Are you looking for the best books about budgeting? Learning how to budget can change your life – you may be able to improve your finances, stop living paycheck to paycheck, start living debt-free, improve your net worth, and so much more. All from learning how to budget. To get good at budgeting, I think…
Are you looking for the best books about budgeting?
Learning how to budget can change your life – you may be able to improve your finances, stop living paycheck to paycheck, start living debt-free, improve your net worth, and so much more.
All from learning how to budget.
To get good at budgeting, I think it’s a great idea to learn from people who know a lot about it, which includes reading the best money books. There are all different kinds of budgeting books out there that cater to different people and their unique financial situations, so you are sure to find one that fits what you are looking for.
Key Takeaways
Best Books About Budgeting
Below are the best books about budgeting.
1. The Millionaire Next Door
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy written by Thomas J. Stanley is a favorite personal finance book for many people and is a great first budgeting book to read.
This book helps you to better understand the habits and mindset of millionaires in an easy-to-understand way (and it’s so interesting to read as well!). You will learn about the importance of living below your means and avoiding lifestyle inflation to achieve financial success and build real wealth.
You’ll find out that many millionaires live real simple lives, spending wisely and doing things differently, like how they use their time and raise their kids. It’s surprising to see what being rich really means, and some people who seem rich might actually have a lot of debt.
This is one of the best budgeting books because it teaches you that anyone can retire with wealth.
Please click here to learn more about The Millionaire Next Door.
2. The Simple Path To Wealth
The Simple Path To Wealth was written by J.L. Collins, and it’s one of the best books on money management, especially if you want to retire early.
This highly recommended book makes building wealth easy to understand, and it’s the book to go to if you want to make your finances better but don’t want to spend a lot of time on it.
In his book, Collins talks about important money topics, like staying away from debt, building wealth, understanding the 4% rule, and much more.
Please click here to learn more about The Simple Path To Wealth.
3. Broke Millennial
Broke Millennial: Stop Scraping By and Get Your Financial Life Together was written by Erin Lowry, and is one of the must-read best money books for young adults. The author makes talking about money fun and interesting, especially for young adults.
This book is made for millennials (and young adults!) who want to manage their money well.
Erin writes about how to have a clear plan to stop being broke and gives a step-by-step guide where she covers many different topics, including tricky ones like managing student loans and talking about money with your partner.
I like to give this book as a graduation gift to those finishing high school or college. It’s one of the best personal finance books for beginners because it helps young adults better understand money.
Please click here to learn more about Broke Millennial.
4. The No-Spend Challenge Guide: How to Stop Spending Money Impulsively, Pay off Debt Fast, and Make Your Finances Fit Your Dreams
The No-Spend Challenge Guide by Jen Smith is the perfect book for those struggling with spending. This guide has actionable steps to stop impulsive spending, pay off debt, and align your financial decisions with your dreams.
Jen Smith went from struggling to stay on a budget for more than two weeks to paying off $78,000 of debt in under two years. In her book, she shares experiences and strategies, including using No-Spend Challenges to shift her money mindset and budget more effectively.
Please click here to learn more about The No-Spend Challenge Guide.
5. The One Week Budget: Learn to Create Your Money Management System in 7 Days or Less!
The One Week Budget by Tiffany Aliche (The Budgetnista) is a great book to read if you want to create a better money management system that takes less of your time. So many people are afraid to manage their money because they think it will be hard or take a lot of time, so this is a great book to read to overcome that.
In just one week, this book will help you create a budgeting system to manage your money effectively. This is a great read for anyone new to budgeting or looking for a more simple approach to managing their money.
Please click here to learn more about The One Week Budget.
6. We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power
We Should All Be Millionaires by Rachel Rodgers is an inspiring book that teaches women how to build wealth and achieve financial independence.
You will learn how to make better money decisions, strategies to bring in more income, and how to change your attitude about money.
This book will also show you how to overcome obstacles in your life (such as lack of confidence or knowledge) so that you can build wealth.
Please click here to learn more about We Should All Be Millionaires.
7. How to Stop Living Paycheck to Paycheck (2nd Edition): A Proven Path to Money Mastery in Only 15 Minutes a Week!
How to Stop Living Paycheck to Paycheck by Avery Breyer is a practical guide that helps readers break the cycle of living paycheck to paycheck, and it gives tips on budgeting, saving, and investing.
You will learn how to build an emergency fund, get out of debt, avoid budget traps, and more.
This book teaches a complete budget system for beginners and takes only 15 minutes per week to do.
Please click here to learn more about How to Stop Living Paycheck to Paycheck.
8. How To Pay Off Your Mortgage In Five Years: Slash Your Mortgage with a Proven System the Banks Don’t Want You to Know About
How To Pay Off Your Mortgage In Five Years by Clayton Morris and Natali Morris is a great book for anyone looking to pay off their mortgage fast.
This is a helpful read for homeowners looking to shorten their mortgage term and save money on interest in the long run. This is a step-by-step system with a strategic plan to pay off your mortgage fast.
Please click here to learn more about How To Pay Off Your Mortgage In Five Years.
9. You Need A Budget
You Need A Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want by Jesse Mecham is a great personal finance book that teaches you a step-by-step budgeting system for managing your money more effectively.
You will learn things such as how to pick your priorities for your money, how to not let expenses sneak up on you, how to handle an unexpected expense, and how to get your money to last.
Please click here to learn more about You Need A Budget.
10. The Automatic Millionaire
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach is a book that simplifies the process of becoming financially independent, emphasizing the power of automating your savings and investments.
The Automatic Millionaire begins with the inspiring tale of an ordinary American couple — a low-level manager and a beautician — whose combined income never surpasses $55,000 per year. Remarkably, they achieve debt-free homeownership of two houses, put both kids through college, and retire at 55 with over $1 million in savings.
Please click here to learn more about The Automatic Millionaire.
11. I Will Teach You To Be Rich
I Will Teach You To Be Rich was written by Ramit Sethi and is a great first personal finance book to read. This has been a popular money book for years and for good reason!
This book is full of very helpful lessons presented in a fun way, and he covers the basics of personal finance, including budgeting, saving money, investing, and more.
Please click here to learn more about I Will Teach You To Be Rich.
12. The One Page Financial Plan
The One-Page Financial Plan: A Simple Way to Be Smart About Your Money by Carl Richards is a book that will help you create a single-page plan based on your personal financial goals.
This book will help you figure out how much money to invest each year, how much life insurance you need, how to handle unexpected costs (or a job loss), and more.
If you are looking for more of a visual way to manage your money, then this is the book to read.
Please click here to learn more about The One Page Financial Plan.
13. Your Money or Your Life
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin and Joe Dominguez has sold more than one million copies and is one of the most popular and best money books ever.
This book has been popular for over 25 years (but don’t let that stop you from reading it!), and it’s been updated with more recent topics like side hustles, new investment options, how to track your money online, and more.
This book focuses on mindful spending and helps you reevaluate your relationship with money. This book will guide you in getting out of debt, saving money with mindfulness and good habits, building wealth, contributing to saving the planet, and so much more.
Please click here to learn more about Your Money Or Your Life.
14. The Financial Diet
The Financial Diet (same name as the very popular blog!) by Chelsea Fagan is a guide to managing money, including tips on budgeting, saving, and investing so that you can make smart financial decisions.
This book will teach you how to get good with money, how to stick to a budget, how to invest, how to save money on food, and more.
The Financial Diet is the personal finance book for someone who doesn’t care about personal finance but is looking for a beginner’s guide to improve their financial situation. The writing style of this book will keep you interested and actually want to learn about personal finance.
Please click here to learn more about The Financial Diet.
Frequently Asked Questions About Budgeting Books
Below are common questions about finding the best budgeting books.
What are the best budgeting books for young adults?
My favorite budgeting book for young adults is Broke Millennial, and I personally buy this book and give it as a gift to anyone I know who is graduating from high school or college.
There are many other budgeting books that people love such as How To Manage Your Money When You Don’t Have Any by Erik Wecks, The Total Money Makeover by Dave Ramsey, Money Honey by Rachel Richards, Spend Well, Live Rich by Michelle Singletary, and so many others.
What’s the best budgeting book planner?
A budgeting book planner is a tool that you can use to organize your finances in one place and stick to your budget. You can find many different budgeting book planners here.
Best Budgeting Books – Summary
I hope you enjoyed this list of the best books on budgeting.
As you can see, there are many different budgeting books that can fit your personal situation.
These books talk about different parts of budgeting, like making a basic plan or handling money when you don’t have much. Whether you’re just starting or want to get better at budgeting, there is probably a book above that has something for you to learn.
Here’s a quick list of the best budgeting books listed above:
The news many American homeowners and homebuyers have been waiting for is starting to arrive.
Mortgage interest rates are coming down again, albeit not in a major way. Still, any drop is a welcome one, particularly after they hit the highest point since 2000 earlier in 2023. As of December 8, 2023, the average mortgage rate for a 30-year loan is 7.41% while the average 15-year refinance rate is 6.69%. While these pale in comparison to the rates buyers and owners could have secured just a few years ago, they’re still heading in the right direction. Just look at the beginning of November when the 30-year loan rate was 8.06% and the 15-year refi rate was 7.20% for confirmation.
Against this backdrop, many current owners may be wondering if now is the time to refinance their existing homes. While mortgage refinancing may not be for everyone, there are some major signs to look for that could indicate it’s the right time for you to act. Below, we’ll break down three big signs it’s time to refinance now.
Not sure what mortgage refinance rate you’d qualify for? Find out here now.
3 big signs it’s time to refinance your mortgage
Does a mortgage refinance make sense for you now? Here are three major signs it may be time to get started.
