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Building a budget can pay off quite literally: It provides guidelines for your money and helps you wrangle your spending and saving to achieve financial health. With smart planning, you can make your cash work harder for you and grow.

Many people think that a budget is all about deprivation, but it’s really about organization. A key step in developing a good budget is knowing how to categorize both your spending and saving. That can help you get a handle on where your money is going and how to make the most of it.

In this guide, you’ll learn how to divide your expenses into three main categories (namely, needs, wants, and savings), and then further separate things into smaller groups. This can help you truly understand your spending habits and optimize your finances.

Whether you’re just starting out on your independent financial life or if you’re looking to tweak your existing budget, this advice can help you better manage your budget categories and direct your spending goals.

Getting Started With the 50/20/30 Rule of Budgeting

The 50/20/30 rule for budgeting (made popular by Sen. Elizabeth Warren in her 2006 book, “All Your Worth: The Ultimate Lifetime Money Plan”) can be a helpful guideline to use when you are first setting up your budget.

The plan recommends making a budget by breaking your after-tax (or take-home) income into needs, wants and savings. Here’s how these categories are allocated:

•   50% of your earnings to needs

•   30% to wants

•   20% to savings

To see how your spending lines up with these guidelines, you’ll want to get out the past three or more months of bank and credit card statements and receipts. Then, simply start listing all of your expenses for each month and grouping them into categories.

9 Budget Categories for Needs

Of course, you probably are wondering what actually constitutes budgeting categories. First, focus on the needs of life.

This category, which represents the largest chunk, includes expenses that you must pay in order to live and work. You might think of these as things you actually need to survive — they’re sort of like the air, water, and food of your budget.

So, for instance, a fancy dinner out or a caramel latte are definitely food, but they wouldn’t necessarily go in this category. Groceries would though.

A good rule of thumb is to have this category take up about 50% of your after tax income. Housing and utilities are likely to take up the biggest chunk, but ideally no more than 30% of income.

The percentages, however, are just guidelines. Because the cost of living in different states varies across the country, you may need to adjust your budget according to where you live.

1. Housing

Whether you pay rent or have a home mortgage, paying to keep a roof over your head is definitely a need. In addition, you may have property taxes to pay if you are a homeowner, and home maintenance costs can be part of this category for renters and owners alike.

2. Utilities

Depending on your living situation, you might pay for electricity, WiFi, heating fuel, telephone service, water, sanitation services, and other necessities.

3. Insurance

Having car, health, life, homeowners or renters insurance and possibly pet insurance can be important. You don’t want to wing it with this kind of protection (and auto insurance is required).

4. Groceries and Personal Care Items

Of course, you need food and toiletries as part of daily living. So the food you purchase to make meals and items like toothpaste go into your budget as “needs.” However, buying that $7 pack of cookies or $40 hair conditioner? Those might be better deemed “wants.”

5. Transportation

Car ownership expenses, public transportation, and the occasional Uber to get to urgent care can all be considered necessities.

6. Clothing

Yes, you need a warm winter coat if you live in the climates that get chilly, plus boots. And you need basic garments to wear to work and on your off-hours. However, if you buy a cool jacket because you love it or yet another pair of cute shoes since they are on sale, those are not vital to your survival and should go in the “wants” category.

7. Debt

Minimum payments on outstanding debts like credit cards, student loans, auto loans, or personal loans would also go into the 50% needs portion.

8. Parenting Expenses

Child care, as well as child support or alimony payments, go into the “must” bucket of your budget. Those are not discretionary expenses.

9. Healthcare

Depending on your insurance coverage, you may have expenses related to staying well, such as copays, prescription costs, and the like. Treating yourself to a massage that isn’t medically required? That’s not a “need” but a “want.”

Recommended: Budgeting for Beginners

6 Spending Categories for Wants

These are expenses that don’t qualify as needs and don’t include your savings and payments towards debt. Though it can sometimes be tricky to separate needs from wants, if you can live and earn your income without it, then it’s probably a want.

If you can live and earn your income without it, then it’s probably a want.

This is where you could put spending on clothing outside of what you need on a day-to-day basis, dinner and drinks out with friends, going to the movies, gym memberships, personal care, and miscellaneous spending.

As a general guideline, this category shouldn’t take up more than 30% of your spending. While you may need to give and take depending on your situation, seeing how much you are spending on wants in black and white may cause you to start thinking more carefully about these expenditures.

1. Clothing and Personal Care

Treated yourself to a new but unnecessary shirt as part of a little retail therapy? Took yourself to the spa for a day? Or bought yourself a fancy watch since you got a promotion? Those are all wants. They aren’t necessarily bad things, but be clear that they are not vital to your survival.

2. Dining Out and Drinking

It’s part of life to meet friends and loved ones for happy hour or a nice meal, or to get a bubble tea while running errands on the weekend. Or maybe you don’t feel inspired to cook so you order some Pad Thai for pickup or delivery. These are all discretionary food expenses vs. those that are vital to your survival.

3. Entertainment

While entertainment can definitely enrich your life, it goes into the “wants” category. This includes things like concert, play, and movie tickets; books and magazines; cable and streaming services; downloading music; and attending festivals and fairs.

