The word budget is kinda like the word diet — it conjures up all sorts of feelings, oftentimes negative. But a budget just means you’re keeping track of your money and being deliberate with your financial decisions.

Whether or not you plan to go on a diet, you want to be aware of the foods you put into your body, right? And setting financial parameters is the same idea. They may add limits to your life or give you permission to spend without worry. Either way, you’re in control.

So if you’re one of the many people who’s averse to having a budget (only 42% of Americans track their spending and keep a budget, according to a 2024 survey by the National Foundation for Credit Counseling,) ask yourself why and whether your reasons really hold water. They might be on our list of common myths and misconceptions about budgets.

Myth: “A budget means I can never have any fun.”

Bust: Not at all. A budget will tell you how you can have fun. Let’s say you want to take your girlfriend out for a fancy birthday dinner. Keeping track of spending is how you’ll know you can easily afford it if you pack your lunch instead of hitting the fast-food drive-through a few times in the month.

In fact, you may have even more fun with a budget. Once you have a rough dollar amount allocated for non-essentials, you won’t feel guilty about using that money. A budget simply means you’re deciding what’s important and making sure you get what you want without piling up debt.

Myth: “It’s annoying to track down every penny I spend.”

Bust: You don’t have to document every nickel and dime you spend to get a sense of where your money goes, and none of us has the time anyway. Thankfully, a budget with broad categories is really all you need. You can leave the tracking and math to one of several good budgeting apps, including SoFi’s Relay app.

Myth: “I make enough money. I don’t need a budget.”

Bust: If you don’t have debt and make a good living, you may feel you don’t need to worry where your money goes. But being comfortable financially is just as much of a reason to have a budget. If you want to protect what you’ve got and maximize the potential for your money, make sure you’re setting a clear and deliberate path for it.

Maybe by tracking, you discover that you’re somehow spending twice as much as you used to on Ubers and food out, but with nothing to show for it. Or you realize that after that last raise, you can put 40% of your income into your retirement account, rather than 30%.

Just like a report card tells a student how they’re doing academically, a budget tells you where you stand financially.

Myth: “Why bother? My finances are just a big mess.”

Bust: Plenty of people are struggling to make ends meet. In the latest Survey of Household Economics and Decisionmaking, fielded by the Federal Reserve each year, 17% of U.S. consumers reported they couldn’t pay all their bills, and 18% said their savings wouldn’t cover an emergency expense of more than $100.

No matter what your situation is, a budget isn’t a lost cause. In fact, not having one can make things even worse.

If your income isn’t covering your bills, you’re probably adding to your credit card debt, which can be a slippery slope of mounting finance charges. Building a budget can help you determine where to cut back, or show you when bigger life changes like moving may be needed. It can also help you establish an emergency fund so a job loss or other unexpected bill doesn’t derail you again.

Myth: “I’m young. Budgeting and saving for retirement can wait until I’m older.”

Bust: Budgeting so you can make regular contributions to a 401(k) or IRA is one of the best moves you can make when you’re young. Waiting even 10 years to start saving for retirement means you’ll need to invest much more to get even close to the same result.

Here’s an example: Let’s say you invest in an account that has a 7% annual return. If you contribute $50 a week for 40 years, you’d have $517,454 at the end of the 40 years. But, if you start 10 years later, you’d have to contribute twice that much — $100 a week — and you’d still only wind up with $490,818 at the end of 30 years.

Taking Control

Creating a budget may not be your idea of fun, but keeping track of your money — even in broad strokes — gives you the visibility to make more intentional choices and gauge your progress on your financial goals. And when it comes down to it, you may find taking control to be liberating and motivating. Plus, having a solid financial footing can give you confidence in other areas of your life.

Thinking you might want to try it? Here are five steps to get you started.

image credit: Bernie Pesko

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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If you’re behind on your federal student loans, this year is pivotal.

It’s the first year since the pandemic began – including the three-plus years when all loan bills were suspended — that not paying counts against your credit score. And borrowers who are 90 days or more overdue on payments could see a significant hit, researchers from the New York Federal Reserve Bank said this week.

In some cases, delinquent borrowers risk a drop of more than 150 points once their missed payments appear on their credit reports, they estimated.

Why now? Because after an unprecedented 43-month reprieve triggered by the pandemic, the government resumed billing in October 2023, but gave borrowers a year’s notice before reporting missed payments to the major credit bureaus. Add to that 90 days for delinquencies to roll through to those credit reports, and here we are.

“We expect to see more than nine million student loan borrowers face substantial declines in credit standing over the first quarter of 2025,” the New York Fed’s Daniel Mangrum and Crystal Wang wrote on their Liberty Street Economics blog Wednesday, implying that some borrowers may have already seen the hit.

“Although some of these borrowers may be able to cure their delinquencies – either through making up missed payments or by entering an administrative forbearance with their loan servicers – the damage to their credit standing will have already been done and will remain on their credit reports for seven years,” they wrote.

The study estimated the potential for credit score damage using delinquency and credit score data from prior to the pandemic. Once a delinquency of 90 days or more is reported, those with higher credit scores could see a bigger average drop than those with lower scores, the researchers said.

Borrowers with a credit score of 760, for example, could see it decline to 589, while those with a score of 620 may see it fall to 477, according to their estimates.

(Worth noting: Borrowers who were already behind or had fully defaulted before the pandemic were granted a clean slate during the payment break, which lifted median credit scores significantly, according to the research. This means any declines that may be coming are relative to those inflated scores.)

So what? It’s been a strange and turbulent few years for people with government student loans, and the Trump administration is pursuing more changes. If you’re struggling financially — or your payment obligation has suddenly increased — you’re not alone. As of September 2024, 9.7 million borrowers were delinquent on more than $250 billion in loans, the researchers estimated.

