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5 Reasons You Should Track Your Spending

If the thought of sitting down to make a budget is overwhelming to you, you’re not alone. One poll found that only 32% of Americans maintain a household budget.

It makes sense. We’re all crazy-busy, and already spend more than enough time in front of our computer and telephone screens. Very few people get excited to come home and budget after a long, exhausting day at work.

Some folks may avoid building a budget because they don’t know where to start. Others may be struggling with finding the motivation to sit down and do it.

For those that don’t know where to start, here’s your first step: Track your spending. It is impossible to build a meaningful budget if you don’t know where the money is going in the first place. (Building a budget requires you assign dollar figures to spending categories, which you’ll need some sense of first.)

If you’re struggling with motivation, we’ll also cover the five reasons you should track your spending, along with some tips on how to track spending and ultimately, build out a budget plan.

Identify Areas That You’re Overspending

In every person’s spending hides some sort of gremlin, busting up budgets while lurking around completely unnoticed. And there’s no way to uncover the problem without spending some real time looking at the numbers. The truth is, spending is so easy and frictionless these days, that it’s nearly impossible to do mental accounting on how much we’re spending in each category and overall.

It’s not uncommon to hear stories about people who are tracking their spending for the first time who realize they are spending hundreds more in certain categories than they had anticipated.

For example, lots of people find they are spending more than they expected on dining out, Starbucks, groceries they don’t use, or shopping. Sometimes, the act of daily or weekly tracking alone inspires people to spend less.

What’s Measured Gets Improved

When it comes to spending less and saving more, the old adage holds true: what’s measured is what gets improved. There’s hardly a way to make meaningful change if you have no benchmark for which you can build from. Say, for example, that you want to spend less on dining out. That’s great, but how can you spend less, if you don’t know how much you spend now?

Only after tracking your spending for a time can you begin to build a meaningful budget. Think about building a budget without knowing how much you spend in each category! There would literally be no point.

For example, say that you guess that you spend $100 on gas each month. But if you had actually tracked your spending, you would know that you get gas once/week, and it costs $40 each fill. Really, you need to budget $160 for gas each month (or slightly less, if you are trying to reduce gas spending).

Feel Inspired to Make Eliminations

The shock of seeing how much you’re spending (and on what) may be the inspiration you need to make real changes. And perhaps these changes extend beyond simply nixing the daily Starbucks habit.

Use that motivation to eliminate unused subscriptions, to work on lowering your gas or phone bill, to cut out entire spending categories, to take public transportation more, or to consider more drastic measures—like getting a roommate or moving into a more affordable place.

Change is never easy to make, but it’s best to use the spark of motivation you first have when you realize that there are plenty of ways to cut back.

Give Yourself the Freedom to Spend on What You Love

Sure, budgeting can feel restricting at first. But eventually, you may come to find that budgeting gives you both peace of mind and the freedom to spend on exactly what you love.

Without a budget, it is possible to feel anxious every time you swipe your card, not sure if you can really afford this thing. With a budget, you can make a purchase knowing that you planned for it and that the money will be there.

Here’s what a lot of people get wrong: the tracking of spending doesn’t have to result in the diminishment of your pleasure. Instead, it’s about looking at how you spend, and assigning priority to those different expenses.

Ask yourself this question: In retrospect, was that purchase worth it? And what purchases weren’t? Again, eliminate the categories that don’t bring you utility or joy, keep the ones that do, and never hesitate to spend on those items again. Tracking and budgeting allow you this freedom.

Build Saving Into Your Plan

If you want to build savings into your monthly financial plan, but can’t imagine how, you have to begin by tracking your spending. Identify areas that you can cut back in so that you are then able to re-allocate those funds to your future.

Once you have found some spending categories where you can give yourself some leeway, practice moving that spare cash into a savings account at the end of the month.

After a month or two of this, you’re ready to truly build savings into your budget, through automation. To do this, set up an automatic transfer of funds from your account, scheduled a few days after your paycheck hits.