4. Gym Memberships, Self-care, and Grooming

You could just workout for free at home while watching a Youtube video, so health club memberships, yoga or Pilates classes are “wants.” Same goes with self-care and grooming: Facials, manicures, and the like are considered discretionary. That $50 hair conditioner you can’t live without? That isn’t a “need” either.

5. Travel Expenses

If you are traveling for business purposes to pitch a new account, that’s more of a “need,” but otherwise, a getaway is a “want.” So tally up any airfare, rental car costs, hotel or Airbnb, food, and tour/attraction tickets, and consider them “wants.”

6. Home Decor

If your mattress bites the dust and you replace it, that is a “need,” but deciding to buy a new couch because your home could use a spruce-up is a “want.”

Categorizing Your Savings

Under the 50/20/30 rule, it’s suggested that savings take up 20% of your post-tax income. This is the money you’re putting toward your retirement, emergency fund, and other savings. You can also put payments against debt above minimums here since this can ultimately save money on interest, it’s considered savings.

Here are specifics.

1. Emergency Fund

Financial experts recommend having three to six months’ worth of basic living expenses socked away in case of emergency. This could mean job loss or receiving an unexpected and major medical or car repair bill. You don’t want to have to resort to using your credit card for such things.

2. Retirement Savings

If you aren’t offered a 401(k) or something similar at work, you can still contribute to retirement savings. You might be able to find a low-fee, or no-fee, individual retirement account (IRA).

3. Other Short- and Long-Term Savings

You’ll also probably want to fund non-retirement savings goals, such as saving for a summer vacation or the down payment on a house. It can be a good idea to open a separate savings account, ideally where you can earn higher interest than a standard savings account, such as a money market fund, online savings account, or a checking and savings account.

To make sure saving happens each month, you may also want to set up an automatic transfer from your checking account into this account on the same day every month, perhaps after your paycheck gets deposited.

4. Additional Debt Payments

If you can pay more than the minimum on your credit card bill or make extra payments on your loans, that can decrease what you are spending on interest. That in turn can help increase your overall financial health and wealth.

Why Categorizing Your Budget Is Important

Categorizing your budget is important because it can give you a much better sense of where your money goes versus just paying whatever bills turn up.

•   When you see how much cash goes towards the different kinds of “needs,” “wants,” and savings, you can better manage your cash. Tracking your spending can bring greater financial insight.

•   Also, as you categorize and tally your spending, you may see that much more than 30% of your take-home pay is going to ”wants.” That could convince you to recalibrate and cut back.

•   Or you might notice that you are spending way more than 50% on “needs.” This can happen when you are just starting out in your career or if you live somewhere with a high cost of living. Again, you might look to lower costs.

Finalizing Your Budget Categories and Getting Started

Now that you have an idea of how to allocate your income based on standard budgeting categories, you may want to start building out your budgeting plan.

If you find that your monthly expenses (including savings) are higher than your monthly take-home income, you’ll likely want to make some adjustments. One of the easiest places to do this is within the “wants” bucket.

Here, you can scout for unnecessary expenses you may be able to do without. For instance, maybe you would be fine saving on streaming services by dropping one or two platforms, cooking at home a few more times per week, or cutting back on clothing purchases.

If your “musts” are eating up more than 50%, perhaps you want to consider moving to a less expensive home or taking in a roommate. Another option could be to start a side hustle to bring in more income or train up for a higher-paying line of work.

It can help to keep in mind that the 50/30/20 guideline is just that, a guideline. Everyone’s situation is different and your numbers may vary depending on many different factors, including where you live, your income, how much debt you have, and your savings and investment goals. (There are also other budgeting methods to try, if you like.)

The Takeaway

Putting expenses into categories and coming up with a spending plan can bring significant benefits. These include being able to pay off debt, saving up for short-term goals (such as an emergency fund, a vacation, or a down payment on a home), and funding your retirement.

The 50/20/30 rule can give you an general idea of how to allocate your income based on standard budgeting categories and help you start building out your budgeting plan.

Need some help keeping track of spending? Many financial institutions offer tools that can help you see where your money is going and make the most of your savings.

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 up to 4.50% APY on SoFi Checking and Savings.

FAQ

What are the 4 main categories in a budget?

There are different ways to categorize a budget, but commonly, people focus on their take-home pay, their spending on their “wants,” their “needs,” and how much they save.

What categories should you have in a budget?

When building a budget, it’s important to know how much income you have after taxes, what are the expenses that are necessary for your survival, what is your usual discretionary spending (which some people call the “fun stuff” in life), and how much are you saving. Within the last three buckets, you can subdivide into more specific categories.

How do you organize a budget?

One good budgeting technique is the 50/30/20 budget rule. This principle says that 50% of your take-home pay should go towards necessities, 30% to discretionary spending, and the remaining 20% should be saved.

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Tuition-free college sounds like a fantasy. But at some colleges and universities, it is possible for students to qualify to attend without paying tuition costs.

Not all colleges offer free tuition, and some may require students who are receiving free tuition to maintain certain academic standards or meet other requirements. Other colleges may offer a reduced-tuition option for eligible students.

