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23 Ideas for Cheap Christmas Decorations

If you’re dreaming of a white Christmas, but you live in an area that doesn’t get any snow, you can use spray snow to make your winter wonderland dreams come true. You can spray artificial snow on your windows to create a frosted look or spray your front door wreath to make it appear to be covered with snowflakes. A can of spray snow costs less than on Amazon.
Dress up your dining table to bring out the joy of the holiday season. Drape your table with a red, green or white tablecloth and fill a vase or tray with seasonal elements, such as pine cones, holly leaves, cranberries, sprigs of pine needles, jingle bells, candy canes or candles.
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23 Ideas for Cheap Christmas Decorations

Source: thepennyhoarder.com

1. Wall Christmas Trees

Turn empty flower pots into outdoor Christmas decor with just a little paint. You’ll need at least three pots of varying sizes. Paint them white if you want to create a snowman out of your flower pots or green to make a flower pot Christmas tree. Once dried, stack the pots on top of each other upside down and paint additional embellishments, like a face and buttons on your snowman or ornaments and tinsel on your Christmas tree.

2. Get an Artificial Christmas Tree

You can buy boxes of candy canes for cheap at grocery stores or dollar stores around this time of the year. Fill candy dishes full of these red and white striped treats to go on your tablescape, coffee table or end tables. Or hang one or two candy canes on your Christmas tree in place of buying more pricy ornaments.

A woman decorates a tiny Christmas tree.
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3. Get a Tiny Tree

The weather’s getting colder. The days are getting shorter. Before you know it, Christmas will be here.

4. Garland

Transform your doors into the biggest presents ever by covering them in wrapping paper. You can use wrapping paper to decorate your interior doors as well as your front door. Add ribbon or a big bow for extra embellishment.

5. DIY Ornaments

Talk about easy Christmas decorations that make your home merry. You can also stack your wrapped present props in an empty corner, by the base of your staircase or on your front porch.

6. Twinkling Lights

Rather than buying an advent calendar this year, make your own. This post from Country Living has several ideas. Come up with whatever little treat, token or message you want to open each day.

7. Window Stickers

Whether you use a kit or make your own gingerbread from scratch, a gingerbread house is a fun holiday project that can double as Christmas decor. Just know it probably won’t last long — so consider this a temporary decoration!

8. Candles

Bundling up on a snowy day to go to the Christmas tree farm and chop down the perfect tree may be a sweet holiday outing, but you’ll get more bang for your buck by opting for an artificial Christmas tree. Now, artificial trees can get pricy themselves, depending on what size and type you choose. However, you can reuse the tree for years to come, rather than having to put it out to the curb when the new year rolls around.

A front door is wrapped in wrapping paper.
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9. Decorate Your Doors

Candles are a simple and low-cost way to add a bit of Christmas spirit to a room. You can create a tablescape with red, green, white or gold candles — or set them on the mantle or a wide window ledge. Set battery-operated votive candles inside Mason jars painted in holiday colors for a flame-free decor option.

10. Bells Around Door Knobs

This winter craft doubles as a cheap Christmas decoration. You may be able to make it with items you already have at home: white tube socks, rice, buttons, pins and a scrap of fabric. This post from Darkroom and Dearly tells you exactly how to create them.

11. Decorate With Ribbon

Instead of buying an expensive 7-foot tree, you can save money by getting a much smaller tree that’ll fit on your tabletop. In addition to spending less on the tree, you’ll save on the amount of lights and ornaments you’ll need to decorate it.

12. Wrap Empty Boxes

Dress up your windows with seasonal decals. You can find window stickers of snowflakes, ornaments, gingerbread men and more at the dollar store, craft store and major retailers like Walmart or Amazon. If stored properly, you can even reuse them for next year.

13. Holiday Cards Display

An easy way to light up the outside of your house without needing yards of string lights and a ladder is to use a light projector. You can buy one on Amazon, Home Depot, Walmart and similar retailers for under .

14. Make your Own Advent Calendar

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A boy eats a gingerbread house he made.
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15. Gingerbread House

Deck the halls without wrecking your finances. Here are 23 festive ideas for cheap Christmas decorations.

16. Display Your Kids’ Holiday Artwork

A flat Christmas tree hung on the wall is a great space saver and money saver. You can make wall Christmas trees out of a string of lights, garland, a large piece of felt or even Washi tape. Check out this article from Apartment Therapy for ideas. It looks festive with or without a tree topper!

17. Create a Holiday Tablescape

Make your home not only look but sound festive by tying jingle bells to some red or green ribbon and then wrapping them around your door knobs. Whenever someone opens a door, the kiddos in the house will be looking over their shoulders to see if Santa’s coming.

