Financial Independence Archives

Q: Why are music festivals so expensive?

Attending music festivals can be expensive. The tickets for weekend-long events are pricey (the organizers have to cover the bands’ fees, the space, set-up, advertising, and more). Plus, if you travel to get there, you have transportation and lodging costs to contend with as well, plus food costs are part of the experience, too.

Q: How much does it cost to hold the festival?

One reason that tickets for music festivals are so expensive is that it can cost a lot of money to host these events. It can cost millions upon millions of dollars to host a music festival — especially when top-tier musical talent is performing; their fees can be steep, in keeping with their stature.

Q: Should you layaway your festival tickets?

Whenever possible, it’s best not to make a purchase using a layaway arrangement, especially for an unnecessary expense like a music festival. While layaways don’t come with interest like credit cards, they do typically charge fees for spreading out the cost of the purchase. It’s best to create a budget for attending a music festival and to save up for festival tickets in advance.

May

2025

How Much Does It Cost to Go to a Music Festival?

By Jacqueline DeMarco | Budgeting & Goals, Financial Independence, money | Comments Off

We won’t sugarcoat it: Music festivals can cost a lot. Weekend passes are often several hundred dollars and don’t include travel expenses and other extras. That doesn’t mean you should skip music festivals altogether. The events are a great way to sample many different artists, meet people, and enjoy time outdoors.

Keep reading to learn more about the average cost of going to a music festival, the main expenses to consider, and how to make attending one of these events more affordable.

Key Points

• The main expenses for attending a music festival include tickets, travel, lodging, and drinks/meals.

• Buying tickets early can help save money by avoiding last-minute price increases.

• Booking travel in advance can also lead to better deals.

• Camping at the festival can be a cost-effective and enjoyable alternative to hotel stays.

• Bringing your own food and water, if permitted, can greatly reduce meal expenses.

What Is the Average Cost of a Popular Music Festival?

The average cost of music festival tickets — typically for an event that lasts several days — ranges from $200 to $600. If travel is required, expenses can shoot up quickly: Spending $2,000+ for a long weekend is not unusual. Transportation and lodging are often premium-priced during a festival, since businesses know they can get top dollar.

Music festival costs also depend on where the festival is located and the type of experience the attendee is looking to have. Camping out will save you money, as will skipping the VIP experience for basic tickets bought at early-bird pricing.

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Main Expenses to Consider When Going to a Music Festival

Because everyone’s music festival experience looks different, costs can vary. That said, these are the common music festival expenses worth planning for.

Tickets

Tickets for a multi-day event can cost hundreds of dollars. For instance, in 2025, general admission (including fees) to Coachella is approximately $550, Stagecoach is close to $400, and Lollapalooza runs around $385.

Costs will vary depending on when you buy tickets (they generally get more expensive closer to the actual performance date), and whether you decide to shell out for the VIP options. Also keep in mind that tickets typically don’t include parking, food, or any accommodations.

Travel

Don’t forget to budget for travel for out-of-town events. Driving may cost less than flying, and if you opt to travel via camper, it could save you money on hotels. Just keep in mind that the cost of gas for driving an RV can be high.

These tips on saving up for a vacation can help you project your travel costs.

Transportation

Even if you live nearby, you may need to pay for a rideshare or shuttle pass to get to the event. At the very least, remember to account for gas and parking.

Lodging

Music festivals attract large crowds and visitors from around the world. That means local hotel and home rental costs can become inflated. Book early to avoid overpaying once pickings are slim.

Meals

Because music festivals have their attendees held somewhat captive for the day or days of the event, the food and drinks for sale there can be exorbitant. Think about what you pay at a concert or in an airport to get a sense of what you might need to pay.

Clothing

Part of the fun for many festival-goers is planning what you’ll wear. Sure, some people are happy in their usual jeans and a T-shirt, but if you want to buy some new clothes or accessories before a music festival — be honest! — add those costs to your budget.

Recommended: 15 Ways to Save Money on Clothes

Tips for Saving Money on a Music Festival

The price tag for a music festival experience can be steep, but it can also be an amazing and memorable experience. Here are some ways to bring the costs down so you can be part of the fun.

Project Your Expenses

From tickets to transportation to food, plan out what the day or weekend will entail cost-wise and make a budget. If you can plan for this outing well in advance, you can slowly save up for it so your overall budget doesn’t take a major hit.

Once you know the total amount needed, you can divide that by the number of months until it’s time to pay for your expenses. The figure you see is how much you should save monthly to afford the festival.

💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

Take a Pass on VIP Tickets

Music festivals often have different tiers of tickets and offer some sort of VIP experience for a much higher price than the cost of general admission. You may want to skip these overpriced tickets, and spend the money on food or transportation instead.

