Renters Insurance

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If you’ve been looking for a rental of any kind, you know how tough the hunt can be. Dozens of applicants for each vacancy, stricter credit, income, and referral requirements from landlords, bidding wars. These are, unfortunately, all part of navigating today’s tough rental market.

The culprit is a national housing shortage that has been brewing for more than a decade. After the housing crash of 2008, new construction of homes and rental units slowed dramatically. An uptick in building was later offset by supply chain and other pandemic-related delays. Meanwhile, rising mortgage rates made owning a home less affordable, prompting lots of would-be buyers to stay put in the rental market. The result? During the height of the rental crunch in early 2022, apartment occupancy hit an all-time high of 97.6% and rents jumped an average of 15.2% throughout the country.

Although the rental market has cooled somewhat since then, rents remain high and lower-cost rental units are in especially high demand. About half of people who rent are considered cost-burdened, meaning they spend more on rent than the recommended 30% of income.

If you’re competing in a tight rental market — or just competing for an affordable rental to call home — these four steps can help you anticipate what landlords are looking for and help you present yourself as the ideal tenant.

Tips to Get Approved for a Lease

Step 1: Know Your Number

Determine just how much you can afford for housing costs.

The advertised or asking rent is just the beginning. You’ll also need to take any fees, utilities, maintenance, parking, and renters insurance into account. If it’s been a while since you signed a new lease, you may need to adjust your estimates for these costs upward. Moving to a new area? Whether you’re renting or in the market for a house (and a home loan), check out a cost of living by state breakdown to get a feel for the numbers.

Take into account the possibility that you might find yourself in a bidding war. In the heat of the moment, you may outbid the others but also end up with an apartment you can’t comfortably afford. To avoid this scenario, determine your ideal monthly payment and stick to that number, no matter how tired you are of the apartment hunt.

Step 2: Prepare Your Rental Resume

Apply for a rental the same way you approach applying for a job. You want to make sure you fulfill all of the requirements, and then some.

The first step to getting approved for an apartment is usually filling out an application online. Be sure to do so accurately and thoroughly. When the time comes to see the place, you’ll help make your case if you bring the following:

Copies of Your Credit Reports

Landlords routinely do background and credit checks on applicants they are considering. Offering a copy of a credit report gives them on-the-spot information. If something on your report is confusing, you can attach your own letter of explanation.

Most landlords will look for a good FICO® score (670 to 739) or higher. Find your credit score on a loan or credit card statement or through an online credit score checker. Or get it for free from Experian.

Proof of Employment and Income

Landlords want to know that you can comfortably afford the rent. To prove you can, you could bring copies of your past three to six months of pay stubs, a copy of your most recent tax return, and contact information for your current employer. (This may be more than the landlord is asking for, but it helps build your case.)

Some, but not all, landlords also require employment history information. Having a list of former employers and their contact information on hand can help speed up this process. Even if it’s not required, the list helps paint a more complete picture of why you’re a trustworthy candidate.

References

Be ready to present credit references, which may include character references and asset documentation. Personal references from your boss, a co-worker, or another nonfamily adult who can vouch for you are a good idea. The landlord or agent may not call these people, but having them on your list is a sign of your professionalism and trustworthiness.

Landlords probably also will want the names, locations, and contact information of any previous landlords. A stellar rental history can help put you ahead of the crowd, so you want to make it easy for the agent or landlord to check on you.

If you’ve had trouble making rental payments, it’s best to be honest and offer an explanation.

Documentation for Service or Assistance Animals

According to the Fair Housing Act, a person with a disability may seek a “reasonable accommodation” from a housing provider so that they may have an equal opportunity as a nondisabled person to use a dwelling, even one that otherwise does not allow animals. The disability can be physical or mental.

Service animals, defined as dogs, are not considered pets, and housing providers cannot charge fees or deposits for them.

So-called emotional support animals have ruffled feathers throughout the country. First, applicants with assistance animals must make a request for reasonable accommodation, and not necessarily in writing. If the disability is not observable, they must provide reliable information — typically a letter from a medical provider or therapist — to the housing provider showing that the animal provides assistance.

Beyond that, the U.S. Department of Housing and Urban Development (HUD) does not allow housing providers to seek personal details of a person’s medical history. Importantly, HUD says that online certificates alone are not sufficient to reliably establish that a person has a nonobservable disability or disability-related need for an assistance animal.

So if you have assistance animals, it’s a good idea to bone up on the laws, which can be complicated, and have professional documentation.

Step 3: Show an Interest

It may sound trite, but landlords and rental agents are reassured when they know that someone really wants to live in the property. At a time when demand is high, this can be even more important as landlords become inundated with calls or online requests.

If you’ve visited the property before, have a friend in the same complex or nearby, love the neighborhood, or even appreciate the architecture or amenities, be sure to say so. Landlords want to know you’ll enjoy living there and, in turn, take good care of your new home.

Step 4: Prepare to Pay

Many leases have been lost when an early and promising applicant is ready to rent but doesn’t have the funds available.

Make sure you bring your checkbook or an electronic payment option so you can pay your security deposit, first month’s rent, and whatever else is required immediately. And, of course, make sure you have the funds available, while still leaving room in your budget to also cover moving expenses.

Move-in money can obviously be a challenge to come up with. If it’s several thousand dollars, a personal loan could help.

Did you snag the apartment or house? Once you move in and exhale, undertake a few renter-friendly updates to help you make the space your own.

Recommended: How Home Ownership Can Help Build Generational Wealth

The Takeaway

It’s a challenging time to look for a rental. But preparing thoroughly before you start your hunt and taking steps to show landlords your qualifications and genuine interest can help you stand out in the crowd. In this rental squeeze, however, some house hunters may find that it makes more sense to build equity in their own home than to pay rent.

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

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How do I impress a potential landlord?