18. Sock Snowmen

While you’re out shopping for gifts, it can be very tempting to add a bunch of holiday decorations to your cart to help get your home looking merry and bright. But the cost of Christmas decorations often gets overlooked when making your holiday budget — and you end up spending way more than you thought you would.

A person decorates their Christmas tree with candy canes.
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19. Candy Canes

To avoid that post-holiday regret, consider these low-budget suggestions for decorating for Christmas.

21. Fake Snow in Windows

Forget the store-bought ornaments, and pick up your hot glue gun. Create wonderful holiday memories while crafting ornaments you can hang on your tree or use as decor around the house. See this Good Housekeeping post for over 75 ideas for DIY Christmas ornaments.

22. Flower Pot Decorations

Nicole Dow is a senior writer at The Penny Hoarder.

23. Light Projector

A string of lights can really spread holiday cheer. To save money, opt for shorter strings of light to cover smaller areas — such as a window or mantle piece, rather than along your gutters or around a 7 foot tree. You can also use a string of lights on a blank stretch of wall in the shape of a star or to spell out “Merry Christmas” in cursive.
You can use ribbon for more than just wrapping presents. Take some thick ribbon in Christmas colors like red, green or gold and use it to make bows to hang on your Christmas tree, your mantle and even on door knobs or drawer pulls. Tie them around a glass vase with a candle inside for a simple Christmas centerpiece. <!–

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Garland is a low-budget Christmas decoration that instantly adds holiday spirit to a room. In addition to stringing garland around your Christmas tree, you can hang strings of garland above your mantle, over your doorways, around your window frames or wrapped around the banister of your staircase. Instead of buying your garland, you can make your own using natural elements like dried citrus and pine cones, construction paper, popcorn or cheap ball ornaments.

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Using Income Share Agreements to Pay for School

Many students end up taking out loans to finance the cost of college. As of the first quarter of 2021, Americans collectively held $1.57 trillion in student debt, up $29 billion from the previous quarter. And a significant share of borrowers were struggling with their debt burdens: Just under 6% of total student debt was 90 days or more past due or in default.

Students looking for alternatives to student loans can apply for grants and scholarships, take on work-study jobs or other part-time work, or find ways to save on expenses.

Recently, another alternative has appeared on the table for students at certain institutions: income share agreements. An income share agreement is a type of college financing in which repayment is a fixed percentage of the borrower’s future income over a specified period of time.

As this financing option grows in popularity, here are some key things to know about how these agreements operate and to help you decide whether they’re the right choice for you.

How Income Share Agreements Work

Unlike student loans, an income share agreement, also known as an income sharing agreement or ISA, doesn’t involve a contract with the government or a private lender. Rather, it’s a contract between the student and their college or university.

In exchange for receiving educational funds from the school, the student promises to pay a share of his or her future earnings to the institution for a fixed amount of time after graduation.

ISAs don’t typically charge interest, and the amount students pay usually fluctuates according to their income. Students don’t necessarily have to pay back the entire amount they borrow, as long as they make the agreed-upon payments over a set period. Though, they also may end up paying more than the amount they received.

Income share agreements only appeared on the scene in the last few years, but they are quickly expanding. Since 2016, ISA programs have launched at places like Purdue University in Indiana, Clarkson University in New York, and Lackawanna College in Pennsylvania. Each school decides on its own terms and eligibility guidelines for the programs. The school itself or outside investors may provide funds for ISAs.

Purdue University was one of the first schools to create a modern ISA program. Sophomores, juniors, and seniors who meet certain criteria, including full-time enrollment and satisfactory academic progress, are eligible to apply.

Students may have a six-month grace period after graduation to start making payments, similar to the six-month grace period for student loans, and the repayment term at Purdue is typically 10 years. For some schools, however, the repayment term ranges from two to 10 years.

The exact amount students can expect to pay depends on the amount they took out and their income. The university estimates that a junior who graduates in 2023 with a marketing major will have a starting salary of $51,000 and will see their income grow an average of 4.7% a year.

If that student borrowed $10,000 in ISA funds, he or she would be required to pay 3.39% of his or her income for a little over eight years. The total amount that student would pay back is $17,971. The repayment cap for the 2021-2022 school year is $23,100.

Again, every ISA is different and may have different requirements, so be sure to check with your college or university for all the details.

The Advantages of Income Share Agreements

ISAs aren’t for everyone, but they can be beneficial for some students. For example, students who don’t qualify for other forms of financial aid, such as undocumented immigrants, may have few other options for funding school.

