Other than possible lender-imposed waiting periods after a mortgage loan closes, you can generally refinance your home as many times as you like. But you’ll want to do the math first.
Homeowners choose to refinance for a number of reasons: to lower monthly payments, take advantage of lower interest rates, get better terms, pay the loan off more quickly, or eliminate private mortgage insurance.
Refinancing involves paying off the current mortgage with a second loan that has (hopefully) better terms. Borrowers don’t have to stay with the same lender—it’s possible to shop around for the best deals.
Mortgage rates seem to be constantly in flux, moving mostly in parallel with the federal interest rate. In 2021, the average rate of a 30-year fixed mortgage was 2.96%. In 2022, as the Federal Reserve raised interest rates to try to tame inflation, mortgage rates began to rise and jumped to more than 7%. By mid-June 2023, the average rate of a 30-year fixed mortgage was 6.69%.
So is now the right time for you to refinance? Here are some things to consider before taking the plunge.
The Basics of Mortgage Refinancing
Because a homeowner who chooses to refinance is essentially taking out a new loan, the cost of acquiring the new loan must be compared with potential savings. It could take years to recoup the cost of refinancing.
As with the initial mortgage loan, a refinance requires a number of steps, including credit checks, underwriting, and possibly an appraisal.
Typically, however, many homeowners start with an online search for the rates they qualify for. (A lower average mortgage rate doesn’t necessarily translate to an individual offer—creditworthiness, debt-to-income ratio, income, and other factors similar to what’s required for an initial mortgage will matter.)
The secret sauce that makes up a mortgage refinance rate might seem like a mystery, but there are some common factors that can affect your offer:
• Credit score: As a general rule, higher credit scores translate to lower interest rates. A number of financial institutions and credit card companies will give account holders access to their credit scores for free, and a number of independent sites offer a free peek, too.
• Loan term/type: Is the loan a 30-year fixed? A 15-year? Variable rate? The selected loan repayment terms are likely to affect the interest rate.
• Down payment: A refinance doesn’t typically require cash upfront, as a first-time mortgage usually does, but any cash that can be put toward the value of a loan can help reduce payments.
• Home value vs. loan amount: If a home loan is extra large (or extra small), interest rates could be higher. But generally speaking, the less the mortgage amount is compared with the value of the home, the lower the interest rates may be.
• Points: Some refinance offers come with the option to take “points” in exchange for a lower interest rate. In simplest terms, points are discounts in the form of a fee that’s paid upfront in exchange for a lower interest rate.
• Location, location, location: Where the property is physically located matters not only in its value but in the interest rate you might receive.
What Types of Refinance Loans Are Out There?
As with first-time home loans, consumers have a number of refinance mortgage options available to them. The two most common types involve either changing the terms of the original loan or taking out cash based on the home’s equity.
A rate-and-term refinance changes the interest rate, repayment term, or sometimes both at once. Homeowners might seek out this type of refinance loan when there’s a drop in interest rates, and it could save them money for both the short term and the life of the loan.
A cash-out refinance can also change the terms or interest rate, but it includes cash back to the homeowner based on the home’s equity.
Within those two basic types of refinance options, conventional mortgages from traditional lenders are the most common. But refinancing can also happen through a number of government programs.
If a home purchase comes with immediate equity—it was purchased as a foreclosure or short sale, for example—the temptation to cash out immediately with a refinance may be strong. The same could be true if interest rates fall dramatically soon after the ink is dry on a mortgage. Especially for conventional loans, it may be possible to refinance right away. Others may require a waiting period.
For example, there can be a six-month waiting period for a cash-out refinance. Or, refinancing via government programs like the FHA streamline refinance or VA’s interest rate reduction refinance loan can require waiting periods of 210 days.
Lenders can require a waiting period (also called a “seasoning period”) until they refinance their own loans for a number of reasons, including assurance insurance that the original loan is in good standing.
For a cash-out refinance, some lenders may also require that the home has at least 20% equity.
Questions to Ask Before You Refinance
Just because you can refinance doesn’t necessarily mean you should. First, ask yourself these questions.
What Is the Goal?
Identifying the endgame of a mortgage refinance can help determine whether now is the right time. If a lower monthly payment is the goal, it can be wise to play around with a refinance calculator to see just how much a lower interest rate will help.