When considering that attending a four-year college can cost tens of thousands of dollars, the appeal of free tuition is obvious. Read on for more details about how free-tuition programs work and an overview of colleges that offer free or reduced tuition.

What Is Tuition-Free?

Yes, it’s true: There is a limited number of schools that offer free college tuition to students. There are also schools that offer free tuition if your parents earn less than a certain amount of money per year.

Keep in mind that offers of free college tuition often may not include other costs like books, fees, transportation, or room and board. Researching the total cost of education at your chosen institution will give you a complete picture of your financial obligation.

Still, tuition is, generally speaking, a huge cost — so not having to pay it could mean huge savings.

Why We Need Tuition-Free College

The answer to this question is probably pretty obvious: For many families, college is prohibitively expensive. Parents who want to foot the bill for their kids may feel stressed and guilty when they find they can’t afford the cost of college out of pocket, and students themselves may feel the repercussions of the exorbitant cost of school for decades.

Still, there are both pros and cons to consider when deciding whether a tuition-free university is right for you. Here are some things to consider.


💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

The Pros of Free College Tuition

The first pro is the most obvious: You could save a lot of money. Maybe you had planned on taking out student loans to pay for school. Think of the financial freedom you could enjoy if you didn’t have to spend years paying off student loans after graduation.

Second, free tuition can help make college more accessible for low-income students. If your family can’t financially contribute to your education, and you aren’t willing or able to accumulate educational loan debt, free tuition programs can make college a possibility.

The Cons of Free College Tuition

Few colleges offer free tuition to all students, which means your options for schools may be more limited. Some tuition-free programs are competitive. A few of these programs are connected with the U.S. Military and require students to serve after graduation. A lot of the tuition-free colleges are small, private schools, and many are religion-based. You may want to consider whether these are environments you would enjoy for four years.

Because there are so few schools offering free tuition, attending school may require you to move further away from home. Depending on the student, this could be a pro or con.

Some schools have certain requirements for those who attend and/or receive free tuition, such as participating in a work-study program, maintaining a certain GPA, or living on campus.

Before you apply to a tuition-free program, you’ll want to consider all the pros and cons to decide if the program is right for you.

Recommended: What is the Average Cost of College Tuition?

Schools That Offer Free College Tuition to All Students

Here are 31 tuition-free colleges in the U.S.: 15 offer free tuition for all students, and 16 offer free tuition to students from low-income families.

Service Academies

The United States Air Force Academy (Colorado)

The Air Force Academy provides free tuition, room, board, and medical and dental benefits. Students must serve as an officer in the Air Force for at least eight years, and at least five of those years must be in active duty.

The United States Coast Guard Academy (New London, Connecticut)

The Coast Guard Academy offers students free tuition, room, and board. Students must serve as a Coast Guard officer for at least five years after graduation.

The United States Merchant Marine Academy (Nassau County, New York)

Midshipmen receive free tuition, uniforms, books, room, and board. Basic medical and dental care are also provided by the Academy’s Office of Health Services. However, any healthcare expenses that exceed the provided health plan will need to be covered. Students are also responsible for transportation during leave periods. The Academy recommends applying for student loans if you need help with these expenses. Service obligations after graduation may vary between five and eight years.

The United States Military Academy at West Point (West Point, New York)

Tuition, room, board, and medical and dental insurance are free for West Point students, and they also receive a monthly stipend. Incoming Plebes, as new students are called, have to pay a one-time fee of $8,400 to cover uniforms, books, and other equipment. Graduates are commissioned as Second Lieutenants in the Army. You must serve a minimum of eight years, though that obligation is a combination of Active Duty and Reserve.

The United States Naval Academy (Annapolis, Maryland)

The Navy covers students’ tuition, room, board, and medical and dental costs. In return, they must serve in active duty for at least five years after graduation.

Four-Year Schools

Alice Lloyd College (Pippa Passes, Kentucky)

This liberal arts college provides free tuition to residents of Central Appalachia , which spans five states including Kentucky, Ohio, Tennessee, Virginia, and West Virginia. Students are required to participate in the Student Work Program , which involves at least 10 hours per week and 160 hours per semester. They must cover expenses other than tuition.

Barclay College (Haviland, Kansas)

This Christian school provides a scholarship equal to the amount of tuition to students who live on campus. Students must cover the cost of room, board, or other fees.

Berea College (Berea, Kentucky)

Berea is a liberal arts school that provides free tuition to all students. In order to qualify, students must come from families with limited resources. The average annual family income of Berea students is less than $32,000. Students, however, pay some costs , including room, board, health and dental care, which add up to about $4,000 per semester. Almost all Berea students (96%) receive Pell Grants to cover those costs.

College of the Ozarks (Point Lookout, Missouri)

This Christian liberal arts college provides free tuition for full-time students, provided they participate in the work-study program, which involves 15 hours per week and two 40-hour workweeks per year. Room, board, fees, or books are not included.

Curtis Institute of Music (Philadelphia, Pennsylvania)

The conservatory provides free tuition to undergraduate and graduate students through merit-based scholarships. If students need financial assistance for other fees and living expenses, they can participate in the work-study program.

