How to Get Out of Student Loan Debt: 6 Options

Dealing with substantial student loan debt can be overwhelming, especially if you find yourself struggling to make your payments.

Fortunately, there are some options that may help minimize the amount of money you pay back, such as federal forgiveness programs and income-driven repayment plans. You also might be able to reduce your monthly payment with a student loan refinance or temporarily postpone your payments through deferment or forbearance.

Options to Get Out of Repaying Student Loans Legally

1. Loan Forgiveness Programs

Depending on your eligibility, there are a few different federal loan forgiveness programs available to borrowers with federal student loans. These programs could help you get out of paying a portion of student loan debt as they forgive your loan balance after a certain number of years.

Each forgiveness program has different eligibility criteria.

Teacher Loan Forgiveness

This federal student loan forgiveness program forgives the loans of highly qualified teachers. Depending on the subject area they teach, teachers who meet the eligibility requirements may have up to $17,500 or up to $5,000. Teachers are eligible to apply for this loan forgiveness program after they have completed five years of service.

Recommended: Explaining Student Loan Forgiveness for Teachers

Public Service Loan Forgiveness

This program is designed for those working in public service. In order to qualify for Public Services Loan Forgiveness (PSLF), applicants must meet the programs eligibility requirements, including:

•   Work for a qualified employer

•   Work full-time

•   Hold Direct Loans or have a Direct Consolidation Loan

•   Make 120 qualifying payments on an income-driven repayment plan

Borrowers who are interested in pursuing PSLF will have to follow strict requirements in order to qualify and have their loan balances forgiven.

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2. Income-Driven Repayment Plans

Income-driven repayment plans for federal student loans tie a borrower’s monthly loan payments to their income and family size. Depending on the specific income-driven repayment plan you select, your payment will typically be 10-20% of your discretionary income. However, depending on your income and family size, your payment could be as low as $0.

The repayment period for income-driven repayment plans varies from 20 to 25 years. While these plans help make loan payments more affordable for borrowers, extending the loan terms may result in accruing more interest over the life of the loan.

At the end of the loan term, any remaining loan balance may be forgiven. Be mindful that the forgiven amount may be considered taxable income by the IRS.

3. Disability Discharge

It may be possible to have federal student loans discharged if you have a permanent disability. To be eligible for the disability discharge, you need to show the Department of Education that you are not able to earn an income now or in the future because of your disability.

To do so, you need to get an evaluation from a doctor, submit evidence from Veterans Affairs, or show that you are receiving Social Security Disability Insurance. You cannot apply for disability discharge until you have been disabled for 60 months unless a doctor writes a letter saying that your disability and inability to work will last at least 60 months.

4. Temporary Relief: Deferment or Forbearance

This is an option to consider for borrowers struggling to make monthly payments on their federal student loans. Forbearance and deferment both offer borrowers the ability to pause their payments if they qualify.

Depending on the type of loan you have, interest may continue to accrue even while the loan is in deferment or forbearance. However, applying for one of these options can help borrowers avoid missed payments and potentially defaulting on their student loans.

Note that private student loans don’t offer the same benefits as federal student loans, but some may offer their own benefits. For example, SoFi offers Unemployment Protection, which allows qualifying borrowers to pause loan payments if they lose their job through no fault of their own.

5. Student Loan Refinancing

This option won’t get rid of your student loans, but it could help make student loans more affordable. By refinancing your student loans, you can potentially qualify for a lower interest rate, which can possibly lower your monthly payments or save you money on interest over the life of your loan.

If you refinance with a private lender, you can also change the term length on your student loans. While private lenders can refinance both your federal and private student loans, you do lose access to some protections that federal student loans provide, such as income-based repayment programs.

6. Filing for Bankruptcy: A Last Resort

Bankruptcy is a legal option to clear debt. However, it is extremely rare that student loans are eligible for discharge in bankruptcy. In some instances, if a borrower can prove “undue hardship,” they may be able to have their student loans discharged in bankruptcy.

Recommended: Bankruptcy and Student Loans: What You Should Know

Filing for bankruptcy can have long-term impacts on an individual’s credit score and is generally a last resort. Before considering bankruptcy, review other options, such as speaking with a credit counselor or consulting with a qualified attorney who can provide advice specific to the individual’s personal situation.

The Takeaway

It can be challenging to pay student loan debt, but there are options that can temporarily reduce or eliminate your payment. It is only in extremely rare circumstances that student loans can be discharged in bankruptcy.

For federal student loans, some options that can help alleviate the burden of student loan debt include deferment or forbearance, which may be helpful to those who are facing short-term issues repaying student loans. Another avenue to consider may be income-driven repayment plans, which tie a borrower’s monthly loan payments to their income, helping make monthly payments more manageable.

Refinancing student loans could be another option to consider. Qualifying borrowers may be able to secure a more competitive interest rate, which could result in less accrued interest over the life of the loan. This option won’t be right for all borrowers, as refinancing federal student loans eliminates them from federal benefits and protections.

If refinancing is something you are looking into, consider SoFi. There are no origination fees or prepayment penalties and it’s possible to get a prequalification quote in just a few minutes.