For years, it has been a general rule that a refinance should lower the interest rate by at least 2 percentage points to be worth it. Some lenders believe 1 percentage point is still beneficial (each percentage point amounts to roughly $100 a month in payment reduction), but anything less than that and the savings could be eaten up by closing costs.
What Is the Total Repayment Amount?
It’s important to remember that a lower monthly payment—even if it’s significantly less—doesn’t necessarily equal savings in the long run.
If a mortgage with 20 years remaining is refinanced to lower the monthly payment, for example, the most affordable option could be a 30-year mortgage. But is the lower monthly payment worth it if you’ll be paying it off for 10 additional years?
Will I Need Cash to Close?
One of the biggest differences between a first-time mortgage and a refinance is the amount it costs to close the loan. Many times, closing costs for a refinance can be rolled into the loan, requiring no cash at the outset.
Closing costs typically come in at 2% to 5% of the loan amount, and although they can be rolled into the loan and paid off over time, that could mean the new monthly payment isn’t as low as planned.
One way to make sure the investment is worth the cost is to consider how long it would take you to reach the break-even point, which is when you recoup the costs of refinancing. For instance, if it takes you 24 months to reach the break-even point, and you plan on living in your home for at least that long, refinancing may make sense for you.
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Whenever you’re ready to refinance, SoFi is here to help.
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If you’re like the roughly 45% of credit card holders known as “revolvers,” you probably carry at least some debt from month to month. Indeed, the average credit card balance in the U.S. is currently $5,733.
Unfortunately, many consumers are uninformed and unprepared for the responsibility of paying with plastic. Credit card issuers don’t require you to take a class before they hand you that first card — or the next one, or the next. But the consequences of getting in over your head can be troublesome.
What else should you know about credit cards? Here are some do’s and don’ts to keep in mind:
Just Because You Can Get Another Credit Card Doesn’t Mean You Should
Once you prove your creditworthiness, you’ll likely receive other credit card offers in the mail. Retail stores you shop in often ask if you’d like to apply for their card, offering things like special discounts, partnerships, and card-holder shopping days to draw you in.
But unless the rewards are high and the annual percentage rate (APR) is low, you may want to pass, especially if you’re in a store and won’t have time to focus on the terms and fees in the agreement.
Remember: When you apply for a credit card, it can create a credit inquiry on your report because of the hard pull on your credit report. Unless your credit inquiry qualifies as rate shopping, too many inquiries in a short time period could have a negative impact on your credit score.
A Credit Card Can Be Convenient — If You Keep Your Balance In Check
The clock starts ticking whenever you make a purchase using your credit card. Many credit card companies will give you a period of interest-free grace, but if you don’t pay off the balance within the grace period, you’ll start racking up interest.
Of course, using cash instead of credit for purchases is an option, especially for purchases made in person.
Thinking Twice Before Just Paying The Minimum
It’s easy to get into the mindset that you’re on track for the month because you paid the minimum payment due on your credit card statement. But that amount is typically based on a small percentage of your balance, typically between 1% and 3%, or a fixed dollar amount.
Unless you have a 0% credit card rate, letting your balance carry over can rack up additional interest.
Checking Your Statements Every Month
A thorough monthly review of credit card statements makes it possible to find billing mistakes and be sure your purchases and returns are accurately reflected.
It’s worth reviewing your statement for any subscription services you might be making automatic payments or renewals for. You could be paying for a service or app you don’t want anymore.
Reviewing your charges can also help you determine if you’ve been the victim of identity fraud. The faster you move to report any problems , the better off you typically are. The Fair Credit Billing Act (FCBA) instructs consumers to report unauthorized charges within 60 days after the statement was mailed. So making it a habit to check your statements as they come in — or reviewing them online at least once a month — can help you be aware of any issues and report them quickly.
If you’ve made late payments or missed a payment, your interest rate may have gone up — and you could be paying a much higher rate than you thought. Keeping track of this information will give you a more complete picture of the amount you owe.
Credit card statements also include information about how long it will take to pay off the bill if you send only the minimum payment each month, as well as how much you’ll pay in interest. Think of this information like nutrition facts on food packaging — it could be an encouragement to be financially healthier.
Reporting Misplaced, Lost, or Stolen Cards
Under the FCBA , a consumer’s liability for unauthorized use of their credit card is limited to $50. However, the FCBA also says if you report the loss before your credit card is used to make unauthorized purchases, you aren’t responsible for any charges you didn’t authorize.