Now, you can do as Warren Buffet says: “Do not save what is left after spending, but spend what is left after saving.” Building automatic saving into your monthly financial plan is always best, but monitor to make sure you don’t overdraft your account.

Tips and Tricks On How To Track Spending

Start By Gathering Account and Income Information

If you want to make a personal budget and keep track of spending, your first step is to know exactly where money is moving both to and from. Gather up information on checking accounts, credit cards, online mobile transfer accounts (like PayPal), and so on. Organize your information and make sure that you can log into all of your accounts.

While you’re at it, make sure that you have all sources of income accounted for. Know what these figures are both before and after income and other taxes. It will be up to you whether you budget with after-tax income or pre-tax-income (and consider taxes a line item in your budget), but start with both figures.

Track Last Month’s Income

Instead of starting in the middle of the month, begin by looking at the most recent full month’s worth of spending. Practice putting money into categories like groceries, entertainment, dining out, bills, etc.

You may want to practice doing this in a few different ways. A good way to start is by downloading all of a month’s spending into a spreadsheet. (This should be an option provided by your bank, usually under the “statements” tab or something similar.)

This method requires more upfront work, but forcing yourself to sit with the numbers and manually identify transactions is an important skill to learn. You can also switch to using an app like SoFi Relay.

Determine Your Categories

After looking through last month’s spending and putting transactions into categories, determine how much you’d like to spend in each category. These categories can be as broad or as narrow as works for you and your budgeting style. Don’t forget to account for expenses that don’t happen monthly (like semi-annual car insurance payments) and incidentals.

Increasingly, folks do their shopping at stores like Target or on Amazon, where spending doesn’t fit nicely into one category. During one trip, you could easily buy groceries, toiletries, clothes, and furniture. This makes it hard to budget by category. In that case, consider giving yourself a budget by store.

Get Into A Groove

Maybe you’ll continue to update your spreadsheet with downloaded information from your account, and this is the tracking method that you’ll stick with forever.

Perhaps you’ll find something that you like better, such as app or program. To figure it out, you’re going to have to try it all out. This will be hard in the first few months—give yourself the space to feel frustration—but know that it does get easier over time. The good news is that money-tracking technology is getting better and more helpful and there are many solutions you can check out.

SoFi Money

SoFi Money® is one option to check out. It is a cash management account that comes with a dashboard that provides weekly expense tracking.

After a few months of tracking, you’ll have a better idea of how to put purchases into categories that work as part of a bigger budgetary system. For most people, this will be the hardest part, but it will be worth it. You’ll get into a groove, feel in control of your spending, and finally be able to say, “I am confident in my ability to keep track of my spending.”

Get started with SoFi Money to keep track of your expenses.


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

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What Are Penny Stocks & How Do They Work?

There is a certain allure to the story: A distant uncle who swears he knows about this great investment that’ll cost you next to nothing. An old roommate that analyzes stock charts all day and identified some new, skyrocketing tech company. A cab driver who tells you he struck it rich by playing penny stocks.

Honestly, who isn’t enticed at the thought of a cheap investment that could make you rich? Still, you take these stories with a grain of salt, because you’re rightly skeptical of claims for “getting rich quick.”

Often, when people talk about such an investment, they’re referring to penny stocks.

Penny stocks, which are technically any stock trading for less than $5 per share but often less than $1, often find themselves at the center of a debate on whether people should even consider investing in them. While penny stocks can turn a profit, it is also possible to lose big in penny stocks.

Today, we’ll be answering the questions “What are penny stocks?” and “How do penny stocks work?” Additionally, we will explore the pros and cons of penny stock investing along with a discussion of who should invest in penny stocks and whether there are better options available for investors.

Exploring Penny Stocks & How They Work

First, let’s review the definition of a stock. A stock is a piece of ownership in company, called a share, and is traded on an exchange like the New York Stock Exchange or the NASDAQ. You can own a stock in “public companies,” which simply means that they can be owned by people like you and me.

Penny stocks generally represent small companies, some of whom are new, or don’t even have positive earnings. They are usually much smaller companies than you would see on one of the big dog exchanges.

