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If you own a home, a home equity line of credit (HELOC) lets you tap into your home equity to finance renovations or other expenses. Before borrowing against your home equity, it’s worth asking, how does a HELOC affect credit scores?

Taking out a new credit account has an impact on your credit score. But how a home equity line of credit affects credit scores depends on multiple factors, including your payment history and existing credit.

Here’s a look at how a HELOC could affect your credit score across the entire lifespan of the line of credit, from filing your application to closing a HELOC account — plus tips to maintain your credit score.

Understanding HELOCs and Credit Scores

First, let’s start with a HELOC definition. A HELOC, or home equity line of credit, is a revolving line of credit that typically allows homeowners to borrow up to 90% of their home’s value, minus the outstanding mortgage principal. Borrowers can draw against their approved credit line as needed until the end of the draw period, which is usually 5 or 10 years, before having to repay the balance over another 10 to 25 years. That’s HELOCs explained, in a nutshell.

Meanwhile, your credit score is calculated based on how you manage debt payments, also known as credit. A variety of factors affect your credit score, including payment history, credit utilization, length of credit history, credit mix, and applications for new credit. Your credit score appears as a three-digit number. Credit score ranges run from 300 to 850, with scores of 670 or higher being considered good to excellent.

Impact of Applying for a HELOC on Your Credit

So how does a HELOC impact credit scores? Similar to other types of credit, applying for a HELOC involves a credit check, which is added to your credit report.

Hard Inquiries

When you apply for a HELOC, lenders will run a credit check to assess your creditworthiness. This involves requesting to review your credit report, which is known as a hard inquiry.

A record of any hard inquiry, sometimes referred to as a hard pull, is registered on the credit report. Having one hard inquiry could lower your FICO® Score by up to five points, but only for one year.

To avoid multiple hard credit pulls, you can check to see if lenders offer HELOC prequalification with a soft credit pull instead.

New Credit Accounts

Applying for a HELOC means opening a new credit account. This could decrease the average age of your credit accounts and ding your credit score by a few points.

Effects of Using a HELOC on Your Credit

Once you’ve been approved for a HELOC, how you begin using funds and managing payments can affect your credit. Let’s explore what goes into these HELOC credit score impacts.

Credit Utilization Ratio

Your credit utilization ratio is a calculation of how much of your credit you’re using. In other words, it’s the percentage of your credit limit you’re using on all your revolving credit accounts, such as credit cards, combined.

So does a HELOC affect your credit score and credit utilization ratio? While HELOCs operate like a revolving line of credit, they’re secured by a property. This means that it isn’t included in your credit utilization ratio as part of your FICO score.

Using funding from a HELOC to pay off high-interest debt like credit cards could lower your credit utilization ratio and boost your credit score. Maintaining a credit utilization ratio below 30% is recommended to qualify for financing or get mortgage preapproval.

Payment History

Payment history is the largest component of a credit score. Making consistent, on-time payments each month on a HELOC could help build your credit score over time. On the flip side, failing to stay current on payments could hurt your credit score and ultimately put your property at risk.

HELOCs are typically structured to have higher monthly payments after the draw period ends. Once the repayment period begins, you won’t have the ability to continue drawing funds. You can use a HELOC repayment calculator to see what your monthly payment would be based on how much you owe on a HELOC, your repayment term, and interest rate.

Credit Mix

Your credit mix refers to the number and types of credit accounts you have, including student loans, home loans, credit cards, and car loans. Demonstrating your ability to manage different types of debts can benefit your credit score.

Taking out a HELOC could improve your credit mix (and credit score) if you don’t have other types of revolving credit, especially for borrowers without much credit history.

Bottom line: The HELOC–credit score connection can be significant.

Recommended: FHA Loans

Closing a HELOC and Its Credit Implications

Paying off and closing a HELOC can have impacts on your credit. (Paying the balance off on a HELOC removes the lender’s lien on your home.) Here are some potential credit implications to consider when closing a HELOC.

Account Age

If you’ve been making payments on a HELOC for several years, closing the account could potentially lower the average age of your accounts. How much this impacts your credit score will depend on the age of your other accounts.

But if the account is in good standing with no late payments, it can still factor into your credit history for several years after closure.

Credit Availability

Closing a HELOC won’t affect your credit utilization for your FICO score. But if you don’t have other revolving lines of credit, it could reduce your credit mix, potentially putting a small dent in your credit score.

Strategies to Minimize Negative Credit Impact

Applying for a HELOC — or opening any new credit account — can initially lower your credit score by a few points. But there are several ways to reduce further damage to your credit score.

Timely Payments

As a reminder, your payment history is the largest component that goes into calculating your credit score. Continually making on-time payments each month can build up your credit. Conversely, paying less than the minimum or missing a monthly payment could harm your credit score.

Note that the interest on monthly payments could be eligible for a tax deduction, like mortgage interest, if used to make substantial improvements on your home. You’ll want to discuss this with your tax advisor.

Managing Credit Utilization

As you manage monthly HELOC payments, keep an eye on the balances for other revolving lines of credit, such as credit cards. Again, keeping a credit utilization ratio below 30% is considered beneficial for your credit score.