For students who have already maxed out their federal loans, ISAs can be a more affordable option than Parent PLUS loans or private student loans, both of which sometimes come with relatively high interest rates and fees.

Compared to student loans, many ISAs also protect students by preventing monthly payments from becoming unaffordable. Since the amount paid is always tied to income, students should never end up owing more than a set percentage for a fixed period of time. However, a student’s field of study may impact this. Students who are high earners after college may end up paying more to repay an ISA than they would have under other financing options.

If a student has trouble finding a well-paying job, or finding one at all, payments typically shrink accordingly. For example, Purdue sets a minimum income amount below which students don’t pay anything.

In Purdue’s case, the student won’t owe anything else once the repayment period is over, compared to student loans that can multiply exponentially over time due to accrued interest.

Purdue and several other universities also set the amount and length of repayment based on a student’s major, meaning monthly payments can be more tailored to graduates’ fields and salaries than student loans are. For fortunate students who see their income rise beyond expectations, many schools ensure the student won’t pay beyond a certain cap.

Potential Pitfalls of Income Share Agreements

ISAs come with some risks and drawbacks, as well. Firstly, since the repayment amount is based on income, a student who earns a lot after graduation might end up paying more than they would have with some student loans. This is because if a student earns a high income after graduating, they’d pay more to the fund. Second, the terms of repayment can vary widely, and some programs require graduates to give up a huge chunk of their paychecks.

For example, Lambda School , an online program that trains students to be software engineers, requires alums who earn at least $50,000 to pay 17% of their income for two years (up to $30,000). This can be a burden for recent graduates, especially compared to other options like income-driven repayment, which determines the percentage of income going towards student loans based on discretionary income.

Currently, there is very little regulation of ISAs, so students should read ISA terms carefully to understand what they’re signing up for.

No matter what, income share agreements are still funding that needs to be repaid, often at a higher amount than the principal.

So you’re still paying more overall for your education compared to finding sources of income like scholarships, a part-time job, gifts from family, or reducing expenses through lifestyle changes or going to a less expensive school.

How Do Income Share Agreements Impact You?

Many schools’ ISA programs are designed to fill in gaps in funding when students do not receive enough from other sources, such as financial aid, federal or private student loans, scholarships or savings. Thus, it’s important to understand how an ISA will impact both your long-term finances and other methods to pay for college.

ISAs do not impact need-based aid like grants or scholarships. Students with loans, however, could have a more complicated repayment plan with multiple payments due each month.

With ISAs, there is less clarity as to how much you’ll end up repaying from up to 10 years of income. As your income changes, your payment will remain the same percentage unless it falls below the minimum income threshold ($1,666.67 at Purdue) or reaches a repayment cap.

Whereas students may pay more than the loan principal to reduce interest, ISAs often require reaching a repayment cap of roughly double the borrowed amount to be paid off early.

Depending on your future income and career path, an ISA could cut into potential savings and investments or serve as a safety net for a less stable occupation.

Who Should Consider An ISA?

As previously mentioned, income share agreements are an option for students who have maxed out on federal loans and scholarships. There are other circumstances when an ISA may or may not be worth considering.

Colleges may require a minimum GPA to be eligible for an ISA. For instance, Robert Morris University requires incoming students to have a 3.0 high school GPA and maintain a 2.75 GPA during their studies for continued funding eligibility. Taking stock of how an ISA aligns with your academic performance before accepting funding could reduce stress later on.

Since ISA programs structure repayment as a percentage of income, graduates who secure high-paying jobs can end up paying a significant sum compared to the borrowed amount. An ISA term could be more favorable to students planning to enter sectors with more gradual salary growth, such as civil service.

Repayment plans at income sharing agreement colleges are not uniform. Students at schools with lower payment caps and early repayment options may find ISAs more advantageous.

Considering Private Loans

Students should generally exhaust all their federal options for grants and loans before considering other types of debt. But for some students looking to fill gaps in their educational funding, private student loans may make more sense for their needs than ISAs.

Recommended: Examining the Different Types of Student Loans

In particular, students who expect to have high salaries after graduation may end up paying less based on interest for a private student loan than they would for an ISA. Some private loans can also allow you to reduce what you owe overall by repaying your debt ahead of schedule.

SoFi doesn’t charge any fees, including origination fees or late fees. Nor are there prepayment penalties for paying off your loan early. You can also qualify for a 0.25% reduction on your interest rate when you sign up for automated payments.

