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Housing and transportation may be the top line items in a typical family budget, but the cost of meals and groceries can also be significant. The cost of food jumped during the pandemic and has remained high due to inflation, supply chain issues, and other factors. While all consumers are impacted by price hikes, families in particular may be feeling the pinch at checkout.

If you have a larger family, creating a budget can help keep you from overspending at the grocery store. But how much should you allocate for food each month? Keep reading to learn more about creating a grocery budget for a family of five.

Average Grocery Budget for American Family of Five

When coming up with your grocery budget, it helps to first understand how much you can expect to spend on food. The average household spends about $519 a month, or $6,224 a year, on food at home, according to the most recent Consumer Expenditure Survey from the Bureau of Labor Statistics. That figure covers an average household of 2.4 people.

But how much should you budget for groceries if you have a family of five? A good starting point is the USDA’s food plans, which include four spending levels: thrifty, low-cost, moderate-cost, and liberal. According to USDA’s August food plans, here’s what a family of five should plan to spend on groceries:

Spending level	Cost per month	Cost per year
Thrifty	$1,151	$13,817
Low-cost	$1,239	$14,872
Moderate-cost	$1,529	$18,349
Liberal	$1,849	$22,188

Source: USDA food plans, August 2026. Figures assume two adults and three children ages 4 to 11, calculated using USDA’s method of summing individual costs and applying its 5% reduction for five-person households.

How Much to Budget for Groceries Per Person

How much a family of five ends up budgeting for groceries depends on a number of factors, like how much the store charges, the type and amount of food purchased, and whether they use a grocery delivery service.

Want to figure out how much to allocate in your food budget for each family member? You can refer to the USDA food plans above for a general idea of monthly and yearly costs, and divide the amounts by the number of members of your family. You can also look at the last three to six months of your family’s grocery bills and calculate a monthly average, or run the numbers through a grocery budget calculator. Divide that amount by the number of members of your family.

Once you see how much you’re actually spending per person each month, you can adjust your budget categories accordingly.

SoFi Coach℠ Chat is a tool designed to help you view and analyze your financial data, get personalized insights, learn about SoFi products, troubleshoot issues, and take certain actions in chat. Coach responses are information for you to consider and not financial advice. Coach responses are based on limited information from your connected accounts and may have inaccuracies. The insights are meant to help you think about your finances and options —they are not advice or recommendations, and they do not guarantee results. Coach may offer you options to explore SoFi products on which SoFi would earn revenue. You are solely responsible for any financial decisions you make. Coach is offered by Social Finance, LLC.

How to Prioritize Your Grocery Spending

When you’re feeding a large family, you want to make the most of your grocery list. The best way to prioritize your food spending is to create a home budget and stick to it. Having a plan in place makes it easier to curb grocery store splurges.

If you’re new to budgeting, you may want to use the 50/30/20 rule. This framework calls for earmarking 50% of your monthly after-tax income on things you need (such as food, housing, and transportation), 30% on things you want (such as a new outfit or tickets to a concert), and 20% on savings and debt repayment.

Another helpful tool to consider is a budget planner app, which allows you to easily set spending and savings goals and monitor your progress.

How to Stay Within Your Grocery Budget

Staying on top of a grocery budget can be challenging, especially when you have a larger family. The following tips can help:

Don’t Shop When You’re Hungry

When your stomach is grumbling in the middle of the grocery store, chances are you’re more likely to give in to cravings. This may leave you with a cart full of impulse buys, which could add to your overall cost.

Make a Shopping List

Writing down everything you need before you start shopping is a good way to ensure you only pick up the items you need and are in your budget.

Embrace Meal Planning

Create a weekly menu ahead of time so that when you hit the store, you know exactly what ingredients to buy. If your finances allow, consider reserving a small chunk of the budget so that each family member can pick out a treat for that week.

Recommended: How to Create a Budget in 5 Steps

How to Budget for Restaurants and Dining Out

While eating at home can be more cost effective than dining out, many memories are made at restaurants. If your family is planning to have meals out, how much should you expect to spend?

The average American household spends $3,945 a year on food away from home, according to the most recent Consumer Expenditure Survey from the Bureau of Labor Statistics. However, larger families should expect to spend more.

Tips for Reducing Your Grocery Budget

Looking to lower your grocery bill? Consider these simple strategies:

•   Buy in bulk

•   Shop at discount retailers

•   Choose generic brands

•   Meal prep for the week

•   Shop sales

•   Join rewards programs

•   Use coupons

•   Use a credit card that earns cash back rewards

Tips for Getting Help If You Can’t Afford to Buy Groceries

Families that are struggling to pay for food have several government resources they can turn to for help. SNAP benefits (formerly known as food stamps), the WIC program, school meal programs, and food assistance programs are all worth looking into. Depending on the program, you may need to meet certain criteria, such as an income limit, in order to be eligible.