Monitoring Credit Reports

Periodically checking your credit report can help detect any instances of fraud or payment errors and inform strategies to improve your credit score. Requesting a credit report is free, and it’s a good idea to do so before applying for a new loan or credit card to understand how lenders will evaluate you as a borrower.

Recommended: Mortgage Rates

The Takeaway

How does a home equity line of credit affect credit scores? Applying for a HELOC involves a hard credit check, which can have some impact on your credit. However, making timely payments, keeping a strong credit mix, and maintaining a low credit utilization ratio can mitigate these effects and strengthen your credit over time.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

Does opening a HELOC significantly lower my credit score?

Opening a HELOC typically involves a hard credit check which can lower your credit score by several points. Whether this is significant will depend on what score you start with — if your credit score is teetering near an important benchmark, such as the 669-670 dividing line between “fair” and “good” credit, it may be an important effect. The hard credit check can stay on your credit report for 12 to 24 months.

How does a HELOC affect my credit utilization ratio?

A HELOC typically does not affect your credit utilization ratio, as it’s secured with a property as collateral versus other revolving lines of credit, such as credit cards, which are unsecured.

Will closing a HELOC improve my credit score?

Closing a HELOC can have a negative effect on your credit score by reducing your credit mix and age of accounts. However, if you made on-time payments over the life of the loan, that will be reflected on your credit history for several years.

Can a HELOC help diversify my credit mix?

Yes, a HELOC can help diversify your credit mix and show lenders that you’re a responsible borrower. If you have installment credit like a mortgage, student loans, or personal loans, taking out a HELOC would provide a form of revolving credit to your credit mix.

How can I use a HELOC responsibly to maintain a good credit score?

Paying off higher-interest debt, such as personal loans or credit cards, and funding home improvements that may make it possible for you to deduct the interest paid on a HELOC, are examples of how to responsibly use a HELOC. Making monthly payments on time and in full is essential to safeguarding your credit score when taking out a HELOC.

Photo credit: iStock/kate_sept2004

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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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SOHL-Q125-057

If someone has a lot of money, you might say they’re rich or even wealthy. But there’s actually a difference between wealthy and rich, both in terms of how much money you’re talking about and how someone uses their financial resources.

A rich person can have a lot of money or earn a high income, but their money may only go so far if their lifestyle is extravagant or they take on significant debt. They may live in the moment or spend freely. A wealthy person, by contrast, is generally more focused on securing their long-term financial picture.

Is it better to be rich vs. wealthy? Here’s a closer look. Understanding the difference between them can help you to shape your personal financial plan.

What Does “Rich” Mean?

If you ask friends, family members, or coworkers whether they’d like to be rich, quite a few of them might say yes. After all, if everyone was satisfied with their financial situation, then get-rich-quick schemes wouldn’t exist. But what is the difference between rich and wealthy, and does it matter?

If you look up “rich” in a dictionary, the most common definition centers on what a person has. Someone who’s rich has a lot of possessions and material wealth. So a rich celebrity or social media influencer, for example, might own multiple homes, cars, or jewelry that’s worth millions. They may spend their time jet-setting around the world or partying with other rich people.

That’s what it means to be rich in a financial sense, but someone could also be rich in other ways. For example, someone who has an extensive personal network may be said to be rich in friends. And someone who’s well-educated or well-traveled may be described as being rich in knowledge or experience.

Recommended: What Is the Average Pay in the United States Per Year? 

What Does “Wealthy” Mean?

When discussing what it means to be wealthy vs. rich, it’s easy to assume they’re similar. Both rich people and wealthy people may maintain a lifestyle that’s posh and out of reach for the average person. The distinction between wealthy and rich, however, is that wealth is more sustainable and lasting than simple riches.

There are different ways to measure wealth. The Census Bureau, for instance, uses net worth to estimate the wealth of American households. Net worth is the difference between your assets (what you own) and your liabilities (what you owe). Someone who is wealthy may prioritize accumulating assets that produce income or appreciate in value over time, while limiting their exposure to debt.

Wealthy people may enjoy much higher incomes than everyday people, and, importantly, they may spend less than they earn. Some wealthy people are born into money; others build their fortunes through a combination of career, entrepreneurship, and careful investment.

When talking about wealth, some make the distinction between new money vs. old money. New money is earned while old money is passed down from generation to generation. In the U.S., many of the wealthiest individuals are well-known business owners or investors, like Jeff Bezos, Bill Gates, and Mark Zuckerberg to name a few. Some of these billionaires were born into wealthy families while others were not.

Recommended: Is $160,000 a Good Salary for a Single Person in 2024? 

Key Differences Between Rich and Wealthy

When comparing rich vs. wealthy people, the way they approach money matters. Rich people may see money as a means to buy things and maintain a certain lifestyle. Wealthy people, on the other hand, may view money as a means of creating more money, either through investments or business ventures.

Here’s a closer look at the difference between wealthy and rich.

Amount of Money

There’s no set dollar amount at which someone goes from being rich to wealthy. Instead, it’s largely about perception. For example, you might feel rich if you normally keep $500 in your bank account and you decide to use a tax refund to bump that up to $5,000. Meanwhile, someone who wins $100 million in the lottery after working a minimum-wage job for years might think of themselves as rich rather than wealthy.

