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Effective Investing as a Couple

You know you want to invest your money, and you know your finances are at least partially combined with your significant other’s, but you don’t know how to invest together. Should you simply merge all of your existing accounts into a joint investment account? What should you do if you each have different goals for your future?

No wonder it seems like money is one of the most common reasons for divorce . It can be a source of stress and investing isn’t the only financial decision you’ll have to make as a couple. Long before you get married or buy a house together, you’ll need to make some decisions about how to combine your finances.

But once you’ve tackled the questions of how (and how much) to merge your money, then you should consider what to do with your investments and your long-term financial planning.

The sooner you start investing, individually or together, the sooner you can potentially start accumulating returns (depending on market forces). Some good rules of thumb, whether solo or as a couple: diversify, start small, have long-term goals, and look for low fees.

Now how do you make that work for both of you, to get started investing together? And what other money tips for couples will set you on a healthy path towards your financial goals? Get all your financial info out and get ready to have an open conversation with your partner.

Investing Together

For most couples, the reason they want to invest together is fairly simple: They live together and spend together and are planning a future together, so investing is an obvious next step.

Nine out of 10 couples buying a house, then that might mean having a joint investment account or a joint brokerage account in order to plan for your joint goals. Or it could make sense for you to share some accounts as a couple and to keep some separate.

Related: Examining Male vs. Female Investment Behavior

It can also be practical, in terms of financial returns, to invest together. Combining your money can potentially pay dividends—as you reinvest your larger returns, they accumulate and may go further. Why have two smaller portfolios when you could have one bigger one?

And why use just one person’s investing smarts, when you could use two? Some studies, for example, have found that women tend to be better investors —largely because they tend to trade less (incurring fewer fees) and take a longer, safer view of the market. So combining your skills could work out to both of your advantages.

Some Challenges With a Joint Investment Account

It’s common for different people to have different goals and strategies with their money—even people who are in a relationship. However, the danger comes when you don’t communicate about your different goals or your shared finances.

A great first step is to understand your joint finances. Understanding your joint finances means making sure both of you know the passwords to all of your joint accounts, how much is in those accounts, even where the checkbook is.

You also want to have a clear understanding of how much debt you each have and what your plan is to tackle it together: Will you pay off grad school or credit cards first? How much will you invest after accounting for expenses and debt? Will you put it towards retirement or towards other long-term financial goals?

Before you start investing, one option is to track your spending in order to know what you’re both spending on and how much you can reasonably put into long-term savings or investments.

This isn’t to place blame on one person for spending more or to fight over daily expenses! In fact, you might decide to allocate a certain small portion of your monthly income to each person to spend on what they want without judgment. You can do this in a joint cash management account like SoFi Money®. You and your +1 can have a single place to access your cash.

An important thing to do is to lay out a plan and communicate clearly about what you want to do with a joint investment account before you ever even open one. And even after you start investing together, keep a monthly money date to sit down and handle your finances.

Tips for Opening a Joint Investment Account

Here are some money tips for couples that applies to almost everything: it’s all about communication and compromise. That’s true when it comes to investing together too.

•  Decide on your investment goals for your joint brokerage account upfront—as opposed to goals for any other accounts or money you have. That means deciding: What do you want to save money together for—a vacation, a house? When do you want to retire and how much do you need at retirement? If you disagree about retirement plans, can you compromise? And how much are you going to set aside for each of your goals, with what strategies? Use automatic contributions from your paychecks to put away money in retirement or investment accounts.

•  A corollary to having joint goals for your joint investment accounts is that it’s OK to have separate financial goals too—as long as you’re on the same page. You can set aside some amount out of your discretionary income, like 1%, for each of you to spend as individual fun money. Or maintain smaller separate accounts, in addition to your joint accounts. A TD Bank study found that 42% of people in relationships who have joint accounts also have separate accounts for reasons ranging from independence to emergencies. One strategy is to use your individual retirement accounts, which generally have to be kept separate for each person, as a place to play with your individual investment strategies.

•  The reality is you’re likely to have different risk tolerances, which can heavily influence your investment strategies. That’s not necessarily bad. It’s one thing to know you should invest when the market is down; it’s another to have the risk tolerance to do so. If you have different tolerances, they might balance each other out. Or you could end up magnifying each other’s worse tendencies, depending on what your tendencies are. Talk to a wealth advisor to get a real understanding of both of your risk tolerances, instead of just thinking you know. And figure out if you’re going to balance each other out in your joint portfolio, or if you need to find a compromise.

