The Complete Guide to Using Your Debit Card

The Complete Guide to Using Your Debit Card

A debit card is a payment card that is linked to your bank account. These cards can help you make purchases either online or in-store, as well as withdraw cash at an ATM. A debit card can allow you to breeze through your day, paying to pick up a few things at the store, then later grabbing some takeout for dinner.

Debit cards can also facilitate your financial life in other ways. But if you are new to using one, you may have questions. That’s where this guide comes in. Read on to learn:

•   What is a debit card?

•   How do you use a debit card?

•   When and where can you use a debit card?

•   What are the pluses of using a debit card?

What Is a Debit Card?

A debit card is a payment card that is typically linked to a bank account. These cards can be used in place of cash when making purchases.

Debit cards have many of the same characteristics as credit cards, such as a 16-digit card number, expiration date, and CVV or a similar code. In addition, they often use the same payment networks as credit cards, like Visa or Mastercard.

Usually, you will receive a debit card when you open a checking account at a bank. However, debit cards can be linked to other types of accounts in some cases, like a health savings account (HSA).

How Does a Debit Card Work?

You can use your debit card to make purchases in-store or online, or use it to withdraw cash. When you use it in a store, you can swipe, insert, or tap (provided the card supports contactless payments).

What distinguishes a debit card from other kinds of plastic is where the money comes from. While a credit card works like a loan you pay off over time, a debit card typically draws directly from your checking account. Hence, a debit card will be allied with the bank that holds your cash balance. Contrast that with credit cards, which you can open with any of a number of banks, even if you haven’t deposited cash there.

How to Use a Debit Card

Learning how to use a debit card is usually a simple process. In general, it’s a matter of transmitting your card’s information to a merchant or service provider. You can do this by swiping, inserting, or tapping your card. When making purchases online, you must provide basic information printed on your card. Typically, that means sharing the card’s number and three-digit code, along with other personal information.

In most cases, using a debit card is much the same as using a credit card. However, you often need to type in a personal identification number (PIN), while credit card purchases don’t usually require that.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Ways That You Can Use a Debit Card

There’s no shortage of ways to use a debit card. You can use your debit card to make everything from in-store purchases to ATM withdrawals. As long as you have cash available, debit cards are a convenient way to pay.

•   In-Store Purchases You can typically pay with your debit card at an array of businesses in the United States, from the dry cleaner to your local yoga studio. Many debit cards have a Visa or Mastercard logo on them, which doesn’t mean they are credit cards but does indicate that they are likely accepted wherever those cards can be used.

   To pay, either swipe the card, insert it into a terminal, or simply tap your card near the sensor. You may or may not have to sign for the purchase. Also, you may be able to access features you don’t usually see with a credit card, like the ability to request cash back.

•   Online Purchases You can use your debit card for online purchases much the same way you would a credit card. Ordering flowers to send your mom on Mother’s Day? Or perhaps snapping up some new shoes on sale? Your debit card may well be accepted.

   At checkout, you’ll have to enter information like the name on the card, the card number, and the card’s expiration date.

•   At an ATM You can perform several tasks at an ATM using a debit card. These may include: withdrawing money, depositing cash at an ATM, depositing a check, viewing your balance, and transferring money. Usually, you must enter your PIN to complete a transaction.

Recommended: What Is a Cardless Withdrawal?

Debit Card vs Prepaid Card: What’s the Difference?

Debit cards and prepaid cards have many similarities, but they are not the same. The main difference is that debit cards are linked to a checking account, while prepaid cards must be loaded with money before you can use them.

There are pros and cons to prepaid debit cards. For instance, the fact that they aren’t linked to a checking account makes them a great gift. However, they can also come with high fees.

Here’s a side-by-side comparison of debit cards vs. prepaid cards:

Debit Card

Prepaid Card

Linked to checking account?YesNo
Reloadable?No. It’s linked to an account’s cash balanceTypically yes
FeesNot in many cases, though some checking accounts may have monthly feesYes. Many prepaid cards have monthly, transaction, and other fees
Minimum balance?VariesNo

Recommended: Breaking Down the Different Types of Debit Cards

Benefits of Using a Debit Card

Debit cards have a number of benefits that may make them a valuable part of your money management plan. Some of their benefits include:

•   Convenience: Most stores in the United States will let you pay with a debit card, making them an easy way to pay. Plus, you can use them in place of cash, so you don’t have to fumble through your wallet or purse for dollars and cents.

•   Cash back: Some stores let you request cash back when making a purchase with a debit card, saving you a trip to the ATM.

•   No interest charges: When you first get a credit card, you may realize that they are like a loan and so you will be charged interest on the money borrowed. Debit cards, however, don’t involve any such fees.

•   Limits overspending: When you compare debit cards vs. credit cards, you may realize that credit cards can lead to ringing up significant debt. With a debit card, you are drawing from your own cash balance, so you can only spend the cash you have on hand.

The Takeaway

Debit cards are typically provided when you open a bank account. They let you conveniently shop online or in-store. You can also use them to make deposits and withdrawals at an ATM. Debit cards are often branded as Visa or Mastercard, allowing you to use them at a broad array of merchants and service providers.

Getting a debit card can be an important factor when picking a bank. If you’re opening an online bank account, see what SoFi offers.

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

What happens if my debit card is declined?

This depends on the reason it was declined. For instance, it could be that your bank suspects unusual activity or that you have an insufficient balance. Depending on the reason, you may have a hold placed on your card, overdraft protection might kick in, or your recurring payments might fail. Contact your bank to learn more.

Are debit cards better than credit cards?

Both debit cards and credit cards have their advantages, and one is not necessarily better than the other. Debit cards have benefits like a lack of interest charges, the inability to overspend, and the ability to request cash back at some stores.

What are the drawbacks of a debit card?

Perhaps the biggest drawback of a debit card is that it can make it more difficult to recover from fraud than credit cards, mainly because debit cards are tied directly to the cash balance in your checking account. Because credit cards don’t draw money directly, it’s easy to reverse a fraudulent transaction. Debit cards also lack the rewards and benefits that certain credit cards offer, and they don’t contribute towards your credit score either.

Where can I not use a debit card?

Many debit cards can be used anywhere that accepts Visa or Mastercard. That means you can use them at most stores. Some establishments, like independently owned restaurants or rental car agencies, may not let you use your debit card.