Buy Tickets Early

Some music festivals offer cheaper tickets for people who book early, so don’t sleep on those good deals. If possible, save up before tickets go on sale to take advantage of early booking deals.

Book Travel Far in Advance

It can be possible to save on travel and lodging by booking those things sooner rather than later as well. (This is a wise move when trying to save money for a trip of any kind.) Once your festival tickets are booked, try to find some travel deals. When flights and hotels get down to the last few available options, prices tend to soar.

BYO Food and Water

If allowed, pack food and lots of water to avoid overspending on food and drinks at the event. Bonus: You’ll spend less time in line and more time enjoying the music. Some music festivals won’t allow attendees to bring in their own food, but most allow water from outside sources. Not overspending on water is a great way to save money and stay hydrated while out in the sun all day.

Volunteer

Some music festivals offer volunteers the chance to trade work for access to the festival. It’s always worth seeing whether such opportunities are available — they may very well be worth the trade-off.

Walk Whenever You Can

If you’re staying nearby, try walking to the event. Parking is often expensive at music festivals, and ride-share prices surge as well due to high demand.

Camp Out

Because it can be hard for the many attendees of music festivals to find affordable lodging nearby, some music festivals are held at campgrounds. Camping generally costs significantly less than hotels, and it can add to the fun of the weekend.

The Takeaway

Music festival costs can vary greatly, but the major ones are undeniably expensive. Planning ahead for these events is one of the best ways to manage costs. By booking early, camping instead of staying at a hotel, and considering volunteer opportunities on-site, you may be able to listen to your fill of music and still have money in the bank.

If you’re looking to save up for a music festival or other short-term goal, SoFi has you covered.

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FAQ

Why are music festivals so expensive?

Attending music festivals can be expensive these days. For one reason, higher artist fees have led to higher ticket prices. Organizers also have to cover the cost of the space, set-up, advertising, and more. Fans not only have to pay for tickets but also cover the cost of traveling to the event, staying in a hotel or campground, and food and drinks at the venue.

How much does it cost to hold the festival?

The cost of holding a music festival varies widely depending on the size and scale of the event. A small, local music fair might cost $5,000 to $20,000, while a large-scale, multi-day festival featuring top tier artists can run well into the millions.

Should I use my emergency fund for a festival?

Emergency funds are a type of savings fund specifically earmarked for unexpected expenses that interrupt daily life, such as a car repair, medical bill, or loss of one’s income. Since a music festival is a planned expense, you generally do not want to tap your emergency fund for this. Instead, it’s better to gradually save up for the cost of the festival in advance.

Should you layaway your festival tickets?

Using layaway can make buying a festival ticket more manageable by spreading the cost over several months. However, there are some downsides and risks. For one, committing to a payment plan may strain your finances if an unexpected expense crops up. Also in some cases, failure to complete the payment plan leads to forfeiting the ticket — and the money you’ve already paid. In addition, some layaway plans charge service fees, which can increase the overall cost of the ticket. In general, it’s better to create a budget for attending a music festival and to save up for the tickets in advance.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/urbazon

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May

2025

5 Tips to Hedge Against Inflation

By Brian Nibley | Financial Independence, Growing Wealth, invest, Investing | Comments Off

Inflation refers to the ever-increasing price of goods and services as measured against a particular currency. The purchasing power of a currency depreciates as a result of rising prices. Put differently, a rising rate of inflation equates to a decreasing value of a currency.

To achieve financial freedom and build wealth over long periods of time, it’s vital to understand the concept of inflation, and some strategies to protect or hedge against it.

Key Points

• Inflation decreases currency value, impacting savers negatively.

• Moderate inflation encourages spending, benefiting economic growth.

• ETFs offer diversified investment, potentially hedging against inflation.

• Gold has historically maintained purchasing power, serving as a long-term inflation hedge.

• Gold prices can rise sharply during periods of rapid inflation, though this is never assured.

What Is Inflation, and How Is It Measured?

Inflation is most commonly measured by the Consumer Price Index (CPI), which averages the national cost of many consumer items such as food, housing, healthcare, and more.

The opposite of inflation is deflation, which happens when prices fall. During deflation, cash becomes the most valuable asset because it can buy more. During inflation, other assets become more valuable than cash because it takes more currency to purchase them.

As for which assets tend to perform best during times of inflation? This is a much-debated topic among investment analysts and economists, with many differing opinions. And while there may be no single answer to that question, there are still some generally agreed-upon concepts that can help to inform investors on the subject.

Is Inflation Good or Bad for Investors?

For the average person who tries to save money without investing much, inflation could generally be seen as negative. A decline in the purchasing power of the saver’s currency leads to them being less able to afford things, ultimately resulting in a lower standard of living.

For wealthier investors who hold a lot of financial assets, however, inflation might be perceived in a more positive light. As the prices of goods and services rise, so do financial assets. This leads to increasing wealth for some investors. And because currencies always depreciate over the long-term, those who hold a diversified basket of financial assets for long periods of time tend to realize significant returns.