Make sure you fill out the rental application fully. When you tour the apartment, bring along a copy of your credit report, proof of employment and income, and contact information for some character references. Then express genuine interest in the property — comment on the building or neighborhood, for example — to show you’ll be invested in caring for your rental home.

What kind of background check do most landlords do?

A background check from a potential landlord might include a review of your credit history, employment and income history, and even a criminal background check. Some landlords also check for a history of eviction. They may also contact a former landlord or ask you for a character reference from a friend or colleague.

How much money should I have saved before renting an apartment?

You’ll want to have at least three months’ worth of rent saved before you start apartment hunting — the equivalent of your first and last months’ rent plus a security deposit. What’s more important, though, is that you have carefully considered the full cost of renting — including paying for utilities, renter’s insurance, and perhaps expenses such as parking. A good rule of thumb is that your housing expenses should not exceed 30% of your take-home pay.

Photo credit: iStock/cnythzl

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Source: sofi.com

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So you’re ready to start the next chapter in your life. Perhaps you’re moving out of your college apartment in Charleston and into a rental in San Diego, or maybe you’re considering renting a house in Austin for the first time. Regardless of your situation, your first time renting is always going to be a learning experience. 

This ApartmentGuide article is packed with rental checklists, budgeting advice, and essential tips for novice renters. 

Keep reading to find out the 20 key things you need to do and know for a smooth and successful first-time renting experience

1. Determining Your Budget

Setting a realistic budget is a crucial first step in the apartment hunting process. Start by evaluating your monthly income and subtracting essential expenses like food, transportation, and existing bills. Next, account for one-time costs such as security deposits, moving expenses, and application fees. Also, consider ongoing expenses like utilities, renters insurance, and potential maintenance costs. Financial experts recommend that when calculating your rent, it should ideally consume no more than 30% of your monthly income.

2. Choose your neighborhood

Choosing the right neighborhood is crucial when renting your first apartment. Consider factors like proximity to work, preferred transportation methods, and the overall vibe of the area. Ask yourself:

  • How close am I to work?
  • Do I prefer driving, taking public transportation, or walking?
  • Do I need quiet, or do I want to live in the middle of it all?
  • Is my dream location more expensive than its surrounding neighborhoods?
  • How far do I want to be from museums, restaurants, and attractions?

Additionally, think about the convenience of essential shops and services. Living near grocery stores, hair salons, and good restaurants can significantly enhance your daily life. Having a few walkable options is a bonus, as is being close to public transportation if it’s available. Make sure to factor in your commute time by mapping out the distance during typical travel hours. A long commute can affect your daily routine, so it’s essential to find a balance between your ideal neighborhood and practicality.

3. Decide if you need a roommate 

Deciding whether to have a roommate is a crucial step in renting your first apartment. Having a roommate can significantly reduce your financial burden by splitting rent, utilities, and other expenses. However, living with someone requires compatibility and mutual respect for each other’s lifestyles and habits.

Consider the following factors when deciding if you need a roommate:

  • Financial benefits: Sharing costs can make living in a desirable neighborhood or a larger apartment more affordable.
  • Lifestyle compatibility: Ensure your potential roommate has a compatible lifestyle, including cleanliness standards, sleep schedules, and social habits.
  • Shared responsibilities: Discuss how household chores, groceries, and other responsibilities will be divided.
  • Privacy needs: Determine how much personal space and privacy you need and whether a roommate arrangement can accommodate this.
  • Conflict resolution: Consider your ability to communicate effectively and resolve conflicts, as disagreements are inevitable.

Having a clear roommate agreement and understanding from the start can help ensure a harmonious living situation. Whether you decide to live alone or with a roommate, make sure it aligns with your financial situation and personal preferences.

4. Decide if you need a co-signer

Sometimes, first-time renters may need a co-signer to secure an apartment. A co-signer, often a guardian or a close one, agrees to take on the financial responsibility if you are unable to pay rent. This can be crucial if you have limited credit or rental history. Make sure your co-signer is prepared to provide their financial information and sign the lease agreement.

If you don’t need a co-signer, consider collecting a few character references to write letters you can bring with when you turn in your rental application. Since you won’t have a rental history, these can help persuade the property owner that you’ll be a good tenant.

5. Know the upfront costs

Rent is not your only financial concern with a new apartment. Even before the monthly expenses, you need to save for the additional fees. Between application fees, a security deposit, a pet fee if applicable and first and last month’s rent, you’re going to shell out some serious money before you even get the keys to your first apartment.

To budget for this, plan on having a few months’ rent already in the bank to cover costs.

6. Know your long-term costs

Renting an apartment for the first time involves various long-term costs. Initially, you’ll need to cover the security deposit and possibly the first and last month’s rent upfront. Monthly rent payments are the most obvious ongoing expense, but utilities, renter’s insurance, and maintenance costs also add up. Over time, your rent costs may increases and moving costs can further impact your budget. Here are some of the long term costs associated with renting that you should plan for: 

  • Security deposit
  • First and last month’s rent
  • Monthly rent payments
  • Utilities (electricity, water, gas, internet)
  • Renter’s insurance
  • Maintenance and repair expenses
  • Rent increases
  • Furnishing and replacing items over time

7. Prepare any necessary documents

Preparing the necessary paperwork is an essential step when renting your first apartment. Gathering documents like recent pay stubs, bank statements, and photo ID in advance can expedite the application process. Property managers typically require verification of your identity, employment, and financial stability. Being organized and ready with these documents will help ensure a smoother and quicker review.

8. Understand lease terms

Lease terms refer to the specific conditions and rules outlined in a rental agreement that both the landlord and tenant must follow. Familiarize yourself with common rental agreement terms and read your lease thoroughly. If anything is unclear, seek clarification before signing. Pay special attention to sections on regulations, restrictions, late rent policies, and potential eviction actions. If you find terms you disagree with, discuss them with your property manager. It’s acceptable to request changes, though not all negotiations will be successful. Being well-informed and proactive ensures you understand your obligations and rights as a tenant.