You can get a lower interest rate than what you already have
While a 6.69% refinance rate isn’t considered a bargain by many (particularly when they were under 2% just a few years ago), it could be lower than what you currently have. If you have an adjustable-rate mortgage (ARM) currently, for example, you could be paying more than that. So by refinancing, you’ll save money that otherwise would have been going to interest. That said, there are a few caveats to be aware of.
First, make sure that the new rate is at least one point lower than your existing one. Many experts don’t recommend making the switch if the difference isn’t at least that large. Secondly, you’ll want to make sure that you can afford a larger payment. By refinancing into a shorter term, your loan will become condensed and your payments will increase, even at a lower rate. So crunch the numbers before proceeding — or look at refinancing into a 30-year loan instead. Finally, be sure that you’re planning on staying in the home long enough to recoup the closing costs required to refinance. If you’re not, it doesn’t make sense to act, even if you could get some short-term relief.
Explore your mortgage refinancing options here to see if it’s right for you.
You want to get rid of the loan sooner
Let’s say you recently inherited a large sum of money or your job situation has changed dramatically. In these instances, and some others, you may want to pay down your existing debt quicker. And with mortgages being some of the biggest monthly payments Americans have, it makes sense to look to a refinance.
By refinancing to a shorter time frame, you’ll have larger payments to make now, but for a much shorter period than you would have if you kept your loan on the current pace. Plus, you’ll save significant sums of money that otherwise would have gone to the lender in the form of interest.
Your finances have changed
Your finances may have changed since you first took out your loan. If you received an adjustable-rate mortgage, for instance, you may have since seen your interest rate increase significantly. In this case, you may want to refinance to a lower, fixed rate instead.
It’s also possible that you put a down payment of less than 20% when purchasing your home, thus mandating a private mortgage insurance (PMI) payment to the lender. But if you’ve since accumulated that 20% in equity (and you probably have, since millions of homeowners now have hundreds of thousands of dollars worth of usable equity), then it may make sense to refinance and have the PMI dropped.
Only you will know which circumstances apply and which ones don’t. Take a closer look at your mortgage loan and paperwork and crunch the numbers to see. You may be surprised at what you could save by acting now.
The bottom line
While a mortgage refinance can make sense for many in a low-rate environment, it may not be as beneficial now, even if rates are dropping in a favorable direction. That said, it can make sense to act now if by refinancing you can get your rate lowered by one point (or more). It may also be helpful to refinance to a shorter term if your goal is to rid yourself of the loan as soon as possible. And if your finances have since changed — your ARM rate has gone up or you’re still paying PMI when you don’t need to — it may be a sign that a refinance is right for you. As with all personal financial decisions, be sure to crunch the numbers carefully and review your budget before acting. By doing so, you’ll know if a mortgage refinance really makes sense for you now, or if it just appears that way.
Learn more here now.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
Graduating college is a big deal. The time you spent in school has likely taught you a lot about the subjects you studied, being organized and meeting deadlines, and life in general. Once you have your degree, you’ll put those skills to good use as you embark on your career and independent life. No more dining hall, no more dorms…it’s time to launch adult life and figure out how to make your own way.
To help you deal with some of the basics (like a job and banking), read on. You’ll find valuable tips to help you through the first steps of post-grad life.
Life After College
Congrats on your degree! Now, on to the next challenge after graduating college. It’s time to tackle adulting, which can include such things as getting set up in your new living situation, finding your favorite brunch spot, and making new friends if your college pals have scattered to different places.
In addition, there are some major daily-life tasks to wrangle:
• Finding and holding a job
• Taking control of your health and your health insurance
• Keeping your brain active, which may lead to more studies
• Managing your money.
Read on to get some helpful advice on these last four topics (you can probably find the best brunch spot in your new neighborhood without too much help). 💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.
Getting to Work
Hopefully you enjoyed a few weeks off post-grad to travel or kick back and relax after four years of hard work. But what to do after college for many people is find work.
When you’re ready to begin your job search, it can be a lot to process. Chances are, it’s time to focus on taking steps towards building your career.
First off, don’t let job searching stress you out. New grads are in luck. Unemployment is low, and the labor market is strong. According to a recent survey by the National Association of Colleges and Employers, companies expected to hire almost 4% more class of 2023 grads than they did from the previous class.
Not sure where to look for work or what you should be earning? Research, network, and research some more.
• Your school’s career services office may provide job leads, and its alumni office may be able to network you with people in your field who can share insights.
• Search for jobs online. There are many job boards, such as Indeed and ZipRecruiter, to access.
• Put out the word among friends, families, past internship supervisors, and others.
• To gain intel on starting salaries, try an online salary calculator. You provide some basic info like your location and experience, and their tool tells you what the average salary for your desired role is. While this tool can only provide an estimate, it may help you determine if you should try to negotiate for a higher salary when you receive a job offer.
Taking Your Health into Your Own Hands
As part of learning how to navigate life on your own, make sure you take the reins of your healthcare. Mom and Dad likely aren’t scheduling those biannual dental checkups for you anymore.
Whether you’re still on your parent’s policy or are buying your own health insurance, getting more familiar with the resources your healthcare plan provides is never a bad idea.
It can help you stay on top of scheduling check ups, dental cleanings, and eye exams. You may also need to learn the ropes of finding in-network doctors as you move to a new place or get your own policy.
And you might want to start saving for any unexpected medical or dental bills that may arise. Having an emergency fund at the ready can be an important step to financial wellness in this new chapter of your life.
Speaking of wellness: You may feel swamped by post-grad life, but it’s such an important time to prioritize your well-being. It might be helpful to make time to go to the gym each week, meditate, cook healthy meals, and get a good night’s sleep. Getting into good health habits is an excellent adulting accomplishment. 💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.
Continuing Your Learning
It’s normal after college to need a little break from learning. For the first time in your life, there is no one telling you what to read or what classes you have to take. But once the dust has settled and you’ve had a rest from hitting the books, you might try to prioritize learning. Not only does it keep your brain sharp, it can also help boost your career.
For example, you could consider obtaining a professional license related to your career or industry. According to the most recent intel from the Bureau of Labor Statistics, 24% of workers have some sort of professional license or certification. Having one may give you a competitive boost at work or while job searching. You can go the extra mile to develop more skills needed in your career through an online class or professional conference.
What’s more, additional learning and training could lead to a profitable side hustle or gig work. For instance, you might be able to pick up extra cash during tax season supporting professional tax preparers.
Learning-wise, not all of what you do after graduation has to go towards career advancement, of course. Take that cool history of film class at your local community college. Join a book club or just load up your bookshelf with books you’re dying to read. Exploring your passions can help you feel motivated, fulfilled, and inspired. Now is the time in your life to open doors, not close them.
Recommended: What Should I Do After My Master’s Degree?
Getting Your Finances Organized
Once you graduate from college and join the working world, it’s likely time to look at whether your current banking partner suits your needs.
It can be a wise move to look for a bank that offers a good interest rate on your deposits, convenient access, and tools that help you track your money in a quick and convenient way.
As you organize your money (and don’t forget to start that emergency fund mentioned above), you may realize that one expense that may really be bringing you down is your student loan debt payments.
The average federal student loan debt is currently $37,338, according to the Education Data Initiative. Is student loan debt weighing you down? There are a few strategies you can use to help pay off your student loan debt quicker. You might start your journey to a student loan-free life by creating a monthly budget that can help you get out of debt.
• To create a budget that can assist with paying off debt, you could start by gathering all of your bills and recent receipts. Review exactly what you need to spend on necessary living expenses (rent, food, health insurance, minimum debt payments), how much you are spending on the wants in life (travel, entertainment, clothing), and how much you can save or put toward additional debt payment.
• There are different budgeting methods, and it’s a good idea to spend a bit of time finding the one that works for you. For instance, you might like the 50/30/20 budget rule, which says to allocate 50% of your take-home pay to necessities, 30% to wants, and 20% to savings and extra debt payoff.
Whichever technique you choose, do compare the cost of your living expenses to your paystubs to see how much you can afford to pay towards debt each month. Creating a budget can help you not only pay off your debt, but avoid accumulating more debt in the future.
Recommended: Which Debt to Pay Off First: Student Loan or Credit Card?
The Takeaway
Once you have your monthly budget under control, you might be considering refinancing your student loans as part of how you navigate life post-college. You may be able to lower your interest rate, lower your monthly payments by extending your repayment term, or release a co-signer from a previous loan.
Do note that lengthening your repayment term can increase the interest you’ll pay throughout the life of your loan.
Refinancing comes with many benefits, but keep in mind that you lose federal benefits and protections when you refinance federal loans with a private lender. But if you are not planning on taking advantage of these benefits, refinancing might be for you.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
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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Learning how to budget money on a low income takes work, but it can pay off big if you start early. Here’s how.
November 28, 2023
Starting your first job after school can be exciting, but it also ushers in new challenges. One of the biggest hurdles is making sure you can cover all of your bills and living expenses with your entry-level income.
Taking the time to create a budget can reduce stress and set you up for long-term financial success, says Michela Allocca, founder of the personal finance blog Break Your Budget. Sticking to a budget on a low income in your 20s can get your financial life in order with the right mindset for planning.
Not sure how to budget money on a low income? Allocca explains what a budget is, why it’s important to have one, and how to stick to one—even on a low income.
Why budgeting for young adults is important (especially on a low income)
Creating a budget may not sound like the most exciting way to spend time when you’re young and adventurous. But Allocca says that putting in the work now will make it easier to reach your financial goals and avoid money stress in the future.
In short, a budget is a spending plan based on an individual’s income and expenses, Allocca says. “In its simplest form, it’s how you choose to allocate your funds over a certain period of time,” she says. “It includes the essential expenses that make up your cost of living, as well as your nonessential expenses such as eating out, entertainment, or travel.”
Allocca believes having a budget is helpful at any stage of life, but it’s especially important in your 20s. “Not only does it provide direction on where your money is going, but it draws your awareness to what you are spending your money on,” she says. “This level of awareness makes it possible to nip poor spending habits in the bud early on, as well as ensure the money you are spending is being directed toward things that matter to you.”