It’s generally thought that there is a certain level of inflation that contributes to a healthier economy by encouraging spending without damaging the purchasing power of the consumer. The idea is that when there is just enough inflation, people will be more likely to spend some of their money sooner, before it depreciates, leading to an increase in economic growth.

When there is too much inflation, however, people can wind up spending most of their income on necessities like food and rent, and there won’t be much discretionary income to spend on other things, which could restrict economic growth.

Central banks like the Federal Reserve try to control inflation through monetary policy. Sometimes their policies can create inflation in financial assets, like quantitative easing has been said to do.

5 Tips for Hedging Against Inflation

There are a number of different strategies investors use to hedge against inflation. The common denominators tend to be hard assets with a limited supply and financial assets that tend to see large capital inflows during times of currency devaluation and rising prices.

Here are five tips that may help investors hedge against inflation.

1. Consider Investing in Real Estate Investment Trusts (REITs)

A Real Estate Investment Trust (REIT) is a company that deals in real estate, either through owning, financing, or operating a group of properties. Through buying shares of a REIT, investors can gain exposure to the assets that the company owns or manages.

REITs are income-producing assets, like dividend-yielding stocks. They pay a dividend to investors who hold shares. In fact, REITs are required by law to distribute 90% of their income to investors.

Holding REITs in a portfolio might make sense for some investors as a potential inflation hedge because they are tied to a hard asset—real estate. During times of high inflation, hard assets tend to rise in value against their local currencies because their supply is limited. There will be an ever-increasing number of dollars (or euros, or yen, etc.) chasing a fixed number of hard assets, so the price of those things will tend to go up.

Owning physical real estate — like a home, commercial complex, or rental property — also works as an inflation hedge. But most investors can’t afford to purchase or don’t care to manage such properties. Holding shares of a REIT provides a much easier way to get exposure to real estate.

2. Know How Bonds and Equities Could React to Inflation

The recurring theme regarding inflation hedges is that the price of everything goes up. What investors are generally concerned with is choosing the assets that go up in price the fastest, with the greatest possible return.

In some cases, it might be that stocks and bonds very quickly rise very high in price. But in an economy that sees hyperinflation, those holding cash won’t see their investment, i.e., cash, have the purchasing power it may have once had.

In such a scenario, the specific securities aren’t as important as making sure that capital gets allocated to stocks or bonds in some amount, instead of holding all capital in cash.

3. Consider Investing in Certain Exchange-Traded Funds

An exchange-traded fund (ETF) that tracks a particular stock index or group of investment types is another way to get exposure to assets that are likely to increase in value during times of inflation and can also be a strategy to maximize diversification in an investor’s portfolio.

ETFs are generally passive investments, which may make them a good fit for those who are new to investing or want to take a more hands-off approach to investing. Since they are considered a diversified investment, they may be a good hedge against inflation.

4. Consider Gold and Gold Mining Stocks

For thousands of years, humans have used gold as a store of value. Although the price of gold or other precious metals can be somewhat volatile in the short term, few assets have maintained their purchasing power as well as gold in the long term. Like real estate, gold is a hard asset with limited supply.

Still, the question of “is gold a hedge against inflation?” has different answers depending on whom you ask. Some critics claim that because there are other variables involved and the price of gold doesn’t always track inflation exactly, that it is not a good inflation hedge. And there might be some circumstances under which this holds true.

Investors seeking to add gold to their portfolio have a variety of options. Physical gold coins and bars might be the most obvious example, although these are difficult to obtain and store safely. But investors can also invest in mining companies, or others that have exposure to the gold market.

5. Do Your Homework About Inflation and the Market

Ultimately, no assets are 100% protected from inflation, but some investments might be better than others for some investors. Understanding how inflation affects investments is the beginning of growing wealth over time and achieving financial goals.

The Takeaway

Inflation is marked by a period of rising prices, and is a normal side effect of a healthy economy — within certain bounds. Inflation may have positive effects for certain people, and bad ones for others, but overall, inflation is generally a negative for savers and consumers. Still, there may be certain investment strategies that can help hedge against inflation.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What is inflation?

Inflation refers to the tendency of prices to rise over time, and is often measured by the Consumer Price Index, or CPI.

Is inflation good for investors?

While inflation is generally a bad thing for consumers and savers, it’s debatable as to whether it’s a positive thing for investors. It largely depends on the specific assets the investor holds.

What assets do some investors invest in during times of inflation?

Some investors may invest in precious metals like gold, real estate through vehicles like REITs, or various stock or bond-related instruments. But it’s important to remember that no asset is likely to be immune to inflation.

