in with a romantic partner, you will likely be sharing more than a place to live but also expenses and other financial interests.

A cohabitation (or living together) agreement protects the assets you acquired before living together and also specifies how assets and debt acquired during cohabitation will be shared.

A cohabitation agreement can protect your rights and also help you and your partner communicate about big issues, such as how you will divide up the rent and other household expenses and purchases, and whether you will keep your finances separate or open up a joint account.

If you decide to merge at least some of your money, you may want to consider opening up a SoFi Money® joint cash management account. With SoFi Money you and your significant other can earn competitive interest, save, and spend all one place. And, you’ll both have equal access and control over the account.

Make sharing expenses with your sweetie simple with SoFi Money.

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

Budgeting on a Fellowship Doctor Salary

A medical fellowship after residency can provide the training you need for a successful career in your preferred specialty. But it also probably means you’ll make far less for a period of one to three years.

Do you get paid during a fellowship? Yes, you do. Medical fellows and residents earn a median salary of $58,305 a year, depending on how many years it has been since they earned a medical degree.

The Difference between Residency and Fellowship

Residency usually happens right after medical school and is designed to give residents the experience needed to serve patients. A fellowship usually follows residency and is designed to train fellows in a narrower specialty.

While some fellows may earn more than residents, the salary is still lower than for most working physicians. Usually fellows have to pay for the majority of their living costs, including housing and at least some meals.

Additionally, most fellows face a high student loan burden as well. Nearly three-quarters of medical students graduated with debt in 2020, and the median debt amount in 2019 was $200,000.

With a relatively low salary and a high debt burden, being smart with money during fellowship years can be a big part of creating a strong financial foundation.

Fellows may feel like they have too much on their plate to devote time to thinking about personal finance. But just a few savvy budgeting strategies can help fellows live within their means and potentially avoid getting deeper into debt.

10 Budgeting Tips for Living on Your Fellowship Doctor Salary

1. Finding a Budget that Works for You

The first step to smart budgeting is actually making a budget. This isn’t as hard as it sounds. Start by making a list of monthly expenses in two categories: fixed expenses (those that stay roughly the same every month, such as rent, utilities, and insurance) and variable expenses (those that fluctuate, such as eating out and entertainment).

Next, note how much money is earned each month from fellowship or any other income sources. Use take-home pay after taxes and deductions.

Ideally, expenses should be less than income. If they’re not, work out where costs could be trimmed. With a reasonable budget in place, the next step can be to track spending each month.

2. Living Within Your Means

It bears repeating: generally expenses should not exceed the money you bring in. On a medical fellowship, you might be tempted to bite off more than you can chew financially with the expectation that your salary will soon increase dramatically. But going into debt isn’t a savvy way to start off your career.

Credit cards generally have the highest interest rates (currently more than 16% on average), so even a small balance can balloon into substantial debt down the line. Failing to make payments, or using too much available credit, could impact an individual’s credit score, which could make a difference when, for example, when looking for a mortgage or car loan.

3. Choosing Housing Carefully

For most people, housing is their single largest monthly expense. That’s why it’s worth putting in the effort to find an affordable option that meets your needs. In a particularly expensive market, it may be worth getting roommates. Another factor to consider—the closer you are to your workplace, the more that can potentially be saved in commuting costs.

4. Delaying the Purchase of a New Car

For those living in an urban area, think about whether public transit or carpooling may be options for getting to work. If a vehicle is non-negotiable, consider a used car rather than a new one. Cars lose much of their value when they’re driven off the lot for the first time, so it may be worth seeking out used cars that are in great shape at a great price.

5. Saving on Food

As a variable expense, food is an area with plenty of opportunity to save. If you have any meals provided for you as part of your fellowship, take advantage of the free food. Eating out can be tempting with a busy schedule, but it may be wiser to limit how often you go to restaurants and how much you spend there.

Since you won’t always have time to cook, preparing meals in batches to eat throughout the week could help you resist the temptation of going out.