The Takeaway

As mentioned, an income share agreement is an alternate financing option for college. An ISA is generally used to fill in gaps in college funding. Generally, it’s an agreement between the borrower and the school that states the borrower will repay the funds based on their future salary for a set amount of time.

One alternative to an ISA could be private student loans. Keep in mind that private loans are generally only considered as an option after all other sources of federal aid, including federal student loans, have been exhausted.

If you’ve exhausted your federal loan options and need help paying for school, consider a SoFi private student loan.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.
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.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Paying your credit card early: Does it help your score?

Couple looking at finances together.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Paying your credit card early can raise your credit score. After your statement closes, your credit card issuer reports your balance to the credit bureaus. Paying your bill ahead of time lowers your overall balance, so the bureaus will see you using less credit in total. Since utilization makes up around one-third of your credit score, paying your card early can have a positive overall effect. 

However, paying your credit card bill early may work differently if you carry a balance on your card each month. Instead of paying your next statement early, you’re actually making an extra payment on your previous balance. Therefore, you’ll likely still need to pay the minimum amount on your next statement, or your payment could be considered late.

In most cases, paying your credit card bill early is a good idea—and it can have a positive impact on your score. 

Read on to learn more about how paying your card early affects your score. 

How paying your credit card bill early can help your credit score

Paying your credit card bill early may increase your credit score, since the overall debt that gets reported to the credit bureaus is likely to be lower. 

To understand how paying a bill early could raise your score, you need to understand two things: the factors that make up your score and how your credit issuer reports to the credit bureaus. 

How paying early could raise your score

Your score is calculated based on several factors, and two of them are relevant to paying your bill early: credit utilization and payment history. 

  • Payment history makes up around 35 percent of your score, and simply put, paying your bill early means that you aren’t paying it late. Late payments can have a major negative effect on your score, so paying your bill on time or early will help boost your score.
  • Credit utilization accounts for around 30 percent of your score, and it represents how much of your available credit you’re actually using. As a general rule, you should aim to use one-third of your credit or less. For example, if you have a total credit limit of $9,000, you’d want to keep your balance below $3,000.

The credit bureaus—TransUnion®, Experian® and Equifax®—are responsible for keeping track of your credit history. They receive all of their information from lenders, like the financial institution that issued your credit card. 

After your monthly statement is issued with your balance, you have a grace period before the payment is due—typically around 21 days. During that time, your credit card provider will report your balance to the credit bureaus. If you pay your balance before your statement closes, the total listed balance will be lower, so the credit bureaus will see your overall utilization as lower, which could increase your score.

That said, your particular situation may change how early payments work, so you’ll want to make sure you understand your billing cycle and balance before making early payments.

Is it ever bad to pay your credit card early?

While it is never bad to pay your credit card bill early, the benefits you receive from doing so may vary depending on your circumstances.

For example, if you carry a balance on your credit card every month, you may need to adjust how you handle early payments. While it is a myth that carrying a balance on your card improves your score, there are reasons you may have lingering credit card debt nonetheless.

Early payments work differently if your credit card has a balance.

If you do carry a balance on your card each month, keep the following in mind:

  • Your early payment may not count as your minimum payment. If you have a balance from a previous month, you can’t make an “early” payment toward your next statement. Instead, you’re making an extra payment, so you’ll still need to make a minimum payment after your new statement is issued.
  • You may not save money on interest and fees by making an early payment. Depending on how your credit card issuer calculates finance charges on your previous balance, your early payment may not reduce your interest or fees by much or at all. For example, if you’re charged based on average daily balance, simply paying at the end of the month may not help much.

All that said, it’s still usually a good idea to pay down your credit card debt if you have the funds available to do so. You may not see an immediate score increase if you have a substantial balance, but over time, you’ll build the financial habits that can help you eliminate debt and begin making on-time—or early—payments consistently. 

When is the best time to pay your credit card? 

The best time to pay your credit card bill is before the payment is late. While you may benefit from paying your bill early, you’ll definitely see negative effects if you pay your bill late. 

Paying early keeps your payment history intact and may help lower your overall utilization, while paying your bill more than 30 days late will likely lead to a negative item on your credit report. And if you neglect to pay long enough, your account could get sent to collections. 

If you do start paying your credit card bill early, you’ll want to begin checking your credit report regularly to see how your balance is being reported to the credit bureaus. Over time, you should see your utilization drop and your credit score increase.

While sifting through your credit report, it’s important to keep an eye out for inaccurate information like fraudulent accounts, incorrect negative items or factual mistakes. Any of these inaccurate items could be lowering your credit score. Fortunately, it’s possible to dispute these items on your report and repair your credit score. 

