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Whether from parents, friends, or financial advisors, you have probably heard plenty of people say that you should be saving money. But did you ever stop and consider why exactly saving money is so important?

Saving money is truly a smart move: It can help you achieve your financial aspirations, prepare for the future, and weather unexpected events. It can even help you earn money without doing anything at all. When you look at it in a big-picture way, saving can also relieve a lot of money stress from your life.

Reasons Why Saving Money is Important

It can be hard to get motivated to save money just because it’s the “responsible” thing to do. But you may see the appeal once you understand the huge advantages that saving offers. Here are a few.

Peace of Mind

If money is tight, you may find yourself worrying how you will pay the rent or other critical bills if an extra unexpected expense were to suddenly come up, as they often do. After all, cars break down, and dental work can crop up. Or what if your kid discovers a passion for soccer and wants to go to a pricey summer camp.

Having savings in the bank (whether that’s an online bank or a traditional one) can provide the sense of security that comes with knowing you can get through these kinds of moments without hardship. You’ll be able to have that back-up money to afford many of life’s expenses that crop up. By saving, you may also worry less about tomorrow, knowing that you have stashed away some cash. That means you can breathe a little easier.

Avoiding Debt

When you have money in the bank, you can make purchases, planned or not, with the money that’s on deposit. That means you can avoid using high-interest credit cards or potentially taking out a personal loan or a home equity line of credit (HELOC) to pay for things.

That can help you avoid debt, which can help save a significant amount of cash in the long run.

Expanding Your Options

Generally, the more money you have saved, the more control you can have over your life and your financial security.

If you’re unhappy with where you live, for instance, having some savings can open up the possibility of moving to a more desirable location or putting a down payment on a new home.

If you dislike your job, having a cushion of cash in your savings account might afford you the option of leaving that job even before you have another one lined up.

Money certainly does not solve all problems, but having savings can give you a little bit of breathing room and allow you to take positive steps in your life.

Having Financial Freedom

Another benefit of savings is that you are on a program that can give you financial freedom. If you stick to a plan of stashing 10% or 20% into savings, as many financial experts recommend, you can avoid living paycheck to paycheck and have more financial freedom.

For example, with adequate savings, you might be able to take a sabbatical from work and pursue a passion project. You might have enough cash to start your own business or retire early. Or you might plan a luxe anniversary celebration somewhere tropical. Savings can enable your dreams.

Recommended: Guide to Improving Your Money Mindset

Saving for Big Purchases

Having a savings account is a great way to afford big purchases without racking up credit card debt and the high interest that goes along with it or turning to other expensive financing options.

Say you want to take your kids on a Disney vacation or you really need that second car. Or maybe there’s a designer bag that you’re totally in love with. By putting money aside in a savings account and earning interest on those funds, you can be in a position to buy your wish-list item outright, rather than borrowing funds to do so. (To see how your money can grow when in an interest-bearing account, you might use an online savings account interest calculator.)

Saving Money for Emergencies

Here’s another reason why it is important to save money: Life has its twists and turns. One minute, everything is humming along nicely, the next, your car needs $2,000 worth of repairs. Or the hot water-heater conks out or you lose your job. These situations and others can put a real strain on your finances.

That’s why financial experts generally recommend building up an emergency fund of at least three to six months’ worth of living expenses to prepare for any financial surprises.

It can be hard to prioritize this, but saving for an emergency fund is important. To help make it happen, you might set up an automatic transfer from your checking into savings the day after payday. This can painlessly, seamlessly whisk money to your emergency fund so it doesn’t sit in savings, tempting you to spend it. Whether the amount is $15 or $150, just do it. Every bit helps.

Recommended: Emergency Fund Calculator

Earning Interest

Savings accounts come with interest, which is the bank’s way of thanking you for keeping your money with them, where they can use it until you withdraw it.

Here’s an example: That can help your savings along. If you have $5,000 in a savings account with a 3.00% APY earning compound interest monthly, that would give you an extra $152 at the end of the year. Add $20 per month to the account and let it sit for five years, and you’ll have a total of $7,101. Nice! That’s cash in your account for doing absolutely nothing.

Reducing Your Taxes

Here’s the part about how saving money makes you money, beyond interest you’ll earn. If you save money into certain tax-advantaged retirement vehicles, not only do you have that nest egg for later in life, but you can lower your tax liability.

By putting money into your employer’s 401(k), if available, you can lower the income on which taxes are assessed. If you are self-employed, there are various retirement accounts that may allow you to put pretax dollars away for the future.

When you save money this way, you could even challenge yourself to put the tax savings back into a savings account. That’s a way to increase your money in the bank another notch or two.

Giving Back

Another reason why saving money is important is it can enable you to give back to others. When you have a cash cushion and aren’t living paycheck to paycheck, you have the opportunity to help those around you.

That might involve sending a few hundred dollars to a relative who has a big dental bill and is struggling to pay it. Or you might make a charitable donation to a medical research cause, a disaster fund, or a local after-school program that you love. The choice is yours, but having a healthy savings account can make it possible.

Benefiting from Compound Interest

Another big incentive to save, as mentioned above, is the power of compound interest.

Compound interest means you earn a return not just on the amount you originally put away, but also on the interest that accumulates.

Over time, that means you can end up with much more than you started with. And the earlier you start saving, the more your money grows, since compound interest is able to work its magic over a longer time horizon.

You saw an example above that involved putting money into a savings account at a bank. Here’s another example: A person who starts putting $100 per month towards retirement at age 25 will wind up putting $12,000 more of their money into their retirement fund by age 65 than the person who started saving $100 per month at age 35.

But because of compound interest (and assuming a 7.00% annual rate of return), the person who started at 25 will wind up with over $120,000 more at age 65 (way more than the extra $12,000 they deposited).

How to Get Started with Saving

If you’re convinced that saving is the right move, how do you actually do it? The key is to make a budget and make sticking to it easy.

