When you hear the word bonds, you may think of the savings bonds your family members gave you on your birthday as a child. And you may not have given them much thought since.
But, as a generally lower-risk investment than stocks that offer a reliable source of interest payments, bonds can (and should) be a part of your grown-up investing strategy, too. Read on for an explanation of how they work—and how they can work for you.
What Are Bonds?
In short, bonds are loans you make to either a company or a government entity for a fixed period of time. The specific terms of the deal vary, but basically: You give someone money, they promise to pay it back in the future, and they pay you interest until they do.
For example, you might buy a GE bond that lends the company money for 20 years at 4% interest. For each $1,000 you invested, you would get $40 per year for 20 years; then you’d get your $1,000 back.
Why Invest in Bonds?
There are two good reasons to buy bonds—income and safety. Bonds pay interest at a fixed rate, usually twice a year. People in retirement who need a reliable source of income often invest in bonds.
High quality, investment grade bonds (more on this later) are typically safer, because the borrower is less likely to default on their promise to repay your investment. This doesn’t mean you can’t lose money if you need to sell the bond before it matures, but the issuer is unlikely to go broke. The price of bonds can fluctuate, but usually much less than the price of stocks. They are used in a portfolio to smooth out the volatility of stocks and reduce the risk of your overall investment strategy.
Who Issues Bonds?
There are four broad categories of bonds available to most investors:
• Treasury Bonds: Bond issued by the U.S. government.
• Corporate Bonds: Bonds issued by a corporation.
• Municipal Bonds: Bonds issued by a state or local government or agency (for example airports, school districts, and sewer or water authorities).
• Mortgage and Asset Backed Bonds: Bonds that pass through the interest on a bundle of mortgages or other financial assets such as student loans, car loans, or the accounts receivable of companies.
The main difference between them? Risk. The U.S. government (probably) won’t go broke, but a company might. Because the expected return is tied to risk, you are likely to see higher returns with a corporate bond than with a treasury bond. Municipal and mortgage and asset backed bonds vary widely in risk.
Just How Risky Are Bonds?
Depends on the issuer. To help investors understand the risk, corporate bonds are rated for risk by agencies such as S&P and Moody’s. The precise scale varies with the rating agency, but bonds rated AAA to BBB by S&P are considered “Investment Grade,” those rated BB+ to C are high-yield, or “junk bonds“. Bonds with a D rating are in default and not paying interest.
Muni and asset backed bonds are also rated by agencies on a similar scale. Muni ratings depend on the credit quality of the issuing city or state, while asset backed bonds depend on the quality of the assets backing the bonds. As a rule, investors demand higher interest on lower quality bonds. High-yield bonds yield more because the risk of default is higher. Note that ratings can (and do) change over time.
Bonds can also go up or down in value if interest rates change. You can buy a 20-year bond that only has 8 years left on it in the bond market. The price you’d pay for the bond depends on whether interest rates on similar bonds went up or down since it was issued. If this kind of bond pays 4% today, you would pay more than $1,000 for one issued some years ago that pays 5%. An old bond that pays only 3% would be worth less, since interest rates today are 4%.
Unless you are a very aggressive investor, you should probably have some bonds in your portfolio. Some people can’t stomach the wild swings of stock values. Adding even a small percentage of bonds to your investment mix can smooth out the volatility and might help you from panic selling when the market drops.
With that said, buying individual bonds isn’t always the best approach. Since most bonds have a face value of $1,000, it can be difficult and expensive to build up a diversified bond portfolio. Unless the bond portion of your portfolio is several hundred thousand dollars, it usually makes more sense to invest in bond mutual funds or exchange traded funds (ETFs). A typical bond fund will generally hold between dozens and hundreds of individual bond issues.
Bond ETFs generally contain bonds of similar types of issuer, maturity range, and quality.
(Again, the issuer is the entity that borrowed the money. Maturity is how long the bond holders have to wait for their money. The longer it is, higher the interest rate they usually get, but also the greater the risk that something will go wrong. Quality is the financial strength of the issuer. How likely is the borrower to not be able to pay back your investment?)