Prequalify for a student loan refinance today.



SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

CLICK HERE for more information.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.


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

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

Do you sometimes find that there is more money flowing out of your checking account than going in? The culprit could be overspending, or spending more than you can comfortably afford.

Breaking this habit isn’t necessarily as difficult, or painful, as many people assume.

Getting your spending to sync up better with your income and financial goals can boil down to a few simple steps. Among them are tracking your spending, setting up a budget (a basic one is fine), avoiding shopping temptations, and developing short- and long-term savings goals

Here, you’ll learn some ways to control excess spending and improve your money habits.

Easy Tips to Stop Overspending

Here are 9 ways you can take better control of your spending.

1. Following the Money

One way to gain control over spending is to actually track how much you’re spending each day (that includes every cash/debit/credit purchase you make, plus every bill you pay) for a month or so.

You can do this the old-school way, by carrying around a pad and pen or simply saving all of your receipts, and then writing up a list, or inputting these expenses into a spreadsheet on your computer.

There are also a number of apps that can make the process of tracking your daily spending easy. Your financial institution may have tools for this.

Once you start tracking your expenses, you may be surprised by what you discover. Spending tends to be so frictionless these days, many of us really don’t really have an accurate sense of how much money we are actually spending.

Seeing it clearly laid out can help you think twice before buying something nonessential, and also help you become more intentional with every dollar.

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2. Setting up a Budget that Works for You

Once you’ve done the work of tracking your monthly expenses, you may next want to compare this to how much money (after taxes) is coming in each month, and set up a personal budget.

This involves putting your spending into categories and also listing them in order of priority. Some of your expenses are necessary, such as rent and utilities, and would go high on the list, while others, like clothing, travel and entertainment, are more “nice to haves,” and would go lower.

When creating a budget, it is important to allot money for both necessary and unnecessary spending each month.
You may also want to allot a category for saving towards your short- and long-term goals, whether it’s building an emergency fund, coming up with a downpayment on a home, or funneling more money into your retirement fund.

In terms of how to allocate your funds, there are several types of budgets you might try.

Financial planners often recommend breaking down your after-tax income into three buckets according to the 50/30/20 rule:

•   50% on needs

•   30% on wants

•   20% on savings

Once you set up these spending parameters, and know how much money you can put into each bucket, the next step is to try to keep your spending in line with these goals.

3. Identifying Areas Where You Can Cut Back

To make it easier to spend within your budget, you may want to take a look at your list of expenses and find areas where you may be able to prune back.

For example, you might find you mostly watch streaming services, yet are still paying for a pricey monthly cable package. You could then take the cable plan down a notch, or reduce the number of subscriptions and save on streaming services.

Or, you might see that you’re paying for memberships you no longer need or use. If you’re grabbing take-out most nights, you might consider cooking at least a few nights per week.

You could likely also spend less on coffee, too, especially if your once-a-week fancy coffee habit has gotten more frequent.

Everyone spends differently and will likely have expenses they are used to paying for, but it’s possible that some of those expenses might not be that necessary, or even wanted anymore.

4. Consider a One-Month Spending Freeze

One quick way to change your spending strategies is to put yourself on a 30-day nonessential spending freeze.
Or, if that seems too tall an order, you might pick a category (such as clothing) to stop spending on for a month, or agree to not buy anything at a specific retailer for that period.

A spending freeze can immediately pay off by leaving more money in the bank (or fewer bills) at the end of the month.

And, once you start seeing the payoff of not giving in to impulse buying, you may find yourself cutting back on spending even after the freeze is over.

Another benefit of a spending freeze is that if you typically spend money when you are bored, this practice can help you break the habit.

5. Switching to Cash

It’s easy to spend money when only using credit cards and debit cards. Whenever possible, it’s a good idea to use cash so that it’s easier to track where money is going.

Consider taking out enough cash at the beginning of the week to cover your daily expenses to help you stick with your budget.

Or, you might want to try the envelope budget system. This involves gathering a bunch of envelopes for all your variable expenses, and labeling each one according to how much you’ve allocated in your budget. Then, put that amount of cash inside for the next week.

6. Unsubscribing

If your in-box is often cluttered with emails alerting you to sales at your favorite retailers, you may want to think about getting off these e-mailing lists.

Sales and great deals happen all year round, and generally the best time to purchase something is when you really need it. Even if you don’t find that needed item at its lowest ever sale price, you will likely end up spending less than buying more things simply because they are on sale.

If the temptation to buy doesn’t constantly land in your inbox, you’ll be less likely to give in to it (and won’t even know what you are missing out on).

This move could quickly translate into more cash, or one less bill, at the end of the month.

Recommended: How to Stop Compulsive and Impulsive Shopping

7. Asking the Right Questions When Shopping Sales

When shopping in stores, it can be tempting to pick up something on sale as a smart way to save money. However, this practice doesn’t always pay off, particularly if you’re purchasing items you really don’t need.

Before purchasing something on sale — no matter how good the deal is — consider answering the following questions:

•   Am I buying this only because it is on sale?

•   Do I really want or need this item?

•   Will this add to my credit card debt and is it worth doing that?