Photo credit: iStock/chabybucko

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with 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 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 a Direct Deposit or $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 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 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 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 Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with 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.

*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/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOBNK-Q125-017

Read more
Are Payment Apps Safe?

Are Mobile Payment Apps Safe?

Mobile payment apps are certainly convenient, and, when compared to other payment methods, they are quite safe. They allow you to make payments with devices like smartphones and smartwatches, and can be even faster than using a debit or credit card.

That said, you should know a few details before deciding to use a payment app and when deploying one in daily life to keep your hard-earned cash as safe as possible. This guide will help you with such questions as:

•   What are mobile payment apps?

•   Are mobile payments secure?

•   What are the pros and cons of mobile payments?

•   How do I use a mobile payment app?

Key Points

•   Mobile payment apps allow you to make contactless payments and conduct other financial transactions using your mobile device.

•   While no payment app may be 100% secure, mobile payment apps typically use a number of features to enhance security, including tokenization, encryption, and two-factor authentication.

•   To authenticate each transaction, a mobile payment app may require a PIN or use biometrics, such as a fingerprint or face ID.

•   There are steps mobile app users can take to help minimize risk, such as setting up payment notifications, enabling two-factor authentication, and allowing automatic updates, which might include security features.

•   Always double-check recipient details to avoid sending money to the wrong person or to potential scammers — once funds are transferred, it can be hard to get them back.

What Are Mobile Payment Apps?

Mobile payment apps enable contactless payments by waving a smart device at a payment terminal. This can be faster and touchless versus pulling out a debit card or credit card and then inserting it into a reader. In addition, mobile payment apps allow you to send and receive money with friends and family. These apps can be installed on devices like smartphones, smartwatches, and tablets. Many payment apps are available, but common choices include Apple Pay, Google Pay, Samsung Pay, and Venmo.

Some mobile payment apps have a wallet feature that allows you to store credit and debit cards and things like boarding passes and tickets. Instead of having to carry each card individually, you can load them all into your mobile wallet.

How Mobile Payments Work

Typically, mobile payment apps work by connecting directly to your bank account, debit card, or credit card. To connect the app to your checking account, you generally need to enter details like your bank’s routing number and your personal account number.

To link a debit or credit card, you’ll need basic information such as the card number, expiration date, and CVV (those few digits, often found on the back). Then, instead of paying with the card directly, you’ll use your device to pay using the payment app. Your device sends your necessary information via what’s known as near field communication (NFC) but without revealing your actual account numbers, which is a welcome security feature.

Benefits of Mobile Payments

Mobile payment apps have several benefits that can make them preferable in our increasingly connected world. Some of those benefits include:

•   Convenience: On any given day, you may find you need to carry a wide variety of cards. Not just credit cards and debit cards, but also things like loyalty cards, boarding passes, and sporting event tickets. All of these can be loaded into popular mobile payment apps, so you have everything you need in one place.

•   Security: When you wave your device to pay with your mobile app, it doesn’t share your card number. Instead, it generates a series of random numbers (called a token) for each transaction you make. Plus, mobile payment apps require you to enter a PIN (personal identification number) or authenticate with biometrics like a fingerprint or face ID with every transaction. So, even if someone gets access to your device, it’s unlikely they would be able to use it to make purchases.

•   Speed: Paying with a mobile payment app tends to be much quicker than having to open a “real” wallet, fish for the right card, then insert or tap to pay. This benefit may seem minor in the grand scheme of things, but it can make a big difference when you’re in a rush.

Are Mobile Payments Safe?

Usually, mobile payment apps are safe compared to other payment methods. Most of that safety comes down to the tokenization mentioned in the previous section. Not only are these tokens different from your card number, but they are also encrypted and unique for each transaction.

This renders “sniffing” of mobile payment data (a common hacking method) virtually useless. Indeed, mobile payments are usually safe in most scenarios in the same way that mobile banking is safe. However, this doesn’t mean mobile payment apps are completely guaranteed to never have security issues or other glitches.

Consider this scenario:

•   Most of these apps allow you to send money directly to friends and family to cover the portion of the meal you had together. To be sure, that can be more convenient than dealing with cash.

•   However, there may not be a lot of safeguards in place when you send money with a mobile payment app. If you have a new person in your friend group and you accidentally send money to the wrong person (whose username is just one letter or digit different), it can be difficult to get it back.

This shows that mobile payment apps are safer in some contexts but aren’t perfect. The answer to “Are payment apps safe” may never be 100% certainly “yes.” One good way to protect yourself from problems is to always check that your money is going to the right place when paying with a mobile payment app.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Drawbacks of Mobile Payments

Like all technologies, mobile payments have their pros and cons. Here are a couple of the downsides:

•   While the popularity of mobile payments has rapidly expanded, there might still be some merchants that don’t accept them.

•   You may find that the payment terminal has a technical issue preventing it from accepting mobile payments. Thus, you might occasionally find you aren’t able to make a purchase by, say, waving your phone.

•   There are many different players in the mobile payments field, all of whom may have different policies. For example, the guidelines can be murky around things like data sharing. In addition, many mobile payment apps are available, which can create confusion as people navigate this new technology.

•   While rare, money scams and hacking involving mobile payments are possible.

Features of Payment Apps to Look Out For

Because there are so many mobile apps available right now, it can be helpful to look for certain features. Here are some key features to keep in mind:

•   Ease of use: One of the best aspects of mobile payment apps is they tend to be convenient and easy to use. If you find yourself struggling to link your cards or make payments, the app you are using may not be the best choice for you.

•   Security: The other great thing about mobile payment apps is that they sometimes provide greater security than credit cards alone. You’ll want to ensure your payment app has security features like two-factor authentication and PIN or biometric verification for purchases. It should also never display your full card number in your wallet or payment method screen.

•   Privacy: Privacy is increasingly an important part of any app’s policies, especially as more and more of our data lives online. However, it can be tough to know how your data is being used without diving into documents like the app’s terms of use and privacy policy. Still, it may be helpful to at least skim them if privacy is important to you. If the app sells your data to advertisers, it should be disclosed in these documents.

You may also feel safer going with a widely recognized mobile payment app, one that has many users and very positive reviews.