If you invest in SoFi Invest®, all but our most aggressive portfolios contain at least some bonds. We currently use nine different bond ETFs to build our portfolios. Each ETF contains different kind of bonds, which lets us use the right combination of bonds for each portfolio.
Not sure what the right investment strategy is for you? An investment account with SoFi makes it easy: Our technology helps you determine the right asset allocation mix for you, while advisors are available to offer you complimentary, personalized advice. Consider working with a SoFi Invest advisor today.
SoFi Wealth, LLC does not render tax or legal advice. Individual circumstances are unique and we recommend that you consult with a qualified tax advisor for your specific needs.
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About 10% of Americans moved within the country last year, according to the U.S. Census Bureau. Though that number may seem small, its actual value is not—that amounts to an estimated (and whopping) 32 million people.
Within that group, the impetus for moving varied, from people moving in order to establish their own household, opting for a more affordable home or moving for a new job.
While the prospect of a new home can be exciting, the move itself can require a surprising amount of time and money. Unless you have a family or friend group ready and willing to pack your things, haul your boxes, and load your belongings into your new space, chances are you will hire a professional moving company to assist you with the above tasks.
Just as you make a weekly or monthly budget in order to see your finances clearly, it can be helpful to crunch the numbers on the cost of a move before you get started. One question worth considering before you cross hire movers off your to-do list is, how much do professional movers cost?
The short answer is—it depends. There are a variety of factors that will influence the cost of hiring professional movers. Below is some information that might help you prepare mentally and financially for a big move.
Making a Local Move
While moving across town might seem straightforward, it can be a drawn-out process—though a more affordable one—if you’re doing some of the legwork yourself. Keep in mind that unless you’re taking vacation days to pack and move, you may be filling boxes on nights and weekends for a while.
The upside of packing (and later unpacking) your own stuff is that you’re paying zero dollars to a moving company for those hours. That means you need only need a standard moving service. Once your boxes are taped up and ready, a moving company can come to load boxes and furniture into a truck, transfer them to your new neighborhood and unload them into your new space.
Costs for a standard move like this will depend on a few key factors, including the amount of stuff you have, the distance you are moving, and the number of hours it takes movers to move your things. (Because quantity matters here, it can be a good idea to use a move as the impetus for donating things you no longer want or need.)
To get an idea of how much movers cost for a local move in your area, gather estimates from a few companies. Most offer a free quote, and there are websites like QuoteRunner that aggregate moving quotes for local companies based on a few moving details provided by you.
By comparing the prices of local movers, the Unpackt Blog estimated the average moving price for a standard move in various cities. In each location, the blog shows how the size of your current home impacts the cost.
In New York City, for example, a local standard move for someone in a large one bedroom might cost around $350, while a four-bedroom move could cost more than $1,000. Keep in mind this is simply transporting packed boxes from Point A to Point B. The blog gathered moving data and estimated local costs for cities such as Raleigh , Baltimore , and Minneapolis .
A full-service move includes a good deal more assistance from your moving company, but for a greater price. The higher price is because this service covers just about everything.
You can opt to have your movers pack your things, disassemble (and later reassemble) all your furniture, load and unload everything, then unpack it for you, with your guidance as to where things go. Full-service movers also usually take care of packaging supplies and their disposal.
According toMove.org , the cost of a full-service local move will range between $550 and $12,000. Again, the price range varies so greatly because it depends on the number of belongings the movers will be packing and transporting.
It might help to compare and contrast a few different moving companies, Moving.com suggests reviewing at least three. This can help you make the best pick for your move and budget. Some movers will tell you a cost per hour for moving, but it can be hard to estimate just how many hours a full-service move will take since so many processes are included.
An additional note for your budget: Consumer Affairs says that tipping movers is customary, so maybe plan to tack on an additional $20 to $40 per day, per mover. So if you’ve got three movers helping you across two days, gratuity could range from $120 to $240.
Moving Out of State
The American Moving and Storage Association (AMSA) found that about 650,000 Americans use professional movers for an interstate move—that means they leave one state for another.