Generally, the higher your net worth, the closer you get to the wealthy vs. rich divide. Someone who has $10 million in assets and no debt, for example, may be in a better position to invest and fund philanthropic efforts than someone who’s making $200,000 a year but has a negative net worth because of debt. The person with the $10 million in assets is wealthy, while the other person’s earning power could put them in the “rich” bucket, though their debt actually erases that upon a closer look.

Investments

People who are rich may put spending and funding their lifestyle ahead of investing. So even though they might pull in a six- or even seven-figure income each year, a lot of that money goes right back out of their bank accounts. They might have some retirement savings if they’re participating in, say, their 401(k) at work, but investing may get pushed to the back burner.

Wealth investing can look very different. Wealthy people tend to invest their money so they can grow it and turn it into more money. They may have money in real estate, the stock market, and other investments that provide them with passive income or aids in building additional wealth for themselves and future generations.

How They Live Their Lives

Money can be a tool for improving your quality of life, but what that life looks like can be very different if you’re rich vs. wealthy. A rich person might think nothing of dropping $10,000 on a shopping trip or last-minute travel. They tend to live in the moment and may not consider how spending that money today might affect them tomorrow.

A wealthy person may still enjoy the finer things, but their approach might be more balanced. For example, billionaire Warren Buffett is one of the wealthiest people in the U.S., but he notably lived in a relatively modest home that he purchased in 1958 for over seven decades. Other wealthy millionaires and billionaires may similarly adopt a frugal mindset or focus on giving away large amounts of their wealth to good causes.

Hobbies

Certain hobbies and pastimes are the domain of the rich or wealthy, simply because of how much they cost. Yachting, big game hunting, and polo are just a few examples of activities that are associated with wealthier people who can afford the associated costs.

Rich people may also indulge in those kinds of pastimes but on a smaller scale than those who are wealthy. Instead of buying their own private yacht or plane, for example, they might lease one when they want to plan a getaway. Or instead of going to their private island for the summer, they may splurge on a couple of weeks’ vacation in Bora Bora or St. Kitts.

Expenses

Rich and wealthy people can have very different expenses, depending on their lifestyle. A rich person may have a mortgage payment, car payments, private school tuition payments for their kids, and all the regular day-to-day living expenses like utilities and food. They may also have credit card bills or student loans to pay each month.

Wealthy people may not have debt-related expenses, such as a mortgage or car payment, since they might own those assets outright. If they use credit cards, those bills might get paid in full each month rather than accruing interest.

Ultra wealthy people may have unique expenses that the rich don’t, such as maintenance for one or more vacation homes, insurance for a private jet or yacht, and staff payroll if they employ housekeepers, landscapers, and other individuals to work in their home. They may also pay out expenses to financial advisors or investment advisors for wealth management services.

Streams of Income

A rich person may rely on their paychecks from working a regular job as their main source of income. They might also earn money from side hustles or businesses they own, but generally, they’re working for a living in some way. If they don’t keep up their pace at work, they could lose that status of being rich.

An oft-cited IRS study suggests that the average millionaire has seven different streams. They may have a job, but a large part of their income may come from different types of investments or business ventures. Wealthy people can also generate income from pensions or annuities. It this way, they are less beholden to what you might call the daily grind.

Recommended: Aiming to Become a Millionaire? These Steps Could Help 

Budgeting and Financial Planning

Rich people might make a six-figure or even seven-figure income or more, but they may not save or invest much of that income. (Think about those actors and singers you may have read about who have frittered away their fortunes on luxury real estate, travel, fashion, food, and wine.) They might have a budget, but not always stick to it. Perhaps they’re spending more than they make as they attempt to cover their lifestyle. Some rich people may not be very forward-thinking in terms of planning for retirement or other long-term goals.

Wealthy people may not have to live by a strict budget either if their assets substantially outpace their spending. But they may take financial planning more seriously and be proactive about things like investing and retirement planning. They may also focus on estate planning and the best ways to pass on as much of their wealth as possible while minimizing taxes for their heirs.

Is It Plausible to Become Wealthy?

Can a regular person become wealthy? The answer is that it depends on where you’re starting, where you want to go, and your strategy for getting there. Building wealth in your 30s, for example, could be easier if you have a solid income, no debt, and you’re committed to living well below your means. The odds of starting a billion-dollar company and becoming wealthy overnight are, on the other hand, much slimmer.

Having a clear plan and getting an early start are two of the keys to building wealth. The longer you have to save and invest money, the more room that money has to grow through the power of compounding interest. It’s also important to choose investments wisely to maximize their growth potential. Understanding your individual time horizon for investing and your risk tolerance can help you to decide which investment types to include in your portfolio.

Talking to a financial advisor can help you get some clarity on what you might need to do to begin building sustainable wealth. An advisor can review your situation, offer advice, or suggest tactics for creating a realistic budget, paying down debt, saving, and investing for the long-term.

Banking With SoFi

Whether you consider yourself rich, wealthy, or neither of the above, where you keep your money matters. Finding a bank that offers you a competitive rate on your savings and charges few, or no fees can help you make the most of the money you have.