This doesn’t have to be intimidating. The key is to get familiar with what you spend, what you earn, and what your goals are.

Here are some steps you could take to help get started.

Figuring Out What You’re Saving for

Is it a long-term goal, like retirement or your kids’ college tuition? A short-term goal, like an emergency fund? Or a medium-term goal, like a wedding or home renovation? It can help to get a sense of how much you need to stash away and by when.

The point of this is twofold:

•   First, you can divide the amount you need by the months left until your deadline to get a clear picture of how much you’ll need to save each month.

•   Second, you will know where to put your money. If your goal is less than a couple of years away, you may want to keep your savings in an online savings account, a certificate of deposit (CD), or money market account.

These options might help you earn more interest than a standard savings account but still allow you to access your money when you need it.

If your goal is in the distant future, you might consider investing the money in a retirement account, 529 college savings plan, or brokerage account so that it could have the chance to grow over time. All investments, however, come with risk, and growth is not guaranteed.

Sticking to a Budget

You don’t really know where your money is going unless you track it. That’s why for a month or two, you may want to take note of all your daily and monthly expenses.

Next, you’ll want to tally up your net monthly income, meaning what goes into your account after the different types of taxes and deductions are taken out.

The difference between your monthly income and your expenses (everything from rent to student loan payments to food and dining out) is what you have left over to save. If there’s not enough left over, you can work on finding ways to cut spending or increase your income. You might try following the 50/30/20 budget rule to help guide your spending and saving.

Putting Savings on Autopilot

If you’re manually putting cash away every month, it can be easy to fall behind.

For one thing, you may forget to move money into savings regularly amid your busy schedule. And, unless you protect the money in advance by transferring it to a different account, you may accidentally spend it.

One way to avoid this is to set up automated savings through your bank account or retirement plan.

If you’re putting away the amount you identified you need for your goal, you may get there without even thinking about it.

Recommended: The Different Types of Savings Accounts

Common Places to Save Your Money

Where to put your money as you save? Consider these options:

•   Traditional savings account: You could put your money in a savings account at a financial institution, whether at a bank or credit union.

•   High-yield savings account: These accounts are likely to pay a much higher interest rate than a conventional savings account while offering the same convenience and security. They are often found at online banks.

•   CD: A CD gives you a specific rate of interest but you must agree to keep your money in the account (that is, not withdrawing any of it) for a specific term, whether that’s several months or years. Withdrawing earlier could trigger penalties.

•   Investments: There are many options here, such as Treasury bills and bonds. These can earn healthy returns and are typically considered safe places to keep money.

A quick note: While typically it’s a savings account that earns interest, some checking accounts earn a bit of interest, too. This can be especially true if you deposit your money in a checking account at an online bank. While it may not offer a high rate of interest, earning some money on what you keep in your checking account can contribute toward building your wealth.

The Takeaway

It’s important to save money for a variety of reasons. It can provide peace of mind, open up options that improve your quality of life, increase your wealth due to compound interest, and possibly lower your tax liability, and may even allow you to retire early. Many people earn wealth through a combination of working and savvy saving. Having the right banking partner can be part of the process.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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.

FAQ

What are the benefits of saving money?

There are many benefits of saving money: It helps you save for your future, cover unexpected expenses, make major purchases, and have financial freedom. What’s more, the money you save can help make you more money, thanks to compounding interest and lowering your tax bill.

What are common things to save money for?

Common things to save money for are an emergency fund, retirement, a big purchase (like a car, a vacation, or the down payment on a home), and educational expenses, among others.

What happens if you don’t save money?

If you don’t save, you may lack financial security and the ability to meet certain aspirations. For instance, you wouldn’t have a retirement fund and would therefore have to keep working indefinitely. You wouldn’t have money for a big purchase like a car or a home or your child’s education. Plus you wouldn’t be able to handle some expenses, whether planned or unexpected, and might have to take out a loan or use credit cards, which means you are paying for the privilege to borrow funds. That takes away from your earnings.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q125-034

Writing checks may not be an everyday occurrence for you, but they are still a reliable form of payment that have a place in most people’s finances. So if you think a check you wrote got lost or was stolen, it’s important to report it to your bank ASAP and request to stop payment on it.

If you suspect there’s criminal activity afoot, you may also want to notify your local police. In addition, it becomes important to monitor your accounts and credit reports for any signs of identity theft.

By acting quickly, you could avoid major stress as well as financial loss.

What if a Check You Sent Never Got Cashed or Deposited?

If you’re concerned because a check you sent hasn’t cleared your online bank account, you may want to start by contacting the recipient (whether it’s a person or business) to make sure they aren’t just sitting on it.

These days, electronic payments are processed so rapidly, we’ve become accustomed to seeing payments show up immediately on online bank statements.

If your paper check is slow to show, it could be that it’s still sitting on someone’s desk or in their wallet.

But what if the check never made it to its destination? It’s possible for checks to get lost in the mail or stolen, so there are steps you should take.

How to Report a Lost or Stolen Check

So if it does seem that a check has gone missing, here’s what to do.

Gather Details about the Check

Before you contact your bank or credit union, you may want to take a few minutes to gather as much information as you can about the check (or checks) that are MIA. This includes:

•   Your account number

•   The check number

•   The routing number

•   The name or names on the bank account

•   The exact name of the payee as you wrote it on the check

•   The check amount.

Contact Your Bank

With that information in hand, you can call your bank, contact it online or in app, or visit your local branch to report the missing check and request a stop payment. Some financial institutions may allow you to do this online. See below for more details on stop payments.

Monitoring Your Bank Accounts

If the bank didn’t receive the stop payment order in time or if the information you provided was incorrect, it still might process (or pay) the check from your checking account.

So if you don’t already monitor your checking account online, you may want to start. For many people, monitoring your bank account a few times a week works well; daily if you think there’s reason for concern.

If you believe the bank cashed a check in error and you want to dispute it, it can help if you move as quickly as possible in order to avoid liability.

