SoFi

Wondering how to lower your internet bill? With families paying roughly $73 every month for high-speed internet services, it can be a significant drain on the monthly budget. But the internet, like a cell phone plan, has become just as necessary for everyday life as other major utilities, especially with remote working and learning environments.

To help, here are 11 great tips for cutting back costs of the internet. Learn how to save money by negotiating your rate and other other smart strategies.

How Much Does the Average Household Spend on Internet Services?

The average household spends about $73 a month on internet services, according to the 2024 Broadband Pricing Index. But internet prices can vary significantly depending on the speed you require, what other services you have it bundled with, what promotional offers you qualify for, and the way the internet is delivered to your home.

Broadband (cable or fiber) is the high-speed internet connection many of us have come to depend on, but some homes utilize dial-up, cable, or even satellite internet connections. These come at varying price points. Understanding what you have and what your options are in your neighborhood can help you find the best deal.

Recommended: How to Organize Your Bills

11 Money-Saving Internet Tips

With internet prices accounting for a notable portion of your monthly budget, you may be wondering how to cut internet costs — without sacrificing quality. To help you do that, here are 11 money-saving tips for decreasing your internet bill.

1. Shopping Around

Depending on where you live, you may have a handful of internet providers to choose from. If you’re not happy with the cost of your current internet bill, you can research what competitors are charging. They may offer low promotional deals for the first six months, year, or even two years. Often the deal is a lower rate, but sometimes it involves a prepaid gift card or other bonus.

It’s a good idea to read the fine print, as the price may go up when the promotional period ends. There may also be one-time fees to start up the service that could counterbalance any savings. Still, if you find a good offer, it could be an option if you want to find out how to lower your internet bill.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

2. Negotiating for a Better Rate

If you spot a better offer from another company, you don’t have to jump ship. It may be worth your while to call customer service for your current provider and negotiate your rate down. Letting them know that you’ve found a better deal elsewhere but appreciate their service can go a long way. To retain you as a customer, they may be willing to offer you a discount.

If the conversation with the customer service rep feels like a dead end, you may want to end the call and try your luck with another rep. You can also ask to speak with a manager.

Not comfortable haggling for a bargain over the phone — or just don’t have time to spend on hold? You might be able to find a third-party service to negotiate your rate for you. Services like Trim, BillFixers, and BillCutterz will call and negotiate on your behalf, but they’ll take a cut of any savings they earn you.

3. Checking Your Internet Speed

Your internet contract should spell out a certain speed that you’re meant to receive. Higher-tier plans offer faster speeds (and cost more). But internet service providers (ISPs) may not be delivering that speed to you at all times; in fact, recent research shows that on average, Americans are getting just 32% of the speed they pay for.

You can test your internet speed with a third-party test site like speedtest.net, though many ISPs have their own proprietary speed tests. If you discover that you’re not getting anything close to the speed your contract stipulates, you may want to call customer service to demand a discount or faster speeds. Some providers may even offer a bill credit for the time you paid for higher speeds but didn’t receive them.

4. Downgrading Your Plan

In some cases, you may be paying for faster speeds than you really need. If you regularly stream 4K videos and rely on Zoom meetings for your job, paying for fast internet is likely worth the cost. But if all you use the internet for is checking email, scrolling through Facebook, and occasionally streaming Spotify, you might be fine with slower internet service.

Similarly, individuals who live alone or with one other person are less likely to need internet services as fast as a larger household with multiple users accessing the internet at the same time.

Some ISPs offer “economy tiers” as slow as 3 mbps, though they may not always advertise these. If that sounds too slow for you, there may be a middle ground between the bottom and top tiers. Calling customer service to discuss options could be a good move if you’re ready to downgrade.

Recommended: How to Save Money on Streaming Services

5. Bundling with Another Service

Many ISPs offer discounts when you bundle your internet service with a phone plan or cable TV package. While this technically lowers your internet bill, it could add on new or higher costs for other services, so proceed with caution.

If you want cable TV or have it through another provider, it doesn’t hurt to see how much a bundle can save you. But if you won’t use cable TV, it likely isn’t the right move for you.

6. Using Auto Pay

Often, you can get a monthly discount on your internet bill by opting in to auto pay, sometimes as much as $5 or $10 a month. To avoid overdraft fees, however, it’s important that you ensure there’s enough money in your checking account before the auto pay processes each month.

7. Reviewing Your Bill

Many ISPs offer a temporary promotional discount when you switch to their service, but your costs could go up afterward. That’s one of the reasons why it’s a good idea to review your bill every month, even if it’s on automatic bill payment. Doing so will alert you to changes in your bill total, whether it’s from the end of a promotional period or other unexpected charges.

If you have questions about your bill, it’s wise to call customer service as soon as possible. The longer you wait, the more months you’ll pay a higher rate.

8. Buying Your Own Equipment

ISPs usually charge you a monthly rental fee to use their modem and router. Before 2019, consumers might have also paid a fee to use their own equipment instead. Either way, consumers typically paid an extra fee.

But in 2019, Congress passed the Television View Protection Act, which prohibits internet providers from charging you a fee to use your own equipment. You’ll pay an upfront cost for such equipment, but over time, it could save you money on your internet bill.