Companies that file to have their stock traded on the major exchanges are subject to a high degree of scrutiny but because penny stocks don’t file on an exchange, they are not subject to such inspection. They are also generally not subject to the same regulatory scrutiny as companies that are listed on major exchanges.

Companies that issue penny stocks often lack resources. When they create stock shares for investors to purchase, it is on a smaller scale. That, combined with low demand for most penny stocks, creates an illiquid market. This can make it difficult for investors to sell their penny stocks on demand.

How do penny stocks work? To buy a penny stock, buyers must do so in the over-the-counter (OTC) markets such as the OTC Bulletin Board. These markets are also sometimes called “pink slips,” after the color of the physical papers that investors acquire when a penny stock transaction is completed. Rarely, a higher-priced penny stock will trade on the NASDAQ or one of the foreign exchanges.

Penny Stocks Are Highly Speculative

Here’s an important thing to understand about all investments: Risk and reward are two sides of the same coin. You cannot have one without the other. If it is possible to make a run-away amount of money, then it must be coupled with a similar amount of risk. Beware of anyone who claims otherwise.

Being both high-risk and having a potential for high reward are the defining characteristics of penny stocks. Therefore, any investor who wants to try their hand at penny stocks must have an appetite for risk.

Pros of Penny Stocks

High Reward Potential

It is possible to get a high return on a penny stock. Not only is this the nature of high-risk investments, but the multiplier (price compared to company earnings) on small stocks has the potential to grow rapidly. There is a belief that small stocks have more room to grow than large stocks.

Enjoyment

Just as some people like to gamble, others like to invest for fun. Plenty of people would consider analyzing stock charts, reading up on new, interesting companies, and making bets one of their hobbies. Investors like this might want to consider penny stocks as “fun spending,” not investing.

Cons of Penny Stocks

Small Likelihood of Success

Making a lot of money on a penny stock is an extremely rare occurrence. Investors should be aware of this, despite the tales of sudden wealth they may hear. Also, contrary to popular belief, success by investing in penny stocks can often take a long time.

Possibility of Losing it All

A small likelihood for success means that there will inevitably be many failures. It is quite common for small, unestablished businesses to fold and go under, or flounder, or simply have unsuccessful stock. When stocks become worthless, investors lose all of their money.

Volatility: Penny stocks are highly volatile, which means that their prices can change a lot, rapidly. This can happen in either direction, which makes them a difficult tool for building long-term wealth.

Scammers: The penny stock business is ripe with scammers. There are thousands of penny stock newsletters promising big wins and penny stock “investors” manipulating both the market and potential customers.

If DIY investing to achieve long-term growth seems overwhelming, there are now some great, affordable options for investors. Companies like SoFi manage wealth portfolios that consider your goals, risk, and timeline, and help you invest accordingly.

Best of all, we utilize low-cost index funds to build a tailored strategy. Unlike the “old way” of investing, there are no crazy hidden fees that eat away at your wealth.
As a bonus, SoFi Invest® provides you with a financial advisor for $0 who can answer questions about the portfolio and your overall savings and investment strategy. You can start with as little as $100.

Ready to take a step toward reaching your financial goals? Learn about SoFi Invest automated investment portfolios featuring $0 SoFi management fees and $0 for unlimited personal financial advice.


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

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Investing Tips for Newlyweds

So, you’re a newlywed! Congrats.

You’ve probably been busy planning your wedding ceremony, enjoying your honeymoon, perhaps moving to a new place, and otherwise settling in as a married couple. So, if you haven’t had time to create and agree upon an investment style and strategy, that’s understandable.

Investing as a couple doesn’t mean you need to adopt one another’s investment philosophies and risk tolerance, but it can be extremely helpful to be clear about how one another feels as you create investment goals for your portfolio. (Also consider discussing how you feel about socially responsible investing, as increasing numbers of people feel passionate about aligning investments with their personal ethics.)