How to Use a Mobile Payment App

Each mobile payment app is different, but there are usually just a few steps to using one. Typically, this is how they work:

•   Start by downloading your payment app of choice. Or you may already have a payment app loaded on your device, like Apple Pay, Google Pay, or Samsung Pay.

•   Once you have your payment app on your device, link the payment card(s) you want to use with it. At this stage, you may have to complete a two-step verification process. For example, you might receive a verification code from your bank, or you may have to call the bank.

•   After completing the verification process with your bank, your payment app should be ready to use with your linked cards. You can use your payment app (or a contactless credit card) if you see the NFC symbol when you pay. There are a few different versions of the NFC symbol, but it usually shows an image of waves that increase in size.

•   Note that payment apps usually require you to add a PIN or biometric unlock (your fingerprint or face, for instance) to your phone and enter it before each payment.

•   Once you unlock and hold your device near the terminal, you will likely see an indication on your phone screen that the transaction is successful. You may also hear an alert sound. When that happens, ta-da: You’ve paid with your mobile payment app.

Recommended: How to Send Money to Someone Without a Bank Account

Tips to Safely Use Mobile Payment Apps

Although mobile payment apps can be safer than other payment methods, there are a few steps you should take to ensure they are secure:

•   Set up payment notifications: These will alert you to any payments on your card, so you will know immediately if someone gains access to your information.

•   Enable two-factor authentication: Two-factor authentication is an extra layer of security that makes it more difficult to gain access to your account. For example, you must enter a code from a text message or email to verify it after you link a payment card.

•   Enable automatic updates: Mobile payment apps frequently receive updates, which might include security features. Auto-update is often toggled on as a default setting, but double-check it’s enabled on your device.

   For instance, open the Google Play Store app on Android and tap the menu icon > Settings > Auto-update apps. On iPhone, open Settings > App Store and enable App Updates.

•   Check that you are sending money to the right person. It can be difficult to get your money back if you send it to the wrong person using a mobile payment app. Before sending money, double-check (and perhaps triple-check) the details on your screen match those of the person who should receive the money.

•   Beware of scams. Mobile payment apps are a common way for scammers to get money from unsuspecting victims. An easy way to prevent this is to avoid using a payment app to send money to people you don’t know.

Recommended: Key Features of Mobile Banking

The Takeaway

Mobile payment apps allow you to pay using a smart device like a smartphone, smartwatch, or tablet, and to do so in a fast, contact-free manner. They may also allow you to send and receive money with friends and family. These apps can be safer than other payment methods, like credit cards. However, they can sometimes be fallible, so you should always be careful when sending money.

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

What are the pros and cons of mobile payment apps?

The pros of mobile payment apps include their convenience, security, and speed of payment processing. Cons include that they aren’t yet accepted everywhere and are sometimes used by scam artists.

Does card fraud happen on payment apps?

There have been some instances of card fraud on payment apps, like when scam artists use flaws in the app’s design to extract money from victims. However, thanks to features like tokenization (encryption of your personal financial information), most payment apps make fraud much more difficult.

Are payment apps stealing my information?

Some payment apps might use your information in certain ways, like capitalizing on it to market products or selling it to advertisers. However, these details are often laid out in the app’s policy documents.


Photo credit: iStock/Ridofranz

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with 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 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 a Direct Deposit or $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 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 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 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 Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with 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.

*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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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.

SOBK1222025

Read more
Beautiful Master Bathroom Remodel Ideas

Beautiful Primary Bathroom Remodel Ideas

Remodeling a primary bathroom can provide a spa-like sanctuary while adding value to your home. With some design upgrades, including countertops, tile, fixtures, cabinetry, and bathtub, you can create a new look that really makes a splash.

The vast array of materials, colors, and design choices can be overwhelming. To help get you started, read on for 20 primary bathroom — formerly referred to as a “master bathroom” — remodel ideas.

Key Points

•   Primary bathroom remodel ideas include updates like new countertops and space-saving floating vanities.

•   Master bathrooms have evolved away from opulent designs to be functional, spa-like spaces.

•   Current trends emphasize organic materials and earthy tones for a natural, calming atmosphere.

•   The average primary bathroom size is around 100 square feet, typically featuring double sinks, a large shower, and a toilet.

•   Remodeling costs vary, with a full renovation ranging from $7,000 to $30,000.

How the Primary Bathroom Has Changed Over Time

In the 1960s and 1970s, people started migrating from the cities to suburbia. More space meant more square footage. Initially, a primary bath meant a bigger bathroom with a double sink.

In the 1980s, opulence was king. Primary bathrooms meant sunken jetted tubs, lavish fixtures, and expansive countertops for perfume bottles and dressing vanities.

Today, many real estate agents and developers use only the term “primary” bathroom or bedroom and have dropped “master” from the vernacular (even though the National Association of Realtors® has noted that a HUD opinion said “master” in this context is not related to race or gender and therefore does not violate fair housing laws).

While primary bathrooms are still spacious, style trends have taken a more subtle turn toward organic materials and earthier tones.

Regardless of trends, the primary bathroom is here to stay, and is considered a must-have for many first-time homebuyers and experienced buyers.

What Is the Average Size of a Primary Bathroom?

A primary bathroom is defined as the largest bathroom in the house, and is almost always connected to the primary bedroom. A suburban primary bath averages 100 square feet but may range from 75 to 210 square feet.

A primary bathroom typically features:

•   A double sink

•   A large shower

•   A toilet

A bathtub is not a requisite, but these days most homebuyers want a tub in the primary bathroom, especially if there is not another one in the house.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


10 Standard Primary Bathroom Remodel Ideas

An average-size primary bathroom renovation may cost $10,000 to $30,000, depending on material types, labor costs (do you need to find a contractor?), and the scope of the project.

Here are 10 remodeling ideas for a standard primary bath that can offer panache for your cash.

1. Refresh Your Countertops

Replacing worn-out countertops in a primary bath can transform the feel of the space. Granite, marble, and quartz counters add a sense of contemporary elegance but cost more than laminate.

Granite can cost $180 to $330 per square foot; marble, $110 to $200; and quartz, $50 to $150. Laminate costs around $50 to $80 per square foot. That’s just the materials.

2. Go for the Hip, Hip Bidet

While common in Europe and Japan, bidets are finally gaining popularity in the United States. Because bidets limit the use of toilet paper, they are considered good for the environment and better for your skin.