9. Paying with a Cash Back Credit Card

Not every ISP allows you to pay your bill with a credit card. But if you have a cash back credit card that offers rewards with every swipe, you may want to find an internet provider that does permit it.

For example, if your card offers 3% cash back rewards and your monthly internet bill is $64, that’s nearly $2 in savings every month. It’s not a huge savings, but every bit can help.

10. Researching Low-Income Programs

Lifeline is a federal program that offers a monthly discount to eligible low-income consumers for internet and phone service. You must apply for the program and if you’re accepted, you then sign up for it and choose a participating internet service provider near you (you can also check to see if your current provider offers Lifeline). If you’re struggling with your internet bill, it can be a good idea to see if you qualify for this program.

11. Reducing Usage

Some internet plans have monthly data caps. Once you reach these caps, your ISP may charge you extra for usage (or slow down your speeds significantly).

If your bill regularly has fees for exceeding your data cap, you might want to switch to a provider with unlimited data (this may cost more as a monthly fee) or focus on reducing internet usage at home.

The Takeaway

Knowing how to lower your internet bill without sacrificing quality is important. If you’re willing to do some research and make some phone calls to customer service, you might be surprised by how much money you can save — and use elsewhere in your monthly budget. Or, you can put your savings in a bank account for a future financial goal.

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 much is a good amount to spend on the internet?

The average household spends around $73 monthly on broadband internet services, according to recent research. You may be able to spend less for slower internet or by bundling with another service; often, you can also find promotional deals, too. Ultimately, you’ll know if you’re spending a fair amount on the internet by comparing rates from other services and asking your friends and neighbors what they’re paying.

How can you lower your internet bill?

To lower your internet bill, you can try several tactics, including switching providers, negotiating for a better rate, using your own equipment, setting up auto pay, and even looking for low-income plans. Using a combination of strategies may help you get the best internet deal possible.

How much will your budget improve when you save money on your internet bill?

How much your budget improves when you save money on your internet bill depends on how much you’re able to reduce your internet bill by. For example, many people save $5 or $10 by setting up auto pay on their internet bill; this means they have between $60 and $120 extra a year to use elsewhere. Others earn cash back by using a rewards credit card to pay the bill; the earnings might be as little as 1% cash back, but every cent saved helps.

Photo credit: iStock/urbazon

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.
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/.

¹SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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.

*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.

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.

SOBNK-Q325-011

Universal basic income (UBI) is a governmental public program that can be implemented at the local, regional, or national level that would guarantee all citizens sufficient income to meet their basic needs.

The goal of this type of program is to reduce financial stress faced by the citizens of a country (or region) and enable them to focus on improving their job skills, furthering their education, or managing personal issues while still receiving enough income to meet their basic living expenses.

Because these programs are either experimental or being developed, there is some variance among UBI systems that have been proposed, but the core principles include providing a regular cash payment to every adult citizen, regardless of any conditions, such as employment or income. What follows is a closer look at what we do know about UBI, including the history behind the idea of universal income and the potential pros and cons of UBI.

Has There Ever Been a Guaranteed Income in the US?

The short answer to this question is yes, no, sort of, but mainly no. There have been trials of UBI programs in the U.S. For example, a Mayor-led UBI pilot in Stockton, CA, launched in 2019 called The Stockton Economic Empowerment Demonstration (SEED), giving randomly selected individuals $500 per month for two years, with “no-strings attached.”

The debate over universal basic income also spun up when Andrew Yang proposed the Freedom Dividend, during his campaign for the 2020 Democratic presidential primary, in which he proposed a standard $1,000 monthly payment for Americans.

Yang argued his Freedom Dividend would have increased productivity and boosted economic growth amid the concern that new technologies were putting American jobs at risk. More recently, as worry that the rapid rise of artificial intelligence (AI) could displace jobs in the coming decades, some again point to UBI as a potential way to help stabilize incomes in anticipation of a shift among certain segments of the workforce.

The World Economic Forum’s Future of Jobs Report 2025 estimates that close to 40% of current job skills will be transformed or eliminated by 2030.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Guaranteed Income Trials in the US

The idea of a universal basic income isn’t new, however, and there’s actually precedent to it: Since 1982 in Alaska, for example, there’s the Permanent Fund, an annual payment that “allows for Alaskans to share in a portion of the state minerals revenue in the form of a dividend to benefit current and future generations.”

A similar program more related to sharing resources is Texas’ Permanent University Fund (PUF). Established in 1876, the PUF utilizes revenue generated by oil and gas companies to fund and support higher education within the state.

A broader, UBI-like program was rolled out in the U.S. during the coronavirus pandemic, when many people lost income because their employers either scaled down or shut down operations. As unemployment skyrocketed, the federal government intervened and added to unemployment benefits to help those in financial distress. The government also implemented a widespread economic stimulus package.

Another example of something akin to UBI is the welfare system, which is government support to help ensure very-low-income citizens can meet their basic needs. However, people lose their eligibility for welfare programs (like food stamps provided by SNAP or Medicaid benefits) if they begin earning more than a certain threshold.