Some banks don’t impose time limits for customers to report fraudulent check cashing. But because stolen paper checks aren’t regulated by federal laws the way stolen debit and credit cards are, policies can vary from one bank to the next.

Sending a New Payment

The person or business that didn’t receive your check is still going to be looking for that payment (or expecting that gift), so you’ll likely want to send a replacement as soon as possible.

However, you may want to consider using a more secure method for sending the second check. Keep in mind:

•   If the payee is a person or vendor who insists on personal checks, you might want to deliver the payment in person.

•   If you must mail a check, consider using certified mail. The cost is higher than regular mail, but you’ll get a receipt from the U.S. Postal Service when you send it, plus a notification when it’s delivered.

•   Or you could see if the payee will accept an online method of transferring money to another bank account.

Recommended: Emergency Fund Calculator

Issuing a Stop Payment on a Check

If you do indeed wind up issuing a stop payment on a check that is lost in the mail or otherwise missing, here are points to keep in mind:

•   Fees for stopping a check vary from one bank to another but can run around $30. Whether you keep your accounts at an online bank or traditional one, you may find that some financial institutions waive the fee for customers with premium accounts, and some may not charge fees if the missing checks are blank.

•   With a stop payment order, the bank flags the missing check number, and as long as the check hasn’t already been processed, it won’t allow the check to clear.

•   A stop payment typically lasts for six months. According to state law, however, a stop-payment request made by phone (and not in writing) can lapse after 14 days, so you may want to ask your bank if any forms need to be filled out to get the full six-month hold.

•   If the stop payment order ends and you suspect criminal activity, you can renew the order for an additional six months, but you may have to pay another fee.

Recommended: What Is a Routing Number?

Protecting Yourself From Fraud and Identity Theft

There are a few different ways in which checks can be stolen. Someone could possibly remove it from the outgoing mail in your mailbox or the payee’s mailbox. There have also been some cases in which mail has been stolen from a blue U.S. Postal Service mailbox. Or the check might have been stolen from the recipient after they received it.

What can someone do with a stolen check?

•   Once they’ve intercepted your check, thieves might find a way to cash it for the amount written or change it to a larger amount. In some cases, they may use chemicals to alter the name of the payee, or the amount.

•   It may also be possible for a thief to use the information on the check to steal your identity and use that information to open new accounts in your name.

If you believe your check was stolen and you’ve already reported it to your bank, there are a few more steps you may want to take to protect yourself.

Recommended: What Can a Scammer Do With Your Bank Account and Routing Number?

Filing a Police Report

By going to your local police department, you can create a paper trail to show the bank and others you’ve been doing all you can to get to the bottom of your loss and stop any further theft.

Reporting Stolen Mail

If you think you’ve been the victim of mail theft or tampering, you can report it to the U.S. Postal Inspection Service online or call 1-877-876-2455.

Reporting Identity Theft

The Federal Trade Commission (FTC) offers step-by-step advice on what to do if you think your personal information has been compromised, including placing a fraud alert on your credit reports.

Watching Bank Accounts Closely

Keeping an eye on other accounts — including savings accounts and credit card accounts — could help you spot identity theft faster.

If anything looks out of the ordinary, you can check into it immediately and take any necessary actions to report the theft and protect your account.

What If a Check Written to You Is Lost or Stolen?

If a check that was sent to you never arrives and you’re wondering what to do if the check is lost in the mail, follow these steps:

•   Notify the person or business who sent it as soon as possible so they can stop payment before someone else can cash or deposit it.

•   If you believe the check was stolen from your mailbox and could be cashed, it’s also a good idea to report it to the police.

•   If someone cashed and/or altered the check, and you’re worried about identity theft, you may want to report the theft to the FTC.

•   You may also want to ask the issuer to send the replacement funds in a more secure way.

What If Your Checkbook or Multiple Checks Are Missing?

If several checks or your entire checkbook go missing and you suspect they were stolen, it’s wise to spring into action to protect yourself.

•   Quickly report the loss to your bank and also file a report with the police. If you don’t, you could be held responsible for any unauthorized activity.

•   If you know the numbers of the missing checks, you may choose to put a stop payment on each one.

•   Consider putting a freeze on the account or closing it. If you have other transactions that haven’t finished processing, a bank representative can help you decide which are safe to clear.

How Can You Help Prevent Check Theft?

Implementing a few safeguards could help save you from the stress of dealing with a lost or stolen check. These might include:

Guarding Your Checkbook

It’s wise to treat your checkbook as if it were a big stack of cash. If you don’t think you’ll need it, why not leave it in a safe place at home? Or you could tuck one check in your wallet, just in case.

Mailing Checks with Extreme Care

Putting the flag up on your mailbox can be a signal to thieves looking for an opportunity to steal checks. Rather than leave envelopes with checks in your mailbox or in an outgoing mail basket at work, consider taking them to the post office yourself. If you want to be extra-safe, consider sending them by certified mail.

Using Your Check Registry

If you aren’t writing checks very often, it may seem silly to maintain the check register. But the information you keep there can help you keep track of when and where you sent a check. And if a check is stolen, you’ll have the details you need to report it.

Checking Your Transactions Daily

It doesn’t take long to log into your account and check your transactions frequently, even daily. If you have an app, you can often do this quickly with your phone.

If something looks fishy or a check you sent a while ago hasn’t cleared, it’s a good idea to follow up with the payee and/or your bank.

Being Cautious When Writing Checks

It’s a good idea to be careful when filling in the front of your checks. This includes making sure your signature is clear and consistent, not putting your Social Security number on a check, and only writing your phone number or driver’s license number on a check if a merchant known to you requests it.

The less information you provide, the harder it will be for someone to impersonate you and attempt to cash your check.

Paying with Checks Only When Necessary

Many transactions can be completed online these days, so you may want to consider that route whenever it’s a choice.

You can also set up automatic payments so you don’t have to write checks for recurring expenses.