A stand-alone bidet with installation can run between $500 and $2,000. An all-in-one bidet toilet can cost anywhere from $1,200 to $2,500.

3. Install a Walk-in Shower

Walk-in showers are usually partially enclosed with glass — devoid of doors, tubs, and shower curtains. The lack of barriers creates an open, contemporary look, almost like bathing in an outdoor shower.

Beyond being stylish, walk-in showers are accessible. With no steps or ledges to trip over, this type of shower remodel will age well with you and your home.

4. Consider Shower Speakers

As long as you’re redoing the shower, you might as well add some in-ceiling shower speakers. These advanced sound systems offer hands-free use, connecting to voice assistants like Siri or Alexa. Singing in the shower never sounded so good!

5. Install a Fan Timer Switch

A long, hot shower can generate a lot of steam. A smart-fan timer will sense the amount of steam and moisture in the air, turning on and staying on long after you’ve toweled off. This can prevent water damage, excess moisture, and potential mold.

6. Upgrade Outdated Fixtures

Switching out your old faucets, knobs, and light fixtures is a quick and cost-efficient way to spiff up your primary bathroom.

7. Tile an Accent Wall

Retiling the entire bathroom can take a big bite out of your wallet. Some homeowners are choosing to tile a single wall or focal area. You can energize the space by contrasting white subway tiles with a colorful wall of hexagonal tiles.

8. Elevate Your Look With Floating Shelves

Even a primary bathroom can use more storage. Floating shelves on the walls can help achieve a sleek, minimalist look and cost less than installing cabinets.

If the bathroom has a closet or you’d like to add one, a closet remodel might be in order.

9. Keep Things Cozy With Heated Floors & Towel Racks

If you’re renovating your primary bathroom floors, perhaps you could put in an electric or water-based heating system. This will ensure toasty toes without clunky radiators or exposed pipes.

Heated towel racks provide warmth in the winter and a quick-drying option for summer beach towels, all for about the same electric costs as flipping on a light switch.

10. Outlets in the Vanity Drawers

A primary bath typically has a lot of vanity drawers. Installing outlets inside the drawers will help keep hair dryers, electric razors, and other appliances from cluttering your countertop.

10 Small Primary Bathroom Remodel Ideas

Not every primary bathroom has enough space for a Jacuzzi tub. Here are some remodeling ideas for a small master bath.

1. Install a Pocket Door

Doors that open on hinges can take up a lot of space. A sliding pocket door to the bathroom can make the primary bath feel much roomier.

2. Add a Skylight

Adding a skylight in your primary bathroom can flood the space with natural light, making it feel more airy and spacious. So can recessed lighting.

3. Choose a Long Sink

Instead of the standard double sink, consider a long, troughlike sink for a primary bathroom vanity. It can provide a chic, modern look, and the elongated sink creates the illusion of more space.

4. Mount an Elongated Mirror

As with a long sink, stretching a mirror across a whole wall, instead of just over the vanity, can add depth and extra reflective light.

5. Opt for a Floating Vanity

A floating vanity is a cool design choice for a smaller primary bath. It can add openness and more space underneath the sink for storage.

6. Add Lights Under the Cabinets

Cabinets, vanities, and shelves can cast a shadow on the floor, darkening a master bathroom and making it feel smaller. Installing lights underneath countertops and storage units can cast a downward light to add dimension.

7. Stretch the Floor Tiles Into the Shower Stall

If you have a walk-in shower, consider extending the floor tiles into the shower stall floor. The continuity of design will give the illusion of a longer space.

8. Add Storage

Select bathroom pieces with a dual purpose: mirrors with built-in shelves, a vanity with multiple drawers. Containing your clutter will make the primary bath seem bigger and is one of the ways to refresh your home.

9. Consider a Freestanding Bathtub

Although a stand-alone tub can need more room for its fixtures, a clawfoot or modern oval bathtub can make a small primary bathroom feel grand.

10. Stick to Light Colors

Soft whites, blues, and greens reflect natural light from windows and skylights, making the primary bath seem more spacious. Choose light vs. dark colors for wall paint, shower curtains, and countertops.

Ways to Finance a Primary Bathroom Remodel

A primary bathroom renovation can add up. Here are several ways to finance the project.

HELOC

If you own your home and have sufficient equity, you may be able to open a home equity line of credit (HELOC), using your home as collateral. You’ll only make payments on the amount you borrow, the limit may be higher than a personal loan, and a HELOC usually has a lower interest rate than a credit card or personal loan.

But the rate is usually variable and can increase, and you could face closing costs and a minimum-withdrawal requirement. If you default on a HELOC, you risk losing your house.

Still, HELOCs tend to be hot when interest rates are rising.

Cash-Out Refinance

If you have sufficient home equity, you can apply for a cash-out refinance. You would refinance your home mortgage loan for more than you owe, take out part of the cash difference, and use the lump sum to build your new primary bathroom.

Expect mortgage refinancing costs of 2% to 6% of the loan amount.

Personal Loan

With a personal loan for home improvements, you can receive a lump sum and repay it with interest in monthly installments. These loans typically offer same-day funding with no collateral required. The rate is based on the loan term, the amount of credit requested, and your credit score.

Credit Card

If you have a 0% interest period on a credit card, it could be a smart way to pay for your primary bath reno. But unless you pay attention to the end of that introductory period, you could end up buried in interest charges. A missed payment will hurt your credit scores, and most of the time a late payment will stay on a credit report for seven years.

The Takeaway

Remodeling a primary bathroom will add value to your home and create a retreat where you can invest in some serious self-care. The cost to remodel has a wide range.

How to renovate so you can luxuriate? SoFi offers a personal loan of $5,000 to $100,000 with no fees, as well as a cash-out refinance.

SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit brokered by SoFi.

FAQ

Does remodeling a bathroom increase home value?

Yes. One study showed that the average full bathroom remodel cost of at least $25,000, and homeowners could expect a return on investment upon resale of more than 60%.

What is the biggest expense in a bathroom remodel?

Labor in general. Plumbing and tile work in particular. Want to move the toilet? That’s a complicated task.

What is trending in bathrooms?