Examples of the Cost of Common Groceries

As anyone who has stepped foot in a grocery store lately can attest, food costs are going up. But just how much depends largely on where you live. To make budgeting for groceries and other expenses easier, consider using a money tracker app.

It can be helpful to understand national prices so you can prepare your food budget accordingly. Below is the national average of six common items, according to BLS Average Price Data for August 2026.

Average Cost of Groceries
Orange juice, frozen concentrate, 12 oz. can	$4.82
Eggs, grade A, large, per doz.	$2.27
Chicken breast, boneless, per lb.	$4.17
Ground beef, 100% beef, per lb.	$6.92
Bacon, sliced, per lb.	$6.61
Bread, white, pan, per lb.	$1.82

How to Stretch Your Grocery Budget

Stretching a grocery budget requires careful planning. A few places to start: planning meals for the week, taking advantage of weekly ads and local deals, and shopping at more affordable grocery stores. Savvy shoppers can even design meals around the discounts and coupons being offered at the more affordable grocery stores.

Another strategy is to buy in bulk where it makes sense. Purchasing larger amounts of staples like rice, flour, and paper products can provide a better bang for your grocery buck.

Recommended: 23 Ways to Cut Back on Spending and Expenses

The Takeaway

Food is a major expense for most Americans, but perhaps more so for larger families. Creating a budget can help keep costs in check. On average, a family of five spends anywhere from $1,151 to $1,849 a month on groceries, according to USDA monthly food plans. If you’re looking to curb your spending, consider meal planning, buying in bulk, and shopping at more affordable grocery stores. If you need help paying for groceries, government programs like SNAP benefits and WIC can provide support.

Take control of your finances with SoFi Coach. You can easily view all of your accounts in one convenient dashboard: bank and investment balances, current debts, spending breakdowns, and credit score. Easily set up budgets and spot upcoming bills. And get personalized insights on everyday money questions and take action with Coach chat, the AI guide that’s powered by the playbooks of SoFi Financial Planners, so its guidance comes from expert knowledge.

Coach helps you track, budget, save, and invest with step-by-step, chat-based guidance.

FAQ

What is a realistic grocery budget for a family of five?

Depending on how much you have to spend on food, a realistic grocery budget for a family of five may range anywhere from $1,151 to $1,849 a month on groceries, according to USDA monthly food plans. To determine how much your family should spend each month, consider adding up the last three to six months of grocery bills and finding the monthly average.

How can a family of five save money on groceries?

There are steps a family of five can take to save on groceries, including meal planning, taking advantage of coupons and weekly deals, and making a shopping list ahead of time. Those strategies allow families to spend more mindfully and, ideally, lower their grocery bill.

What is a reasonable grocery budget?

The average American household spends $6,224 per year on food at home, according to the most recent statistics available from the Bureau of Labor Statistics.

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About the author

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Photo credit: iStock/seb_ra

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SORL-Q326-022

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In addition to spoiling their grandkids with toys and ice cream, many grandparents also want to help them secure a solid financial future. That can mean setting up a custodial account, considering tax-advantaged savings options, and exploring other ways to start building a child’s wealth.

Below, you’ll learn about the different ways to save money for your grandkids, plus the pros and cons of each.

Why Open an Account for Grandchildren?

Sure, your grandkids might prefer a new video game or a Lego set now, but you’ll do them a favor tomorrow by opening a savings account for them. Here are a couple of good reasons to open a savings account for your grandchildren.

Teaching Financial Literacy Early

Money management skills are crucial, but personal finance education is practically nonexistent at school. It’s not typical for schools to teach kids how to balance a checkbook, how to invest in stocks, how to save for a down payment on a house, or how to file taxes.

Thus, it’s up to parents, and grandparents, to equip the next generation with financial literacy. Opening an account for your grandchildren can help them learn about concepts such as interest, budgeting, and investing.

Getting a Head Start for College and Life

While teaching children how to manage money can give them a head start on the path to financial wellness, so, too, can providing them with a nest egg that can grow over time through various savings and investing accounts. Consider these options:

•   When you open a savings account for grandchildren early on, they could wind up having a sizable chunk of cash to put toward their first car or even a house down payment as young adults.

•   A 529 college savings plan could help them avoid taking on too much debt from student loans.

•   Retirement accounts, such as a Roth IRA, can help them achieve their retirement goals, even if those are more than half a century away. Remember, the earlier someone starts investing, the more they stand to earn in the long run.

Types of Accounts to Consider

Grandparents have many options when it comes to opening an account for their grandchildren.

Savings, CDs, and Bonds

Many banks and credit unions offer savings accounts designed for kids. Do a quick online search for “best savings accounts for grandchildren” or check if your own bank offers such an account.

