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Maybe your ultimate financial goal is to pay off your mortgage and live debt-free. Or, perhaps your dream is to retire early and relocate to a remote tropical island.

Whether you’re dreaming big, small, or somewhere in between, achieving financial security can help make your vision of the future a reality.

But what exactly is financial security? Broadly speaking, financial security or wellness refers to a condition in which you are able to meet your current and ongoing financial obligations, have the capacity to absorb a financial shock, feel secure in your financial future, and are able to make choices that allow you to enjoy life.

While that may sound like a far-off concept, achieving financial stability often isn’t as far off as many people think. The key to getting there is to think about your short- and long-term financial goals, and then devise a savings plan that can help you reach them.

Here are five steps that could help you achieve financial security.

1. Setting Goals

Financial goal-setting can be like jumping ahead to the last chapter of a book.

Financial goal-setting can be like jumping ahead to the last chapter of a book. It starts with the endgame, such as paying for kids’ college, traveling, buying or renovating a home, or getting a new car.

From there, “reading” goes backward by breaking those goals into bite-size steps until the arrival at Chapter 1—an overview of the current situation and a plan to meet those long-term goals.

Short-term financial goals could include things like paying off credit card debt, student loans or car loans, saving for a downpayment on a home or a car, or growing an emergency fund (more on that below).

Once those are achieved, money you were setting aside each month for those goals could be shifted into longer-term planning, such as retirement, buying or upgrading a home, paying off a mortgage, or investing.

No matter how long it takes, checking something off a goals list can be a huge feeling of accomplishment, as well as motivation to start the next chapter.

2. Creating a Budget

One of the most important things you can do to achieve financial security is to live on less than you earn, since this enables you to siphon some of your income into saving towards your financial goals each month.

A great first step is to set up, or fine-tune, a monthly budget. To do this, you’ll want to grab the last few months of financial statements and pay stubs, then use them to determine what your average monthly take-home (after tax) income is, and what your average monthly spending looks like.

If you find that your spending is equal to, or exceeding, your income, you may then want to drill down into exactly where your money is going each month. You can start by making a list of essential expenses (rent/mortgage, utilities, insurance, car payments, groceries) and nonessential expenses (clothing, dining out, entertainment).

It’s often easiest to cut back spending in the nonessentials category. You might decide to cook more meals at home instead of eating out, for example. Or, you might cancel a streaming service or quit the gym and work out at home.

The money you free up can then be put into savings every month for your future goals.

3. Attacking Debt

If those monthly high-interest credit card payments didn’t exist, where would that money go instead? Paying off debt could free up a potentially big chunk of money to put toward those big dreams. Creating a debt-payoff strategy can be an essential part of a financial wellness plan.

One popular method for getting out of debt is the debt snowball. This calls for listing debts from smallest to largest amounts owed, then paying any extra money you have each month towards the smallest debt (while paying the minimum on the others). When that debt is paid off, you move on to the next smallest debt, and so on.

Another option is the debt avalanche method. This involves making a list of all your debts in order of interest rate (regardless of balance). You then put extra money towards the debt with the highest interest rate, while paying the minimum on the others.

When that debt is paid off, you start tackling the debt with the next-highest interest rate, and so on. As you continue paying off bills, you will be saving in interest payments and should have more and more money to put toward each debt as you go.

4. Building an Emergency Fund

An emergency fund is money tucked away that you can use in times of financial distress. Having this contingency fund can significantly improve financial security by creating a safety net that can be used to meet unanticipated expenses, such as an illness, job loss, or major home repair.

A good rule of thumb is to keep enough money in an emergency fund to cover three- to six-months worth of living expenses, but some people may need a larger emergency fund. You may want to keep this money in an account that earns more interest than a standard savings account, but is still easily accessible. Good options include a high-yield savings account, online savings account, or a checking and savings account.

Having this money available when you need it can reduce the need to tap high-interest debt options, such as credit cards or unsecured loans, or undermine your future security by dipping into retirement funds.

5. Saving for Retirement

Once you are free of high interest debt and have a solid emergency fund, you may want to focus on investing more of your income into a retirement fund.

The earlier you start saving for retirement, the easier it will be to meet your goal, thanks to the benefit of compounding interest (when the money you invest earns interest, that interest then gets reinvested and earns interest of its own).

One of the simplest ways to save for retirement is through a 401(k) program at work, since you can set up automatic pre-tax deductions from your paycheck (and may not even miss the money). If your employer is matching up to a certain percent of your contributions, you’re essentially getting free extra cash to save.

Another option is to open an Individual Retirement Account (IRA). Like a 401(k), an IRA allows you to put away money (before taxes are taken out) for your retirement. However, there are annual contribution limits you’ll need to keep in mind.

The Takeaway

Reaching a state of financial stability means you feel confident and don’t feel stressed about money. You are able to pay your bills each month, have money set aside for any unexpected bills or emergencies, you are saving money each month, and you are also debt-free.

One of the easiest and most important ways to achieve financial security is to spend less than you earn and to put money aside each month towards your goals.

If you’re looking for a good place to start–or build–your savings, you may want to consider opening a SoFi Checking and Savings®️ checking and savings account.

With SoFi’s special “vaults” features, you can separate your savings from your spending while earning competitive interest on all your money. You can also set up recurring deposits to help you reach your financial goals faster.

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If your master plan involves climbing the corporate ladder you may be considering heading to grad school to get your MBA. It’s a serious investment—business school doesn’t come cheap.