Macaulay Honors College at The City University of New York (New York City, New York)

The highly selective honors college is part of the City University of New York. It provides free tuition to New York state residents who are admitted to the program. Students must maintain a certain GPA during their time at Macaulay, and they are responsible for additional fees including covering room and board.

Warren Wilson College (Swannanoa, North Carolina)

Warren Wilson is a small, private liberal arts college in North Carolina. Students who qualify for federal and/or North Carolina state-based aid receive free tuition. You must be a North Carolina resident, enroll as a full-time student, live on campus, and participate in the work-study program. If you don’t qualify for free tuition at Warren Wilson, the school is known for providing generous scholarships.

Webb Institute (Glen Cove, New York)

This engineering college provides free tuition to all students and financial aid opportunities to cover additional fees. The school offers only one undergraduate degree: a dual Bachelor of Science in Naval Architecture and Marine Engineering.

Junior Colleges

Deep Springs College (Deep Springs, California)

This unique two-year college is located on a remote cattle ranch in California. Only 12 to 15 students are admitted each year, and tuition, room, and board are free. Students can apply for additional scholarships if they need help covering other expenses.

Williamson College of the Trades (Media, Pennsylvania)

This men’s vocational college teaches trades such as carpentry, power plant technology, and masonry. Each student receives the Williamson Scholarship, which is need-based and can be as high as $32,430, which is $140 shy of the school’s estimated costs for tuition, room, board, and annual fees.

Schools That Offer Free or Reduced Income-Based College Tuition

The following schools offer varying amounts of tuition assistance depending on a student’s family income level. Based on the information a student provides on the yearly Free Application for Federal Student Aid (FAFSA®), schools take into account both parent contributions and student contributions to determine financial need.

Recommended: SoFi FAFSA Guide

Offers of free tuition may sometimes mean that the parent contribution is equal to zero, but there may still be an expected student contribution.

Ivy League Schools

Brown University (Providence, Rhode Island)

Brown fully covers tuition for families earning $125,000 or less. In addition, students of families making less than $60,000 a year will receive scholarships that cover all expenses including tuition, room, board, and books. Students can apply for additional scholarships to help support other expenses. The university’s website specifies that student contribution expectations are set annually.

Columbia University (New York City, New York)

Students qualify to attend tuition-free if their parents earn less than $150,000 annually and have typical assets. For students coming from families who earn less than $66,000 annually, there is no expectation of parental financial contribution. All incoming first-year students are expected to pay $2,400, which is the minimum student contribution as part of their financial aid award.

Cornell University (Ithaca, New York)

Cornell guarantees no parental contribution and no loans for students whose families earn less than $60,000 per year and typical assets. For students from families with total annual income up to $75,000, the annual aid offers include grants and work-study only — students are not expected to need to take out loans.

Dartmouth College (Hanover, New Hampshire)

For students whose families earn less than $65,000 per year with typical assets, there’s no expectation of parental contribution, and the aid award does not include any loans. Students are expected to contribute toward their own expenses, but they can choose to take a loan if needed. The Dartmouth Scholarship provides free tuition for students from families with total incomes of $125,000 or less who possess typical assets.

Harvard University (Cambridge, Massachusetts)

Harvard’s website states that as of the 2023-24 school year, if a student’s family earns under $85,000 annually, parents won’t pay anything for tuition or other fees. If they earn between $85,000 and $150,000, families and students pay between zero and 10% of their income per year. A student may still qualify for financial aid if their family earns more than $150,000.

Princeton University (Princeton, New Jersey)

Princeton offers full tuition, room, and board for students whose parents earn less than $65,000 per year. After that, financial aid is offered on a tiered scale, with families earning between $65,000 and $160,000 receiving full tuition and a portion of room and board fees.

University of Pennsylvania (Philadelphia, Pennsylvania)

Students from families with incomes less than $75,000 (and typical assets) receive financial aid packages that cover tuition, fees, room, and board. UPenn states they are also eligible for additional benefits like laptop funding and summer opportunity funds. Students from families with incomes between $75,000 and $140,000 (and typical assets) receive financial aid packages that cover at least tuition. Students from families with incomes higher than $140,000 may be eligible to receive aid packages that are greater than half of tuition. Penn emphasizes that it’s committed to meeting 100% of demonstrated financial needs with grant-based aid.

Yale University (New Haven, Connecticut)

Yale expects zero parent contribution for students whose families earn less than $75,000 per year and have typical assets. Students from families who earn between $75,000 and $200,000 (with typical assets) contribute a percentage of their annual income towards their child’s education, on a sliding scale that begins at 1% and moves toward 20%.

Other Elite Schools

Duke University (Durham, North Carolina)

Beginning with the fall 2023 semester, Duke will provide full tuition grants for undergraduate students from North Carolina and South Carolina whose family incomes are $150,000 or less. For North and South Carolina residents, students whose families earn $65,000 or less will receive full tuition, plus financial assistance for housing, meals, and other campus expenses, and there’s no expectation they will need to take out loans.