•  Take a long view on your joint financial goals. While you may disagree about whether to buy a new couch, you should agree on when you want to retire. (Not that each of you need to retire at the same time.) The added benefit of a long view is that, while the market can go up or down in any given year, by some estimates, on average and in the long run, it gives around a 10% return .

•  Establish a system for resolving disputes before you get started investing. Even in the healthiest of relationships there are bound to be disagreements. Before you open a joint investment account, decide how you’re going to resolve disputes about whether to invest in one asset or to rebalance your portfolio. One way could be to establish objective parameters—will this move us toward our financial goal per the expected returns v. risk. Another option is to let each person try their own strategy with a small amount of money, and bring in a financial advisor for guidance on bigger issues.

There are a lot of different strategies you can utilize to invest together as newlyweds or if you’ve been married for years. Some couples like to split the difference in their retirement accounts, allowing each person to use their own strategies for those investments.

Others like to set aside extra money to “play” with, while focusing the main investing on their joint brokerage accounts. Depending on your relationship, it might make sense for one person to take the lead, if they’re more interested in financial details, but both of you should be involved in the discussion and in all meetings with financial advisors.

Don’t be Afraid to Ask for Help

Even the most communicative and well-informed of couples might need a little extra help when it comes to money advice.

That’s when a financial advisor can come in handy, simply to give you an outside perspective on financial strategies and an objective assessment of your risk tolerance. (Often what we think we’ll do is not the same as what we actually do when presented with market ups and downs.)

As a SoFi Invest® member, you have complimentary access to a financial advisor who can help recommend a portfolio strategy that’ll work for both of you.

Plus you can have different portfolios for different financial goals. That can let you invest as a couple, with joint goals and with your own separate goals that might have a different asset allocation and strategy.

Ready to get started investing as a couple? You can open a joint investment account today with just $100 and pay no SoFi management fees.


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External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

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Balancing Paying Off Student Loans & Starting a Family

These days, planning for parenthood can seem even more daunting thanks to student loan debt. Older millennials ages 25 to 34 owe an average debt of $42,000, including credit card and student loan debt, according to Northwestern Mutual’s 2018 Planning & Progress Study.

So when looking to start a family, it’s important to understand how to prioritize your debts and all of the new budget needs you’ll encounter. Raising a baby while making student loan payments is certainly possible, but it just means taking those nine months (or more, if you are thinking ahead) to sort out your finances first.

Student loans and pregnancy go almost hand-in-hand these days, since American women carry two-thirds of all student debt , according to the American Association of University Women. The last thing anyone wants to be thinking about when pregnant, or holding a new baby, is missing a student loan payment, so it helps to plan ahead to start getting your debt under control. Paying off student loans while saving for children is definitely doable.

Whether you are considering refinancing your student loans, lowering your monthly payments by switching to an income-based repayment plan, or are just looking to save more money before the arrival of your new baby, there are plenty of ways to stay on top of your student loan payments while saving for new kid costs.

Preparing Financially for Your First Child

For most families, housing-related costs such as rent, insurance, or a mortgage are their largest expenses. So, if bringing a new baby into your home means saving up for a big move, or even just expanding into a two-bedroom apartment, evaluating if you need more space for your growing family can certainly put a strain on the budget. Childcare itself is the second-largest expense after housing for most families.

Plus, perhaps you even want to start saving now for your child’s future education, so that hopefully they are less burdened by student debt. All of these expenses, in addition to the general costs of raising a child, can really add up and make it feel like paying your monthly student loan payment is not a priority.

However, there are a number of solutions to explore to see if you can reduce your monthly student loan payments and put those savings toward a new baby.

Exploring Income-Based Repayment

If one person in your partnership is becoming a stay-at-home parent, or even taking an extended parental leave from work, consider applying, or reapplying, for an income-based repayment plan, even if you’re already on one for your student loans.

Since your loan payments were originally calculated based on your income while employed, if you inform your loan servicer about your change in circumstance, you might be granted a different, lower payment plan.

These plans can make your monthly payment more affordable, based on your income and family size. Most federal student loans are eligible for at least one income-driven plan .

