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Preapproved vs. Prequalified: What’s the Difference?

What does it mean to be prequalified or preapproved for a mortgage? The two words are often used interchangeably, but they aren’t the same thing and don’t carry the same weight when a hopeful homeowner is ready to buy.

Here’s a look at how these two steps vary, how each can play a significant part in any home buying strategy, and how one in particular can increase the chances of having a purchase offer accepted when there are multiple offers on a house.

Getting Prequalified for a Mortgage

Getting prequalified is a relatively quick and easy process.

You, the mortgage applicant, provide a few financial details to a lender. The lender uses this unverified information, usually along with a soft credit pull, to let you know approximately how much you may be able to borrow and at what terms.

Because prequalification is an estimate of what the lender thinks you can probably afford based on the data input, the lender may ask some clarifying questions around income, assets, employment, and debt. You likely won’t be asked to provide any documentation at this point, so it’s pretty painless.

Getting prequalified can give an applicant a general idea of loan programs and the amount they may be eligible for.

But because the information provided has not been verified, there’s no guarantee that the loan or amount will be approved.

That doesn’t make this step irrelevant, though. Prequalification can help you in a few ways.

•  It can give you an idea of how much house you can afford.

•  It can alert you to loan programs you may be eligible for.

•  It can tell you what your monthly payment might look like when you do get approved for a mortgage.

It might be tempting to blow through this step by providing incomplete or embellished financial information to lenders—or to skip the prequalification process entirely. But who wants to fall in love with a house they can’t potentially afford? And who wouldn’t want to weed out any mortgage programs or lenders that don’t suit their needs?

Mortgage LoanMortgage Loan

Getting Preapproved for a Mortgage

Once you decide on a mortgage lender or lenders, you can begin the preapproval process.

Preapproval typically takes longer than prequalification and requires a thorough investigation of your income sources, employment history, assets, credit history, and other financial commitments and debts.

Verification of this information, along with a hard credit pull from all three credit bureaus, allows the lender to complete a preapproval of the loan before you shop for an eligible property.

When seeking preapproval, besides filling out an application, you may be asked to submit the following to a lender for verification:

•  Social Security number or some other form of identification

•  Two most recent pay stubs

•  W-2 statements for the past two years

•  Tax returns from the past two years

•  Sixty days’ worth of documentation (or a quarterly statement) of the activity in checking, savings, and investment accounts

•  Residential addresses from the past two years, including contact information for rental companies or landlords, if applicable

The lender may require backup documentation for certain types of income in order to qualify for a mortgage. For example, rental property owners may be asked to show lease agreements. Freelancers may be asked to provide 1099 forms, bank statements, a profit and loss statement, a client list, or work contracts.

Buyers also can expect to have to explain negative information that might show up during a credit check. (To avoid any surprises, proactive buyers can get annual free credit reports from A credit report shows all balances, payments, and derogatory information but does not give credit scores. It may help potential borrowers identify and amend errors before applying for a loan.)

Those who have filed for bankruptcy in the past may have to show documentation that it has been discharged. Applicants face a waiting period, which varies with the lender and whether they are seeking a conventional vs. government home loan, after a bankruptcy dismissal or discharge and before being eligible for new loan approval.

The lender will need to verify the amount and source of the down payment you plan to provide. If your parents are kicking in some cash, for example, the lender will ask for a gift letter that confirms that the money is a gift and not a loan. Some loan programs may require you to contribute a certain amount of your own money (sometimes 5%) to the loan before a gift can be applied. Generally, investment properties are not eligible for gift funds.

Those taking a loan or withdrawal from a 401(k) also typically will have to show the paperwork. And any sudden changes in finances may have to be explained—so it’s important to have a paper trail.

Three Reasons to Get Preapproved

Sounds like a lot of work, right? But preapproval has at least three selling points:

1. Preapproval lets you know the specific amount you are qualified to borrow from the lender, instead of just an estimate. You can always purchase a house for less than the preapproved amount.

2. Going through preapproval before house hunting could take some stress out of the loan process by breaking up the borrower and property underwriting portions of the loan. Underwriting, the final say on mortgage approval or disapproval, comes after you’ve been preapproved, found a house you love and agreed on a price, and applied for the home loan.

3. Being preapproved for a loan helps to show sellers that you’re a vetted buyer. The lender can provide a preapproval letter that indicates the willingness to lend you a particular amount, and the interest rate and fees you can expect to pay on that loan (though it’s not a guarantee that you’ll get the loan).

