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Divorce can be emotionally and financially challenging, and one of the biggest concerns people have is how to finance the process. From filing and attorney fees to establishing separate households, the costs can quickly add up.

Knowing how to pay for divorce is particularly tricky because most people don’t plan for a divorce and, as result, likely don’t have a special bank account in which they’ve been saving up for a divorce. This can leave them feeling stuck in a tight corner.

For anyone scratching their head and wondering how to pay for a divorce, here are some answers. Take a look at how you can cover the cost of a divorce while still keeping an eye on your long-term (post-divorce) financial health.

How Much Does Divorce Cost?

We’ll start with the crummy news: Getting a divorce, already a difficult experience, is also expensive. While the cost varies depending on where you live and the complexity of the divorce, the average cost of a divorce in the U.S is $12,900. That said, a simple DIY divorce could run a lot less (typically a few hundred dollars). A complicated divorce (with disagreements around child custody or dividing up property), on the other hand, could run well over $100,000. Gulp.

Factors that can affect the cost of a divorce include:

•   The state where the divorce takes place

•   Whether the couple lives in an urban or a rural area

•   Whether it is contested or uncontested

•   Whether or not the couple hires professional legal help

•   The complexity of the couple’s finances

•   Whether or not there are child custody issues involved

How Do I Pay for My Divorce?

Ideally, every person, couple, and family would have some emergency money set aside to cover unforeseen events. While many wouldn’t consider this money would be for a divorce,it could qualify as an unexpected expense.

If you don’t have much, or any, rainy day savings, here are some steps that can help you manage the cost of your divorce.

•   Create a budget. A good place to start is to assess your financial situation and create a realistic budget for your divorce. Take a look at your income, expenses, and any debts you may have. This will help you determine how much you can allocate toward your divorce costs, find areas where you may be able to cut costs, and develop a strategy to finance your divorce.

•   Negotiate with your spouse. If possible, see if you can reach an amicable agreement with your spouse regarding the division of assets and expense payments. This can help reduce your legal fees and minimize the overall cost of the divorce process.

•   Explore mediation. Mediation is a cost-effective alternative to traditional divorce litigation. A neutral mediator helps facilitate discussions between you and your spouse, allowing you to work together to reach mutually agreeable solutions. Mediation can often be less expensive and less time-consuming than going to court.

Borrow From Friends and Family

If you need some financial assistance to cover the costs of your divorce, reaching out to friends and family is one option to consider. Loved ones who understand your situation may be willing to lend you money to help you through this challenging time.

You’ll want to approach borrowing from friends and family with caution, however. You want to be sure that you can eventually pay the money back and clearly communicate that you intend to do so. Also, discuss any expectations or terms, and ensure that the arrangement is legally documented to avoid misunderstandings or strain on personal relationships.

Recommended: Am I Responsible for My Spouse’s Debt?

Is a Personal Loan a Good Option to Pay for Divorce?

Another option to finance your divorce is to consider a personal loan.

Personal loans are often unsecured (meaning you don’t have to put up an asset as collateral) and can be used for a variety of purposes, including legal costs. They can provide you with the necessary funds to cover divorce-related expenses while allowing you to make manageable monthly payments over a fixed period, typically two to five years.

If you have good to excellent credit, a personal loan can be a better choice than using a credit card for your divorce costs, since rates are typically lower. A personal loan may also allow you to borrow a larger amount than your current credit card limit allows. Personal loans also come with fixed monthly payments, which can be easier to budget for.

Before applying for a personal loan for your divorce however, you’ll want to consider the annual percentage rates (APRs) and repayment terms offered by different lenders. Be sure to carefully assess your ability to repay the loan to avoid adding further financial stress during and after the divorce process.

Putting Your Financial Health First

While it’s crucial to address the immediate financial challenges of a divorce, it’s equally important to prioritize your long-term financial health. Here are some tips to help you navigate this process.

•   Protect your credit. Divorce can have a significant impact on your credit score. To minimize the impact, you’ll want to be sure to close joint accounts and establish individual accounts. It’s also advisable to monitor your credit report regularly to ensure it’s accurate and address any issues promptly.

•   Update legal and financial documents. It’s a wise idea to review and update your will, insurance policies, retirement accounts, and other legal and financial documents to reflect your new circumstances. You’ll also want to update beneficiaries and ensure your assets are distributed according to your wishes.

•   Focus on rebuilding. After the divorce, take steps to rebuild your financial stability. Set financial goals, create a savings plan, and consider ways to increase your income or reduce expenses. Building a solid financial foundation will help you regain control of your life and prepare for the future.

Recommended: Budgeting Tips for Life After Divorce

The Takeaway

Financing a divorce can be a challenging task, but with careful planning and consideration, it is possible to navigate this process successfully. Key steps include assessing your financial situation, exploring various options such as negotiation and mediation, and, if needed, borrowing from friends and family or getting a personal loan to help cover the costs of the divorce.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

✓ Checking your rate will not affect your credit score.

FAQ

How are finances split in a divorce?

Before a divorce can be finalized, couples will need to draft a legal document that outlines how they’ll split their assets. Once a judge determines the agreement to be fair and legal, it becomes part of the divorce settlement.