Having money in savings at an early age will let your grandkids benefit from compounding interest, especially if you find a high-yield savings account for kids.

You can also consider opening a certificate of deposit (CD) or purchasing savings bonds for your grandchildren. CDs are savings accounts that typically provide a higher interest rate than a standard savings account in exchange for keeping your money in the account for a fixed period of time. Savings bonds, issued by the U.S. Department of Treasury, are a very low-risk, longer-term investment that provides interest in return for lending the government money.

With both of these options, the money is less liquid, but if the CD or bond matures when your grandchild is older, they’ll have a reliable source of funds they can use in the future.

Custodial Accounts (UGMA/UTMA)

Beyond savings accounts for grandchildren, you can consider helping your grandkids start investing with a custodial account through the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). Once they’re between the ages of 18 and 25 (the exact age varies by state), they take control of the account.

These accounts are taxable (meaning taxes need to be paid on interest earned) and have no contribution limits. They’re an easy way to purchase stocks, mutual funds, and other securities for your grandchild, and you can even transfer your own securities into the custodial account.

529 College Savings Plans

The cost of college tuition continues to increase, meaning it’s never too early to start saving. There are several benefits of a 529 college savings plan. While the contributions to this qualified tuition plan aren’t tax-deductible, your grandchild’s distributions from the account are tax-free at the federal level as long as the money is used for qualifying expenses.

A 529 college savings may have “college” in the name, but your grandchild can also use it for other higher education programs, such as a trade or vocational school. You can also roll over 529 funds into a Roth IRA if your grandkids don’t use all (or any) of the funds.

Contributions to a grandchild’s 529 account are not deductible on your federal income tax return. However, many states offer either a deduction or credit for this kind of contribution.

Another consideration: Contributions to 529s are subject to annual gift tax exclusion limits, which are $19,000 for individuals and $38,000 for married couples in 2025 and 2026. If you were to put more than that into a 529 for a grandchild, you would need to file a gift tax return (though this does not mean you’ll owe any gift tax).

IRAs for Minors

Similar to custodial investment accounts, you can open custodial retirement accounts for your grandchildren, including a traditional IRA and a Roth IRA. While your grandkid won’t benefit from this account for decades, starting them early on the path to retirement savings means they could have considerably more money to work with when they reach retirement age.

However, it’s important to note that opening an IRA requires the child to have earned income in a given year. For teens, this can make sense. For a newborn, it’s unlikely to be a viable option.

When making contributions to an IRA for a grandchild, note that the amount you deposit is subject to the annual federal gift tax exclusion limit.

Choosing the Right Account

Not sure how to choose the right savings account for your grandchildren? Here are some things to consider.

Comparing Interest Rates and Fees

If you’re opening a savings account, compare interest rates. You’ll want an account with a high yield so that the money compounds more quickly over time. For example, the average interest rate for standard savings accounts as of September 2026 is 0.37%, while the figure for high-yield savings accounts (often from online-only banks) can be several times that number.

For custodial accounts, you’ll want options with low or no fees. It can be wise to shop around and see what options you have at different banks and brokerage firms.

Recommended: How Old Do You Have to Be to Open a Bank Account?

Accessibility and Withdrawal Rules

Certain accounts allow your grandchildren to access funds sooner, while others (such as IRAs) have strict rules about when they can withdraw funds and what the funds can be used for (as is the case with 529 plans). Think about the specific timeline and use case you envision for your grandchildren. Sometimes, opening more than one type of account makes sense, depending on how many goals you want to enable for your grandkids.

Tax Implications and Benefits

Some accounts have tax-deductible contributions, while others have tax-free withdrawals. For example, withdrawals from a 529 account are not usually taxable, provided they’re used for qualified educational expenses. With a Roth IRA, withdrawals made after your grandchild is older than 59 ½ (as hard as that may be to imagine) are not taxable. With a traditional IRA, taxes are paid when the money is withdrawn, usually in retirement.

Speaking with a financial advisor can help you understand the tax implications of each type of account you’re considering and what your grandchild might pay.

Setting Up and Contributing to the Account

Ready to open a savings account for your grandchildren? Here’s how it works:

Opening and Funding the Account

Follow the bank’s or investment firm’s guidelines for opening the account. You will likely need some specific information from the grandchild’s parents to open the account. You’ll also need to deposit money into the account to start the nest egg. Custodial accounts may even let you transfer your own assets into the account.

Automatic Transfers and Recurring Contributions

You may be able to set up recurring transfers into the account. Perhaps you want a recurring transfer every holiday season or on your grandchild’s birthday. Work with the financial institution to set up these contributions and perhaps find out how other loved ones might be able to contribute as well.