As an overview of our tips for newlyweds, we’ll discuss:

•  agreeing upon finances in a marriage

•  sharing financial information with one another and merge investing, as desired

•  creating or build upon an emergency fund

•  investing together (or separately) as a married couple

•  different generations may need different investing strategies

We’ll share seven tips relevant to today’s market, plus how SoFi can help with your investments and financial plan.

Love and Money Tips for Newlyweds

Having a common vision about how to spend, save, and invest money will likely go far beyond simply creating a budget and financial strategy. Agreeing upon money can also be important to protect your marriage. According to PsychCentral.com , money arguments are “by far the top predictor of divorce.”

Citing a study with data collected from more than 4,500 couples, they noted the following:

•  how much money you make and how much you are worth aren’t factors, with money arguments happening at all levels

•  couples take longer to recover from money arguments than any other type

•  couples typically use harsher language during financial-based arguments

•  continuing financial arguments tend to lower the “relationship satisfaction” of a couple

Additionally, Dr. Sonya Britt (professor at Kansas State University) suggests that couples educate themselves about finances, and then create a financial plan for today and for your future. She even suggest financial planning as part of premarital counseling, including a look at one another’s credits reports.

Money.USNews.com suggests, as an important step, that each of you organizes your finances, and then analyze where you are, right now. This might include each person sharing his or her tax returns from last year, recent pay stubs, credit card bills, student loan balances, and more. You could then each create a net worth statement where you list your assets and liabilities.

Because this can be an intimidating process and because your spouse may feel vulnerable when sharing, it’s important to “be respectful, not judgmental” during this discussion. Then, what happens when you combine net worth statements?

What does this comprehensive financial statement look like? How much money is currently in savings? Investment funds? Retirement accounts? (And, during this process, check to make sure you’ve changed beneficiaries wherever it’s needed.)

Agreeing Upon Savings

After you’ve taken a good look at your assets and liabilities, and created a budget, you can gain visibility into how much money you can save and invest. And, here’s more money tips for newlyweds. If you aren’t satisfied with how much money you’ve put away into an emergency fund, then it makes sense to focus on that first.

Looking for a place for you and your partner to save money together? With SoFi Money® cash management account, you and your +1 can easily merge your finances and continue to get 0.20% APY, no account fees, unlimited ATM reimbursements, and more.

Create specific goals and then set up automatic deposits to make that happen. As you see financial successes as a team, this will likely inspire you to save and invest even more.

In general, an emergency fund should contain enough money for three to twelve times what you spend monthly, with many people suggesting six months’ worth as your target.

Talking About Investment Strategies

As step one, consider why you want to invest. The “why” will help to direct the “what,” because selecting the right investment strategy differs by financial goals.

Saving for retirement is a pretty universal goal, so ask yourself these questions:

•  At what age would you like to retire? If you were born after 1960, the retirement age for full Social Security is 67.

•  How much money (in today’s dollars) would you need to live on each year?

•  How long do you expect to live? That can be a tough question to answer but, statistically, people born in the 1980s have an average life expectancy of 70 for men, 77.4 for women. When planning for retirement, though, it can make sense to plan on 90 for men and 95 for women.

You can use our retirement calculator to help determine, hypothetically, how much you should be investing for retirement.

It may help to think of emergency savings and retirement savings as being the two bookends, and then you can determine what other savings and investment goals you have in between. These can include:

•  buying a home

•  starting a family

•  opening a business

•  traveling

After you’ve determined your goals (be specific!), then you can calculate how much money you’ll need to achieve each one, and on what timetable. Now, reverse engineer to calculate how much you’ll need to save or invest each month to reach your goals.

Compromising on Style

No post on investing tips for newlyweds could be complete without discussing what to do if you have different investing styles, which could include differing levels of risk tolerance.

Maybe she has an aggressive investing style, wanting the biggest return on investment possible, willing to take chances to get that pot of gold—while he may want to increase financial wellness but is less comfortable with high volatility.

