SoFi

The Federal Home Loan Mortgage Corporation, or FHLMC, is known as Freddie Mac, the entity created by Congress for the purpose of buying mortgages from lenders to increase liquidity in the market. Freddie Mac was created in 1970 and expressly authorized to create mortgage-backed securities (MBS) to help manage interest-rate risk.

Because the FHLMC buys mortgages, lenders don’t have to keep loans they originate on their books. In turn, these lenders are able to originate more mortgages for new customers. The mortgage market is able to keep capital flowing and offer competitive financing terms to borrowers because of this system. In other words, the market runs more smoothly because of Freddie Mac and its sister company, Fannie Mae, the Federal National Mortgage Association (FNMA).

If you want to know more about how this government-sponsored enterprise works and how it affects your money, read on for details on:

•   What is the FHLMC and what are FHLMC loans?

•   What is the difference between Freddie Mac and Fannie Mae?

•   What are Freddie Mac mortgages?

•   How does the Federal Home Loan Mortgage Corporation work?

Freddie Mac and Fannie Mae

These organizations, with their friendly-sounding nicknames, serve a very important purpose. Freddie Mac and Fannie Mae were created for the purpose of stabilizing the mortgage market and improving housing affordability. These government-sponsored enterprises (GSEs) do this by increasing the liquidity (the free flow of money) in the market by buying mortgages from lenders. Mortgages are then pooled together into a mortgage-backed security (MBS) and sold to investors. The process created the secondary mortgage market, where lenders, homebuyers, and investors are connected in a single system.

In the past, Freddie Mac and Fannie Mae operated as private companies, though they were created by Congress. Fannie Mae came first in 1938, followed by Freddie Mac in 1970. Freddie Mac’s addition in 1970 resulted in the creation of the first mortgage-backed security.

The federal government took over operations at both companies following the financial crisis in 2008. According to the National Association of Realtors®, without government support of Freddie Mac and Fannie Mae, there wouldn’t be very much money available to lend for mortgages.

The Federal Housing Finance Agency (FHFA) has oversight of Freddie Mac and Fannie Mae. On a yearly basis, it assesses the financial soundness and risk management of Fannie Mae and Freddie Mac.

What Is the Purpose of the FHLMC?

As mentioned above, the FHLMC, or Freddie Mac, makes the housing market more affordable, stable, and liquid by buying mortgages on the secondary market. When they buy these loans, the retail lenders they buy them from are able to originate more mortgages to new customers and keep the mortgage market flowing smoothly.

There are many types of mortgage loans; the ones that Freddie Mac buys are known as conventional loans. The mortgage loan must conform to certain standards (such as loan limits) for Freddie Mac to guarantee they will buy these loans.

In general, the process of successfully obtaining a mortgage usually looks something like this once the buyer has made an offer on a house that’s been accepted:

•   The consumer finds a lender, if they haven’t already done so, and will apply for a mortgage.

•   The lender collects documentation required by the loan type and submits it to underwriting.

•   The underwriter approves the loan.

•   The homebuyer closes on the loan, and mortgage servicing begins.

•   The lender sells the loan on the secondary mortgage market to Freddie Mac (or Fannie Mae or Ginnie Mae, depending on what type of loan it is and from what type of lender it originated).

From a homeowner standpoint, they will see the outward mortgage servicing, which is the entity to which they will send their monthly payment and who takes care of the escrow account. The mortgage servicer is the one who forwards the different parts of the mortgage payment to the appropriate parties.

Mortgage servicing can also be sold from servicer to servicer, but this is different from the sale of a mortgage to Fannie Mae or Freddie Mac.

Freddie Mac is also tasked with the responsibility of making housing affordable. There are specific mortgage programs guaranteed by Freddie Mac and offered by lenders.

•   HomeOne®. HomeOne is a mortgage program that offers low down payment options for first-time homebuyers. There are no income or geographic limits.

•   Home Possible®. Home Possible is a program for first-time homebuyers and low- to moderate-income homebuyers. It offers discounted fees and low down payment options.

•   Construction Conversion and Renovation Mortgage. This type of loan combines the costs of purchasing, building, and remodeling into one loan.