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.

FAQ

Is a millionaire wealthy?

Whether a millionaire is wealthy or not depends on their financial situation and lifestyle. Being a millionaire means having assets worth at least one million dollars, but true wealth involves more than just a high net worth. It also includes financial stability, freedom from debt, and the ability to sustain one’s lifestyle without relying heavily on active income. A millionaire can be wealthy if their assets provide long-term financial security and passive income.

Is six-figures rich?

Someone with a six-figure income might consider themselves to be rich if they’re able to enjoy an upgraded lifestyle. For example, traveling frequently or buying luxury items are often associated with people who are rich. However, if that person lives in an expensive city and is supporting a family, they might not feel rich at all, despite their income. In other words, it depends on personal circumstances.

Is it better to be rich or wealthy?

Being rich vs. wealthy isn’t necessarily a matter of one being better than another. It all comes down to what you do with your money. If you think of yourself as rich, can live the lifestyle you want, and are avoiding debt while investing wisely, then you may be both rich and wealthy. And remember that being wealthier might ensure that you’re financially secure, but it doesn’t guarantee greater happiness.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

SOBNK-Q324-070

Preparing to go to college starts long before your senior year in high school. In fact, soon after starting your freshman year in high school, you may want to begin thinking about what you can do to put your best foot forward on your college applications.

With the right college preparedness plan, choosing where to apply, filling out your applications, and getting into your top choices can be significantly easier. Here’s a smart 10-step plan that can help ensure you are ready for college when the time comes.

10 Ways to Get Prepared for College

1. Take the Required Courses

It’s a good idea to consult with your high school guidance counselor about what classes you should take for college preparation. Generally, high school students will take courses like:

•   English (American and English literature)

•   Math (Algebra I and II, Geometry, Trigonometry, and Calculus)

•   Science (Biology, Chemistry, Physics, and Earth Science)

•   Social studies (U.S. History, U.S. Government, World History, and Geography)

•   Foreign language

•   Arts

Completing these courses demonstrates to college admissions officers that you can handle a rigorous curriculum. It also prepares you for college-level coursework, allowing you to meet prerequisites for specific majors and improve your chances of excelling in advanced subjects.

2. Enroll in AP, IB, and College Courses

Your high school may offer you the opportunity to take Advanced Placement (AP) or International Baccalaureate (IB) classes, which are college-level and will allow you to earn college credit. Then, you can skip these courses when you get to college and ensure you have a head start.

Both require that you take exams, and you can send your scores to colleges. Keep in mind that IB classes would be more useful if you plan on going to college outside the U.S., since only U.S.-based schools recognize AP coursework.

3. Do Test Prep

A key step in preparing for college is studying for the SAT or ACT. Taking one of these tests is required for many college applications in the U.S. You can study by forming study groups with friends, taking the PSATs/pre-ACTs and practice tests, getting an SAT/ACT tutor, and enrolling in SAT/ACT practice classes.
You may want to look at the average SAT/ACT score of students who have been admitted to your top choice schools and aim to get those scores — or higher — to ensure your application impresses the admissions officers.

Recommended: ACT vs. SAT: Which Do Colleges Prefer?

4. Hone Your Study Skills

In college, you’re going to take a rigorous set of courses. Your academics are likely to be more challenging than they were in high school. This means you should hone your study skills now to prepare for college. Find a quiet place to study, turn off all distractions, organize your lecture notes, join study groups, and take breaks when you need them in order to effectively study.

5. Go to College Fairs

Whenever there is a local college fair happening, try to attend it. That way, you can learn about different colleges you may want to apply to. Typically, a college fair will consist of college representatives who set up booths, give presentations, talk to prospective students, and hand out pamphlets about their schools. College fairs can be a great opportunity to learn about a number of colleges in a short time period.

College fairs also allow you to connect with representatives at the colleges. As an attendee, you’ll have the opportunity to ask the representatives specific questions and take the handouts so you can continue your research at home.

Recommended: Ultimate College Application Checklist

6. Take College Tours

Before applying to a school, try to go on a campus tour to see what it’s all about. A college that has a great website or looks good on paper may not end up being the right fit once you actually visit it. While on the tour, ask your student tour guide and other students around about the pros and cons of the school to get a real feel for whether or not you’d like it there.

Some colleges may do interviews as a part of the application process. If you’re heading to campus for a college interview, make time for a tour too.

7. Meet With Your High School Guidance Counselor

Your high school guidance counselor can help you with preparing for college in a number of different ways. They can advise you on what classes to take and extracurricular activities you can enroll in to ensure you have a competitive college application when the time comes.

Your counselor can also help you determine what you want to major in and the kind of career you might enjoy by steering you toward career fairs and giving you a test that will show your strengths and reveal your talents. If you’re worried about paying for college, they can let you know your options and ensure you fill out all the right forms in time.

8. Fill Out a FAFSA Form

The Free Application for Federal Student Aid (FAFSA®) is the form you need to fill out each year to apply for federal financial aid. This includes federal grants, scholarships, work-study, and federal student loans. Some schools also use the information provided on the FAFSA to determine scholarship awards.