And if you have to send money to friends or family, you may want to try switching to P2P transfers. You may want to keep in mind that, depending on the money transfer service or app you use, both parties may need to have access to the app or set up an account to exchange money. Also be aware of any fees assessed as you move funds around this way.

The Takeaway

When you write a check and it gets lost or stolen, it’s a good idea to act quickly to protect your finances. This may involve putting a stop payment on the check and possibly contacting authorities if you believe a crime was committed or that identity theft may be the goal. There is typically a fee charged for a stop payment, but it can be worthwhile to protect yourself. After a check is stolen, you run the risk of identity theft, so it’s wise to monitor your accounts and your credit reports closely.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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.

FAQ

Can I cancel a check after it’s been cashed?

Once a check has been cashed, you cannot stop payment or cancel it. If you believe there’s fraudulent activity related to the check, contact your financial institution as quickly as possible and possibly other authorities.

How long before a check is considered lost?

Checks are typically good for six months, meaning that someone could hold onto one for that long and still cash it. However, if you were expecting a check to arrive via mail in, say, a week and you have waited twice as long, you might wonder what to do if a check is lost in the mail. Consider issuing a stop payment and then having payment made again, possibly by another method.

Can someone steal your bank info from a check?

If someone gets one of your checks, they have access to both your bank account number and bank routing number. With those two sets of digits, they can potentially commit fraud, such as printing fake checks that are drawn against your account or setting up ACH (automated clearing house) withdrawals from your account.

How do thieves cash stolen checks?

One common method that thieves use is working with household chemicals to erase the ink on a check they have stolen. They can then write in a new payee’s name and amount and cash the check. Typically, they might cash the altered check at an ATM or a currency exchange.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q125-024

There is no one-size-fits-all answer to how many bank accounts you should have. The answer will likely be, “It depends”. Your personal and financial situation and goals will impact whether you have just one or two accounts or several of them with different purposes. For example, a recent college grad who is just entering the workforce will likely need fewer accounts than a self-employed person who is saving for a down payment on a house and their toddler’s future education.

There can indeed be advantages to holding multiple checking accounts or savings accounts, but having more than one or two will definitely require more of your time in terms of money management.

How Many Bank Accounts Do Most People Have?

When it comes to managing your money, many adults have, at a minimum, one checking account and one savings account at the same bank. In the journal Consumer Affairs, one landmark study found that the average American had 5.3 accounts.

That said, for most individuals, especially those who are unmarried, opening just one checking account and one savings account usually covers their basic banking needs.

With just one checking account and one savings account, you eliminate confusion and can simplify your finances. If all of your paycheck goes into your checking account using direct deposit, you can set up recurring automatic transfers into savings for the date after your payment hits.

If you automate your finances in this way, money moves into your savings account and leaves what you know you’ll need in checking until your next paycheck.

It’s also wise to keep in mind that some banks, especially the larger traditional banks vs. online banks, may charge monthly fees for checking accounts or require a minimum deposit. If you bank at one of these bricks-and-mortar financial institutions, having only two accounts can reduce the fees you’ll need to pay.

7 Reasons to Open Multiple Bank Accounts

Although two bank accounts may suit some people just fine, there are many people who may prefer or even need to open additional accounts. Among them may be those who are married or starting a family, those who are planning extended foreign travel, military personnel, freelancers, and/or business owners. For these individuals, there may be benefits to having multiple savings accounts or checking accounts for different financial needs.

1. Large Transactions

While couples do not necessarily need to share all of their finances, there are certain benefits to having a joint account for your household and family. This can be helpful, even if you still have a personal account for your own discretionary spending.

For one thing, this pooled account can help cover large monthly payments such as a mortgage, rent, or other household expenses equally.

Plus, rather than individual savings, you might want a shared savings account for emergencies, like a surprise medical bill or car trouble. Each partner might put a small amount into that fund every month, with a goal of having at least three to six months’ worth of basic living expenses covered. (You can use an online emergency fund calculator to determine what your goal amount should be.)

2. Specific Savings Goals

Having dedicated savings accounts (especially high-yield savings accounts) can also be a smart tactic to encourage you to put away money for future goals, whether that’s travel or saving up for a wedding or baby.

Some couples even prefer a shared account for debt payments (such as student loan debt or credit card debt). However, helping to pay off your partner’s debt is an important financial conversation to have before you start a new bank account for that purpose.

3. Saving for College

Saving for college is another reason parents might open an additional bank account. Can you have more than one bank account for this purpose? Of course, especially if you have more than one child.

Also, even an individual who is currently paying for school might see the benefits in having a separate checking account to manage and keep track of spending on books or other school-related costs. This would be distinct from a checking account for spending on food, clothes, and other everyday expenses.

4. Charity Donations or Family Healthcare

Other reasons people might consider opening additional bank accounts would be for charity donations or offering financial assistance to another family member, such as paying for eldercare. While there’s probably no reason why those monthly expenses can’t also be accounted for in your regular checking or savings account, keeping such things separate can improve some people’s money management.

5. Separating Finances

In some situations, partners may want to open additional accounts to keep some of their finances separate. For instance, in a married couple, you might both agree to put the majority of your paycheck into a joint checking account. However, you could each direct some of your earnings to a separate checking account for discretionary spending. For some couples, this can help keep the peace, since there’s no need to explain how much you chose to spend on new shoes or the latest cell phone model.

Or you might decide to open up different types of savings accounts to put some money into for an upcoming friends’ getaway or a similar goal.

What’s more, if one of you is starting a business (say, selling prints of your travel photos online), it would make sense to open a dedicated account for that, to keep your earnings and work-related expense payments in one place.

Recommended: How to Write a Check

6. Creating Accounts for Your Kids

If you have a child you’d like to gain financial literacy, opening an additional account with them can be a wise idea. You can open a shared account and begin teaching your kid how to put money in the bank, withdraw funds saved, and see how interest is earned.