Do I have to pay my spouse’s credit card debt in divorce?

In general, you’re responsible for any credit card debt that’s in your name or for joint credit card debt. But if you live in a community property state, you may also be on the hook for a portion of your spouse’s credit card debt, as long as the debt was incurred during your marriage.

How can I prepare my finances for divorce?

There are steps you can take to prepare your finances before the paperwork is filed. One helpful strategy is to keep track of your income and household expenses, such as food, child care, home repairs, and housing. It’s also a good idea to estimate future expenses, such as your child’s school tuition. This information will come in handy as you create a post-divorce budget, but it can also help the judge determine how to split your combined assets and debts.

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About the author

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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.

This article is not intended to be legal advice. Please consult an attorney for advice.

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

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A wire transfer is a way of moving money electronically between from one individual to another person or a business. For example, if you’re buying a house and you need to make the down payment, you could do a wire transfer to deliver the funds quickly. Or maybe you need to send money to relatives overseas. Wire transfers can be done within the U.S. and internationally.

Read on to learn more about bank wire transfers, how to wire money, the cost involved, and the pros and cons of transferring money this way.

What Is a Wire Transfer?

A wire transfer is an electronic transfer of funds between bank accounts. Wire transfers can be done by banks or by money transfer services like Western Union and MoneyGram.

Wire transfers allow a certain amount of money to be sent electronically from your bank account at a traditional or online bank to a recipient’s bank account, or vice versa.

Domestic vs International Wire Transfers

Wire transfers are a way to manage money, and they can be domestic or international.

Domestic wire transfers involve transferring money to someone within the same country. You may be able to do the wire transfer through your online portal on your bank’s website, using your bank’s mobile app, or by calling the bank. You’ll need the recipient’s banking information, including their account and routing numbers, and their contact information. Domestic wire transfers are typically processed the same day.

The process is similar for an international wire transfer in which you send money to someone in another country, but banks may have stricter rules for these transfers. For example, you might need to visit a branch in person and/or provide more detailed information about the transaction. International wire transfers may take two or three days or more to clear.

How Wire Transfers Work

You can wire money through a bank or wire transfer service. Either way, here are some details to know:

•   You’ll typically need to provide banking information like the recipient’s routing and account numbers in order to process wire transfers.

•   The money could be sent within hours if it’s a domestic wire transfer or a few days if it’s an international transaction.

•   When someone is sending money, the funds must be in their account before the bank will initiate the transaction. The money will be removed immediately after the wire transfer.

•   When someone is receiving money through a wire transfer, the bank will treat the payment like cleared money. As soon as the recipient’s account is credited, they can withdraw or spend the money.

How Long Does it Take to Wire Money?

A wire transfer can be set up in minutes at a bank or wire transfer service. Then, once it’s sent, wire transfers are typically processed the same day when they are domestic.

International wire transfers can take at least two to three days, depending on the receiving country’s banking processes.

How to Wire Money in 5 Steps

Wiring funds typically involves the following steps:

1. Make Sure You Have the Funds

If you are the sender, make sure that the money is in your bank account. Wire transfers can’t be sent if the money isn’t there.

2. Pick a Wire Transfer Service

The sender can typically transfer the money online or go to providers in person and use cash or a bank account, depending on the service.

3. Fill Out the Forms/Create an Account

When sending money through a bank, senders will need to fill out forms and include their bank account information, their bank’s contact information, and the recipient’s bank account information, including the account number and contact information for the bank. They may also need to provide a government-issued ID if they do a wire transfer in person.

When sending through a wire transfer service, they may have to log in online or go to the service in person and draw funds from a linked bank account or take cash, choose the recipient’s country, delivery method, and account information, and fill out any other information that’s required. Again, they may need to provide a government-issued ID.

Senders have to be careful that the bank account numbers they provide are accurate so that the money gets to the recipient.

4. Include Fees

Banks and wire transfer services should be able to tell users what the fees are going to be upfront. Your bank will typically deduct the fee from your bank account.

5. Ask for a Receipt

The last step in how to wire money is to get your receipt. This ensures that senders have a record of the transaction.

Pros of Wiring Money

Reasons that people might want to wire money include the following.

They Need to Move a Big Amount

Wire transfers are common for moving large sums, such as money in a savings account that’s needed for real estate transactions and sending money to and from family members.

The Money Is There

With checks and debit cards, payment can bounce or an account can go into overdraft. With a wire transfer, that’s not possible, since the money must be there in order to be sent. A wire transfer request will be declined if someone has limited funds.

It’s Safer Than Checks

While checks are typically safe, mailing them is not necessarily. Individuals might open mail that isn’t theirs and take checks out and try to cash them. Wire transfers may offer a more secure alternative to writing checks.

Money Can Be Sent Internationally

Say a person goes to work in another country but wants to send money to family members back home every month. With a wire transfer, that’s easily done.

Cons of Wiring Money

Wire transfers do have some possible drawbacks, such as:

Cost

For a domestic wire transfer, the cost is typically about $25 to $30 for an outgoing bank transfer within the U.S, and $0 to $15 for a domestic incoming payment. International transfers typically cost around $50 for an international outgoing payment and $0 to $25 for an international incoming wire transfer.