If you anticipate needing support to cover the cost of attendance in college, this is usually the place to start. The FAFSA for the 2025-26 school year is available now.

9. Look Into Student Loans

Filling out the FAFSA isn’t the only thing on your financial to-do list when you’re prepping for college. You could also weigh your student loan options. As mentioned, the FAFSA puts you in contention for federal student loans — among other tuition subsidies like work-study or grants. Federal student loans have fixed interest rates, which means the rate will not change for the duration of the loan.

Each year, Congress determines what the fixed interest rate on federal student loans will be — and interest rates vary across federal undergraduate loans, including PLUS loans for parents and grad students. While these loans can be an important resource when it comes to funding your education, there are limits to the amount you can take out each year. For example, first-year undergraduates currently have a federal loan limit of $5,500.

If federal aid and other sources of funding aren’t enough to cover the cost of tuition, you may consider looking into private student loans to fund the rest of your education. Private student loans don’t always offer the same benefits as federal student loans — like the option to pursue Public Service Loan Forgiveness or student loan deferment — so they are generally considered only after all other options have been reviewed and exhausted.

Recommended: Private Student Loans vs Federal Student Loans

10. Apply for Scholarships

Once you start applying to colleges, you may also want to search out and apply for private scholarships. Your school may offer specific scholarships you can apply for that will help you pay for your education. Online databases are another resource to check out. One option is Fastweb, a free national scholarship database that matches you to scholarships, internships, and grants you could potentially qualify for.

You can also use SoFi’s scholarship search tool to find scholarships based on your location, field of study, religious affiliation, and more.

Recommended: The Complete Guide on Going to College

The Takeaway

There are many things you can do to prepare for college. Above all else, you’ll want to focus on your academics and make your college application as competitive as possible so that you can get into the school of your dreams.

You’ll also want to think about what your education will potentially cost and come up with a plan for how you will pay for college. Your options include savings, grants, scholarships, work-study, and federal or 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.

FAQ

What are some effective ways to stay organized when preparing for college?

To stay organized, you can create a detailed checklist of application deadlines, scholarship opportunities, and required documents. Using digital planners or apps to manage tasks and setting reminders for important dates will keep you on track and reduce stress.

How can high school students improve their chances of getting into their desired college?

High school students can improve their chances of getting into their desired college by maintaining a strong GPA, participating in extracurricular activities, and volunteering in the community. Additionally, writing a compelling personal statement and securing strong letters of recommendation can make a positive impression on admissions officers.

What financial steps should students take before starting college?

Students should research scholarship opportunities, apply for financial aid through FAFSA, and create a budget for tuition and living expenses. Opening a savings account and exploring part-time job options can also help manage costs and reduce the need for student loans.

About the author

Kylie Ora Lobell

Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.

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.

SOISL-Q125-020

Discretionary income is defined as the cash you have available to spend after your necessary payments are covered. Those necessities are typically made up of basic living expenses, such as housing, utilities, food, healthcare, insurance costs, as well as minimum payments on debt.

So what does discretionary income equal in daily life? It’s the post-tax money you can put toward things like eating out, entertainment, travel, clothing, electronics, and gym memberships. You might think of discretionary income as paying for the wants in life vs. the needs.

Read on for a closer look at the meaning of discretionary income, including examples, how to calculate discretionary income, plus tips on how to make the most of your discretionary income.

What Is Discretionary Income?

Discretionary income is defined as the amount of post-tax income that is left over after you have paid for all your essential expenses. Essential expenses include your mortgage or rent, utilities, car payments, as well as food, healthcare, and occasionally clothing (if it is needed, not just wanted). To phrase it another way, no, a Netflix subscription or your AM latte isn’t a “necessity.”

Also worth noting (warning, buzzkill ahead): Discretionary income isn’t just to be spent on cool stuff and fun experiences. It’s also important to put at least some of this money towards savings and making extra payments on any debt. This can help you build wealth and financial security over time.

7 Examples of Discretionary Income and Expenses

Discretionary expenses are the things people buy with their discretionary income. Here are some examples:

Entertainment and Eating Out

This category includes such expenses as dining out, getting drinks, splurge-y takeout food (pizza delivery, we’re looking at you!), and fancy coffees. In terms of entertainment, the following is typically considered discretionary: Concert, play, and movie tickets, as well as museum admission, books, magazines, streaming services, and similar costs.

Recommended: How to Save on Streaming Services

Vacations and Travel

Taking a vacation, whether you go to the other side of the planet or an hour’s drive away, is not a necessity, despite how you may feel about it.

Luxury Items

These expenses could be anything from a pricey sports car to designer clothes to jewelry to wine. While clothing and a car may be necessities in life, when you pay extra for top-notch prestige brands, you enter the realm of discretionary expenses.

Memberships and Hobbies

Yes, joining a gym or taking up a musical instrument are admirable pursuits. But they are not essential. For this reason, things like yoga or Pilates classes, crafting supplies, and similar expenses are considered discretionary.

Personal Care

A basic haircut or bottle of shampoo may not be discretionary, but pricey blowouts, manicures, massages, skincare items, and the like are.