8. Shopping Smarter at the Grocery Store

We’ve all heard the advice, “don’t go to the grocery store hungry.” While that’s a good rule to follow, there are some other easy ways to save money on food. Such as:

•   Making a shopping list and only buying items on that list.

•   Planning meals ahead of time and stocking up on the exact groceries needed for that meal.

•   Buying produce when it is in season and costs less.

•   Stocking up on favorite non-perishables when they’re on sale.

•   Signing up for store reward membership programs (if free), and using coupons (which can often be found in newspapers, online at the store or manufacturer’s website, and on coupon specific websites) whenever possible.

•   Shopping low–food stocked on the shelf closest to the floor tends to cost less than that at eye level

•   Picking store brands, which often cost less but are of a similar quality to higher end products

•   Checking to see if purchasing a larger size offers a better value, as long as you will use it before the expiration date.

Recommended: Tips for Saving Money Daily

9. Creating Short- and Long-Savings Goals

Overspenders are often focused on the here and now, and may think less about how their spending can affect them in the longer term.

A great way to resist the urge to overspend is to create some savings goals. This might be having enough for a downpayment on your dream home, or building up an emergency fund for financial peace of mind. Or, maybe you’re looking to buy a car or renovate your kitchen in a couple of years.

Whatever you’re saving for, you may want to set up an account precisely for that purpose. As your account grows, you can gain motivation.

Consider putting the money earmarked for a short-term savings goal in a place where it can earn higher interest than a traditional bank account, but will allow you to access your money when you need it. Some good ideas include an online savings account, money market account, or a checking and savings account.

You may also want to consider your long-term goals, such as putting more money into your retirement account (if you aren’t already contributing the maximum allowed per year).

Another tip to try:

•   To keep you on track with your savings goals, also consider setting up automatic payments between your checking account (or wherever your paychecks are deposited) and your savings account. You could select a dollar amount to be sent each month after your paycheck gets deposited.

Automating is a simple and powerful way that can help make progress toward savings goals without having to think about it all the time.

The Takeaway

You may not be able to completely reform an overspending habit overnight. But by tracking your spending, setting up a basic budget, and altering some of your everyday habits, you may soon be able to gain control over your financial life and start reaching your short- and long-term savings goals.

One way to help keep spending in line (and jump-start savings) is to sign up for a SoFi Checking and Savings account. You’ll spend and save in one convenient place, plus be able to easily track your weekly spending in your dashboard within the SoFi Checking and Savings app.

Better banking is here with up to 4.30% APY on SoFi Checking and Savings.



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

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How Does Car Insurance Work?

How Does Car Insurance Work?

Most people know that after an accident, they’ll likely need to use the car insurance they’ve been diligently paying for. Car insurance can protect you from financial liability that has the potential to be devastating.

Being protected by a car insurance policy that is appropriate for your needs — and your budget — is vital.

What Is Car Insurance?

A car insurance policy is an agreement between you and your insurance company. At regular intervals — typically once a month, every six months, or annually — you pay the cost of the policy. In return, the car insurance pays for damages that occur when an accident happens, whether that damage is to your car or someone else’s car. What and how much the insurance will pay depends on the type of car insurance coverage you purchase.

How Does a Car Insurance Deductible Work?

If the time comes to put in a claim, you’ll most likely have to pay a deductible first. The deductible for car insurance works in a similar way to that for medical insurance. It’s the amount of money you will pay out of pocket on a claim before your policy picks up the rest — up to the limit you agreed to.

If you sign up for a high deductible, then your policy payments will be lower. A policy with a $1,000 deductible will not cost as much every month as a policy with a lower deductible. But if you find you need to put in a big claim to have your car fixed, you’ll have to come up with that $1,000 up front. If that is too big a hit for your bank account, then you may want to consider a lower deductible.

Most deductibles range from $100 to $2,000.

Recommended: 5 Steps to Switching Your Car Insurance

Types Of Car Insurance Coverage Options

Car insurance coverage varies by type of coverage, amount of coverage, and amount of deductible. Some drivers may want to purchase specialty coverage that will be priced separately — for example, coverage for antique automobiles or vehicles driven for commercial purposes, or ride-share insurance.

Insurance companies will pay up to the limits of the policy, after any deductible.

Liability Coverage

A basic car insurance policy is liability coverage that will pay if there are bodily injuries to people in the other car or vehicular damage to the other car, and you are at fault.

Uninsured or Underinsured Motorist Coverage

Sometimes included in a liability policy package, but also available as a separate part of a policy, is uninsured or underinsured motorist coverage. If someone without their own liability insurance coverage hits your car, this type of insurance pays for your bodily injuries and physical damage to your car.

Emergency Road Service Coverage

If your car breaks down, your battery dies, you lock your keys in your car, or other types of emergencies that might leave you stranded, emergency road service coverage can be helpful to have. This type of coverage, sometimes called roadside assistance coverage, may pay for a tow truck, a locksmith, or even bring gas to you so you can make it to the next gas station. This is generally very affordable coverage to add to a policy.