No Do-Overs

Wire transfers are typically irreversible, so both sender and recipient should be sure that all of the required information is correct.

Potential Scams

Scammers might ask unsuspecting people to wire them money for goods or services and then never follow through with the items, among other possible scams involving wire transfers. So it’s best to avoid wire transfers unless the sender and receiver know each other.

Unlike with a credit card, where someone might be able to dispute the charge, the money sent by a wire transfer may be gone forever once it’s sent.

Here, for a quick comparison, are the pros and cons of wire transfers:

Pros of Wire Transfers	Cons of Wire Transfers
Can move large sums domestically and internationally	There are typically fees involved.
Reliable — the money can only be sent if the sender has it	No do-overs
May be safer than checks	Potential for scams

Alternatives to Wiring Money

If you need to move money but don’t want to use a wire transfer, here are some other options.

Peer-to-Peer Services

P2P payments (peer-to-peer payments) through an app such as PayPal or Venmo usually can be made from a linked bank account or directly from the P2P account for free.

Some P2P providers charge around 1.5% to 3.5% to process payments drawn from a credit or debit card.

Bank Account Money Transfer

You may also set up electronic transfers with your bank. Funds can often be sent to any other bank account, not just those held at the same financial institution. The following are two different types of bank account transfers.

Automated Clearing House (ACH) Transfers

The Automated Clearing House is a national electronic network that links financial institutions in the U.S. With an ACH payment or transfer, an individual or a business can move money from one bank account to another.

For example, ACH transfers are often used for bill payment. Individuals provide their bank account information to businesses like their mortgage lender or utility companies, and those companies can then withdraw funds through autopay or one-time payments.

The ACH network is also often used by employers to direct deposit paychecks into employees’ bank accounts. This may show up on your bank account as an ACH credit, meaning the money has been paid to you.

Blockchain-Based Bank Transfers

A blockchain bank transfer is a way to send digital assets like cryptocurrencies over a blockchain network. (A blockchain network uses a decentralized network of computers to perform the transaction. ) The sender converts the money they want to send into digital assets in order to do the transfer. The recipient usually receives it within minutes.

However, the blockchain transfer process can be complex and typically involves a learning curve for those who have never done it.

Here’s a quick overview of how three major methods of transferring funds — wire transfer, P2P transfer, and bank account transfer — compare:

Wire Transfer	P2P Services	Bank Account Transfer
Often involve a fee	May involve a fee, depending on the provider and funding source	Often free
May take at least two to three days internationally	May take up to 5 days internationally	May take up to 5 days internationally

The Takeaway

Wire transfers can be an efficient electronic way to move funds between people or businesses. Depending on the specific details, such as whether the transaction is domestic or international, the timing and fees may vary. A good first step may be to check with your banking partner to learn what they offer.

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 3.10% APY on SoFi Checking and Savings.

FAQ

What information is required to wire money to someone?

To wire money, you will need to use your bank or a wire service and have the sum available in your bank account that you’re planning to transfer. Then, you’ll need to fill out the proper forms, provide the recipient’s bank account information, and pay any fees owed for the transfer.

How much do bank wire transfers cost?

The amount it costs to wire money depends on the financial institution, whether the money is moving into your account or into someone else’s account, and whether the funds are being sent domestically or internationally. Fees typically range from about $0 to $50 per transaction.

How do you do a wire transfer?

To wire money, you can go through your bank or use a wire transfer service. Make sure you have the funds available that you’re planning to transfer. Then, you’ll fill out paperwork with the recipient’s banking information, including their bank account and routing numbers, and pay a fee for the transfer, if required. Finally, it’s a good idea to get a receipt so that you have a record of the transfer.

Are wire transfers reversible if I make a mistake?

Wire transfers are generally irreversible once they’re sent. Carefully review the recipient’s information, including their bank account and routing numbers, to make sure they are correct before you sign off on a wire transfer.

Do wire transfers get reported to the IRS?

Wire transfers of sums over a certain amount are reported to the IRS. Any transfer over $10,000 must be reported to the IRS by banks and other financial institutions under the Bank Secrecy Act. The reason for this is to help prevent money laundering and other illegal activity.

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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.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
This article is not intended to be legal advice. Please consult an attorney for advice.
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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You may have heard of both FICO® and Experian®, but the two companies serve different purposes.

FICO is a credit scoring model developed by the Fair Isaac Corporation (FICO) that lenders often use when assessing a borrower’s creditworthiness, or how likely they are to repay debts.

Experian, on the other hand, is one of the three major credit bureaus (along with Equifax® and TransUnion®) that collect credit and debt information and use it to create individual credit reports. These credit reports offer more details about an individual’s credit history than FICO’s three-digit score.

Take a closer look at what separates FICO vs. Experian, which credit score is the most accurate, and how to keep tabs on your credit score.

What Is the Difference Between Experian Score vs FICO?

As mentioned previously, Experian is a major credit reporting agency. It does not have its own credit scoring model. However, in 2006, it partnered with Equifax and TransUnion to create the VantageScore credit score model. Like FICO, VantageScore provides three-digit credit scores for consumers, though it uses slightly different factors and weightings.