What’s most important is to openly communicate and seek solutions. These could include:

•  have separate investment accounts, one more aggressive and one more conservative

•  on joint accounts, the investment strategy could be more moderate

•  keep a more robust emergency fund to help reassure the more conservative member of the couple

Here’s something else to consider. You may be a newlywed couple in your twenties—or in your sixties. Wise investment strategies can vary by generation, and SoFi has an article about investment strategies by generation. And, no matter what generation you are, we invite you to download The SoFi Wealth Investing Guide. This guide provides step-by-step information about investing, including:

•  goal setting

•  understanding tradeoffs between risk and reward

•  learning about different types of investments

•  choosing an investment portfolio

As one more resource, we’ve also created a list of seven investment tips for today’s market. As an overview, they include:

•  Start now, start small: The sooner you start to invest as a couple, the longer you can keep this money invested—which naturally gives it more time to grow.

•  Focus on investing, not on picking stocks: If you’re not comfortable picking individual stocks, that’s okay. You can work with a wealth advisor.

•  Diversify: When you invest in more than one type of investment, you can feel less anxious when the market fluctuates.
Have long-term goals: We covered this earlier in this post, but it bears repeating.

•  Understand your risk tolerance: It’s your money. You’re in control. A quality advisor will work with your risk tolerance, no matter where it falls on the spectrum of conservative to bold.

•  Consult with an advisor: This can help you choose a portfolio of investments that will facilitate your ability to meet your investing goals.

•  Opt for the lowest fees: Investment fees and advisors fees can take a chunk out of earning, so consider choices with limited fees (or even zero management fees).

Investing with SoFi

With SoFi Invest®, you pay zero in SoFi management fees. Absolutely zero. And, you can start online investing with as little as $1. You can also access the SoFi financial advisor team who can help you to create a personalized financial plan.

The curated portfolio will be based on several factors, including your age, assets, and income. We can track your portfolio and adjust it, as needed.

At SoFi, we put your money to work, with benefits including the following:

•  We will work with you to help you achieve goals; that’s because we map out a plan together—and then help you to stick with that plan.

•  We believe in diversification, so we aim to reduce some of your portfolio’s risk by investing in ETFs.

•  When it comes to portfolio selection, we actively manage passive assets to give you the best of both worlds.

•  Plus, we automatically rebalance your investments, as needed.

At SoFi, you can count on real advice from real advisors. Better yet, it’s on the house! You get access to financial planning services with human advisors at no extra charge.

Ready to get started? You can invest with SoFi. Simply make an appointment or call to meet with an advisor.


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do-it-yourself?

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

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

Financial decisions. They’re already hard enough as an individual, and even harder to do with another person who has their own independent ideas.

Our relationships with money are a very personal thing. We each grow up with preconceived notions about money and through our own individual experiences develop feelings about money, including how it should be spent and whether it should be saved.

Considering how personal and therefore complicated it already is to make financial decisions on our own, it probably comes as no surprise that doing so with a partner can pose even more of a challenge.

As with any difficult conversation with a partner, deep-seeded personal feelings are involved and that makes navigating money conversations feel tricky. The first step is understanding that financial decision making as a couple may not come naturally, and that’s completely fine! These conversations take practice.

And ultimately, the work is worth it. Arguments about money are the leading indicator for divorce —not disagreements about the children or even a rogue in-law or two. If you and your partner can devise a method for having productive conversations about financial decisions, it could preserve the relationship.

Here are a few strategies to try and ideas to keep in mind when making financial decisions with your partner.

Start Early

This doesn’t mean that you come into a first date armed with twenty questions about a person’s financial life. That would be weird. But it may not be smart to wait until you’re married to talk about money, either.

As your relationship with a person develops, it could be a good idea to make it a practice to talk about money as you would talk about other important factors in your relationship, such as whether you want to have kids.

At the beginning stages, start with easier topics, like who pays for dinner and whether or not you enjoy your jobs. With comfort and practice, you can begin to discuss weightier topics like debt and future financial goals.

The very fact that marriages are dissolving because of arguments over money makes the case for why it is so important to have these conversations early (and often). Not only are you able to practice without the stress of needing to take immediate action, but you can get a feel for how your partner navigates money decisions.

