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From snagging that first real job to starting a family (congrats all around), life is full of important rites of passage. These events are meaningful, for sure, and they can also impact the path of your personal finances.

As you take control of your money, it can be wise to think about and plan for these key transitions. That way, you can be better prepared for how they may alter your financial health.

In this guide, you’ll learn about seven major milestones plus advice on navigating these life events successfully so you can build wealth today and tomorrow.

1. Your First Job

You’ve finished your education (for now, at least) and are starting your first job. This is where your financial journey really begins. And, since you are likely earning more money than you ever have, it’s important to have a plan for how you will use that money wisely.

If your employer offers a 401(k) for retirement, you may want to consider having at least some money taken out of each paycheck each cycle and put into this fund.

Once you get your first paycheck, you can see exactly how much money you are taking home (after all deductions, including retirement, and taxes are taken out). This can be a perfect moment to make a simple budget. This will help you get the most out of your salary and build some financial stability.

•   This involves listing all of your essential monthly expenses. You can think of these as the “needs” in life, such as housing, food, and minimum payments on debts or loans.

•   Then subtract them from your monthly take-home pay to see how much you have left over to play with (the “wants” in life) and, of course, to save.

•   Saving can be crucial, so it’s wise to determine an amount you can set aside each month into a separate savings account. It’s perfectly fine to start small. Even putting a little bit of money aside each month will start to add up over time.

•   This savings account can help you build an emergency fund (generally three to six months’ worth of living expenses). Having financial back-up can help to ensure that if you should have a large, unexpected expense, you could cover it without having to rely on high interest credit cards.

•   Once you have a comfortable emergency fund, you may then want to start working on other savings for other goals, such as buying a car or other major item you are hoping to buy in the next few months or years.

If you are looking for guidance on how to establish a budget that works for you, consider the 50/30/20 budget rule. This guideline says that, of your take-home pay, you should allocate 50% towards “needs,” 30% towards “wants,” and 20% to savings.

Recommended: 50/30/20 Budget Calculator

2. Paying Off Student Loans

Student loan payments can be a drag on your monthly budget, especially if you are trying to save toward other financial goals, like buying a home or paying for your kids’ college education.

One of the best ways to pay off student loans is to pay more than the minimum each month. The more you pay toward your loans, the less interest you’ll owe — and the quicker the balance will disappear.

There’s typically no penalty for paying student loans early or paying more than the minimum. However, there is a caveat with prepayment: Student loan servicers, which collect your bill, may apply the extra amount to the next month’s payment.

The problem with that is that it advances your due date, but it won’t help you pay off student loans faster. That’s why it can be a good idea to tell your servicer (whether online, by phone or by mail) to apply overpayments to your current balance, and to keep next month’s due date as planned.

Another option you may want to look into refinancing your student loans. This could help you pay off student loans sooner without making extra payments.

Refinancing replaces multiple student loans with a single private loan, ideally at a lower interest rate. To speed up repayment, it can be a good idea to choose a new loan term that’s less than what’s left on your current loans.

Keep in mind, however, when you refinance a federal student loan into a private loan, however, you may extend the term, which means paying more interest over the life of the loan. Also, you may lose the benefits and protections that come with a federal loan, like deferment and public service-based loan forgiveness.

3. Buying a Car

Buying your first car can be an exciting experience. And, you might want to rush to the nearest dealer and purchase a shiny, new model right away.

However, saving up for a vehicle before you buy minimizes the amount you have to borrow to buy a car and can save you a substantial amount in interest.

To get a sense of how much you need to save for a down payment, you can research some car makes and models that might suit you and get a sense of prices for both new and used cars.

You can then zero in on a price range you can afford and calculate the down payment. Deciding between a new vs. used car? A good rule of thumb is to put 20% down on a new vehicle and 10% down on a used one.

Making a higher down payment helps you qualify for a loan, and it can earn you a lower interest rate and result in more affordable monthly payments.

Once you know how much to save, the next step is to find a good place to start saving. Good options include: a money market account, online savings account (which typically offer higher interest rates), or checking and savings account.

These accounts can enable you to earn more interest than a standard checking account but allow you to access the money when you are ready to buy that car.

4. Buying a Home

For many people, buying a home is the biggest purchase they will ever make. So, it’s important to prepare for it.

A great first step is to figure out how much house you can afford to buy. You can come up with a target price range based on the area you want to live in, details about the type of home you want, and how much you’re comfortable spending on a monthly mortgage payment.

This exercise will help you understand how much you need to save and roughly how long it will take you to save enough.

Mortgage lenders and online mortgage calculators can also help you decide the absolute maximum you can afford to spend on your house.

One common rule of thumb is that your home payment (including loan payment, property taxes and homeowners insurance) should take up no more than a third of gross pay (your monthly paycheck amount before taxes and deductions are taken out). However, this can vary depending on the cost of housing in your area.

Once you have a target home price, you can start saving for a down payment. Many mortgage lenders prefer you to make an upfront deposit of up to 20% of your home’s cost. However, there are mortgages available for those who put down significantly less (even zero).