The credit score Experian provides — sometimes called an “Experian score” — relies on both VantageScore and FICO Score.

FICO works differently. As a credit scoring model, it uses a proprietary algorithm to evaluate your credit risk. Specifically, the following factors affect your credit score:

•   Your payment history

•   The amounts you owe

•   The length of your credit history

•   How much new credit you have

•   The diversity of your credit mix

While FICO is used in the majority of lending decisions, some lenders use VantageScore.

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.

Which Credit Report Is Most Accurate?

It’s common to have multiple credit reports, including ones with Experian, Equifax, and TransUnion. It’s also common to have minor differences in your credit file from bureau to bureau. That’s because lenders don’t always report the same information at the same time to every bureau. But rest assured, credit reports from all three credit bureaus are widely considered to be accurate.

That said, it’s a good idea to regularly review your credit report. You can access yours for free via AnnualCreditReport.com or through tools such as a money tracker app.

If you find any errors or inconsistencies in your credit report, be sure to dispute them with the relevant credit bureau so the incorrect information can be removed.

Why Is My Experian Credit Score Different From FICO?

You may notice that your so-called Experian score is slightly different from your FICO Score. That’s because both scores are based on different scoring models. FICO uses its own algorithm, while Experian’s score uses both FICO and VantageScore.

While some variations are to be expected, if one score is drastically higher or lower than the other, it’s a good idea to review your credit reports and address inaccuracies.

Is Experian Better Than FICO?

No credit score is better than another. Some lenders prefer FICO, while others rely on VantageScore. Each model can provide lenders with different insights about a person’s financial habits.

The good news is that FICO and VantageScore generally calculate their scores with similar information, which means you can improve both scores simultaneously. Smart strategies include paying bills on time, keeping credit utilization low, and paying down balances.

Recommended: How Long Does It Take to Build Credit?

Is a FICO Score the Same as a Credit Score?

When comparing a FICO Score vs. a credit score, it’s important to understand that a FICO Score is a type of credit score. But of course, it’s not the only type of credit score.

VantageScore, for example, issues credit score models such as VantageScore 4.0, VantageScore 4plus™, and VantageScore 5.0. Experian, Equifax, and TransUnion also provide credit scores based on data in your credit report.

What Is My Real Credit Score?

There is no one true credit score. Instead, banks, lenders, and other companies may use different credit scores when they check your credit. And they could see different figures, depending on which credit score they use.

Fortunately, it’s relatively straightforward to check your credit score without paying. That way, you can get an idea of what your credit score is and what lenders might see when they check your credit.

What Score Do Lenders Use?

Lenders can and do consider a variety of credit scores, depending on which scoring model works the best for their specific lending criteria. Unfortunately, it’s often difficult or even impossible to know which model a particular lender uses. However, the factors that impact your credit score generally hold true regardless of the credit score model used.

Understanding Various Credit Score Models

While most credit score models start with some of the same basic data, each one uses different information and weighs credit history information differently. This can mean that the different credit score models, such as FICO and VantageScore, come up with different credit scores, even for the same consumer.

Recommended: What Is the Starting Credit Score?

How Can You Check Your Credit Score?

Keep in mind that your credit score updates at least once a month as new information comes rolling in from lenders., If you’re working on boosting your three-digit number, you may want to check on your progress every so often.

There are a few different ways that you can keep tabs on your credit score. You can sign up for a credit score monitoring service, which can provide regular credit score updates.

Another way is by using a spending app or credit card that provides access to your credit score as a feature or benefit. You may also have free access to it through your bank.

The Takeaway

FICO and Experian may be common names, but that’s where the similarities end. FICO is a widely used credit scoring model that creates a three-digit score based on reports provided by credit bureaus, including Experian. In addition to creating those detailed credit reports, Experian generates a credit score using data from FICO and another scoring model, VantageScore. Lenders may use both VantageScore and FICO when determining an individual’s creditworthiness.

Credit scoring models usually rely on a similar set of information, which means you can take the same actions to boost both scores. Making on-time payments, paying down what you owe, and diversifying your credit mix are all ways to help build up your credit score.

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.

Meet SoFi Coach, your smart personal guide to getting your money right.

FAQ

Is Experian or FICO more reliable?

Your VantageScore and your FICO Score are two different credit scores that use two different credit models. Both are considered to be reliable. But lenders may prefer to use one model over the other, depending on which one best fits their needs.

Why is my FICO Score different on Experian?

Though it does not have its own credit scoring model, Experian generates a score using data from VantageScore and FICO. FICO, on the other hand, creates its score using only its own calculations.

How close is your FICO Score to your credit score?

People have multiple credit scores, and your FICO Score is just one of them. Most credit scores use a similar set of data, which means credit scores usually vary by only a few points. If you spot a large discrepancy between your scores, take a look at your credit report and dispute any errors or inaccuracies you see.

Which credit score is most accurate?

No one credit score is considered more accurate than the others. Rather, different credit scores may provide lenders with different insights on spending or borrowing habits.

What is a good FICO Score?