And if you have found that you are with someone who holds wildly different values about money, you may need to consider this before making any further commitments to this person.

Make a Date to Talk

Sometimes it feels easiest to dive headfirst into a big money talk in order to get it the heck out of the way. But this may not be your best strategy. Instead of bringing up the topic of money out of the blue, give your partner some notice.

No one is their best self when they feel caught off guard. A conversation about a tough financial decision will be more productive with two calm, prepared people at the table.

Set a time to talk about the financial decision at hand. Maybe, you’ll even want to make it into a “real” date and treat yourself to a coffee at the local shop or a favorite take-out dinner and wine.

No matter how you do it, the most important thing is that you have a designated time for the talk. This strategy can be applied to discussing one particular financial decision, or you can utilize it on a regular basis.

Merging your finances?
With SoFi Money it is easy to share
a cash management account with your partner.


Write It Out

Sometimes, it’s just plain hard to communicate how you feel. This is especially true for topics that affect us deeply and in confusing ways, like money. If you and your partner are people that like to put their feelings down in written word, consider writing each other a letter prior to your financial “date.”

While this exercise may feel unrelated to financial decision making, it really isn’t. There is important work to be done in laying the groundwork for future conversations. No matter how pragmatic a financial decision may seem, feelings may (understandably) become involved.

In your letter, include some background on how you were raised to think about money, your money stressors, and your financial goals. Focus the letter on yourself and from where your financial beliefs stem.

Not only will this help your partner understand where you are coming from, but it will provide you with some very useful introspection about money and your system of values.

Be Prepared to Listen

When financial decision making, your first priority should not be to explain your point of view. To have a truly productive conversation, you must be committed to listening.

This is good practice in all conversations with your partner and loved ones, but especially when talking about financial decisions.

Here’s the thing about making financial decisions; it’s not usually black and white; there is generally no right and no wrong. Being open to listening often translates into being open to learning.

Not only is your partner’s perspective important, but you might even be able to learn something from them. We’re all learning as we go anyway, and by listening, you have a chance to learn and evolve as a couple.

Be Communicative

One key to a productive and healthy conversation regarding a financial decision with your partner is to communicate your feelings, thoughts, and fears. Something that seems obvious to you may not be obvious to them, so give your partner the grace of explaining yourself in a calm and thorough way.

When you communicate, stick with talking about how you feel regarding a matter and avoid making declarations about what your partner has done in the past or what you’re hoping that they will do in the future.

Making comments about how a person is spending can quickly turn accusatory, making a person defensive. Even when having tough conversations, do your best to remove judgment from the equation.

Also, accept that just because you have explained something to your partner once, that they understand what you mean and where you are coming from. Don’t lose your cool if you have to remind your partner what’s important or a priority to you, especially if that’s not the way they seem wired to operate.

Crunch the Numbers

If you are making a big (or small) financial decision, you and your partner are going to want to sit down and work out a plan. You might find it helpful to have a Google doc or some pen and paper handy so you can write it all down.

Because while it’s one thing to have money goals and plans, it’s another thing to map them out. Take the time to figure out exactly how each financial decision would play out over the short and long term. Break big costs down into monthly numbers. Enact plans for these reaching goals, such as setting up automatic transfers from checking accounts and into savings accounts.

Sometimes, the numbers help guide financial decision making within a relationship. You and your partner can see, on paper, what is possible (and what isn’t). The exercise may provide a new perspective altogether or at the very least, get you on the same page regarding the different options with your money.

If you feel at a loss for what you should be focusing on or how to accomplish your goals, you may want to hire a financial expert, such as a credentialed financial planner. Some financial guidance from a person skilled in financial planning could be just what a couple needs to step up their money game.

Compromise

If you’re in a partnership, you already know that compromise is the name of the game. The good news with money is, compromising is not only possible but often ideal. For example, you do not have to pick just one savings goal to work on at a time. Financial decisions don’t have to be “one or the other.”