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May

2025

Mortgage-Backed Securities, Explained

By Matthew Warholak | Financial Independence, Growing Wealth, invest, Investing | Comments Off

Mortgage-backed securities are bond-like investments made up of a pool of mortgages. When you purchase a mortgage-backed security, you’re buying a small portion of a collection of loans that a government-sponsored entity or a financial institution has packaged together for sale.

Investors may refer to these loans as MBS, which stands for mortgage-backed securities. Investing in mortgage-backed securities allows investors to get exposure to the real estate market without taking direct ownership of properties or making direct loans to borrowers. Mortgage-backed securities offer benefits to other stakeholders as well, namely loan-issuing banks, private lenders, and investment banks who issue them.

Key Points

• Banks originate loans, sell them to entities that bundle and securitize them, then issue mortgage-backed securities to investors.

• Main entities in the mortgage-backed securities market include government-sponsored entities and private financial institutions.

• Types of mortgage-backed securities include pass-through, residential, commercial, and collateralized mortgage obligations, among others.

• Risks associated with mortgage-backed securities include prepayment, default, housing market fluctuations, and liquidity risk.

• Increased regulation and scrutiny require mortgages from regulated entities and investment-grade ratings.

What Is a Mortgage-Backed Security?

Mortgage-backed securities are asset-backed investments, in which the underlying assets are mortgages. Government entities and some financial institutions issue mortgage-backed securities by purchasing mortgages from banks, mortgage companies, and other loan originators and combining them into pools, which they sell to investors.

The financial institution then securitizes the pool, by selling shares to investors who then receive a monthly distribution of income and principal payments, similar to bond coupon payments, as the mortgage borrowers pay off their loans.

💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.

How a Mortgage-Backed Security Works

When dealing with mortgage-backed securities, banks essentially become middlemen between the homebuyer and the investment industry.

The process works as follows:

1. A bank or mortgage company originates a home loan.

2. The bank or mortgage company sells that new loan to an investment bank or government-sponsored entity, and uses the sale money to create new loans.

3. The investment bank or government-sponsored entity combines the newly purchased loan into a bundle of mortgages with similar interest rates.

4. This investment bank assigns the loan bundle to a Special Purpose Vehicle (SPV) or Special Investment Vehicle (SIV) which securitizes the bundles of loans. This creates a separation between the mortgage-backed securities and the investment bank’s primary services.

5. Credit rating agencies review the security and rate its riskiness for investors. The SPV or SIV then issues the mortgage-backed securities on the trading markets.

When the process operates as intended, the bank that creates the loan maintains reasonable credit standards and makes a profit by selling the loan. They also have more liquidity to make additional loans to others. The homeowner pays their mortgage on time and the mortgage-backed securities holders receive their portion of the principal and interest payments.

Recommended: Investing 101 Guide

Who Sells Mortgage-Backed Securities?

While some private financial institutions issue mortgage-backed securities, the majority come from government-sponsored entities. Those include Ginnie Mae, the Government National Mortgage Association; Fannie Mae, the Federal National Mortgage Association; and Freddie Mac, the Federal Home Loan Mortgage Corporation.

The U.S. government backs and secures Ginnie Mae’s mortgage-backed securities, guaranteeing that investors will receive timely payments. Fannie Mae and Freddie Mac do not have the same guaranteed backing, but they can borrow directly from the Treasury when needed.

Types of Mortgage-Backed Securities

There are several different types of mortgage-backed securities.

Pass-Through

A Pass-Through Participation Certificate, or pass-through, is the simplest type of MBS. They are structured as trusts, in which a servicer collects mortgage payments for the underlying loans and distributes them to investors.

Pass-through mortgage-backed securities typically have stated maturities of five, 15, or 30 years, though the term of a pass-through may be lower. With pass-throughs, holders receive a pro-rata share of both principal and interest payments earned on the mortgage pool.

Residential Mortgage-Backed Securities (RMBS)

Residential mortgage-backed securities are mortgage-backed securities based on loans for residential homes.

Commercial Mortgage-Backed Securities (CMBS)

Commercial mortgage-backed securities are mortgage-backed securities based on loans for commercial properties, such as apartment buildings, offices, or retail spaces or industrial properties.

Collateralized Debt Obligations (CDOs)

These securities are similar to mortgage-backed securities in that CDOs are also asset-backed and may contain mortgages, but they may also include other types of debt, such as business, student, and personal loans.

Collateralized Mortgage Obligations (CMO)

CMOs or Real Estate Mortgage Investment Conduits (REMICs) is a more complex form of mortgage-backed securities. A CMO is a pool of mortgages with similar risk categories known as tranches. Tranches are unique and can have different principal balances, coupon rates, prepayment risks, and maturity rates.