Reviewed by Horacio Celaya, Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Horacio Celaya was born in Tucson, Arizona but eventually moved with his family to Mexicali, Baja California, Mexico. Mr. Celaya went on to graduate with Honors from the Autonomous University of Baja California Law School. Mr. Celaya is a graduate of the University of Arizona where he graduated from James E. Rogers College of Law. During law school, Mr. Celaya received his certificate in International Trade Law, completing his thesis on United States foreign direct investment in Latin America. Since graduating from law school, Mr. Celaya has worked in an immigration firm where he helped foreign investors organize their assets in order to apply for investment-based visas. He also has extensive experience in debt settlement negotiations on behalf of clients looking to achieve debt relief. Mr. Celaya is licensed to practice law in New Mexico. He is located in the Phoenix office. 

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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What Is IPO Due Diligence?

An Initial Public Offering, or IPO, represents the first time a private company makes its shares available for trade on a public stock exchange. As part of the IPO process, private companies must perform due diligence to ensure that they’ve met all the requirements for going public. This ensures that the company follows all registration and disclosure guidelines established by the Securities Act of 1933.

Broadly speaking, IPO due diligence is similar to the due diligence performed in any other situation involving large amounts of capital. Just as an investor may research certain aspects of a company before deciding to purchase shares, a company that’s planning an IPO must have an understanding of the various factors that could positively or negatively affect its success.

If you’re interested in investing in IPOs, it’s helpful to know what goes on behind the scenes and how the IPO due diligence process works.

Recommended: How to Buy IPO Stocks

IPO Due Diligence Process

IPO due diligence typically takes place within the first 60 days of a company beginning the IPO process. During the IPO due diligence process, the IPO underwriters and IPO attorneys will work together to perform the necessary background research to gain a better understanding of the company, its management and its financials. This involves gathering the follow information:

1. Organizational Data

During the first stage of the IPO due diligence process, the underwriters and attorneys gather information about the company’s organizational structure. This may include requesting copies of any or all of the following:

•   Articles of incorporation

•   A list of the company’s shareholders and committees

•   An overview of the number of shares owned per individual shareholder

•   Annual business reports for the previous three years

•   Company business plans or strategic plans

•   A breakdown of the company’s organizational structure, including board members, directors, and employees

The underwriting team may also request a copy of a certificate in good standing from the State Secretary, along with information on organizational decision-making.

2. Licensing and Taxation

The next step in IPO due diligence involves collecting information about the company’s licensing and taxes. At this stage, the IPO underwriter and/or attorneys may request copies of:

•   All business licenses currently issued to the company

•   Annual tax returns

•   Government licenses and permits held by the company

•   Employment tax filings

•   Comprehensive reports of the company’s tax filing data

The underwriting team may look back three years or more when analyzing income tax returns and tax filing information.

3. Board and Employee Information

Due diligence can also extend to information about the company’s board of directors, its managers, and its employees. At this phase of IPO due diligence, underwriters and attorney may request:

•   A list of all individuals it employees

•   Information about employee status, including each employee’s position and salary

•   Details regarding employee benefits and bonuses, according to position

•   A copy of company policies relating to sick leave or conflict resolution

•   Details about employee insurance benefits, including health, disability and life insurance

•   Copies of resumes for leading personnel

•   Copies of employee audits

With regard to employee audits, underwriters can look back two to three years.

4. Financial Information

A company’s finances can come under close scrutiny during the IPO due diligence process. When considering financial information, the IPO underwriting and legal team may review:

•   Copies of broker or investment banking arrangements

•   Company financial statements records, including previous financial audits

•   A list of all financial accounts help by the company

•   Copies of financial analyst reports

•   Information about the company’s inventory holdings

•   Details regarding the company’s accounting and amortization methods

•   A list of all fixed and variable expenses

The time frame for which underwriters can review financial information can stretch from the previous three to five years, depending on what they’re examining.

Recommended: How to Read Financial Statements

5. Customer/Service Information

Due diligence also takes into account interactions with customers and service practices. During this step, the underwriting team may request:

•   Reports or information about the products and services offered by the company

•   Details about consumer complaints filed against the company

•   Information about legal approvals for the company’s products and services

•   Copies of the company’s trading policies

•   Details regarding the company’s marketing strategies as well as copies of marketing materials

The underwriters may also need to see copies of customer supply or service agreements.