Some of those folks—about 39% of them, actually—don’t pay for their own moves, thanks to corporate sponsorship, which sometimes foots the bill if you’re moving for a job. About 44% of interstate moves are paid for by individuals. Military and other government-sponsored moves make up the rest.
If you’re an individual moving to a new state, know that your moving costs will likely depend on three primary factors, similar to a local move: the weight of your shipment, the mileage your belongings will be transported, and labor costs outlined by the moving company you’ve chosen.
Free cost calculator City to City can help you estimate your move. Users enter their Point A and Point B, and can also select premium services to see how that impacts price.
For example, using that calculator, a move from Los Angeles to Denver—about 830 miles—with about 3,500 pounds of belongings and including packing services might cost around $2,500.
A move from Los Angeles to Chicago—about 1,750 miles—with the same specs might cost around $3,300 miles.
Keep in mind that the weight of your belongings may need to be altered. Some say to estimate that each furnished room in your house contains weighs about 1,500 pounds.
Financing a Move
If you already have a clear picture of your personal budget, it may be simple to tell whether you need to do more of a do-it-yourself move or if you can spring for a full-service move through a professional moving company.
Some people might opt to use a credit card to pay for moving fees. If you go this route, consider keeping your card interest rate in mind. If you can’t pay off your incurred moving costs fairly quickly, remember that interest will rack up, potentially making your move more expensive in the long run.
Another way to pay for a move is with an unsecured personal loan, which may come with a lower interest rate than your credit cards. You can check your interest rate for a personal relocation loan through SoFi online and within minutes.
If you qualify, this loan gives you access to cash (usually in less than a week), which may come in handy if your mover offers a discount for an up-front cash payment. You can also use a personal loan to help pay for other moving-related costs that can come up, such as first and last month’s rent for a rental unit.
Ultimately, a move can be a fresh start and offer a new perspective on life. Paying for that fresh start in a way that best suits your budget can help make this life transition go smoothly.
If you’re figuring out how to finance a move with the help of professional movers, consider looking into a SoFi’s personal relocation loan.
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When it comes to creating or improving upon a budget for yourself, your family and your household, the last thing you want to do is keep it all in your head.
That’s not a negative comment on your cognitive skills or intelligence; it’s just that when you write it all down and can see it with a bird’s eye view, you can get a deeper understanding of where your money is going, or where it could be going.
Many people would be surprised to see how they might be bleeding money by a thousand cuts: ATM and other banking fees, subscriptions they had forgotten about, restaurants, gasoline, that daily cup of joe (or three) at the coffee shop, cranking up the air conditioner or the heat, one streaming service too many, or more mani-pedis than are really needed. If you look closer, you could find even more cracks in your budget.
Here are nine steps to take that can help you to budget money better and get your budget in top shape, which could lead to more stability and excess money to use for your future.
Counting Only Your After-Tax Income
If you include your gross salary, you’re not doing your budget any favors. You can only work with the money that’s left over after your taxes are deducted; that’s called your net income. The money that was taxed goes directly to Uncle Sam. If you think you may be getting a tax refund or a bonus at work, wait until you actually get them before including them in your budget.
Recording What You Spend — to the Penny
The more accurate you can make your budget, the more you can understand how it’s helping or hurting you. Mortgage loans, rent, utilities, insurance, groceries, credit cards, loans, gas, and Internet are just a few of the facts of life.
Don’t round off to the nearest dollar; if pennies are involved in the charges, be sure to include them. The goal is to have more money coming in then what is going out every month. Once you have this figured out in dollars, you can start planning from there.
Setting Goals
Instant gratification (buying that coffee or that restaurant meal) is nowhere near as satisfying as setting a long-term goal and saving for it. A special trip, a down payment on a car or a house, or even just building a nest egg can be done with better budgeting.
Try opening one account specifically for that one goal, and put what you can into it week to week or paycheck to paycheck — or whenever you can. You’ll likely become even more motivated when you see that account grow as you grow closer to your goal.