How to create a budget that works for you
Younger people are often looking to align their spending with their values, Allocca says, and creating a budget can make your financial dreams a reality. When you’re ready to create a budget, Allocca recommends taking the following steps:
1. Gather information
“First, start by bringing awareness to your expenses,” Allocca says. “Look back at how you’ve been spending pre-budget.” She recommends taking a look at your credit and debit card statements from the last three months. From there, you can figure out the categories, based on your monthly expenses, that you’ll need to allocate money to.
2. Pinpoint your spending
Next, identify what you’re spending on average for each of the various categories of your budget. “You can use your historical information as a guide from the statements you reviewed earlier,” Allocca says. This is especially helpful if you’re thinking about how to budget to pay off debt.
3. Adapt and adjust
No budget is perfect out of the gate, Allocca says. Rather than spending time making sure your budget is flawless, it’s more important to put it into action and iterate as you move forward. “It’s super normal for your budget to shift and change both throughout the month and over time,” she says. “If it’s your first budget, keep an open mind to adjustments, and don’t worry if you are over or under in a certain area at first.”
To build your beginner budget, Allocca recommends using either a budgeting app or a budgeting spreadsheet (her personal preference).
How to stick to your budget over the long run
Creating a budget is the first step toward building a healthy financial future, but sticking to a budget is crucial. Allocca shares some tips for budgeting for young adults, even those who have a low income.
Learn how to say no
“’No,’ is a full sentence,” Allocca says. “In your early 20s it can be easy to succumb to peer pressure or to feel like you need to buy things to keep up with an image. It’s okay to turn down plans if it’s going to stretch your finances too thin or if it just isn’t worth it.” Your future self will be rewarded for making those sacrifices early in adulthood, she says.
Keep your essential expenses as low as possible
Having fewer expenses will make it easier to stick to a budget. “The highest expenses you’ll have are rent and your car, if you have one,” Allocca says. “If you’re in your early 20s, get a roommate or two, and don’t buy or lease a car that is more than 10%-15% of your income.”
Prioritize your value categories
What expenses are most important to you? “You don’t need to do everything, and you don’t need to spend your limited income on anything that isn’t adding value to your life,” Allocca says. “In my early 20s, I prioritized my discretionary income on my gym and my restaurant budget because those two things added the most value to my life.” Or, if you’re learning how to budget to pay off debt, you should prioritize your debt payments in your budget to become debt-free.
How to adjust when your expenses outweigh your income
Allocca says that budgeting for young adults on a low income is very similar to budgeting on an average or even a high income. The formula stays the same, she says: Allocate your income to the appropriate categories.
“The challenging part of having a low income is that you have less wiggle room, which can make day-to-day decision-making a lot harder,” Allocca says. “Don’t let this intimidate you, because a budget shows you how to use your money. It’s designed to be a tool to help you.”
And if your expenses outweigh your income, you can either reduce your expenses or increase your income. “Unfortunately, there is no secret sauce to this problem; it boils down to the math,” Allocca says. “That being said, there are ways to go about this that don’t need to be super overwhelming or stress-inducing.”
First, look at your expenses. If this is your first budget, there are likely many ways to make cuts. Start with unnecessary expenses: What can you live without? Once you’ve trimmed the nonessentials, assess whether you can reduce any essential expenses—whether that means moving to a less expensive apartment or buying produce on sale.
Spending less is a great start, but you can only cut your expenses so much. “The other side of the coin is increasing your income, which isn’t as hard as you think,” Allocca says. She encourages people to pick up a side hustle, such as ride-share driving or delivering food to earn extra cash. “Think about skills you have that you can leverage to earn money online via freelance websites,” she says.
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Budgeting allows you to get a handle on your expenses, spending, and financial goals. Having a budget in place early in adulthood helps you develop healthy financial habits—such as regularly adding to your savings account—and can reduce money-related anxiety, Allocca says.
But budgets are not a one-and-done exercise; your budget should evolve to adapt to your life situation and goals, she says. To stay on top of your changing priorities, try referring to a financial review checklist to ensure your budget is always aligned with where you are—and where you want to be.
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Want to learn how to make money on maternity leave? Parental leave can be a time of joy and excitement with a new baby around, but it can also mean money stress for parents. While you spend time taking care of your newborn, you may also need to find ways to make extra money to…
Want to learn how to make money on maternity leave?
Parental leave can be a time of joy and excitement with a new baby around, but it can also mean money stress for parents. While you spend time taking care of your newborn, you may also need to find ways to make extra money to pay for your expenses.
I had a baby not too long ago (she is currently 1.5 years old – time flies!), and being able to work while taking care of her has been a lifesaver. So, I understand why you’re reading this article – because I also had to work with a newborn.
The good news is that there are plenty of ways to make extra money while still being present for those early months with your new baby.
Why You May Need Extra Money On Maternity Leave
Many families have to take unpaid maternity leave, and others may find their leave is simply not long enough and want to extend it longer (many families in the U.S. get 3 months or even much less time).
Not only that, but maternity leave is an expensive time with medical bills coming in, the cost of baby essentials (diapers aren’t free!), and everyday living costs.
Also, there might be unexpected costs that weren’t part of your maternity leave budget. Perhaps your baby needs special formula or medication, or maybe your car broke down. These unplanned costs can put a dent in your finances, especially when your income may already be reduced during your maternity leave.
Or, you might also be looking to create a financial cushion for the future such as by saving for vacations or even starting a college fund for your baby. So, finding ways to make extra money during your maternity leave can be very helpful.
Recommended reading:
How To Make Money On Maternity Leave
When trying to earn money during maternity leave, here are three things to think about:
Flexibility is key – Choose work that can adapt to unexpected baby-related needs. It should let you manage your time effectively.
Think about earnings and growth – Think about how much you can make, how quickly, and if there’s room to grow.
Pick something you like and fits your goals – Do you enjoy the work? You may want to find work that matches your interests, skills, and future plans.
Read further to learn how to make money on maternity leave.
Top ways to make money on maternity leave
There are 27 ways to earn extra money on maternity leave listed below. If you want to skip the list, here are some jobs that you may want to start learning more about first:
1. Start a blog
Blogging is my favorite way to make money from home, and this is what I do while also raising my daughter.
Being a blogger involves creating content for online readers. You have the freedom to write about a topic you’re interested in (such as finance, travel, lifestyle, or family,) and freedom to decide how you want to make money on your blog – there are many different ways available such as affiliate marketing or displaying ads.
Blogging is my main source of income, and it has completely changed my life. I have the freedom to travel whenever I want, set my schedule, be my own boss, and I can spend all day with my daughter.
Learn more at How To Start A Blog FREE Course.
2. Sell printables on Etsy
Creating and selling digital printables on Etsy is a great way to work on your own schedule and earn money.
Plus, it is fairly passive income as you only have to make one digital file for each printable, and you can sell it as many times as you like. Another positive is that you can start it very affordably because you only need a laptop and internet.
So, what is a printable? They are digital items that you can download and print at home, such as grocery shopping checklists, budget planners, wedding invitations, wall art, and more.
I recommend signing up for Free Workshop: How To Earn Money Selling Printables. This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
Recommended reading: How I Make Money Selling Printables On Etsy
Other than printables, there are many other things you can sell on Etsy as well, such as soap, candles, jewelry, and more.
3. Transcription work
Transcription jobs are flexible and can be done from home. By turning audio files into text, you can earn money when it’s most convenient for you.
An online transcriptionist listens to audio or video recordings and writes down exactly what is being said. This process is called transcribing. The goal is to do this without any errors in spelling, grammar, or punctuation.
If you want to learn how to make money on maternity leave, this can be a great option as you can do this at home.
I recommend watching Free Workshop: Is a Career in Transcription Right for You? to learn more.
Recommended reading: 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly
4. Freelance writing
Freelance writers write articles, website content, social media posts, or even ebooks for clients.
I was a freelance writer for many years before switching to working full-time at writing here on Making Sense of Cents. It is a great career path where you can work from home and make your own schedule, such as writing while your baby is sleeping.
Recommended reading: 14 Places To Find Freelance Writing Jobs For Beginners
5. Virtual assistant
One of my first side hustles was working from home as a virtual assistant. This is a great way to work from home and have your own schedule.
Virtual assistants do many different kinds of tasks for clients, such as answering emails, scheduling appointments, managing websites, sending invoices, and so much more. It simply depends on what the person who is hiring you needs done.
If you want to become a virtual assistant, I recommend watching the free training 5 Steps To Become a Virtual Assistant.
Recommended reading: Best Ways To Find Virtual Assistant Jobs
6. Bookkeeper
If you’re good with numbers, you could sell bookkeeping services online or for small businesses, either on a freelance or part-time basis.
Bookkeepers are individuals responsible for managing financial things for businesses. This includes recording sales, tracking expenses, and generating financial reports.
If you want to become a bookkeeper, I recommend watching the free training How To Become A Bookkeeper.
Recommended reading: How To Find Online Bookkeeping Jobs
7. Freelance graphic design
With design skills, you can create logos, website designs, business cards, marketing materials, and more for clients and make money even during your maternity leave.
Recommended reading: How To Make Money As A Digital Designer
8. Data entry
Data entry clerks are like computer organizers. They enter, update, and double-check information in lists or tables. They type things like numbers and names to keep everything neat and organized.
Data entry jobs pay around $15 to $20 an hour, on average.
9. Create Canva templates
A Canva template is a pre-made design you can sell for things like social media graphics, ebooks, and presentations. It’s a handy starting point if a person is not great at designing from scratch.
Businesses, advertising professionals, social media influencers, and more all buy Canva templates all the time.
Canva templates have blank spaces where you can add your own words and pictures. You can also change colors and fonts to suit your preferences. They’re really useful for making things look good without spending a long time on it.