Since those under age 18 typically can’t have their own account, this can be a good way to instill good financial habits at a young age.

7. Budgeting Is Easier

Deciding which budget is right for you can take some trial and error, and some people find that keeping track of their finances is easier with multiple accounts. For instance, if you follow the 50/30/20 budget rule, you are likely putting 50% of your take-home pay towards the “musts” of life, 30% towards the “wants,” and 20% towards savings.

In this situation, you might find it clearer and more convenient to have two checking accounts from which you pay those two types of bills. You might even name one “musts” and one “wants,” if you like.

Recommended: How Much Money Should You Have After Paying Bills?

How Many Checking Accounts Should You Have?

If you’re thinking about whether to have multiple bank accounts, keep this in mind: There’s no single right or wrong answer. While there is no need to open five new savings accounts to plan for your next five vacations, how many bank accounts you should have can depend on your ability to organize your finances.

Some individuals might find they prefer having at least one or two extra savings accounts for savings goals. These savings goals could be anything from an emergency fund, travel fund, or saving up for a car.

That emergency savings account can be critical to have, by the way, to be prepared for whatever may come your way. Whether you want this account to be a separate fund in a different bank account or part of your overall main savings account, however, is really up to you.

Potential Downsides to Having Multiple Bank Accounts

Before you start opening up additional checking and savings accounts, consider these cons:

•   You risk incurring more bank fees. Some banks will charge you account fees for each and every account you open, which can take a bite out of your funds.

•   You will have to keep track of account rules. In some cases, there are minimum balance requirements, limits on the number of withdrawals, and other guidelines that can take up brain space, not to mention involve potential charges.

•   There can be an increased chance of overdrafting. No one is perfect, and the more accounts you have, the more opportunity there is to forget about some autopayments you had set up and wind up with a negative balance. This in turn can trigger overdraft and NSF (non-sufficient funds) fees.

Why Freelancers and Business Owners May Need Separate Bank Accounts

While large businesses inevitably need their own bank accounts, sometimes smaller enterprises or even individuals with side hustles overlook creating a separate business bank account.

Some banks offer small business accounts, which can be used by freelancers, side hustlers, or small business owners. Basically, you want to make it easy on yourself to track personal and business expenses separately, and having different bank accounts helps take care of a lot of the legwork.

An additional account makes it easy to track business expenses and deductions, like shipping costs for your Etsy account or treats purchased for your dog-walking gig. Plus, with all of your business expenses in one place, you are more prepared for an audit and have a better bookkeeping record, rather than sorting through every transaction and trying to remember if that coffee you had six months ago was for a work meeting or not.

A great benefit of having another savings account for your business or freelance work is that you can set aside money specifically for taxes.

Of course, as a business owner or freelancer, it’s also important to save for tax season, which is why opening a separate business savings account can also come into play. A great benefit of having another savings account for your business or freelance work is that you can set aside money specifically for taxes.

Recommended: Business vs Personal Checking Account: What’s the Difference?

Alternate Money Management Options to Consider

Whether you are looking to open a new checking and savings account with a new bank or taking a broader look at what works best for your financial needs, there are a number of reasons to consider making a change.

A new account could offer you better rates or features, lower fees, or greater interest earnings.

Here, some options:

•   Credit unions are banks that are run as financial co-ops, meaning each member has a small stake in the business. Banking with a credit union usually allows more flexibility and lower fees. As nonprofits, they are designed to serve their members, often paying higher interest rates on deposits as well.

•   Online banks typically offer lower (or no) fees than traditional banks because they don’t have to support physical locations. They often have higher annual percentage yields (APYs) on deposits, too.

The Takeaway

There is no one answer to how many bank accounts you have. Typically, having checking and savings accounts is a wise and convenient move, but many people find they have multiple accounts. This might be to separate different income streams, save for various goals, and to differentiate personal from joint finances when, say, getting married.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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.

FAQ

Is it a good idea to have multiple bank accounts?

Whether it’s a good idea to have multiple bank accounts depends upon an individual’s personal and financial situation. A single person with a full-time job may do fine with one checking and one savings account. A married person with a day job and a side hustle, who is saving for a house and putting money aside for a child’s education, may prefer having multiple accounts to help them stay organized.

Is 3 bank accounts too many?

Three bank accounts is not necessarily too many, though it depends on a person’s situation. Having a checking account, a savings account for a down payment on a home, and a savings account for an emergency fund can be a good thing. However, if that number of accounts winds up charging too many fees or risking overdraft for the account holder, then it is possibly too many.

Do too many bank accounts hurt your credit?

Multiple bank accounts should not impact your credit. When you open a bank account, you are not requesting a line of credit, so it should not be reflected on your credit report nor should it lower your credit score.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q125-032

Round-ups are an automatic savings tool that rounds up purchase prices to the nearest dollar. The difference between that somewhat higher figure and the actual price then gets deposited into a savings or investment account.

One of the key benefits of this savings technique is that it’s effortless. The money accrues without your doing any calculations or transfers. It’s akin to the saving technique in which people pay cash for purchases using bills and accumulate change in a jar that they eventually bring to the bank and deposit. Round-ups accomplishes the same goal, but there’s no lugging coin jars involved.

If this round-ups concept sounds interesting, read on to learn more, including:

•   How does round-up savings work?

•   Do banks offer round-up savings?

•   What are round-up savings apps?

•   What are the pros and cons of round-ups?

How Does Round-Up Savings Work?

Need a real-world example of how round-up savings works? Let’s say your bank account offers round-ups and you opt in to the service. You then stop at your local coffee shop for a latte to go. You pay $4.65 with your debit card. The price would be rounded up to $5, with $4.65 going to the merchant and 35 cents to the account you have designated.

Now, 35 cents might not sound like much, but think of how many times you swipe or tap that card. It’s not uncommon for people to make 30 transactions per week and save more than $10 per week with round-ups. That would be in excess of $520 a year, not including the power of compound interest which can boost the amount higher still.