Getting Granular and Detail-Oriented
Your cash can jump out of your hands in ways that you often don’t even realize. ATM fees, tips, a quick Uber ride, buying a buddy a coffee, or a bag of peanuts at the convenience store can start to add up. Be sure to save receipts and include these spends on your budget chart. To help keep track of your spending, get started with SoFi Relay. SoFi Relay tracks all of your money, all in one place.
In essence, write down everything you spend, and try to record them as they happen, or at least on the same day. This way, the receipts won’t pile up as much and make you feel reluctant to continue on. Becoming conscious of these little costs during the course of your day can help you start thinking about getting more budget-conscious and thrifty, and on your way to budget better.
Saving for the Inevitable
Christmas comes at the same time every year. So do birthdays. And Valentine’s Day. Figure out what you may be spending for those events that always seem to creep up on you without warning, and make an attempt to save a little each week toward those goals.
Get up to $250 towards your holiday shopping.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $250 cash bonus. Plus, get up to 4.60% APY on your cash!1
Trimming the Fat
Once you start getting a better idea of how your existing budget is, you can start getting creative with where you can cut the unnecessary costs.
It could be as simple as eliminating a premium cable or Internet subscription or keeping the a/c at a slightly higher temp. It sounds painful, but once you start cutting, it may actually feel good, and you may get tempted to keep going.
Paying Yourself First
You always want to have enough money in your budget to cover your most important expenses (rent/mortgage, health insurance, utilities), but consider getting into the habit of putting a percentage of your earnings into your savings. If you do this first, you may not come up short when it comes time to dip into an emergency fund.
Being Consistent
Get into the habit of paying attention to your better budgeting every single day. Do everything in your power not to trail off. It’s so easy to skip one month of your budget due to being especially busy or simply just life happening in general.
Skipping one month can lead to skipping a number of months, and then your better budgeting can become just a hazy memory in your rear-view mirror. Reaching your financial goals can be much easier when you have a plan and stick to it.
Getting Budgeting Help
Better budgeting is certainly not rocket science — spend less than you make — but many of us could use some help when it comes to money. Sometimes, the ultimate help is being able to step back and take a comprehensive view of where you stand.
It’s fee-free and costs nothing to maintain. Plus, with your SoFi Checking and Savings account you’ll be able to see, on a weekly basis, what your spending looks like.
Whether it be saving or investing, SoFi can help you get on track and reach for your financial independence. More than half a million members have already used SoFi to get their financial house in order and their futures more secure.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
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 can’t guarantee future financial performance. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite. Neither SoFi nor its affiliates is a bank. SoFi Checking and Savings® is offered through SoFi Securities LLC, member member FINRA / SIPC . The information provided is not meant to provide investment, tax or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory and automated services offered through SoFi Wealth LLC. An SEC registered investment advisor. SoFi Securities LLC, member FINRA / SIPC . SOMN18117
Nursing can mean long hours spent on the hospital floor looking after patients. It can be exhausting, and some days, it may feel like there’s not a moment to spare as you dash from patient to patient. That said, caring for those in need as a nurse can be a stable and rewarding career.
If you’re interested in pursuing a career in nursing you might be wondering what the average nurse salary, average starting salary for nurses, average registered nurse salary, or average nurse practitioner salary is.
There are a variety of factors that will influence how much money a nurse makes. Things like how many years of experience a nurse has, location, and the type of degree or certifications, can all impact how much money a nurse earns.
Average Salaries for Different Types of Nurses
When considering nursing as a career, it’s helpful to know the different types of nurses. Each has its own education and certification requirements.
A licensed vocational nurse (LVN) or licensed practical nurse (LPN) is one of the lowest paid jobs within the nursing field. Job responsibilities are typically similar for LVN and LPNs. California and Texas use the term LVN , while the rest of the country uses LPN.
These positions also have the lowest educational requirements. While LVN /LPN roles don’t always require a college education, there are usually state-approved training certification programs, most taking one year; that aspiring LVN/LPNs must complete along with passing the NCLEX-PN examination for state licensing. The average salary for LVN/LPNs as of July 2019 was $46,584 a year or $21.73 an hour .