Income-Based Repayment

Payments are generally 10% or 15% of your discretionary income , depending on when you first received your student loans. Any outstanding balance is forgiven after 20 or 25 years, but you may have to pay income tax on that amount . You generally must have a high debt relative to your income to qualify for this repayment plan.

Income-Contingent

Payments will be either 20% of your discretionary income, or the amount you would pay on a fixed 12-year repayment plan adjusted to your income, whichever is less. Most borrowers can qualify for this plan, including parents, who can access this option by consolidating their Parent PLUS loans into a Direct Consolidation
Loan
. Outstanding balances are forgiven after 25 years.

Revised Pay As You Earn (REPAYE)

Payments are 10% of discretionary income , and outstanding balances will be forgiven after 20 years for undergraduate loans.

Pay As You Earn (PAYE)

For this repayment plan, you are required to make payments of 10% of your discretionary income. To qualify, each of those payments must be less than what you’d pay if you went with the 10-year Standard Repayment Plan. The repayment period for PAYE is capped at 20 years. You must be a new borrower on or after Oct. 1, 2007 to qualify .

The important thing to remember about all of these plans is that you must reapply every year, even if your circumstances don’t change. Once you switch over to an income-based repayment plan, you can start saving the difference in amount from your earlier payments. This extra savings could go toward expenses for your new baby.

Student Loan Consolidation and Forbearance

Another option to consider when having a baby while paying off student loan debt is consolidation. Student loan consolidation can lower your monthly payment; however, it does so by lengthening your repayment period, meaning you will end up paying more overall due to the additional interest payments.

A Direct Consolidation Loan can be a smart way to stay on top of student loan payments, and also set yourself up to qualify for eventual loan forgiveness and/or income-based repayment plans.

If you find yourself in a situation where you are truly unable to make your student loan payments due to the costs of a new baby, you can also consider student loan forbearance.

Forbearance temporarily allows you to stop making your federal student loan payments, or at least temporarily reduce the amount you have to pay. In order to request a general forbearance and get approved, you must meet certain requirements .

This usually means you are unable to make monthly loan payments because of financial difficulties, medical expenses (which might include high hospital bills from pregnancy), or change in employment (especially key if one parent is going to stay at home with the baby).

Ways To Save Money

If you are already on an income-based repayment plan and have considered other options to reduce your student loan debt, and are finding it is still not enough to comfortably save for a new baby, consider some other savings tricks to help you manage your money better.

In order to make sure some money ends up in your savings account every month, you can set up a portion of your paycheck to deposit directly into your savings account, instead of just a checking account.

Most banks also have the option to set up recurring transfers yourself between your own accounts. This way, your desired amount will get transferred into savings without you having to think about it.

Keep in mind there are also tax benefits to having a baby , which can earn you some extra cash back to help you reduce your overall amount of student debt.

Refinancing Your Student Loans During Pregnancy

Refinancing your student loans is another way to make your loans more manageable. Refinancing student loans through a private lender such as SoFi can give future parents the opportunity to consolidate multiple student loans into one loan with a single monthly payment.

Refinancing can provide great value as you can choose your repayment terms and potentially end up with a lower payment to free up money. (Just remember that doing this means extending your loan term, which would up the total interest you’ll pay over the life of the loan.)

Take a look at our student loan refinance calculator to see how your loan could change when you refinance. Those savings can then be put toward staying financially secure while having a baby.

Learn more about refinancing with SoFi and see what your new loan could look like in just two minutes.


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice about bankruptcy.
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How to Manage Your Money Better

If you want to manage your money more efficiently and effectively, you definitely aren’t alone. For example, when you think about New Year’s resolutions made each year by friends, family members, and coworkers, they probably include:

•  I’m going to save more money this year.

•  This year, I’m going to pay off all my credit cards.

•  I’m going to create a budget and stick to it this year.

And while everyone may have similar resolutions, no two people have the exact same financial situation, goals, challenges, or opportunities, so no two financial strategies should be precisely the same.

Yet, there are certain strategies that will help nearly everyone improve their financial situation, bringing them closer to achieving their money-related goals. In this post, we’ll share five money management tactics.

The five tactics are:

•  Set financial goals, along with a realistic budget.

•  Start saving money (or more money).

•  Use your credit cards wisely.