If your credit card account number is stolen, but not the card, the FCBA also says you won’t be liable for unauthorized use. Credit card companies are generally quick to provide customers with new account numbers, passwords, and cards.
Using a Credit Card To Get Cash
Another piece of information available on a credit card statement is the APR charged for cash advances. Most likely, the interest rate charged for cash advances is several points higher than the rate charged for purchases.
If a credit card is used at an ATM, there may also be an additional fee charged by the machine’s owner.
So unless it’s an unavoidable emergency, it’s probably much better for your wallet to stick to your debit card or go old-school and cash a check.
Using a Credit Card for Purchases Just to Get the Rewards Points
Cash back and other perks make some cards more appealing than others. But that probably shouldn’t be an excuse to use a credit card if you’re not in a solid financial position. The trade-off probably isn’t worth it if you carry a balance.
Balance Transfer Cards Can Be Appealing, But…
Again, if you have solid credit, you may be getting offers for 0% balance transfer cards. And they may potentially save you a significant amount of money, if you can realistically pay off that balance in the designated period.
If not, the interest rate will increase after the introductory 0% interest period ends. And moving the remaining amount to yet another balance transfer card could ding your credit record, as every time you apply for a credit card a hard inquiry is pulled.
Negotiating Rates and Fees
Even the most attentive person might sometimes miss a credit card due date. This oversight, however, means a late fee and interest may be added to the account balance. If this happens more than once, you might incur a higher late fee than the first one and the account’s interest rate might increase.
It may be possible, however, to negotiate credit card interest rates and fees. If you’ve only had one late payment, it’s worth a call to customer service asking for the late fee to be waived. If there have been multiple late payments and you’re faced with an increased interest rate, it might take up to six months of on-time payments before a credit card issuer is willing to consider lowering the interest rate.
The amount of debt owed is the second largest factor that makes up a person’s credit score. It accounts for 30% of the total score, and revolving credit accounts like credit cards are important in the calculation of a credit score. Someone who is using a high percentage of their credit card limit might be seen as potentially risky by lenders. But someone who uses a lower percentage of their credit card limit may be considered to be in a favorable financial position.
Credit card companies sometimes raise the credit limit of financially responsible customers. By keeping your account balance low, it can improve the credit utilization rate used to calculate your credit score.
The Takeaway
Credit card debt can feel overwhelming quickly. If you’ve racked up more debt than you can comfortably pay off, you might consider using a personal loan to consolidate that debt. If your financial history is solid, getting approved for a personal loan interest rate that’s lower than your credit card rates could make your outstanding debt easier to deal with. Using a debt consolidation loan to consolidate multiple credit cards would also mean just one bill to pay each month instead of keeping track of multiple payments and due dates. A consolidation loan with a respected lender can be part of a smart overall money management plan.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
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Dealing with debt can be overwhelming and stressful. If you find yourself struggling to pay off multiple debts, the snowball method can provide a practical and effective strategy to regain control of your financial situation. This method, popularized by personal finance expert Dave Ramsey, focuses on paying off debts in a specific order to build momentum and motivation.
Read on to learn how the snowball debt payoff method works, including its benefits, plus alternative payoff strategies you may want to consider.
Building the Snowball
With the snowball method you list your debts from smallest to largest based on balance and regardless of interest rates. The goal is to pay off the smallest debt first while making minimum payments on other debts. Once the smallest debt is paid off, you roll the amount you were paying towards it into the next smallest debt, creating a “snowball effect” as you tackle larger debts.
Getting rid of the smallest debt first can give you a psychological boost. If, by contrast, you were to try to pay down the largest debt first, it might feel like throwing a pebble into an ocean, and you might simply give up before you got very far.
A Word about Paying off High-interest Debt First
From a purely financial perspective, it might make more sense to first tackle the debt that comes with the highest interest rate first, since it means paying less interest over the life of the loans (more on this approach below).
However, the snowball method focuses on the psychological aspect of debt repayment. By starting with the smallest debt, you experience quick wins and a sense of accomplishment right away. This early success can then motivate you to continue the debt repayment journey. In addition, paying off smaller debts frees up cash flow, allowing you to put more money towards larger debts later.
Making Minimum Payments Doesn’t Equal Minimum Payoff Time
While you may feel like you’re making progress by paying the minimum balance on your debts, this approach can lead to a prolonged payoff timeline. The snowball method encourages you to pay more than the minimum on your smallest debt, accelerating the repayment process. Over time, as you pay off each debt, the amount you can allocate towards the next debt grows, increasing your progress.