Comprehensive and Collision Coverage

Comprehensive insurance covers repairs to a car that is damaged — outside of an accident — or stolen. Damage could be things like vandalism, a broken windshield, a fallen tree on your car, or other occurrences out of your control.

Collision coverage will pay to repair or replace your car if it’s damaged in an accident with another car or even an object such as a fence or tree.

These two coverages are sometimes listed together as “comp and collision” on a policy, but they are available as separate purchases in most cases. Both may be required by a lender if you’re leasing a car or still paying on an auto loan. They’re the most common types of car insurance to include in a deductible.

Personal Injury Insurance

Personal injury insurance, or medical payments coverage, will pay for your and your passengers’ medical expenses after an accident, no matter which driver was at fault.

Gap Insurance

If you are still making auto loan payments or you’re leasing a car, gap insurance might be something to consider. This type of coverage will pay the difference between the amount the car insurance company pays and what you still owe on the purchase or lease in the case of a total loss after an accident.

Understanding car insurance terms will help you make a smart decision about what types and amounts of coverage to purchase.

Do You Need Car Insurance?

In most states, you must have at least some form of liability coverage. In fact, to legally register and drive your car, you’ll have to establish and maintain a minimum level of coverage.

New Hampshire and Virginia are two exceptions.

•   New Hampshire drivers are not required to carry any automobile insurance unless they have been convicted of driving while intoxicated, have had their driver’s license revoked, or were at fault in a car accident and were uninsured, among other stipulations.

•   Virginia drivers who choose not to carry liability insurance must pay an uninsured motor vehicle fee when they register and license their vehicle.

In all U.S. states, driving without at least minimum liability coverage may result in being fined and even losing your driver’s license.

How Much Car Insurance Do You Need?

After you’ve purchased liability coverage, other coverage may be optional. Older cars whose value is lower than the coverage costs, including any deductible, might just need liability coverage, instead of comprehensive and collision coverage.

Some things to consider when purchasing insurance are the value of your car, your driving history, how far and how often you drive the car, and how much you could afford to pay out of pocket if you are in an accident.

Recommended: How Much Auto Insurance Do I Really Need?

Discover real-time vehicle values with Auto Tracker.¹

Now you can instantly monitor vehicle prices in this unprecedented market—to help you make smart money moves.


How Much Does Car Insurance Cost?

According to Bankrate.com, the average full-coverage car insurance policy costs $2,014 per year or about $167 a month. However, these averages vary widely by state. Michigan, Louisiana, Florida, and Nevada reportedly have the most expensive car insurance policies.

Other factors that go into car insurance policy prices are what kind of driving record you have, your age and gender, and the type of car you’re insuring, among others. If you get a speeding ticket or you’re at fault in an accident, your insurance policy is most likely going to go up in cost.

Car insurance is highly competitive, so comparison shopping can be a wise move.

Recommended: How Much Does Insurance Go Up After an Accident?

How to File a Car Insurance Claim

It’s recommended that claim filing should happen as soon as possible after an accident. Call your insurance company and be ready to inform your insurer which vehicle was involved, who was driving, the exact location and time of the accident, the description of the damage, and the name and insurance of the other driver.

If the incident you report is covered, your insurer will pay, up to the policy limits, for the cost of the damage you caused, or the damage to your car, minus the deductible if you have one. Your insurer may pay you directly. Or payment may be made to the other driver or to the repair shop working on your car.

Some insurers request a copy of the police report filed on an accident. If you didn’t call the police at the scene, you can still go to the local police precinct to file a report.

Recommended: Car Insurance Guide for New Drivers and 3 Ways to Save

The Takeaway

Car insurance pays a claim when there are injuries to people and damages to a vehicle when an accident has occurred. Types of coverage vary from minimal liability coverage to more broad-spectrum comprehensive and collision coverage, in addition to some coverage for special situations.

Taking the opportunity to compare car insurance companies before committing to a policy can be a smart move that might save you money on your insurance rate. When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

Compare quotes from top car insurance carriers.


Photo credit: iStock/Melena-Nsk

¹SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. Vehicle Identification Number is confirmed by LexisNexis and car values are provided by J.D. Power. Auto Tracker is provided on an “as-is, as-available” basis with all faults and defects, with no warranty, express or implied. The values shown on this page are a rough estimate based on your car’s year, make, and model, but don’t take into account things such as your mileage, accident history, or car condition.
SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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What Does Car Insurance Cover?

What Does Car Insurance Cover?

Should you get into a car accident and harm someone else or yourself with your car, your car insurance may cover the costs of medical bills. Depending on the coverage included in your policy, car insurance could also cover damage to your car while it’s parked, like if a large tree branch were to fall on it.

Ultimately, what your auto insurance will cover — and how much — depends on what type of car insurance you have and the amount of coverage you select. Read on to learn more about how exactly auto insurance works.

How Car Insurance Works

When you purchase car insurance, you can choose different types of insurance and policy amounts. Depending on the state where you live, there are certain car insurance requirements you’ll need to meet — more about this later on.

Adding more types of insurance and higher coverage limits provides greater coverage, but it also raises your premiums. Having a lower deductible can also bump up your rates. On the other hand, a higher deductible can lower your rates. (A deductible is a common insurance term that means how much you would need to pay upfront before insurance coverage kicks in.)