Depending on the real estate market, sellers might receive offers from multiple buyers. Having a preapproval letter could improve the chances that your offer will be selected, especially if other offers lack a preapproval letter.

The letter tells the seller that your credit, income, and assets have been reviewed and approved by a lender to move forward and that if the property is eligible, the loan should close with no issues to derail the purchase.

Time Is of the Essence

A preapproval letter usually expires in 90 days because pay stubs, bank statements, and so on are considered dated after 90 days.

If the information needs to be updated and reverified after that point, the preapproval letter can be reissued with a new expiration date.

If you’re seeking loan preapproval, you may benefit from mortgage rate shopping within a focused period—generally 14 to 45 days, varying by the credit score model each lender uses—to avoid dragging down your credit score.

If you apply for mortgages with several lenders within the condensed time frame, and each makes a hard pull of your credit, it will count as just one hard inquiry.

Finalizing the Mortgage Application

After you find the house you want to purchase and the seller has accepted the offer, the next step is to finalize your mortgage application and move toward final loan approval.

You don’t have to choose a mortgage from the same place a preapproval letter came from.

Once the lender receives the property appraisal and title report, a loan underwriter reviews the data and issues a loan commitment letter or final approval. This means that the loan has been fully approved and a closing date can be scheduled.

The lender may perform another credit check right before a loan closes. Applying for any new credit cards or auto loans, or making large credit purchases during the home buying process could affect final mortgage approval.

Some borrowers choose to lock in the interest rate offered by the lender once they find a home they want to buy. This freezes the mortgage rate for a predetermined period.

It’s a good idea to verify the time period to make sure the rate is in effect through the escrow closing date, and to review the fully executed purchase contract with the lender for closing and loan contingency timelines to be sure contract dates can be met.

Finally, even if you pass the loan approval process with flying colors, the home being purchased might not. The lender will likely order an appraisal to be sure the selling price is accurate and that the property type (single-family home, farm, etc.) and condition are eligible for home loan financing.

If the sales price is higher than the appraised value, you may have to go back to the negotiating table, walk away from the deal, or come up with cash to make up the difference.

What If My Preapproval Didn’t Pan Out?

Being turned down for a mortgage—or not being able to borrow as much as expected—can be disappointing. But it doesn’t have to put a stop to home buying hopes.

If you are in that boat, you might want to try to understand why you were not eligible.
You could:

•  Consider another loan product or lender where you might meet the lending criteria.

•  Work on improving whatever put a damper on your home loan qualification.

•  Find a home that’s better suited to your budget if you were preapproved for a lower loan amount than expected.

The Takeaway

Preapproval vs. prequalification: If you’re serious about buying a house, do you know the difference? Getting prequalified and then preapproved may increase the odds that your house hunt will lead to homeownership.

SoFi offers a range of fixed-rate mortgage loans with competitive rates and low down payment options.

Looking at investment properties? SoFi has loans for those, too.

It’s a snap to get prequalified and view your rate.

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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Common Financial Mistakes First-Time Parents Make

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

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

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

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

1. Overspending on Baby Gear

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

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

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

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

2. Living Without a Safety Net

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

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

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

3. Avoiding a Budget

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

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

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

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

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

4. Putting Off Saving for Retirement

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

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

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

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

5. Not Saving for College

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

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

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

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

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

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

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

6. Missing Out on Tax Breaks

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

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

7. Not Teaching Your Kids About Money

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

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

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

The Takeaway

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

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

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

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Ways to Pay for Unexpected Vet Bills

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

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

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

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

Considering Pets as Family Members

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

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

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

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

Being Prepared With Pet Insurance

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

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

Trying to Negotiate an Installment Plan With Your Vet

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

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

Seeking Out a Second Opinion or a Nearby Veterinary School

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

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

Seeking Help From a Charitable Organization

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

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

The Takeaway

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

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

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

Learn more about reliable insurance options with SoFi Protect.

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4 Ways to Pay for Your Child’s Tuition

If you’re a parent who has always dreamed of sending your child to college someday, you’re probably well aware that tuition costs have increased pretty drastically over the past 20 years (although we’ll share some good news on that subject in this post!).

According to data reported in an annual survey for US News & World Report , the average cost of tuition and fees for the 2020 to 2021 school year was $35,087 at private institutions, $9,687 for in-state residents at public colleges, and $21,184 for out-of-state students at state schools.