9. What amenities are you looking for?

If you made a list of things that you couldn’t live without in your first apartment, what would be on it? Do you need in-unit laundry so that you don’t need to leave your apartment to do laundry Do you need an on-site workout room to help keep you in shape? Do you need an elevator instead of stairs to get to your apartment? These are important things to consider when renting an apartment to ensure you enjoy where you’re living. 

10. Pet or no pet

If you have pets or plan to get one, it’s important to factor them into your apartment search. If you have a furry friend, make sure your property manager allows pets and your particular breed. Most pet-friendly buildings have a pet deposit or add a pet fee onto your monthly rent, so it’s good to know how much that is for budgeting.

11. Know when the best time is to rent an apartment

Timing your apartment search can significantly impact your options and costs. Understanding the rental market’s seasonality and when the best time is to rent an apartment will help you find the best deals and the widest selection of available units. Here are some key points to consider:

  • Peak seasons: The busiest times for apartment hunting are late spring and summer (May through August). During these months, many leases end, and new inventory becomes available. However, competition is high, and rent prices can be at their peak.
  • Off-peak seasons: The best deals are often found in the fall and winter months (October through February). Fewer people are moving, so landlords may lower prices or offer incentives to fill vacancies. While the selection might be more limited, you can take advantage of lower rents and reduced competition.
  • Early planning: Start your search at least two months before your desired move-in date. This allows you to explore multiple options and secure a place that meets your needs and budget.
  • Flexibility: If possible, be flexible with your move-in date. This can give you leverage to negotiate better terms or take advantage of last-minute deals.

12. Do you need renter’s insurance?

Renter’s insurance protects your personal belongings, covers liability if someone is injured in your apartment, and helps with temporary housing costs if your apartment becomes uninhabitable. It’s usually affordable, costing around $15 to $30 per month. Some landlords require renter’s insurance, but even if it’s not mandatory, having it is a smart way to protect yourself and your belongings.

13. Questions to ask during an apartment tour

When touring potential apartments, asking the right questions can help you make an informed decision. Here are essential questions to consider:

  • What is the monthly rent, and what utilities are included? Are there any additional fees?
  • What is the length of the lease? Are there options for month-to-month or shorter-term leases?
  • What is the security deposit, and are there any non-refundable fees? Are there pet deposits or fees?
  • How are maintenance requests handled? Is there a 24/7 emergency maintenance service?
  • What amenities are available (gym, pool, laundry facilities)? Are there any additional costs for using these amenities?
  • Is parking available, and is there a fee? What are the options for public transportation nearby?
  • What security measures are in place (gated access, security cameras)? How is the neighborhood’s safety?
  • How are lease renewals handled? What is the history of rent increases in the building?
  • Is subletting allowed? What are the terms for breaking the lease early?

14. Know how to spot rental scams

Protecting yourself from rental scams is essential when searching for an apartment. Scammers often target unsuspecting renters with too-good-to-be-true deals or pressuring tactics. Here’s how to spot and avoid rental scams:

  • Too good to be true: If the rent is significantly lower than similar properties in the area, it might be a scam. Be cautious of deals that seem too good to pass up.
  • No in-person viewing: Scammers often avoid in-person meetings. Insist on seeing the property before making any commitments. If the landlord makes excuses for not showing the apartment, it’s a red flag.
  • Upfront payments: Be wary of landlords asking for large sums of money upfront, especially if they demand cash or wire transfers. Legitimate landlords will typically require a security deposit and the first month’s rent, but not before you’ve seen the property and signed a lease.
  • Pressure tactics: Scammers might pressure you to act quickly, claiming there’s another interested tenant. Take your time to research and verify the legitimacy of the listing.
  • Incomplete or suspicious listings: Listings with vague details, grammatical errors, or lack of contact information should raise suspicion. Check for consistency across different rental platforms and look for professional presentations.
  • Verify ownership: Research the property and verify the owner’s identity. Check property records or contact the building’s management to confirm the landlord’s legitimacy.

15. Pack by priority

Packing for your first apartment is a great opportunity to declutter and start fresh. Instead of bringing everything from your childhood home or college dorm, prioritize what you really need and use. Here’s how to streamline your move:

  • Declutter: Assess your belongings and decide what’s essential. Let go of items that are no longer useful or hold sentimental value only.
  • Donate or recycle: Give away or recycle things you don’t need. This reduces clutter and helps others.
  • Store sentimental items: For items you’re not ready to part with, consider storing them at a close one’s or friend’s place. If you don’t miss them after a few months, it’s a sign you can let them go.

By packing only what’s necessary, you’ll make moving easier and keep your new apartment organized and clutter-free.

16. Move-in plan

The two common options for moving are doing it yourself or hiring professional movers. Once you decide which way to go, schedule your move-in day. Rent your own moving van and secure friends who can commit to helping. Call around to a few local movers, get price quotes and put down a deposit. Shop for moving supplies a few weeks before the big day and begin packing in small increments to make sure you aren’t doing it all at the last minute.

Informing your property manager or landlord of your move-in day is essential for a smooth transition. It allows them to prepare facilities, such as reserving the elevator or protecting floors and walls during the move. Additionally, it ensures they can have the apartment ready, complete any necessary maintenance, and provide you with keys and access instructions.

17. Essential items for your first apartment

Once your lease is signed, it’s time to focus on outfitting your new apartment with essentials. Start with the basics: a bed, seating, dishes, and basic kitchenware. Prioritize items that you’ll use daily, like sheets, towels, cleaning supplies, and paper products. Shopping for these necessities before moving day ensures you’re prepared from the start. Remember, some furniture items might take a few days to be delivered, so plan accordingly.