•  Manage your debt appropriately.

•  Use the right bank account.

Keep reading to get tips on how to accomplish those tactics.

Setting Financial Goals, Along With a Realistic Budget

No matter what financial situation you’re in, a great way to manage money begins with goal setting and budget making. If the idea of doing so stresses yotu out, know that setting goals doesn’t have to be stressful.

That’s because, while it’s important to set concrete, realistic goals, it’s also okay to create, say, a five-year plan that culminates in the vacation of your dreams—or whatever else puts a big smile on your face.

Let’s delve into budget making first and then return to goal setting. Here are some tips to create a solid budget:

  1. Collect the most recent statements from all of your lenders, as well as your most recent utility bills, property tax statements, and the like. Make sure you have everything gathered together.

  2. Using these documents, make a list of your monthly expenses, including:

 a. fixed ones, such as rent or mortgage payment, insurance payments, credit card payments, student loan payments, your typical grocery expenses, and so forth

 b. more flexible ones, such as eating out at restaurants, hobby expenses, clothing, and so forth

  3. List all sources of monthly income; use your take-home pay after taxes and after pre-tax contributions are taken out.

  4. Add up your savings, including your retirement accounts.

  5. Create a draft of your monthly budget.

  6. Identify weak spots in your budget and adjust it, as needed. If, for example, your dining out expenses are cutting into your ability to save, what adjustments can you make to improve your financial picture while remaining realistic?

Now, think about your financial goals. Try to break them down into multiple-year plans, not just this year or 25 years from now. They might include items like this:

•  One-year plan: Pay off credit card debt.

•  Two-year plan: Increase savings account by 50%.

•  Five-year plan: Have enough savings for a down payment to build a new house.

This can help your goals feel more achievable. Keep those in mind as we go through the other tips for learning how to manage money better. For additonal help with budgeting, get started with SoFi Relay. SoFi Relay tracks all of your money, all in one place (at no cost) so you stay on pace to hit your goals.

Starting Saving Money (or More Money)

Once you have a reasonable draft of a budget and you know your financial goals, know that you can continue to tweak the budget to help you achieve your goals.

It’s typically recommended that, ideally, everyone has an emergency fund that would cover living expenses for three to six months (or even up to 12 months). So, what are you willing to cut back on to create that fund?

Do you subscribe to numerous subscription-based services and apps? Which ones don’t you really use? Which ones are a bonus and not something of true importance? Rather than going on a big trip this year, how can you create a staycation to remember? If you’re a fan of designer clothes, what outlets might help you to get the outfits you love at a price that’s gentler on your wallet?

Here are three more ideas to consider:

•  Pay yourself first by having money automatically deducted from your paycheck to put into a savings account.

•  Monitor how well you’re meeting your savings goals and revisit your budget until you find the right mix of strategies to meet your savings goals.

•  If you discover that there are luxuries you really don’t want to give up, you can always pick up a side hustle and use that extra cash for your splurges.

If you think of saving as a game to see how quickly you can reach a certain goal, it can make the whole process much more enjoyable.

Using Your Credit Cards Wisely

When thinking about how to manage finances, you may think about credit card management first—and you’re right that this is a core component. The average credit card annual percentage rate (APR) in 2018 was 15.32%. By just paying credit card minimums, the principal balance may not seem go down very much.

There are, however, three time-tested tips that could help you escape credit card debt. They include:

  1. The snowball method is a debt payoff strategy where you focus on the smallest debts first. Then once you tackle your smallest debt, you continue to pay off your debts in order from smallest to largest. Remember, it is important to continue to pay the minimum payment on all of your debts, even though you are focusing on the smallest one.

  2. Or, use the same basic system, but pay them off starting from the one with the highest interest rate then down to the lowest.

  3. Or, consolidate credit card debt into a low interest personal loan and focus on paying off that one loan.

A big advantage of the third method is that you have an opportunity to get a lower interest rate from a personal loan than a credit card.

No matter which method you choose, once credit cards are paid off, it’s probably smart to only use them to the degree that you can pay them off in full each month. Then, when emergencies arise, you can use your emergency savings fund to address those needs.

Managing Your Debt

As you tackle your credit card debt, you’ve already begun the process of better managing your debt overall. And, if you have student loans, it may make sense to also consider how to address that debt effectively. And, it can be a good strategy to investigate how much money you can save when you refinance your student loans into one convenient, low interest loan.