With Canva templates, you can sell a single design an unlimited amount of times. If you are looking for something passive, this is a great way to learn how to make money on maternity leave.
Recommended reading: How I Make $2,000+ Monthly Selling Canva Templates
10. Tutor
Tutoring students can be a great way to make money while on maternity leave, as there are many options to tutor from home. You may be able to create your own schedule and pick how much or how little you would like to work.
You can find online tutor jobs on websites such as Tutor.com. If you’d prefer to do in-person tutoring, you can call or email local tutoring companies in your area or share your tutoring services on social media or in local Facebook parent groups for your area.
Recommended reading: 11 Best Places To Find Online Tutoring Jobs (Make $100+ an hour)
11. Rent out your baby gear
Since you have a baby, you probably have a lot of baby gear.
Did you know that you can make extra money by renting it out?!
Renting out your baby gear on sites like BabyQuip can be a game changer when it comes to making extra income during maternity leave. This site allows you to share your baby items with families in need (such as a person on vacation), turning your baby gear into a source of income.
From strollers and cribs to high chairs and toys and more, you can list many different items on BabyQuip’s site.
Plus, you don’t need to have a lot of baby gear in order to get started – you can start with as little as a crib (which is the most commonly rented item).
According to BabyQuip, the average person can earn around $1,000 a month, and some are able to make over $10,000 per month.
12. Baby sleep consultant
As you already know, sleep is so important for a baby (and for the parents!).
You can earn a living while on maternity leave by becoming a sleep consultant. This is where you help other parents by helping them improve their baby’s sleep habits and routines.
Pediatric sleep consultants are experts in helping children sleep better and they make a big difference in families’ rest.
Read more at How To Become A Sleep Consultant And Make $10,000 Each Month.
13. Deliver groceries
If you want a flexible side gig while on maternity leave (and you also have someone to watch your child), then you may want to look into delivering groceries and food.
This can be a flexible side hustle because you can choose your hours and how much you’d like to work each week.
Services like Instacart need grocery shoppers, and the average shopper makes $15 to $20 an hour to deliver groceries. Drivers are paid per order, and you get to keep 100% of your tips. With Instacart, you would be physically going into grocery stores, picking out the food items yourself, checking out, and then delivering the groceries to your customer.
You can also learn more at Instacart Shopper Review: How much do Instacart Shoppers earn?
There are other food delivery gigs that you can do as well, such as GrubHub, Uber Eats, and DoorDash.
14. Airbnb host
If you have a separate space to rent in your home, such as an in-law’s quarters or an apartment above a garage, then you may be able to make money during your maternity leave by renting this space out.
You can learn more about this at What You Need To Know About Renting A Room In Your House.
15. Pet sit
If you are a pet lover, consider pet sitting for friends, family, or through an online service. It’s a great way to make some extra cash while you’re home and can be a fun addition to your day if you already have pets and babies at home.
If you’re interested in watching pets or dog walking, Rover is a platform where you can list your services and find clients.
16. Answer surveys
While answering online surveys and focus groups isn’t a way to make a ton of money, it can be a way to earn some extra money with whatever spare time you have from your newborn (such as when they are sleeping).
You simply share your opinions and answer simple questions, and in return, you can get cash or rewards like Amazon gift cards.
The survey companies I recommend include:
Survey Junkie
Swagbucks
Branded Surveys
InboxDollars
PrizeRebel
American Consumer Opinion
User Interviews – These are the highest paying surveys with the average being around $60.
Recommended reading: 18 Best Paid Survey Sites To Make $100+ Per Month
17. Affiliate marketing
If you want to learn how to make money while on maternity leave, one of my favorites is affiliate marketing.
I have been an affiliate marketer for years through this blog, and it is what allows me to stay at home with my daughter.
Affiliate marketing means making money by sharing a referral link on your website, YouTube channel, social media account, and more. When people use your referral link to purchase something, you then earn money.
For instance, consider sharing books from Amazon on your blog. You give your readers a link to a particular book and encourage people to buy it through your affiliate link. Companies like Amazon value affiliates who bring in high-quality traffic because they appreciate the extra support in helping them make more sales.
If you want to learn more about affiliate marketing, I recommend Affiliate Marketing Tips For Bloggers – Free eBook.
18. Proofread and edit
If you have an eye for detail, you may be able to sell your services as a proofreader or editor for different types of content.
Writers, business owners, and more hire proofreaders and editors to improve their work. There’s a big need for these types of positions, and you can find jobs through many different platforms.
If you want to become a proofreader, I recommend joining the free 76-minute workshop – Learn How to Become a Proofreader…and Start a Freelance Proofreading Business.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year)
19. In-home childcare
One great way to make money while on maternity leave is to provide childcare services for other families in your area, either part-time or full-time.
This is one of the best stay at home jobs for someone on maternity or paternity leave because it allows you to stay home with your kids while making money at the same time.
Depending on your location, you might need specific licenses. But you could potentially begin without the extra legal steps by working with just one or two children. Just be sure to verify with your local city or state regulations beforehand. It’s also very important to make sure that your home is safe for children and that you are CPR certified.
20. Sell baked goods
Do you like to cook? You may be able to make money at home by starting a home bakery for people and/or pets. You can sell homemade baked goods at local farmers’ markets or online too.
You can read more at How To Make Extra Money By Starting A Home Bakery. Here, you’ll learn about the equipment you need to start a home bakery, food laws, how much to price your baked goods at, and more.
If you are interested in baking goods for pets, then I recommend reading How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!).
21. Stock photo photography
Selling stock photo photography can be a great way to learn how to make money on maternity leave. This is because you would be working for yourself and can take pictures in your free time.
Stock image sites are popular sites for photographers to sell their photos. These sites allow customers to purchase pictures for various uses like websites, TV shows, books, and social media.
One great thing about stock photo sites is that they can be a great form of passive income. You can take pictures, upload them, and earn money from an older photo for months or even years in the future.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
22. Social media manager
Social media managers handle businesses’ social media accounts with the goal of attracting new customers and helping a business grow.
They might share images or videos showcasing products or the company, take part in popular social media trends (like on TikTok) to increase visibility, and respond to common customer questions.
23. Book reviewer
Book reviewers read books and share what they think through paid reviews.
Yes, there are websites where you can receive payment (as well as a free book) for sharing your thoughts about books. Some companies that pay for book reviews are Online Book Club, Kirkus Reviews, and BookBrowse.
Recommended reading: 16 Best Ways To Get Paid To Read Books
24. Flea market flipper
A flipper buys items from places such as garage sales, Facebook Marketplace, or thrift stores and resells them online for a profit.
You may be able to earn extra money by flipping items for resale or possibly earn a full-time income! You can even be able to make this a more flexible gig, such as only working during nap times.
A helpful free training that I recommend is Turn Your Passion For Visiting Thrift Stores, Yard Sales & Flea Markets Into A Profitable Reselling Business In As Little As 14 Days.
25. Rent out storage space
If you have unused space in your home, you can sell it as storage for rent to people in your local area. This can be a garage, driveway, closet, basement, or even an attic.
You can use a site called Neighbor to list any extra space you have available for rent and have the potential to make up to $15,000 per year.
You can sign up at Neighbor for free here and list your space.
You can also learn more about Neighbor at Neighbor Review: Make Money Renting Your Storage Space.
26. Sell an online course
Selling an online course is a great option for stay-at-home moms and dads who want to have control over their schedule and earn a somewhat passive income.
Some topics that you can teach in a course are:
Fitness and exercise programs
Time management and productivity hacks
Parenting
Arts and crafts
Languages
Programming
Personal finance
Traveling
Photography and photo editing
Plants and gardening
Baking and pastry making
And so much more!
You can sell a course in many different ways, such as through Udemy or Teachable.
27. Rent out your unused RV
Instead of letting your RV sit in your driveway unused, you can list it on RVshare and make some semi-passive income. My sister has rented a few RVs from this site, and she has had a great experience each time!
Renting out an RV can earn you anywhere from a couple hundred dollars to a couple thousand dollars each month.
How To Manage Your Money On Maternity Leave
Managing your money while on maternity leave can be tough at times. If you are looking for more things that you can do other than only learning how to make money on maternity leave, you do have some options.
Below, I will be talking about how to cut your budget so that you can save money, as well as your rights and benefits on maternity leave.
Cut your budget
During parental leave, cutting your budget can be a great way to manage your finances while adapting to life with a newborn.
Here are a few ideas to help reduce your expenses during this time:
Evaluate your current spending habits to determine where you can make adjustments – This might involve tracking your spending for a month or looking back at bank statements. You’ll likely find areas where you can save, such as dining out, entertainment, or shopping.
Cut back on subscriptions and memberships – Assess each subscription and determine the must-haves and those you can temporarily suspend or cancel.
Batch cook freezer meals before the baby comes – This is where you make a bunch of meals before the baby is born and freeze them. This can give you an easy meal to pop in the oven before the baby comes.
Cook at home – Getting food delivered can be convenient, but it’s usually more expensive than making your meals at home. Plus, cooking allows you to control ingredients and portion sizes.
Buy in bulk – When possible, get the items you use most frequently in bulk. Items like diapers, baby wipes, and nonperishable foods have a longer shelf life, and buying them in larger quantities can offer considerable savings.
Get secondhand and borrowed items – Instead of buying new baby gear and clothing, try borrowing from friends or family, or shopping at thrift stores like Once Upon A Child. Babies grow quickly, and they often outgrow items before they wear out.
Negotiate medical costs – If you have medical bills, you can try to negotiate them. Medical providers may be open to setting up payment plans or giving discounts for paying up front.
Short-term disability insurance
You may want to look into short-term disability insurance options before your maternity leave starts to help cover lost wages during your time off.