•   CHOICEHome® offers financing for real-property factory-built homes that are built to the HUD Code and have the features of a site-built home. This is an option for those buying manufactured homes.

Recommended: What Is the Average Down Payment on a House?

Understanding Mortgage-Backed Securities

After a mortgage is acquired from a lender, Freddie Mac can do one of two things: either keep the mortgage on its books or pool it with other, similar loans and create a mortgage-backed security (MBS). These MBS are then sold to investors on the secondary mortgage market.

What’s attractive about a mortgage-backed security to an investor is how secure it is. Fannie Mae and Freddie Mac guarantee payment of principal and interest. Both Fannie Mae and Freddie Mac issue mortgage-backed securities now.

Does the FHLMC offer Mortgage Loans?

Freddie Mac does not sell mortgages directly to consumers. You won’t see a Freddie Mac mortgage or an FHLMC loan advertised to consumers. Instead, the FHLMC buys mortgages from approved lenders that meet their standards.

Recommended: What Are the Conforming Loan Limits?

The Takeaway

The housing market in the United States arguably benefits from the role of the Federal Home Loan Mortgage Corporation. Lenders can essentially originate mortgages to as many borrowers as can qualify. The free flow of capital created by the FHLMC also means mortgages are less expensive for homebuyers all around. In short, the smooth operation of the housing market owes much of its success to Freddie Mac and Fannie Mae.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQs

What does FHLMC stand for?

FHLMC is an abbreviation of Federal Home Loan Mortgage Corporation. It is commonly referred to as Freddie Mac.

What type of loan is FHLMC?

Freddie Mac guarantees conventional loans that adhere to funding criteria, but it does not offer Freddie Mac mortgages directly to consumers.

What is the difference between FNMA and FHLMC?

Fannie Mae and Freddie Mac originated in different decades and initially had different purposes, but for the most part, they serve the same purpose today of helping to improve mortgage liquidity and availability.

Photo credit: iStock/Andrii Yalanskyi

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

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

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.

SOHL-Q125-052

Read more

Do you want to invest in transportation stocks or a transportation ETF? Here’s everything you need to know to get started investing in transportation.

Read more

Most drivers know that the cost of car insurance in California varies, sometimes by hundreds of dollars. What you pay may be substantially different from what your friend pays, even if you have similar driving records and similar cars. That’s because there are dozens of data points that car insurance companies consider, from your age and Zip code to your insurance deductible and amount of coverage.

Keep reading to find out the average cost of car insurance in California, and how you can lower your premiums without sacrificing the coverage you need.

How Much Does Car Insurance Cost in California?

Drivers in California pay on average $1,782 a year for auto insurance, according to U.S. News & World Report. In a state where housing prices and the cost of living are so high, it stands to reason that car insurance is expensive as well. But what exactly goes into insurance companies’ calculations?

The California Department of Insurance weighs the following information in its estimates:

•   Coverage type. Liability Only vs. Standard.

•   Location. Divided into cities and, in bigger cities, into regions/neighborhoods.

•   Number of drivers covered. Single, couple, or family.

•   Years licensed.

•   Annual mileage.

•   Driving record.

•   Vehicle.

Average Car Insurance Cost in California per Month

Interested in getting car insurance in California? As you shop around, keep in mind that each insurance company has its own formula for calculating insurance rates. The table below shows how premiums vary among the ten largest insurance companies serving California.

Insurance Company	Annual Premium	Monthly Premium
Allstate	$1,884	$157
CSAA	$1,785	$148.75
Farmers	$2,130	$177.50
Geico	$1,352	$112.66
Kemper	$2,007	$167.25
Mercury	$1,503	$125.25
Nation General	$1,703	$141.91
Nationwide	$2,683	$223.58
State Farm	$2,042	$170.16
Wawanesa General	$1,214	$101.16

Source: U.S. News & World Report

Average Car Insurance Cost in California By City

Your location has a big influence on the cost of car insurance in California. Insurance companies actually track traffic volume, accidents, and crime in different neighborhoods across the state. Drivers in more populated areas typically pay more than those who live in small towns or out in the countryside.