For families who earn under $60,000 annually, Duke does not require any parental financial contribution. First-year students are expected to make a minimum contribution of $2,600 regardless of income.

Massachusetts Institute of Technology, or MIT (Cambridge, Massachusetts)

MIT ensures scholarship funding for students whose family income is less than $140,000 (plus typical assets) so most can attend tuition-free. Most students whose families earn less than $65,000 receive aid to cover tuition, fees, housing, and some dining costs.

Rice University (Houston, Texas)

Students from families who earn less than $75,000 annually can attend Rice with an aid package that covers tuition, fees, room and board. Students from families with annual incomes between $75,000 and $140,000 are awarded full-tuition scholarships, and students from families earning between $140,000 and $200,000 will receive scholarships covering at least half of their tuition.

Stanford University (Stanford, California)

Stanford does not expect parental contribution toward educational costs for students whose parents earn a total annual income below $100,000 and typical assets. Students are expected to contribute toward their own expenses — usually around $5,000 — from their summer income, part-time work during the school year, and their own savings. Students from families who earn less than $150,000 per year plus typical assets can typically attend Stanford tuition-free.

Texas A&M University (College Station, Texas)

As of fall 2023, Texas A&M will cover both tuition and fees for students whose family income is $60,000 or less. Beginning in the fall semester of 2021, families who earn more than $60,000 but less than $130,000 qualify for scholarships or grants, ranging from $500-$1,500 based on income and financial need.

University of Chicago (Chicago, Illinois)

If your family’s adjusted gross income is less than $125,000, you’re eligible to receive free tuition to the University of Chicago. If your family’s AGI is less than $60,000, the school will also cover room, board, and other fees.

University of North Carolina (17 campuses across North Carolina)

As of fall 2024, UNC will cover tuition and mandatory fees for North Carolina students whose families earn less than $80,000 annually and have typical assets. Students from families with a total income that is at or below 200% of the poverty guideline and who meet additional economic criteria to qualify can attend UNC debt-free thanks to the Carolina Covenant aid program.

Vanderbilt University (Nashville, Tennessee)

Vanderbilt’s financial aid program is ranked number one by Princeton Review in 2023. Instead, Vanderbilt claims to meet 100% of families’ demonstrated financial need (through grants and a “reasonable work expectation”) based on the FAFSA and they do not use income bands to determine who receives aid. Vanderbilt’s financial aid packages do not include student loans.

Financing Your Education If You Don’t Qualify For Free Tuition

Not all students will qualify for or attend a school that offers free tuition. There are several options for financing college.

Tuition Payment Plans

Students and their parents may be able to take advantage of a tuition payment plan, which allows you to break up the cost of tuition, room, and board, over the course of a semester or year.

Scholarships and Grants

Scholarships and grants are often referred to as “gift aid,” because you don’t typically have to pay back scholarships or grant money after graduation as you do with student loans.

Scholarships are often offered based on merit, while grants are typically based on financial need. Gift aid can come from different types of institutions — from your college to local community organizations to large corporations.

Recommended: A Guide to Unclaimed Scholarships and Grants

Student Loans

Unlike scholarships and grants, you do have to repay student loans upon leaving school or graduating. Student loans are split into two broad categories: federal and private loans.

Federal student loans are disbursed by the government, which sets fixed rules about repayment and interest rates. You apply for these loans by filling out the FAFSA.

Private financial institutions may provide private student loans. Each private loan company sets its own repayment requirements and determines their own interest rates. You apply for these loans directly through the lender.

Private student loans are generally considered as an option only after all other sources of aid have been exhausted. This is because they lack the same borrower protections as federal student loans, such as income-driven repayment plans or the option to pursue Public Service Loan Forgiveness.


💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

The Takeaway

There are a number of schools that offer free tuition plans or substantial financial assistance to students. Free tuition programs can make higher education more accessible to lower-income students. As mentioned, some schools may have requirements around work-study, academics, or living on campus, in order for students to qualify for free or reduced tuition.

Students who aren’t enrolled in a school that offers free tuition have a few options for financing their education including savings, federal financial aid, scholarships, and federal 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.

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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 Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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When you’re in college, you likely want to choose a major that will lead to a successful and enjoyable career. If you’re a business marketing major, you may wonder whether the education you’re getting now will pay off in terms of the type of job you’ll qualify for after you graduate, and what you can earn.

Here’s a look at what you can expect as a marketing major — both during college and after you graduate.

What Does a Marketing Major Learn?

As a marketing major, you will learn various aspects and strategies for promoting a company or product, creating brand awareness, and building relationships with customers.

You may study marketing tools like social media, content marketing, and advertising, as well as public relations, sales, marketing strategy, and consumer behavior.

Once you complete your degree, you should have a thorough understanding of how to employ these tools and tactics in the real world on behalf of your employer.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Who Is It Good For?

If you’re still trying to determine the best college major and are considering marketing, here’s some insight into the type of person who might thrive in a marketing career.

If you’re curious about how brands connect with customers and find yourself analyzing ads in magazines and on television, you might be a natural marketer. Marketers are typically creative and good communicators; you’ll need that ingenuity to come up with innovative marketing campaigns to compete with others in a given industry.