In some cases, your employer may provide this benefit, or you can purchase a policy separately. These policies typically cover around 60% to 80% of your regular income and may have a waiting period before benefits start (so, you will need to have the policy before you get pregnant).
Government assistance programs
There are government assistance programs that could help you during your maternity leave. For example, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) has nutrition education, breastfeeding support, and healthy food benefits for eligible families.
You can also check to see if you qualify for financial assistance from your state or other programs related to maternity and family support.
Find charities for help
During maternity leave, managing money might be tricky, but there are places that can help, like charities and groups that want to support new parents. You can find them online or at local community centers. Libraries, online parent groups, and special organizations are also great places to get help.
Remember, asking for help is a strong and smart thing to do, and there are lots of resources out there to help parents during this special time.
I recommend reading:
Know your state and federal law rights
I recommend learning about relevant state and federal laws governing maternity and family leave. The Family and Medical Leave Act (FMLA) allows eligible employees to take up to 12 weeks of unpaid, job-protected leave for the birth or adoption of a child. The law also says that you cannot be replaced or overlooked for pay raises and other promotions during your leave.
However, paid maternity leave policies differ by state and company. Some employers may offer a certain amount of paid leave, while others may offer none. Make sure to review your state’s laws and your employer’s policies to understand your rights during your maternity leave.
By knowing your rights, insurance options, and the benefits available to you, you can better plan your financial strategy during your maternity leave.
Frequently Asked Questions About How To Make Money on Maternity Leave
Below are commonly asked questions about how to make money while on maternity leave.
Can I make money while on maternity leave? Are you allowed to make money while on maternity leave?
If you are in the U.S., then yes, you should be able to make money on maternity leave. If you are unsure, check your employment contract or talk to your employer’s human resources department to be positive.
Before starting any side income streams, if you’re worried about whether or not you are allowed to make extra money while on maternity leave, then double-check your company’s policies and your leave agreement to make sure that earning money during your time off is permissible. Some employers may have restrictions on outside work or income during your leave.
How do I survive financially during maternity leave?
To survive financially during your maternity leave, you may need to find ways to cut your budget as well as learn how to make money on maternity leave.
Does unpaid maternity leave qualify for unemployment? Can you collect unemployment after having a baby?
This depends on why you are no longer working at your job. If you simply stopped working because of your pregnancy, then you may not be able to receive unemployment pay.
However, if you are pregnant or recently had a baby and were fired or laid off, then you may qualify for unemployment pay.
What are some ways to make money while on maternity leave? How can I make money while taking care of my baby?
There are many ways to make money while on parental leave, such as by working online, selling photography, renting out storage space or an RV, and more.
How can new mothers use their time efficiently while working from home?
Time management is important for new moms working from home. I recommend creating a routine, setting realistic goals (if you are working and watching your baby, it won’t always go perfectly), and designating work hours during the baby’s nap time to help manage work alongside childcare responsibilities. It’s also important to take regular breaks to avoid burnout and feeling stressed. Working while also taking care of a child can be very tiring.
How to Make Money on Maternity Leave – Summary
Federal law, specifically the Family and Medical Leave Act (FMLA), does not require employers to give paid maternity leave. Eligible employees are allowed to take up to 12 weeks of unpaid leave, and because of this, you might be worried about money during your maternity leave or feel like you can’t afford to take the full 12 weeks.
There are many ways to make money while on maternity leave, which may help you to pay your bills without sacrificing quality time with your new baby.
For example, you can sell handmade items or even sell consulting services. Remote jobs and work-from-home jobs are also an option (and my favorite), allowing you to use skills like graphic design or writing to make money.
Remember, it is possible to make money while on maternity leave. Yes, it will most likely be very hard at times and even feel impossible. But, you do have many options to try and make it work.
Do you want to learn how to make money on maternity leave?
You may not think of saving money as being a creative pursuit, but with a little effort, you can find fresh (and even fun) ways to help you stash away some cash. This can make the pursuit more engaging and motivating.
Perhaps your goal is to save for the down payment on a house or build up your kid’s college fund or simply take a great vacation next year. You can try some clever methods to make saving money more interesting and maybe a bit exciting.
Read on to learn such tactics as partnering up with a savings buddy and tapping your DIY skills. You’ll also learn ways to make the most of the cash you sock away. Get set to save more.
15 Creative Ideas to Save Money
You are probably familiar with some of the usual tactics for saving money, such as comparison shopping and clipping coupons. If you’re ready to mix things up and try some less common tactics, consider the following 15 quirky but effective ideas.
1. Identifying Your Saving Goals
2. Finding a Saving Buddy
3. Seeking Out Free Activities
4. Getting Creative and DIY
5. Gamifying Savings
6. Swapping Goods and Trading Skills
7. Increasing Income
8. Switch Your Bank
9. Split Your Direct Deposit into Checking and Savings
10. Change Your Due Dates for Bills
11. Save Every $5 Bill
12. Take Advantage of Cash Back Credit Cards
13. Round Up Your Purchases Automatically
14. Consolidate Credit Card Debt with a Personal Loan
15. Automate Your Savings into an Investment Account
💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.
1. Identifying Your Saving Goals
Not sure how to make saving money fun or prioritize it? You could start by identifying your goals. Are you saving up for a big purchase, like a down payment on a house? Are you saving for your child’s future education?
Once you’ve figured out what you want to accomplish, you could determine a target amount of money you’d like to save. While this number might change over the course of your savings journey, you can always readjust your plan.
If you have an idea of how much money you’d like to work toward saving, you can consider diving deeper into your finances to pinpoint realistic objectives. You can use a tracking and budgeting tool, such as SoFi Insights, to get a big-picture snapshot of your money and drill down on ways to save.
Once you’ve reviewed your individual financial circumstances and have a better idea of your savings goal(s), you could try these fun ways to save money.
2. Finding a Saving Buddy
With the right company, even the most mundane tasks can be enjoyable. You could talk about your savings goals with your friends and family members to potentially identify a saving buddy with similar objectives.
An ideal saving buddy will be supportive of your financial goals, offer good advice, and have a positive money mindset.
Checking in with your buddy regularly could help keep you both stay on track and you can celebrate each other’s accomplishments. This person might also be able to talk you down if you’re on the verge of making a big impulse buy. If you’re stressed about how to make saving money fun, you could brainstorm creative tactics with your saving buddy and implement them together.
3. Seeking Out Free Activities
Saving money does not have to be synonymous with missing out on exciting opportunities around you. You could enjoy free activities offered in your area.
Perhaps your local park offers free theater performances or concerts in the summer, or your area bookstore hosts interesting literary panels and author discussions with no attendance fee. Think about the resources provided by your local library, such as book clubs, language exchange programs, craft nights, and movie screenings.
This can be a great option to pricey movie or concert tickets. And here’s a way to save money on streaming services: You could try a free service like Hoopla or Kanopy, which are offered at no cost to library card holders.
4. Getting Creative and DIY
Here’s another clever way to save money: Adopt a DIY (do-it-yourself) attitude. You could create things using materials you already own instead of buying new products. You can save money on food by meal-prepping for the week ahead; think about recipes that incorporate ingredients you already have in your pantry.
You could make your own household cleaners out of vinegar, lemon rinds, and herbs or face masks using fresh ingredients like avocado, tea, honey, and oatmeal. There are ways to reuse materials that might otherwise be thrown out or recycled: Newspapers and coupon booklets could make fun wrapping paper, for instance.
5. Gamifying Savings
If you’re looking to break up the monotony of saving, you could consider incorporating games and challenges into your overall savings plan. A friendly competition with your saving buddy could be seeing who can save the most money every week, month, and/or year.
Creating small rewards for reaching your goals might be an incentive, too. (Bonus points if these rewards are free!) No-spend weeks, where you refrain from spending any money for seven days, also might help with saving. If you succeed at that, you might want to ramp up to a 30-day no-spend challenge. You can tailor this to cut down on all discretionary spending or just a single category, such as dining out.
6. Swapping Goods and Trading Skills
Getting serious about saving money doesn’t mean you need to give up “luxuries” such as exercising, new clothes and accessories, or home goods. Trading skills and swapping goods are two potential examples of how to make saving money fun while not depriving yourself of the things you want.
You could go to your favorite yoga studio and ask if they have a work-trade program where you can do administrative duties in exchange for classes. A clothing swap with your friends could refresh your closet at no cost.
You might also consider an informal exchange with skilled friends. For example, if you’ve been eyeing an original painting from your artist pal but don’t have the funds to pay her, you could offer your website design services (or some other helpful skills) for the painting.
7. Increasing Income
Sometimes, cutting down on expenses might not be the most effective way to reach a savings goal. It might be easier, in some cases, to make a bit more money than to reduce costs, especially if you are spending more than 50% of your income on non-discretionary expenses like groceries and debt payments. (That’s the figure established by the popular 50/30/20 budget rule, that half of your take-home income goes toward necessities.)
You could reflect on your particular skills and/or hobbies to see if there is a way to translate one of them into an income stream. For example, if you love to knit, you could start an online store for your yarn creations. Or you could offer your writing or editing services in a freelance capacity. A successful low-cost side hustle could help bring additional money into your bank account and add more fun and enjoyment in your life.
Recommended: 39 Passive Income Ideas to Build Wealth
8. Switch Your Bank
If your financial institution seems to be charging you endless fees and offers little interest on your savings account, consider switching banks.
You might consider an online bank. Because these institutions don’t have brick-and-mortar locations to fund, they can pass those savings along to customers in the form of lower or no fees and higher interest rates.
You might also consider a credit union instead of a big name bank. Credit unions are run as financial co-ops, meaning each member has a stake in business. As nonprofits, they are designed to serve their members, typically paying higher interest rates on deposits and charging lower fees.
Ready for a Better Banking Experience?
Open a SoFi Checking and Savings Account and start earning up to 4.60% APY on your cash!