Less-risky tranches tend to have more reliable cash flows and a lower probability of being exposed to default risk and thus are considered a safer investment. Conversely, higher-risk tranches have more uncertain cash flows and a higher risk of default. However, higher-risk tranches are compensated with higher interest rates, which can be attractive to some investors with higher risk tolerance.

What Are the Risks of Investing in Mortgage-Backed Securities?

Like all alternative investments, mortgage-backed securities carry risks that investors must understand. One such risk is prepayment risk, in which mortgage borrowers pay off their mortgages (often because they move or refinances), reducing the yield for the holder of the MBS. Mortgage defaults could further decrease the value of mortgage-backed securities.

Other risks include housing market fluctuations and liquidity risk.

Recommended: Opportunity Cost and Investments

Mortgage-Backed Securities and the 2008 Financial Crisis

Mortgage-backed securities played a large role in the financial crisis and housing market collapse that began in 2008. By 2008, trillions of dollars in wealth evaporated, prominent companies like Lehman Brothers and Bear Stearns went bankrupt, and the global financial markets crashed.

At the time, banks had gotten increasingly lenient in their credit standards making risky loans to borrowers. One reason that they became more lenient was because they were able to sell the loans to be packaged into mortgage-backed securities, meaning that the banks faced fewer financial consequences if borrowers defaulted.

When home values fell and millions of homes went into foreclosure, the value of all those mortgage-backed securities and CDOs plummeted, indicating that they had been riskier assets than their ratings indicated. Many investors lost money; many homeowners foreclosed on their homes.

An important lesson from that time is that mortgage-backed securities have risks associated with the underlying mortgage borrower’s ability to pay their mortgage.

💡 Quick Tip: How to manage potential risk factors in a self directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.

MBS Today

Residential mortgage-backed securities now face far more government scrutiny than they did prior to the financial crisis. MBS mortgages must now come from a regulated and authorized financial institution and receive an investment-grade rating from an accredited rating agency. Issuers must also provide investors with disclosures including sharing information about their risks.

Investors who want exposure to mortgage-backed securities but don’t want to do the research or purchases themselves might consider buying an exchange-traded fund (ETF) that focuses on mortgage-backed securities.

The Takeaway

Mortgage-backed securities are complex investment products, but they have benefits for investors looking for exposure to the real estate debt without making direct loans. While they do have risks, they may have a place as part of a diversified portfolio for some investors.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What is a mortgage-backed security?

Mortgage-backed securities are asset-backed investments, in which mortgages are the underlying assets. Government entities and some financial institutions issue mortgage-backed securities by purchasing mortgages from banks, mortgage companies, and other loan originators and combining them into pools, which they sell to investors.

Who sells mortgage-backed securities?

Most mortgage-backed securities are issued by government-sponsored entities such as Ginnie Mae, the Government National Mortgage Association; Fannie Mae, the Federal National Mortgage Association; and Freddie Mac, the Federal Home Loan Mortgage Corporation.

What are common types of mortgage-backed securities?

Common types include pass-throughs, residential mortgage-backed securities, commercial mortgage-backed securities, and collateralized debt obligations, among others.

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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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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Dollar Cost Averaging (DCA)
Dollar cost averaging is an investment strategy that involves regularly investing a fixed amount of money, regardless of market conditions. This approach can help reduce the impact of market volatility and lower the average cost per share over time. However, it does not guarantee a profit or protect against losses in declining markets. Investors should consider their financial goals, risk tolerance, and market conditions when deciding whether to use dollar cost averaging. Past performance is not indicative of future results. You should consult with a financial advisor to determine if this strategy is appropriate for your individual circumstances.

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May

13

2025

10 Tips for Finding Cheap Cruises

By Michael Schreiber | Budgeting & Goals, Financial Independence, money | Comments Off on 10 Tips for Finding Cheap Cruises

The high seas, sun, 24/7 dining, and stops at exotic ports of call: What’s not to love about a cruise? Sometimes, the answer is the price. A cruise can be a big-ticket vacation item that’s a challenge to afford.

But for the people who crave an all-inclusive travel experience, there are smart ways to snag a deal. Whether your fantasy is navigating the dramatic Alaskan coastline or floating through the Caribbean’s crystal waters, there are hacks that can help make it a reality.

Read on to learn insider strategies for finding the cheapest ways to cruise.

Key Points

•   Book during off or shoulder seasons for cheaper cruise prices.

•   Monitor last-minute deals for potential discounts.

•   Bundle services and amenities to save money.

•   Use credit card rewards to lower costs.

•   Set a budget and save in advance.

Buyer Beware

First, a word to the wise: As just about every frugal traveler knows, sometimes deals really are too good to be true…or at least not all they’re cracked up to be. It’s important to read the fine print and be sure of what’s included and not included in cruise deals you may find.

When considering the cheapest way to cruise, you’ll want to think about airfare, meals, excursions, room type and location, and other amenities that can lead to upcharges. That way, you can budget appropriately and make sure you have enough money in your travel fund to ensure you can afford your trip.