With some providers, these small amounts of change accrue and then are deposited into the user’s account in a lump sum once they hit a certain dollar-amount threshold or a specific time period has passed. With others, the funds may be deposited as soon as the transaction settles.

Do Banks Offer Round-Up Savings?

Some bank accounts offer round-up savings for transactions. However, not all do, so if the notion sounds like the right tactic to help you save, consider investigating whether the feature is offered before deciding where to open an account.

It can be a good perk that helps add to your savings, whether your goal is accruing the money you need for an emergency fund or getting enough moolah together for next summer’s vacation.

How does a round-up savings account work? Typically, you will have linked checking and savings accounts at a bank. The debit card for the checking account can be activated to round up the price of purchases. The difference between the actual cost and the rounded-up price is then transferred to the checking account.

Round-Up Savings Apps

There are also standalone round-up apps, which users can typically connect to a credit card, debit card, or checking account. The app then monitors transactions and either transfers the proceeds of round-ups in batches or allows users to transfer money on demand.

Some standalone round-up apps may charge a monthly user fee. In such cases, consider the monthly volume of transactions to make sure the cost is significantly less than the amount of money round-ups will help to accrue for savings. The point here, of course, is to grow your wealth, not nibble away at your money.

Recommended: 5 Types of Savings You Should Consider Having

Round-Up Savings Can Add Up

While saving 23 or 85 cents here and there may not sound like much, any coin jar saver who ever went to the bank with $100 in change can attest that putting away small amounts can add up fast. Consider the following:

•   Saving just five extra dollars a week in round-ups adds up to $260 over the course of the year. This may not sound like a lot to save in a year in total, but it can provide a nice boost to augment a more intentional savings strategy.

•   Just like other savings or investments, round-ups have the potential to earn a good interest rate. If the proceeds of round-up purchases are deposited into a high-yield savings account on a regular basis, for example, that spare change would grow — and could continue growing — each time interest compounds. For round-up investing, those small savings can, over time, help in the purchase of additional shares which may also grow in value.

For round-up investing, those small savings can, over time, help in the purchase of additional shares which may also grow in value.

Pros and Cons of Round-Up Savings

It’s a fact that many Americans have trouble saving money. For example, about one-quarter of U.S. adults age 50 and older have no retirement savings at all, according to a January 2024 survey by the AARP.

While saving via round-ups won’t be enough to reach a lofty savings goal like retirement, it can help augment your savings. It can also help you get into the savings habit.

If you’re wondering whether setting up round-ups is worth the effort, it can be helpful to consider the pros and cons.

Pros of Round-Up Savings

Here’s a look at some of the main benefits of using round-ups as a saving tool.

•   Round-ups are a positive step in financial selfcare. One reason round-ups can be a useful savings tool is they help someone pay themselves with each transaction. Kind of like tipping oneself, round-ups pay the saver a little something extra on their purchases, making everyday spending a little more rewarding.

•   Round-ups are automatic. Part of why saving can feel painful is that it requires the saver to make difficult decisions on a regular basis. Once round-ups are set up, no conscious sacrifices are required. You don’t have to engage in any potentially painful decisions about, say, how to save money on streaming services or your utility bill.

Automating personal finances can be a helpful tactic to encourage healthy habits, and round-ups can be a valuable part of this seamless approach to money management.

•   Round-ups show visible progress on your savings goals. For those who are already putting money into savings on a regular basis, taking advantage of round-up features can help to grow that money more rapidly, putting savings goals within even closer reach. For those who aren’t currently saving, seeing round-ups grow as you swipe or tap your debit card can be an encouraging experience.

•   Round-ups may help counter savings procrastination. While some people save early and often, others may put it off. There are lots of reasons for procrastinating on starting a savings plan and surely many other tempting ways to spend your cash. Round-ups can help motivate savings procrastinators by demonstrating the effects of putting money away on a regular basis.

Cons of Round-Up Savings

While round-ups work well for many people, there are some downsides to consider as well.

•   Round-ups may come with fees. When opting into a round-up service, review the fees. Saving $5 a week seems great, but if fees are going to cost you $2, is that worth it?

•   Round-ups could throw off a careful budget. If you are on a very tight budget, rounding up could tip things out of balance. Also, people who often have a low balance in their checking account could overdraw their account due to the automatic round-ups fee being debited. That, in turn, can lead to overdraft or NSF (non-sufficient funds) fees. Review program requirements for round-ups and your bank accounts’ guidelines before opting into anything.

The Takeaway

Saving money can be hard work but using round-ups can automate savings and eliminate some of the pain of growing your finances. If you’re interested in setting up this incremental approach to saving, you might sign up for a round-up app, then connect your debit or credit card to the service. Or, you can look for a banking partner that offers this feature as a perk to their account holders.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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.

FAQ

Do round-up savings work?

Round-up savings can work by increasing the price you pay on transactions to the next higher dollar amount and depositing the difference in a savings or other account. However, be aware that some round-up apps may charge a fee, which may diminish the amount you save.

What is a round-up savings account?

A round-up savings account is one in which your debit card transactions from a linked checking account are rounded up to the next dollar amount. The rounded-up amount (the difference between the actual price of the goods or service and the price you paid as a round-up) then goes into your savings account where interest can help it grow.

Do banks offer round-up savings?

Some banks offer round-up savings. How it works: When you use the debit card linked to your checking account at the bank, the cost of a purchase will be rounded up to the nearest dollar. The extra money then gets deposited into your linked savings account where it can grow.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q125-020

If you are looking for some relatively painless ways to spend less, read on. There are all kinds of ways to slash expenses that don’t require much, or any, sacrifice. These can include trimming back some of your recurring bills to tweaking your typical shopping habits. You’ll even learn smart ways to avoid the temptations that can lead to overspending.

Ready to improve your cash flow? Here are 23 simple ideas for how to cut back on spending.