9. Split Your Direct Deposit into Checking and Savings
If you have regular paychecks, one of the easiest ways to start saving a bit more money is to guarantee some automatically ends up in a separate savings account, making it that much harder to spend. If you have a checking account, odds are you have a savings account too, or at least access to one.
Maybe you find it hard to remember to put some money away into savings or harder still to force yourself to part with it. If so, splitting your direct deposit into two accounts helps make sure your savings grows every paycheck, without you needing to worry about transferring the money. Check with your HR department or your online pay system to see if you can add a bank account and designate a certain amount of each paycheck to go into your savings account as part of your direct deposit.
Most banks also have the option to set up recurring transfers yourself between your accounts. If you don’t have the option to split up your paycheck or would prefer not to, your bank can likely automate your savings with a transfer the day after you get paid. You won’t have to think twice about stashing money away.
💡 Quick Tip: As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.
10. Change Your Due Dates for Bills
Having extra money in your savings account doesn’t help if you are constantly pulling from it to pay bills.
If you are overdrafting frequently or borrowing from savings, especially at certain times of the month when big payments are due, consider this unique way to save money: Change the due dates of some of your bills. Sometimes spreading out your larger payments — like credit card bills or student loans — throughout the month can help when those more inflexible due dates, like rent, roll around.
By changing the date of some of your bills, you will hopefully avoid overdraft or NSF fees. This will encourage you to not touch your savings account, as opposed to pulling from it every time your checking account balance gets precariously low.
11. Save Every $5 Bill
This is a classic adult remix of the piggy bank you had as a kid. Only this time, instead of squirreling away quarters, take every $5 you get and put it in a separate drawer at home. Keep all of these $5 in the back of a closet somewhere, tucked away and out of sight.
Once you get into the habit of identifying $5 as “no spend” bills, you’ll find it can really be a creative way to save money — depending on how much cash you use in a typical day, of course.
The benefit of this method is that $5 isn’t really enough to miss if you are just putting away a bill or two, but that at the end of the year, it can easily add up to enough cash to help with holiday shopping, a loan payment, or even a nice charity donation without having to touch your savings in the bank.
12. Take Advantage of Cash Back Credit Cards
Need another clever way to save money? Simply put, if you have a credit card that has a decent rewards program, you can likely get your rewards in cash. While getting cash back won’t boost your savings directly, it can allow you to spend rewards points instead of your savings.
However, if you tend to carry over a balance on your credit card, cash back cards may not be a good solution for you right now.
13. Round Up Your Purchases Automatically
There are plenty of apps available to round up your purchase to the nearest dollar and then save the change for you. Your bank may offer this kind of savings tool, which can be an easy way to save money automatically.
The amount these apps save for you is small, so you aren’t likely to notice $1 or even a few cents when it transfers, but it can add up to hundreds stashed away per year.
14. Consolidate Credit Card Debt with a Personal Loan
If your credit card debt is preventing you from saving as much as you would like, you might use a personal loan as a creative way to shake up your finances.
If you owe money on more than one credit card or have a high balance relative to your credit limit, the rates on a personal loan could help lower your monthly payments. Often, taking out one personal loan to pay off credit cards can help you with savings in the long run. While you’ll still be paying off the personal loan, the interest rate is likely to be significantly lower than that of the credit cards. That means you can probably pay off the total sooner, leaving more cash free for savings.
15. Automate Your Savings into an Investment Account
It’s the age-old financial advice worth repeating here: If your company offers a match on your 401(k) savings, take advantage of it! If your company match is 6%, you should set your contribution for at least 6% to get the most out of your retirement funds.
It can be simple to creatively save money using the following technique. Most company wealth management accounts can be set to automatically deduct contributions from your paycheck, but you can schedule other automatic investments too. You can make scheduled, recurring transfers between your bank account and your wealth management account.
You get to select the dollar amount, the date and the frequency you want. This is a great way to put your savings to good use — send it into an investment account. There are plenty of other technologies available to help make this easy, too.
Why Is Making Saving Money Fun Important?
Trying tactics like the ones above can help make it fun to save money. That’s important for a couple of good reasons. Shaking up your savings routine can make socking away cash seem fresh and more engaging, meaning you are more likely to get the job done. Basically, it can rev up your motivation to save money.
Also, when you find a technique that is fun, such as a no-spend challenge, it can help encode the new savings behavior in your routine. If it’s enjoyable, you are more likely to keep up the good work.
How Can You Make the Most of the Money You Save?
When you save money, you likely want it to grow over time, not just sit there. One good way to do that is to stash your money in an interest-earning account. This will be especially effective if the financial institution where you save charges low or no fees and doesn’t have high minimum opening deposit or balance requirements.
You might look for a high-interest or high-yield savings account. These can pay a significantly higher rate than standard savings accounts, and your money will be accessible and likely insured by the Federal Deposit Insurance Corporation, or FDIC, or NCUA (the National Credit Union Administration).
Optimizing Your Savings
Beyond the creative ways to save that you just learned, there are other important ways to optimize your savings.
• Budgeting wisely can help you better understand your personal finances. It can help you get a grip on your earnings, spending, and savings. When you see where your money goes, you can tweak your spending to help funnel more towards savings.
• Putting a spending limit on your credit card (or cards) can help you rein in spending, which can reduce high-interest credit card debt and allow you to save more.
• Lastly, it you are struggling to put away money, one dramatic move that can help you save more is to move to an area with a lower cost of living. Whether that means moving across town or across the country, it could make a major difference in your finances.
The Takeaway
Putting away money for your future does not need to be a boring task; there are countless fun ways to save money that could be customized to your specific financial needs and wants. From finding a savings buddy to gamifying your saving, creative tactics can help enhance your motivation and your ability to put away cash.
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FAQ
What is a clever way to save money?
There are several clever ways to save money. Automating savings so you don’t have to remember to transfer funds is one good tactic; so is giving yourself a no-spend challenge, finding free activities, and doing a skills swap to reduce spending.
How can you save $1000 in 30 days?
To save $1,000 in 30 days, you can try a spending freeze, a savings challenge, and/or use a card that gives you cash back. Make sure you are keeping the money you save in a high-yield savings account.
What is the 50 30 20 rule?
The 50/30/20 budget rule is a popular technique for managing your money. It advises spending 50% of your take-home pay on the needs of life (housing, food, healthcare, etc.), 30% on the wants in life (such as dining out, Ubers instead of public transportation, travel, and so forth), and 20% goes into sayings.
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According to reports from the second quarter of 2022, the total of all household debt in the United States is a whopping $16.15 trillion. Mortgages make up the bulk of that debt, with student loan, auto loan and credit card debt trailing behind.
On average, adults in the United States carry debt loads ranging between $20,800 and $146,200. If you’re in debt and looking for a way to pay it off, making a plan is a critical step. Find out more about how to get out of debt below.
1. Collect All Your Paperwork in One Place
Before you can get out of debt, you need to know how much debt you actually have. You should also know who you owe and what the terms are, as this can help you prioritize debt payments to pay them off faster.
Start by collecting all your debt paperwork in one place and creating a master list of everything you owe. You can do this in a spreadsheet or with a pen and paper. Information to gather includes:
Statements for all your debts. One way to do this is to spend a month saving all your financial mail and email so you have a comprehensive picture of your debt.
Regular bills that aren’t debts. Your cell phone and utility bills, as well as your rent, should all be included when you gather this financial information. Information about income. Look at paycheck stubs or your bank accounts so you know what, on average, you can expect in income each month.
Your credit reports. Get your free credit reports at AnnualCreditReport.com to ensure you know about all the debt you owe.
Tip: Sign up for ExtraCredit to see your credit reports and 28 FICO® scores in one place.
2. Create a Budget and Determine What You Can Pay Every Month
Using the information you gathered in the above step, create a monthly budget. Make sure you cover all your bills and minimum debt payments. When possible, include an amount that can go toward building your savings. Allocate funds for essentials, such as groceries and gas.
Once you cover all the needs for the month, figure out how much money you have left. How much of that can you put toward extra debt payments so you can start getting ahead on debt?
3. Manage Your Debts in Collections
If you see that you have any debts in collections when you pull your credit reports, make sure you have a plan for taking care of them. Collection accounts have a serious negative impact on your credit score. Creditors may also sue you and try to collect on these accounts via wage garnishments or bank levies if you don’t take action to manage collections. That can throw a huge wrench into your plan for getting out of debt.
Tip: If you don’t enjoy manual calculations, check out Tally. You can use Tally to total up your expenses, pay down credit card bills, and generally figure out where you stand.
4. Consider Your Options
There are two main approaches to paying off debt as quickly as possible: the snowball method and the avalanche method.
The snowball method involves paying off accounts with the lowest balances first. You take any extra money you have—even if it’s just $50—and add it to your regular minimum monthly payment on that small balance. When that balance is paid off, you take the extra $50 plus the minimum payment and add it to the next biggest balance. You keep doing this as you work your way up to larger balances, paying your debt off faster and faster.
With the avalanche method, you tackle accounts according to interest rates. You start by paying off accounts with the highest interest rates first. The thought behind this method is that you save money in the long run by tackling high-interest debt first.
5. Try to Reduce Your Interest Rates
Interest refers to how much your debt costs. If you have a lower interest rate, your debt costs less and you can pay it off faster. Here are some ways you can try to reduce interest rates on your debts:
Ask for a lower interest rate. If you’re a credit card account holder in good standing and your credit history and score has improved since you got the card, you may be able to get a better rate. Call customer service for your card and let them know you are looking for a better deal. They may agree to lower the rate to keep you as a cardholder.
Look into debt consolidation or refinancing. A debt consolidation loan provides funds you can use to pay off higher-interest debts. Refinancing occurs when you get a new loan for a home or car. If you had lackluster credit when you got your auto loan, for example, you may be able to refinance it for a lower rate if your credit has improved.