After securing the essentials, gradually expand your list to include items like trash cans, dressers, a coffee table, and a dining set. Buy based on what you can afford and what you genuinely need, avoiding the urge to splurge on non-essentials.

18. First time apartment traps to avoid

While it’s tempting to fill your new apartment with all the latest gadgets and decor, focus on what you truly need versus what you want. Limited space means prioritizing functionality over luxury. Avoid cluttering your kitchen with seldom-used appliances like bread makers or stand mixers unless you cook often.

To avoid overcrowding, realistically assess your storage space and layout. If possible, obtain a floor plan or take measurements of your new apartment before move-in day. This helps in planning your purchases and ensures you don’t overdo it with unnecessary items. Prioritizing essential items and thoughtful planning will make your new apartment functional and comfortable without overwhelming it with clutter.

19. Maximizing your space and organizing

Effective storage solutions are crucial for maintaining an organized and clutter-free apartment. Most apartments lack extensive closet space and built-in shelving, so you’ll need to get creative with space-saving options. Under-bed storage bins are excellent for storing off-season clothing, while furniture pieces like ottomans with hidden compartments provide extra storage. Bookcases, wall-mounted shelves, and decorative bins can also help keep your essentials organized and add aesthetic appeal.

To avoid a cluttered feel, use a combination of storage solutions that blend functionality with style. Thoughtful organization will make your apartment feel more spacious and comfortable.

20. Personalizing and decorating your apartment

Decorating your apartment transforms it into a home that reflects your personality. Start by selecting favorite pictures, art pieces, and decor items that resonate with you. Consider creating a cohesive design with a color scheme or theme that ties your space together. 

Take your time with this step and let it evolve naturally as you settle in. Prioritize getting essential items in place first, as this will give you a better perspective on how to incorporate decorative elements effectively. Thoughtful decoration not only enhances your living space but also makes it uniquely yours.

Source: apartmentguide.com

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A prime credit score typically refers to a high credit score, usually above 720. It shows lenders that you have a history of responsibly managing credit and can qualify you for better loan terms and lower interest rates.

Few numbers are as important as your credit scores. Lenders use them to determine if you qualify for auto loans, home loans, credit cards and other products. In some states, insurance companies use credit scores to calculate your premiums. You may even have to undergo a credit check to qualify for some jobs.

Whether you just got your first credit card or have more than a decade of experience managing credit, it’s important to understand the score ranges and how they’re used. Keep reading to learn more about prime credit scores in particular.

What Is a Prime Credit Score?

A prime credit score is any score that falls into the “prime” category, and according to the Consumer Financial Protection Bureau, prime scores range from 660 to 719. Some lenders may have slightly different ideas of what is classified as a prime score. Although a prime score isn’t the highest credit score you can have—credit scores generally range from 300 to 850—it’s high enough to help you qualify for many loans and credit cards.

Additional Score Categories

Prime is just one of the five categories used to classify consumer credit scores in the context of lending. The others are deep subprime, subprime, near-prime, and super-prime. Here’s what they mean:

  • Deep subprime (579 or lower): If you have a deep subprime score, banks view you as highly likely to default on your financial obligations. In other words, there’s a good chance you won’t repay loans and credit cards as agreed. With scores in the subprime category, you’ll find it difficult to qualify for credit. Even if you do qualify, you’ll pay the highest interest rates, making it more expensive to borrow money.
  • Subprime (580 to 619): Subprime scores are a little better than deep subprime scores, but you’ll still find it tough to qualify for loans and credit cards. People with subprime scores also pay higher interest rates than people with scores in the prime and super-prime categories.
  • Near-prime (620 to 659): If you have a near-prime score, you’re getting closer to qualifying for the lowest interest rates. With a little effort, you can make the leap from near-prime to prime, making it easier to reach your financial goals.
  • Super-prime (720+): If you have a score of 720 or higher, you pose the lowest amount of risk to lenders. As a result, super-prime borrowers qualify for the most favorable interest rates and loan terms.

Note that these score ranges are slightly different from the official FICO® score ranges:

  • Poor: 579 or less
  • Fair: 580 – 669
  • Good: 670 – 739
  • Very good: 740 – 799
  • Exceptional: 800+

Factors Used to Calculate Your Credit Scores

FICO scoring models use the following factors to calculate your scores.

Payment History

One of the best ways to boost your score is to make on-time payments, as payment history accounts for a whopping 35% of your FICO scores. If you borrow money, the lender expects to be repaid as agreed. A history of on-time payments shows that you follow through on your financial commitments.

Amounts Owed

Another major factor, accounting for 30% of your credit score, is the amount of available credit you are using on a regular basis. To maintain a prime credit score or super-prime credit score, avoid using a high percentage of your available credit. Maxing out your credit cards affects your utilization rate, which is a comparison of how much credit you have available versus how much you’re using.

For example, if you have balances totaling $5,000 against credit limits totaling $10,000, you have a 50% utilization rate. Lenders typically like to see utilization rates below 30%, so paying down debt and requesting credit limit increases can help you optimize your scores.

Length of Credit History

FICO’s models also consider your average age of accounts, along with the age of your oldest and newest accounts, when determining your scores. You don’t need a long history to achieve a high credit score, but it can help. This determines 15% of your credit score.

Credit Mix

The term credit mix refers to how many types of credit accounts you have. Some people have one or two credit cards, while others have a full portfolio of credit cards, personal loans, and auto loans. Credit mix doesn’t make up a huge percentage of your score (10%), but it’s one of the factors used to assess your creditworthiness.