If you are saving for a down payment, you can think about when you want to buy a home and then work backwards to determine how much you need to save each month to reach this goal. You might see what interest rates you can earn at an online bank vs. a traditional bank. They typically offer higher returns and lower (or no) fees.

5. Changing Jobs

At some point during your career, you may change jobs. Generally, this can be a smart financial and professional move, but changing jobs is still something you’ll want to plan for financially. Some tips to help your money work harder for you:

•   You’ll likely be eligible for a new set of employee benefits, including health insurance. However, it will probably be up to you to ensure that you have health coverage during the transition. To avoid any gaps, it’s a good idea to ask your new employer how soon you will be able to qualify for healthcare.

•   You may also want to create a plan for transferring your 401(k) and health savings account (HSA) to your new accounts. Rolling them over is generally a simple process, but you may want to contact your previous employer for guidance.

•   An FSA vs. an HSA can require a different approach. If you have a flexible spending account (FSA), you may need to submit all eligible expenses for reimbursement under your old program before you leave your current job. It can be a good idea to check with your company’s HR department to find out whether or not you have a grace period for submission.

Since you may be earning a higher salary, you may also want to re-examine your budget, and perhaps do some tweaking, such as funneling a bit more money into your retirement fund and/or savings account each month.

6. Saving for Your Kids’ College

Next to buying a home, child education expenses are among the biggest you may have in your lifetime. Just like retirement: it’s never too early to start saving for college. But even if you put it off, you can still help cover most or all of those college costs with wise saving and investing.

While predicting how much college will be for a kindergartener may be difficult, it gets a little easier the older your kids get. However, you can find current college costs and predictors for future college tuition costs online and use that as a benchmark for your savings.

One great place to start building education savings is in a 529 college savings plan. These are savings plans, usually sponsored by state governments, that encourage saving for future education costs.

They are often tax-friendly, in that many states will let you deduct your contribution from your state income tax. Even better, when you withdraw the money for college, the money will not be federally taxed.

That means, any growth (or money in the account that you didn’t put in) is not taxed, which can be a significant advantage over traditional investment accounts.

You can put money into your own state’s 529 or any other state’s plan. Whatever you choose, consider automating your finances, so that your bank transfers the money right into the 529 on the same day each month.

One way to ease saving for college is to use smaller life transitions to help fund your education savings plan. When your child no longer needs daycare or preschool, for example, you could funnel what you were paying for that into your account.

7. Retirement

Retirement may seem far away, but it can come up faster than you expect and, if you’re unprepared, you may struggle financially. Saving for retirement early can provide peace of mind later.

And, the earlier you start saving for retirement, the less you’ll actually have to put away, thanks to the magic compounding interest (which means the interest you earn on your investments also earns interest).

While it can seem impossible to predict how much money you’ll need once you retire, some financial experts recommend this rule of thumb: Aim to save at least 15% of your pretax income each year from age 25 onward. If you start later, you would want to up those percentages.

Fortunately you can get Uncle Sam to help. By contributing to tax-advantaged savings accounts like traditional 401(k)s and individual retirement accounts (IRAs), your contributions are made before taxes, reducing your current taxable income.

That means you get a tax break the year you contribute. Plus, that money can grow tax-free until you withdraw it in retirement, when it will be taxed as ordinary income (and at retirement time, you may be in a lower tax bracket).

With Roth 401(k)s and IRAs, your contributions are after tax, but you can withdraw the money tax-free in retirement (assuming certain conditions are met).

If you are contributing to 401(k) at work and your employer offers matching funds, you may want to increase your automatic contributions at least to that level. This is effectively “free” money.

The Takeaway

Throughout your life you will likely experience some significant events and milestones that can have a major impact on your financial well-being. These include buying a home, saving for your child’s education, and stashing money away for your retirement. The better prepared you are for these transitions, the less stressful and more enjoyable they can be. Part of that preparation can mean finding the right banking partner.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How to financially prepare for life?

Some important ways to financially prepare for life include budgeting wisely, setting money goals, accruing an emergency fund, managing debt and credit responsibly, and planning for long-term goals like saving for your child’s education or for your retirement.

What are examples of life events?

Life events are major moments that can impact the path of your life. They include such things as moving to a new location, getting married, having a child, starting a new job, losing a job, divorce, illness, death of a loved one, and embarking on retirement, among others. Often, these events require smart money management.

What is the 1234 financial rule?

The 1234 financial rule is a ratio for budgeting: It says 40% of your income should go to non-housing expenses, 30% to housing, 20% to savings, and 10% toward insurance premiums.

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SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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A bank deposit is defined as funds that are put into a checking or savings account, among other types of financial products. This money is kept safely at a financial institution like a bank or credit union, and it may earn interest in return for keeping your cash there.

You can make bank deposits via cash, checks, online transfers, or direct deposit, among other methods. The type of deposit you make will determine when you can withdraw funds.

Understanding how bank deposits work and the pros and cons of each type of deposit can help you better manage your money. Here’s what you need to know.

What Are Bank Deposits?

A bank deposit involves putting money into a bank account. Your bank deposits can go into various accounts such as a savings or checking account, a money market account, or a certificate of deposit (CDs).

Depositing your money into a bank account can help you accomplish two things:

•   It can keep your money safe.