The Snowball Plan, Step By Step
Here’s a step-by-step guide to implementing the snowball method.
1. List all debts from smallest to largest. You want to list them by the total amount owed, not the interest rates. If two debts have similar totals, place the debt with the higher interest rate first.
2. Make minimum payments. Continue making minimum payments on all debts except the smallest one.
3. Attack the smallest debt. Put any extra money you can towards paying off the smallest debt while making minimum payments on others.
4. Roll the snowball. Once the smallest debt is paid off, take the amount you were paying towards it and add it to the minimum payment of the next smallest debt.
5. Repeat and accelerate. Repeat this process, attacking one debt at a time, until all debts are paid off.
A Word About Principal Reduction
It’s a good idea to reach out to your creditors and lenders and find out how they apply extra payments to a debt (they don’t all do it the same way). You’ll want to make sure that any additional payments you make beyond the minimum are applied to the principal balance of the debt. This will help reduce the overall interest you pay and expedite the debt payoff process.
Perks of the Snowball Method
The snowball method offers several advantages:
• Motivation and momentum The quick wins and sense of progress provide motivation to continue the debt repayment journey.
• Simplification Focusing on one debt at a time simplifies the process, making it easier to track and manage.
• Increased cash flow As each debt is paid off, the money previously allocated to it becomes available to put towards the next debt, accelerating the payoff timeline.
Alternatives to the Snowball Method
While the snowball method has proven effective for many, it’s not the only debt repayment strategy available. Here are three alternative methods you may want to consider.
The Avalanche Method
The avalanche method involves making a list of all your debts in order of interest rate. The first debt on your list should be the one with the highest interest rate. You then pay extra on that first debt, while continuing to pay the minimum on all the others. When you fully pay off that first debt, you apply your extra payment to the debt with the next highest interest rate, and so on.
This method can potentially save more on interest payments in the long run. However, it requires discipline and may take longer to see significant progress compared to the snowball method.
The Debt Snowflake Method
The debt snowflake method is a debt repayment method you can use on its own or in conjunction with other approaches (like the snowball or avalanche method). The snowflake approach involves finding extra income through a part-time job or side gig, selling items, and/or cutting expenses and then putting that extra money directly toward debt repayment. While each “snowflake” may not have a significant impact on your debt, they can accumulate over time and help you become free of high-interest debt.
Debt Consolidation
If the snowball, avalanche, or snowflake methods seem overwhelming, you might want to consider combining your debts into one simple monthly payment that doesn’t require any strategizing. Known as debt consolidation, you may be able to do this by taking out a personal loan and using it to pay off your debts. You then only have one balance and one payment and, ideally, a lower interest rate, which can help you save money.
The snowball method offers a practical and motivational approach to paying down debt. By starting with small debts and building momentum, you can gain control of your finances and work towards becoming debt-free.
However, it’s important to choose a method that aligns with your financial goals and personal preferences. Whichever method you choose, the key is to take action and commit to a debt repayment strategy that works for you.
If you’re interested in exploring your debt consolidation options, SoFi could help. With a lower fixed interest rate on loan amounts from $5K to $100K, a SoFi personal loan for debt consolidation could substantially lower how much you pay each month. Checking your rate won’t affect your credit score, and it takes just one minute.
See if a debt consolidation loan from SoFi is right for you.
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Most people have money goals. One person might want to pay off their student loans; another might be saving up for the down payment on a house; and yet another might want a seven-figure retirement fund.
Whatever your particular aspiration may be, there are smart strategies that can help you achieve your goals. These tactics can help improve your financial fitness, balance your budget, reduce debt, and save more money.
Read on to learn some of the best personal financial strategies that can scoot you closer to reaching your money goals.
Smart Financial Strategies to Aim For
Here are some solid ways to begin to enhance your financial fitness.
Build and Maintain an Emergency Fund
When faced with an unexpected big expense or being laid off, it can be helpful to have saved up an emergency fund, which is a cash reserve that is only tapped, well, in case of an emergency. When should you use your emergency fund? A layoff, an unexpected medical or car repair bill, or a relative in need may all be good reasons to dip in.