New Credit

Every time you apply for a loan or a credit card, the lender checks your credit report. This is known as a “hard inquiry” on your report. There’s nothing wrong with an inquiry or two, but applying for multiple lines of credit in a short amount of time is a red flag for lenders. If a lender sees four or five inquiries in a matter of weeks, they may wonder if you’re running out of money and relying on credit to pay your bills. New credit accounts for 10% of your FICO credit score.

Benefits of Having Good Credit

Having a prime credit score opens many doors for borrowers. For example, you’re likely to qualify for the best interest rates, reducing the total cost of borrowing money. Lenders may also be willing to offer more favorable loan terms, such as more time to pay or reduced fees.

Good credit also gives you more freedom. If your car breaks down, a prime credit score makes it easier to qualify for a vehicle loan. Without a good score, you might have to rely on an unsafe vehicle or take out a loan with an extremely high interest rate. Prime credit scores may even help you secure lower rates on your auto insurance, homeowners insurance or renters insurance coverage.

Maintaining a Prime Credit Score

Once you have a prime credit score, it’s important to maintain it. You can maintain good scores by making on-time payments, keeping your credit utilization rate as low as possible and applying for credit only when you truly need it. Over time, these good financial habits may help you jump from a lower credit to higher credit.

Get your free credit score from Credit.com today to see where your credit currently lies and determine what you can do to maintain or improve it.

Source: credit.com

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If you’re trying to save some money, trimming some discretionary spending categories from your budget can be a good way to start.

But it isn’t necessarily the only or best way to save — especially if reducing or removing things like streaming services, concerts, or monthly massages from your budget makes it harder to stick to your plan.

Instead, it may make sense to track where your money is going for a few weeks and then take a look at all your spending categories to determine which cuts could have the biggest impact.

What Are Spending Categories?

Spending categories can help you group similar expenses together to better organize your budget. They can come in handy when you’re laying out your spending priorities, deciding how much money to allot toward various wants and needs, and determining whether an expense is essential or nonessential.

Many of the budgets you’ll see online use pretty much the same spending categories, such as housing, transportation, utilities, food, childcare, and entertainment. But you may find it’s more useful to track your spending for a while with a money tracker, and then create some of your own categories. You may choose to drill down to specific bills or go broader, breaking down your budget into just the basics.

By personalizing your spending categories, you may be able to put together a budget that’s more manageable — and, therefore, one you’re more likely to stay with.

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How Do Spending Categories Work?

To customize your spending categories, it can help to gather as much information as possible about where your money is actually going.

You can start by looking at old bank and credit card statements to get a good picture of past spending. Your bigger spending categories should be easier to figure out. Those bills are often due on the same day every month and are usually about the same amount. But you’ll also want to keep an eye out for expenses that come just once or a few times a year (such as taxes, vet bills, etc.). And, if you use cash frequently, you’ll want to determine where that money went, too.

A tracking app can help you grasp the hard truth about your spending as you move forward. That cute plant you bought for your windowsill? Pitching in for a co-worker’s going-away gift? Those little splurges can add up before you know it.

Once your spending picture comes into focus, you can divide your expenses into useful personal budget categories, and start thinking about what you might be able to trim or cut out altogether.
💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

Examples of Spending Categories

Although it can be effective to organize your spending categories in a way that’s unique to you, there are a few basic classifications that can work for most households when making a budget: They include:

Essential Spending

•   Housing: This category could include your rent or mortgage payment, property taxes, homeowners or renters insurance, HOA fees, etc.

•   Utilities: You could limit this to basic services like gas, electricity, and water, or you might decide to include your cell phone service, cable, and WiFi costs.

•   Food: This amount could be limited to what you spend on groceries every month, or it could include your at-home and away-from-home food costs.

•   Transportation: Your car payment could go in this category, along with fuel costs, parking fees, car maintenance, car insurance, public transportation, and DMV fees. You could also include the cost of Uber rides.

•   Childcare: If you need childcare while you work, this cost would be considered necessary spending. If it’s for a night out, you may want to move it to the entertainment or personal care category.

•   Medical Costs and Health Care: This could include your health insurance premiums, insurance co-pays and prescription costs, vision and dental care, etc.

•   Clothing: Clothing is a must-have, of course, but with limits. You may want to put impulse items in a separate category as a nonessential or discretionary expense.

Non-essential Spending

•   Travel: This category would be for any travel that isn’t work-related, whether it’s a road trip or a vacation in Paris.

•   Entertainment: You could get pretty broad in this category, but anything from streaming services and videogames to concerts and plays could go here.

•   Personal: This might be your category for things like salon visits, your gym membership, and clothes and accessories that are more of a want than a need.

•   Gifts: If you’re a generous gift-giver, you may find you need a separate category for these expenses.

Other Spending

•   Savings and investments: Though it isn’t “essential” for day-to-day life, putting money aside for long- and short-term goals is a must for most budgets.

•   Emergency fund: This will be your go-to for unexpected car repairs, home repairs, or medical bills.

•   Debt repayment: Student loan payments, credit card debt, and other balances you’re trying to pay off could fit in this category.

Pros and Cons of Spending Categories

The idea of making a budget can be daunting, particularly if you’re trying to fit your needs and wants into spending categories that aren’t suited to how you live. Here are some pros and cons to using categories for spending that might keep you motivated and help you avoid potential budgeting pitfalls.

Pros

•   More control: Creating a budget with spending categories that match your lifestyle can help you put your money toward things that really matter to you.

•   Less stress: If you’re living paycheck to paycheck even though you know your income is sufficient to cover your needs, a budget with realistic spending categories can help you see where your money is going.

•   Better planning: Whether you’re trying to save for a vacation, wedding, house, retirement, or all of the above, including those goals in your spending categories will help ensure they get your attention.

Cons

•   May feel limiting: Working with a budget can feel restrictive, especially if you’ve been winging it for a while or aren’t including enough discretionary spending.