Get a balance transfer credit card. You may be able to transfer balances from a credit card with a high interest rate to one that has an introductory low APR offer. This may allow you to pay off the debt over the course of 12 to 22 months without incurring any more interest expense.
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Do Your Best to Pay More Than the Minimum
Only paying the minimum on high-interest debt, such as credit card debt, doesn’t get you out of debt fast. It can take years—dozens of them—to pay off credit card balances if you’re only making minimum payments.
Instead, put more than the minimum on your debt whenever possible. You may also want to put any additional funds you receive—such as a tax refund—on your debt to help with this process.
Consider More Options for Getting Out of Debt
Creating a budget, managing your money wisely, and making extra payments toward your debt all help you get out of debt. Here are some other ways you can deal with debt:
Increase your income while cutting unnecessary spending. Join the gig economy with a side job to earn extra money, or sell things you don’t need via online marketplaces.
Undergo credit education and counseling. These services can help you make the most of your monthly budget.
Engage in debt settlement. You may be able to negotiate with creditors, especially for accounts in collections, to settle debts for less than you owe. Just make sure you understand any effects on your credit.
Enter a debt management plan. During such a plan, you make a single payment to a trustee. They use those funds to pay your debts, hopefully in a way that gets you out of debt faster. Declare bankruptcy. If you find you’re unable to pay your debts, much less make extra payments, you may need another option. Chapter 7 and Chapter 13 bankruptcy are potential considerations.
How to Avoid Getting into Debt
Paying off debt doesn’t have to be impossible, but it can be challenging. For many people, it requires altering years’ worth of financial habits. If you’re not already in debt, it may be easier to stay out of it. Create a budget and stick to it, spend wisely and avoid using credit cards for things you don’t need or can’t afford to buy with cash.
Graduating college can come with a lot of implications and responsibility, and those associated with your finances are certainly no exception. On top of the need to get your career off the ground, you should also think about how this impending career and salary will help you get your relationship with your personal finances in good shape, as well.
Prior to college, you probably did not have any credit. And during college, if you weren’t using a credit card or participating in other practices that establish and build credit, you’ll basically be starting from scratch. This can be a great spot to be in because it sets you up to grow your financial reputation without having to rebuild it from any previous blemishes on your record. At this transitional and vulnerable time in your life, think about your future, and be sure to include those future thoughts in your decision-making so that you can (somewhat) effortlessly stay on track. This is some of the money advice college grads never get, but definitely should.
Student Loan Repayment
If you took out student loans to fund your education, you’re likely feeling a tad overwhelmed by the outstanding balance and impending payments to pay it all back. While this type of debt is sizable, it’s not something to fear to the point of disregard. So, many people use student loans to cover college costs, which is good news for you because there’s no shortage of tips on repayment strategies for you to consider.
Paying your monthly minimum each month is going to help you begin to establish credit. While it’s acceptable to follow this strategy, it might not get you where you want to be in terms of growing your credit score. If you can, think about ways to dedicate more money towards repayment each month so that your debt-to-income ratio can become more favorable to you, faster.
Read More: What is the Average Student Loan Debt?
A savvy way to accomplish this is through refinancing. Although you’re just starting the process of paying back your student loans, that doesn’t disqualify you from refinancing. The rates that were in effect when you took your loan out might be higher than they’re now, in that case, a refinance can shave years off your payments simply by decreasing your total interest. Your monthly rate will likely decrease as well, which means that potentially you can pay down principal faster if your budget that allowed for the previous, higher amount, is still manageable.
Get Professional Guidance
Like it or not, money is essential in life. While the amount you have doesn’t determine the level of importance, the simple fact that you need money to be able to get through life is undeniable. At this beginner stage, consider meeting with a credit counselor. These professionals can help you identify goals, discuss different strategies, and help you decide if it is right for you at this time.
Since this is likely your first time managing your money independently as an adult, and at this level, the habits you build now are probably going to be the ones that stick. Your credit score is sensitive but powerful. As you walk through various stages of life, that number is going to be what determines things like mortgage rates, car loans, and even your ability to start your own business even if that’s years from now.
Budget Appropriately
After having spent a few years scraping pennies together to split a pizza three ways with your roommates, you’re going to be tickled to receive that first job salary, and the paychecks that come along with it. But don’t get careless. Before you cash your first check, examine your finances, and set a budget for yourself. Some of the best budgeting methods are simple and straightforward, which is ideal for a beginner. A great piece of advice here is to continue to live as you did in college and operate on a shoestring budget as far as your extra money goes.
Paying your bills on time is going to help you improve your credit score at a steady and consistent pace, so you won’t want to fall behind. The occasional splurge is fine, but make this the exception and not the rule. It might not feel the most exciting or fun to dedicate your first job finances towards responsibility. However, if you put this into practice now, you’ll have to work at it less and less over time. Then, maintaining your good credit will be a natural consequence of your habits instead of something you have to consciously work at.
Related Read: Side Hustles for College Students
Use Credit Cards Strategically
One of the best ways to build credit is by using credit. Keep your momentum alive by applying for a credit card, one with perks that appeal to you, and terms that you can manage. You might not yet be able to qualify for a traditional credit card, but a secured credit card should be well within your capabilities. Your credit limit will probably be low, but that is ok. The point here is to get into the practice of using a card, and paying it off, on time and at least at the minimum, consistently month to month.
A credit card should work for you in terms of what you get back from it. Not all cards are created equal so definitely shop around before you just randomly pick one. Perks like airline miles and cash back are very popular places to start. If you take out a card and begin to use it and quickly notice that you’re not savvy enough to manage this responsibility yet, cut the card up. Closing credit accounts is one of the bad credit habits to avoid and can negatively impact your score. So you are better off cutting the card up, ceasing to use it, and continuing to pay down the balance without adding to it.
FOMO spending stands for “fear of missing out,” meaning you are dropping dollars to keep up with what others are doing. That might mean anything from trying the skincare product a favorite celeb swears by to dining at the super-pricey new omakase place all your friends are raving about or even signing your toddler up for an enrichment class because your neighbor says it’s a fab headstart.
The fear of missing out can change how many people relate to their cash. It can trigger impulsive and compulsive spending and lead to “splashing out” on things they never had any intention of purchasing. In other words, it can motivate them to live (too) large and wind up with pricey credit card debt and little progress towards their savings goals.
If you’re wondering how to stop FOMO spending, know this: It doesn’t mean subsisting on ramen and never traveling. It does mean being mindful and meaningful so you don’t get caught up in trying to match what your free-spending friends may do. Here, you’ll learn more about FOMO spending and how not to overdo it.
Wait, Back Up—What Is FOMO?
FOMO, or Fear Of Missing Out, is a feeling of anxiety someone might experience about not being part of an event that is happening, usually triggered these days by seeing social media posts from friends enjoying an activity (from a Taylor Swift concert to a holiday in Croatia) and wishing you were part of the fun. While it’s certainly true that businesses employ FOMO tactics to get you to buy things, it’s not just a sales strategy.
Nick Hobson Ph.D., says “While the fear of missing out has always been there, the explosion of social media has launched our young people headfirst into the FOMO experience.”
For many people, social media can be their main community lifeline, and having the impression that you are not part of the “in” group is enough to trigger a stress response like FOMO.
FOMO Spending Definition
So how is FOMO spending defined? It’s when a fear of missing out propels you to spend money (perhaps too much money) to feel as if you are part of the crowd and keeping up with your peers.
Examples could be feeling as if two far-flung vacations a year are must-haves because that’s what your coworkers do. Or perhaps it means plunking down four figures on a designer bag because all your friends have one. At a smaller scale, it could mean joining the other moms every morning after drop-off for a fancy latte. It’s all part of feeling as if you’re on the same level as your peers…and it all can add up.
💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.
FOMO Spending to Keep Up with Peers
How widespread is FOMO spending? One recent study found that almost 40% of more than 1,000 Americans ages 18 to 34 said they have gone into debt just to keep up with their friends’ lifestyles. This is FOMO taken the financial extreme.
People may try to overcome FOMO by spending more than they have on things like travel, clothes, food, and going out. Whether it’s bigger “once-in-a-lifetime” experiences you can’t miss out on like trips, music festivals, or weddings, or even smaller events like dinner and drinks, FOMO spending can impact your finances and ability to build wealth over time.
• FOMO spending often stems from peer pressure to buy something you can’t afford so that you can still participate in a group.
• It could stem from feelings of insecurity; you want to show others that you fit in and do so by spending more than you might otherwise.
Unfortunately, this can add up to extra spending, money stress, and debt.
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How Many People FOMO Spend?
As noted above, one recent study found that 40% of people admit to FOMO spending. And those are the ones willing to admit to it. The figure could be considerably higher.
One study found almost twice that percentage of people admitted to going into debt to keep up with their friends’ spending. That’s a startling figure and shows just how common FOMO spending can be.
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4 Tips to Avoid FOMO Spending
Reining in FOMO spending can be hard, especially if your friends are truly living at a different income level than you. But odds are, some of your friend group might be in the same situation and are overspending in an effort to impress. You can avoid FOMO shopping or at least cut back on spending by trying these tips:
1. Suggest Free Alternatives
The first way to conquer FOMO spending is to simply stop spending! While it’s of course easier said than done, why not come up with a free alternative when a friend suggests plans?
Meeting for up for a $10 bubble tea at a cafe could just as easily turn into sitting on your couch with a homemade cup of joe. Friends want to go out to the movies or the mall? Suggest visiting a museum on a day they offer free admission instead.
2. Limit Your Card Usage and Carry Cash
Limiting your spending on credit or even debit cards and making the majority of your purchases with cash will drastically impact how often you impulse-spend on something when the feeling of FOMO creeps in.
If you only withdraw a certain amount before heading out to dinner or the bar, you’ll already have a pre-set budget that you know you feel comfortable spending. So maybe you only have one pricey cocktail or skip coffee and dessert: You can still have a great experience going out.