You’ll also want to pay close attention to cancellation policies. Many people plan trips far in advance, and situations can change between the time you book and the time you are supposed to board the ship. It can be wise to consider the costs and benefits of trip insurance. Note: Some credit card travel insurance may have you covered; check with your card issuer for details.

Next, the money-saving tips.

💡 Quick Tip: Tired of paying pointless bank fees? When you open a bank account online you often avoid excess charges.

1. Read Cruise News

There are countless sites and blogs devoted to the cruise industry, staffed by both insiders and frequent cruise passengers. These sites cover both industry trends as well as specific deals and offers from particular cruise lines. In addition to finding cruise deals, they are great for learning about unique cruise offerings and locales. Some noteworthy sites include CruiseFever, CruiseHive, and CruiseCritic.

2. Search the Travel Sites

CruiseDirect.com, CruisesOnly.com, Cruise.com, and others are searchable databases of cruise offers. They are similar to Expedia, Travelocity, and other general interest travel websites, except they are devoted to cruises. These sites typically have sections focused on cruise deals and may at times have exclusive offers that aren’t available elsewhere.

Cruise lines, like Carnival, Princess, and Royal Caribbean, also typically have their own deals section, which can be worth checking out.

3. Scan Social Media

To find cruise deals on social media, it’s a good idea to follow your favorite cruise lines’ official accounts on platforms like Facebook, X (formerly Twitter), and TikTok. You might also search for the hashtag #cruisedeals and related terms to discover promotions, giveaways, and last-minute sales.

4. Look for Bundles

Both travel websites and cruise lines themselves often encourage passengers to bundle a variety of services and amenities when booking. These cruise bundles can offer real savings. Some of the options that are typically bundled include airfare, meal and drink packages, transport to and from the ship, free WiFi, and more. (About that WiFi: While some cruise lines have free WiFi, others can charge around $20 or more per person per day for this.)

When evaluating these packages, it’s worth taking the time to review each item, what it includes (there are various levels of perks available on ships, after all), whether you really want everything in the bundle, and what it would cost if you were to purchase the items separately.

5. Travel With Friends

If you have a big family and/or lots of friends, or if the idea of going on a cruise with your coworkers isn’t terribly off-putting, you might be able to score a group rate on a cruise. For example, Norwegian Cruise Lines features a group deal that offers bonuses for every five cabins booked. People traveling on group deals may qualify for bonus packages that include food and drinks, excursions, free WiFi, and more.

Recommended: Creating a Travel Fund

6. Book Well in Advance…Or Last Minute

Popular cruises, particularly the more luxurious ones, tend to fill up quickly. And the best rates are usually available when tickets first go on sale, which can be as much as a year or more advance. After tickets begin to sell (often between November and March, when promotions kick in) and the sail date nears, prices typically start to rise. The other benefit of booking early is that you’re more likely to get your choice of cabin and dining options. Early bookers may also get access to other special perks, like free airfare, upgrades, and free drinks.

That said, there are also plenty of stories of people scoring incredible last-minute deals on cruises. As the departure date grows closer, if a ship hasn’t sold out, the cruise line may offer serious incentives in order to fill up those empty rooms.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

7. Sail During Shoulder Season

Determining peak cruising season, when demand is the highest, can be tricky because of all the variables involved. First and foremost (and perhaps most obviously), different parts of the world experience the seasons and corresponding vacations at different times. So peak season in one part of the world may be very different from peak season in another.

Many think that off-peak season, when demand is the lowest, is the best time to find a cruise deal, though that may not always be the case. If a cruise line cuts back on the supply of cruises too much because of seasonal drops in demand, there may not be many deals or even much availability to be found.

That’s why many point to “shoulder season,” the period between the peak and off-peak seasons, as the best time to find deals on cruises. Keep in mind that the weather might not be as great as it is during peak season, but you’re also more likely to avoid crowds both on the boat and on shore excursions. You’ll also want to consider seasonality when looking for the cheapest days to fly to and from your cruise’s point of departure and return.

8. Check for Special Discounts

Factors such as what organizations you’re a member of and where you live can help you save money on your dream cruise, whether that means exploring the Mediterranean or waters around Mexico.

You may find that belonging to a group like AARP can score you a cruise discount. In addition, some credit card issuers offer cruise benefits. There may also be general discounts for seniors, military families, teachers, and even frequent cruisers.

You might also be able to take advantage of resident cruise deals if you live in a particular area. Celebrity Cruises, for example, offers exclusive deals to residents of certain states, while Disney offers Florida residents up to 25% on select Caribbean cruises.

9. Pay in Full

Even if you’ve found a fantastic deal on a cruise, vacations are expensive, so it’s important to consider your financial options. If you don’t have the funds to cover the entire cost of the trip, then you may want to consider waiting until you’ve saved up enough cash to pay in full up front.