Aspiring registered nurses (RN) typically need a bachelor’s or associate’s degree from an accredited program. There are also some accelerated programs available and some second degree programs for students who already have a bachelor’s degree in another field.
After successfully completing their chosen coursework, students must pass the NCLEX-RN exam in order to become a certified RN. RNs typically need to obtain a state license after passing the NCLEX-RN exam.
Each state has its own licensing board so it’s worth checking individual requirements in the state you plan to practice. The average RN salary as of July 2019 was $62,805 per year or $29.14 per hour .
Clinical Nurse Specialists (CNS) have gone a step further and pursued additional education after becoming an RN. At a minimum, to become a CNS you must have a master of science in nursing (MSN).
A CNS typically trains extensively in an area of specialty. Some common specialties include emergency, oncology, and women’s health. The average salary for a CNS as of July 2019 was $88,143 annually or $39.66 per hour .
A Nurse Practitioner (NP) holds an advanced degree, but their responsibilities vary slightly when compared with a CNS. For example, in most states, a nurse practitioner is able to prescribe medication, while a CNS is not. The average nurse practitioner salary as of May 2018 was $110,030 annually or $52.90 per hour .
Average Salaries and Location
Location can also influence an average nurse’s salary. For example, in California, the average salary for an RN was $106,950 while the average in South Dakota was $58,340.
According to the Bureau of Labor Statistics, of the 50 states and the District of Columbia, the five top-paying areas in for RNs as of May 2018 are:
• California: The average RN salary is $106,950. The average hourly wage is $51.42.
• Hawaii: The average RN salary is $98,080. The average hourly wage is $47.16.
• District of Columbia: The average RN salary is $92,350. The average hourly wage is $44.40.
• Massachusetts: The average RN salary is $92,140. The average hourly wage is $44.30.
• Oregon: The average RN salary is $91,080. The average hourly wage is $43.79.
How Much Does it Cost to Get a Nursing Degree?
The cost of getting a nursing degree varies based on the type of nursing program you choose. Each of the nursing positions listed above requires different degrees and certification.
The process to become an LVN/LPN generally costs between $10,000 and $15,000.
Taking an associate’s program to become an RN can take between two and three years. This route can cost around $31,000.
An alternative is to become an RN through a four-year bachelor’s program. This process works similarly to most other bachelor’s degree programs and typically costs the same as a four-year college or university.
In addition to having already been an RN, both CNS and NP careers require advanced degrees. Typically, a masters of science in nursing (MSN) is required for both positions.
The cost of getting an MSN will vary depending on the school you choose but can fall around $36,000 . Some choose to further their education, becoming a Doctor of Nursing Practice (DNP). These degrees can be expensive but also have the potential to increase a nurse’s salary.
There are usually costs beyond nursing school tuition. You’ll likely have to buy textbooks and supplies like a lab coat, scrubs, and a stethoscope. Many programs also charge additional lab fees each semester. Many schools will require nursing students to take out liability insurance and get some mandatory immunizations.
After graduating from your chosen program(s), you’ll also likely want to factor in the cost of licensing and exam fees.
Paying for Your Nursing Degree
Becoming a nurse can be a pricey process, depending on the path you choose. But there are options available to help students pay for their nursing degree. The American Association of Colleges of Nursing has a scholarship database for nursing schools. Since scholarships don’t need to be repaid, and can be valuable in making ends meet as a nursing student.
In addition, federal aid, including grants, scholarships, work-study, and federal student loans could provide some relief. To apply, students must fill out the Free Application for Federal Student Aid each year.
Public Service Loan Forgiveness (PSLF) forgives certain federal Direct loans after 10 years of qualifying, on-time payments. This program is open to borrowers who work for a qualifying organization, like a government organization, a tax-exempt not-for-profit organization, certain other not-for-profits, or as a volunteer for AmeriCorps or Peace Corps. Complete the Employment Certification Form annually.
The NURSE Corps Loan Repayment Program will repay a portion of a nurse’s eligible student loans when they work full time at a Critical Shortage Facility or as a faculty member at a qualifying nursing school.