But now is a critical moment to stay current with your payments. Having a lower credit score can increase the cost of borrowing and make it more difficult to even get a credit card, car loan or mortgage.

So give your next steps careful consideration by taking stock of all of your options and staying on top of any developments. The online application for income-driven repayment plans just became available again Wednesday. Or you may want to consolidate or refinance your loans, find ways to lower your other expenses, or even pursue forbearance.

Related Reading

•   U.S. Department of Education Opens Revised Income-Driven Repayment Plan and Loan Consolidation Applications for Borrowers (U.S. Department of Education)

•   Student Loan Balance and Repayment Trends Since the Pandemic Disruption (Liberty Street Economics)

•   Moving Student Loans to the SBA Could Create Problems for Borrowers, Experts Say (Investopedia)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM20250328SW

• Best Personal Loan Overall

  According to the Nerdwallet Best-Of Awards 2024.^§

• Low monthly payments

  Save big by consolidating high-rate debt to one fixed payment.

• Get $5K to $100K

  Get funds as soon as the same day you sign^‡ or we can pay your credit card or personal loan lenders directly.

• See rates in 60 seconds

  No impact to your credit score.^† No commitment.

We’ve helped members pay off over $33B in debt with a SoFi Personal Loan.

The savings and experiences of members herein may not be representative of the experiences of all members.
Savings are not guaranteed and will vary based on your unique situation and other factors.

We’ve helped members like these pay off over $33B in debt with a SoFi Personal Loan.

The savings and experiences of members herein may not be representative of the experiences of all members. Savings are not guaranteed and will vary, based on your unique situation and other factors.

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Combine your debt into one payment and you could reduce your monthly payments. Learn more.

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Pay for home repairs or renovations without using your home as collateral. Learn more.

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Cover pregnancy, adoption, IVF or surrogacy costs with manageable monthly payments. Learn more.

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With low fixed rates, steady monthly payments, and no fees required, our personal loan travels well. Learn more.

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From engagement ring to honeymoon—you could save money compared to a high-rate credit card. Learn more.

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Why apply for a SoFi Personal Loan?

Expand to see how the features of a SoFi Personal Loan makes it stand out from the rest.

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How do personal loans work? A personal loan is a borrowed sum of money that is paid back with interest in installments. With SoFi Personal Loans, you can borrow between $5,000 and $100,000 for various expenditures that include home improvements, credit card consolidation, medical bills, IVF, even unplanned life events that call for emergency funds, and more. You can also check your rate in 60 seconds without affecting your credit score†, and get your loan amount funded as soon as the same day you’re approved.^‡

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Get a more precise estimate of how a SoFi Personal Loan could save you money.
Personal Loan Calculator

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Easily apply for a personal loan online in 3 steps.

1. Prequalify

   Find the rate that you qualify for in 60 seconds with no commitment.

2. Choose your loan terms

   Choose from 2-7 year terms and finish your application online.

3. Receive your funds

   Sign your documents and funds will be wired to your account—as quickly as the same day.‡

View your rate

Checking your rate will not affect your credit score.

Resources on personal loans.

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BTW it’s a soft inquiry, so it won’t affect your credit score.^†

† To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/21/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

Fixed rates from 8.74% APR to 35.49% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 12/15/25 and are subject to change without notice. The average of SoFi Personal Loans funded in 2023 was around $33K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.

Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.

⁵ Autopay: The SoFi 0.25%autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.

⁷ Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

§ Awards or rankings are not indicative of future success or results. Neither SoFi Bank, N.A. nor its employees paid a fee in exchange for ratings. Awards and ratings are independently determined and awarded by their respective publications.

‡ Same-Day Personal Loan Funding: 83% of typical SoFi personal loan applications, excluding Direct Pay personal loans and personal loan refinance, from January 1, 2023–January 1, 2024 that were signed before 6pm ET on a business day were funded the same day.

^ Direct Pay: Terms and conditions apply. Offer good for new personal loan customers with credit cards in their name only and subject to lender approval. To receive the offer, you must: (1) register and/or apply through this landing page; (2) complete a loan application with SoFi within 90 days of your application submit date; (3) meet SoFi’s underwriting criteria; (4) apply 50% or more of your loan proceeds directly to your creditors. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.25% rate discount. Offer good for new customers only. Cannot be combined with other rate discounts with the exception of the 0.25% autopay rate discount, 0.25% direct deposit discount. SoFi reserves the right to change or terminate the Rate Discount Program to unenrolled participants at any time with or without notice. It takes about 3 business days for your credit card lender to receive payment after your loan is signed. You will be responsible for making all required payments to avoid credit card fees.

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How long do I need to wait to reapply after my Personal Loan application has been declined?
You will need to wait at least 30 days before re-applying for a Personal Loan with the same borrower(s). You are welcome to retry at any time with a co-borrower, if the previous application was as a single borrower. If you initially applied with a co-borrower, you can retry as a single borrower or with a different co-borrower.

Returning Borrower Pricing: Former SoFi Personal Loan customers who have paid their previous personal loan in full may be eligible for Returning Borrower special pricing on another personal loan if they meet the eligibility criteria and any other applicable terms and conditions. The pricing special does not apply to new Personal Loan customers or existing Personal Loan customers who are currently in repayment. To receive this offer you must (1) apply for a new personal loan and submit your application; (2) complete a loan application with SoFi within 90 days of your application submit date; (3) and meet SoFi’s underwriting criteria. A 0.50% interest rate reduction will automatically be reflected in the rate offered at time of application. SoFi reserves the right to discontinue or modify the Returning Borrower Rate Discount at any time and without notice. Such changes or modifications will only apply to applications begun after the effective date of the change.