FICO Scores are generally divided into five different categories, from Poor to Exceptional. A “Good” FICO Score falls between 670 and 739. Having a FICO Score that is Very Good (740-799) or Exceptional (800-850) is even better.

Why is my FICO Score higher than my credit score?

Your FICO Score is just one of many credit scores that you may have. It may be higher or lower than other credit scores depending on the calculations used, including how the information in your credit report was weighted. As long as your various scores are within a few points of each other, there is usually no cause for alarm.

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Photo credit: iStock/Prostock-Studio

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.

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Building an emergency fund savings program for employees can be one way employers can help workers prepare for unexpected expenses and financial disruptions. Many Americans continue to struggle to build adequate emergency savings.

According to Bankrate’s 2026 Annual Emergency Savings Report, just 27% of U.S. adults have enough emergency savings to cover at least six months of expenses, while 24% have no emergency savings at all. That shortfall can contribute to financial stress. Bankrate found that 60% of Americans are uncomfortable with the amount of emergency savings they have, including 31% who are very uncomfortable and 29% who are somewhat uncomfortable.

HR leaders have taken note of the need to help employees build greater financial resilience. Some employers are incorporating emergency savings into their broader financial wellness benefits, giving workers tools to set aside money for unexpected expenses.

If your organization is considering an emergency saving benefit, there are several ways to approach it. Here are six moves that can help you build an emergency auto savings program that supports your employees while fitting your company’s needs.

1. Evaluate Employee Needs

Adding an emergency savings plan can help employees alleviate a significant amount of financial stress and provide a solution to the lack of short-term savings. This might be especially appealing for younger members of your workforce who may have fewer resources to rely on than older employees.

To determine how effective an auto savings program will be for each segment of your staff, you might think about creating a preliminary survey of employees to see what they feel they need most from a short-term savings plan.

Consider the following questions:

•   Will you participate or do you feel there are already too many demands on your paycheck?

•   Are you more likely to join if the company offers a match or initial contribution?

•   Will you gravitate to emergency savings in lieu of long-term retirement savings?

•   Do more accessible after-tax savings in a 401(k) account that can be used for emergencies appeal to you?

•   Do you think automatic enrollment in an emergency saving plan could help you feel more financially secure?

2. Check Out the Competition

A good next step is to determine what competitors are offering their existing talent and new recruits in the short-term financial wellness arena. For example, is an emergency savings program common among companies competing for your talent? Do most competitors offer a match or contribution to get employees, especially new hires, started?

Use the results of this data and the survey of employees to devise the most effective program for your employees (see below) and, importantly, to help convince team members and management why an automated emergency savings program is right for your company’s comprehensive compensation and benefits package.

3. Determine the Impact of an Emergency Savings Program on Your Total Rewards Strategy

Your total rewards strategy may have evolved in recent years as you’ve adjusted compensation, benefits, flexibility, performance recognition, and career development programs. As you consider adding an emergency auto savings benefit, think about how it fits into your broader strategy. Does it support your financial wellness goals and align with your organization’s business priorities? Does it address a financial need that your employees are facing today?

Emergency savings can complement a broader total rewards strategy by helping employees prepare for unexpected expenses and feel more financially secure. But it’s important to structure the benefit so it supports your overall goals for attracting, retaining, and engaging talent.

Adding an emergency savings benefit may also shift employees’ attention toward immediate financial needs rather than longer-term needs. As you implement the program, consider how you can support both. Alongside emergency savings, continue educating and encouraging employees to work toward longer-term financial goals, such as saving for retirement and preparing for future health care costs.

The goal is to make emergency savings part of a broader financial wellness strategy — not a replacement for other benefits and resources that help employees build financial security over time.

4. Select the Solution and Roll Out Best for Your Goals

At SoFi at Work, we’ve found that selecting the right solution is critical to the utilization and effectiveness of every benefit in your total rewards strategy. Following the McKinsey framework can work well for all types of benefit rollouts, including emergency auto savings programs. These four principles can also help ensure benefit rollouts are integrated into your business strategy.

Choose Partners Wisely

There are generally two ways to set up ESAs for employees: One is to link these accounts to an existing 401(k), where the ESA shares the same platform as the 401(k) plan. Another option is to set up an ESA with an outside bank or financial institution.

For many employers, an out-of-plan solution is appealing because these accounts are often hosted through banking platforms that can offer easier access to the funds for employees, while reducing employer responsibility and involvement. If you go this route, you’ll want to look for a credible partner that can provide expert support and advice to a wide variety of employees with varying financial needs. Consider partnering with a bank, credit union, or other financial institution that offers a low-cost, easy-to-use platform, like SoFi At Work’s Emergency Vault.

Focus on What’s Feasible

Make the program feasible to launch, which will help you make meaningful progress for employees in the short term as you lay down the foundation for long-term initiatives. This is key with emergency savings rollouts because by helping to relieve some short-term financial stress, you allow employees to focus on long-term goals sooner rather than later.

Make It Sustainable

Sustainable programs are able to flex with your business over time and during uncertain business conditions. Can your emergency auto-save program survive current or future political and economic changes? To answer this, your company may need to weigh questions such as: Do the engagement benefits of a match outweigh the cost of sustaining the program? Is the plan flexible enough to undergo changes in the economy, your workforce, and your business strategy over time?