Here are average costs for standard car insurance in ten of California’s biggest cities.

City	Annual Premium	Monthly Premium
Anaheim	$2,572	$214.33
Bakersfield	$2,477	$204.42
Fresno	$2,385	$198.75
Long Beach	$2,681	$223.42
Los Angeles	$3,149	$262.42
Oakland	$2,802	$233.50
Sacramento	$2,665	$222.08
San Diego	$2,324	$193.67
San Francisco	$2,777	$231.42
San Jose	$2,406	$200.50

Source: Insure.com

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car?

Average Car Insurance Cost in California By Age of Driver

A driver’s age (or experience level, really) also plays a role in the cost of car insurance. A teenager who has just gotten their license is considered a greater risk by insurance companies. Higher risk translates to higher premiums. This is why many teens share a policy with parents. Once a driver hits age 20 (and still has a clean driving record), premiums often decrease. To find the best deal for younger drivers, compare quotes from an online insurance marketplace.

Age of Driver	Average Annual Cost for Men	Average Annual Cost for Women
17	$4,896	$4,896
25	$2,149	$2,149
60	$1,546	$1,546

Average Car Insurance Cost in California After an At-Fault Accident

Your driving record has a major effect on your insurance premiums. Whether you’re involved in a fender bender or a more serious crash, chances are your car insurance rate will go up after an accident. According to U.S. News & World Report, California drivers who have one accident pay an average of $2,910 per year for coverage. By comparison, drivers with a clean record pay around $1,782 per year for coverage.

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

Average Car Insurance Costs for Good and Bad Credit

In California, insurance companies can’t factor in credit scores when underwriting car insurance policies. So your credit history won’t have an affect on your ability to get or renew a car insurance policy — or how much you’ll pay.

Californians should be thankful for this. In New York state, drivers with excellent credit pay on average $2,096, while those with poor credit pay — whoa! — $4,088.

Recommended: How to Get Car Insurance

What Else Affects Your Car Insurance Cost?

As noted above, there are dozens of data points that insurance companies can use to estimate their risk and set premiums accordingly. One is marital status. Another is your car’s make and model, as well as its safety features and overall value.

Aside from the driver and the car, the type of policy impacts premiums. The more coverage you have, the more expensive your policy will be. Your state’s minimum car insurance requirements will get you the most rock-bottom premiums.

The type of deductible you choose also influences your cost. With a higher deductible, your premiums will be lower. The trade-off is that, if you get in an accident, you’ll be responsible for a larger share of the repair bill. In short, you can pay now or pay later.

How to Get Affordable Car Insurance

To find the most affordable car insurance for your profile and needs, it’s best to shop around and compare quotes. These days, online insurance marketplaces make that easy to do.

Once you’ve chosen one or two reputable insurers, it’s important to ask yourself how much car insurance you need. This goes back to the “pay now or pay later” dilemma mentioned above. A no-frills, liability-only policy with a higher deductible will have the lowest monthly premiums. But if you’re in an accident, you may wish you’d chosen more coverage.

Also consider bundling opportunities. Just as you pay less for Internet and TV when you combine services, you can save on car insurance if you purchase it from a company with which you have another policy, such as homeowners coverage.

And finally, ask about possible discounts through organizations and schools you’re affiliated with. Most insurers have a long list of companies they partner with to offer lower rates to customers.

Recommended: Cheapest Car Insurance Companies: Find the Cheapest Car Insurance for You

The Takeaway

The average cost of car insurance in California is $1,782. Your premiums may be higher or lower depending on factors related to your background (age, location, driving record), your vehicle (make and model, safety features), and your level of coverage (liability vs. comprehensive, low vs. high deductible). Just remember that the lowest premium may not offer all the coverage you need in case of an accident.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Explore your options with Experian at SoFi, your personal insurance shopper.

FAQ

How much is the average car insurance per month in California?

Numerous factors go into the calculation of a car insurance premium, including where you live in California, the length and status of your driving record, the type of vehicle you have and its mileage, and more. The average statewide is about $1,782, but the best way to find the most affordable coverage for your situation is to shop around for quotes from multiple insurers.