Starting an emergency fund might cover your basic living expenses for anywhere from three to six months or more. So, if a person normally spends $3,000 per month, then they could strive to set aside $9,000 to $36,000 in their emergency fund. Naturally, this amount will vary based on individuals’ unique financial situations and income vs. expenses.
Now, if that dollar amount sounds a little daunting, it’s always possible to start small — setting aside 50 or 100 dollars a month. With some accounts, users can even automatically transfer a set amount to a savings account on a specific date each month (e.g., payday). Over the course of a year, that bit-by-bit approach to saving money can add up to a much larger sum.
Once a person has tackled high-interest debt, they may have more income available to squirrel away towards their emergency fund.
Some savers prefer to host their emergency fund in a high-yield savings account, which, thanks to its higher annual percentage yield (APY) than standard accounts, can help your money grow faster.
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Paying Off Debt
Debt can be a budget killer. With high interest rates and fine-print fees, individuals can end up paying significantly more than an initial charge on outstanding recurring debts, whether student loans or credit cards.
When it comes to credit cards, for instance, the average interest rate is 20.09% for existing accounts and 22.29% for new accounts . If a person gets charged hundreds or even thousands of dollars in interest per month on existing debts, it could take longer to pay off the initial borrowed amount.
In terms of adopting smart strategies that can lead to greater financial independence, a good place to start is by paying off high-interest debts as quickly as possible.
Two popular debt-repayment approaches are called the snowball method and avalanche approach.
• With the snowball method, you pay down your smallest debts first — no matter what the interest rate is. Once that smallest debt is paid off, you could then apply that payment amount towards the next debt, and so on.
For instance, if a person pays $150 a month to one debt, they could continue paying that sum to their next smallest debt after the first one has been paid down. At the same time, you’ll make minimum payments on all other debts to keep the payment history intact. Over time, the additional payments “snowball,” building up to less overall debt.
• With the avalanche method, a person opts to pay off the debt with the highest interest rate first. Once the highest debt gets paid off, they’ll then roll the regular payments on that now-cleared debt into their next highest debt, all while paying the minimums on other debts at the same time.
While the avalanche method may make more sense mathematically, the snowball method can be more psychologically motivating. The snowball approach can keep some people engaged, since they’ll see quicker progress towards paying down one of their high-interest debts.
However, if a person can commit to the avalanche method, they may end up saving more in total interest paid than with the snowball financial strategy.
Using Credit Cards Wisely
Credit card debt can land cardholders in financial hot water. However, using credit cards judiciously can come with certain benefits (assuming the cardholder regularly pays down what they buy). Here’s a closer look:
• Many credit cards give rewards in return for account holders spending money when shopping. For instance, a user may be able to get 1% to 5% back on grocery store or other purchases at specific retailers. With some cards, it’s possible to earn points that can be used toward discretionary expenses like travel, eating out, hotels, and more.
• Generally, credit cards offer fraud protection, which means that if a card gets stolen (or their account gets hacked), fraudulent charges are not paid by the cardholder — unlike, say, with cash.
• When it comes to healthy financial strategies, it’s also possible to use your credit cards to maintain one’s credit score. One factor that lenders might consider is a loan applicant’s credit history (including the number of active accounts open and their debt-to-income ratio).
Smart financial strategies for credit cards include paying off the entire bill on time and keeping old lines of credit open so the account holder’s credit history is longer. Also, it’s advisable to aim for a lower credit utilization ratio — which is how much debt a person has in relation to how much credit is available. A credit utilization rate below 30% is, generally, considered “good,” though lower will be better.
• Another one of the smart financial strategies is to use credit cards for 0% interest balance transfers. If someone has a credit card with a high-interest rate, they could apply for a balance transfer credit card, pay a fee to transfer over their card’s balance, and then get more time to pay down the existing debt interest-free.
Some cards offer over a year of interest-free access. However, it can be smart to pay off the transferred debt before the end of the agreed-to 0% interest period. Otherwise, a higher interest rate will kick in on whatever has not been paid off. In some cases, the interest after the zero-interest period could be higher than what was paid on the original card.
Budgeting Incoming and Outgoing Money
Budgeting is a classic way to keep tabs on how much money is coming in and how much is being spent each month. If a person is not yet budgeting for their expenses, whether essential or discretionary, it can be one of the simplest ways to track money, and there are many different budgeting methods available.
When adopting financial strategies for budgeting, a good place to start with the 50/30/20 rule. With this budgeting rule, a person spends 50% on needs, 30% on wants and 20% on savings.