Recommended: How Does Car Insurance Work?

Car Insurance Requirements

Most states require car insurance, with the type of insurance and minimum coverage amounts depending on the state.

The only two states that do not require car insurance are Virginia and New Hampshire. While auto insurance is not mandatory in New Hampshire, if you’re at fault in an accident, you would need to show that you have enough funds to meet the state’s motor vehicle financial responsibility requirements. In Virginia, if you don’t have the minimum coverage amounts for car insurance, you’ll need to pay a yearly uninsured motor vehicle fee of $500 on top of your regular registration fees.

If you’re not sure what the minimum requirements for car insurance are where you live, you can check your state’s DMV site. Keep in mind that while you can squeak by with the minimum coverage, how much car insurance you need varies. Depending on your situation, it may be a good idea to get more coverage.

Discover real-time vehicle values with Auto Tracker.¹

Now you can instantly monitor vehicle prices in this unprecedented market—to help you make smart money moves.


Types of Car Insurance

When comparing car insurance, there are six main types to keep in mind.

Bodily Injury Liability

If you get into a car accident and are found to be at fault, bodily injury liability coverage can help cover medical bills and wages lost for taking time off of work because of bodily harm. It can also cover named drivers, such as family members on your policy or drivers who are using your car with your permission.

Bodily injury liability is typically must-have coverage. According to the Insurance Information Institute (III), the average claim for bodily injury was $22,734 in 2021. Having enough coverage could help protect your property, assets and home.

Collision

If you crash into another car or an object, or your car gets damaged from driving over a pothole, collision coverage can pay for the costs to repair any damages to your car. It can also cover damages should your car flip over. Once your deductible is paid, the coverage will kick in.

If the other driver is the one at fault, then typically a claim can be filed with their insurance company and they’ll cover the costs. In the case the other driver’s coverage amounts aren’t enough, and you don’t have uninsured motorist coverage (sometimes called underinsured coverage), then your own collision policy can step in.

If you’re taking out a loan and still paying off your car, lenders likely require you to have full coverage, which includes liability, collision, and comprehensive insurance.

Recommended: How Much Does Insurance Go Up After an Accident?

Comprehensive

While collision coverage can cover the costs of damage during a car crash, comprehensive liability includes everything else — like a deer running into the front of your car, riots and vandalism, a tree branch falling on your car, or a hail storm or other natural disaster. Comprehensive coverage can also pay for a broken windshield (though whether it makes sense to file a claim depends on your policy and deductible). It can also cover theft, of either your entire car or a piece of your car, such as a hood ornament.

As mentioned before, if you’re still making payments on your car, you most likely are required to have both comprehensive and collision insurance in addition to liability coverage.

Personal Injury Protection (PIP)

Should you, the driver, or your passengers get harmed in a car accident, personal injury protection (PIP), also known as medical payments coverage, can help pay for medical bills, lost wages and sometimes funeral costs. It can cover these costs no matter who is at fault, hence why it’s sometimes called no-fault insurance.

Depending on your policy, PIP can also help pay for bodily harm should you get injured while walking or riding a scooter or a bike.

Property Damage

Like bodily injury liability, property damage coverage is also usually required in most states. Let’s say you or a named driver on your policy damages another vehicle or property, such as the side of a building. In these situations, property damage can reimburse the cost of repairs.

Uninsured or Underinsured Motorist

In the case of a hit-and-run, uninsured or underinsured motorist coverage can foot the bill for covered damages. Or, should someone who hits you not have adequate insurance, this type of policy can help pay for any shortfalls.

Special Considerations When Choosing a Policy

Besides the standard types of policies, there are some additional considerations to keep in mind when it comes to choosing an auto insurance policy.

Roadside Assistance

While not a type of insurance, roadside assistance can come in handy should you get a flat tire or your battery dies while on the road. While you can usually attach this to your existing auto policy as an add-on, what exactly is covered might vary by carrier.

Outside of purchasing roadside assistance as an add-on to your car policy, you can also shop around for companies that offer roadside assistance as a standalone service.

New Car Replacement Coverage

If your new car gets totaled, new car replacement coverage can replace the vehicle in its entirety. This is usually available as an add-on if you purchased a policy with collision and comprehensive insurance.

Depending on the insurance company and carrier, this might cover cars that are no more than two years old. Plus, restrictions and limitations might differ.

Rental Reimbursement Coverage

If your car is getting repaired and those repairs are covered under a car insurance claim, a policy might include an add-on to cover the fees for getting a rental car or other transportation while your vehicle is in the shop. Whether you take public transit, rent a car, or take a rideshare, what exactly is covered depends on your specific policy and limits.

Rideshare Coverage

If you’re a rideshare driver for a company like Uber or Lyft, you’ll need to meet the minimum coverage amounts for that particular company. Some insurance companies provide rideshare coverage in their policies. If not, you might need to get a rideshare endorsement or a separate rideshare insurance policy.