How much does the average person pay for car insurance in California?

Several factors go into the calculation of car insurance for a California resident. This post breaks it down in multiple ways and offers sample averages based on certain demographics and situations.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in California is well below $300. But remember, the amount you pay depends on a number of different factors. A 17-year-old, for example, could very well pay more than $300 per month largely because of her lack of driving experience.

---

Photo credit: iStock/gguy44

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian 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.

SOPRO-Q125-003

Read more

When shopping for car insurance, how much is too much to pay? The answer can vary based on your driving record, age, car type, insurer, and even where you live. But knowing the average cost of coverage in your state can help as you’re comparing quotes. Here’s a look at average prices in New York and how different factors can impact how much drivers there pay for protection.

How Much Does Car Insurance Cost in New York?

Drivers in New York pay an average of $1,808 per year for auto insurance, according to a 2025 U.S. News & World Report analysis of cheap car insurance companies.

Average Car Insurance Cost in New York per Month

The average monthly cost of car insurance in New York is $150.66. However, the amount you pay can vary by insurer, as the chart below shows.

Company	Average Cost Per Month	Average Annual Cost
Allstate	$130.25	$1,563
Erie	$121.08	$1,453
Geico	$122.25	$1,467
Mercury	$385.42	$4,625
Progressive	$77.17	$926
State Farm	$150.50	$1,806
USAA	$116.208	$1,393

Source: U.S. News & World Report

Average Car Insurance Cost in New York by City

Your location can influence how much you pay for car insurance in New York. That’s because when setting rates, insurers often consider the local volume of traffic, accidents, and crime. People living in cities tend to pay more for car insurance than those living in small towns or rural areas. But as the chart below shows, prices can also vary by city. Here are estimates for 10 of the biggest cities in New York:

City	Average Annual Cost
Schenectady	$1,736
Rochester	$1,683
Albany	$1,751
Utica	$1,833
Syracuse	$1,804
Buffalo	$2,125
New Rochelle	$1,939
Yonkers	$2,469
Mount Vernon	$2,623
New York City	$2,600

Source: Insure.com

Average Car Insurance Cost in New York by Age and Gender of the Driver

Your age can impact your premiums. Younger, first-time drivers, for example, often pay more for coverage because they tend to have more accidents than older, more experienced drivers. Gender can play a role, too. In New York, women may end up paying less for car insurance than men because they tend to get into fewer severe accidents.

Age of Driver	Average Annual Cost for Men	Average Annual Cost for Women
17	$5,487	$5,046
25	$2,077	$2,048
60	$1,577	$1,642

Source: U.S. News & World Report

Average Car Insurance Rates After an At-Fault Accident

As anyone who has been in a fender bender knows, car insurance rates tend to go up after an accident. New York drivers with a clean record pay around $1,808 per year for coverage. That amount rises to an average of $1,926 for drivers who have one accident.

But even traffic violations can cause prices to go up. A driver with one speeding ticket on their record pays an average of $2,064 for coverage, and one driving under the influence (DUI) offense causes rates to jump to an average of $2,559.

Recommended: Car Insurance Terms, Explained

Average Car Insurance Costs for Good and Bad Credit

Your credit score doesn’t just impact your ability to secure a loan. It can also play a role in how much you pay for car insurance. According to an analysis conducted by LendingTree, drivers with poor credit pay $4,088 on average per year for coverage, while those with excellent credit pay around $2,096.

What Else Affects Your Car Insurance Cost?

Here are other factors that can cause your car insurance rates to go up — or down.

Marital Status

Married drivers may qualify for more discounts than single drivers, since insurers often place them in a different risk category.

Make and Model of the Car

Your car’s safety features, accident rating, size, and overall value can all affect your insurance rates.

Amount of Coverage

The amount of coverage you need comes down to a number of factors, including your state’s minimum car insurance requirements, your budget, and your lifestyle. As a rule of thumb, the more coverage you have, the more expensive your policy will be.