Depending on the job you get after college, you may work with a team on campaigns, or you may be solely in charge of doing multiple different tasks on your own. Ideally, you’ll be excited and confident about sharing your ideas for projects.

If you’ve got an analytical mind, so much the better. You’ll be able to analyze data to better understand what types of marketing efforts are working to reach your audience and which aren’t.

Recommended: 20 of the Most Popular College Majors

Why Consider Marketing?

Marketing isn’t a trendy or even industry-specific career; it’s one that every brand on earth needs. As a result, there will likely always be careers in marketing. Because marketing is what propels a company to sell products or services, it has a return on investment, and that means that companies are willing to also invest in smart marketing professionals.

Everywhere you look, there’s marketing, from the product placement in your favorite television show to the daily Instagram posts from influencers that offer “sponsored content.” Being a part of this exciting field gives you the opportunity to shape how consumers connect with brands.

Recommended: How Do You Change Your Major?

What Jobs Can a Marketing Major Get?

So you’ve majored in marketing and now you want to know your career options. What does a marketing major do after graduating? And what professional goals can you set down the road, once you’ve had more experience?

Entry-Level Marketing Jobs

Depending on your specific interest in marketing, there are several paths you could take after graduation.

If you enjoy working with advertising, you could get work as a media buyer, who is in charge of purchasing ads, both digital and print, to achieve marketing goals. Average annual salaries can be as high as $80,195.

If you enjoy dabbling in different aspects of marketing, you could be a marketing coordinator. You might be a part of planning and launching marketing campaigns and events, managing email marketing, and writing content for different platforms. The national average annual salary is $51,283.

If you lit up in your public relations coursework, a public relations assistant might be a good first job. You’ll be tasked with creating press releases and pitch letters, and connecting with the media to get interviews and media coverage for your brand. Salaries vary, but the average is around $42,642 a year.

Recommended: Return on Education for Bachelor’s Degrees

Marketing Jobs for More Experienced Professionals

Once you have a bit of experience in your entry-level marketing job, you may be eligible for a promotion or could qualify for a more advanced role with a different company like the following ones.

A public relations manager has approximately six to eight years of experience working in PR. In addition to building relationships with journalists and influencers and securing media coverage for a brand, this role may also hire and manage other PR roles as well as writers and designers. The average salary for this role is around $62,810.

A marketing director could be a good goal after you build experience as a marketing coordinator and have five to 10 years of marketing experience. This role is involved in the planning of marketing activities, building a budget, and forecasting sales. You may oversee a marketing team, including internal staff and freelancers. The average salary for this position is approximately $141,490, but can vary widely.

Another option once you have one to five years of experience, specifically in sales, is as a sales manager. This role analyzes sales data to shape sales and pricing strategy and may train or manage sales staff. The average salary for a sales manager is $107,500.

Launching Your Own Marketing Business

You’re not limited to working for someone else in your marketing career; many professionals get experience under their belt by working for companies of all sizes, then decide to open their own business. That could be a one-person content marketing business run out of your home or a PR firm with office space and staff.

Starting your own business gives you the flexibility of working when you want, and to choose exactly the marketing, advertising, or PR services you want to specialize in. It does, however, require plenty of hard work and dedication: without the stability of a regular paycheck, you aren’t guaranteed to make a certain amount of money.

Recommended: Ca$h Course: A Student’s Guide to Money

What Can a Marketing Major Earn?

Understandably, you want some reassurance that what you’ll make in your career after graduating will help you quickly pay off any student debt and help you become financially successful.

Generally, students can expect to make the least right after graduating, since they’ll have little to no work experience. Salary expectations for entry-level marketing positions can vary based on factors like where you live and the industry you want to work in. Some companies may offer hiring bonuses or commission on top of that salary.

As you build experience, your salary will generally increase. Again, this will depend on your specific experience and accomplishments as well as the industry and company you work for.


💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

The Takeaway

Only you know whether marketing is a field that you will thrive in and enjoy being a part of, but suffice it to say that there is an opportunity to learn a wide range of marketing skills and career advancement potential if you’re willing to put in the work to climb that corporate ladder.

Of course, as a student, you’re still a long way from earning a sizable salary, and coming up with enough funds to cover the high cost of college can be challenging. Fortunately, no matter what you’re thinking about majoring in, you have a range of funding options, including grants, scholarships, federal work-study programs, and 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.

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

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

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College is expensive, with the yearly cost of attendance at some private schools now topping $75,000. Looking at these numbers, you may wonder how you will ever possibly afford to send your kids to college.

But before you get too disheartened, it’s important to understand that a college’s published “sticker price” is often very different from what you actually have to pay (known as the net price). What’s more, just putting a small amount of money aside each month in a college fund can add up to a significant sum over time, especially if you take advantage of a tax-advantaged college savings account.

Read on to learn key things about how to save for college — from estimating how much you need to set aside to picking the right college saving fund.

Determining the Cost of College for Your Children

Tuition costs vary widely, depending on the type of school your child wants to attend, the type of degree they’ll earn (bachelor’s or associate), and even geographic location.