23 Ways to Cut Down Your Spending

Ready to start saving money? Pick and choose among these ideas to find the tips that suit you best.

1. Canceling Subscriptions

There’s a decent chance that you are leaking money on a subscription service that you are not getting much value from.

Scan your checking account and credit card statements for things you’re paying for on a recurring basis and consider canceling anything you don’t really need.

That might mean magazines or newspapers you rarely read, online software you aren’t using, and/or shopping services and other memberships that aren’t worth it anymore.

If you’re looking to save money faster, you might cut down on multiples. For instance, do you really need membership at two different yoga studios? Just one might be fine, and you’ll wind up with more money in your checking account.

2. Cutting the Cord

If you’re paying a high price for cable each month, you may want to think about switching to a streaming TV service. This budget-cutting move could save $40 to nearly $100 per month.

Just don’t let that get out of hand. You likely won’t save on streaming services if you sign up for Netflix, Max, Hulu, and a couple of others.

If you are not quite ready to cut the cord, you may still be able to shrink this monthly line item just by calling your cable service provider and asking for a better deal. Research better deals available elsewhere and cite those when talking to a customer service representative.

3. Revisiting Your Cell Phone Plan

Another way to significantly cut monthly spending is to take a closer look at what you’re paying for your cell phone service and exactly what you are getting.

You can then compare this with the competition and, if you see a better deal, call your provider and see if they will match it.

If you don’t see much wiggle room, you might consider going with one of the smaller MVNOs (mobile virtual network operators) that lease coverage from the major carriers, such as Cricket Wireless, Metro, and Visible.

Or, if you just need a basic plan, you can look into Consumer Cellular or H2O Wireless, which often offer affordable cell phone plans for individuals.

Before switching carriers, however, it’s a good idea to make sure that the carrier has strong coverage in your area. Saving money is great, but may not be worth it if you don’t get quality service.

4. Getting Into the Meal-Planning Habit

An easy way to cut back on food spending is to make a meal plan and a firm shopping list before you go to the grocery store. To cut spending even more, you can check your store’s weekly ads and plan meals around what’s on sale that week.

This can be as simple as picking a few basic recipes that you want to make throughout the week. You may want to try a meal planning app, such as Mealime, among others.

Not only will this help you avoid impulse buys at the supermarket and ordering takeout, but you will likely be able to buy in bulk, cook once and enjoy the leftovers, and otherwise streamline your budget and your life.

5. Actively Paying Down Credit Cards

If you’re currently only paying the minimum on your credit cards, a big chunk of your payment is likely going toward interest and you may be doing little to chip away at the principal.

Doing this every month can increase the amount of time you’re in debt, and increase the total amount of interest you’ll end up paying. That in turn can make it harder for you to plump up your savings account.

If you can swing it, consider putting more than the minimum payment towards your bill each month. This can help you pay off credit cards faster, so you’re not spending so much money on interest.

6. Renewing Your Library Card

How else to cut back on spending? If you’re a reader and love books, a fun and easy way to cut your spending is to fish out that old library card, or if you don’t have one, stop into your local branch and apply for a card.

The library can be a great resource for more than books. For example, you can often access magazines, newspapers, DVDs, music, as well as free passes to local museums. There are also services on your computer and phone that let you stream digital media; check out Kanopy and Hoopla, for instance.

7. Carrying Cash

There’s something about using plastic that can make it feel like you are not really spending money.

That’s why an effective way to cut back on spending is to take out enough cash at the beginning of the week to cover your daily expenses for that week and then leaving your credit and debit cards at home.

Or, you might try the envelope system (a budgeting method), where you designate an envelope for each expense category, then put enough cash inside to get you through the week. When you run out, you can’t spend anymore.

Using cash can also help you become more aware of and intentional with your purchases. You see exactly what you are spending as you go through your day.

8. Eliminating Bank Fees

How to cut back on expenses can involve taking a look at just what fees your bank may be charging for your checking and savings accounts.

They might include service fees, maintenance fees, ATM fees (if you don’t use their in-network machines), minimum balance fees, overdraft or insufficient funds fees, and/or transaction fees. And all those charges can eat away at your funds.

You may be able to cut your monthly spending by switching to a less expensive bank, which could mean an online bank, which tends to offer low or no fees.

9. Clicking Unsubscribe

Do your favorite retailers fill your inbox with tempting sales alerts, whether that’s 75% off, buy-one-get-one offers, or free shipping? One effective way to cut back on spending is to get off their email lists.

Sales and great deals are happening all the time, but generally the best time to purchase something is when you really need it.

If the enticement to spend doesn’t constantly land in your inbox, you’ll be less likely to click through and buy.

Recommended: How to Deposit a Check

10. Consider a 30-Day Spending Freeze

One quick way to change your spending habits is to put yourself on a 30-day nonessential spending freeze.

Or, if that seems too tall an order, you might pick a category (such as clothing or wine) to stop spending on for a month.

A spending freeze can immediately pay off, by leaving more money in the bank (or fewer bills) at the end of the month. And, once you start seeing the payoff of not giving in to impulse buying, you may find yourself spending less even after the freeze is over.

Recommended: Impulsive or Compulsive Shopping: How to Combat It

11. Keeping Your Tires Properly Inflated

A simple way to cut weekly spending on gas is to stop into a local station that offers free air once a month, and do a quick air pressure check on your car tires. If they aren’t inflated to the optimal PSI, you’ll want to fill each one to the maximum recommended amount (as stated on the tire or in your manual).

Here’s why: You can improve your vehicle’s gas mileage by an average of 0.6% and up to 3% with proper tire pressure. Which means you’re saving money on gas.

12. Working Out at Home

Instead of paying for a monthly gym membership, consider free exercise options, such as going for a walk, run, or bike ride around your neighborhood.

You can also find at-home cardio routines, resistance workouts, yoga classes and more for free online (YouTube is a great source). If you’re missing the social aspect of the gym, you always invite friends or neighbors over to work out with you.