Monitoring and Managing the Account

After opening an account, it’s important to monitor it and see how the funds grow over time. Also, once your grandchild is a little older, it’s a good idea to sit down and review the account with them:

•   If it’s a savings account, walk them through how compound interest works.

•   If it’s a 529 plan, talk to them about college costs and how student loans work.

•   If it’s a custodial account, talk to them about the basics of investing and the importance of saving for retirement.

The Takeaway

It’s never too early to start thinking about your grandchild’s future. Savings accounts, 529 plans, and custodial accounts offer several ways for you to give them money that will help them fund college fees, general expenses, and even their retirement. While saving for grandkids is important, it’s also advisable to take care of your own finances.

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, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.30% APY on SoFi Checking and Savings.

FAQ

What are the contribution limits for custodial accounts?

There are no contribution limits for Uniform Gifts to Minors Act (UGMA)/Uniform Trasnfers to Minors Act (UTMA) custodial accounts. But be aware that contributions above a certain amount (which changes each year) are subject to a federal gift tax. Contribution limits apply for custodial IRAs just as they would for regular IRAs.

Can grandparents open a 529 plan for grandchildren?

Yes, grandparents can open a 529 plan for their grandchildren. If the grandchild’s parents have already set up a 529 plan, grandparents can also contribute to that plan directly. This may simplify account management and withdrawals for the recipient of the funds.

What happens to the account if the grandchild doesn’t need the funds?

If a grandchild doesn’t need funds from a 529 plan for college, they can still use them to attend a trade or vocational school or roll them into an individual retirement account (IRA). Grandparents can also reassign the 529 plan to another grandchild.

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Photo credit: iStock/gorodenkoff

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

CN-Q425-3236452-103

SOBNK-Q426-016

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Balancing parenthood and higher education is no easy task, especially for single mothers and fathers who are often managing work, child care, and household responsibilities on their own. Student loans can offer a lifeline, making it possible to pursue a degree and improve long-term financial stability.

However, navigating the world of financial aid can be overwhelming, with so many options, requirements, and decisions to consider. This article breaks down the key information single parents need to know about student loans, including federal aid, private lenders, and tips for borrowing wisely.

What Are Student Loans?

Put simply, student loans allow you to borrow money from either the federal government or a private lender to help you pay for college costs. Student loans can help you cover tuition, fees, supplies, books, rent, living expenses, and other necessary school-related expenses.

Private vs Federal Student Loans

When it comes to financing higher education, single parents often face a key decision: choosing between federal and private student loans. While both options provide essential funding, they differ significantly in terms of interest rates, repayment options, borrower protections, and eligibility requirements.

Understanding these differences is crucial for making informed financial decisions that can affect your long-term debt and financial stability.

Federal Student Loans

The U.S. Department of Education, through the William D. Ford Direct Loan Program (also called the Direct Loan program), offers federal student loans for borrowers who need to finance college or career school.

In order to get a federal student loan, you must file the Free Application for Federal Student Aid (FAFSA) every year. The FAFSA lets colleges and universities know about your financial situation by asking you to input information about your savings and checking account balances, investments, and more. The FAFSA will also help you qualify for more than just loans. You could also qualify for scholarships through your institution, grants, and work-study.

When you file the FAFSA, you receive a FAFSA Submission Summary, which reports your Student Aid Index (SAI). Your SAI is an index number that colleges use to determine how much financial aid you can receive.

You can qualify for Direct Subsidized Loans or Direct Unsubsidized Loans. Grad PLUS loans are no longer available to new borrowers as of July 1, 2026. However, borrowers who already received a Grad PLUS loan before June 30, 2026, can continue borrowing under current terms for three academic years or the remaining length of their program, whichever is shorter.

Most types of federal student loans don’t require a credit check. Independent students may qualify for the following amounts and limits:

•   First-year undergraduate students: $9,500 (no more than $3,500 of this amount may be in subsidized loans)

•   Second-year undergraduate students: $10,500 (no more than $4,500 of this amount may be in subsidized loans)

•   Third-year and beyond undergraduate students: $12,500 (no more than $5,500 of this amount may be in subsidized loans)

•   Graduate or professional students: $20,500 (unsubsidized only)

The current interest rate (2026-27) for Direct Subsidized and Direct Unsubsidized Loans is 6.52% for undergraduate students, and the rate for Direct Unsubsidized Loans is 8.07% for graduate or professional students. The interest rates are fixed for the life of the loan.

Private Student Loans

The main difference between a private student loan and a federal loan is that you don’t get a private student loan from the federal government like you do a federal student loan. You can get a private student loan from a bank, credit union, or online lender.

It’s a wise idea to exhaust all of your federal grant and loan options before you consider private loans. In general, interest rates are usually higher for private student loans compared to federal student loans. The amount you can borrow depends on the costs of your degree but also depends on personal financial factors (such as your credit score and income).