According to the College Board, the average annual college tuition costs for the 2022-23 school year were:

•   $10,940: public four-year in-state (a 1.8% increase from 2021-21)

•   $28,240: public four-year out-of-state (a 2.2% increase from 2021-22)

•   $39,400 : private nonprofit four-year (a 3.5% increase from 2021-22)

•   $3,860: public two-year in-district (a 1.6% increase from 2021-22)

The College Board also studied the annual, inflation-adjusted change in college tuition and fees over the last decade:

•   -1%: four-year public schools

•   -4%: two-year public schools

•   +6%: four-year private (nonprofit) schools

If your kids are young, you may wonder how much college will cost when it’s time for them to head off. Fortunately, there are many online calculators that can help you figure this out, taking factors like your child’s age, the type of school you expect your child to attend, and the expected rise in the cost of college into account.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Net Price vs. Sticker Price

Every college and university, private or public, lists a sticker price, which is also known as the cost of attendance (COA). This price includes tuition, fees, room and board, books, supplies, and miscellaneous expenses.

The net price, on the other hand, is what a student would actually pay, after factoring in any financial aid provided by the college and the federal government.

Financial aid is based on your family’s income, as well as the student’s academic achievement. Aid is offered in the form of grants, scholarships, work-study, and sometimes federal student loans. Schools offer aid based on financial need, a student’s “merit,” or a combination.

When you fill out the Free Application for Federal Student Aid (FAFSA), you will receive a Student Aid Index, or SAI. (Previously, this was called the Estimated Family Contribution, or EFC.) Colleges use this number to determine the amount of financial aid they award to accepted students. Typically, colleges come up with a financial aid package to help bridge the gap between the school’s sticker price and what your family can afford to pay.

Indeed, sometimes colleges with the highest sticker price end up costing less than a college with a much lower sticker price.

Recommended: How to Start Saving for Your Child’s College Tuition

Using a Net Price Calculator

Fortunately, you can get an idea of what the net price will be for a particular college before you apply by using the government’s net price calculator. This tool can help students and their families get a better idea of the cost of college, after subtracting scholarships, grants, and other financial aid.

Keep in mind, though, that the net price calculator is going to require specific details about your income and assets, so the more transparent you are regarding your personal finances, the more precise your calculation is likely to be.

When is a Good Time to Start Saving for Your Child’s Education?

Generally, the sooner the better. In fact, it can be wise to set up and start making small monthly contributions to a college savings fund soon after your child is born.

For some familes, however, it may not be possible to start saving that early. It’s equally important to pay attention to your other expenses and family’s needs. For example, you may want to prioritize building an emergency and paying off expensive credit card debt over saving for college. It’s also a good idea to make sure you’re on track with retirement savings. At the end of the day, students are able to get loans for an education but it’s not possible to take out loans to fund retirement.

Some Options for Saving

529 Plan

A 529 education savings plan is an investment account that can be used to save for the beneficiary’s qualified education expenses. The funds can be used to pay for higher education or private elementary or high schools. A 529 plan allows your savings to grow tax-free, and some states even offer a tax deduction on your contributions.

All 529 plans are set up at the state level. However, you don’t have to be a resident of a particular state to enroll in its plan.

If your child decides not to go to school, it’s possible to roll the account over into the name of another family member. If the funds aren’t used for education-related expenses, there may be taxes and penalties.

Family members and friends can also contribute to a child’s college savings plan. They may choose to make deposits to an existing 529 account or set up one themselves, naming a beneficiary of their choice.

Some 529 savings plans offer an age-based investment option to automatically adjust the risk of the investment strategy as the beneficiary gets older. This type of investment approach might be similar to how a target date fund works in your retirement plan.

Regular Savings Accounts

You can also save for your child’s college tuition using a savings account at a traditional bank, credit union, or online bank. Just keep in mind that interest rates, even for high-yield savings accounts, tend to be relatively low. Plus, savings accounts don’t offer the tax advantages you can get with some other college savings vehicles.

It may be difficult to reach education financing goals through a traditional savings account alone since the interest rate might not keep pace with the inflation of college expenses.

Roth IRAs

Although generally used for retirement savings, a Roth IRA can be used to pay for the cost of college. Contributions to a Roth IRA are made with after-tax dollars but earnings grow tax-free.

Generally, to withdraw the earnings from an IRA without paying a penalty (or taxes), the account holder needs to be at least 59 ½ years old. However, if you made the first contribution to your Roth IRA at least five years before, you can also withdraw the growth penalty-free for qualified education expenses, including tuition, books, and supplies.

Keep in mind that, while there may not be an early withdrawal fee, the earnings withdrawn may still be subject to income tax.

Other Options to Pay for College

Sometimes saving alone isn’t enough to cover the cost of college. In that case, there are other funding options available that could help students and their families pay for college.

Private Scholarships

Scholarships are essential free money for college because you don’t have to pay them back. Scholarships are typically merit-based and are offered through a variety of organizations and institutions, including nonprofits, corporations, and even directly from universities and colleges. In some cases, scholarships are awarded on the basis of nationality, ethnicity, or economic need. There are a number of searchable databases that compile different scholarship opportunities.