•   It can help your money grow.

Here’s a little more detail: Bank deposits are typically insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per account ownership category, per financial institution, and in some cases even more. That means your money is a whole lot safer in a bank account than under your mattress.

The other thing you can accomplish by depositing your money is helping it grow. Because many financial institutions offer interest-bearing bank accounts, you can capitalize on compounding interest by not withdrawing funds and also consistently adding to your balance over time.

How Do Bank Deposits Work?

The type of deposit you make will dictate the process of your cash getting into an account.

For example, when you deposit a check, the bank sends a digital image of the check to the payer’s financial institution. While large banks usually communicate directly to clear checks, other banks work through a clearinghouse or a third-party intermediary to verify checks. The clearinghouse organizes all the deposits coming in and out of a specific bank and ensures all deposits are put in and taken out of the correct accounts.

If the payer’s account doesn’t have enough funds to process the check, it will bounce and be returned unpaid. If you have already taken out the funds from the check, you will have to pay the total balance back, usually plus a fee.

Direct deposits, on the other hand, work a little differently. Since direct deposits are scheduled payments, the payer’s or employer’s bank will credit the account before sending the direct deposit. This way, the payer’s bank can ensure the account has enough money to cover the transaction.

Once the funds are deposited in your bank account, you can access the sum the next business day.

How Long Do Bank Deposits Take to Process?

Process times vary by the financial institution and how the deposit is made. However, federal law limits the time it takes for a bank deposit to process.

•   For example, if you deposit checks totaling $275 or less, the bank must let you access the funds the next business day. So, if you deposited checks on a Monday, you should be able to access your money on Tuesday. However, if there’s a bank holiday transactions may be delayed.

•   If you deposit a check(s) totaling more than $275 you will have access to the first $275 the next business day. Then, you will have access to the remaining deposit the following business day.

•   When you deposit a check from another account from that financial institution, a government check, or a certified check in person at a bank branch, you should have access to the money the next business day.

Keep in mind some banks and credit unions apply cut-off times, which dictate the end of the day. So, if you deposit after the cut-off time, you may have to wait an extra business day before accessing the deposit.

Also, other types of deposits have different processing time. For example, wire transfers and ACH deposits can usually take a couple of days to process but may take longer in some situations.

Here are a few reasons why it can take longer for your deposit to process:

•   You’re depositing money into a new account

•   You made an ATM deposit to an ATM outside the financial institution’s network

•   If you have a deposited check that was returned unpaid

•   Your deposits exceed $6,725

•   You’ve overdrawn your account too many times.

Recommended: Causes of Overspending

2 Types of Bank Deposits

There are two primary types of bank deposits: demand deposits and time deposits. Here’s a breakdown of each.

Demand Deposits

Demand deposits consist of money you put into a bank account that you can take out when you need cash. Demand deposit accounts usually have minimal interest rates (or no interest), but they give you more freedom to withdraw money when needed. These types of deposits can be made to three types of accounts, including:

•   Checking accounts. This type of account is meant for everyday transactions. You can deposit and withdraw money as often as you want. Usually, checking accounts have checks and debit cards linked to them so you can access your money when you’re on the go.

•   Savings accounts. This type of account is designed to help you sock your money away for short-term or long-term goals. Since the different types of savings accounts are meant for savings, some banks apply withdrawal limits, limiting the number of monthly withdrawal transactions that can occur in an account.

Savings accounts may also have interest rates higher than checking accounts. This is especially true if you deposit funds at an online vs. traditional bank.

•   Money market accounts. This type of account combines the features of a savings account with those of a checking account. Money market accounts let you earn interest, just as a savings account does. They can also provide a debit card and checks so you can withdraw funds more easily.

Time Deposits

A time deposit is when you put money into a deposit account with a fixed rate and term, like certificates of deposit (CDs). You can only take money out of a time deposit account once the term expires. (You may have to pay a penalty if you take money out of the account beforehand. But whether you get a penalty or not depends on the type of account and the financial institution.)

For example, let’s say you deposit $5,000 in a CD that earns 5% interest for one year. Then, after one year, you can withdraw $5,250.00, which includes your deposit and interest earned.

You can think of banks as using time deposit accounts to borrow money from depositors. In exchange for borrowing money for a certain amount of time, the bank usually gives the depositor a fixed interest rate, typically higher than traditional savings accounts. At the end of the term, the depositor can take out the money in the account or renew the time deposit for another term.

Recommended: Savings Account Interest Calculator

What Are Mobile Deposits?

Mobile banking, as you likely know, gives you access to banking services no matter where you are or what time it is. You can make mobile check deposits from your phone as part of this service. So, instead of driving to an ATM or local bank branch, you can deposit it on your mobile device.

The steps involved usually include:

•   Download the bank’s mobile banking app.

•   Log into your account.

•   Choose the account you want to deposit the check into.

•   Endorse the back of the check.

•   Enter the amount of the check.

•   Snap a photo of the front and back of the check.

•   Review the deposit information, and then hit deposit.

Remember, though, there can be limits on the amount and type of checks you can deposit on your mobile app. For example, some banks prohibit depositing third-party checks, money orders, traveler’s checks, and foreign checks. So, verify the rules with your bank or credit union.