Those accepted by the program are eligible to have 60% of their outstanding loan balances forgiven over a two-year commitment. Some nurses may qualify to extend to a third year and have an additional 25% of their original loan balance forgiven.
If you borrowed federal or private student loans to help you pay for nursing school, creating a repayment strategy can be valuable. The average starting salary for nurses is around $66,640 .
Coming off of life as a student, it can be tempting to spend all of your newfound income. But strategies like developing a budget and repayment plan for your student loans can help set you up for financial success.
If you don’t qualify for any of the available loan forgiveness options, federal student loans come with a few different student loan repayment plans so you can find the option that works best for your budget.
If you relied on private student loans to help you pay for your tuition at nursing school you may have to review the repayment terms. Each lender will determine their own terms and conditions for the loans they lend.
When you refinance a loan, you take out a new loan with new terms. This loan is then used to repay your existing loans. If you borrowed multiple loans, this means you have the option to consolidate them into one single monthly payment—potentially with a lower interest rate.
Refinancing won’t be for everyone. If you have federal loans and are pursuing a forgiveness program or are taking advantage of income-based repayment, it may not be your best option. When you refinance federal loans, they are no longer eligible for federal protections or benefits.
But with your new degree and new salary, you could potentially qualify for a lower interest rate than the one on your existing loans. A lower interest rate could mean you pay less in interest over the life of the loan, potentially saving you money in the long term. To see how refinancing could impact your student loan, you can take a look at SoFi’s student loan refinancing calculator.
If you’re interested in refinancing, consider SoFi. There are no fees or prepayment penalties when you refinance with SoFi and the application process can be completed easily online. You can find out in just a few minutes if you pre-qualify.
Ready to take control of your student loan repayment? See how refinancing with SoFi can help you eliminate your debt.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
Financial wellness is something that everyone wants, in theory, but is very difficult to define. Sometimes, it feels more like a fleeting buzzword than a real state of being that a person can actually achieve.
Here’s the good news: You can accomplish financial wellness. It might not be easy, though, because financial wellness cannot be bought at a store, purchased online, or procured from a close family member.
Financial wellness is something that must be worked for. But financial wellness is worth every ounce of effort.
To work towards something, first, we must first understand it. The Consumer Financial Protection Bureau (CFPB)did a comprehensive study on financial wellness in 2017 where they found that because individuals value different things, strictly monetary measures such as income or net worth were not a perfect measure of financial wellness.
Instead, financial wellness relies on our ability to take care of our current and future selves with the resources we have. Naturally, this is going to look a little bit different for everybody.
Below, we will take some time to understand the definition of financial wellness. With this foundation, we can begin to design and enact a plan for anyone who wants to work towards financial well-being.
What Is Financial Wellness?
The CFPB defines the four elements of financial well-being, which include:
• You have “Control over day-to-day, month-to-month finances.”
• You have the “Capacity to absorb a financial shock.”
• You are “On track to meet your financial goals.”
• You have the “Financial freedom to make choices to enjoy life.”
Again, you’ll notice the absence of traditional markers of financial success, like earning a high income. While having a high income certainly helps, there are plenty of people who are high earners but are not financially well. Conversely, those who are low or middle earners are not precluded from achieving financial wellness.
Taking Steps Toward Financial Wellness
Next, we will cover some tips that can help you work toward financial wellness.
Paying Attention to Your Mindset
Financial wellness is connected to emotional wellness. These concepts are all related, and it is hard to have one without the other. Those who have experienced trauma or difficult experiences with money (such as growing up in poverty) may need to address what may be a tenuous relationship with money. Heck, all of us should take time to examine the way that money affects our mental states.
This process is going to look different for everyone. Some people may feel the need to do an examination of their beliefs about money they have from growing up. Others may want to explore issues with a professional.
For some folks, creating daily affirmations (such as “I am deserving of abundance”) or building a gratitude mindset (“I am grateful to live in a place where saving money is possible”) may work well. Keeping your money mindset in shape can take continual work, so try pairing exercises like these with the more logistical money tips we go through below.