Also, know that there is no perfect formula for how a couple makes financial decisions. Just because your best friend and her boo may divide up their finances in a certain way or prioritize working on a particular goal with their partner, it doesn’t mean that you have to do it this way. Part of compromise with your partner is abandoning the idea that your partnership should work like anyone else’s.

Compromise is certainly more difficult when partners disagree about big picture money issues, such as whether saving is a priority or paying off debt is important.

Put Plans Into Action

Once you’ve hashed out your money goals and fears with your honey, it’s time to take legitimate steps towards making your dreams a reality. Use the fact that you have a built-in accountability buddy and set weekly goals for accomplishing tasks.

One such goal should be to start a savings account that exists separate from your checking accounts. It may help you avoid the temptation of spending money that lingers in your account for too long.

You could try a cash management account like SoFi Money®. You can use any ATM that accepts Mastercard and we’ll reimburse all of your ATM fees. Best of all? SoFi Money has no account fees (fee structure subject to change), which means you can try it out without fear of being overcharged.

You (and your partner) are free to use it in a way that makes the most sense in accomplishing the financial goals you’ve laid out before you.

It’s the perfect option for setting up a new cash management account whether you’re doing it solo or jointly with a significant other. A SoFi Money cash management account can be used for a specific savings goal, or it can be used as your all-purpose money needs.

No matter your financial goals, take steps towards accomplishing them. You give your relationship the greatest gift of all by turning your financial dreams into reality.

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What Is Student Loan Exit Counseling?

Graduation is an incredible, busy time. In addition to taking their last set of tests, wrapping up final projects, and spending time with friends, college students will probably be applying to jobs and generally preparing for the next phase of life.

Students might even be moving cities and furnishing new apartments. (Or, like many graduates, they’ll just use camping chairs for another two years until they can afford to buy a real couch.) Another item that’ll show up on a student’s end-of-school year checklist is student loan exit counseling . Students with most federal student loan types must find some time to complete exit counseling.

When a student graduates from college, the government wants to arm them with the basics of managing their student loans. That’s because student loans can be tricky to understand; student loan repayment and general financial knowledge are not necessarily intuitive. In fact, the government requires, by law, that students go through student loan exit counseling when they leave college for any reason, including transferring schools or dropping below half-time enrollment.

Here’s what a student borrower should know about federal student loan exit counseling, why it’s important, and where to get student loan exit counseling. Additionally, we’ll discuss what’s not covered in federal student loan exit counseling but could be important for student loan borrowers nevertheless.

What to Expect with Student Loan Exit Counseling

Depending on your school, students typically complete their exit counseling online or through an in-person meeting with a counselor at the school’s financial aid office. Schools may also offer online counseling
programs
to review all of the important information regarding paying back student loans. Each student should check in with their school’s website to find out their options.

Generally, student loan exit counseling takes about 30 minutes if completed online. If the student meets with a counselor or has specific questions, it might take longer. Although no one usually loves sitting through a presentation about financial planning, it’s a great idea to take advantage of the learning and soak up as much knowledge as possible.

Before student loan counseling, the student must prepare some information. First, they should know the outstanding balances on their current federal student loans. You can find that here at the Federal Student Aid website .

Also, the student should gather the names, addresses, email addresses, and phone numbers for a close relative, two references that live in the United States, and their employer, if they have one. The Department of Education requires this information in the event that a borrower defaults on their loans and cannot be contacted.

During the online student loan exit counseling the student will also spend some time mapping out their potential salary and living expenses such as rent and utilities, so that they can create an expected budget.

Major Topics Covered in Student Loan Exit Counseling

Here are some of the topics you’ll encounter in student loan exit counseling:

Understanding Your Loans

During this portion of student loan exit counseling, the student receives a summary of their student loans, including total balance, terms and conditions, and the date that the first payment is due.

Next, they’ll cover the interest rates on student loans. Each loan has a set interest rate that depends on the loan type (subsidized, unsubsidized, PLUS, etc.) and the year they’re dispersed; students may want to write these interest rates down so that they can calculate their monthly payments in a later section.