Grocery shop knowing what’s on sale, what produce is in season, and even take a chance on generic versions of brand-name foods. Look for nonperishable items in bulk at discount stores. If you’re feeling extra thrifty, clipping coupons could save you some change, too. Some stores even offer coupons through their app—no clipping required.

6. Traveling with Rewards Points

During your fellowship, you’ll probably want to go on vacation and take a well-deserved break. But your trip doesn’t have to break the bank. Fellows with a decent enough credit score, may qualify for credit cards that offer significant point bonuses, which can be redeemed for travel costs like flights, hotels, or rental cars. Some cards may require cardholders to spend a certain amount up front to qualify for a bonus, so double check you’re not taking on unnecessary expenses or carrying a balance if you don’t need to.

Related: Top Travel Hacks

7. Taking Advantage of Income-Based Repayment Plans, Deferment, or Forbearance

Those with eligible federal loans who cannot afford to make payments, may be able to pause their payments through deferment or forbearance options if they meet certain qualifications.

Income-based repayment plans allow borrowers to tie their monthly payment to what they make, and the balance is generally forgiven after a certain number of years (currently anywhere between 20 to 25 years).

Eligibility for these programs largely depends on the types of student loans that the borrower holds and when they were borrowed. Those who are in a qualified graduate fellowship, may be able to request to defer your loans.

If successful, they likely won’t have to make payments during the fellowship. In some cases, borrowers may not be required to pay accrued interest, for example, if they hold subsidized federal student loans.

Borrowers who don’t qualify for deferment, but are still struggling financially, may be able to apply for forbearance, but would likely be responsible for paying the interest that accrues.

Fellows who are interested in pursuing a career in public health may also consider the Public Service Loan Forgiveness program . In that program, borrowers who work for a qualifying non-profit establishment, may be able to get their loans forgiven after 10 years of income-based payments.

8. Trying to Save

Living on a fellows salary may not leave much room for saving, but if at all possible, setting small savings goals could be helpful.

For example, if you don’t already have an emergency fund, you could try to put away some money every month until you have about three to six months of living expenses saved.

Once you have a cushion for emergencies, consider contributing to a retirement account, such as a traditional or Roth IRA. The power of compound interest means investing early can translate into gains over time. The longer money is invested, the more time it potentially has to grow and withstand any volatility.

9. Considering Passive Income

As a fellow, you probably don’t have much extra time to take on a side hustle. If you’re looking for ways to potentially boost your pay, consider looking into low-effort side hustles as sources of passive income, which can allow you to earn money without investing much time or energy.

Examples include renting out your room or car, wrapping your car in ads, or creating an online course. It may require some up front effort, but if you can increase your cash flow without working too much, it could be worth it.

10. Refinancing Your Student Loans

Dealing with student loans, potentially from both undergraduate and medical school, can be challenging when you’re living on a medical fellowship salary.

Refinancing your medical student loans is one way to help make your debt more manageable and potentially free up some extra cash.

When you refinance your loans—both federal and private—with a private lender, you typically get a new loan at a new interest rate and/or a new term.

Depending on your situation, refinancing can lower your monthly payment. Many online lenders consider a variety of factors when determining your eligibility and loan terms, however, including your educational background, earning potential, credit score, and other factors.

Keep in mind that when refinancing with a private lender, you do give up the benefits that come with most federal student loans, like deferment, forbearance, or income-based repayment programs, so it won’t make sense for all borrowers.

The Takeaway

Fellowships can be an excellent opportunity to learn about a specific medical field, but the relatively low salary may require some creative budgeting in order to keep expenses in line with income.

Some ideas to consider include creating a passive income stream, shopping smarter at the grocery store, establishing a realistic budget, and finding an affordable living situation.

Interested in refinancing student loans? Learn more about options available 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

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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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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.
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3 ways to support your employees during times of uncertainty

3 Ways to Support Your Employees During Times of Uncertainty

Human resources and benefits managers have never been more put to the test than they have during this past year.

The pandemic has meant that they were suddenly managing a remote workforce while trying to fill immediate needs for short-term benefits such as emergency savings and child and elderly care support. In addition, economic instability and the racial justice crisis added to employees’ concerns and stresses.