• Needs include housing, utility bills, food (basic groceries, not pricey takeout or restaurant meals), car payments, and debts.
• Wants span entertainment, travel new but unnecessary clothing and gadgets, and similar purchases.
• Savings could include an emergency fund, retirement account, and investments.
Budgeting can be made easier with Google Sheets or Excel, or by using an app, or taking advantage of tools that your financial institution offers. Digital personal finance apps can be easy to use. Many financial institutions offer solid ones that give users insights on spending patterns and money habits.
Considering Reducing Monthly Expenses
After tracking their monthly expenses, some people like to see where they can trim and tighten their spending. Some pricey expenses that could be pared down include:
• Housing costs: If rent is gobbling up a huge amount of income each month, moving to a less expensive place or area (i.e., lowering your cost of living) could help with cutting back on spending. If an individual ends up moving to a more economical city or town, it’s likely that local housing costs, groceries, and the general amount it takes to cover day-to-day living expenses will go down as well. Or you could take in a roommate.
• Transportation: In terms of transportation, drivers could try to get out of an expensive lease and purchase or lease a less expensive vehicle. Or a person could utilize public transit or carpool with colleagues to save on gas. One good financial strategy is to shop around for lower car insurance rates.
• Pricey cable plans: If a person spends a significant amount each month on non-essential items or services, they may want to try to reduce their discretionary costs, too. For instance, instead of paying an expensive cable bill every month, one could only pay for Hulu or Netflix as a way of lowering your streaming services costs. Many internet providers run promotions, so it may be worth thinking about switching to a less expensive provider.
• Eating out vs. cooking at home: In lieu of eating out every day, budget-minded individuals could cook at home. Buying ingredients is, generally, much less expensive than dining in a restaurant or picking up take-out. And, if cooking is intimidating, perhaps invest in a slow-cooker to ease into cooking at home.
• Shopping online: Online shopping can tempt many to spend unnecessarily. It’s just so darned easy to click-to-buy when a credit card is saved online. So, some savings seekers opt to delete their credit card details from their favorite online shops.
This adds one extra step (digging the card out of the wallet) before being able to purchase. Those added seconds can give shopping lovers a second chance to decide whether the item in their cart is really essential. You might also unsubscribe from shopping emails that can tempt you with sales and special offers.
Negotiating Better Deals
If you don’t have time to call up your providers and search for better deals, apps like Trim can analyze an individual’s spending patterns, negotiating internet, cable, phone and medical bills while canceling older subscriptions. Users pay a fee for this service, but it could end up saving dollars that would otherwise get spent unknowingly.
You might also call your credit card company and see if they can lower your rate, especially if you’ve found a better deal elsewhere. And if you have a major bill, don’t be shy about seeing if it can be reduced. You may even be able to negotiate medical bills.
Opening a Retirement Fund
When it comes time to retire, money will be needed to pay for everyday life. That’s why it’s a good financial strategy to start a retirement account as soon as a person starts working.
There are many different types of retirement accounts to choose from, including individual retirement accounts like a Roth IRA (which individuals can open on their own and contribute to with after-tax money), a 401(k) (which is a plan through an employer, and a traditional IRA (which people open on their own and gets taxed upon withdrawal).
If an employer offers retirement fund matching, take advantage of it! Matching entails putting a percentage of a paycheck automatically into one’s retirement. The employer then matches that deposit with the same amount. Employer matching can speed along an individual’s path towards saving for retirement; it’s pretty much free money.
In terms of how much to save for retirement, it can be smart to put aside at least 15% of pre-tax income every single year. Doing so can help you later on in life to avoid needing to delay retirement because not enough had been saved prior.
Searching for Low Interest Rates on Loans
Big expenses — going to college, purchasing a car, buying a home, repairing a house, or moving — can come with a big price tag. So, many individuals seek out loans to cover these big-ticket items. When taking out a loan, some smart financial strategies include shopping around and comparing interest rates — looking for the lowest interest rate possible.
As with any debt, it’s essential to pay back the loan on time every month to avoid late payment fees or dings to one’s credit history. For some, it may also be possible to refinance a loan and secure a lower interest rate.
Getting Started with Investing
For those stashing money in a traditional savings account, it’s likely that the money is earning very little interest. As a result, some individuals choose to invest their money with the hopes of earning a higher return over time.