Also, if you deposit a check using the mobile app, keep the paper check until the check clears. This way, you’ll have a backup if it doesn’t go through or there is an error.

The Takeaway

A bank deposit is money that is given to a financial institution where it is safely held and may earn interest. Examples of deposit accounts are checking and savings accounts, money market accounts, and CDs. When considering where to keep your money, it’s wise to shop around and consider such factors as interest paid and fees charged.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What are the 2 types of bank deposits?

Demand deposits and time deposits are the two types of bank deposits. A demand deposit references deposits made into an account such as a checking or saving account where you can withdraw the funds at will. A time deposit, on the other hand, refers to a deposit made to an account with a fixed interest rate and set terms (whether several months or years), like certificates of deposits.

What happens if you deposit more than $10,000 in the bank?

When you deposit $10,000 or more into a financial institution, federal law requires them to report the deposit to the federal government. The federal government requires this alert to help prevent money laundering and fraud.

Does deposit mean payment?

Yes, deposits can mean an initial payment towards a product or service. It can also mean putting something of value away for safekeeping, like when you make a bank deposit to a bank, or hand over cash for safekeeping.

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Photo credit: iStock/AlexSecret
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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In many parts of the country, a $100,000 salary is considered good; maybe even very, very good. It can be more than enough for an individual or even a small family to live comfortably. With $100,000 a year, a person could cover typical expenses, pay down debt, build their savings, contribute toward retirement, invest, and still have enough money for entertainment, hobbies, and vacations. But in large (pricey) cities and for larger families, it could be hard to stretch that income to cover all expenses and financial goals.

Factors to Determine if a $100,000 Salary Is Good

In most cases, a $100,000 salary is considered good. It is well above the poverty line as well as the American median income for individuals. Even in the face of rising inflation, a $100,000 annual income can typically afford a comfortable lifestyle and financial stability.

Here are some factors to determine if $100,000 is a good salary:

•   Location: While $100K can cover expenses in most places across the U.S., it won’t stretch as far in places with a higher cost of living. In some of the most expensive cities in the U.S., a $100K salary might mean spending a significantly higher percentage of your income on housing. For instance, in the summer of 2025, the average rent in Manhattan hit $5,539 a month.

•   Taxes: As an individual, $100K a year puts you in the 22% federal income tax bracket as of 2025 for both single and joint filers. That means that you’d only bring home $78,000 after federal taxes — even less depending on state, city, and school district taxes.

•   Family size: A $100K a year salary can yield comfortable living for most individuals, but the larger a family becomes, the harder it is to make that money stretch. Additional children or other dependents may result in higher grocery bills, utility usage, school costs, and doctor visits.

How Does a $100,000 Salary Compare to the American Median Income?

The American median household income is roughly $78,538, per the latest published U.S. Census results. A $100,000 salary is considerably higher than the American median income.

However, according to the most recent data, the median individual income is $43,289, meaning a $100K salary is more than twice that figure. If you live in what’s known as a DINK household (dual income, no kids) and your domestic partner also brings home a sizable paycheck, you may have even more spending power and more cash in your bank account.

What Percentage of Americans Make Over $100,000 Annually?

According to the U.S. Census Bureau, 41% of American households pull in more than $100,000 annually. A “household” might consist of two or more salaries totaling $100,000.

$100,000 Salary Breakdown

So is making $100K a year good? It’s almost surely easier than living on $20K a year. Let’s look at how it breaks down into monthly, weekly, and even daily pay:

•   Monthly income: $8,333.33

•   Biweekly paycheck: $3,846.15

•   Weekly income: $1,923.08

•   Daily income: $384.62 based on 260 working days per year.

Keep in mind that this salary breakdown uses pretax income. Actual paychecks will likely be lower after taxes and any health insurance premiums and retirement contributions are deducted.

Can You Live Individually on a $100,000 Income?

It is indeed possible to live individually on a $100,000 income. At that salary, many individuals will be able to cover not only basic living expenses but also discretionary expenses, like dining out and traveling.

Individuals making $100K annually often have enough disposable income to pay down debt, contribute to retirement, work toward multiple savings goals (like home ownership and vacations), and even invest.

How Much Rent Can You Afford Living on a $100,000 Income?

The conventional advice on how much of your income to spend on housing is no more than 30%. While economists may need to reevaluate that number given current inflation and soaring housing prices, that would mean an individual could afford $30,000 in rent costs each year, or roughly $2,500 a month, on $100K a year.

However, at $100,000 a year, an individual could consider buying a home instead. Depending on where one lives and their other expenses, a $100K salary could make it easier to save for a down payment and keep up with maintenance expenses, property taxes, and homeowners insurance.

Best Places to Live on a $100,000 Salary

At $100,000 a year, an individual or small family can likely live in most locations. If you want to make your dollars stretch as far as possible, consider what U.S. News has deemed the five cheapest cities to live in 2025-26:

•   Decatur, Illinois

•   Enid, Oklahoma

•   Weirton, West Virginia

•   Springfield, Illinois

•   Mission, Texas

Recommended: Cost of Living by State

Worst Places to Live on a $100,000 Salary

A $100,000 salary can typically afford at least basic living expenses even in America’s most expensive cities. However, living in such places can make it harder to build your savings and invest toward your future.