•   Time consuming: It might take some trial and error to find a budget system that works for you. And if you’re budgeting as a couple, you’ll likely have to work out some compromises when determining your spending categories.

•   Requires maintenance: Budgeting isn’t a one and done. You’ll be more likely to succeed if you consistently track your spending to make sure you’re hitting your goals.

Common Spending Categories to Cut First

Often when you see or hear budgeting advice, it tends to focus on cutting back on small extras — $6 daily lattes at your favorite café, for example, or those weekly Happy Meals for the kids. Some other top spending categories that traditionally are among the first to hit the chopping block include:

•   Gym memberships

•   Dining out

•   Subscription services you don’t use anymore

•   Cable

•   Personal care services you can do at home for less, such as manicures and pedicures

•   Alcoholic beverages

•   Cigarettes and vaping products

•   Vacations

But it can also be useful to review, and potentially cut back on, how much you’re budgeting for basic living expenses, such as:

•   Clothing and shoes

•   Utility bills

•   Groceries

•   Insurance

•   Cars

•   Cellphones and computers

•   Rent

Tips for Customizing Your Spending Categories

As you create your spending plan, keep in mind that it doesn’t have to be like anyone else’s. If you track your expenses and use that information to create your personalized budget, you may have a better chance of building a plan you can stick with.

Here are some more steps to consider as you get started:

•   Be realistic. It may take a while to get to your goal, but doing even a little bit consistently can make a difference. Know yourself and do what you can.

•   Don’t forget irregular expenses. Bills that you pay every month can be easy to remember. (You might even put them on autopay to make things more convenient.) But infrequent expenses such as tax bills can get away from you if you don’t include them in your spending categories.

•   Avoid spending more than you have. Knowing how much you’ll have left after taxes each month is an important part of successful planning. An emergency fund can help you stay on track when unexpected expenses pop up.

•   Leave room for fun. Eliminating date nights and small splurges completely could make it much harder to stay with your plan.

•   Pay yourself. Make saving and investing goals a separate spending category.

•   Find a budgeting method that works for you. Whether it’s the popular 50/30/20 budget — which divides your after-tax income into needs, wants, and savings — or a detailed spending breakdown with multiple categories, try various budgeting methods until you find one that motivates you.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

Want to save some money but know you need to make some changes? Monitoring where your money is going every month can help you create a spending plan with categories that are customized to your needs, wants, and goals. A plan that’s realistic, but not too restrictive, can give you the kind of control and motivation you need to get and stay on track financially.

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

With SoFi, you can keep tabs on how your money comes and goes.

FAQ

What are the four main categories in a budget?

The four main spending categories for most budgets are housing, food, utilities, and transportation. Once you’ve established how much you’ll need to cover these costs, you can move on to planning for other expenses.

What is the 50/30/20 rule of budgeting?

The 50/30/20 rule is a budgeting method that allocates your take-home income to three main spending categories: needs or essentials (50%), wants or nonessentials (30%), and saving or financial goals (20%).

What are the four characteristics of a successful budget?

A successful budget usually includes accurate income and spending projections, realistic and personalized spending categories, consistent and frequent check-ins, and solid savings goals.

Photo credit: iStock/mapodile

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

If you caused a major car accident and the other driver sued you to cover their medical costs, would you have enough liability insurance to pay the damages? In a financially disastrous situation like this one, an umbrella insurance policy could help.

Umbrella insurance offers extra liability coverage beyond what’s on the policies you already have, such as auto or homeowners insurance. But there can be big differences from one umbrella policy to the next, including coverage details and maximum limits. Here’s how to find the best umbrella insurance for you.

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How to find the best umbrella insurance

When comparing umbrella insurance options, consider the following questions.

What’s covered?

A standard umbrella insurance policy will cover injuries or property damage you cause to others, as well as your legal defense for such claims. But the nitty-gritty details may vary between policies.

For example, if your idea of a fun vacation is renting a Jet Ski and hitting the water, know that some umbrella insurers won’t cover these kinds of personal watercraft. The best umbrella insurance coverage for you will include your hobbies and other activities.

Many umbrella policies offer coverage anywhere in the world, which could be useful if you often travel overseas. But some policies may pay only for lawsuits brought in the U.S. or Canada.

You might also see some insurers offering excess liability policies, which tend to be similar but not identical to umbrella policies. Excess liability policies essentially boost the limits on the coverage you already have, while umbrella policies may also offer extra types of coverage that aren’t available on your existing policies.

An independent insurance agent can help talk you through exactly what’s covered and what isn’t by each policy you’re considering.

How much underlying coverage is required?

Insurers often require a minimum amount of liability insurance on your underlying policies before you can buy umbrella insurance.

For instance, to add umbrella coverage to your car insurance, your policy may need to have $250,000 of bodily injury liability coverage and $100,000 of property damage liability coverage. To add umbrella coverage to a homeowners policy, you often need $300,000 of liability insurance.

If your existing policies fall short of these limits, increasing your coverage amounts will likely raise your premiums.

Can you buy your policies from different companies?

Before they sell you an umbrella policy, many insurers require that you carry your auto, homeowners, condo or renters insurance with them, too. RLI and Auto-Owners Insurance are two companies that offer stand-alone umbrella insurance policies, meaning you could carry your auto or homeowners coverage with someone else.

How much coverage should you buy?

Another factor to look at when shopping is the maximum limit a company offers. Most umbrella policies stop at $5 million, but some go higher. Farmers, for instance, offers umbrella insurance up to $10 million in most states, while Chubb‘s umbrella limits go up to $100 million.

When choosing your coverage limit, add up the value of your assets, such as savings, investments and real estate. These are things you could lose if someone files a lawsuit against you. Consider choosing an umbrella liability limit at least high enough to cover all your assets.