Proponents of UBI or Guaranteed Income in the US

While an argument could be made that welfare is a stepping stone to deploying universal basic income, that hasn’t quite happened yet. This is despite the fact that many have tried. In the 1960s, Martin Luther King, Jr. called for a guaranteed income to abolish poverty and help diminish income inequality among Americans. That same decade, in 1969, President Richard Nixon toyed with a guaranteed income plan to assist poor families by giving them an annual amount, determined by family size and income.

Before Yang revived the idea, the Green Party in 2010 advocated for a universal basic income for “every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people’s lives.” In 2017, Hawaii State Representative (now Senator) Chris Lee published a bill to investigate basic income for his state and explore its viability.

These recommendations are not unique to politicians alone. Facebook Co-Founder Chris Hughes’ 2018 book Fair Shot: Rethinking Inequality and How We Earn argues for a guaranteed income plan providing $500 to working adults in households under a certain income limit, financed by taxes on the top, wealthiest 1% of the country.

More recently, OpenResearch, a nonprofit research group chaired by Sam Altman, CEO of OpenAI, published findings in 2024 of a three-year study, looking at how a payment of $1,000 a month impacted low-income recipients across areas such as employment, health, and agency.

In America alone, UBI has been suggested, debated, and floated as an idea going all the way back to political theorist and revolutionary Thomas Paine in the 18th century, and the publication of the “Agrarian Justice” pamphlet (which is also recognized as the first American proposal for pension plans). “Agrarian Justice,” written in 1795-1796, discussed the origins of property, and that divisions between the poor and the rich were arbitrary ones that should be actively eroded, if not discarded.

But as the above paragraphs suggest, these calls, experiments, and trial balloons flirting with UBI have not resulted in any kind of universal basic income program in the U.S.

Recommended: Guide to Income-Based Student Loan Repayment Plans

What About the Rest of the World?

Since other countries in the world have a longer history than America, it might not be a surprise to learn that the notion of universal basic income does as well. It has emerged and re-emerged throughout history — dating back at least to the 1500s.

In 1516, English philosopher and lawyer Thomas More published Utopia, a satirical book that posited how a minimum income might cure theft. As time went on, these suggestions have gone from being less radical to more seriously considered.

When Thomas Paine wrote about UBI in the 18th century, historians say French military general Napoleon Bonaparte began to open up to the idea of providing a type of basic support to the public.

While Napoleon ultimately never implemented UBI, a good deal of the rest of the world seems to be thinking it’s time to adopt it. Fast-forward to more recent times, and in 2018 British business magnate Sir Richard Branson spoke to the press about the importance of UBI, saying he believes “it will come about one day.”

In Germany, the results of a three-year UBI study called the Basic Income Pilot Project were published in April 2025. Groups in South Africa have made repeated calls for basic income, and political parties and economists in Japan support the idea. While there aren’t any fully implemented national UBI plans currently in practice, there is a growing list of countries that have explored smaller-scale programs to test out the idea.

What Are Some of the Pros and Cons of UBI?

Like anything, UBI has a number of pros and cons. The arguments for and against can be complex, branching into economic and political factors and ideas. This article provides a brief overview of some of the frequently cited pros and cons.

Pros of UBI

Some of the pros of UBI are straightforward — for example, with consistent and reliable payments from the program, people could choose to learn new skills and pursue jobs they enjoy or those that offer more competitive wages, reducing financial anxiety.

Another pro — with this safety net, people would also be better able to take time off of work to care for a family member, should the need arise.

Proponents of UBI say that governments may spend less to administer UBI in comparison to traditional welfare plans. And UBI could help in ending the cycle of poverty that some people on welfare find themselves trapped in.

Another benefit? UBI payments have the potential to help stabilize the economy during a recession.

Cons of UBI

UBI can raise concerns about inflation. People would be receiving payments and feasibly have more money to spend, which could cause inflation if there is an increased demand for goods and services. And, if there is increased inflation, the payments wouldn’t necessarily lead to an increased standard of living.

While proponents of UBI anticipate that the program would be less expensive than the current welfare system, there aren’t many plans that detail what a potential transition from welfare to UBI could look like in the United States.

Some critics worry that other social services could be defunded following the implementation of UBI.

Additionally, there are concerns that UBI could squash people’s motivation to work.

The Takeaway

Universal basic income, or UBI, is the idea that each citizen would receive an unconditional universal basic payment from the government to help meet their basic needs. This idea has been percolating for centuries. Proponents of the idea suggest that the program would offer stability for residents and could potentially cost less to administer than the current welfare system. Detractors of the idea argue that UBI could lead to inflation and disincentivize people from working.

Whatever you may think of the merits of and arguments against universal basic income, it’s anyone’s guess whether it will become a reality in the U.S. In the meantime, you could consider reviewing or making your own financial plan. Being more deliberate about how you earn and spend, and being sure to put some money aside each month for the future can help you create your own personal financial safety net.

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 is a simple definition of universal basic income (UBI)?

Universal basic income is a government program that delivers a regular, unconditional cash payment to every citizen within a given population, allowing them to meet their basic needs. These consistent payments are provided without any work or income-level requirements.

What are the main arguments in favor of UBI?

Proponents argue that UBI may reduce poverty and income inequality. By alleviating individuals’ and families’ financial burdens, it could allow them to concentrate on enhancing their job skills, pursuing education, or addressing personal matters, all while maintaining a basic standard of living.

What are the biggest potential downsides of UBI?