Right now you’re likely in the sorting-out stage, trying to figure out how best to take what you learned in the crisis and apply it to long-term policies and tactics that will continue to support employees as we all enter the new and equally confusing post-pandemic stage.

What can you do to support workers during these–and future–times of uncertainty?

These three steps can help.

1. Make Sure Communications Are Honest and Accurate–and That They Reach Everyone

You’ve likely hit some obstacles as you tried to communicate COVID-oriented policies and protocols among your far-flung workers. In the process, you may have found strategies that work for you and others that don’t. Add to those lessons the following tips to help you move forward.

Be Honest

Research shows employees engage more if they think company communications are honest. That means it’s OK to tell employees management is still looking into a change or isn’t sure exactly when a new policy will be implemented. In uncertain times, it’s better to keep in touch. Employees are looking to you for leadership, but they also want to be in on the process when changes are taking place. What’s more, giving employees honest updates can avoid the need for damage control later.

Be the Voice of Reason and Compassion

Your employees are likely overloaded with news and information, some of which may be contradictory and confusing. It’s important that your communications stay on top of breaking news and add a clear, helpful, and understanding voice to the discussion when events impact the company, the employees, and benefits.

Take a Multi-Channel Approach

While email is still the most common way to communicate with employees, you also want to use mobile and social media to help ensure that all employees see vital communications no matter where they are or what their work situation may be. This will be, literally, reaching out to your employees where they are.

2. Review Your Voluntary Benefits

In times of uncertainty, employees may look to their employer for a shoulder to lean on. Many HR professionals have recognized this through the COVID-19 crisis by offering a variety of flexible benefits that can help employees solve their short-term financial challenges today and assist them in building a stronger future.

More employers are offering or planning to offer voluntary benefits across a wide spectrum of needs, according to the Emerging Trends in Health Care Survey by global advisory, broking, and solutions company Willis Towers Watson. A full 94% of employers find voluntary benefits to be important to their employee value proposition and Total Rewards strategy three years from now. That’s up compared to just 36% in 2018, according to the survey.

The fastest-growing benefits employees are offering include theft protection, hospital indemnity, critical illness insurance, and pet insurance. In addition, some of the most widespread voluntary benefits that employers offer or will offer over the next two years include financial planning counseling, tuition reimbursement programs, onsite fitness centers, backup childcare, and elder care, the survey reports. The range in responses illustrates the holistic approach that employers are taking toward benefit support.

Whatever combination of flexible or voluntary benefits you may be considering, you’ll want to be sure it fits your workers’ demographics and pressing needs. A variety of well-chosen benefits can help your employees face their specific challenges while also reducing stress and calming nerves during any period of uncertainty.

3. Help Employees Balance Short-Term and Long-Term Financial Well-Being

In uncertain times a flexible financial well-being approach that includes the short-term benefits employees need to make it through is more important than ever. That’s why so many employers have introduced the types of benefits that employees feel are most relevant to their current financial concerns. Those may include emergency savings programs, homeownership benefits, and student loan repayment programs, to name just a few.

But this doesn’t mean that the importance of retirement savings and other long-term benefits should be diminished. Far from it. The security of knowing long-term retirement savings is in place can help add to employees’ overall financial well-being, especially during tumultuous times. Through effective communication and education programs, HR professionals can help employees balance short-term and long-term financial needs and goals.

It’s essential in times like these to try to help employees feel –and be–secure. These strategies may help you and your company continue to improve financial well-being during these tumultuous times and during calmer days down the road.

SoFi at Work is offered by Social Finance Inc. SoFi loans are offered by SoFi Lending Corp. or an Affiliate (dba SoFi), licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 ( ). The Student Debt Navigator tool and 529 Savings and Selection tool are provided by SoFi Wealth, LLC, an SEC Registered Investment Advisor. For additional product-specific legal and licensing information, see
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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Ways to Pay for Unexpected Vet Bills

When you adopted your newest furry friend, you may have underestimated just how much you could love your pet. But they became a member of the family in an instant, and now you can’t imagine your home without their friendly presence.