You can find your rate at SoFi in just two minutes. At SoFi, we consolidate and refinance federal and private loans together. We charge no application fees and there are no prepayment penalties or hidden fees. Plus, you can find the rate you qualify for in 1 minute with no commitment.

Using the Right Bank Account for You

As you’re building up your emergency savings, it’s important to consider your savings account’s interest rate. Right now, rates are rising on savings accounts, but it is still important to make sure there aren’t conditions in the fine print that could make the deal less than appealing. Conditions to be aware of can range from minimum balances that are beyond your current financial reach to fees and more.

You can also go with a non-traditional option, such as a cash management account with SoFi Money®. It is a cash management account that will provide you with tools to spend and save.

About SoFi Money

You can simplify your finances with SoFi Money. SoFi Money is a cash management account and has no account fees.

SoFi Money comes with numerous benefits, including:

•  You’ll receive a debit card.

•  You can make mobile transfers and photo check deposits.

•  You can benefit from complementary career coaching and SoFi community resources.

•   You can count on security SSL encryption and fraud protection. Plus, once your money arrives at our partner banks, it is FDIC insured up to $1.5 million.

You can open a SoFi Money account quickly and easily. Start saving and spending in one place.



External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
Each business day, cash deposits in SoFi Money cash management accounts are swept to one or more sweep program banks where it earns a variable interest rate and is eligible for FDIC insurance. FDIC Insurance does not immediately apply. Coverage begins when funds arrive at a program bank, usually within two business days of deposit. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank). If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be lower. For more information on FDIC insurance coverage, please visit www.FDIC.gov . Customers are responsible for monitoring their total assets at each Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits in SoFi Money or at Program Banks are not covered by SIPC.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
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How Rising Interest Rates Impact Your Investments

After falling to rock bottom levels following the Great Recession of 2008, interest rates are on the rise again.The Federal Reserve raised benchmark rates in December for the fourth time in 2018, bringing them up to a target range of 2.25% to 2.5%. Observers expect those hikes to continue into the following year.

The Fed usually only raises rates by a small amount each time, so there’s little cause to worry about something overly dramatic happening. But a steady climb does affect the economy, including your debt and investments. When interest rates go up, borrowing gets more expensive.

So if you’re planning on taking out a new home mortgage loan or car loan, or refinancing an old one, you may want to keep in mind that rates are likely lower now than they will be in the near future.

And if you have a variable rate loan, you might see your interest rate start to climb. Similarly, credit card interest rates are also likely to go up, so it may make sense to to pay off any balances in full, if possible.

But what happens to your investments when interest rates rise? The answer, though complicated, is worth digging into. Knowing what to expect can help you figure out what you should be investing in and when. We break down how climbing interest rates can often affect investments such as money market accounts, stocks, bonds and commodities.

How Rising Interest Rates Impact Money Market Accounts and CDs

When benchmark interest rates climb, banks and other financial services providers tend to increase the rates they offer on high-interest savings accounts, money market accounts, and certificates of deposit (CDs). Although these rates are still unlikely to match what you’d get from investing in the stock market long term, they can make these financial products a more attractive place to park your money.

If you’re already in a high-interest non investment account, many banks will keep raising your rate without you having to do anything. If you’re not, this could be a good time to start looking around for an institution that’ll put more money in your pocket.

If you already have money in a CD, rising rates won’t do much for you until the term ends, since you’re probably locked into what you signed up for.

How Do Interest Rates Affect Bonds?

When you purchase a bond, you loan money to a company or the government for a set amount of time and receive a fixed return in exchange. When interest rates rise, bond yields—or the return you make on investing in a bond—rise as well.

With interest rates low in recent years, bond yields have been low as well, making them less appealing as an investment. As rates increase, a higher return can make bonds seem more attractive. On the other hand, when demand for bonds increases, the price of bonds can go up, too.

What to Know About the Interest Rate and Stock Market

Unlike some investments, interest rates don’t have a single, clear impact on stock performance. However, rising interest rates have often had a negative impact on the stock market historically. Since borrowing becomes more expensive, consumers may put off taking out mortgages, buying cars or purchasing major household appliances.