Tracking Your Spending
It’s not glamorous, and it is that last thing that so many people want to do on their precious weekends, but tracking spending is essential to financial wellness. There is real truth to the saying “What gets measured gets improved.” There’s no way to fix problems like overspending without understanding exactly what goes in and what goes out.
Additionally, having a good budget is an important first step in building a solid overall financial infrastructure, which can include more advanced steps like saving and investing for long-term goals, like retirement.
It can feel overwhelming to start, but it doesn’t have to be. Begin with this month’s spending. Pull up your statements and organize purchases into categories, such as utilities, groceries, dining out, and shopping. Once it is added up, does a spending category jump out at you? This simple exercise often reveals at least a surprise or two.
If you don’t want to do manual tracking, you can use an app like SoFi Relay or see if your bank account provides a tracking feature. SoFi Checking and Savings® accounts provide weekly spending charts so you can visualize where your money is going.
Your next step would be to organize this information into a monthly cash flow report, where you compare your source(s) or income versus the money that was spent in that same month. Did you spend more than you earned? Or did you earn more than you spent, with some left over for savings? Next month, go through the exercise again (it gets easier every time). What patterns are emerging? Understanding these habits will be crucial to your success.
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Building Saving into Your Budget
An integral part of financial wellness is having money in the bank. People who have saved money also tend to have the peace of mind knowing that they could afford an emergency or job layoff. Additionally, financially well people are also typically saving for their future. This means setting some money aside for long-term goals like retirement.
To begin a saving routine, you can start by opening a savings account and transfer a portion of the money in your checking account into your new account. It can be a good idea set up a savings account that is separate from your checking.
Some people may find that cutting back on their spending and moving extra funds into savings is the way that works best for them. (For tips on reducing spending, see below.) Other people may find that a more proactive approach is best.
To fully embrace your new savings plan, you can set up an automatic, recurring transfer from your checking account to your saving account. It’s okay to start small—even small amounts matter, and everyone has to start somewhere.
Looking for Big Wins to save Money
If you want to start saving more money, often the fastest way to do so is by spending less money.
Clipping coupons or not ordering the appetizer once a month aren’t going to be the items that make or break your budget. Instead, look for ways that you can win big on savings. Easy ways to do this include cutting back in one of the categories we tend to spend the most amount of money on—housing, transportation, food, and other bills.
There are almost always ways to spend less in these categories—it’s often a matter of what we’ve grown comfortable with or accustomed to. With housing, you could downsize or have roommates. On transportation, you could own a more affordable car or consider car alternatives.
For food, actually use those groceries that you buy, or consider cutting back or eliminating eating out. There are plenty of ways to lower phone, electric, and gas bills. As a bonus, you can cancel any and all subscriptions (like cable) that you aren’t using.
Controlling Your Debt
It can be hard to feel financially well if you are also feeling overwhelmed by debt. Debt can come in many forms—credit cards and other personal loans, auto loans, student loans, and mortgages. People incur debt for many reasons, some of which are in their control and some that aren’t. Either way, large debt loads or big monthly debt bills can trigger stress in a person.
What can you do to control debt that feels out of control? The first step is to remind yourself that debt can be overcome and that it does not define you or your future. Second, make a plan to get out of debt by listing out all sources of debt, and tackling them either by the avalanche or the snowball method .
If you are dealing with credit card debt, specifically, you can call the credit card companies and ask them to lower your annual percentage rate (APR). Explain to them your situation and that you are trying to improve and organize your finances. A lower APR means lower interest charges, which may help you make some headway in paying off your credit card debt.
Depending on your APR, you may want to consider paying off your credit cards with a personal loan at a lower rate. This probably won’t make your debt go away (or stem the problem that caused the debt), but it could help you pay off your debt faster.
Accepting That Financial Education Is Ongoing
According the CFPB, a characteristic that all financially well people share is that they are committed to learning about how to manage their money. They understand that both work and education is continuous process.
We’ve provided a lot to think about here, so you can start with one or two items, and build from there. Don’t expect yourself to get there right away—remember to embrace the idea that financial wellness is a journey and an ongoing process. Good luck as you find a path towards financial wellness that works the best for you.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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