Steam showers, towel and floor heaters, and spa-inspired decor. Vintage-inspired sinks, mirrors, light fixtures, and clawfoot tubs. Wet rooms, where the shower, tub, sink, and toilet are all in the same room at the same level. Earth tones and jewel tones. Smart devices.

What should you not do when remodeling a bathroom?

A downward-facing light centered over the mirror can cast a shadow. Other mistakes: not adding enough storage, buying fixtures made with plastic parts instead of metal, installing a hook out of reach from the shower, and not adding a hand shower, which will mean a tougher task cleaning the shower walls.


Photo credit: iStock/stocknroll

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

SOHL-Q125-048

Read more
14 Must-Know College Financial Aid Terms for Parents

College Financial Aid Terms

When applying for financial aid to fund their college educations, students and their parents are often introduced to words they’d never heard of before. To help you learn the lingo, here are definitions of important financial aid terms, plus information about different ways to pay for college.

Key Points

•  Understanding key college financial aid terms — such as grants, loans, FAFSA, cost of attendance, and Student Aid Index — can help students and families make informed decisions about funding higher education.

•  The FAFSA is a form that students must complete annually to be considered for federal financial aid, including loans and grants.

•  A financial aid award letter is a document from colleges detailing the financial aid package offered, including grants, scholarships, work-study, and loans.

•  The Student Aid Index (SAI) is a measure of a family’s financial strength and is used to determine aid eligibility, calculated from income, assets, and family size.

•  Student loans include both federal and private student loans. Federal loans should be exhausted first, followed by private student loans, if needed.

Award Letter

A financial aid award letter goes by a few different names: merit letter, award letter, a financial aid offer, or a financial aid package. But no matter what you call it, once a student fills out a FAFSA, they’ll receive one of these letters from each college that accepts them. A typical letter will list a student’s cost of attendance, expected family contribution, awarded grants and scholarships, work-study details, and federal student loans. Many schools now provide this information electronically.

Bursar, Student Accounts, or Student Financial Services

The bursar is the office responsible for managing student billing and payments at a college or university. This department handles tuition, fees, and other charges, ensuring that students’ accounts are up to date.

The student accounts office oversees the financial records of enrolled students, including tuition payments, fees, and any outstanding balances. This office ensures that students meet their financial obligations and may assist with setting up payment plans, issuing statements, and explaining charges on a student’s account.

Student financial services is a broader department that combines financial aid, student accounts, and sometimes the bursar’s office to provide comprehensive support. This office helps students understand financial aid packages, manage tuition payments, and explore funding options such as scholarships, grants, and loans.

Cost of Attendance

A student’s cost of attendance (COA) is the total of all costs to attend college in a given year. This includes tuition, room and board, book and supplies, loan fees, costs associated with studying abroad or managing a disability, and more.

The COA is different from an invoice a college may send a student, which is more comprehensive. The COA figure is used to determine how much financial aid a student may be eligible to receive. Anyone who receives a form of financial assistance is not responsible for paying the full COA.

CSS Profile

The CSS Profile (College Scholarship Service Profile) is an online financial aid application used by many colleges, universities, and scholarship programs to determine a student’s eligibility for nonfederal financial aid. Unlike the FAFSA, which is used for federal aid, the CSS Profile provides a more detailed analysis of a family’s financial situation, including income, assets, and expenses. Administered by the College Board, the application helps institutions award need-based grants, scholarships, and institutional aid.

Demonstrated Need

Demonstrated need is the difference between the cost of attendance (COA) at a college or university and a student’s Student Aid Index (SAI), as determined by financial aid applications like the FAFSA or CSS Profile.

Schools use this figure to determine a student’s eligibility for need-based financial aid, including grants, scholarships, and subsidized loans. The higher the demonstrated need, the more financial assistance a student may qualify for, though the amount awarded varies by institution and available funding.

Enrollment Status

Enrollment status refers to a student’s classification based on the number of credit hours they are taking in a given academic term, which can affect financial aid eligibility, loan repayment, and other benefits.

Common statuses include full-time, half-time, and part-time, with full-time students typically taking at least 12 credit hours per semester.

FAFSA (Free Application for Federal Student Aid)

FAFSA is the official government form that students must fill out to be eligible for federal student loans and grants. Filling the FAFSA out does not guarantee that a student will receive aid, but it must be completed annually in order to be considered for the upcoming academic year. The information provided will be used to calculate a student’s Student Aid Index (below).

Recommended: Who Qualifies for FAFSA? Find Out if You Do

FAFSA Submission Summary

FAFSA submission summary (formerly known as the Student Aid Report or SAR) is a document provided to students after they submit the Free Application for Federal Student Aid (FAFSA). It summarizes the information reported on the FAFSA, includes the Student Aid Index (SAI), and indicates potential eligibility for federal financial aid.

Financial Aid

Financial aid refers to funding provided to students to help cover the cost of higher education, including tuition, fees, books, and living expenses. It can come from various sources, such as the federal government, state agencies, colleges, and private organizations.

Recommended: FAFSA Grants and Other Types of Financial Aid

Financial Aid Office

The financial aid office is a department within a college or university that assists students in understanding, applying for, and managing financial aid. It provides guidance on available aid options, including grants, scholarships, loans, and work-study programs. The office helps students complete required forms like the FAFSA and CSS Profile, determines eligibility for aid, and processes disbursements.

Financial Aid Officer

A financial aid officer is a professional at a college or university who helps students and families navigate the financial aid process. They assist with completing applications like the FAFSA and CSS Profile, determine eligibility for grants, scholarships, and loans, and provide guidance on payment options.

Financial aid officers also explain award packages, help students understand borrowing responsibilities, and offer advice on managing education costs.

529 Savings Plan

A 529 savings plan is a tax-advantaged investment account designed to help families save for future education expenses. Contributions grow tax-free, and withdrawals for qualified education costs — such as tuition, fees, books, and room and board — are also tax-free. These plans are sponsored by states, educational institutions, or agencies, but funds can typically be used at eligible schools nationwide.

Grant

Grants are used to help fund a qualifying student’s college education, and unlike loans, they typically don’t need to be paid back. They are often based on financial need and are available from private and public organizations. Some grants have criteria that a student must meet, such as maintaining a certain grade point average or declaring a certain major.

Loan

A student loan is a type of financial aid designed to help students cover the costs of higher education, including tuition, fees, books, and living expenses. These loans can come from federal or private lenders, with federal loans typically offering lower interest rates and more flexible repayment options.