Additionally, private student loans don’t offer the same borrower protections and benefits available to federal borrowers, such as income-driven repayment plans.

Student Loans for Single Parents

Single parents can get both private and federal student loans. Read on to discover some specific financial aid ideas for single parents.

Private Student Loans for Single Parents

As a single parent, you may have a limited amount of time to research your private student loan options, but it’s to your advantage to do so because you can ensure that you choose the right type (and the right interest rate).

Take a look at three to five different private student loan lenders and compare everything apples to apples — interest rates, fees, repayment terms, deferment, forbearance and discharge options, as well as in-school repayment options.

Then, walk through the next steps:

1.    Give yourself plenty of time to apply for private loans. The application and approval process can take longer than you might think. Remember that you’ll need to monitor your financial situation each semester to make sure you have enough loan money to carry you through the academic year.

2.    Gather your personal information. Before you apply, you’ll likely need to have the following handy: Social Security number, employment information (including a recent paycheck stub), gross annual income, assets, rent or mortgage information, and tax returns. Specific application requirements may vary by lender.

3.    Apply for a private student loan. You can apply for a private student loan on a lender’s website. The lender will ask for the personal information listed above and possibly more. You’ll also submit information about your school, graduation date, and loan amount needed. You must also agree to the lender’s terms and conditions, which you’ll want to read carefully, and proceed with the application.

Your search for financial aid doesn’t have to end with filing the FAFSA or applying for private student loans. You may also want to look for single-parent scholarships or grants through organizations that include your school, state government, federal agencies, charitable foundations, and professional associations.

Another important thing you can do is to contact your school’s financial aid office and explain your situation as a single mother or father. Many colleges and universities offer endowed scholarships for students and may be able to offer you financial aid specifically for single-parent families.

Recommended: Private Student Loans Guide

Federal Student Loans for Single Parents

To obtain a federal student loan, you must demonstrate financial need, be a U.S. citizen or eligible noncitizen, have a valid Social Security number, enroll in an eligible degree or certificate program, show successful completion of a high school degree or GED, maintain satisfactory progress in school, and sign the certification on the FAFSA.

Undergraduate students who show evidence of financial need can qualify for a Direct Subsidized Loan. Undergraduate, graduate, and professional students can qualify for a Direct Unsubsidized Loan, but eligibility is not based on financial need. The government pays the interest for Direct Subsidized Loans while you’re in school but does not pay the interest on Direct Unsubsidized Loans during that time.

As mentioned above, graduate or professional students may no longer take out a Direct PLUS Loan as a new borrower.

Above all else, in addition to learning more about single parents’ loans at your school, it’s also important to contact the financial aid office at the school you want to attend to fully understand the financial aid process at your college or career school.

Tips for Single Parents to Borrow Wisely

For single parents, borrowing wisely is key. The right approach can prevent overwhelming debt and create a path toward long-term financial stability. Here are practical tips to help single parents make smart, informed choices when taking out student loans.

•   Complete the FAFSA early and every year: Federal aid is often awarded on a first-come, first-served basis. Submitting the FAFSA promptly increases your chances of qualifying for grants and low-interest federal loans.

•   Maximize grants and scholarships first: Before borrowing, seek out all free money options, including federal Pell Grants, school-based aid, and scholarships specifically for single parents.

•   Choose federal loans before private ones: Federal student loans usually offer lower fixed interest rates and flexible repayment plans, such as income-driven repayment and loan forgiveness programs.

•   Borrow only what you truly need: Avoid borrowing the full amount offered if it exceeds your actual costs. Calculate tuition, fees, child care, and living expenses carefully.

•   Understand loan terms thoroughly: Know the difference between subsidized and unsubsidized loans, your interest rate, the grace period, and when repayment begins.

The Takeaway

Affording higher education as a single parent can be a challenge, but there are student loans, grants, and scholarships available to help ease the burden. Single parents can apply for federal student loans by filling out the FAFSA each year. If this aid isn’t enough, some students may consider applying for 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

Do you get more financial aid if you are a single parent?

Schools award need-based financial aid based on demonstrated need. If you demonstrate financial need, you’ll more than likely receive some type of financial aid from the college or university that you plan to attend. It’s very important to file the Free Application for Federal Student Aid (FAFSA) to qualify for federal student aid and also talk to the financial aid office of your college or university for more information about the financial aid opportunities available to you.

How can a single parent afford college?

There are a number of ways that a single parent can afford college, and it starts with open communication between you and your school’s financial aid office. A few excellent steps you can take include filing the Free Application for Federal Student Aid (FAFSA), looking for scholarships and grants in your community, and comparing private loan lenders for private loans that fit your needs.

Are there specific student loans or grants just for single parents?