Upgrading Items

If your current phone is functional but you still decide to buy the latest one, that’s a discretionary expense. The same holds true for being bored with your couch and getting a new one or remodeling your bathroom just because.

Gifts

Of course you want to show you care for your loved ones. But buying presents for others isn’t something you absolutely have to do, so this should be earmarked as a discretionary expense.

How Is Discretionary Income Used?

In addition to making the types of purchases listed above, discretionary income can also be used to save for future purchases and getting ahead on long-term financial goals.

Common Uses of Discretionary Income

Here’s a more detailed look at some of the different ways you can use discretionary income:

•   “Fun” spending: Many people use discretionary income to purchase goods or experiences that they can enjoy right away.

•   Saving for short-term goals: Another common use of discretionary income is to put it in a high-yield savings account earmarked for goals like taking a vacation or making a down payment on your dream house.

•   Paying down debt: While minimum payments on debts are generally considered necessary expenses, making extra payments is a common — and potentially smart — way to use discretionary funds.

•   Investing: Another way many people use discretionary income is to invest it in the market for long-term goals like retirement or a child’s future college education.

•   Charitable donations: Doing good with your discretionary dollars is another common and positive way to spend discretionary income.

💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

How to Calculate Discretionary Income

The formula for calculating discretionary income is:

Discretionary Income = Gross Income − Taxes − Essential Expenses

Start by assessing your average monthly take-home income (gross income − taxes). You can do this by scanning the last several months of financial statements. Or if your only source of income is your paycheck, you can simply look at your paystubs.

Next, you’ll need to tally up your essential expenses. These may include:

•   Rent/mortgage payment

•   Utilities

•   Internet/phone bills

•   Groceries

•   Minimum debt payments (credit cards, student loans or car loans)

•   Insurance premiums

•   Medical expenses

•   Transportation costs

Once you know how much you’re spending on essentials, you can subtract that number from your monthly take-home income. The result is your monthly discretionary income.

Factors That Affect Discretionary Income Calculation

A number of things can influence the amount of discretionary income you have to spend, such as:

•   Income level: Higher earnings generally increase discretionary income, provided you don’t increase your living expenses as your income goes up.

•   Living costs: Living in an area with a high cost of living raises essential costs and, in turn, lowers discretionary income.

•   Debt level: Needing to make monthly payments on loans, credit cards, and other financial obligations reduces funds available for discretionary spending.

•   Tax rates: Higher income and/or property taxes lowers your take-home pay, resulting in less discretionary income.

•   Inflation: Rising prices for goods and services increases essential expenses, which shrinks discretionary income.

What Is a Good Amount of Discretionary Income?

Generally, a good amount of discretionary income means you have enough funds after covering your essential expenses to be able to save, invest, and still enjoy the pleasures of life. The 50/30/20 budgeting formula offers one way to allocate your income. It suggests using 50% of your take-home pay on needs, 30% on wants (discretionary purchases), and 20% on goals (saving and paying more than the minimum on debts).

For example, if your monthly take-home income is $5,000, $2,500 would be siphoned off for necessities, $1,500 would be allotted for wants, and $1,000 would go toward goals like saving and investing.

Managing Your Discretionary Income for Financial Success

Making the most of your discretionary income involves thoughtful planning and smart money management. Here are some strategies to consider:

•   Track your spending: “It’s the last thing that many people want to do on their precious weekends, but tracking spending is essential. There is real truth to the saying ‘What gets measured gets improved,’” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. You may find some easy places to cut back, freeing up more money for saving.

•   Slash necessary expenses: Consider ways you might be able to reduce the cost of essentials, such as switching to a more affordable insurance, cell phone, or internet provider; meal-planning to cut food spending; or moving to a less expensive location.

•   Set financial goals: Having specific goals — like purchasing a home, funding a child’s future education, or retiring early — can help you stay focused and use your discretionary income wisely.

•   Grow your income: To boost discretionary income, you might ask for a raise at work or look into side jobs, freelance work, or ways to earn passive income.

•   Avoid lifestyle creep: As your income rises, try to resist the temptation to increase spending. Consider funnelling the extra funds into savings or investments to build wealth and strengthen your financial future.

Discretionary vs Disposable Income

The terms “discretionary income” and “disposable income” are often used interchangeably but they are not the same thing.

Key Differences

While discretionary and disposable income both refer to income left over after certain financial obligations are met, they differ in scope.

•   Disposable income refers to the money you have left from your earnings after taxes are taken out but before any other deductions are removed. It’s the total amount you have available to spend, which is typically a much higher number than your discretionary income.

•   Discretionary income is a subset of disposable income — it’s the amount of money left after your taxes and all necessary expenses are paid. You use it for “extras” like entertainment, savings, and investments.

It’s important to note that the government and courts may have slightly different definitions of these terms. In bankruptcy cases, for example “disposable income” is the amount that remains after subtracting allowed bankruptcy expenses from your monthly gross income.

If you have student loans, the federal government uses a discretionary spending formula to set your repayment amount under income-driven repayment plans. For many plans, they define “discretionary income” as the difference between your annual income and 150% of the poverty guideline for your family size and state.