Get Personal

Enable personalization where you can. This way, employees are likely to feel emergency auto savings can help meet their unique needs. Offering a range of amounts that employees can automatically withdraw is the first step toward personalization. Providing calculators and other educational tools that help employees determine how much they need to save and how much they can afford to save is another personalization tactic.

Recommended: How Much Should Your Employees Have in Emergency Savings?

5. Use Communication Effectively

Top-notch communication techniques can help you drive participation and, importantly, change savings behavior in your workforce. Coordinating communications about the importance of emergency savings with other financial well-being education programs can also help get the word out in an immediate and holistic way.

Clarity is Key

Accompany your rollout with clear communications telling employees exactly what they can expect, including:

•   How payroll deduction works

•   How much — or how little — employees can save in the account

•   Calculators, tools, and education efforts designed to help employees determine what they should/can save

•   Thorough explanation of any company match offered — how much, how often, and portability

•   Which bank, credit union, or other financial institution will run the account

•   How much, if any, interest will be earned

•   How withdrawals can be made

•   The fact that withdrawals can be made for any reason, no questions asked, with no penalties

•   A reminder that if employees leave the company, they may easily transfer their contributions to the account to their own savings account

Meet Employees Where They Are

Make sure effective and thorough communications are available across platforms so you can keep up with your far-flung workforce. Simply posting on the company website and hoping people sign up likely won’t work, especially for remote workers who may be feeling disconnected from corporate communications.

In all communications, make sure you take a multi-platform, consumer-grade, mobile-native technology approach.

6. Take Ongoing Pulse Checks

To determine engagement and any ongoing tweaks that need to be made, you’ll want to establish metrics to measure success at least quarterly. Then you’ll want to benchmark those results against your competitors and national averages to add an “outside-in” perspective.

There are several ways you can solicit employee input on the success of the program: employee surveys, focus groups with critical talent segments, and analysis of recent departing employees and job candidates who declined an offer.

Metrics can also help you track how well the benefit is supporting business goals. For instance, a customer-service-oriented company may find a higher focus among phone reps and fewer errors when staff is less burdened with financial worries.

The Takeaway

These six concepts are designed to help you build a successful, engaging, and effective employer-sponsored emergency savings plan. By reducing employee stress and increasing productivity and loyalty, you can help promote financial well-being in your workforce as well as enhance your company’s total rewards strategy and overall business objectives.

If you’re interested in setting up an emergency savings program, SoFi at Work can help. We provide an array of benefit platforms and education resources that can enhance financial wellness throughout your workforce.

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Photo credit: iStock/alvarez

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.

SOAW-Q326-004

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Real estate investing can be one way to diversify an overall investment portfolio and potentially generate income. But not everyone has the resources, time, or know-how to purchase and manage an investment property. Fortunately, there are a number of ways to invest in real estate, from publicly traded real estate investment trusts (REITs) to rental properties and real estate crowdfunding. The best option depends on how much money you have to invest, how hands-on you want to be, and how much risk you’re comfortable taking. Here’s what you need to know to get started.

Why Invest in Real Estate?

Real estate investing can offer a number of potential benefits for both new and experienced investors. Here are some of the main advantages to consider.

•   It can help diversify a portfolio: Real estate investments don’t necessarily move in lockstep with stocks and other investments. However, real estate can still be affected by broader economic conditions, interest rates, and market sentiment, so diversification does not eliminate risk.

•   It may offer some protection against inflation: Real estate can sometimes benefit from rising prices. For example, landlords may be able to increase rents over time. That said, inflation can also increase costs such as maintenance, insurance, and property taxes, which can reduce cash flow.

•   It may generate income: Rental properties can produce rental income, while some REITs distribute income to shareholders. However, the consistency and amount of this passive income can fluctuate.

•   It may appreciate over time: Property values can increase over the long term, allowing you to build equity and capital gains when you eventually exit. However, appreciation is not guaranteed. Real estate values can also decline, sometimes significantly.

•   It may offer tax benefits: Depending on the type of real estate investment and your circumstances, you may be able to take certain tax deductions. For example, rental property owners may generally deduct certain expenses such as mortgage interest, property taxes, repairs, and depreciation, according to the IRS.

Another thing that can make real estate investing attractive for beginners is the variety of ways to participate. You can choose an approach based on your available capital, time commitment, desired level of control, and comfort with risk.

7 Ways to Get Started in Real Estate Investing

Real estate investments can take different forms as part of a broader strategy focused on alternative investments. Some involve directly owning and managing property, while others allow you to gain exposure to real estate without buying a building yourself.

As you compare different real estate investments, here are some factors to consider:

•   Minimum investment requirements

•   Fees and other costs

•   Liquidity and potential holding periods

•   How the investment has performed historically

•   Potential sources of return

•   Investment-specific risks

•   How much time and effort the investment requires

Keeping these key factors in mind, you might consider one of these seven ways to get started in real estate investing.