Similarly, because they are paying higher interest rates on existing bills, consumers have less money left over to spend on other goods and services. Reduced spending affects companies’ revenues and profits, which can have a ripple effect throughout the stock market.

Like individuals, companies too find it more expensive to borrow when interest rates rise. They may borrow less or have less money left over to invest in their business, potentially slowing growth and reducing profits, all of which can dampen stock performance. Even the psychological impact of anticipated interest rate hikes can be enough to make individuals and companies spend less, causing the market to take a hit in advance of actual increases.

When stock prices decline broadly, the primary market indexes will also go down, which can further reduce confidence in the market. The exception is banks and other companies in the financial sector, such as mortgage or insurance providers, who benefit from higher interest rates and often see a bump in stock value. That often makes those stocks more attractive during rising interest rates.

Despite these trends, there is no guarantee than any given change to interest rates will affect stocks negatively. That’s because the stock market is affected by myriad factors besides interest rates, including current events, trade policies and other economic conditions.

It’s worth remembering that selling stocks out of panic during a downturn isn’t usually a great idea. Instead, it makes sense to buy when stocks are low. Even more importantly, the best predictor of returns is the length of time that your money remains in the market, so resist the urge to pull money out.

How Do Rising Interest Rates Impact Commodities?

Interests rates usually have a more direct relationship to commodities prices than they do to the stock market. Commodities are raw materials or agricultural products, include things like steel, beef and lumber. When interest rates rise, commodities prices usually fall.

That’s because it becomes more expensive for the companies that buy commodities, such as food producers or construction firms, to stockpile them and store them for long periods. As a result, companies will buy more commodities as they need them and lower demand will fuel lower prices.

That said, don’t panic yet: There’s no guarantee if this will happen since factors like inflation also play a role.

How Investing with SoFi Invest® Can Help You Tackle Rising Interest Rates

When you open an automated account with SoFi Invest, you can invest in a bundle of Exchange-Traded Funds. Because your portfolio is diversified across thousands of assets, you have more protection against fluctuations across various types of investments due to rising interest rates then you might if you invested in just one or two stocks.

Plus, a credentialed financial advisor will rebalance your portfolio at least quarterly, so you can know your investments will stay on track with your goals and risk tolerance, even if things start to change due to climbing interest rates.

If you’re a member and have more questions about how to invest in this dynamic environment, you can access complementary financial advice as often as you like. And you can start investing with as little as $100.

Want the confidence that comes with knowing your portfolio can respond to a changing economic environment? Look into investing with SoFi today.


Choose how you want to invest.

Ready to
do-it-yourself?

Learn more →

Want to take a
hands-off role?

Learn more →



The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth LLC, a registered investment advisor. SoFi Securities, LLC, member FINRA / SIPC .
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Student Loan Advice For Recent College Graduates

Now that you’ve graduated from college and started your career, you may have already received some student loan advice from well-meaning confidantes (or strangers, let’s be honest).

But something that worked well for a family member or friend may not work for you. With student loan payments looming, it’s wise to create a student loan repayment strategy based on your unique situation as soon as possible.

That includes understanding what type of student loans you have, what repayment options are available, and how to eliminate your debt as quickly as possible.

5 Pieces of Student Loan Advice to Help You Start Off On the Right Foot

Leaving college and entering the so-called “real world” can be overwhelming enough as it is. Knowing how you’re going to pay down your student loans can make everything else seem a little easier.

As you consider the right repayment strategy for your student loans, these tips might help. This stuff can get complicated, so of course we always recommend that you speak to a qualified financial advisor to help determine what’s best for you and your situation.

1. Know What Type of Student Loans You Have

There are two types of student loans: federal and private. The type of student loan you have can help determine what sort of repayment options are available to you and if you qualify for certain benefits, including student loan forgiveness and income-driven repayment plans. (Private lenders don’t typically offer flexible repayment options like these, so if your student loans are eligible for them they’re probably federal loans.)

If you don’t know what type of student loans you have, finding out should be easy. If you applied for student loans by filling out the Free Application for Federal Student Aid (FAFSA®), for example, you have federal loans. You can also use the National Student Loan Data System (NSLDS) to track down all of the information on your federal student loans.

If you applied with a private lender and underwent a credit check to get approved, you have private student loans. If you’re still not sure, check with your student loan servicer. You likely received an email or letter from your servicer encouraging you to open an online account. Find that message and either email or call your servicer and ask.