The type of deductible you choose can also influence your overall costs. A deductible is the amount of money you’re responsible for after an accident before the insurance company pays its portion. With a higher deductible, you pay less money in premiums each month, but will be responsible for a bigger share of the expenses if you get in an accident.

Insurance History

Drivers who allow their coverage to lapse may be more likely to cancel their policy, so having a reliable history with one insurer may qualify you for a lower rate. In fact, it’s possible you’ll get a better quote when switching car insurance carriers than if you purchase insurance after going a few years without it.

Recommended: How to Lower Car Insurance

How to Get Affordable Car Insurance

The cost of coverage often varies by insurer. To find affordable car insurance, it’s a good idea to shop around and compare quotes. You can search online insurance companies and compare multiple car insurance rates.

You’ll also want to figure out how much car insurance you need. Keep in mind your state’s minimum car insurance requirements as well as additional coverage you may need.

If you’re looking to lower your car insurance, there are several strategies to consider. You may want to explore different policy options; look for bundling opportunities, such as getting your home and auto insurance from the same company; ask about possible discounts; and consider whether a policy with a higher deductible makes sense for you.

Recommended: Cheapest Car Insurance Companies: Find the Cheapest Car Insurance for You

The Takeaway

Drivers in New York pay an average of $1,808 per year for car insurance. However, the amount you pay can depend on several factors, including your age, gender, driving record, credit score, marital status, and where you live. It helps to shop around and compare multiple quotes to find coverage that fits your needs and budget.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.

FAQ

How much is car insurance in New York monthly?

The average cost of car insurance in New York is $150.66 per month. But you may end up paying a different amount based on a wide range of factors, such as age, gender, driving record, credit score, and location.

How much is car insurance in New York for a 25-year-old?

A 25-year-old man pays an average of $2,077 per year for car insurance, according to a 2025 analysis conducted by U.S. News & World Report. Women of the same age pay an average of $2,048 per year. Gender and age are two of several factors that can impact how much you pay for coverage.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in New York is below $300. But premium amounts vary based on a number of factors. An 18-year-old male driver, for example, could very well pay more than $300 per month because of his age and lack of driving experience.

---

Photo credit: iStock/cmart7327

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian 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.

SOPRO-Q125-002

Read more

Many people struggle to keep up with the demands and expenses of daily life, which can create stress and anxiety. That’s why some choose a minimalist lifestyle: Fewer possessions make for easier management. Minimalists strive to eliminate anything in their life that does not serve their purpose. This leads to more physical, emotional, and financial space.

If the concept of minimalism appeals to you, read on to better understand what a minimalist lifestyle is, its benefits, and how to start on the path to a simpler, more manageable, and possibly more affordable lifestyle.

What Is a Minimalist Lifestyle?

Minimalist living is uncluttered by superfluous items like luxury cars, excessive clothing, and purely decorative furnishings. There can be many reasons someone chooses a minimalist lifestyle; they might want to simplify their life to reduce stress, improve their health, or reduce harm to the environment. They may also want to cut back on expenses and improve their budgeting and finances.

Recommended: Free Credit Score Monitoring

Surprising Benefits of a Minimalist Lifestyle

When you have less stuff, it follows that you have less to worry about. A minimalist lifestyle allows you to carry less literal and metaphorical baggage around.

Another benefit is that minimalists buy fewer things, which can allow you to save money. From a holistic perspective, minimalism reduces consumerism, and that can benefit the planet.

How to Live a Minimalist Lifestyle

Living a minimalist lifestyle can seem daunting for some, requiring a mindset shift. Here’s a window into a more minimalist mindset and lifestyle to give you a taste of what it involves. And don’t forget as you read that there are benefits to living below your means.

Invest in Experiences

Rather than collecting things and possessions, a minimalist lifestyle emphasizes experiences. Minimalists spend, just in a more deliberate way. For example, minimalists may spend on vacations and concerts rather than on cars and jewelry.

Audit Your Life

Auditing your life involves deciding what is most important and eliminating anything superfluous. Deciding what is most important can be difficult, but some questions to ask yourself are: How am I doing mentally and physically? What’s important to me now that perhaps wasn’t before? The answer to these and similar questions can help you pinpoint your core values and priorities.