1. Real Estate Investment Trusts (REITs)

A real estate investment trust (REIT) is a company that owns or finances income-producing real estate. Depending on the REIT, its holdings may include apartment buildings, warehouses, shopping centers, hotels, office buildings, or other types of real estate. Some REITs invest in mortgages or other real estate-related debt instead of owning properties directly.

REITs offer a way to gain exposure to real estate without purchasing and managing physical property yourself. REITs generally must distribute at least 90% of their taxable income to shareholders annually to maintain their special tax status. However, distributions can fluctuate and the value of a REIT can fall.

Many REITs are publicly traded on a stock exchange, allowing you to buy and sell shares through a brokerage account much like traditional stock trading. This can make publicly traded REITs relatively accessible and liquid compared with directly owned property.

2. REIT ETFs

An REIT exchange-traded fund (ETF) is a fund that generally holds a portfolio of REITs and trades on a stock exchange throughout the trading day. Buying shares of one REIT ETF can give you exposure to multiple REITs through a single investment.

One potential advantage of ETF investing is diversification, and this is also the case with REIT ETFs. Instead of choosing individual REITs, you can own a basket of REITs with one purchase. ETFs may also have relatively low expense ratios, although fees vary from one fund to another.

REIT ETFs also have potential drawbacks. Their share prices can fluctuate based on changes in the value of their underlying REITs, interest rates, economic conditions, and real estate market trends. The fund’s expenses can also reduce potential returns.

As with other investments, it’s important to review a fund’s holdings, fees, investment strategy, and risks before buying shares.

3. Real Estate Mutual Funds

Real estate mutual funds pool money from multiple investors and use it to purchase a portfolio of securities related to real estate. Depending on the fund’s strategy, its holdings may include REITs, real estate companies, mortgage-related securities, or other real estate investments.

Because a mutual fund can hold many securities, it may provide diversification across multiple companies or types of property through a single investment. For example, a fund might hold REITs that focus on apartments, warehouses, health care facilities, and retail properties. However, investors are still exposed to property market ups and downs. Mutual funds typically also charge annual management fees, which may be higher than REIT ETFs.

Unlike an individual REIT, a mutual fund is not itself required to distribute 90% of its taxable income. Mutual funds can make distributions to shareholders, and investors can also potentially benefit from changes in the value of the fund’s holdings.

One important difference between mutual funds vs, ETFs is how they trade. Mutual fund shares are generally bought from and redeemed with the fund at the next calculated net asset value, rather than traded continuously throughout the day on an exchange.

4. Real Estate Crowdfunding

Real estate crowdfunding platforms allow multiple investors to pool money to finance real estate projects or invest in real estate-related securities. Depending on the platform and offering, investors may be able to participate with relatively small amounts of money compared with buying a property directly.

Crowdfunding investments can be less liquid than publicly traded REITs and ETFs, since some offerings require investors to keep their money invested for a specified period. Eligibility also varies by offering. Some real estate crowdfunding opportunities are available to nonaccredited investors, while others are limited to accredited investors. Under Securities and Exchange Commission (SEC) rules, an individual generally qualifies as an accredited investor if they meet certain income or net-worth requirements or hold certain professional securities licenses.

Because real estate crowdfunding investments can have different structures, fees, liquidity restrictions, and risks, it’s important to review the offering documents carefully before committing money.

5. Rental Properties

Buying a rental property can provide rental income if you can find and retain tenants. Some ways to generate rental income through real estate include:

•   Buying a property and renting it to long-term tenants

•   Buying a vacation property and renting it to short-term or seasonal tenants, where permitted

•   Purchasing a multifamily property, such as a duplex or triplex, and renting the units

•   Renting out part of your home

However, owning rental property also comes with risks and responsibilities. Potential challenges include:

•   Periods when a property is vacant and produces little or no rental income

•   Problem tenants or tenant turnover

•   Maintenance and repair costs

•   Property taxes, insurance, and other operating expenses

•   Lack of liquidity compared with publicly traded investments

•   Unexpected expenses that reduce cash flow

Financing is another important consideration. Depending on the property and your circumstances, you may be able to use a conventional mortgage, an FHA loan for an eligible multifamily property you plan to occupy, a home equity loan or home equity line of credit (HELOC), or another type of financing. Each option has its own eligibility requirements, costs, and risks.

Before purchasing a rental property, it’s important to estimate not only the mortgage payment but also property taxes, insurance, maintenance, vacancies, property management, and other expenses. A property that generates rental income isn’t necessarily cash-flow positive after all of its costs are considered.

Recommended: Investing in Real Estate vs. Stocks

6. Fix-and-Flip Properties

With a fix-and-flip strategy, you purchase a property, renovate it, and then attempt to sell it for more than your total costs. The difference between the sale price and your costs isn’t guaranteed to be a profit, and unexpected expenses or a slower-than-expected sale can reduce or eliminate the potential return.

Successful house flipping generally requires knowledge of the local housing market, an understanding of renovation costs, and enough time or expertise to manage the project. You’ll also need to consider who will complete the renovations. Doing some of the work yourself may reduce labor costs, but taking on projects without the necessary skills can lead to delays or additional expenses.