If you want to live comfortably on $100,000 a year, it may be wise to avoid what have been deemed America’s most expensive cities in 2025-26:

•   Newport Beach, California

•   Westminster, California

•   Daly City, California

•   Spring Valley, New York

•   Huntington Park, California

Is a $100,000 Salary Considered Rich?

Many people may consider a $100,000 salary to be rich. However, “rich” is a relative term with a vague definition, meaning an abundance of wealth and assets. Much of it depends on where you live and how you use the income (spending vs. saving vs. investing).

Also, consider how personal circumstances can differ. If you earn $100K a year and your spouse doesn’t work outside the home and you are supporting three children as well as a relative with medical needs, that high salary may not stretch as far. Add some student loans, a jumbo mortgage, and car payments to the picture, and you realize a person earning $100,000 a year might not qualify as rich in most people’s estimation. They may be barely making ends meet.

Tips for Living off a $100,000 Budget

How can you make the most of a $100,000 salary? Here are a few tips for living off a $100,000 budget:

Getting on a Budget

No matter your salary, it’s a good idea to design a monthly budget. At a minimum, keep track of your monthly expenses vs. your monthly income. After you have accounted for all your mandatory expenses, like your mortgage and your groceries, you can calculate what you have left for discretionary expenses (the “wants” in life), savings, debt repayment, and investments.

Recommended: 50/30/20 Budget Calculator

Saving Your Money

It’s a good idea to have emergency savings at the very least; being able to cover three to six months’ of expenses without any income flowing in is ideal.

Beyond an emergency savings, you may want to allocate money in your budget each month to other savings goals, including a house or car down payment, wedding, vacation, or home renovations. Having a high-interest savings account with automatic savings features can help you get to your goal faster.

Recommended: How to Save Money From Your Salary

Getting Out of Debt

Paying down debt can be a good use of funds when you have room in your budget, especially if you have particularly high-interest credit card debt. You can weigh options like the debt avalanche vs. debt snowball method when you have multiple sources of debt or even consider a credit card debt consolidation loan.

Creating a Retirement Plan

If you’re wondering when you should start saving for retirement, many financial experts would likely say the answer is “yesterday.” The sooner you start saving, the sooner your money can grow via compound interest.

If your employer offers a 401(k) match and you can afford to funnel a percentage of your paycheck into a retirement account, it’s often a wise idea to opt in. But employer-sponsored 401(k) accounts aren’t your only retirement option. Depending on your situation, it may be a good idea to take advantage of a rollover or traditional IRA and other retirement strategies.

Investing Your Money

Investing isn’t only for retirement. If you are earning $100K a year and have extra money after having built up emergency savings and wiped out your debt, you might benefit from investing in the stock market or even real estate.

Learning how to invest can be intimidating; if you’re not sure where to start, it can be a good idea to work with a trusted investment broker.

The Takeaway

For most individuals and small families, $100,000 is a good salary and well above both the median individual and household income. Cost of living and family size can affect how far $100,000 will go, but generally speaking, you can live comfortably on $100,000 a year.

If you are hoping to make the most of your salary, finding the right banking partner can be important.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What jobs pay over $100,000?

Many jobs pay over $100,000 a year in various fields. These jobs include doctors, lawyers, software engineers, business leaders, pharmacists, psychologists, IT managers, finance managers, and many others. Those in creative fields, from writers to hair stylists, can earn that salary, too.

Is making $100,000 a year common?

Making $100,000 a year is not uncommon in the U.S. According to the U.S. Census Bureau, more than 40% of American households make more than $100,000.

Can you live comfortably on $100K a year?

Most people can live comfortably on $100K a year. If you live in an area with a high cost of living and/or have a large family or very high expenses and/or debt, it may be more difficult to live comfortably on $100K a year. In either case, it is usually not challenging to afford basic living expenses.

What is considered wealthy in the U.S.?

Americans said in one survey that they believe it takes a net worth of $2.3 million to be considered “wealthy.” When calculating net worth, you’ll factor in more than just income; it also includes assets (like a house and retirement account), less any debts and liabilities.

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Photo credit: iStock/Inside Creative House

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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While it may not be as much fun as scrolling through social media posts, there’s definitely a payoff for reviewing your monthly bank statements. Consistently reviewing these documents is one of the most effective ways to stay on top of your financial health. From catching errors (or even fraud) to aligning your spending with your money goals, taking a few minutes each month to drill down your bank account statements can help you avoid costly mistakes and make smarter decisions.

Here’s your guide to reviewing bank statements as quickly and efficiently as possible.

What Is a Bank Account Statement?

A bank account statement is a summary of all transactions made through your bank account during a specific time period, usually a month. You’ll likely see your paycheck being deposited and your rent/mortgage, utilities, credit card, and subscription payments going out.

Your bank statement is provided to by your bank either through online access, in its app, or via a mailed paper copy.

What Information Does It Contain?

A typical bank statement includes:

This document serves as both a financial report and a tool for accountability.