While there are no federal loans specifically for single parents, there are grants and scholarships designed to help. Examples include the Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG), and scholarships from organizations that support single mothers and fathers in school.

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About the author

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Photo credit: iStock/Geber86

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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

SOISL-Q426-022

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Military veterans represent a highly valuable and uniquely skilled segment of today’s workforce. While many companies have invested in veteran-focused employee resource groups, specialized recruitment teams, or tailored onboarding programs, one area often underutilized is financial well-being support.

While financial health is a vital consideration for all employees, veterans often face distinct challenges and circumstances as they transition from military to civilian life. Many are dealing with everyday financial issues — like budgeting, choosing workplace benefits, and planning for retirement — for the first time. Veterans may also carry significant debt and struggle with balancing short-term needs with long-term financial stability. As a result, financial education and counseling can be a critical and much-appreciated benefit for this segment of your workforce.

Here’s a look at how you can design a meaningful and impactful financial wellness program to attract, engage, and retain veteran talent.

Student Loan Employer Contributions

Despite having access to significant federal veterans’ education benefits, not all veterans leave the service debt-free. Indeed, research indicates that more than a quarter of veteran undergraduate students have taken out private and federal student loans (with a median amount of $8,000) to complete their education, according to The Pew Charitable Trusts. Their data suggests that the majority of undergraduate student veterans borrow primarily to cover living expenses such as housing and child care. In addition, many veterans accrue student loan debt when they cosign or take out loans for their children.

Offering student loan repayment benefits can be a powerful way to support veterans and all employees carrying student debt. One tax-advantaged option is to provide a direct student loan repayment assistance program. In 2026, employers can provide up to $5,250 annually in tax-exempt student loan repayments per qualified employee. This cap will be indexed for inflation for tax years beginning after 2026.

Under Section 110 of the SECURE 2.0 Act, employers can also support these workers by making matching contributions to retirement plans based on their student loan payments. This provision helps employees who might otherwise skip elective payroll contributions due to debt, ensuring they do not miss out on valuable employer matches.

Emergency Savings Programs

Veteran financial wellness also suffers among those who have less in liquid savings or feel they could not absorb an unexpected financial shock. Research conducted in late 2025 by the Military Family Advisory Network indicates that over one-third (34.1%) of military and veteran families have less than $500 in emergency savings, or no savings at all. These numbers suggest that one way to help relieve financial stress among veteran employees is through an employer-sponsored emergency savings plan.

These plans allow employees to contribute after-tax payroll deductions automatically into a customized savings account. Many employers also make matching contributions, much as they might with a 401(k). Depending on plan design, these funds can be available at any time and for any reason. In addition, most Emergency Savings Accounts (ESAs) are portable, meaning that employees can maintain their accounts and retain accumulated benefits even after a change in employment.

Help With Credit Card Debt

Another factor that commonly impacts employee financial well-being is high-interest debt, and this may be particularly true for veterans. According to research published by the nonprofit group American Consumer Credit Counseling, 41% of military households have $5,000 or more in credit card debt, compared to 28% of civilians. Furthermore, 27% of military families owe $10,000 or more while only 16% of civilians do, and 10% carry a balance of $20,000 or more, compared to just 7% of civilians.

For any employee carrying a substantial credit card balance, high interest charges and minimum payment structures can create a cycle of debt that’s hard to break free from. Minimum payments often barely cover the interest, which can result in years of payments with little reduction in the outstanding balance.

Here are some ways employers can help support employees having trouble getting ahead of credit card debt:

•   Financial education programs: Consider offering workshops or webinars on budgeting, debt reduction strategies (like the snowball or avalanche method), and credit management. In addition, you might offer access to financial literacy platforms or tools that explain interest rates, minimum payments, and the long-term cost of debt.

•   Financial coaching and credit counseling: You might partner with a local financial counselor or a nonprofit organization to offer employees free or subsidized one-on-one financial coaching and debt counseling.

•   Flexible payroll options: Giving employees access to their earnings before payday in case of an emergency can help workers pay their bills on time, avoid late fees, and reduce their reliance on credit cards for everyday expenses.

Recommended: How Financial and Mental Health Can Collide With Work

Balance Short-Term Needs and Long-Term Financial Goals

Veterans often need to juggle short-term needs (like finding housing, covering moving expenses, or supporting a family) with long-term goals like retirement. Balancing these competing demands can be especially difficult if they’re dealing with debt and learning how to manage money without military infrastructure.

Employers can support retirement readiness by offering clear, veteran-specific guidance on retirement planning, including how to roll over Thrift Savings Plans, how to integrate VA disability benefits into long-term financial planning, and how to catch up on retirement savings. Employer 401(k) match incentives and targeted education on retirement investment strategies can also be especially impactful.