Where to buy umbrella insurance

Many major carriers offer umbrella insurance. A good first step is to call your current auto and home insurer and request an umbrella insurance quote. Remember that you may have to increase the coverage limits on your underlying policies, which could raise your total cost.

If you have coverage with multiple companies, ask how much it would cost to move all your policies to that company, including the new umbrella. See if a bundling discount could reduce the total cost of your premiums.

🤓Nerdy Tip

Take this opportunity to shop around. Since you’re adding a new type of insurance and potentially raising the coverage limits on your existing policies, you may find that your current insurer no longer offers the best value.

We recommend getting quotes from at least three companies before making a decision. An independent agent or broker can shop around on your behalf and explain the coverage differences between policies.

Umbrella insurance companies to consider

Below are some of the major umbrella insurance companies in the U.S., along with details about their coverage limits and eligibility requirements. Keep in mind that smaller regional insurers may also offer solid coverage at an affordable price. A local insurance agent can help you find them.

Allstate

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Alaska, Massachusetts, Nevada and New York.

Eligibility requirements: You must have underlying policies with at least the following limits:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

  • $500,000 combined single limit.

Amica

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Hawaii.

Eligibility requirements: Requirements vary by state. Generally, your underlying policies must meet the following minimums:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $50,000 property damage liability.

  • $500,000 combined single limit.

Auto-Owners

Coverage limits: $1 million to $5 million, with additional limits potentially available.

States available: Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia and Wisconsin.

Eligibility requirements: Eligibility requirements differ depending on underlying policy, underlying carrier and where you live.

Chubb

Coverage limits: $1 million to $100 million.

States available: All 50 states and Washington, D.C.

Eligibility requirements: Minimum limits for underlying policies vary by state.

Note: Chubb’s policy is technically an excess liability policy, not an umbrella policy.

Farmers

Coverage limits: $1 million to $10 million, except in Florida and California, where the maximum limit is $5 million.

States available: All states except Alaska, Delaware, Hawaii, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, North Carolina, Rhode Island, Vermont, Washington, D.C., and West Virginia.

Eligibility requirements: Farmers must insure at least one car with bodily injury liability limits of at least $250,000 per person and $500,000 per accident. You can insure your home with any company as long as it has at least $300,000 of liability coverage.

Geico

Insurance type

NerdWallet star rating

Auto insurance

Homeowners insurance

Coverage limits: $500,000 to $10 million. (Limits above $2 million require additional eligibility requirements.)

States available: Washington, D.C., and all states except Alabama, California, Georgia, Montana, Nevada, New York, Texas and Washington. In the states where Geico doesn’t currently sell umbrella insurance, it can offer a policy through a partner carrier.

Eligibility requirements: You generally must have all vehicles insured with Geico and have the following minimum coverage limits on any relevant underlying policies:

Auto, RV, motorcycle or golf cart

  • $300,000 bodily injury liability per person.

  • $300,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Property (homeowners, renters, etc.)

$300,000 of liability coverage.

Boat (26 feet or longer, or over 50 horsepower)

$300,000 of liability coverage.

Boat (under 26 feet with motor of 50 horsepower or less)

$100,000 of liability coverage.

Liberty Mutual

Coverage limits: $1 million to $5 million.

States available: All states except California, Georgia, Louisiana and New Jersey. Coverage limits and requirements vary by state.

Eligibility requirements: You generally must have a Liberty Mutual auto policy with at least the limits below, but requirements may vary by state. The other policy types are optional, but if you have any of them, the liability limit must be at least $100,000.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $50,000 property damage liability.

  • $500,000 combined single limit.

Homeowners, dwelling, watercraft, farmer’s personal liability or general personal liability

  • $100,000 of liability coverage.

Nationwide

Coverage limits: $1 million to $5 million.

States available: Washington, D.C., and all states except Alaska, Hawaii, Louisiana and Oklahoma.

Eligibility requirements: It depends on where you live. In most cases, all vehicles and your primary home must have Nationwide policies with at least the following limits:

  • $300,000 of liability coverage.

  • $250,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

  • $300,000 bodily injury liability per person.

  • $300,000 bodily injury liability per accident.

  • $100,000 property damage liability.

USAA

Coverage limits: $1 million to $5 million, with higher limits available through the USAA Insurance Agency.

States available: All 50 states and Washington, D.C.

Eligibility requirements: USAA policies are available only to veterans, active military and their families. The following limits apply to underlying policies:

Homeowners, renters or rental property

  • $300,000 of liability coverage.

  • $300,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Watercraft (if applicable)

  • $300,000 bodily injury liability per person.

  • $500,000 bodily injury liability per accident.

  • $100,000 property damage liability.

Source: nerdwallet.com

Apache is functioning normally

Millions of employees work from home at least part time. They’ve carved out dedicated office space and plopped laptops on kitchen counters and in closets. They almost never can declare the home office tax deduction.

Millions of self-employed people have also created workspaces at home. If they use that part of their home exclusively and regularly for conducting business, and the home is the principal place of business, they may be able to deduct office-related business expenses.

Why the difference? The Tax Cuts and Jobs Act nearly doubled the standard deduction and eliminated many itemized deductions, including unreimbursed employee expenses, from 2018 to 2025.

Read on to learn whether or not you may qualify for the home office tax deduction.

What Is a Home Office Tax Deduction?

The home office tax deduction is available to self-employed people — independent contractors, sole proprietors, members of a business partnership, freelancers, and gig workers who require an office — who use part of their home, owned or rented, as a place of work regularly and exclusively.

“Home” can be a house, condo, apartment, mobile home, boat, or similar property, and includes structures on the property like an unattached garage, studio, barn, or greenhouse.

Eligible taxpayers can take a simplified deduction of up to $1,500 or go the detailed route and deduct office furniture, homeowners or renters insurance, internet, utilities needed for the business, repairs, and maintenance that affect the office, home depreciation, rent, mortgage interest, and many other things from taxable income.