But an MBA could help you advance your career and increase your income potential by a fairly substantial amount. If you decide to go to business school, part of your search will likely involve finding the most affordable MBA program for you.

The Cost of Getting an MBA

Tuition costs for MBA programs can vary dramatically. At the lower end, tuition starts around $27,864 per year, and at the higher end, it’s closer to $80,000 per year. At Elite schools students can expect tuition costs over $100,000.

On top of tuition costs, there are other fees and expenses associated with attending school: You’ll have to account for housing, or room and board, plus books and other supplies; some clubs, which are important for networking, have fees that you may want to cover; and certain MBA programs offer study-abroad opportunities, also at an additional cost.

For example, at MIT, the estimated cost of tuition, housing, books, and other fees for the 2020-2021 school year was $120,846 .

Affordable MBA Options

Finding an affordable MBA program may require some research, but there are options out there. Here are a few avenues to consider when looking for one of the most affordable business schools.

Affordable Full-Time MBA Programs

Take the time to do a quick search and compare the going rates of MBA programs. Attending a state school where you qualify for in-state tuition could ultimately lower the cost of earning your MBA.

For the 2020-2021 school year, in-state residents at Oklahoma State University Sears School of Business pay a tuition of $18,814.80 per year, while tuition for out-of-state students is $42,069.00. The University of Central Arkansas offers online, on-campus, and hybrid programs with a base tuition rate of $325.00 per credit hour .

Online MBA Programs

There are a variety of universities that offer online-only MBA programs , at relatively low costs. Tuition for some online MBA programs under $10,000. Online programs can also offer flexibility for students who are still working while pursuing their degree.

Depending on the program courses may be offered synchronously, at-set times where lectures take place live, or asynchronously, where lectures are recorded and students may be able to set their own schedules.

However, some online programs (especially ones that are not accredited) aren’t as well regarded by industry professionals as full-time or in-person programs, which may mean less return on investment after you graduate.

Another potential downside to an online-only education is there is limited opportunity to network with other students in the program.

Part-Time MBA Programs

Part-time MBA programs allow students to complete their MBA while still working full- or part-time. This allows students to continue earning an income and supplement what they are learning in their classes with the real-life experience they are getting from their work. Many of these programs can take two to three years to complete.

Depending on the school, the part-time MBA program may also be on the expensive side, so read the details on tuition and fees at the schools you are comparing.

One-Year MBA Programs

While two year, full-time programs are traditional, one-year MBA options are popular in Europe. These are accelerated courses of study where students enroll in an intensive program to earn their degree. The cost of tuition may be less than for a full-time MBA program since students spend just one year taking classes and out of the workforce.

More programs in the U.S. are starting to offer one-year MBA options, including Northwestern University and Cornell University .

Cost-Benefit Analysis of MBA Programs

When it comes to applying to an MBA program, the cost of tuition (and books, housing, other fees, etc.) will likely all factor into the equation. It’s also worth reviewing the average salaries of graduates from specific programs you are considering.

Some programs have a fairly low salary-to-debt ratio (highest average salary, with lowest debt incurred), while others leave their student under a mountain of debt with less than ideal income prospects after graduation.

Beyond just the cost of tuition, there are other intangible factors that may come into play, like the network you are (hopefully) building as you make your way through your MBA program plus other transferable skills you’ll hopefully gain.

It can be difficult to place a monetary value on these items, but it’s not a bad idea to consider them when making your decision. For example, if there is a strong alumni network, it could help you find a job after graduation.

How you plan on paying for your MBA should also be factored into your decision-making process. Some companies may offer to cover a portion or all of the program’s tuition.

This can be a great benefit for those able to cash in, but review company policies because there may be some strings attached: You may be required to work for a specified number of years at your current firm, which could be unappealing if you’re interested in exploring a new industry.

Another option is MBA student loans, either private or federal. While federal student loans come with attractive protections, like deferment, forbearance, or income-driven repayment plans, private student loans could be an option as well.

In general, private student loans are borrowed as a last-resort option. Federal student loans, scholarships or grants, and other fellowships are generally preferable to private student loans.

Review the loans you are eligible for, including their terms, student loan repayment plans, interest rates, and any additional fees. Take the time to see how much you could be paying in interest over the life of the loan to get an idea of what your degree could truly be costing you.

When it comes right down to it, to help ensure you’re getting an affordable and valuable degree, do your research. Finding the best program for you may take a little time, but if you’re passionate about advancing your education and pursuing a career in business, the right MBA program can be a great step in the right direction.

The Takeaway

An MBA can be a solid step for those pursuing a career in business. Graduates learn valuable skills for the workplace and could improve their earning potential.

What may be a disadvantage to some considering graduate school is the cost of some MBA programs. There are alternatives that may make getting your MBA a more affordable goal. These options include part-time, online, one-year, or even some full-time in-person MBA programs.

MBA grads with student loans may find themselves in a position where they’re interested in refinancing after entering (or re-entering) the workforce.

Student loan refinancing lenders use criteria like borrower credit history and earning potential (among other financial factors) to determine the new interest rate and terms.

As a newly minted MBA holder, you’re on the path to upward mobility and may benefit from refinancing your student loans. Refinancing any federal student loans will eliminate them from federal benefits, things like income-based repayment plans or Public Service Loan Forgiveness. But, a lower interest rate could mean you’ll pay less money over the life of the loan. To see what your new loan could look like, check out our easy-to-use student loan refinance calculator.

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