Some of the primary concerns about UBI include the cost of implementing such a large-scale program and the logistical challenges of transitioning from welfare to a UBI system. Critics also cite the risk of UBI leading to inflation as consumer spending power increases. Some worry that other public benefits could be defunded as a result of UBI, while others say it might reduce the incentive for some people to work.

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.

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.

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.
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/.
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.

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.

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.
*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.

SOBNK-Q225-098

If you die without a will, a court will decide how your assets are distributed in accordance with state law. Each state has its own laws in place, called intestate succession laws, that determine how assets are passed to family members in the absence of a valid will.

That means plans you had about giving items or cash to friends, charities, or other recipients may not be followed. In addition, your survivors may have a tricky road ahead as they navigate the management of your estate.

Many people postpone writing a will out of the belief that it will be a time-consuming and expensive task, but it doesn’t have to be either of those things. Here, you’ll find out what happens if you haven’t made a will, as well as tips to get started. You’ll also learn how writing a will can save your loved ones stress, time, and, yes, money.

Who Handles Your Estate if You Die Without a Will?

When there is no will to name an executor, state law dictates who will be in charge of handling your estate.

A will is a legal document that outlines details including how you wish to have your estate distributed and who you wish to designate as the executor or personal representative. This is the person who takes responsibility for administering your estate after you die. They make sure final bills and taxes are paid and your financial assets are distributed according to your plans.

If no valid will exists, the executor will typically be appointed according to a priority list determined by the state. For example, most states will make the surviving spouse, if there is one, the executor. Adult children are typically considered next, followed by other family members.

Until the courts decide who will distribute your assets, they will be frozen. Keep in mind that some assets may not be subject to probate, such as financial accounts that have designated beneficiaries or property that has joint ownership established. Assets subject to probate, however, may be held until an executor is selected.

If nobody is willing or able to handle your estate, the courts will name a public trustee to represent you. This would mean that a stranger would be in charge of distributing your assets according to the laws in your state.

Who Gets Your Money If You Die Without a Will?

If you were to die without a will (legally called “intestate”), the court would decide how to divide your assets during probate.

Probate is the legal process in which a court validates the will (if it exists) and oversees the distribution of the deceased’s assets. If a will is not in place when you die, probate could be a complex process that can hold your assets in place for an extended period of time. It could also potentially be time-consuming and expensive for your survivors, depending on the situation.

How an estate will be distributed in the absence of a will depends on state law. Typically, the bulk of the estate will go to a spouse. If you have children, they will also likely get a share or, if there are no children, your parents. Next, the state will typically look for siblings, nieces, nephews, aunts, uncles, and cousins. Some relatives might have to claim unclaimed money from the deceased.

The probate process can mean that your belongings are inherited by those you didn’t necessarily intend. For example, if you are single and you die, your parents may get all of your possessions. This may not have been your wishes if you have a partner, or if you and your parents don’t get along.

If you are in a relationship but have no marriage certificate, your significant other may not be able to inherit any of your assets.

You also don’t have an opportunity to give anything to charity, your alma mater, or create a legacy.

What if I Die With Credit Card Debt or Loans?

Your estate typically has to pay any creditors before anything is passed down to those named in your will or determined by the court. If you have a mortgage or credit card debt alongside other assets, the process can take time and potentially lead to confusion for your loved ones.

If you die, federal student loan debt will be discharged, but private loan debt is dependent on your policy. If someone cosigned the loan, they may be responsible for future payments.

If you have credit card debts and not enough assets to cover them, your survivors will typically not be responsible for payment. But despite your loved ones not being legally obligated to pay the debts, it may also lead to creditors contacting your family.

Recommended: What Happens if Direct Deposit Goes to a Closed Account?

Who Gets My Children if I Die Without a Will?

Guardianship, or who takes care of children who are minors in the event of your death, can be the most pressing concern for many parents.

If you die without a will, your children’s surviving parent will usually get full custody of them. If there is no surviving parent, the state will appoint a guardian for your children. The state will choose guardians that they believe are in the best interest of the children, but these guardians may not be the same people you would have chosen.

Having the state assign guardians can also be stressful for your loved ones during what would already likely be a tough time.

A will can establish both a personal and financial guardian for your children. While this can be the same person, some parents like the flexibility in dividing guardianship.

For example, a relative may be chosen to be a financial guardian because they are skilled at managing money and have positive net worth. However, a personal guardian could be a family member who lives nearby and could ensure that the children are well cared for and their daily routines stay consistent.

You can also appoint a backup guardian in your will in case your primary choice is unable or unwilling to take on the role. You might also look into putting your house in a trust for your children, as well as other applicable assets, which could help ease the transfer process.

Writing a Will Can be Easier (and Cheaper) Than You May Think

If you have a lot of property or assets and may want to set up trusts for your heirs, it can be wise to hire an experienced estate attorney to help you write a will, as well as any other estate planning documents. You may decide to create a revocable living trust, for example. Assets held in a living trust are not subject to probate. An attorney can also advise you on the best way to handle a will if you are married.

For many people, however, online templates can be sufficient and, provided the documents are signed appropriately, will be legally binding. A will is an important part of an estate-planning checklist.