Recommended: Understanding Bank Statement Abbreviations

Why Review Your Bank Statement Each Month?

Even if you use banking alerts or budgeting apps to track spending, looking over your bank statements can offer crucial insights. Here’s a look at four reasons why it’s important to review your bank statement each month.

Catch Errors and Unauthorized Transactions

Banks process millions of transactions daily, and while errors are extremely rare, they do happen. You might notice a double charge, an incorrect amount, or a transaction you didn’t authorize.

Checking your bank statement also allows you to catch any fraudulent charges. While it’s hard to determine the exact number of bank fraud instances in a year, the Federal Trade Commission (FTC) does receive more than 100,000 reports of bank fraud per year, and millions of cases of identity theft.^[1] Banks work hard to protect accounts from such issues, but it can be worthwhile to be vigilant.

Regular reviews help you identify and report unauthorized transactions quickly, often within the window required to dispute them and recover funds, which is typically 60 days.^[2]

Monitor Your Spending Habits

Even quickly scanning your balance summary can be revealing, since it shows you exactly how much came in that month (total deposits) and how much went out that month (total deductions).

If you consistently see that your monthly spending is around the same as your monthly earning (meaning you aren’t saving money) or, worse, that your spending tends to exceed your earning (meaning you’re going backwards), you’ll want to drill down and look at where your money is going each month in more detail.

Identify Potential Savings Opportunities

Reviewing your bank statements regularly can help you identify patterns in your spending and opportunities to save. Are you tapping your debit card daily to pay for a fancy coffee? Has your home insurance, which you have on autopay, gone up significantly without your realizing it? Are you getting hit with monthly bank fees?

Maybe that cold foam coffee becomes a TGIF treat rather than an everyday expense. Or it’s time to shop for a new, more affordable insurance policy — or a bank with lower (or no) fees. Statements can give you the reality check you need to adjust your habits and make conscious choices with your cash.

Stay on Track With Your Budget

How can monitoring your bank account transactions help you stick to your budget? For one reason, your bank statement is a snapshot of your financial behavior, which makes it a powerful tool for comparing your actual spending with your budget. Say your monthly budget earmarks $400 for groceries, but you see $600 worth of supermarket transactions. That could tell you it’s time to reassess either your budget, your buying behavior, or both.

Reviewing your statement helps you stay informed and can motivate you to ramp up your financial discipline. If after several cycles you find your earnings, spending, and savings are not well-balanced, that might be a signal that it’s time to investigate some different types of budgets, such as the envelope system of the 50/30/20 budget rule.

Tips for Reviewing Your Account Statements

While it may feel like drudgery, monthly statement reviews don’t take much time and can deliver big payoffs. Here are a few tips to make the process easier and more effective.

Set Aside Dedicated Time Each Month

Schedule a 15- to 30-minute time slot for the same day each month, ideally on or near the day your statement is issued. Consistency makes it a habit and helps you stay on top of changes in your financial behavior. For some added motivation, you might put on your favorite playlist, make yourself some matcha, or somehow link the review with something you really enjoy.

Compare Transactions to Your Records

Whether you track monthly expenses using an app, spreadsheet, or checkbook register (or simply collect receipts), it’s a good idea to cross-check your statement against your records. This little bit of bookkeeping effort can help ensure there are no discrepancies or missed entries in your records. It could ward off, say, a bounced check and the bank fees that come with that.

Look for Recurring Payments and Subscriptions

Scan for automatic charges such as gym memberships, cloud storage fees, or subscriptions. If you’re no longer using a streaming service or anything else you are being charged for on a monthly basis, it’s time to cancel.

Investigate Any Unfamiliar Transactions

If something doesn’t look familiar, don’t automatically assume it’s a mistake on your part. It could be fraud or an error. Check with your partner or family members if it’s a joint account, and then contact your bank if you can’t verify it.

How to Report Unexpected Fees and Charges

If you notice a suspicious fee or incorrect transaction, here’s how to take action:

Most banks have specific dispute resolution procedures and will refund the amount if an error or incidence of fraud is confirmed. If the charge is due to a lost or stolen debit card or PIN, you may be liable for a portion of the transaction, depending on how quickly you report the loss.^[2]

Align Spending With Your Financial Goals

Whether you’re saving for the down payment on a house, working to eliminate credit card debt, or building an emergency fund, reviewing your statement can show you places where you may be overspending and allow you to quickly correct course. This can help you save more each month and get closer to your financial goals.

Recommended: How Long Should You Keep Bank Statements?

How Often Do Most People Check Their Bank Statements?

While habits vary, many financial experts recommend reviewing your statement at least once a month. Some people check their account activity more frequently, however, via online banking and mobile banking apps.

A January 2025 MarketWatch Guides survey found that most people check their accounts either daily (36%) or a few times a week (33%).^[3] But that’s often just to eyeball the bank account balance. Fewer people take the time to carefully review their monthly statements.

Even if you frequently check your balance or transaction activity through your banking app or online account, it’s still a useful exercise to look at your monthly online or paper statement to get an overview of your monthly cash flow.