After all, reducing taxable income is particularly important for the highly taxed self-employed (viewed by the IRS as both employee and employer.)

An employee who also has a side gig — like driving for Uber or dog walking — can deduct certain expenses from their self-employment income if they run the business out of their home.
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Am I Eligible for a Home Office Deduction?

People who receive a W-2 form from their employer almost never qualify.

In general, a self-employed person who receives one or more IRS 1099-NEC tax forms may take the home office tax deduction.

Both of these must apply:

•   You use the business part of your home exclusively and regularly for business purposes.

•   The business part of your home is your main place of business; the place where you deal with patients or customers in the normal course of your business; or a structure not attached to the home that you use in connection with your business.

Regular and Exclusive Use

You must use a portion of the home for business needs on a regular basis. The real trick is to meet the IRS standard for the exclusive use of a home office. An at-home worker may spend nine hours a day, five days a week in a home office, yet is not supposed to take the home office deduction if the space is shared with a spouse or doubles as a gym or a child’s homework spot.

There are two exceptions to the IRS exclusive-use rules for home businesses.

•   Daycare providers. Individuals offering daycare from home likely qualify for the home office tax deduction. Part of the home is used as a daycare facility for children, people with physical or mental disabilities, or people who are 65 and older. (If you run a daycare, your business-use percentage must be reduced because the space is available for personal use part of the time.)

•   Storage of business products. If a home-based businessperson uses a portion of the home to store inventory or product samples, it’s OK to use that area for personal use as well. The home must be the only fixed location of the business or trade.

Principal Place of Business

Part of your home may qualify as your principal place of business “if you use it for the administrative or management activities of your trade or business and have no other fixed location where you conduct substantial administrative or management activities for that trade or business,” the IRS says.

Can You Qualify for a Home Office Deduction as an Employee?

Employees may only take the deduction if they maintain a home office for the “convenience of their employer,” meaning the home office is a condition of employment, necessary for the employer’s business to function, or needed to allow the employee to perform their duties.

Because your home must be your principal place of business in order to take the home office deduction, most employees who work part-time at home won’t qualify.

Can I Run More Than One Business in the Same Space?

If you have more than one Schedule C business, you can claim the same home office space, but you’ll have to split the expenses between the businesses. You cannot deduct the home office expenses multiple times.

How to Calculate the Home Office Tax Deduction

The deduction is most commonly based on square footage or the percentage of a home used as the home office.

The Simplified Method

If your office is 300 square feet or under, Uncle Sam allows you to deduct $5 per square foot, up to 300 square feet, for a maximum $1,500 tax deduction.

The Real Expense Method

The regular method looks at the percentage of the home used for business purposes. If your home office is 480 square feet and the home has 2,400 square feet, the percentage used for the home office tax deduction is 20%.

You may deduct 20% of indirect business expenses like utilities, cellphone, cable, homeowners or renters insurance, property tax, HOA fees, and cleaning service.

Direct expenses for the home office, such as painting, furniture, office supplies, and repairs, are 100% deductible.
💡 Quick Tip: A major home purchase may mean a jumbo loan, but it doesn’t have to mean a jumbo down payment. Apply for a jumbo mortgage with SoFi, and you could put as little as 10% down.

Things to Look Out for Before Applying for the Home Office Tax Deduction

If you’re an employee with side gigs or just self-employed, it might be a good idea to consult a tax pro when filing.

To avoid raising red flags, you may want to make sure your business expenses are reasonable, accurate, and well-documented. The IRS uses both automated and manual methods of examining self-employed workers’ tax returns. And in 2020, the agency created a Fraud Enforcement Office, part of its Small Business/Self-Employed Division. Among the filers in its sights are self-employed people.

The IRS conducts audits by mail or in-person to review records. The interview may be at an IRS office or at the tax filer’s home.

A final note: Taking all the deductions you’re entitled to and being informed about the different types of taxes is smart.

If you’re self-employed, you generally must pay a Social Security and Medicare tax of 15.3% of net earnings. Wage-earners pay 7.65% of gross income into Social Security and Medicare via payroll-tax withholding, matched by the employer.

So self-employed people often feel the burn at tax time. It’s smart to look for deductions and write off those home business expenses if you’re able to.

To shelter income and invest for retirement, you might want to set up a SEP IRA if you’re a self-employed professional with no employees.

Recommended: First-Time Homebuyers Guide

The Takeaway

If you’re an employee working remotely, the home office tax deduction is not for you, right now, anyway.

If you’re self-employed, the home office deduction could be helpful at tax time. To qualify for the home office deduction, you must use a portion of your house, apartment, or condominium (or any other type of home) for your business on a regular basis, and it generally must be the principal location of your business. This is something to keep in mind if you’re in the market for a new home, since writing off a portion of your home expenses could help offset some of the costs of homeownership.

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

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much can I get written off for my home office?

Using the simplified method of calculating the home office deduction, you can write off up to $1,500. Using the regular method, you’ll need to determine the percentage of your home being used for business purposes. You may then be able to deduct that percentage of certain indirect expenses (like utilities, cellphone, cable, homeowners or renters insurance, property tax, HOA fees, and cleaning services). Direct expenses for the home office, such as painting, furniture, office supplies, and repairs, are generally 100% deductible.

Can I make a claim for a home office tax deduction without receipts?

The simplified method does not require detailed records of expenses. If using the regular method, you should be prepared to defend your deduction in the event of an IRS audit.

The IRS says the law requires you to keep all records you used to prepare your tax return for at least three years from the date the return was filed.

What qualifies as a home office deduction?

Things like insurance, utilities, repairs, maintenance, equipment, and rent may qualify as tax deductions.

Photo credit: iStock/Marija Zlatkovic

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Source: sofi.com