3. Create a Budget and Stick to It
Along the same lines, creating a monthly or even weekly budget may also help you cut down on FOMO spending. Your budget can and should include money for savings or big-ticket items like travel you know you have coming up. Having a budget can give you guardrails and help you focus on the big-picture rather than getting caught up in the FOMO moment.
By putting some money towards future goals and then calculating how much “fun” money you have left over after bills, you’ll know exactly when you’ve reached your limit. While making a budget might not help you eliminate FOMO spending altogether, you’ll at least give yourself more constraints if you limit yourself to a specific spending amount.
4. Lower Your Social Media Exposure
Ready for another way to stop spending so much? The endless scrolling on platforms like Facebook, TikTok, and Instagram offer some instant gratification, but social media is one of the main contributing factors of FOMO.
Targeted ads, influencers touting products, and even your own friends’ posts can all conspire to budget you toward spending too much. Seeing all the wonderful shiny things and exciting experiences out there can lead you to splurge (and often).
Many people find their guard is especially down at night, and that’s when they are likely to snap up skincare products, a new watch, or a hotel room overlooking the beach. If you can relate, trade in your laptop or phone time before bed for a good old-fashioned book or movie. You won’t wake up the next morning with that guilt about spending money.
If You Must Spend, Still Plan Ahead
You won’t be able to avoid FOMO spending all of the time, so it’s also important to have a strategy in place for making the best use of your time and money if the feeling kicks in.
Some people consider their fixed vs. variable expenses and build in a little extra spending money as part of their discretionary spending. If you know you have, say, a cash cushion of $100 or $200 a month, this can help with those moments when you decide you want to “keep up with the Joneses.” You can decide if this is the moment to splurge or not.
Delayed Gratification
If you have a sudden urge to buy something because of FOMO, try instead to write the item down, whether in a Notes app on your phone or even just a physical piece of paper, and come back to it 24 hours later.
This will help you avoid impulse purchases just because something is on sale, for instance, or your friend just bought it. You can evaluate in a day if it’s something you still really need. Some people even stretch that 24 hours out to a full month with what’s known as the 30-day spending rule.
Buying in Person
Nothing crushes the FOMO spending feeling more than forcing yourself to trek to an actual physical store to make a purchase.
Too many times, FOMO spending happens when you are online shopping and the ease of delivery right to your door doesn’t make you think twice about your purchase.
Making that easy impulse purchase into a chore can be a buzzkill that helps you save big-time.
Introducing SoFi Checking and Savings
Managing your money well can mean recognizing FOMO spending and seeing when it may fit with your budget and your money goals. It can take wisdom and discipline, but it can keep you out of debt and help you build wealth.
This is where the right banking partner comes in; one who can help you see the big picture on your spending and keep tabs on your cash flow. Like SoFi.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
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FAQ
How do you deal with FOMO buying?
Recognizing FOMO buying is the first step to minimizing it. You might avoid social media apps that trigger this kind of spending; find free alternatives to pricey outings your friends suggest; or tweak your budget to allow for small splurges and stick within those spending limits.
How can you stop being affected by FOMO?
Avoiding FOMO is a very personal thing. Some people avoid or even delete social media apps that trigger overspending; others have honest talks with their friend group about their financial limits; still others decide to sidestep certain outings with friends that they know will bust their budget and join them for low-cost get-togethers instead.
What is FOMO spending?
FOMO spending is when you buy an item or experience because you don’t want to miss out on something “everyone else is doing.” Some people may think of it as responding to peer pressure. You purchase, say, a status watch or take a pricey vacation not because you can comfortably afford it but because you want to “keep up with the Joneses.”
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SoFi members with direct deposit activity can earn 4.50% 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 4.50% 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 4.50% 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 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
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College is an exciting time: You’re surrounded by new people, new opportunities, and a chance to dive into the next chapter of your academic career. But this transition also comes with different financial realities—and the need to develop new skills around spending and saving money.
Along with navigating your new campus and sharpening your study skills, there’s another key lesson to learn: how to create a college student budget. When done right, a budget can help you limit debt, build some savings, and accomplish your goals. Need to make sure you have enough for textbooks, rent, food—and some left over for a little fun? Want to spend a semester abroad? Creating a college student budget can help with these goals and more.
Whatever financial issue is giving you trouble, Katie Waters, CFP®, founder of a financial planning firm, has tips for how to set yourself up for success. Here’s how to get started.
Assess your income and expenses
As you begin building your college student budget, you first need to figure out how much money you have coming in and how much you have going out. You can use anything from a simple spreadsheet to a budgeting app to track your income and expenses.
How should students pay for monthly expenses? Start by writing down all the sources of after-tax money you get each month, Waters says. That includes money from a part-time job, financial aid, stipends, grants, loans, or a monthly allowance from your parents.
Next, figure out how much you’re spending each month. Waters recommends looking back at three months’ worth of your expenses. To do that, refer to your debit and/or credit card statements, plus any record of money sent through payment apps.
You should account for every dollar you’ve spent, Waters says, separating expenses into common categories such as:
Cell phone
Food
Entertainment (movies, fun with friends, streaming services)
Clothing
Internet
Transportation (airfare, bus tickets, car insurance, gas)
Tuition
Room and board or rent
Textbooks and school supplies
The point is to add up everything, Waters says. “We want a line item for it all.”
If you’ve gotten this far and you already realize that your expenses weigh in heavier than your income, consider ways you could start giving your income a leg up. Check out these tips to help you make money as a college student.
Create your college student budget
Making and following a college student budget is the best way to ensure you have enough money to pay for the things you need while still having some money left over for the things you want. Here’s how to budget as a college student:
1. Create your spending categories.
Your budget should contain categories for all your major spending groups. (Refer to the list of expenses you created when assessing your expenses.) Then decide how much you must spend for each and assign a dollar amount or percentage to that category.
2. Choose a type of budget.
There are different budgeting styles, and Waters notes that one might fit your specific situation better than another. You could try the 50/30/20 rule, which allocates 50% of your money toward needs (food, textbooks, tuition); 30% toward wants (entertainment, clothing); and 20% toward savings.
You can also go with the envelope system, which involves setting aside a limited amount of money for each spending category. Once you hit the limit in a given category by running through money in its envelope—whether literal or digital—you can’t spend any more in that category until the next budget period begins.
3. Optimize your budget regularly.
Once you’ve set a budget, keep track of it. If you’re consistently under or over, see if there are areas where you can save more or spend less. As your needs change, so should your budget.
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Prioritize essential expenses
Whichever kind of college student budget you choose, make sure necessities such as your tuition payment (if you’re paying for school yourself) or things like bus fare to get to your part-time job are covered. To make that easier, Waters says you can find ways to reduce your expenses, such as:
Renting, borrowing, or buying used textbooks
Buying snacks in bulk or cooking meals that are large enough that you’ll have leftovers
Asking for student discounts when shopping in person or looking for online discounts
Opening a cash back checking account or using a cash back rewards credit card to earn rewards1 for purchases you already make.
Focusing on what you must pay for first can help to lessen the debt you acquire, Waters says. Bonus: If you can do that, you’ll also reduce the amount of interest you’ll have to pay while in school or after you graduate.
Manage your fixed and variable expenses
Certain expenses, such as your cell phone or car insurance bill, typically stay the same every month. Those are fixed expenses. Variable expenses include costs that can change from month to month, like food, gas, or entertainment, depending on your behavior. Variable expenses can be tougher to budget for, but they can also provide more flexibility to your budget.
The envelope budget method can help you learn to budget more accurately for variable expenses when making a college student budget. For example, let’s say you spent $140 dining out in month one, $175 in month two, and $120 in month three. Take the average of the three—$145—and set that as your “dining out” monthly line item that you shouldn’t exceed.
“The biggest ‘don’t’ for college students is saying yes to everything,” according to Waters. Instead, it’s important to set limits. “Get to know your town and find ways to hang out that are free or low cost.”
Save for emergencies
College might not seem like a natural time to save money, especially if you’re not making much to begin with—but it can be done. And saving money will be a critical skill you can continue to use throughout your life.
Often, the easiest way to save is to make it automatic, Waters says. You can automate your savings by opening a savings account and setting up regular transfers from your checking to your savings account. You can choose how much is socked away based on a percentage of your income, as with the 50/30/20 rule, or you can set aside a chunk of your remaining balance at the end of each month.
It’s also important to try and build an emergency fund, even if it’s small, Waters says. An emergency fund is money you use for unexpected expenses—think paying to fix a flat tire, covering medical bills, or repairing a malfunctioning laptop. A good goal for the amount to save in an emergency fund is three to six months of your expenses. That might sound like a lot, but you can build your savings slowly over time.
Waters notes that a savings account or emergency fund is also a great place to stash cash you weren’t expecting to receive—like birthday money from Grandma. Think of it this way: If you save $25 a week, in just six months, you’ll have saved $600. This is also a great chance to learn how to invest as a college student. By keeping your savings or emergency fund money in a high-yield savings account, you can watch how your savings grows over time with interest.
Start building your financial foundation today
Once you’ve set a budget that you feel comfortable with, make sure to regularly check in with yourself about your spending. One trick that’s great for budgeting for college students is a financial checklist, which helps you look closely at your spending habits and whether your needs have changed. Earning more or less money, a change in your rent, or a tuition hike can make it necessary to reassess your budget and tweak as needed, Waters says.
College can be the perfect time to start your financial future off on the right foot. Things like building credit, saving for retirement, and creating a thriving savings account all come from making the right choices early—and regularly. Getting a handle on your finances in college with a college student budget is one of the best first steps you can take.
Creating a budget and learning to manage your finances as a college student can put you in a stronger financial position when you graduate. Here are some of the first steps you can take to ensure your long-term financial wellness.
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1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.