After you write your will, you may need witnesses and a notary in order to make sure it’s legal in the state where you live. Once you have a will, there are a few other steps you may want to take, including:

•   Keeping your will in a safe place. This may include having a digital copy and also a physical copy.

•   Letting someone know where copies of the will are kept (say, the person you appointed as executor of your will).

•   Creating other end-of-life documents, including a living will and power of attorney. These documents can be invaluable if you were to become incapacitated and needed people to make medical decisions for you.

•   Considering adding beneficiaries to financial accounts, such as bank accounts and retirement accounts, which allows funds to be directed to beneficiaries upon death.

•   Talking about your decision with others. Many people put off making a will, which can lead to confusion and uncertainty if the worst were to happen. Encouraging your loved ones to draft their own wills can help give peace of mind to the entire family.

•   Updating it regularly. It can be a good idea to consider looking at your will every year or so, or after a major event, such as a marriage, divorce, death in the family, home purchase, or the birth of a child.

Recommended: Guide to Safety Deposit Boxes

The Takeaway

Creating a will may seem overwhelming, but it can also be a financially prudent move that helps protect your assets — and creates a legacy based on your wishes.

If you die without a will, you will not have a say in how your assets will be distributed and, if you have children, who will necessarily care for them. You also risk putting your survivors in a difficult situation.

You may be able to create your own will relatively quickly online simply by plugging in your information. The rest is done for you, and the results are legally binding as long as they meet the requirements of your state.

While you’re tackling the to-dos you’ve long been putting off, you may also want to also work on getting your financial life in order. SoFi Checking and Savings makes it easy to manage your money by allowing you to save, spend, pay bills, and manage your budget, all in one place.

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

Who takes care of your estate if you die without a will?

If you die without a will, the court will appoint an executor, as determined by state law, to manage and handle the distribution of your estate. Typically, the surviving spouse is first in line, followed by adult children, and then other family members. If no one is willing or able, a public trustee may be appointed.

What happens to my credit card debt or loans when I die?

Your estate is responsible for paying off debts, such as credit card balances or loans, before passing on assets to your heirs. If your estate lacks the funds to cover these debts, your survivors are typically not obligated to use their own resources to settle them.

What happens to federal and private student loans if you die without a will?

Federal student loans are typically discharged upon death, but some private loans may still need to be settled. If there’s a cosigner on the student loan, they might be accountable for the outstanding balance.

How often should I update my will?

It’s a good idea to review and update your will annually or after significant life events such as marriage, divorce, the birth of a child, or the purchase of a home.

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.

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.

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.
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/.
*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.

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.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOBNK-Q225-095

There are plenty of ways to stow your money for future use, and two popular options are savings accounts and money market accounts. These financial products have similarities, such as both being interest-earning, insured ways to stash cash for future needs. However, one may better suit your particular situation better than another. Savings accounts may offer a more favorable interest rate without a minimum balance requirement, while a money market account could offer more flexibility in terms of transactions.

If you’re wondering how to pick between a money market or savings account, learn more here.

What Is a Money Market Account?

A money market account is a type of deposit account offered by banks and credit unions. These accounts can also be referred to as money market deposit accounts, money market savings accounts, or by their acronym, MMAs.

Here’s how a money market account works:

•  Money market accounts allow you to deposit money and earn interest on those deposits.

•  The interest rate and annual percentage yield (APY) earned can depend on the bank and the terms of the account.

•  If you need to withdraw money from a money market account, you will probably find quite a lot of flexibility. You may be able to do it via ACH transfer, debit card, check, or ATM withdrawal.

While Federal Reserve rules limiting you to six withdrawals per month have been suspended since 2020, banks can still impose withdrawal limits. If you exceed the allowed number of withdrawals, your bank can charge an excess withdrawal fee for each transaction over the limit. It can be wise to check with your bank about their policies.

Worth noting: If you are wondering about a money market account vs. a money market fund, know that the latter is a type of mutual fund. Since it’s an investment, it is neither insured by the FDIC nor is it backed by the U.S. government, and it carries risk.

What Is a Savings Account?

A savings account is also a deposit account that can be used to hold money you don’t plan to spend right away. Banks and credit unions can pay interest to savers, though there can be a significant difference in rates from one financial institution to the next. Online search tools will quickly and conveniently show you some options, and savings calculators can help you see how to reach financial goals depending on your timeframe and interest rate.

Can you spend money from a savings account? Technically, a savings account is meant for funds you’ll eventually spend. For example, you might open a savings account to hold money for an emergency fund or for a wedding you’re planning. But you typically can’t spend freely from a savings account the way you would a checking account.

Access may be somewhat limited. Savings accounts usually don’t come with a debit card, ATM card, or checks. If you need to take money from savings, you will probably either transfer funds using your financial institution’s website or an app, by phone, or by visiting a branch if your account is held at a traditional bank. Or you might be able to get access via an ATM card. And again, banks can limit the number of withdrawals you’re allowed to make per month.

3 Main Differences Between Money Market vs. Savings Account

Both money market and savings accounts are interest-bearing deposit account options. In addition, they can both be subject to monthly withdrawal limits. Next, take a closer look at the differences between money market vs. savings accounts. This intel may help you decide which kind of account best suits your particular needs.