Car Rental Coverage

If you have liability and comprehensive coverage on your car, then that coverage can typically carry over to when you rent a car within the country. As mentioned before, depending on the particulars of the policy and car insurance company, this might not be applicable in every state, and the amount of coverage can also vary.

Recommended: Car Insurance Guide for New Drivers and 3 Ways to Save

What Does Car Insurance NOT Cover?

While auto insurance can cover a lot of things, it doesn’t cover normal wear and tear or routine maintenance. And unless it’s a rental car, it doesn’t provide coverage when you’re driving someone else’s car.

A policy also doesn’t pay for lost personal belongings in your car, such as headphones or gym gear. This could be covered by a homeowners or renters insurance policy.

At the end of the day, not all policies are alike nor are they created equally. It’s important to check to see what your policy will cover.

The Takeaway

There are six main types of insurance: bodily injury liability, collision, comprehensive, personal injury protection, property damage and uninsured or underinsured motorist coverage. The type of coverage and limits required vary by state. When choosing a policy, you’ll also want to consider whether additional coverage like roadside assistance, car rental coverage, or new car replacement coverage is right for you.

Taking the opportunity to compare car insurance companies before committing to a policy can be a smart move that might save you money on your insurance rate. When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

Compare quotes from top car insurance carriers.


Photo credit: iStock/tommaso79

¹SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. Vehicle Identification Number is confirmed by LexisNexis and car values are provided by J.D. Power. Auto Tracker is provided on an “as-is, as-available” basis with all faults and defects, with no warranty, express or implied. The values shown on this page are a rough estimate based on your car’s year, make, and model, but don’t take into account things such as your mileage, accident history, or car condition.
SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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31 Tips for Cutting Your Grocery Bill

You may think there’s not much you can do about the high cost of groceries. After all, we all have to eat!

But the truth is, there are a number of relatively easy ways to slash your weekly spending on groceries. And, saving at the supermarket doesn’t have to mean skimping on taste, quality, or nutrition.

What follows are 31 simple tricks that can help you shop smarter and spend less every time you hit the supermarket.

Tips for Grocery Shopping on a Budget

1. Making – and Sticking to – a List

Impulse buys can quickly bust your budget. So before going to the supermarket it can be wise to plan out your meals and make a detailed list of all the things you will need, including any household supplies.

At the store, you’ll want to be strict about sticking to the list. Yes, those pineapples look great and they’re on sale, but are they on your list? No? Then you should probably keep walking.

Shopping with a list not only helps save money but can also cut down on food waste — the items that tend to sit idle in the fridge or on the countertop are often the ones that never had an assigned meal to begin with.

2. Eating Before You Go

If you enter a supermarket hungry, there’s no telling what you’ll end up putting into your cart because, since just about everything is going to look good.

Walk into the grocery store with a full stomach, on the other hand, and you might be shocked by how much lower your grocery bill is.

3. Planning for Leftovers

According to a study by Bosch home appliances, the average American tosses $53.81 worth of spoiled food a week from their refrigerator, or $2,798 every year.

One reason that food goes to waste is that it can be difficult to buy the exact amount of food you need to make the meals we’ve planned. This can result in leftover ingredients languishing in the fridge or pantry, and then landing in the trash can.

You can help reduce wasted food (and money) by doubling your recipe and then having leftovers for lunch and/or putting some in the freezer so you’ll have a meal at the ready when you need it.

Recommended: How Much Should I Spend on Groceries a Month?

4. Grocery Shopping Online

Think you’ll be tempted to go off-script if you enter a grocery store? You might want to try online grocery shopping instead. Many local supermarkets offer online ordering, and allow you to choose either curbside pick-up or delivery.

Or, you may want to try one of the many online grocery services, such as Peapod, Instacart, or Amazon Fresh. You can often choose one-off delivery, as well as recurring delivery of staples (like toilet paper) so you never run out.

It can be easier to avoid the temptations when you can type everything you need into a search bar. Plus, shopping online makes it easy to compare brand prices, see what’s on sale, and watch the total tally up in real time.

💡 Quick Tip: Tired of paying pointless bank fees? When you open a bank account online you often avoid excess charges.

5. Developing a Green Thumb

Even if you’re not much of a gardener, you might want to try growing one or two of your favorite vegetables in a container or a small garden area outdoors. You can then step outside and pick your tomato or bell pepper rather than buying them at the store.

If you don’t have any outdoor space, you might consider starting an indoor herb garden. If you have parsley, basil, or cilantro right on your windowsill, you can just pick what you need rather than buy a whole bunch at the market.

6. Sticking to Stores You Know

Having a tried-and-true grocery store may be good for your wallet. Walking into a store you’re familiar with means you already know where to get the items on your list.

Head into an unfamiliar store and you may be left wandering the aisles for what seems like an eternity trying to find your goods.

That’s because grocery stores are set up to be a little confusing and to drive consumers to have to do a bit of wandering, as that’s when you’re more likely to make random purchases.

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

7. Bringing Your Own Bags

One quick way to potentially drive down the cost of your grocery store run is to BYOB — bring your own bags. Many cities and states have imposed plastic bag bans. If you show up empty-handed, you’ll be stuck purchasing reusable bags at the checkout.