Investing is one the financial strategies, however, that can come with higher risks. Few investments, including those in the volatile stock market, are guaranteed to make a return. For instance, investing in stocks can bear higher returns, but stocks can also plunge in value. Indeed, some investments are riskier than others.
Speaking with a financial advisor can help many to understand the pros and cons of investing and whether it’s the right choice for them.
Here’s an overview of common kinds of investments:
Investing in the Stock Market
While investing money in the stock market can result in a higher return, it’s not guaranteed. It can be safer to invest in already profitable companies that pay out dividends, which distribute some of a company’s earnings to investors. However, more seasoned investors may choose to take on more risks, investing in start-ups or lesser known companies.
Micro Investments
Should a person want to purchase stocks that are more expensive but can’t afford buying an entire share, it’s possible to complete a micro investment. Micro investments are fractions of stocks and a good way to get in on the market without taking too big of a risk.
Mutual Funds
Mutual funds are diverse investments; rather than investing in one stock, an investor is putting their money into a collection of them. The fund has a manager who decides what they’ll do with the money. Typically, investors are charged a fee to invest in these funds.
Investment Bonds
Investment bonds, which are loans made to a company or government, are significantly less risky than stocks. But, it’s worth remembering that lower risk also typically comes with a lower return. Many people get U.S. Treasury Savings Bonds when they’re children and cash them in at a later date.
High-interest Savings Accounts
Some high-interest savings accounts offer around 4.00% APY or higher on deposited funds — significantly higher than the 0.01% that many standard accounts offer. There’s no risk of lost saving, as long as account holders stay below the FDIC-insured limit of $250,000 per account holder, per account ownership category, per insured institution. Interest rates on savings accounts can, of course, vary over time and by bank.
Whichever method gets chosen, there are investment brokers and financial advisors who can offer guidance on how to utilize income and savings.
The Takeaway
Keeping tabs on income, expenses, savings, and investments is one smart financial strategy. With so much to track when it comes to personal finances, budgeting tools can help you develop smarter financial habits and trim back on unnecessary spending.
Opening an online bank account with SoFi lets you save and spend in one convenient place, while earning a competitive APY. Ready to track and then tweak your spending? A SoFi Checking and Savings Account has tools to help you do just that, as well as save towards different goals with our Vaults feature.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
Inflation has hit all aspects of daily life, including that fun and romantic ritual known as date night. The average cost of dinner and a movie for two now rings in at a steep $159. Ka-ching!
But that doesn’t mean you need to go broke enjoying fun times with your sweetie or getting to know someone new.
Here, you’ll find 27 ideas for date nights that don’t cost much. In fact, some of these date night ideas are more than cheap; they’re free.
Fun Date Ideas for Couples on a Budget
Whether you’re just getting to know each other or you’ve been married for years, here are some ways to enjoy a romantic day or evening out without busting your monthly budget.
1. Watching the Sunrise or Sunset Together
Watching the sun come up or sink over the horizon with your sweetie can be a very romantic and cute date idea. Depending on which time of day you choose, you can bring coffee and donuts or a bottle of wine and some cheese and crackers to mark the occasion.
2. Taking Dance Lessons
Couples can show off their moves while taking a lesson in salsa, ballroom dancing, or swing. Consider a home viewing of “Dirty Dancing” afterwards to close out the date.
💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.
3. Going on a Hike
Getting some fresh air and walking in a beautiful area together can be a great bonding experience. To make sure you don’t take on more miles (or hills) than you can handle, you can read reviews of hikes and check out trail maps online before you head out.
4. Picking Apples or Berries
This can be a great idea for a “sweet” date. In the fall, couples can pick apples together and then go home and make some baked apples or an apple pie. In the summer, consider heading to a local farm to pick berries. You can use your harvest to make some tarts or smoothies afterwards.
5. Checking Out a Botanical Garden
Many towns have beautiful botanical gardens where people can walk around. This is a lovely way to spend a Sunday afternoon and it should be either free or low cost.
6. Staying In and Watching a Movie
One (or both) or you may have a Netflix, Hulu, or Amazon Prime subscription. Why not take advantage and watch a movie together at home? You can open some wine and order a pizza or inexpensive takeout.
Not a member of those networks? Look into free services like Hoopla or Kanopy.