6. Company Property

Last but not least, IPO underwriters will examine property holdings owned by the company. This can include reviewing information about:

•   Business locations

•   Real estate agreements and/or franchise licenses

•   Trademarks and copyrights held by the company

•   Approved patents held by the company

•   Trademark complaints, if applicable

•   Official contracts showing the purchase of real estate

The underwriters may also ask for a full inventory of any physical or real property the company owns.

Objective of IPO Due Diligence

During due diligence, the underwriting team is working to gain a full understanding of how the company operates, how it’s structured, how healthy it is financially, and whether there are any potential issues that could be a roadblock to going public. The due diligence process effectively clears the way for the next steps in the IPO process.

The IPO due diligence process ensures that there are no surprises waiting to crop up that could derail a company’s progress. It’s also an opportunity for the underwriting team, the IPO attorneys and the company itself to assess any potential risk factors that may affect the IPO’s outcome.

Benefits of Due Diligence Process

IPO due diligence has benefits for both the company and investors.

IPO Due Diligence Benefits to the Company

•   Due diligence offers an opportunity to explore the viability of an IPO, based on the company’s business model, financials, capital needs and anticipated demand for its shares.

•   Due diligence also allows the company to avoid going afoul of regulatory guidelines, and it can help to identify any issues the company may need to address before going public.

IPO Due Diligence Benefits to Investors

•   The due diligence process can reveal more about a company than the information in the initial red herring prospectus. In IPO investing, a red herring refers to the initial prospectus compiled for SEC registration purposes.

•   If investors feel confident about the information they have, that could help to fuel the success of the IPO which can mean more capital raised for the company and better returns for those who purchase its shares.

Next Steps in Filing IPO

Once the underwriting team has completed its due diligence, the company can move on to the next steps involved in how to file an Initial Public Offering (IPO). Again, that includes:

•   SEC review

•   IPO roadshow

•   Pricing

•   Launch

•   Stabilization

•   Transition to market

The SEC review typically takes between 90 and 150 days to complete. Now, it’s up to the SEC to determine that all regulatory requirements have been met. Usually, the team conducting the review includes one or more attorneys and one or more accountants.

Next, comes the roadshow. During the roadshow, the company presents details about the IPO to potential investors. This step of the IPO process allows the company and underwriters to gauge interest in the offering and attract investors.

IPO pricing usually involves a closer look at the company’s financials, including its valuation and cash flow. Underwriters may also consider valuations for similar competitors when determining the appropriate IPO price.

After setting the IPO price, the underwriters and the company will schedule the IPO launch. Once the IPO launches, investors can purchase shares of the company. The underwriter does the steering on price stabilization movements during the 25 days following the launch, after which the company transitions to market competition, concluding the IPO process.

The Takeaway

IPO due diligence is an important part of the IPO process. Thanks to due diligence, investors who want to purchase IPO stock can feel confident that a company about to go public complies with all relevant SEC regulations.

If you’re interested in purchasing IPO stock, it’s easier than you might think to gain access to newly-launched companies. With a brokerage account on the SoFi Invest investment app, members can invest in IPOs.

Photo credit: iStock/porcorex

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1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
IPOs: Investing early in IPO stock involves substantial risk of loss. The decision to invest should always be made as part of a comprehensive financial plan taking individual circumstances and risk appetites into account.
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Source: sofi.com

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It Still Pays to Wait to Claim Social Security

Laurence Kotlikoff is a professor of economics at Boston University and author of Money Magic: An Economist’s Secrets to More Money, Less Risk, and a Better Life. He also developed MaxiFi Planner and Maximize My Social Security—software programs designed to help users raise their living standards by getting the most out of their Social Security benefits.

In its most recent annual report, the Social Security Board of Trustees said that if nothing is done, the trust fund will be depleted by 2033, which would mean Social Security would be able to pay out only 76% of promised benefits. What do you say to people who plan to file at age 62—which results in about a 25% cut in benefits—because they’re afraid the program will run out of money? I have run through our software a benefit cut starting in 2031, and you still see a very major gain from waiting to collect. But I don’t see the politicians cutting benefits directly. I think they’re going to raise taxes on the rich. Congress could also use general revenue to finance Social Security, or they could partially index benefits for the rich. Historically, they phase in changes, so anybody who is close to retirement is quite safe—and by close I mean 55 and older.

Yet many people fear that if they postpone claiming Social Security until age 70, they’ll die before they’ll be able to take advantage of the higher benefits. What’s your response to that? They’re ignoring longevity risk. If you’re 98 and collecting a Social Security check that’s 76% higher and adjusted for inflation, that’s where you want to be. A lot of people will live that long. If you buy home insurance and your house doesn’t burn down, are you shortchanged because you paid the premium? You’re protecting yourself against catastrophic events. Financially, the catastrophic event is living to 100.