Financing options may include a conventional mortgage, a business or investment-property loan, or a short-term hard money loan, depending on the property and borrower. Hard money loans can have higher interest rates and fees than traditional mortgages and typically have relatively short repayment periods, so borrowers need to carefully consider whether the financing fits the project timeline.

7. Own and Improve Property Directly

Another way to participate in real estate is through direct ownership of property. For example, you might purchase a property and make improvements that could increase its usefulness or market value. You could also purchase a property with the intention of eventually converting it to a rental.

However, owning a primary residence isn’t necessarily the same as making a real estate investment. Your home can build equity and potentially appreciate, but it also comes with costs such as mortgage interest, property taxes, insurance, maintenance, and repairs. Whether a home is a good financial decision depends on factors such as the purchase price, financing, how long you plan to stay, and local housing conditions.

If you’re considering buying a home, understanding what you can afford and what you may qualify for with a mortgage can be a good place to start. Shopping around with multiple mortgage lenders can help you compare interest rates, fees, and loan terms.

How Do You Invest in Real Estate With Limited Capital?

You don’t necessarily need enough money to purchase a property outright to get started with real estate investing. REITs and REIT ETFs, for example, can provide exposure to real estate through a brokerage account without requiring you to make a large down payment or manage a property.

Real estate crowdfunding can also have relatively low minimum investment requirements, although the minimum varies by platform and offering. Some crowdfunding investments are available to non-accredited investors, while others may have higher eligibility requirements.

If you want to own property directly, you may be able to use financing to purchase a rental property rather than paying the full purchase price in cash. A larger down payment can reduce the amount you need to borrow, but you’ll still need money for closing costs, reserves, maintenance, and unexpected expenses.

How to Know If Investing in Real Estate Is a Good Idea for You

Is real estate investing right for everyone? Not necessarily. Every investor’s goals, finances, and risk tolerance are different. Asking yourself these questions can help you determine where real estate might fit into your portfolio:

•   How much money are you able and willing to invest in real estate?

•   What is your main goal or reason for considering real estate investments?

•   If you’re interested in rental properties, will you manage them yourself or hire a property management company?

•   How much rental income would a property need to generate to make sense for you after expenses?

•   If you’re considering a fix-and-flip, do you have the time, skills, and financial resources to manage a renovation?

•   How will you finance a rental property or fix-and-flip?

•   If you’re considering REITs, real estate crowdfunding, or REIT ETFs, how long do you expect to hold the investment?

•   How much risk are you comfortable taking?

•   How much liquidity do you need if your financial circumstances change?

It may also be worth talking with a financial or tax professional if you’re unsure how a real estate investment could affect your broader financial situation or tax bill.

The Takeaway

There are several ways to invest in real estate, from publicly traded REITs and REIT ETFs to crowdfunding, rental properties, and fix-and-flip projects. Each approach comes with different costs, risks, liquidity, and time commitments.

For beginners, the right choice may depend largely on how much money they have available, how involved they want to be, and how much risk they can comfortably take. Understanding those factors and researching an investment before committing money can help you choose an approach that fits your financial goals.

Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

How can I invest in property with little money?

You don’t necessarily need enough money to purchase a property outright to invest in real estate. Real estate investment trusts (REITs) and REIT exchange-traded funds (ETFs) allow you to gain exposure to real estate through a brokerage account, while some real estate crowdfunding platforms have relatively low minimum investments. If you want to own property directly, financing can reduce the amount of cash needed upfront, although you’ll still need money for a down payment, closing costs, reserves, and ongoing expenses. Your options will depend on your finances, investment goals, and risk tolerance.

Is real estate investing worth it?

Whether real estate investing is worth it depends on your financial goals, available capital, time, and tolerance for risk. Real estate can potentially generate rental income, provide portfolio diversification, and appreciate over time, but returns aren’t guaranteed. Direct property ownership also comes with expenses, maintenance responsibilities, and limited liquidity. Real estate investment trusts (REITs), exchange-traded funds (ETFs), and crowdfunding can offer real estate exposure without directly managing property, but each carry unique risks, fee structures, and liquidity profiles. Before investing, it’s wise to consider the potential benefits, costs, risks, and how the investment fits with your overall financial plan.

What makes a good real estate investment?

A good real estate investment depends on your goals and financial circumstances. For a rental property, factors such as location, purchase price, expected rental income, operating expenses, vacancy rates, and financing costs can affect whether the property makes financial sense. For real estate investment trusts (REITs) and other publicly traded investments, you’ll want to consider the underlying assets, fees, performance history, and risks. Regardless of the type of investment, it’s important to understand the potential costs and risks and avoid assuming that past performance or projected returns will continue.

What is the easiest way to buy real estate online?

For many beginners, buying shares of publicly traded real estate investment trusts (REITs) or REIT exchange-traded funds (ETFs) through an online brokerage may be one of the simplest ways to gain exposure to real estate. You can also use online crowdfunding platforms to participate in certain real estate offerings, although eligibility, minimum investments, fees, and liquidity vary. If you want to purchase a physical property online, real estate listing and brokerage websites can help you find properties, but buying a property involves financing, inspections, closing costs, and other steps beyond the online purchase itself.

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Photo credit: iStock/Pheelings Media

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.

SOIN-Q326-090

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