Another cute date idea is to garden together. Whether you and your honey live together or apart, you can start your own garden and fill it with flowers, herbs, and vegetables. At the end of the day, you’ll have a shared sense of accomplishment.
8. Checking Out a Free Museum
Some museums are always free, while others will have free days throughout the month. Couples can go and see cool artwork and have stimulating conversations about the artists.
💡 Quick Tip: An emergency fund or rainy day fund is an important financial safety net. Aim to have at least three to six months’ worth of basic living expenses saved in case you get a major unexpected bill or lose income.
9. Going to a Free Concert
Many towns will hold free concerts in the park during the summer. You can bring a blanket and some food and enjoy a picnic dinner while listening to great live music.
Recommended: How to Save Money Daily
10. Taking a Scenic Drive
You can pick somewhere you’ve never been or head to a favorite spot, such as a nice drive in the country or along the coastline. Consider creating a playlist of tunes you both love for the ride.
11. Breaking Out the Board Games
Who doesn’t love a little competition? This can be a great idea whether you play against one another or with another couple. You can even throw in some prizes from the Dollar Store to up the ante just a bit.
12. Eating at Happy Hour
Want to sidestep a pricey dinner? Here’s a way to save money on food: Couples can find out which establishments have a happy hour and then enjoy some appetizers and drinks for a cheap date idea.
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
13. Visiting Open Houses
Whether you are actually looking to buy a house or just want to be a voyeur, or pick up some design ideas, consider checking out open houses in your area. You can search for open houses on sites like Redfin and Zillow.
14. Cooking a Dish Together
For a fun and tasty evening, you might go to your local farmer’s market or grocery store and then come home and make a gourmet meal together. If neither of you are skilled in the kitchen, you can order a meal delivery service that sends all the instructions and ingredients you need.
15. Checking Groupon for Deals
You can often find some interesting things to do for date night by checking Groupon to see what experiences are on sale. You might find a wine-and-paint night or perhaps a sale on arcade tickets.
16. Renting a Pool
For a fun date on a hot summer day (or night), consider checking out Swimply to see if you can rent out a private pool in your area by the hour. Pool toys and snacks may not be included, so you may want to pack everything you need before heading over for a swim.
17. Going on a Bike Ride
Another cute date idea is to go on a bike ride together. If you don’t own bikes, you may be able to rent them from the city or a local company. You can research local biking trails online before you go.
💡 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
18. Taking a Ferry Ride
Typically, ferry rides are pretty cheap. They may even be free. Consider taking a ride at sunset so you can enjoy a beautiful view.
19. Checking Out a Local Park
When the weather is nice, you might want to pack a blanket and some food and head to a nearby park to enjoy a lazy afternoon together. Have any leftover bread? Maybe you can feed it to the ducks or birds.
20. Going to a Pet Cafe
Pet cafes are now located in many towns around the county. Couples can sip on lattes while petting cute dogs and cats at the same time.
If you split the cost of a kayak or canoe rental, you can enjoy a relatively inexpensive afternoon paddling around a lake or bay together.
22. Taking a Walk in the Mall
Just because you go to the mall, it doesn’t mean you have to shop. Instead, you can do some browsing and not spend any money. Though you might want to share some favorite cheap mall food like Cinnabons and Auntie Anne’s Pretzels.
23. Listening to a Podcast
Podcasts can be just as entertaining as television and movies. Consider grabbing some drinks and snacks and listening to a great podcast together.
Here’s a great way to save money on clothes and spend time together: Hit some local thrift stores for a cute and cheap date night. Maybe you’ll find some treasures or just try on outfits from decades past and make each other laugh.
25. Competing in a Video Game Competition
If you and your mate enjoy playing video games, consider challenging each other in a video game competition. You can offer fun rewards, such as the winner gets a gourmet home-cooked meal or doesn’t have to do any dishes all week.
26. Having a Spa Night
For couples who live together, a nice date night idea is to have a spa night at home. You can include foot massages, a bubble bath, and face masks for some relaxation, and laughs.
27. Doing Crafts Together
Couples that are feeling crafty can go to their local art store and buy supplies they need to create something together. You might even choose a sentimental project like a wreath made of corks from bottles you’ve shared or a scrapbook of vacation memories.
Going out on a “date” doesn’t have to mean dinner at a fancy restaurant followed by a movie. With a little bit of imagination and planning, couples can enjoy a night (or day) out that costs considerably less, yet can be just as romantic and fun.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