Keep in mind that if you put the trip on a credit card and carry that balance over from month to month, you’ll be paying relatively high interest rates, perhaps 20% or higher. That adds to the cost of the trip significantly, even if you’re using a cash back rewards credit card.

Some people opt to use personal loans for vacations, which typically come with lower interest rates than credit cards. But personal loans, though often more affordable than credit cards, aren’t free, and they’ll add to your vacation budget as well.

“While not everyone loves the idea of budgeting, taking a moment to assess your spending can yield some real rewards. Even a basic monthly budget can help you reach your financial goals, whether it’s to have a financial cushion, put a down payment on a home, go on your dream vacation, or all of the above.”

-Brian Walsh, CFP^® and Head of Advice & Planning at SoFi

10. Maintain a Budget

When planning your cruise, it’s important to drill down and really think through the budget. If you don’t have a truly all-inclusive deal, you’ll want to to itemize everything, such as:

•   Cruise tickets

•   Flights

•   Ground transportation

•   Food and drinks

•   Excursions

•   Souvenirs

•   On-ship entertainment

•   Gambling

•   Pictures

•   Travel insurance

•   Gratuities

•   WiFi

•   International calls

•   Fees for any travel visas

•   Currency exchange

There are plenty of great budgeting trackers that can help you monitor spending on vacation and more. But when it comes to vacation planning, it’s best to earmark the money before you’ve spent it, add a cushion of 10% or 20% to cover the unexpected, and then stick to it. You’ll enjoy the vacation more knowing that you’ve got it covered and won’t stress out when it’s over because you’ve spent more than you can afford.

Also don’t forget to see how you might apply your credit card rewards for travel; you might be able to apply cash back or otherwise lower costs this way.

The Takeaway

Taking a cruise doesn’t have to be expensive. If you’re wondering how to get cheap cruise tickets, there are luckily myriad ways you can get cruise discounts, ranging from going during the off or shoulder seasons to bundling your vacation expenses.

The cheapest way to cruise may be to avoid paying with credit cards, personal loans, or other methods that will end up costing you in interest. Instead, consider setting a savings goal based on the expected cost of the cruise then opening a savings account earmarked for the trip. Choosing a bank that pays a competitive rate, and setting up a monthly automated transfer into the account, can help you reach your goal sooner.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

How do you get the cheapest prices on cruises?

To get the cheapest prices on cruises, book during the off-season or “shoulder” season (the period between the peak and off-peak seasons). Look for last-minute deals, but also consider booking well in advance to lock in lower rates. Other tips for finding cheap cruises include: using cruise comparison websites, following your favorite cruise lines on social media, being flexible with your travel dates, and considering less popular destinations.

Do cruises go cheaper closer to departure?

Cruises can go cheaper closer to departure, especially if the ship isn’t fully booked, since many cruise lines will offer last-minute deals to fill remaining cabins. However, prices can also rise if the ship is nearly full. It’s a good idea to monitor prices and be ready to book quickly if you find a good deal. Always check for any restrictions or blackout dates.

How can I pay less for a cruise?

To pay less for a cruise, book early — cruise lines often offer big discounts when you book a year or more in advance. If you are flexible on dates, on the other hand, you may be able to get deals within 30 days of your departure. Cruise lines will often offer deep discounts if a ship hasn’t sold out. Also consider using credit card points or rewards to cover some of the cost, and booking through a travel agent that specializes in cruises (they often have access to lower bulk fares not available to the general public).

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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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May

12

2025

What Is Deflation and Why Does It Matter?

By Ashley Kilroy | Financial Independence, Growing Wealth, invest, Investing | Comments Off on What Is Deflation and Why Does It Matter?

Deflation is the opposite of inflation. It occurs when the prices consumers pay for goods and services go down. That means that consumers can purchase more with the same amount of money.

There are many factors that cause deflation, which happens when the supply of goods and services is higher than the demand for them. While deflation can have some benefits to consumers, it’s often a sign of trouble for the overall economy.

Key Points

•   Deflation, marked by falling prices, can lead to economic stagnation and business closures.

•   Government interventions, including fiscal and monetary policies, help combat deflation and stabilize the economy.

•   Deflation often follows financial crises and is influenced by consumer confidence, technology, and lower production costs.

•   Negative impacts include reduced business revenues, increased unemployment, and decreased consumer demand.

•   The Great Depression exemplifies how deflation caused business failures and unprecedented unemployment.

What Happens During Deflation?

In addition to knowing what inflation is, it’s important to understand how it impacts the economy. In a deflationary economy, prices gradually drop and consumers can purchase more with their money. In other words, the value of a dollar rises when deflation happens.