Recommended: Private Student Loans

Merit Aid

Merit-based assistance is based upon a student’s abilities and accomplishments. This can include their grade point average, athletic achievements, or another skill. Financial need is not typically taken into account. Students generally receive merit-based aid directly from the college.

Need-Based Financial Aid

Need-based assistance is provided to students based on their financial needs, and is commonly offered by federal and state governments, colleges, and other organizations. There are three types of federally granted need-based financial aid: Pell Grants, work-study programs, and Subsidized Direct Student Loans.

To qualify for federal need-based aid, a student must fill out the FAFSA. Colleges may require additional information for non-federal aid. Simply applying for need-based aid does not mean a student will receive it, though applying early may potentially improve their chances.

Need-Blind Admission

Need-blind admission is a policy used by some colleges and universities where an applicant’s financial need is not considered during the admissions process. This means that students are admitted based on their academic qualifications and achievements, without regard to their ability to pay for tuition or other expenses.

Schools with a need-blind policy often provide financial aid packages to help cover the cost of attendance for admitted students, regardless of their financial background. This approach aims to ensure that all qualified applicants, regardless of financial resources, have equal access to higher education.

Net Price

The net price of college refers to the amount a student and their family will actually pay for college after accounting for financial aid, scholarships, and grants. Unlike the sticker price or listed tuition fees, the net price subtracts any aid offered by the school, making it a more accurate reflection of the cost a student will need to cover.

Net Price Calculator

A net price calculator is an online tool provided by colleges and universities to help prospective students estimate the amount they may need to pay for college after financial aid is applied. By inputting financial information, such as family income, assets, and other relevant details, students can receive an estimate of their net price, including tuition, fees, and potential financial assistance in the form of grants, scholarships, and work-study.

Outside Scholarship

An outside scholarship is a financial award for education that comes from sources other than the college or university a student plans to attend. These scholarships can be offered by private organizations, foundations, corporations, or government agencies and are typically based on criteria such as academic achievement, community service, or specific interests.

Recommended: SoFi’s Scholarship Search Tool

Priority Date

A priority date refers to the deadline set by colleges or financial aid programs for submitting the FAFSA or other required financial aid forms to receive maximum consideration for aid. Students who apply by the priority date are more likely to qualify for limited funding sources, such as grants, scholarships, or work-study opportunities.

Reserve Officers’ Training Corps (ROTC)

The Reserve Officers’ Training Corps (ROTC) is a college-based program that prepares students for military service as commissioned officers while allowing them to earn a degree. ROTC programs are available for the Army, Navy, and Air Force, and students typically commit to military service after graduation in exchange for financial assistance.

ROTC can significantly reduce or eliminate student loan debt by providing scholarships that cover tuition, fees, and sometimes room and board. Additionally, ROTC graduates who serve in the military may qualify for student loan repayment programs, where a portion of their loans is paid off in exchange for active-duty service.

Recommended: Does ROTC Pay for College?

Residency Requirements

Residency requirements refer to the criteria a student must meet to be considered a resident of a particular state for tuition and financial aid purposes. These requirements vary by state and typically include factors such as the length of time a student has lived in the state, proof of permanent residency (e.g., driver’s license, voter registration), and financial independence from out-of-state parents.

Scholarship

A scholarship is a type of funding awarded to students to help them pay for a college education. They are available through federal and state government sources, colleges, private and public organizations, and more.

Unlike loans, scholarships typically don’t need to be repaid. They can be based on need or merit, or a combination of the two. There is a wide range of scholarship possibilities, so it can be worthwhile for the student to research their options and apply for ones that seem to be a good match.

Recommended: Finding Scholarships for Current College Students

Student Aid Index (SAI)

The Student Aid Index (SAI), formerly Expected Family Contribution, is a number colleges use to determine a student’s eligibility for financial aid. It’s calculated using a formula that considers a family’s income, savings, investments, benefits, family size, and more.

Recommended: How the Middle Class Affords College

Transcript

A transcript is an official record of a student’s academic performance and coursework completed at a school, college, or university. It typically includes details such as courses taken, grades received, credit hours earned, and cumulative GPA.

There are two types of transcripts: Official and unofficial. An official transcript is a certified record of a student’s academic history, issued by the school with an official seal or signature, often sent directly to institutions or employers. An unofficial transcript contains the same information but lacks official authentication and is typically used for personal reference.

Undergraduate

An undergraduate is a student who is pursuing a postsecondary education program that leads to an associate or bachelor’s degree. Undergraduates typically complete general education courses along with coursework specific to their chosen major. Unlike graduate students, they have not yet earned a bachelor’s degree and are in the early stages of higher education.

Work-Study

The federal government’s work-study program provides college students who have demonstrable financial need with part-time jobs to help them earn money for their college education. The program attempts to match a student with work in their area of study or in jobs that benefit the community. Students who are interested in this program should check with their colleges of choice to see if they participate.

Private Student Loans at SoFi

When it comes to how to pay for college, it helps to understand all the available options and how they may be combined. Students and their parents may have money to contribute to help cover the expenses. Scholarships and grants can reduce the bill and typically don’t need to be paid back, while work-study opportunities allow students to earn money to cover some expenses while in college. And lastly, students can rely on both federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What is a cosigner?

A cosigner helps assure lenders that someone will pay back the loan. Their income and financial history are factored into the loan decision, and their positive credit standing can benefit the student’s loan application.

What’s the difference between a student loan lender and a student loan servicer?

Lenders lend borrowers money to help cover school-related costs. Servicers send borrowers their monthly bill, process payments, field customer service requests, and handle other administrative tasks.

How do I calculate my college costs?

There are several online tools to help students estimate the potential cost of attending college. Net price calculators, for instance, are available on a school’s website and give cost estimates based on basic personal and financial information provided by the student.


SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOISL-Q125-016

Read more
woman with laptop on the floor

7 Different Types of Budgeting Methods

Budgets come in all shapes and sizes, from the old-fashioned, “write down everything you spend” approach to ones that use streamlined apps. There is likely at least one method out there that can help you gain insight and manage your finances effectively. Once a budget is up and running, it can help you wrangle your spending and reach your savings goals, too.