1. Access and Flexibility

A money market account can offer an advantage over a savings account when it comes to how you can access your money. Depending on the bank, your options for making deposits and withdrawals might include:

•  Debit card

•  ATM card

•  Paper checks

•  Electronic transfers

•  Mobile check deposit

•  Teller withdrawals/deposits

Access to a savings account, on the other hand, is usually limited to electronic, ATM, or teller transactions.

With online banks, ACH transfers to and from a linked account at an external bank, wire transfers, mobile check deposit, or mailed paper checks may be your only option for making deposits or withdrawals. Some online banks enable you to make withdrawals from certain ATM networks, however, which adds to their convenience.

2. Account Opening

There may be differences in the minimum deposit requirement between these two kinds of accounts. Generally, money market accounts tend to require a higher minimum deposit to open.

So instead of being able to open a new account with a minimal amount (even no money), which may be the case with a savings account, you might need $100, $1,000, or more instead. Again, how much cash you’ll need to open a money market account vs. savings acct can depend on the bank.

3. Interest and Fees

Money market accounts and savings accounts can also differ when it comes to the interest you can earn and the fees you might pay. If you put a regular savings account vs. money market account from an online bank side by side, for example, the regular savings account is more likely to offer a lower rate and APY, or annual percentage yield. In addition, it’s more likely to charge a monthly maintenance fee, though some money market accounts can have a minimum balance requirement. If that’s not met, you could incur a fee.

That said, a high-yield savings account may have no monthly maintenance fee or minimum balance at all and may offer considerably higher interest rates vs. traditional banks. These accounts are often offered by online banks.

Additionally, money market accounts often offer tiered rates, meaning the more you have on deposit, the higher the rate you may qualify for.

Similarities Between Money Market and Savings Accounts

Here’s a closer look at ways in which savings and money market accounts are similar.

Earning Interest

Both money market accounts and savings accounts pay you interest. When you keep money at a financial institution, they use some of it for other aspects of their business, such as loans to other customers. For the privilege of using some of your funds this way, they pay you interest. Usually, this interest rate will vary with economic factors.

Being Insured

Money market and savings accounts are both likely to be insured by the Federal Deposit Insurance Corporation (FDIC) or NCUA, the National Credit Union Administration. Typically, accounts are insured for $250,000 per depositor, per financial institution, per account ownership category.

Offering Accessibility and Liquidity

Unlike time deposits (such as certificates of deposit, or CDs), savings and money market accounts allow you to withdraw funds at will vs. waiting for the maturation date. However, there may be limits on how many outbound transactions you can make per month, depending upon the institution.

When You Should Use a Savings Account

A savings account could be a good fit in several scenarios:

•  One good reason to use a savings account is if you want a safe place to set aside money for future expenses. Maybe you are gathering funds to landscape your yard next spring. Or perhaps you just want to be prepared and several months’ worth of living expenses stashed away in case of emergency (which is a very good idea).

•  You might opt for a savings account vs. money market account if you don’t necessarily need a debit card, ATM card, or checks to access funds.

•  Where you decide to open a savings account can depend on your needs and personal banking preferences. Online banks may appeal to you if you’re looking for long-term savings account options that often pay the best interest rates and charge the fewest fees.

On the other hand, you might choose a regular savings account at a brick-and-mortar bank instead if you want to be able to get cash at a teller or drive-thru in a pinch. It’s your call.

When You Should Use a Money Market Account

Money market accounts definitely have their appeal, too. They are attractive if you need a low-risk option to put cash away for a rainy day or until you’re ready to spend it on a planned expense. For example, you might consider opening a money market account if you’re saving toward any of these goals:

•  Down payment on a home

•  New (or used) car

•  Vacation

•  Wedding

•  Education expenses

•  Home renovations or repairs

In any of those scenarios, a money market account could offer convenience if you need to write a check or use your debit card to pay for something. If you’re upgrading your kitchen, for example, you could write a check to your contractor from your money market account.

Here’s an overview of the pros and cons of savings vs. money market accounts:

Potential Risks of Using a Money Market or Savings Account

Money market accounts and savings accounts are both quite low-risk since these products can be FDIC-insured. FDIC insurance applies in the rare event that a bank fails. In that case, as noted above, protection extends up to $250,000 per depositor, per account ownership category, per insured financial institution. NCUA offers similar insurance for accounts held at credit unions.

That said, there are some potential drawbacks to these accounts. Being aware of the risks is of course a good idea as you choose the best type of savings account.

Money Market Account

Here are some of the main risks associated with money market accounts:

•  Monthly maintenance fees may apply if your balance falls below the required minimum.

•  Interest rates are not fixed, so you’re not guaranteed to earn a specific APY.

•  Additional withdrawals from a money market account may trigger fees.

•  There aren’t tax benefits for saving this way.

Savings Account

Consider these risks before opening a savings account:

•  Interest rates on traditional savings accounts may be well below what you could get with a money market account. However, high-yield savings accounts (typically offered by online banks) can offer a higher APY than traditional ones and some money market accounts.

•  Accessing cash in an emergency may be difficult if you don’t have linked accounts, an ATM card, and/or your money is at an online bank without an extensive ATM network.

•  You may be penalized for withdrawals over and above your limit.

•  You won’t enjoy tax benefits for saving with this kind of account.