In areas where plastic bags are allowed, many stores will reward customers who bring reusable bags by reimbursing them about 5 to 10 cents a bag at checkout. BYOBing is also kinder to the environment.

Keeping some reusable bags in your car is a good way to avoid forgetting them at home.

8. Joining Loyalty Programs

Many stores now offer discounts for regular shoppers and even secret sale items only for those who’ve signed up.

It’s typically quick, easy, and free to join, though some stores like Whole Foods require customers to be part of its Amazon Prime membership service (which comes with a yearly fee). Still, it may be worth it as discounts at the register can add up to real savings.

9. Embracing Meatless Mondays

Reducing meat consumption and eating more plant-based meals has benefits for the environment, your waistline, and your wallet.

Chickpeas, black beans, peas, brussel sprouts, quinoa, tofu, along with many other beans, whole grains, and vegetables are all excellent (and inexpensive) sources of protein without the added saturated fat that comes with animal products.

You may want to consider going meatless at least one day a week, and then building up to a few meat-free meals per week.

10. Buying Larger Containers

Buying the largest size of packaged, canned, and frozen foods can sometimes help you save money on food. That’s because some of the cost of every grocery item is in the packaging.

If your grocery store has a “bulk foods” section you might save even more by buying the amount of food you need in plastic bags.

11. Thinking Beyond Fresh Produce

Another way to save money at the grocery store is to buy fruits and vegetables in the frozen or canned foods aisle. The savings can add up, especially when the food is out of season.

If you’re looking to add pineapple to a recipe in the winter, for example, you can save money by opting for canned pineapple over a fresh one that’s not in season. Canned and frozen fruits and vegetables also don’t go bad as quickly as fresh, so they may be less likely to get wasted.

12. Trying a CSA

A Community-Supported Agriculture (CSA) program can help you save money on fresh produce, eggs, and herbs. You can look for one using the USDA’s CSA directory and see if they’ll deliver to your front door.

Not only will you be saving money but you’ll be supporting local farmers and eating food that’s close by helps ensure it’s fresher.

13. Clipping Coupons

While it’s not rocket science, this tried-and-true technique is still one of the best ways to cut your grocery bill. You may want to consider scanning the local circulars that come in the mail to see which stores are having deals on the food items you need that week. You can also look for manufacturers’ coupons (online and in circulars inserted into Sunday newspapers).

When it comes to couponing, however, it’s wise to make sure that you’re only buying items you need and usually buy — otherwise you could end up adding to, not shrinking, your grocery bill.

Recommended: How to Coupon for Beginners

14. Shopping in Season

Another way to spend wisely is to cook and shop seasonally. It’s typically cheaper to buy fruits and vegetables that are in season than ones that have been shipped to the store from a far-away place where it can be grown year-round.

Also, since in-season produce is in large supply, it tends to be sold at affordable prices to maintain demand. In-season produce also tends to be tastier.

15. Using Apps

There are a number of rebate apps you can download onto your phone for free that allow you to get cashback on items you purchased. Options include Ibotta, SnipSnap, Saving Star, Coupon Sherpa, and Checkout 51, and Fetch Rewards.

While rebates don’t give you a discount upfront (like a traditional coupon), you should see savings in the long run.

If you frequently shop at large chains like Walmart or Target for groceries, getting their apps may help you earn rewards and get discounts for being a loyal shopper. You just need to scan your mobile app when you check out.

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16. Stocking up on Shelf-Stable Items

When your grocery store is having a sale on canned goods, dried goods, or other pantry items, you may want to consider buying multiples. Items like beans, sauces, soups, nuts, peanut butter, pretzels, shelf-stable snacks like unpopped popcorn won’t expire for a long time.

You’ll be able to enjoy the cost savings and will likely appreciate having them on hand when preparing meals.

17. Buying Store-Brand or Generic

You don’t have to sacrifice flavor and taste in order to save money while grocery shopping. While It’s easy to overlook no-name or store brands, in many cases these items are actually made by the brand name companies, just with a different label.

And the savings can be real. Preparing dinner using generic (rather than brand name) products can save as much as $20 a week — or $80 a month. You can put that extra cash right into your bank account.

18. Shopping the Outside Aisles

The inside aisles of the grocery store are where pricier processed foods are typically stocked, The outer edges, on the other hand, is where you tend to find fresh fruits and vegetables, grains and beans.

Shopping on the edge — and filling your cart with nutrient-dense items and fresh, seasonal food — can help your wallet, as well as your waistline.

Recommended: Examining the Price of Eating at Home vs Eating Out

19. Portioning Food Out Yourself

It can be tempting to buy convenience items where food is pre-portioned into single servings so you can just grab-and-go. Smaller items can also help you keep from overeating. But all of that packaging tends to increase the cost of the item.

If your kids love crackers, you may want to buy a full-size box and portion them out in zip-top bags or reusable containers. You can do the same with other favorite snacks so you won’t be tempted to eat the whole bag in one sitting. You can also spoon yogurt into small containers for school and cut cheese into slices from a block for easy snacks.

💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

20. Drinking Tap Water

To avoid spending money on bottled water, you may want to get a filtered pitcher and switch to drinking tap water. By drinking from a reusable water bottle or a glass throughout the day, you’ll also reduce the amount of plastic waste you’re putting into the environment.

Getting your kids used to drinking water instead of juice or soda can also reduce your supermarket bills.

21. Using a Smaller Cart

If you’re not shopping for a full week’s worth of groceries, consider grabbing a small cart or, even better, a hand-held basket. This will automatically limit how much you can buy because only so much will fit.

When you have a smaller cart — or a basket that will get heavy quickly — you’re forcing yourself to ask, “Do I really need this?” every time you pick up something to buy in the store.

22. Minimizing Trips to the Store

One way you can save money on your grocery bill is to only shop when you need to and to minimize the frequency that you set foot in the supermarket door.

The reason is that the less often you’re physically in the store, the less likely you’ll be tempted to buy something you don’t absolutely need. It can be all too common to go to the grocery store for “one thing” and come out with a few items.

23. Shopping Off-Peak

Most of us don’t want to spend our weekends grocery shopping, right? Unfortunately, Saturdays and Sundays are the days when many of us have the time to go to the supermarket — along with everyone else in our town.

Shopping during peak times can hurt your budget in a few ways. You might try to speed through the supermarket and be more likely to buy an item at the end of the aisle because it’s convenient, rather than grab a similar product on the shelf a few feet away. This could mean they are buying a more expensive version of what they need.

You might also run into trouble shopping during peak times because you’re more likely to get stuck in a long line — and become tempted by miscellaneous items stocked near and along the checkout line.

24. Calculating the Bill While You Shop

Shopping with a calculator or getting out your phone and adding things up as you put them in your cart can help you stick to your spending plan. (If you’re shopping with kids, you can give them the job to tally what’s in the cart.)

By keeping a running tally of how much money is in your cart, you can save yourself from any unpleasant surprises during check-out. Plus, it can make you think twice before putting any extras in your cart.

25. Shopping Your Pantry First

It’s easy to accidentally buy an extra item at the supermarket that you didn’t realize you already had stored at home. That’s why after you write your grocery list, it can be a good idea to double-check pantry shelves, spice racks, the fridge, and the freezer to make sure you truly need what’s on your list.

You may even want to shop your pantry and fridge before making your meal plan and shopping list to see if you can think of meals that incorporate foods you already have on hand.

26. Paying with Cash

A simple trick for lowering your grocery bill is to set your budget and then only bring that much money in cash, leaving the plastic at home.

This will help ensure that you stick to your list and avoid grabbing any tempting extras. You can only spend what you have in your wallet. Full stop.

Recommended: Envelope Budgeting Method

27. Making Breakfast for Dinner

Eggs are one of the most affordable protein sources out there. By making simple breakfast-style food for dinner, you’re offering your family a fun meal and using up some of your (affordable) breakfast foods.

You might consider making an omelet or frittata with eggs, cheese, and leftover vegetables, whipping up blueberry pancakes, or creating a bacon, egg, and cheese burrito. Not only are many breakfast recipes a delicious dinner option, but they’re affordable and often quick to prepare.

28. Avoiding Eye-Level Items

Grocery stores are designed to get you to spend more money, which is why the most expensive products tend to be stocked at eye level. Brands often pay more money for their products to be displayed prominently so you’re more likely to buy them.

Searching high and low when you’re shopping may yield significant savings. Once you start looking, you may even notice a price differential between the eye-level item cost and the one at your feet.

Recommended: How to Stop Spending Money

29. Baking Your Own Treats

Many impulse buys happen in the bakery and snack sections of the supermarket. Before you succumb, you may want to ask yourself if you could bake it at home. You may already have the baking basics on your pantry shelves and could whip up some muffin or cookies fairly quickly. Or, you might want to buy a mix to save time (you’ll still save money).

Before buying chips and snacks, you may also want to consider if there is a more affordable DIY option, like buying popcorn kernels to cook on the stove.

Asking yourself, “Can I make this?” will likely result in saving money and getting the freshest item possible. This way, you can reward yourself without breaking your budget.

30. Hitting the Store on a Wednesday

When it comes to snagging good deals, shopping on a Wednesday may be beneficial. That’s because grocery stores tend to restock their shelves and make new mark-downs in the middle of the week. Since they’re in the process of changing the discounts, they may still honor the price cuts from last week’s sale as well as the new ones.

31. Doing the Prep Work Yourself

Those packaged baby carrots and bagged pre-washed salads make it easier to eat healthier, but if you’re willing to do the cleaning, prepping and chopping of fresh produce, and even meats and poultry, you can save money.

A boneless, skinless chicken breast package will cost more than buying a whole chicken. You’re paying for the convenience. By setting aside time to prep and chop your foods after you get home from grocery shopping, you’ll likely reap savings.

The Takeaway

A little planning and knowing some money-saving tricks can help you lower your monthly grocery bill and stick to your budget.

By following these budget shopping tips, you may find that you have more money left over each month to pay down debt, invest for the future, or save for something fun.

Better banking is here with up to 4.30% APY on SoFi Checking and Savings.


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