Plans to Repay

This is a very important section. Here, student borrowers will learn all about the rules of student loan repayment. Borrowers typically have control over the repayment plan that they choose, so it is wise to understand the pros and cons of all options. For example, income-driven repayment plans may lower the borrower’s monthly bill (in accordance with their income) but could cost a borrower more over time in interest. Keep an eye out for the major trade-offs between plans.

In this section of student loan exit counseling, borrowers are provided with a number of helpful student loan repayment calculations . Most students going through student loan exit counseling will see calculations that show how expensive it can be to utilize a grace period, because as the interest accrues on a student loan, it is capitalized, which means it is added to the balance of the loan. Yet another calculator shows the borrower how much can be saved by making additional payments.

Here, student borrowers are also provided with logistical repayment information, like who to contact and in what scenarios you should contact your loan service provider.

Avoiding Default

Not paying loans on time and allowing student loans to fall into delinquency could have consequences in many areas of a borrower’s life. Therefore, during student loan exit counseling, there is a large focus on borrowers avoiding default on their student loans. This section will discuss the consequences for both a borrower’s federal loans (such as loss of deferment options) and for career and future income (such as wage garnishment and impact to credit scores).

It will also cover options in the event that a borrower cannot make payments, such as deferment and forbearance, and the pros and cons of each of these options.

This section will also explain federal loan consolidation, student loan forgiveness programs, loan discharge for the permanently disabled, and how to settle student loan disputes.

Prioritizing Financial Planning

The next section is dedicated to financial planning. Here, a borrower’s counselor or online program should discuss budgeting, credit management, identity theft, and other basics of money management. Borrowers are encouraged to consider their short-term and long-term financial goals.

Though very important, the advice and education in this section are typically somewhat light. It might be a good idea for students to make note of the concepts they don’t understand and do some additional work outside of student loan exit counseling.

Repayment Information

Last, a borrower would choose a repayment plan, enter in their new contact information, employer or future employer’s information, and provide the names and contact information of references. The borrower’s loan servicer then reviews the information and provides the borrower with a repayment plan.

According to Federal Student Aid , the borrower is told to list their preferred repayment options, at which point their loan service will make a final decision and assign the borrower a repayment plan.

What Your Exit Counselor Doesn’t Tell You

Student loan exit counseling is necessary and important. It is required of all students with federal student loans. But overall, the program to be pretty light and quick.

Think about it: Some borrowers could have tens of thousands or even hundreds of thousands of dollars to pay back and get just 20 minutes of guidance as they click through some online slides. This information very easily could be part of a full multi-credit course at a university.

Also, there is some important information that a borrower just won’t receive in exit counseling, and that’s information on how to handle their private student loans. While there are some similarities, private student loans will have many of their own nuances that are imperative to understand.

For example, private loans determine their own repayment plans and generally don’t offer deferment or forbearance options, and they may or may not allow for advance prepayment on a loan.

Federal student loan exit counselors and programs generally do not cover student loan refinancing. Refinancing is the process of paying off student loans—both federal and private—with a new loan, ideally at a lower rate of interest.

Refinancing could help potentially lower borrowers’ interest rates and consolidate multiple loan payments into one. Compare this to federal loan consolidation, a program offered through the government that simply takes a weighted average of the existing loans’ interest rates.

With refinancing, the borrower pays off your government loans with a private loan, so refinanced loans are not eligible for federal repayment programs such as income-driven repayment, deferment, and public service loan forgiveness.

For borrowers who have no plans to use these programs, it may be worth considering refinancing. You may qualify for a better interest rate through refinancing if your credit score or financial situation has improved since you initially took out your loans as a student.

Regardless, it is a great idea to go into student loans exit counseling with a clear head, ready to lap up as much information as possible. Paying back your loans is no small feat, so it will be so worth it to do some hard work up-front to make the rest of the process as smooth as possible.

See what rates you qualify for with SoFi student loan refinancing. It costs nothing to check and takes as little as two minutes.


Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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