2. Know When Payments Start

If you haven’t already started making monthly payments, it’s a good idea to find out when they’re due and to set up your payment schedule.

In most cases, you’ll have a six-month grace period from the time you left school. Check with your servicer as soon as possible to find out exactly when your first bill is due is and how to make payments.

3. Understand Your Repayment Options

Depending on what type of student loans you have, you may have different repayment options. With federal loans, for instance, you typically start out with the default 10-year repayment plan.

To simplify things, you can consolidate your federal student loans through the Department of Education . But while this can replace several loans with one, you can end up with a higher interest rate overall.

That’s because the government takes the weighted average rates on all of your loans and rounds it up to the nearest one-eighth of a percent (0.125%).

If you can’t afford your monthly payments, however, you can apply for one of four income-driven repayment plans, including:

•  REPAYE Plan: Your monthly payments are generally 10% of your discretionary income, and your repayment term will be extended to 20 or 25 years.

•  PAYE Plan: Your monthly payments are generally 10% of your discretionary income, and your repayment term will be doubled to 20 years.

•  Income-Based Repayment (IBR) Plan: Your monthly payment will generally be 10% or 15% of your discretionary income, and your repayment term will be either 20 or 25 years.

•  Income-Contingent Repayment (ICR) Plan: Your monthly payment will be calculated as the lesser of 20% of your discretionary income or what you would pay on a 12-year repayment plan with fixed payments. Your repayment term will update to 25 years.

Anyone can apply for the REPAYE and ICR plans , but you need to demonstrate financial need to get approved for the PAYE and IBR plans.

With federal loans, you may also qualify for the Public Service Loan Forgiveness program. Through PSLF, you can qualify to have your loans forgiven after you’ve made 120 qualifying monthly payments on an income-driven repayment plan while working for an eligible employer.

Eligible employers include government organizations, tax-exempt not-for-profit organizations, and other not-for-profit organizations that provide qualifying public services.

Only Direct Loans are eligible for PSLF, so if you have a different type of federal loan —like a Federal Family Education Loan (FFEL) a Perkins Loan—you’ll need to consolidate it with a Direct Consolidation Loan.

Depending on your career choice, there may be loan forgiveness program options for you, such as through the military, schools, or hospitals.

If you have private student loans, your repayment term was determined by you and the lender when you first applied for your loans. Private student lenders typically don’t offer student loan forgiveness programs, such as SoFi.

4. Consider Refinancing Your Student Loans

Of all the student loan advice that you receive, this tip could make the biggest difference in eliminating your debt. Refinancing your student loans can save you thousands by reducing your interest rate, shortening your repayment term, or both.

Lenders like SoFi offer fixed and variable rates that can be lower than what you’re currently paying. If you qualify, SoFi will pay off your current loans with a new loan.

So, like federal loan consolidation, you can replace several loans with one. But if you qualify, you can also get a lower interest rate, which can reduce the amount of money you spend on interest over the life of your loan.

Remember, however, when you refinance your federal student loans with a private lender, you forfeit access to federal benefits like income-based repayment plans and student loan forgiveness.

5. Avoid Missing Payments and Defaulting

Whatever you do, avoid the temptation to just stop paying your student loans. You typically can’t get student loans discharged in bankruptcy like you can other debts, and defaulting on your student loans could damage your credit.

What’s more, the federal government can garnish your wages and tax refund for payment on federal loans, and private student loan companies can sue you.

In other words, repaying your student loans may not always be easy. But the alternative can be so much worse.

Finalizing Your Student Loan Repayment Strategy

After you consider these tips for paying off student loans, keep in mind that there’s no single right answer. Start by looking into federal loan consolidation, income-driven repayment, and student loan forgiveness.

But also look into refinancing your loans to see if you can save yourself both money and time. To see what your student loans could look like if you refinance with SoFi, take advantage of our easy to use student loan refinance calculator.

Regardless of how you choose to pay off your student loans, consider adding extra payments each month to pay down your debt even faster. This may require cutting back in other areas of your budget, but it can pay off in the long run.

And of course, we always recommend that you speak to a qualified financial advisor to help determine what’s best for you and your situation.

Looking for a way to make your student loans more manageable? Consider refinancing with SoFi.


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.
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