The Takeaway

It’s important to analyze your workforce — and the talent you’re looking to hire — to understand what programs will best serve your veteran employees’ needs. But implementing a few hallmark veteran-ready financial well-being programs can help you improve the overall financial wellness of your workforce and attract and retain top talent.

SoFi at Work offers a benefits platform, education resources, and financial counseling that can help you increase employee productivity, loyalty, and overall well-being.

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Photo credit: iStock/SDI Productions

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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.

SOAW-Q426-003

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When preparing to buy a home, understanding the early steps in the mortgage process can make the search more focused and effective.

Two common terms are prequalification and preapproval. Each gives lenders and home sellers information about a buyer’s borrowing potential, but they differ in how they evaluate finances and how much confidence they provide in the ability to secure a loan.

Knowing the difference helps buyers set a realistic budget, compare lenders, and submit stronger offers.

What Does Prequalified Mean?

Getting prequalified is an early way to estimate how much a buyer might borrow for a home and what the monthly payments could be.

Where to Get Prequalified for a Mortgage

A buyer can request prequalification from:

•   A mortgage lender or bank

•   An online mortgage lender

•   A credit union

•   A mortgage broker that compares multiple lenders

Many lenders allow buyers to start online. The application typically asks for the estimated purchase price, down payment, your annual income, employment information, existing debts, and contact details. Some lenders may also request a Social Security number and date of birth.

The lender uses this information, which may not be verified, to estimate a potential loan amount, interest rate, and monthly payment. Prequalification is often free, although buyers should confirm whether a lender charges an application or credit-report fee.

Lenders may use a soft credit inquiry for prequalification. A soft inquiry does not affect your credit scores. The process can be completed quickly when the buyer has the required information available, but timing varies by lender and application.

Buyers can request prequalification from several lenders to compare estimated payments and interest rates, which vary by repayment term. Because the information has not been fully verified, prequalification is not a loan commitment or a guarantee that the lender will approve the mortgage.

You can use a home affordability calculator to estimate a comfortable purchase price before requesting prequalification.

What Does It Mean to Be Preapproved?

Mortgage preapproval is a more detailed review of a buyer’s finances. The lender may verify income, employment history, debts, assets, and credit history before conditionally approving a specific loan amount.

A buyer can seek preapproval from a bank, credit union, mortgage broker, or online mortgage lender. Buyers can also review SoFi’s mortgage loan options.

Online, Fixed-Rate, Conventional, and First-Time Buyer Preapproval

A buyer seeking an online preapproval can usually begin by completing a lender’s digital application and uploading financial documents. The same process may support a fixed-rate purchase mortgage, a conventional purchase loan, and a mortgage for a first-time homebuyer, if the lender offers that loan type.

First-time buyers generally provide the same core financial documents as other applicants. A lender may also request information about down payment assistance, gifts, housing history, and homebuyer programs. FHA financing is another option some buyers compare when they have a smaller down payment or different qualification needs. Buyers can review FHA home loan information before discussing available options with a lender.

A preapproval for a fixed-rate mortgage confirms the lender’s preliminary assessment for that loan structure. It does not lock the interest rate unless the lender separately provides a rate lock. Buyers should ask whether the preapproval applies to a conventional, FHA, VA, or another type of purchase loan.

Documents Lenders May Request

When seeking preapproval, buyers will likely complete an application and provide some of the following:

•   Social Security number and card

•   Photo identification

•   Recent pay stubs

•   Tax returns, including W-2 statements, for the past two years

•   Two to three months of checking and savings account statements

•   Recent investment account statements

•   A list of recurring debts

•   Residential addresses from the past two years

•   The planned down payment and a gift letter when applicable

The lender may request additional documentation for certain income types. Freelancers may need to provide 1099 forms, a profit and loss statement, a client list, or work contracts. Rental property owners may need to provide lease agreements.

Approval can take longer when documents are incomplete, income is difficult to verify, assets have unexplained deposits, or credit reports contain negative information. Buyers can reduce delays by submitting legible documents and explaining unusual account activity promptly.

A buyer can review free credit reports before applying at AnnualCreditReport.com. A credit report lists balances, payment history, and derogatory information, but it does not include credit scores.

Getting a Preapproval Letter

After reviewing the application and supporting documents, the lender may issue a preapproval letter. The letter generally states the estimated loan amount and describes conditions that must be met before final approval.

A buyer can ask the lender for a preapproval letter as soon as the lender completes its initial review. The time required depends on the lender, the completeness of the application, and the complexity of the buyer’s finances. A fast preapproval is more likely when the buyer has current documents ready and responds quickly to follow-up requests.

The letter can strengthen an offer, especially when a seller receives multiple offers. Some sellers may disregard an offer without a preapproval letter, although requirements vary by market and seller.