Those are daunting numbers for some—even when factoring how tuition prices actually went down from the previous year.

So what can you do now to prepare for this looming expense? Here are a few ways to finance college:

Smart Ways to Pay for College

When you know that paying for kids’ college may be challenging, here are ways to save and otherwise pay for education expenses, even if you think you can’t afford the costs of college.

1. Starting Early With a Savings Plan

There are a variety of accounts to help people save for college. It could be something as simple as a savings account to which both you and your child can contribute regularly. Or it’s possible to open a tax-advantaged 529 savings plan and invest that money.

529 Savings Plans

Much like a Roth IRA, 529 plan contributions are post-tax (although some states do offer income tax deductions or tax credits for contributions); but when the money is withdrawn and used for qualified education expenses for the designated beneficiary, the earnings are tax-free.

Because it is an investment vehicle, a 529 plan does come with some risk, so you may want to discuss this option with a tax professional and/or financial planner. They can also answer any additional questions you may have about the different types of 529 plans that are available.

Coverdell Education Savings Account

A Coverdell Education Savings Account is another tax-advantaged investment account worth exploring. Like the 529 plan, the money in the account grows tax-deferred, and when it’s used for qualifying expenses, it can be withdrawn tax-free. Unlike the 529, however, there are income limitations for a Coverdell account.

2. Looking for Ways to Get Free Money

When figuring out how to pay for kids’ college, the resources are out there. One starting point is to fill out the Free Application for Federal Student Aid (FAFSA®) together with your child.

Or, if you aren’t quite there yet, you may be interested in checking out the FAFSA4caster to get a free early look at your child’s eligibility for federal aid, including an estimated Federal Pell Grant amount (if any) and Federal Work-Study amount (based on the average nationally).

It’s generally recommended that parents and their children investigate the many types of scholarships available. Scholarships aren’t just for athletes and academic stars; there are acting, dancing, and other area-of-interest scholarships; civic scholarships; scholarships for those with certain diseases and disabilities—even fly-fishing scholarships.

Related: How Do You Find Non Academic Scholarships for College?

Your child also can check out the high school guidance department for any information, and you may want to make an appointment with a school counselor to get any tips that might help your search.

If your son or daughter already has a college selected, funding information is usually available on that school’s website, as well.

3. Considering an After-School Job

You and your buddies who had jobs in college could probably debate for hours the pros and cons of asking kids to work their way through college. That said, when figuring out how to finance college education, don’t overlook this avenue.

Yes, it’s a time suck, but it can help with organizational skills; it can provide a real-world view of what it’s like to juggle employment and other responsibilities; and federal education data show that students who work part-time, up to 12 hours a week, get better grades than those who don’t work at all.

But here’s the true bottom line: Student loan debt is now the second-highest consumer debt category—behind only mortgage debt, and higher on the list than both credit cards and auto loans.

A job won’t pay for everything, but it will pay for some things, and that could mean fewer costs to cover with savings or student loans.

4. Researching Student Loan Options

With the high cost of getting a degree these days, it’s unlikely you and your child will be able to avoid taking on at least some student loan debt. Taking some time to research all the student loan options out there—both federal and private—and how they work could be helpful in understanding which options work best.

The amount a student can borrow in federal loans will depend on his or her year in school, status as dependent or independent, and the type of loan or loans obtained.

Parents of dependent undergraduate students also can apply for Direct PLUS Loans to help pay for education expenses that aren’t covered by other federal financial aid.

Federal student loans usually have more benefits than loans from banks or other private lenders, so be sure to compare the benefits of each private student loan program, as well as the interest rates and the length of the loans available.

For example, federal loans offer deferment and forbearance along with programs like Public Service Loan Forgiveness (PSLF) and multiple income-driven repayment plans when the time comes.

Private lenders don’t usually offer such perks and protections. It’s generally recommended that students exhaust all federal loan options prior to borrowing private student loans.

While researching different options for private student loans, you may encounter different ways for you and your child to apply, such as taking on a private student loan yourself or giving some thought to whether you’re willing to act as a cosigner for a private student loan.

There are, of course, pros and cons to both of those options, so it’s important to do your due diligence on the private lenders you may be considering. What benefits do they offer? What are their rates and terms? Is there any fine print?

If your child doesn’t qualify for enough federal student aid to cover the cost of attending college, private student loans may be a viable option to look into to close the gap.