Recommended: Ways to Earn Interest on Your Money

The Takeaway

Money market accounts and savings accounts can both offer ways to earn interest on your money while safely stowing it away. Whether you’ll benefit more from a money market account vs. savings account can depend on how much you plan to keep in the account, the interest rate and APY you’re hoping to earn, and how you’d like to be able to access your money. Those fine points can make the difference between growing your money in a way that’s frustrating or fabulous.

On the topic of fabulous: Finding the right banking partner for your funds can enhance your money management.

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 a money market better than a savings account?

A money market account might be better than a savings account for people who want to be able to make purchases from the account using a debit card and write checks against their balances. When comparing money market vs. savings accounts, it’s important to compare the accessibility, fees, interest rates, and other features.

Can you lose your money in a money market account?

Money market accounts are a safe place to keep your money provided the financial institution is insured (not all are). Even if your bank fails, which happens rarely, you’d still be protected by FDIC coverage up to the applicable limit. Money market funds, however, are an investment that does carry risk.

Do you get taxed on money market accounts?

Interest earned in a money market account is considered to be taxable by the IRS. If your money market account earns interest for the year, your bank will send you a Form 1099-INT to report interest income. The bank will also send a copy of this form to the IRS on your behalf.

What is the downside of a money market account?

A money market account may have a higher opening deposit and ongoing minimum balance requirement vs. a savings account. Also, it may have limits on the number of withdrawals you can make.

Is a money market account safer than a savings account?

Both money market accounts and savings accounts are typically insured by either the FDIC or NCUA, depending on your financial institution, for $250,000 per depositor, per account ownership category, per insured institution.

Photo credit: iStock/akinbostanci

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.

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-Q325-043

Looking to save $5,000 in a year? Saving money is an important personal finance goal, but with increasing costs of living, it can be difficult to set aside a chunk of money at the end of each month.

It’s not impossible, however. Depending on your income and monthly expenses, you may be able to enact some changes in your lifestyle to build up your savings, whether it’s for an emergency fund, a vacation, the down payment on a house, or your wedding.

Read on to learn how to save $5,000 in a year, from selling your unwanted items to cutting your energy bill, plus the benefits of saving $5,000 a year.

Even if you can’t save that much, remember that any savings goal is admirable. You can pick and choose among these tips to come up with the right figure for your budget.

Is Saving $5,000 a Year Possible?

Saving $5,000 a year may sound daunting, but it is possible for some people. To save $5,000 a year, you’ll need to set aside just under $420 a month. That’s after paying for all your other necessary expenses, like food, transportation, housing, health care, and utilities.

If you earn a healthy salary and/or have low expenses, saving $5,000 in a year may only be a matter of reprioritizing your spending. In fact, you might even be able to save $10,000 in a year if you earn enough.

But if you’re living paycheck to paycheck, have a high cost of living, or considerable debt, you may want to set a lower goal for the first year and increase your goal over time.

Recommended: The Importance of Saving Money

Benefits of Saving $5,000 a Year

What are the advantages of saving $5,000 a year? Saving any amount of money can be beneficial, but $5,000 in your bank account can do a lot of good. Here are some of the benefits:

•   Cover emergencies. Almost 60% of Americans cannot cover a $1,000 emergency using savings. This means they may need to rely on a high-interest credit card or personal loan for things like a car repair and unexpected vet bills. With $5,000 in savings, your family could be prepared to tackle five $1,000 emergencies every year.

•   Fund your passions. With $5,000, you may be more willing to spend money on something you really want: a family vacation, gifts for family and friends, a continuing-ed class, or even a charitable donation. By saving money for a year, paying for things you love is more attainable.

•   Save for big purchases — or even retirement. f you’re hoping to buy a car or a house down the road, saving $5,000 a year could help get you there. Even more importantly, setting aside $5K a year means you can make strategic retirement contributions outside of your 401(k).

•   Earn interest. If you store your $5,000 in a high-yield savings account, you’ll earn additional money just for keeping your cash safe in an FDIC-insured account. It’s a good idea to shop around for a savings account with a high APY.

Note: If you have high-interest debt, it might be a good idea to pay that down before aiming for lofty savings goals. Having a base emergency fund is wise, but beyond that, the debt could be costing you more than you’re saving.

Recommended: Easy Ways to Save Money

How to Save $5,000 in a Year: 12 Helpful Tips

Wondering how to save $5K in a year? Here are 12 tips that could help you on your savings journey.

1. Knowing Your ‘Why’

Knowing what you are saving for could give you the motivation to keep stashing away cash. Whether it’s creating an emergency fund for your family or saving for a big vacation, keeping that long-term goal in mind might make it easier to resist the temptation to spend some of your savings or give up altogether.

2. Setting Your Goals

Hitting $5,000 a year can be daunting, but if you break it up into smaller, more attainable goals, you might realize that it’s not so bad. To save $5K a year, you’d need to hit $416.66 a month.

If you receive a paycheck every two weeks, that’s 26 paychecks a year. You’d need to set aside roughly $192.31 per paycheck, which sounds more manageable than $5,000.

If your pay is variable and you can predict when you might earn more (or if you have a dependable annual bonus that always hits at the same time), you can factor such irregularities into your money saving goals and plan accordingly.