A preapproval letter usually remains valid for a limited period set by the lender. Buyers should ask how long the letter lasts and whether the lender must update income, asset, or credit information before an offer is submitted.

Learn more about how long mortgage preapproval lasts before beginning your home search.

Credit-Score Impact

Prequalification may use a soft credit inquiry, which does not affect credit scores. Preapproval often includes a hard credit inquiry, but the exact process depends on the lender and the type of application.

Mortgage shoppers should ask each lender which credit inquiry it uses and which credit-scoring model applies. Multiple mortgage inquiries made within a short shopping period may be treated as a single inquiry by some scoring models, but the applicable period varies by model.

Buyers can learn more about how to check a credit score without paying before applying.

Choosing a Comfortable Loan Amount

A buyer does not have to spend the full amount shown on a preapproval letter. Preapproval identifies the maximum amount the lender may be willing to lend based on the information reviewed. It does not determine what the buyer can comfortably afford each month.

A lower-priced home may leave more room for:

•   Emergency savings

•   Property taxes and homeowners insurance

•   Maintenance and repairs

•   Retirement contributions

•   Other financial goals

Buyers should account for the down payment, closing costs, monthly debts, and expected housing expenses when setting a purchase budget. Review this guide to first-time home buying before setting a target price.

How Prequalification and Preapproval Compare

Prequalification and preapproval serve different purposes. Prequalification helps a buyer explore a price range early. Preapproval provides a more detailed lender assessment before the buyer makes an offer.

Consideration	Prequalification	Preapproval
Information supplied	Basic, often self-reported income, debt, asset, and down payment information	Financial information supported by documents
Verification level	Limited or none	More extensive review of income, assets, employment, debts, and credit
Credit inquiry	Often a soft inquiry, depending on the lender	May involve a hard inquiry, depending on the lender
Output	Estimated loan amount, interest rate, and payment	Conditional loan amount and a potential preapproval letter
Reliability	General planning estimate	More reliable estimate based on verified information
Use with sellers	Helps a buyer understand a budget	Often more useful when submitting an offer
Timing	Usually an early step	Usually completed before making an offer
Next step	Compare mortgage options and prepare documents	Shop for a home, submit an offer, and complete underwriting

The two terms do not have one universal definition. Some lenders use “prequalification” for a document-based review, while others use it for an automated estimate. Buyers should ask what the lender verifies and what the resulting letter represents.

When a Letter Is Needed

A buyer does not need prequalification to purchase a home. A preapproval letter is also not required for every offer, but an agent or seller may request one.

Preapproval can help because:

1.    It identifies a specific potential loan amount. The buyer has a clearer budget from a particular lender.

2.    It can prepare the buyer for underwriting. Mortgage underwriting is the lender’s final review after the buyer finds a home, agrees on a price, and submits a mortgage application.

3.    It shows that the buyer has completed an initial financial review. This can make the offer easier for a seller to evaluate.

The preapproval remains conditional. The lender still needs to review the property, confirm the final application details, and complete underwriting before issuing a final approval.

The Takeaway

Prequalification provides an early estimate based on basic financial information. Preapproval requires more documentation and usually gives the buyer a stronger estimate of the amount a lender may approve. A buyer can begin with prequalification to explore prices and compare lenders. Before making an offer, obtaining preapproval and a current preapproval letter can help the buyer move faster and present a more complete offer.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is mortgage prequalification?

Mortgage prequalification is an early estimate of how much a buyer might borrow. The lender generally uses basic financial information supplied by the buyer and may use a soft credit inquiry. Because the information may not be verified, prequalification is not a loan commitment.

What does mortgage preapproval mean?

Mortgage preapproval is a conditional assessment based on a more detailed review of income, debts, assets, employment, and credit. The lender may issue a letter stating the potential loan amount, but final approval still depends on the property, updated documents, and underwriting.

Who provides mortgage preapproval?

Banks, credit unions, mortgage brokers, and online mortgage lenders may provide preapproval. Buyers should ask about application fees, credit-report fees, appraisal fees, and other costs before applying.

Which lender offers the easiest home-purchase preapproval?

No lender has the easiest process for every buyer. Buyers should compare lenders based on the documents required, loan types available, rate and fee estimates, communication, online application options, and the time needed to issue a letter. A lender that clearly explains conditions and responds promptly may provide a smoother process for a particular buyer.

Is a preapproval a loan guarantee?

No, a preapproval is conditional and does not guarantee a mortgage. The lender must still verify the final financial information, evaluate the property, confirm the loan program, and complete underwriting.

How long is a preapproval letter valid?

The validity period varies by lender. Income, assets, debts, and credit may need to be updated if the letter expires before the buyer submits an offer or completes the loan application. Buyers should request an updated letter when their financial circumstances change or the lender’s stated validity period ends.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SOHL-Q326-134

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