The Takeaway

There’s no one size fits all way to pay for college. Students and their families may end up using a blend of savings, scholarships, grants, work-study, and aid like student loans to finance their education. When looking at aid options, prioritize federal sources of aid before borrowing private student loans.

Those interested in borrowing private student loans may want to consider options available at SoFi, where both private parent student loans and undergraduate student loans are available. SoFi private student loans have no fees and offer a variety of different repayment options to fit your budget.

Learn more about private parent or undergraduate student loans with SoFi.

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

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Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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How to Make Talking About Finances Fun, Not a Fight

How to Make Talking About Finances Fun, Not a Fight

Ask couples what they fight about most, and money is sure to be mentioned often. Decades of research have shown that some of the most common clashes are over major purchases, decisions about finances and children, a partner’s spending habits, and investment choices.

While dealing with money isn’t always easy, it doesn’t have to drive a wedge in your relationship. These strategies will ensure your financial discussions with your partner are productive and—dare we suggest—maybe even something to look forward to.

Schedule Timed, Regular Meetings

Set aside time in your calendars to have a monthly conversation about all things money. That’s a good amount of time to judge progress because you’ll have paid monthly bills and have gotten a couple of paychecks since your last sit-down.

At the meetings, plan to review your net worth (everything you own minus everything you owe) and cash flow (what money is coming in, being spent, and being saved), and track headway toward any joint financial goals, like buying a house, saving for childcare, or creating a will. If you haven’t already, this is also a great time to make a monthly budget.

While these sessions may seem uncomfortable at first, streamlining your financial conversations may actually prevent them from creeping into the rest of your life.

One way to time-box the conversation is to set a timer and spend no more than 30 minutes having an honest discussion about your finances. Once the timer goes off, go back to being a regular couple, knowing that there’s a special time and place for this type of a conversation.

If you can’t swing monthly meetings, then shoot for quarterly, biannual, or at least annual sit-downs—anything is better than nothing.

Make It a No-judgment Zone

These types of conversations can get very personal, and it’s important to make sure that you don’t judge your partner’s choices. After all, you wouldn’t want the same done to you. Being open with each other is key to having financial success.

If your partner is shy or tends to get defensive, it might help to start things off by revealing a spending habit that you’re not proud of. This might encourage your partner to reciprocate. You can even keep things light by making a joke about it. “So, I realize I blow $150 on a massage every month that I don’t technically need but am totally addicted to. What about you?” This can open up a dialogue about what’s important to each of you, and what expenses may be easy to curtail. (How about a massage every other month instead?)

Let Go of Resentment

Financial inequity between partners—say, if one person has a lot of debt or there’s a large disparity between incomes—can be a common source of tension.

If you feel like one person’s debt is holding you both back, remember that it doesn’t have to last forever. There are many strategies for paying off debt—talking it through will help you find the right path for you both. You might also decide to meet with a financial advisor who can help you prioritize, budget, and sometimes even refinance to break even faster.

In cases of income disparity, it may help to reframe each partner’s contribution to the household. Yes, one person may bring in more (or all) of the household income, but be clear on the non-monetary intangibles that the other person is contributing. Cooking, cleaning, watching the kids, caring for aging relatives—these duties all add up and represent what each of you is bringing to the household.

Reward Yourselves

Create incentives to stick with your financial meeting schedule. Maybe that means taking your laptops to your favorite coffee shop, or treating yourselves to a movie night afterward.

Another idea is to reward yourselves as a couple after you hit a predetermined financial goal or milestone. For example, every month you successfully increase your emergency fund by a target amount, you might choose to enjoy a nice restaurant meal.

Even a free indulgence—like a walk around your favorite lake after the discussion—can be effective. Just make it something that you both enjoy (bonus points if it’s something that you don’t do all the time so it feels extra special). That way, you’ll look forward to it.

The Takeaway

The best way to take the sting out of discussing finances with your partner is to make it a regular part of your life together. Scheduling time to talk monthly (or whatever cadence works for you) allows you to save that time for money talk, and get back to the fun of living your lives together the rest of the time. And make it fun—build in little incentives to stick with your regular financial check-in.

One topic of discussion that might come up during monthly money talks? Investing. SoFi Invest® might be a great place to start—members can trade stocks, ETFs, and crypto, and participate in upcoming IPOs at IPO prices, or start automated investing.

Find your own path to financial wellness with SoFi Invest.

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