The Takeaway

Your bank statement is more than just a record of financial transactions. Reviewed carefully, it’s a monthly money check-in that can protect you from fraud, reinforce the power of your budget, and help you spend smarter. Taking time each month to review it helps you stay informed, avoid fees, and make intentional money moves.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What should I do if I see a transaction on my statement that I don’t recognize?

If you notice an unauthorized transaction on your bank statement, you’ll want to immediately contact your bank and report it. The bank will investigate the transaction and if they find it to be fraudulent or due to an error, they will typically refund any lost funds. If the charge is due to a lost or stolen debit card or PIN, however, you may be liable for a portion of the transaction, depending on how quickly you report the loss.

Can reviewing my account statement help me avoid fees?

Yes. Reviewing your account statements allows you to see when and why your bank may be charging fees, such as monthly account fees, overdraft charges, and out-of-network ATM fees. This can prompt you to take action to avoid fees in the future. Or you might move your accounts to a bank that charges fewer (or no) fees.

What is the purpose of a bank account review?

A bank account review helps you understand your financial habits, track spending, and spot any unusual or unauthorized transactions. By reviewing your bank account regularly, you can ensure all transactions are accurate, avoid overdraft fees, and identify areas where you might cut costs or save more. It also helps you stay on top of recurring charges or subscriptions you may have forgotten about. Overall, it’s a key step in maintaining financial health and making informed budgeting decisions.

Should I let my partner review my bank statements?

It depends on the nature of your relationship and level or shared financial responsibility. If you’re in a committed relationship where finances are shared, transparency can build trust and help both parties stay aligned on spending and saving goals. However, if you maintain separate finances and value financial privacy, it’s okay to set boundaries. Either way, open communication is key — discuss expectations around money management and decide together what level of access feels comfortable and fair.

How often should I review my bank statements?

It’s a good idea to review your bank statements at least once a month, ideally as soon as your statement becomes available. This can help you detect errors, fraudulent charges, or unexpected fees early. Some people like to monitor their bank accounts more frequently using mobile apps and online banking. The frequency depends on your spending habits and financial goals.

Article Sources

1. FTC. Identity Theft Reports.
2. Consumer Financial Protection Bureau. How do I get my money back after I discover an unauthorized transaction or money missing from my bank account?.
3. MarketWatch. 2025 Survey: Banking Habits by Generation.

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photo credit: iStock/damircudic

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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While college is a good option for many people, it isn’t for everyone — and not going to a four-year college doesn’t mean you can’t have a meaningful career.

More people than ever before have a college degree, but a four-year program isn’t the only way to be successful. Even employers are realizing that there are many skills that can’t be captured in a degree program. In fact, some major tech companies, including Google and Apple, no longer require applicants to have a four-year degree for some of their positions.

There are certain jobs for which you need a college degree, like an electrical engineer, marketing manager, or teacher, but there are plenty of careers out there that don’t require additional degrees.

Keep reading for more on the pros and cons of going to college, alternatives to a college degree, and more.

Reasons Not to Go to College

There are a number of valid reasons to delay college — or put it off entirely. Here are some to consider:

•   You’re not excited about your options. Maybe you didn’t get into the schools you expected to or you’re having second thoughts when you try to imagine yourself attending the schools you did get into. If the thought of college fills you with dread or doubt rather than excitement, taking a year off to reassess your options can be a good strategy.

•   You’re unsure what career you are interested in pursuing. You may want to explore different options by being exposed to college-level courses at a community college, or spend time volunteering, working, or traveling.

•   You’re already working. If you already have a job, you may be wanting to lean into your current job or save money to go to school in a few years.

•   You’re exploring non-degree avenues. There are many high-paying trades that don’t require a degree, but may require on-the-job experience or an apprenticeship.

•   You have a plan for a gap year. Some people like to take a year to travel, work, or otherwise take a break in between high school and college to further explore their identity and what they want to do in the future.

•   You feel you’re going to college only to please your family. If you feel pressured to go to college, it may be a sign that college isn’t the right option for you, at least right now.

•   You have essential family obligations. Some students need to help their families and may not be able to take time off to go to school. These students may consider community college or a part-time degree program. Speaking with your current high school counselor may help you find ways to juggle multiple responsibilities.

•   You want to take time to pursue a talent. From sports to the performing arts to a creative path, some people choose to explore a talent more seriously, focusing time, energy, and resources prior to going to college. This can be a decision you make with the help of your family and any coaches or teachers.

Reasons to Go to College

College can be a great time to grow and learn and, for some, it’s a natural step. Here are some other reasons why college may make sense:

•   You’re excited and realistic about college. You recognize college may have ups and downs, but feel confident that college feels “right” as your next step — not just something your family or teachers expect from you.

•   A college degree will help you achieve your career goals. You’ve done your research and/or talked with alums and people working in your targeted field and feel confident that college makes sense for your career goals.

•   College fits into your overall financial plan. You have a sense of how much college will cost and a plan for how you will pay for it, which might include a combination of financial aid, savings, and federal or private student loans. You also want to make sure you will be able to manage any student loan payments after you graduate.

•   You have a ‘Plan B’ in case you realize that college isn’t the right fit. Sometimes people realize one semester into school that college may not be what they need at that moment in their lives. It can be helpful to talk about what this may be, so that you don’t feel trapped if school doesn’t feel like it’s a good fit.