Here, you’ll learn about such budgeting options as the 50/30/20 rule, zero-sum plan, and envelope system. Everyone’s financial situation is different, and this list is in no way exhaustive, but it can be a solid start to taking control of your cash.

Key Points

•   Budgets can help provide insight and financial management by tracking income, spending, and saving.

•   Line-item budgets track detailed monthly expenses, aiding in precise financial control.

•   The 50/30/20 budget rule splits income into needs, wants, and savings, promoting balanced financial management.

•   The envelope system uses cash for categories, making it easier to manage and reduce spending, which the zero-sum budget assigns every dollar a purpose.

•   Tech tools, including those provided by financial institutions, can also play a role in effective budget management.

1. Line-Item Budget

A line-item budget is what you may first imagine when you think of a “typical” type of budgeting. You know the kind: a spreadsheet that lists out each expense by category. The goal with a line-item budget is to keep track of monthly expenditures so they don’t exceed spending targets.

Often, you’ll hear the term “line-item budgeting” in terms of business accounting. Businesses use this technique to track cash inflows and outflows. In your own personal budget, it might help you to do the same, keeping track of the money coming into your checking account and going out.

You can set up a line-item budget using a spreadsheet, whether you like to use pencil and paper or any of the online programs available, like doing a budget in Excel. You list each expense, or category of expenses, over a given time period such as a month or a year. As you progress throughout the year, you can compare current expenses to past expenses to make sure you’re on track.

Because a line-item budget is mostly used to track spending and not to prioritize saving, don’t forget to build a savings line-item into your list of expenditures.

Pros:

•   For new budgeters, this method is relatively easy to create and intuitive.

•   Because a line-item budget is detailed, it can be a good starting place for tracking expenses and can be helpful for those who require more control over their spending.

Cons:

•   Line-item budgets can be a bit rigid. They may not allow the flexibility to track irregular expenses. It will be up to the budgeter to make adjustments.

•   Because line-item budgets are simply a tracking methodology, they do not necessarily help the budgeter to reach savings and other financial goals.

•   Because a line-item budget is relatively detailed, it will be more time-intensive (and potentially frustrating) than some of the other methods.

2. Proportional Budgets

Proportional budgeting is a system where you divide up your monthly income into three categories, based on percentage. One pool of money is allocated towards “needs,” another towards “wants,” and lastly, and perhaps most importantly, towards savings and other money goals.

•   “Needs” are classified as spending that is required to stay alive and employed, such as housing, food, transportation to work, and insurance.

•   “Wants” are anything that you buy for personal enjoyment, such as eating out, traveling, and shopping for clothes (beyond basic needs). You may also hear these called discretionary expenses.

•   The “savings” category encompasses financial goals like building an emergency fund in, say, a high-yield online bank account; retirement; or paying down debt.

It is generally easiest to do this calculation with after-tax figures — also known as your take-home pay. There’s an example of one popular proportional budget below, the 50/30/20 budget, but you can set the amounts per category as you see fit.

Pros:

•   Proportional budgets can help the saver think about the big picture.

•   This is a simple type of budgeting that doesn’t get bogged down with minutiae. Thanks to its simplicity, it may help some budgeters stick with it.

•   Because proportional budgets focus on making room for saving, this budgeting method may work well for those who want to save money but don’t want to count every penny of spending.

Cons:

•   Proportional budgeting provides an end goal, but not necessarily a path to arrive there.

•   It might not work for someone who needs more help setting targets and identifying problem areas in their spending and/or saving.

3. Paying Yourself First

This no-nonsense budget revolves around one premise: Pay yourself first, and whatever happens with the rest isn’t as important. “Paying yourself first” simply means allocating money towards savings or other financial goals.

Say that you’ve decided that you want to save 25% of your take-home income. You set up an automatic contribution of 15% of your income to go towards retirement, 5% to a down payment fund, and 5% to a travel fund. For the remaining 75%, you’d spend as you wish.

Pros:

•   This budgeting method prioritizes saving, which is the desired end-goal for many people. It can help ensure that you stay on track, and there’s money you have after paying bills that can go toward future goals.

•   There’s no need to track all expenses, which can make this budget appealingly fast and easy for some people.

Cons:

•   This strategy probably won’t work for folks who are not yet ready to prioritize saving (such as those with too much debt to stash cash away for the future).

•   Some people may need a tracking technique with more insight into spending in order to save, such as a budgeting app.

•   There is a risk of overdrafting if too much is allocated towards saving and not enough towards spending. This budgeting strategy should only be used by those who are not at risk of having a negative bank balance.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


4. Envelope Budget

Here’s a different type of budgeting to consider: The envelope budget, a hands-on way to divvy up money and control spending. With the envelope budget, you have a set amount of cash to spend in each budget category per month. The pools of money are kept separate in different envelopes — hence the name.

The goal is to make the cash last all month. Once the envelope is empty, you’ll either be done for the month or will need to take cash out of a different envelope to pay for an expense.

How it works:

•   The first step to building an envelope budget is to determine the amount of after-tax income you have each month.

•   Next, you’d determine how much you’d like to allocate to each category of spending, such as “entertainment” and “groceries.”

•   After that’s done, you’d take cash out from the bank to keep in each envelope. No need to take all your envelopes full of cash with you every day — you can just take what you need or adapt the system to use your debit card, keeping careful track of your spending.

Pros:

•   Some studies show that people spend less when they use cash.

•   This budgeting method is a tangible, tactile plan to spend only the money you have available.

Cons:

•   The budget itself does not address saving.

•   Going to the bank each month to get cash can require extra time and effort. (You could, however, adapt this method for debit card use.)

5. Zero-Sum Budgeting

The idea here is to spend every dollar that you have. No, this doesn’t mean spend every dollar on anything you want. Instead, you would assign a specific purpose to each dollar that you earn, whether it’s for savings or discretionary spending.

It’s called a zero-sum budget because after you’ve picked a job for each dollar, you’ll end with zero leftover dollars. The theory behind the budgeting strategy is that dollars without a job will be spent carelessly.

To create a zero-sum budget:

•   Start with your monthly after-tax income.

•   Assign dollars to each of your non-negotiable bills, such as rent, insurance, student loan payments, and groceries.

•   Assess how much money you have left for discretionary spending and saving.