Get Ready to Bank Better with SoFi

Once you know how much discretionary income you have, it’s a good idea to set some of it aside in a savings account that pays an above-average interest rate.

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.

FAQ

What is the meaning of discretionary income?

Discretionary income is defined as the amount of money you have left after covering essential expenses like taxes, rent or mortgage, utilities, and groceries. It represents the portion of your income that can be used for nonessential spending, such as entertainment, dining out, and vacations.

What is an example of discretionary income?

Discretionary income is the money left after paying for essentials like rent, groceries, and utilities. So, for example, if you earn $4,000 a month after taxes, spend $2,500 on necessities, and have $1,500 left, that’s your discretionary income. You could use that $1,500 for dining out, entertainment, and/or saving for a vacation. How you spend this money reflects your financial priorities and lifestyle choices.

What is the difference between discretionary and disposable income?

Disposable income is the money left after paying taxes and is used to cover both essential and nonessential expenses. Discretionary income, on the other hand, is the portion of disposable income left after covering necessities, like housing, food, and utilities. You can use this money for entertainment, shopping, or saving.

How does discretionary income impact financial planning?

Discretionary income is the money you have left after covering all of your essential expenses. It plays a key role in financial planning because it determines how much you can save, invest, and spend on nonessentials each month. Higher discretionary income gives you more flexibility in your budget, allowing you to save for emergencies and other goals, invest for future growth, and enjoy life’s pleasures.

Can discretionary income be invested?

Yes, discretionary income can be invested to grow your wealth over time. After covering essential expenses, you can allocate discretionary income to stocks, bonds, mutual funds, or retirement accounts. Investing part of your discretionary income can help you build financial security, generate passive income, and achieve long-term goals like sending a child to college or retiring comfortably.

Photo credit: iStock/Gearstd

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.

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/.
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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If you’re looking to open a new checking and/or savings account, you’ll likely have loads of options and offers to consider. The question is, how do you choose the right bank?

The best bank for you will depend on a number of factors, including your needs, priorities, and personal preferences. Whether you’re more comfortable with a small local financial institution or prefer the expansive resources of a national bank, this list of key things to look for in a bank will help you make the right choice.

Importance of Finding a Good Bank

It can be valuable (literally and figuratively) to find the right banking partner for a few good reasons:

•   It provides a home base for the money you earn.

•   It can provide security, knowing that your cash is safe and you have a team of professionals to assist you with your money management.

•   It can pay you interest on your funds so your cash grows.

•   It can help you build your financial security and literacy.

•   It may be flexible enough to grow and change with you as you move through the stages and phases of your life. (If not, you can always switch as your needs evolve.)

•   It can offer you additional benefits, like a cash back debit card or a lower mortgage rate.

What to Look for in a Bank

There are thousands of options in terms of banking in the United States. So how do you narrow the choices down to the one bank that’s right for you? There’s no right or wrong answer; it’s all about finding what works best for you.

Consider the following 12 factors that can help you find the right bank account for your current needs. You might create a comparison chart (Excel can be your friend here) so you can tick off the most important factors to you as you delve into this topic. Then use the process of elimination to find your perfect financial institution match.

Sure, it can be smart to take friends’ suggestions into consideration, but the final choice should be the one that is all about you and your needs… not what works for someone else or just what has a good marketing gimmick. Here are key things to consider when choosing a bank.

1. Security

Whether you choose to put your money in an online bank vs. a traditional bank vs. a credit union, it’s vital to make sure your funds are safe. Check to make sure any bank you’re considering is insured by the Federal Deposit Insurance Corporation (FDIC) or if you’re looking at a credit union, that it is insured by the National Credit Union Administration (NCUA).

In the very rare event of a bank or credit union closure, either FDIC or NCUA would be a safety net. You would be covered for up to $250,000 per depositor, per insured institution, for each account ownership category.

2. Bank Fees

This is an important factor. Fees can eat away at the money you have on deposit and the savings you are trying to build up. Some banks charge minimal or no account fees, but in other cases, you may be faced with a deluge. A few of the obvious fees are ATM charges, maintenance fees, and overdraft protection, and they can add up quickly.

What are ATM fees? They can run a few dollars per out-of-network withdrawal and sometimes even more. And how about overdraft? These often range from $30 to $35, and while they’re a good way to avoid negative balances, they can cost you hundreds of dollars if you fall behind.

Returned deposits, foreign transactions, low balances, lost cards, and sometimes even interacting with a human can also incur fees. If you want to avoid monthly maintenance fees and more, be sure to read through the terms and conditions carefully so you aren’t unpleasantly surprised. You may just want to choose an account that’s fee-free instead.

3. Interest Rates

While some banks might still offer the standard — and very low — interest rates on savings accounts, it doesn’t mean you’re stuck with that.

Especially with online-only banks, where overhead is typically much less than traditional brick-and-mortar banks, customers often benefit from annual percentage yields (APYs) that are many times the average interest rates offered by savings accounts. Some online banks even offer high-interest checking accounts.

4. Location

Consider whether you’re the kind of person who likes to visit brick-and-mortar branches often. If you do, you may want to bank with a financial institution that has physical locations close to your home, your workplace, or both.