3. Creating Your Budget

How to save $5,000 in a year can be helped along by a solid budget guiding your efforts. A monthly budget is a helpful tool for visualizing how much money you make (after taxes) and how you spend that money. If your goal is to save $420 a month, you can use the budget to look for ways to cut back expenses and make the savings possible.

How you create your budget is up to you. Some people swear by the 50/30/20 budget while others prefer the envelope budgeting method. Personal finance gurus may want to handle budgeting all on their own with spreadsheets or pen and paper while others might benefit from an app. Whatever method you choose, building flexibility into your budget can be helpful.

4. Tracking Your Spending

Budgets aren’t a set-it-and-forget-it resource. To stay within your budget, it’s important to monitor your purchases and spot spending habits that may be working against your savings goals. It’s OK to slip up — but learning from those mistakes can be the difference between living paycheck to paycheck and saving $5,000 a year (or more).

5. Reducing Entertainment Costs

One of the easiest costs to cut is entertainment because it’s not crucial to survival in the way that food and shelter are. This doesn’t mean you have to give up all entertainment spending; life would be very boring without it!

What it does mean is you can look for ways to reduce your entertainment spending, like:

•   Inviting friends over for a board game night instead of going to a bar

•   Saving money on streaming services and other subscriptions by canceling those you don’t use often

•   Learning to cook new recipes at home instead of ordering takeout

•   Taking advantage of group discounts on fun events like concerts or sports games.

6. Becoming Energy-Conscious

You can save money on your utility bills by adjusting your thermostat: Keeping it a little warmer in the summer and a little cooler in the winter can reduce electricity and natural gas usage. Taking shorter showers and running the laundry only when you have a full load are easy ways to shrink your electric and water bills.

The less you’re spending on utilities, the more you can afford to save. Every little bit helps.

7. Shopping Around for Better Deals

Buying in bulk is a great way to save on groceries and household supplies, and using coupons at the grocery store can make those savings even better. Beyond the grocery store, you can find other great deals to cut costs. For instance, you might be able to lower your car insurance premium by raising your deductible or simply switching to a different insurance provider. Bundling your car and homeowners or renters insurance can also deliver savings.

8. Getting a Side Hustle

Cutting costs can only go so far toward your savings goal if your biweekly paycheck just doesn’t have any wiggle room. If you have the time and energy, you can earn extra income with a side hustle.

You might be able to use your existing skills for a side hustle. Musicians can teach lessons online, coders could build websites for clients on the weekend, or you could even start a wedding photography business if you’re good with a camera.

But you don’t need special skills to start a side hustle. You might be able to land a side gig walking dogs, delivering food, or fulfilling online grocery orders.

9. Telling Friends and Family

Speaking with friends and family about your savings goals is important. Doing so can set the right expectations with them. If they know you’re serious about saving, they may be more likely to suggest staying in for a game night or skipping Christmas and birthday gift exchanges.

10. Selling Items That You No Longer Use

Online marketplaces like Amazon, eBay, Craigslist, and Facebook Marketplace make it easy to sell items you no longer want. Some items to consider offloading are clothing, jewelry, kitchenware, electronics and video games, and furniture.

Recommended: 37 Places to Sell Your Stuff

11. Opening a Separate Bank Account

Seeing the money you’ve saved in your online bank account every time you open your app may entice you to spend it. If you’re struggling with that temptation, it might be wise to open a separate savings account in which to store your savings each month.

Plus, if you find a bank account with a higher interest rate, you’ll grow your savings even faster. Typically, online banks offer better rates than traditional banks, since they don’t have the overhead of brick-and-mortar locations. They can then pass the savings on to their clients.

12. Rewarding Your Success and Milestones

Saving money can be hard work. If you’re sacrificing too much along the way, you might lose your motivation and give up altogether. It’s OK to celebrate your success and milestones with a special night out or a relatively big purchase on something you really want — every now and then. Everything in moderation, as the saying goes.

The Takeaway

With the right income and discipline, saving $5,000 in a year is possible. To be successful, it’s a good idea to define your goals, build a budget, cut unnecessary expenses, and even look for alternative sources of income. Having a high-interest bank account with automatic savings features can also be useful.

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 saving $5,000 a year good?

Saving $5,000 a year can be a good amount to have on reserve. With $5K in savings, you’ll be more prepared to tackle emergencies without needing to rely on a credit card or personal loan. Plus, by saving $5,000 a year, you can build a reserve of funds for financial goals, such as buying a house or to put toward your retirement.

Is $5,000 a lot to save in a year?

Saving $5,000 can be a lot, depending on your income. When setting an annual savings goal, it’s important to consider how much money you make, your current debt, and your monthly expenses. Remember, any money saved is an admirable thing.

What happens if I don’t reach saving $5,000 in a year?

If you don’t reach your $5K savings goal, don’t sweat it. You can always try again next year, and you’ll still have saved some money which is definitely better than nothing in the bank.

Does the envelope method help for saving $5,000 a year?

Some savers like using the envelope method (dividing their income up into envelopes labeled with their purpose) for their savings goals. There are several budgeting methods and resources available, such as the 50/30/20 method. Often, success is just a matter of finding the right method and resource for you.

Photo credit: iStock/Dmitriy Sidor

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.
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/.

¹SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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.

*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.

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-Q325-012