Thanks to big increases in home values, seniors have seen their housing wealth grow to a record $9.6 trillion. Are reverse mortgages, which allow seniors to tap that equity while remaining in their homes, a good source of retirement income? When the Federal Housing Administration insured most reverse mortgages, I thought, they can’t be that bad. But when I spent several weeks looking at them carefully with software, I decided that they’re way too expensive. They’ve got huge fees. You could sell your home and move into a continuing care retirement community—that’s like buying an annuity and long-term-care insurance at the same time. Or you could sell the house to the kids and write a contract in which they let you stay in it until you die. You take care of me and as soon as I die, you get the house. I die early, you win. I die late, I win. But it’s a win-win because we’re insuring each other.

What did the pandemic teach us, if anything, about the state of personal finances in the U.S.? We don’t save enough. The Chinese save 30% of their disposable income. We save very little. This is a wake-up call. The pandemic got me to think about what I was spending on housing, living in Boston. We downsized and moved to Providence, where house prices were a third as expensive. The pandemic has been a saving and spending wake-up call for us, just as the Great De­pression was for those who lived through it. We’ve realized life is much riskier than we thought. The pandemic is making us all reevaluate our finances and what really matters, which doesn’t include driving a BMW.

Source: kiplinger.com

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How to Talk to Your Children About Student Loans: 6 Key Points

Many parents lecture — er, talk to — their teenagers about being responsible. Don’t text and drive. Do try to spend that summer job money wisely. As children approach college, talking about student loans might be a smart idea.

For one, the topic is pretty complicated.

And second, even if you plan to help repay any student loans, most qualified education loans are taken out in the student’s name, and there’s usually no escape: Even bankruptcy rarely erases student loan debt.

Maybe your student-athlete or scholar is counting on a full ride. While confidence is a wonderful thing, full rides are exceedingly rare.

Here are six student loan concepts you can discuss with your aspiring college student.

1. Here’s What We Think We Can Contribute

It might be uncomfortable to talk frankly about your family finances, but they almost always determine the amount and types of financial aid your child may qualify for.

It can be important for parents to discuss what they’re able to contribute in order to help their young adults wrap their heads around the numbers, too.

2. Let’s Forge Ahead With the FAFSA

The first step to hunt for financial aid is to complete the FAFSA®, the Free Application for Federal Student Aid. It takes most people less than an hour. Students helping their parents fill it out will get a look at the expected family contribution: the family’s taxed and untaxed income, assets, and benefits.

Based on financial need, a college’s cost of attendance, and FAFSA information, schools put together a financial aid package that may be composed of scholarships and grants, federal student loans, and/or work-study.

Awards based on merit (scholarships) or need (grants) are free money. When they don’t cover the full cost of college, that’s where student loans can come in.

If your income is high, should you bother with the FAFSA? Sure, because there’s no income cutoff for federal student aid. And even if your student is not eligible for federal aid, most colleges and states use FAFSA information to award nonfederal aid.

About 400 colleges and scholarship programs use the CSS Profile, a financial aid application in addition to the FAFSA. It determines eligibility for institutional scholarships and grants.

3. Interest Rates: Fixed and Not

Your soon-to-be college student may not know that there are two types of interest rates: fixed and variable.

Fixed interest rates stay the same for the life of the loan. Variable rates go up or down based on market fluctuations.

You can explain that all federal student loans borrowed after July 2006 have fixed interest rates, which are set each year, and that private student loan interest rates may be variable or fixed.

4. Federal vs Private Student Loans

Around now your young person is restless. But press on.

Anyone taking out student loans should learn that there are two main types: federal and private. All federal student loans are funded by the federal government. Private student loans are funded by some banks, credit unions, and online lenders.

If your child is going to borrow money for college, it’s generally advised to start with federal student loans. Since federal student loans are issued by the government, they have benefits, including low fixed interest rates, forbearance and deferment eligibility, and income-based repayment options.

Private student loans have terms and conditions set by private lenders, and don’t offer the generous repayment options or loan forgiveness programs of federal loans, but some private lenders do offer specific deferment options.

Private student loans can be used to fill gaps in need, up to the cost of attendance, which includes tuition, books and supplies, room and board, transportation, and personal expenses. A student applicant often will need a cosigner.

5. Another Wrinkle: Subsidized vs Unsubsidized

Financial need will determine whether your undergraduate is eligible for federal Direct Subsidized Loans. Your child’s school determines the amount you can borrow, which can’t exceed your need.