Federal Financial Aid

When you complete the FAFSA each year, you will become eligible for federal financial aid. This can include scholarships, grants, work-study, and federal student loans (which may be subsidized or unsubsidized).

Private Student Loans

If savings and financial aid aren’t enough to cover the full cost of college, you can fill in gaps using private student loans. These are available through private lenders, including banks, credit unions, and online lenders.

Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

College tuition can be a daunting expense. Setting up a dedicated account to save for college tuition can help make the process much more manageable. There are accounts, like 529 plans, that are designed specifically to pay for educational expenses.

In addition to savings, students and their families may rely on scholarships, grants, federal student loans, or even private student loans to pay for tuition and other educational expenses.

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.

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

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.

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.

Tax Information: 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.

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Academic dismissal is when a student is asked to leave a school because of continued poor academic performance. It typically follows a period of probation, which is when a student is given a warning and a set amount of time in which they can try to improve their grades and avoid dismissal.

While academic dismissal may seem like the end of the world, it doesn’t mean that the student can never go to college again. It simply means they have to stop attending their current school, at least for a certain period of time. In addition, there are a number of ways to get back on track after a dismissal and either overturn the decision and return to school, or start on a new path that’s a better fit.

Read on to learn more about academic dismissal, including how it happens, what you can do to appeal it, and how to bounce back after experiencing academic dismissal.

Reasons for Academic Dismissal

Everyone’s academic journey is different, and for some, the transition to college-level work can be more challenging than for others. A student may struggle with grades because they chose a major that’s not compatible with their specific skill set. Or perhaps they faced too many distractions, from personal events or hardships to an overwhelming list of extracurriculars.

When teachers and administrators notice a pattern of poor academic performance, including a GPA below 2.0 or a failure to attain enough credits (as a result of dropping or failing to complete enough courses in a semester), they may put a student on academic probation.

If a student fails to bring up their GPA by the end of their probation period, they may face academic dismissal. Academic probation is not meant to serve as a kind of punishment, but more as a wake-up call to students who are falling seriously behind.

Depending on the school, academic probation may make students ineligible for certain university activities. This makes sense, as probation is meant to be a time to focus seriously on grades in an effort to avoid eventual academic dismissal.

Academic probation or dismissal can also affect a student’s financial aid. The U.S. Department of Education requires students to maintain satisfactory academic progress toward their degrees to receive financial aid — which may include federal, state, and institutional grants and scholarships; work-study; and federal student and parent loans.

There are still options for students who lose their financial aid due to poor academic standing, including some private student loans. Keep in mind, though, that your GPA can also impact your ability to get a private student loan. Each private loan is different, so there’s no one magic number for a student’s GPA. It can be worth shopping around and comparing options from different lenders.

Recommended: How Grades Affect Your Student Loans

How to Appeal Academic Dismissal

If a student ultimately faces the prospect of academic dismissal, there are multiple routes they can take to try and handle the situation. First, it can be wise to take a moment to reflect on what may have caused the decision to dismiss, and reassess one’s priorities. Perhaps a student was up against too much pressure, or was pursuing a subject area that didn’t quite suit them.

If a student decides to appeal the decision, they should be prepared to present a strong and sincere case. Luckily, most schools will allow students to appeal academic dismissal. Most school authorities are receptive to select reasoning or excuses for a poor academic performance. These usually include extenuating circumstances like financial issues, psychological or mental issues, or a family crisis, including an unexpected death in the family.

Approach the case with understanding and humility instead of anger, and try to fight the battle without parents. Students may want to prove that they can handle the stress and academic rigor of college on their own, which involves a certain degree of maturity and independence.

Bouncing Back After Being Dismissed

Applying to college after academic dismissal can be a good idea, but only if a student has taken the time to reflect. This is especially true if a student is re-applying to the same school.

Some schools will require that students wait at least a year before re-applying, and some will have students show that they’ve received a certain number of credits from community college while on hiatus from the institution. Research each school’s particular policy on reapplying before taking any specific measures.

It can be helpful to talk to professors and academic counselors to determine if going back to college is the right decision, and if so, if a student should re-apply to the same school.

It can also be helpful to research schools that have lenient policies around past dismissals when looking to re-apply to school.

College is not for everyone. Other options may include getting a job, pursuing a trade at trade school, or completing an apprenticeship. There’s not one route to a career, so bouncing back may look a little different for everyone.

The Takeaway

It can be invaluable for a student to have a support system when dealing with the prospect of academic dismissal. At the same time, it’s key to let the student fight their own battles.

Academic probation can prevent a student from receiving financial aid, which can worsen any academic challenges they’re already facing. This is one reason why it’s important to handle academic probation and dismissal thoughtfully and methodically, assessing all available options and identifying the issues that may have caused a student to fall behind in the first place.

If college is still on the table, set a goal to improve grades, whether through tutoring, time management strategies, or a peer study group. There’s a lot you can learn from an academic incident like probation or dismissal, and ultimately, it can help you become a better and more dedicated student.

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.

---

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

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

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