A free budget app can help you audit your spending and evaluate how much of it is really necessary.

Eliminate Needless Expenses

A meaningless expense to one person may be valuable to another. That’s why conducting a life audit is important to help you decide which expenses are not serving your purpose. For example, a person might discover that buying gas is often unnecessary if they can manage without a car most of the time. Or that mid-price brands and gently used items can be just as nice as luxury goods.

Set Limits and Delegate

A minimalist lifestyle is easier to control. Setting limits and delegating is one way to live a minimalist lifestyle because you have less to manage. For example, you might use an accountant to do your taxes, or hire someone to manage your website. You might have fewer screens or electronics or downsize to a smaller home.

Recommended: Does Net Worth Include Home Equity?

Honor Your Priorities

The goal of auditing your life is to establish priorities to eliminate what doesn’t align with them. Part of the journey to minimalism is learning to appreciate what you have and not constantly desire new things. Perhaps you and your partner decide to live on a single income while one of you cares for the family. You may also earn less and have to economize.

Minimalist Lifestyle Tips

How do you implement a minimalist lifestyle? Because the changes can be profound, try making small changes at first as you gradually adjust to a new mindset.

Recommended: What Is the 50-30-20 Budget?

1. Declutter Your Environment and Your Mind

A great place to start is to declutter your environment. Start with your home, your workspace, your car. Get rid of things you haven’t used in a while or that you are just hanging onto in case you need them. As the space around you becomes less messy, you might find your thinking becomes more clear. You can also make some money by selling your unwanted stuff or donate items.

2. Be a Purposeful Not Prolific Consumer

Minimalists still make purchases, but the emphasis is on quality rather than quantity. An example is choosing to use one credit card that serves many purposes rather than five because each one comes with different rewards. Yes, you may benefit from free miles and cash back, but you will also have to buy more to earn those points and rewards, which is consumerism, the antithesis of financial minimalism.

3. Digitize Movies and Books

Most of us have bookcases full of books that sit and gather dust. It’s fine to keep some treasured items and classic novels, but you can also download e-books or visit your local library. Declutter your home of old DVDs, CDs, and books you don’t need.

4. Recycle and Reuse

Reusing shopping bags, refilling a water bottle instead of buying bottled water, or taking your own cup to Starbucks are ways to cut back on trash and single-use products. You’ll save money and help the environment.

5. Get Organized

As you declutter, you’ll find ways to be more organized. Find a space for things you want to keep, and use storage bins and organizers. When everything has a place, you’ll waste less time trying to locate things, and you’ll be more motivated to put things back when you’ve used them.

Recommended: The 52 Week Savings Challenge

The Takeaway

A minimalist lifestyle is appealing, considering how busy and cluttered daily life can be. You don’t have to embrace full-on minimalism immediately but can take small steps, such as establishing goals and priorities, decluttering your environment, and organizing. You can also reduce your expenses and financial obligations this way. As you progress, you may find that your mind clears, your life slows down, and you are able to budget more appropriately too.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

How do you live a minimalist lifestyle?

Living a minimalist lifestyle requires prioritizing and eliminating things that do not align with your values. The process of elimination will be different for everyone, but it does not have to be quick or painful. Just removing one thing or downloading a budgeting and money tracking app can help you achieve a simple minimalist lifestyle.

What is an example of a minimalist?

An example of a minimalist is someone who lives with very little furniture, or none at all, or someone who moves to a smaller home. A less extreme version of a minimalist might be someone who simplifies things by clearing items from countertops, buys few clothes, or chooses a vegan diet.

What is the 90 rule for minimalism?

The hardest part of achieving a simpler minimalist lifestyle is decluttering. How do you decide what to get rid of? The 90 rule can help. Choose a possession, and ask yourself if you’ve used that item in the past 90 days. If not, then it’s a candidate for elimination from your life because it is not currently serving a useful purpose.

---

Photo credit: iStock/Pramote Naksomrit

SoFi Relay offers users the ability to connect both SoFi 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. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. 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 is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SORL-Q125-008

Read more