The government pays the interest on Direct Subsidized Loans while your child is in college, during the grace period (the first six months after graduation or when dropping below half-time enrollment), and in deferment (postponing repayment).

With federal Direct Unsubsidized Loans, interest begins accruing when the funds are disbursed and continues during grace periods, and the borrower is responsible for paying it. Direct Unsubsidized Loans are available to both undergraduate and graduate students, and there is no requirement of financial need.

Borrowers are not required to pay the interest while in school, during grace periods, or during deferment (although they can choose to), but any accrued interest will be added to the principal balance when repayment begins.

There are annual and aggregate limits for subsidized and unsubsidized loans. Most dependent freshmen, for example, can borrow no more than $5,500.

6. Soothing Words: Scholarships and Grants

It’s important to not overlook the nonloan elements of the financial aid package. They can (hooray) reduce the amount your student needs to borrow.

Scholarships and grants are essentially free money.

While some schools automatically consider your student for scholarships based on merit or other qualifications, many scholarships and grants require applications.

You may want to assign a research project to your college-bound young adult to look into all of the scholarship options they may qualify for.

The Takeaway

Debt isn’t the most thrilling parent-child topic, but college students who will need to borrow should know the ins and outs of student loans: interest rates, federal vs. private, subsidized vs. unsubsidized, and repayment options.

If federal aid doesn’t cover all the bases of college, your student can consider a private student loan with SoFi.

SoFi Private Student Loans come with competitive rates, flexible repayment options, and no fees. A student can apply entirely online, with or without a cosigner.

See your interest rate in three minutes. No strings attached.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
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 or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

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Dear Penny: Did My Husband Betray Me by Giving Our Broke Daughter Our Car?

Dear Penny,
A couple of things in your letter — like the fact that he was swayed by your daughter’s tears into giving over the car keys and then told you by phone instead of in person — make me think that he may be the type who doesn’t like conflict. If you think that’s the case, make it clear that avoiding tough discussions is causing way more conflict. But if your husband doesn’t involve you out of arrogance, your problem will be a lot harder to solve. This isn’t going to be an easy pattern to fix, particularly if it’s persisted throughout the past 48 years. But your husband needs an impetus to change. Otherwise, this cycle will continue and your feelings of hurt and betrayal will only compound. -Livid Wife We have been married for 48 years. I was LIVID that he didn’t have the guts to talk to me about it and told me on a phone call with everyone there. I am mad and hurt over this. I feel betrayed. My daughter just about ruined our credit because our names were on the title of her past vehicle. Now he does the same thing AGAIN!!  Tell your husband that you feel hurt and betrayed, and explain how his actions affect you. Ask him why he feels that he can’t talk over these matters with you. The key here is to be proactive and talk about this before he makes another big decision.
You need to focus on mitigating the damage from your husband’s latest decision. Your daughter clearly has a history of not making payments, so your husband has put your credit at risk again.

More importantly, you need to get it across to your husband that making big decisions unilaterally is not OK.
Your husband made at least three big financial decisions without your consent. So the answer to your question is, yes, you have every reason to feel betrayed. But focusing on whether you have a right to feel a certain way doesn’t get you anywhere.
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The bigger challenge is communicating with your husband, particularly if he’s gotten used to being the sole decision maker in your 48 years of marriage. You need to have a frank discussion with him about how you handle money matters before he makes another big decision without involving you.
The best way to protect your finances from your daughter is to have her make payments directly to you. Then, you can directly make the payment to the lender. At the very least, you need to have access to the account so you can confirm that your daughter is actually making payments.
Our daughter got a check for ,400 and wanted him to help her find a car, but her credit wasn’t good enough to get one. She was upset and crying. So unbeknownst to me, he sold her our car for 0 down and had her take over payments. 
In that year he kept trying to get rid of his truck. Fast-forward to now. He made a deal to sell it to a car dealer without me. Then he bought a different car. Of course I wasn’t happy about it, but it did take our interest down and the payment to 0 per month. 
Ready to stop worrying about money?
Dear Livid,
Unfortunately, the reality of helping someone who isn’t creditworthy is that there’s a high likelihood you won’t get repaid. So you’ll need to budget with the assumption that you won’t get that 0 each month. If your names are still on the title, that’s actually a good thing because you can take back the car if your daughter fails to make payments.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

He trusted her to make payments that will end up being 0 with the other money she owes us. Am I right to be so hurt and betrayed?

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My husband and I had a four-wheel drive pickup. He bought this vehicle unseen in 2017. The car lot drove it to our house, all without my input. We had it for one year. In that time, our payments were 3 a month.