It’s important not to confuse deflation with disinflation. Disinflation is simply inflation decelerating. For example, the annual inflation rate may change from 5% to 3%. This variation still means that inflation is present, just at a lower rate. By contrast, deflation lowers prices. So, instead of prices increasing 3%, they may drop in value by 2%.

Although it may seem advantageous for consumer purchasing power to increase, it can accompany a recession. When prices drop, consumers may delay purchases on the assumption that they can buy something later for a lower price. However, when consumers put less money into the economy, it results in less money for the service or product creators.

The combination of these two factors can yield higher unemployment and interest rates. Historically, after the financial crises of 1890, 1893, 1907, and the early-1930s, the United States saw deflationary periods follow.

How Is Deflation Measured?

Economists measure deflation the same way they measure inflation, by first gathering price data on goods and services. The Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS) record and monitor this type of data in the United States. They collect pricing information that they then put into buckets reflecting the types of goods and services consumers generally use.

While these buckets do not include every product and service, they offer a sample of items and services consumed. In the United States, economists incorporate these prices into an indicator known as the Consumer Price Index (CPI).

Then, economists can compare the CPI to previous years to determine whether the economy is experiencing inflation or deflation. For example, if the prices decrease in a period compared to the year before, the economy is experiencing deflation. On the other hand, if prices increase compared to the previous year, the economy is experiencing inflation.

What Causes Deflation?

Deflation comes from a swing in supply and demand. Typically, when demand dwindles and supply increases, prices drop. Factors that may contribute to this shift include:

Rising Interest rates

When the economy is expanding, the Federal Reserve may increase interest rates. When rates go up, consumers are less likely to spend their money and may keep more in high-interest savings accounts to capitalize on the increase in rates.

Also, the cost of borrowing increases with the rise of interest rates, further discouraging consumers from spending on large items.

Decline in Consumer Confidence

When the country is experiencing economic turbulence, like a recession, consumers spend less money. Because consumers tend to worry about the direction of the economy, they may want to keep more of their money in savings to protect their financial well-being.

Innovations in Technology

Technological innovation and process efficiency ultimately help lower prices while increasing supply. Some companies’ increase in productivity may have a small impact on the economy. While other industries, such as oil, can have a drastic impact on the economy as a whole.

Lower Production Costs

When the cost to produce certain items, such as oil, decreases, manufacturers may increase production. If demand for the product stagnates or decreases, they may then end up with excess supply. To sell the product, companies may drop prices to encourage consumer purchases.

Why Does Deflation Matter?

Although falling prices may seem advantageous when you need to purchase something, it’s not always a good sign for the economy. Many economists prefer slow and unwavering inflation. When prices continue to rise, consumers have an incentive to make purchases sooner, which further boosts the economy.

One of the most significant impacts of deflation is that it can take a toll on business revenues. When prices fall, businesses can’t make as much money.

The drop in business profits makes it challenging for companies to support their employees, leading to layoffs or pay cuts. When incomes go down, consumers spend less money. So deflation can create a domino effect impacting the economy at many different levels, including lower wages, increased unemployment, and falling demand.

Deflation During The Great Depression

The Great Depression is a significant example of the potential economic impact of a deflationary period. While the 1929 stock market crash and recession set this economic disaster off, deflation heavily contributed to it. The rapid decrease in demand along with cautious money hoarding led to falling prices for goods and services. Many companies couldn’t recover and shut down. This caused record-high unemployment in the United States, peaking at 25%, and in several other countries as well.

During this time, the economy continued to experience the negative feedback loop associated with deflation: cash shortages, falling prices, economic stagnation, and business shutdowns. While the United States has seen small episodes of deflationary periods since the Great Depression, it hasn’t seen anything as substantial as this event.

How to Manage Deflation

So, what can the government do to help regulate inflation? For starters, the Federal Reserve can lower interest rates to stimulate financial institutions to lend money. The Fed may also purchase Treasury securities back to increase liquidity that may help financial institutions loan funds. Those initiatives can increase the circulation of the money in the economy and boost spending.

Another way to manage deflation is with changes in fiscal policy, such as lowering taxes or providing stimulus funds. Putting more money in consumers’ pockets encourages an increase in spending. This, in turn, creates a chain effect that may increase demand, increase prices, and move the economy out of a deflationary period.

The Takeaway

Deflation refers to a period that can be thought of as the opposite of inflation. It occurs when the prices consumers pay for goods and services go down, which means that consumers can purchase more with the same amount of money.

When the economy is experiencing some turbulence, some investors may choose to keep their money in savings. On the other hand, other investors may see falling prices as an opportunity to purchase securities at a discount, either to hold or to sell when the economy recovers. Like any other investment strategy, investors must base their investment decisions on their personal preferences since there are no guaranteed results.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

Photo credit: iStock/eclipse_images

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.

Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

SOIN-Q225-051
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