•   Then assign where your remaining money is going to go. Specificity can help: For example, say “dining out” and “Netflix” instead of “entertainment.” Say “retirement savings” and “extra payments towards debt” instead of “saving.”

Pros:

•   This budget requires you to think critically about every dollar you spend.

•   Done right, zero-sum budgeting makes room for savings goals.

Cons:

•   Because you are breaking spending down into small categories and assigning a dollar value, this budget requires more effort than some of the other budgeting systems.

6. 50/30/20 Budget

The book, “All Your Worth” by Sen. Elizabeth Warren and Amelia Warren-Tyagi popularized this variation on proportional budgeting, which calls for a 50/30/20 budget. Here’s the breakdown:

•   With your after-tax dollars, allocate 50% to “needs,” or expenses like housing, utilities, and food.

•   Put 30% to “wants,” which would include things like dining out, travel, premium streaming services, or some new artwork for your home’s walls.

•   The remaining 20% of monthly income has an important job: It goes toward savings goals.

Here’s how the benefits and drawbacks of this budgeting method stack up.

Pros:

•   This budget gives clear but flexible spending guidelines.

•   The 50/30/20 rule definitely emphasizes saving, which can be important to achieving short- and long-term goals.

Cons:

•   This budgeting system may not be detailed enough for some people, since it allocates money in broad strokes.

•   The 50/30/20 rule may not help identify areas of overspending, which can be an important aim for some budgeters.

Recommended: 50/30/20 Rule Calculator

7. 60 40 Budget

This is a different type of budgeting that also uses a proportional approach. The 60 40 budget is a very general way of managing your money. Here are this budgeting system’s principles:

•   The 60 represents 60% of your after-tax income, which is allocated towards the “musts” in life: food, shelter, utilities, debt, and other basic needs.

•   The 40 represents the rest of your income, to be allocated as you see fit. Some people like to subdivide this quantity into smaller buckets, such as 20% for non-essential spending (entertainment, dining out, etc.) and 20% for savings.

Here are the upsides and downsides of this plan:

Pros:

•   This budget provides a good deal of freedom and flexibility.

•   The simplicity of the plan can be a positive for people who don’t like complicated, time-consuming budgets.

Cons:

•   This budget rule may not provide enough guidance for those who really need to take control of their finances. For instance, it doesn’t offer a detailed way to track and rein in overspending.

•   The 60 40 plan leaves savings allocation up to the individual. That means some people could say they can’t afford to save and thereby sidestep this important path to achieving financial security.

Sticking to a Budget

You now have lots of ideas on different types of budgeting strategies that you can utilize. But next is the hard part — putting theory into practice. Here are some tips to consider as you embark on your budgeting journey:

Overcome Mental Barriers

Having financial discipline and sticking to a budget is difficult. If you are struggling with discipline, you might try these tactics:

•   Start by acknowledging the issue. Out loud. You can only fix a problem if it’s been identified.

•   Create space for yourself to succeed. For example, put a 20-minute block on your calendar to look over your budget every week.

•   Try anchoring the task of budgeting to another activity that you either enjoy (making coffee on Sunday morning). This way, you’ll start to associate the two tasks and think about them in tandem.

Set Realistic Expectations

A common pitfall when setting a budget is to be too restrictive in your spending targets right out of the gate.

While it’s great to have big goals, it is unlikely that you’ll make sweeping changes in your spending just because you set lofty targets. And in fact, missing big targets could be disheartening.

•   Instead, try to set yourself up for success by choosing realistic targets for the upcoming months. Increase or decrease those targets as you are able to amend your behavior.

•   Celebrate victories as they come. Pat yourself on the back for meeting a goal, and know that success in budgeting comes from making everyday adjustments to behavior.

Consider Irregular Expenses

No matter what methodology of budgeting you choose, there will always be the issue of irregular expenses. Irregular expenses can be both expected, like annual memberships or holiday gifts, and unexpected, like car repairs. Some ideas:

•   Find a place for the irregular expenses in your budget as you do for regular monthly expenses.

•   Create a list of possible and expected annual expenses even before you build out your monthly budget. That way, you can spread out the cost of large and irregular budget items across months.

•   It might also be helpful to build up an emergency fund to help cover for unexpected costs.

Stay Out of the Weeds

Don’t get overwhelmed by the details when budgeting. Some advice:

•   Avoid strategies that feel complicated or require hours of effort. You need a budget you will stick with, and that is likely one that suits your style and feels simple.

•   Test-drive a couple of budgets to see which suits you best.

•   Recognize that a budget is never going to be perfect. And that’s okay! If you are tracking every last dollar and go over in a category or two, it may feel like a failure when it’s not.

Recommended: How to Make Money From Home

Leveraging Technology

For some folks, a pen and paper method of tracking spending and keeping a budget will work best. Others may find this challenging, given how much of our lives have been moved to the computer. If so, you might consider the ways that technology can aid you in creating and sticking to a budget.

There are plenty of apps that can help you with budgeting and make tracking spending and saving easier. There’s a good chance that your financial institution offers one.

The Takeaway

Budgeting is a system that can help you track and manage your money better, which in turn can optimize your spending and saving. There are many different budgeting methods, and some popular ones include the 50/30/20 budget rule, the zero-sum system, and the envelope technique. Take some time experimenting to find the system that works best for you. A good budget and the right banking partner can help you along the path to financial wellness.

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

What’s the best budget plan?

The best budget plan is one that works for you. In order to choose the best fit, consider your goals and needs. Some people want to control their spending and like a really detailed budget, such as a line-item budget. Other people are more focused on making sure they allocate funds towards savings, in which case a 50/30/20 rule could be a good option.

What is the simplest way to budget?

A basic budget typically requires the following: knowing your take-home pay, evaluating your “musts” (spending on basics like housing, food, and debt), tracking your spending on “wants” (dining out, clothes, travel), and allocating for savings.

What is the 50/30/20 rule budget?

In this popular proportional budget strategy, you divide your take-home pay into three buckets: 50% for the “needs” in your life (housing, utilities, food, debt); 30% for the “wants” (dining out, shopping for clothes and other items, entertainment); and 20% for savings (for, say, your emergency fund or retirement).


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with 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 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 a Direct Deposit or $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 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 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 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 Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with 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.

*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.

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/.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOBNK-Q125-028

Read more
TLS 1.2 Encrypted
Equal Housing Lender