You might also want to check out if your bank has ATMs or a partner network of no-fee machines near you and the neighborhoods where you typically spend time. This can be important for avoiding ATM fees, such as non-network fees and ATM operator fees. These can add a few or several dollars to every transaction.

5. Ease of Deposit

Along the same lines, you may want to consider how easy it is to deposit funds in a particular financial institution. Many banks offer the benefit of mobile deposit, which allows you to add a check to your account by snapping a photo with your cell phone and uploading it. Check to see what’s available.

Also, if you are looking at online banks, suss out how you might deposit cash, if that’s something you frequently do, and make sure it’s a convenient process for you.

6. Digital Banking

Building on the topic of mobile deposits, it’s likely worth your while to check out a potential bank’s app and online services. Are they easy to navigate? Do they offer the features you’re most likely to use? Comparing a couple of financial institutions’ user experiences can reveal important nuances.

See if you can download a demo or find one on YouTube. Ratings and reviews can also be a great way to find out other customers’ experiences — the good, the bad and the ugly — as opposed to trusting a commercial to be honest with you.

Linking to an outside bank account can help you lower overdraft fees.

For instance: Can you activate push alerts for low balances, or can you link your account to another financial institution? (Life hack: Linking to an outside bank account can help you lower overdraft fees — you’ll still get charged if your bank has to pull from the external account, but it’s typically less than if you didn’t have any other account to pull from at all.)

7. Minimum Requirements

Explore whether your potential bank has a minimum deposit and minimum account balance requirement. If so, that means you must initially put in a certain amount of cash to open your account or to start it and earn a certain APY. Then, with minimum balance requirements, if you dip below a given level, you’ll likely pay a monthly account charge.

With online banks, you may not have a minimum opening deposit or balance requirement; however, you may not earn the top APY unless you maintain a certain level of funds in the account, make a certain number of debit card transactions per month, or set up a direct deposit of your paycheck. Read the details when considering a bank.

8. Availability of Funds

Few people like waiting for funds to clear. When evaluating prospective financial institutions, find out how quickly funds clear. Some banks may offer early paycheck access, for instance, for qualifying accounts.

9. Customer Service

Here’s another dimension to consider when choosing a bank: What kind of customer service do they offer and when? If you are the type of person who likes to interact in-person, you may prefer a traditional bank with branches.

But even if that isn’t a big plus for you, also consider the availability of support by phone and chat during non-business hours. What if you have a pressing financial problem at 9 AM on a Sunday? Would help be there for you?

10. Investment Account Options

If you’re looking for more than just checking and savings, consider a bank that also has investment account options. Having everything you need within the same financial system can make deposits, withdrawals, transfers, and automatic saving a breeze.

11. Perks

Some banks may offer perks that appeal to you, so see what’s out there. For instance, some financial institutions may offer a cash bonus when you open an account; others may have cash back options that suit your spending style. Still others may offer educational events to boost financial literacy or might provide special passes that allow clients to visit local cultural institutions for free.

12. Your Banking History

One last factor to consider when choosing a bank: If you have some less-than-perfect aspects of your financial life, see if you will be penalized for that. For instance, some banks may scrutinize your banking history. If you have enough overdrafts in your history or other issues, they may not approve your account application. Or you might need to open what’s known as a second chance checking account until you prove that you’re a reliable client. It’s wise to consider this as you go bank shopping.

Banking with SoFi

If you’re in the market for a banking partner, come take a look at all that SoFi offers. We think you can bank smarter when you open an online bank account with us. Our Checking and Savings account lets you spend and save in one simple spot; you’ll earn a competitive APY, and you won’t pay any account fees. That means managing your money may be simpler and your cash can grow faster. What’s more, qualifying accounts with direct deposit may get paycheck access up to two days early.

Meet the new SoFi Plus!

Get access to higher APY, credit card cash back rewards, discounts, and more.

The Takeaway

Choosing the right bank depends on your needs and financial goals. In general, you’ll want to look for low (or no) fees, competitive interest rates, and convenient access, whether through local branches, ATMs, or online banking.

Also consider your personal banking preferences. For example, if you want to have the option of meeting with bank staff in person, you might choose a bank or credit union with nearby branches. If, on the other hand, you prioritize digital convenience and user-friendly interfaces, you might consider an online bank. Either way, be sure to compare your options, read reviews, and choose a bank that aligns with your lifestyle and financial priorities.

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.

FAQ

What should I do if a bank does not have what I am looking for?

If a bank doesn’t have the features you are looking for, it’s wise to shop around. There are thousands of banks and credit unions in America, and one or more are likely to suit your needs.

What are some banking red flags?

Banking red flags will vary depending on what your needs are. For instance, is that enticing annual percentage yield (APY) offered just a promotional rate that will drop considerably lower in a short period of time? Do you notice that your bank’s ATM network is getting smaller? Focus on the most important features you’re looking for and read the fine print to prevent disappointment and dissatisfaction.

What is the most important thing to look for in a bank?

Depending on your particular financial style and goals, the most important things when choosing a bank may be interest rates and fees; convenience; and additional features it may offer (such as budgeting tools, cash back, competitive mortgage rates, and the like).

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.

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

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.

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