Source: National Center for Education Statistics

Recommended: Full-time vs Part-time Student

Alternatives to a College Degree

Just because you aren’t interested in a four-year degree doesn’t mean you need to forgo higher education entirely. Alternative educational models, like trade schools and community colleges, offer many practical certification and two-year associate degree programs that can help you get ahead.

It is important to know that even if you’re not planning to pursue a four-year degree, you still have options when it comes to creating a career that is right for you.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

Trade School

Sometimes known as technical or vocational schools, trade schools can prepare you for a specific job, such as a dental hygienist, electrician, cosmetologist, or web developer. These programs are normally much shorter than four years, and certain programs may allow you to finish in only a few months. There are both public and private trade schools.

Trade schools don’t award bachelor’s degrees. Instead, when you graduate from a trade school, you typically receive a diploma or certificate indicating that you are trained and certified to perform a specific job. Some trade school programs do offer associate degrees, which are the same type of degrees offered by many community colleges.

Community College

As mentioned above, community colleges usually offer two-year degrees called associate degrees. These degrees can either stand alone or be a stepping stone to obtaining a bachelor’s degree at a four-year school.

Many community colleges also offer career preparation programs that are designed to help students jump into the workforce without the need for a bachelor’s degree.

Community college could also be a great way to test out college life and see if you want to continue pursuing higher education. They tend to be much less expensive than four-year universities, which means it won’t cost you an arm and a leg before you decide if higher education is right for you.

Apprenticeships

Apprenticeships are paid positions designed to teach the apprentice about a specific job or industry. They can help you learn how to use industry-specific tools and technologies and help you develop your skills over a period of time. This may be in fields as diverse as plumbing to transportation engineering to baking.

Apprenticeships can be a win-win for employers and employees because they allow those starting out to begin working (and earning a paycheck) immediately, and they help employers fill vacant jobs.

Certificate Programs

Similar and sometimes overlapping with trade schools, certificate programs offer specialized training in a specific area. This may include coding, cybersecurity, yoga, fitness, getting a commercial driver’s license (CDL), or other areas where specialized knowledge may be a prerequisite. These certificates may also be helpful in making job seekers eligible for positions with higher starting salaries.

Recommended: Are Coding Bootcamps Worth the Money?

Taking a Gap Year

A gap year is when a student takes a year off between high school and college. Some colleges allow accepted students to defer for a year, holding a place for them in the next year’s incoming class. Some people create a travel itinerary; others may work or volunteer for the year. There are some gap year programs that create opportunities for students, but keep in mind that some programs may be costly.

Starting a Business

If you are already passionate about — and have a lot of knowledge about — a specific field or industry, you might consider skipping college altogether and jumping into that business.

Starting your own business takes a lot of hard work, but it could mean that you get to be your own boss and work in an industry you love. And because you could quickly become an expert on the products or services you provide, you aren’t necessarily at a disadvantage because you lack a degree.

Recommended: 9 High Paying Jobs That Don’t Require a Degree

If You Do Go the College Route

There are plenty of options if you choose not to attend a four-year college. However, there are also options within the world of college, including the type of college you choose, the major you decide to pursue, and how you pay for college.

There’s no denying that college can be expensive. In the 2024-25 school year, the average cost for tuition and fees at an in-state college was $11,610, while the average sticker price for a private college was $43,350. And, these numbers don’t include room and board. This can be a big financial commitment, especially if you are on the fence about pursuing higher education.

That’s why it can be a good idea to begin creating a payment strategy early. A great first step is to fill out the Free Application for Federal Student Aid (FAFSA®) to see how much federal aid — including scholarships, grants, work-study, and federal student loans — you qualify for.

Federal student loans do have limits on how much a student can borrow each year they are enrolled in school. Some students may need additional funds to bridge the gap. In that case, some may consider borrowing a student loan from a private lender to help cover college costs.

In general, it can be a smart idea to tap all your federal loan and grant options before you consider private student loans. That’s because federal loans offer some protections, such as deferment options, that private loans may not. However, private loans can cover up to 100% of the cost of attendance, including money to pay for books, room and board, and personal expenses.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal Parent PLUS Loans. Federal PLUS loans also come with an origination fee.

The Takeaway

College can lead students on a new career path, but depending on your goals and other factors, may not be necessary. Some students may choose to pursue a trade or vocational program instead of a four-year degree, while others may simply want to wait a year or so to earn and save more money to cover the cost of going to college.

If you do decide to go to college, you’ll have to figure out a way to pay for it. Most students rely on a combination of cash savings, scholarships, grants, federal student loans, and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Why do some people not like college?

Some people dislike college due to high costs, irrelevant coursework, lack of practical skills, social pressures, and the rigid structure that doesn’t suit everyone’s learning style.

What are some alternatives to college?

Alternatives to college include trade schools, apprenticeships, online courses, bootcamps, and self-directed learning. These options often offer practical skills, lower costs, and more flexible schedules.

What are the pros of not attending college?

Pros of not attending college include saving money, allowing for early career entry, providing hands-on experience, and offering more flexibility for personal or family responsibilities.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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