There are also a number of free workout apps that can help keep you motivated, such as 7 Minute Workout, Freeletics, and Nike Training Club, among others.

13. Saving Before You Spend

One of the best ways to cut monthly spending is to siphon off some savings before you even have a chance to spend it. Many experts suggest 20% of your take-home pay, as is outlined in the 50/30/20 budget rule.

You can do this by automating your savings. This can mean you set up an automatic transfer from checking to put money in a high-yield savings account on the same day each month, possibly right after your paycheck gets deposited.

And it’s fine to start small. Whatever the amount, since it’s happening every month, it will build up before you know it.

Recommended: 50/30/20 Budget Calculator

14. Turning Clutter Into Cash

If you’re thinking of hiring a company to haul away stuff you no longer want or need, think twice. It can be easy to sell your unwanted items. There are dozens of places to sell your stuff, thanks to sites such as ThredUp, Poshmark, eBay, and Facebook Marketplace. Or you could host a yard or stoop sale (just make sure to check if you need a permit).

15. Reviewing Home and Auto Insurance

Here’s another way to cut back on spending: Review your insurance payments. You may be able to considerably cut your costs by taking some time to shop around and compare prices.

Many insurance companies also offer a discount if you bundle your homeowners and auto policies together. If you currently use two separate insurers, it can be worth asking what kind of discount each would offer if you bundled the policies together.

And you don’t have to wait until your current policy is up for renewal to change insurance providers. With most companies, you can leave at any time without having to pay for the remainder of the policy. If you find a better deal, you can also give your current insurer a chance to match their quote.

16. Drinking More Water

Getting plenty of water can not only help you stay healthy, but it can also help you cut back on spending.

When you’re food shopping, for instance, you can skip over sodas and even bottled water in exchange for free tap water at home. (If you don’t like the taste of your tap water, consider getting a pitcher with a water filter.) Dining out? You can save by ordering water instead of pricey beverages.

17. Using Apps to Earn Cash Back

You can cut your spending even after you’ve made your purchases by keeping track of your receipts and using a cash back app, such as Ibotta, Fetch Rewards, or Shopkick.

While each app works a little differently, you can generally use cash back apps to download digital coupons, purchase specific items, and then scan receipts to claim your cash back.

You may also be able to add your store loyalty card number and avoid the need to submit a receipt.

18. Shutting off the Lights

A super easy way to cut monthly spending is to simply turn off the lights whenever you leave a room or leave your home. You may not notice the impact immediately, but the savings on energy costs can add up over time.

It can also be helpful to unplug any unused electronics and chargers that aren’t in use.

19. Cutting Back on Bigger Expenses

If you’re looking to have more money after paying bills, you may want to address the biggest expenses in your overall budget. For instance, in terms of housing, you might consider downsizing, moving to a more affordable area, or getting a roommate. This could significantly reduce your monthly expenses.

Also take a look at car payments, if you have them. If they account for more than 10% of your take-home pay, consider trading in your car for one with a lower monthly payment. Or, you might want to think about buying a less expensive vehicle with cash.

20. Unfollowing Social Media Influencers Pushing Products

If you, like many people, shop from social media because you see new products being promoted, you may want to unfollow those accounts. That FOMO (fear of missing out) feeling can be powerful when you see an influencer pushing new kitchen gadgets, comfy socks, or other products. By eliminating that temptation, you can cut back on spending.

21. Uninstalling Shopping Apps on Your Phone

Shopping apps can be hugely convenient; maybe too convenient. If you find that apps encourage you to one-click your way to too many products and credit card charges, delete them. You can always reinstall them later if you have more wiggle room in your budget.

22. Buying Used and Second-Hand

A fun and frugal way to shop can be buying used and second-hand. You might hit a local thrift store for clothes, cookware, and other items. Check out a local library’s book sale for new reading material, and if you need a new kitchen appliance, see what major retailers have in their “open box” section (items that were returned with minimal or no use or perhaps floor models).

23. Do Some Bulk Buying

Check out the deals to be had by buying in bulk. That can mean joining a wholesale club, like Costco, or shopping at a local grocery store that has grains, nuts, and pasta sold from large containers to help you save at the cash register.

If you don’t have room to store, say, a pack of 12 cereal boxes or 24 rolls of paper towel, split purchases with a friend or two. You can all cut back on expenses that way.

The Takeaway

Cutting back on spending doesn’t have to involve a complete overhaul of your lifestyle. You can focus on lowering your recurring expenses (housing, insurance, utilities) and also cut back on unnecessary spending, especially impulse buys. If you pay with cash, delete shopping apps, and unsubscribe to marketing emails, you may find there’s a lot more breathing room in your budget. And you might be able to stash more cash and earn interest.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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.

FAQ

How do I cut back on unnecessary spending?

Often, a mix of two tactics can help you cut back on unnecessary spending. First, look at how to reduce recurring basic bills, such as dropping a streaming channel or two, lowering your car insurance, and avoiding excessive banking fees. Next, tackle daily spending. You might reduce your daily latte habit, and look for free concerts and museum nights in your area vs. pricey entertainment. Also: Don’t let yourself give in to marketing ploys, like “buy one, get one” and free shipping, which can encourage you to overspend.

How can I drastically cut my spending?

To drastically cut your spending, try creating and sticking to a budget and using cash instead of credit so you are less likely to ring up debt. Also consider deleting shopping apps, emails, and influencer accounts that encourage you to shop, and putting yourself on a one-month shopping freeze, meaning no purchases except true necessities.

How do I mentally stop spending money?

If you are overspending, think about your triggers. Do you shop when bored or as a weekend activity? Find other ways to fill your time, whether that means reading or taking up a sport. You might also try the 30-day rule, which means that if there’s something you feel you must have, you might make a note of it in your calendar for 30 days in the future. Don’t buy it unless 30 days later you still feel it’s vital. Such feelings often dissipate over time.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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