But pets hit with a health scare can quickly turn into expensive furballs—even if they’re still cute furballs. Survey respondents to the 2020 TD Ameritrade Pets & Finances Survey said the most they would spend on a sick dog’s treatment is $3,307, and $1,991 on a sick cat’s treatment.

Even if they would be willing to spend that amount of money, many people probably aren’t ready for an unexpected vet bill of that size.

If you’ve ever worried about “what happens if I can’t pay my vet bill?”—know that there are ways to plan ahead. There are options to tackle a massive bill so you can make sure your pooch, kitten, iguana, or favorite fish comes home happy and healthy from their next vet visit.

Considering Pets as Family Members

American households increasingly include one or more pets. Currently, 67% of US households have pets, and the current pandemic era has seen an increase in the number of households who welcomed a furry family member.

Gen Z led the pack with a 16% increase in pet ownership in 2020. The percentage of Millennials who welcomed a pet during 2020 increased by 13%. The majority of American pet owners, across generations, consider their pets to be “fur babies,” and 71% of Millennials think of their pets as “starter children.”

So it’s no surprise to learn that Americans are also willing to shell out big bucks for their fur babies. Dog owners spend, on average, $1,201 per year on their pet, and cat owners spend, on average, $687.

Caring for the physical health of our pets is as important as making sure they’re happy in our homes. If offered leave from their jobs to care for a new pet, 61% of Americans surveyed would take it.

Being Prepared With Pet Insurance

The best defense is a good offense, and when it comes to healthcare, that often means having insurance. Like humans, pets, too, can have their own health insurance that can help with vet bills in case things go awry with their health.
Companies like Trupanion™ , Embrace® , Healthy Paws® , and Figo Pet® offer insurance for cats and dogs, while companies like Nationwide® , Pet Assure® , and Prime Insurance™ also cover exotic pets.

Each one offers different plans and different price points. Just like human insurance, the plans offer coverage in exchange for paying premiums each month along with co-pays and deductibles. Checking out sites like Pet Insurance Review may be helpful when comparing plans and pricing to find the offering that fits you and your pet’s needs.

Trying to Negotiate an Installment Plan With Your Vet

You may be able to negotiate a payment plan with your veterinarian, so long as you’re a client in good standing at the practice. This payment plan could work out to weekly or monthly installments, depending on what you and your provider agree upon.

However, it should be noted that this is not a standard practice and your veterinarian has every right to refuse to offer a plan. But it’s always worth asking, especially if it’s the veterinarian who has cared for your pet over its lifetime and knows you well.

Seeking Out a Second Opinion or a Nearby Veterinary School

It can be important to get a second opinion before your pet undergoes major surgery or procedures (just as you would for yourself or a human loved one).

If a second veterinarian gives you the same diagnosis and you’re still unable to pay for the treatment, you may want to consider reaching out to a local veterinary college. Some offer low-cost clinics run by veterinary students supervised by experienced veterinarians and vet techs. The American Veterinary Medical Association provides a list of accredited schools on its website.

Seeking Help From a Charitable Organization

Charities like Paws 4 A Cure provide financial assistance for pet owners who cannot afford non-routine veterinary care for cats and dogs of any breed or age, or for any diagnosis.

If your pet has a non-basic, non-urgent care situation, such as a chronic illness or cancer, organizations like The Pet Fund may be able to help.

The Takeaway

According to the American Pet Products Association , pet owners spent more than $31 billion on veterinary care in 2020. While a typical routine visit may cost about $45 to $55, a radiation therapy treatment for a dog with cancer can run up to $6,000.

One option to cover the cost of expensive medical care for your pet is an unsecured personal loan, which could allow you to pay for your pet’s care upfront, then pay the loanoff over time.

You can’t prevent unexpected vet bills, but you can prepare for other unplanned expenses by making sure you, your loved ones, and your belongings are properly insured. That’s where insurance options with SoFi Protect can help. SoFi Protect offers insurance plans for your home and car, plus life insurance plans to help you protect your loved ones in the future.

Learn more about reliable insurance options with SoFi Protect.

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