Americans are carrying a record amount of debt lately. Just last summer, the Federal Reserve Bank of New York announced that U.S. citizens hit a new milestone: $1 trillion in credit card debt. And when you look at overall debt, the number soars to an eye-watering $17 trillion, with the typical American having $21,000-plus in personal debt (not including mortgages).
Debt seems to be woven into everyday life. Yes, inflation is down from the scary heights of 2020 and 2021, but it’s still an issue for many. And the overall cost of living is climbing, too, which may be why Americans are taking on more debt. A person has to eat, right, and live their life? Debt can be what gets people through.
Taking a closer look at how debt is tracking by age can help as you examine your own situation and think carefully about how you will manage your own debt load.
Breakdown Of Average Debt By Age
Here, you’ll learn more about the latest Federal Reserve and U.S. Census Bureau data and what it reveals about how Americans are using credit. Overall, people in their high earning years (early middle age) carry the most debt, typically in the form of mortgages, while younger families carry more student loan debt. Let’s take a closer look.
Age 35 and under
Percentage of families with debt: 81%
Total median debt per household: $39,200
For the millennials, education debt reigns. Forty-four percent of young households hold student loan debt compared to 28.3% with mortgage debt. This tells us that people in this age range are likely putting off home ownership due to the burden of student loans. The median student loan debt was $18,500 while the mean student loan debt was $33,000. That can add up to a hefty monthly payment that could discourage taking on a mortgage loan as well.
Nearly half of millennial households are also carrying a credit card balance from month to month at a median of $1,400. Paying interest on high credit card balances can quickly eat away at income — and savings.
Age 35-44
Percentage of families with debt: 86.2%
Total median debt per household: $93,700
As you can see, families in this age range have taken on more debt. In this bracket, education debt has increased (median: $20,000) but the percentage of families with student loans has dropped to 34%. Instead, mortgage debt accounts for much of the overall debt increase. Fifty percent of households have mortgage debt in this age bracket, with a median housing debt of $93,700. Their credit card debt is climbing too, with 49% carrying a median $2,500.
These increases show that people in this age range are taking on more debt — likely because they’re earning more and doing more: they’re settling into their careers, buying houses, and starting families.
Age 45-54
Percentage of families with debt: 86.6%
Total median debt per household: $89,900
Most households that are firmly in middle age continue to hold debt, but the amount of debt is much less than younger households. Fewer hold student loan debt (24%, median: $20,000), and about the same number have mortgages (53%), but the amount they owe is less (median: $125,000).
There are a couple of possible explanations for this: one is that they’re earning more and have had more time to pay off their student loans and mortgages. The other is that this generation missed some of the soaring higher education costs that younger generations have had to grapple with.
They also likely entered the workforce and established their careers before the recession, while younger generations are more likely to have been hit hard by career-stalling hiring freezes and wage cuts as they were just starting out. In short, this generation and those in older households haven’t necessarily had to depend on financing as much as younger generations to get their adult lives started.
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Age 55-64
Percentage of families with debt: 77.1
Total median debt per household: $69,000
This age bracket continues to see drops in overall debt. They owe less on their mortgages and even less on education loans. With fewer large expenses related to education, housing, and family rearing, households in this age bracket can focus on paying down debt and building savings as they prepare for retirement.
Age 65-74
Percentage of families with debt: 70.1%
Total median debt per household: $42,000
Households in this age range are likely beginning to or have begun their retirement. At this point, they are probably tightening their budgets to live on retirement savings, pensions, and social security. As a result, they’re spending — and borrowing less.
Despite lower mortgage and education debt, 42% of households are carrying a pretty high balance on credit cards (median: $2,500). This suggests that for smaller purchases, people rely heavily on this convenient, yet high-interest form of borrowing.
Age 75 and up
Percentage of families with debt: 49.8%
Total median debt per household: $20,600
Seniors in this bracket are most likely retired and living on a fixed income. At this point, a good rule of thumb is to have little to no debt. While there are fewer and lower levels of borrowing in this bracket compared to the others, close to 50% are carrying debt. While much of this is accounted for by small mortgages, some of it may be related to high cost of medical care and senior living facilities.
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How Much Debt Is Too Much?
Americans have clearly become accustomed to borrowing in order to move through their everyday lives. In fact, financing is often a necessary step in order to get the graduate level training needed for a professional career or to buy a home that will become a financial asset. But are we culturally becoming too comfortable with borrowing larger and larger sums of money? And how do you know when you’ve over-extended yourself?
One way to find out if you’re carrying too much debt is to calculate your debt to income ratio by dividing your monthly debt payments by your monthly income. For instance, if your total debt payments (student loan, credit card, mortgage, car loan, etc.) come to $2,500 per month and your after-tax monthly income is $8,000, your debt-to-income ratio would be 31.25%. That means that a little over 31% of your income goes straight to your debts.
As a rule of thumb, the lower your debt to income ratio the better: a ratio of around 30% is considered very good, while a ratio of 40% or higher could threaten your financial security.
Carrying debt is enormously stressful, especially if it keeps you from being able to save enough to feel financially secure. Here are some solutions if you’re looking for a strategy for paying down your debt.
Make a Debt Inventory
Start by listing out all of your outstanding debts and sorting them based on whether they are “good” debts (debts taken out to help build wealth or income potential like mortgages and student loans) or “bad” debts (high interest loans and loans to buy things that don’t appreciate like credit cards and auto loans). The bad, or high-risk debts will be the ones you’ll want to take on first.
Create a Debt Pay-Down Goal
Zero in on the loans that cost you the most (in terms of high interest, but also high stress). Then, set a realistic goal for paying it down — as well as a budget for how to swing the extra payments. For instance, you might cut back on some of your unnecessary spending for a set period of time, or choose to take on a side hustle to earn some extra income.
Consider Consolidating Your Debt
If you are carrying a high credit card balance or other high-interest debt, but have a steady income and good credit, you may be able to make your repayment simpler and cheaper by taking out lower-interest personal loans to pay off those debts. You can’t use an unsecured personal loan to consolidate student loan debt, but it can be immensely helpful if you’re trying to get out from under credit card debt.
Many Americans have debt, with younger people having more student debt and those in midlife having more in the form of mortgages.
If you’re concerned about managing your debt (especially from credit cards), you might consolidate your high-interest debt into one monthly payment, which might offer a lower interest rate that could help you get out of debt sooner.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
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About one out of four U.S. consumers report living paycheck to paycheck, with no money left at the end of the month to save or invest, according to a survey conducted in 2024.
With so many people barely paying their bills, you may wonder if living below your means — or spending less money than you make — is even possible. The answer is yes, with a sound budget, determination, and some smart strategies. Learn the details here.
Financial experts say the chances of living on less than you make increase if you haven’t yet bought a house or started a family, but don’t stop reading if you’re already in the thick of those responsibilities. Even with those commitments, you can still live below your means, gaining financial freedom with the right mindset and goals.
Key Points
• Living below your means you spend less money than you earn every month.
• You can live below your means with a sound budget, determination, and smart money-management strategies.
• Financial freedom can be achieved by living below your means, even with commitments like a house or family.
• Living below your means can allow you to save for emergencies and larger purchases, as well as have more financial freedom and confidence.
• Living below your means can also lead to less stress about money and the ability to build wealth.
What Does ‘Living Below Your Means’ Mean?
If you live below your means, you get by on less money than you earn every month. For example: If your household income is, say, $40,000, but you make ends meet by spending $5,000 less than that amount, you’re left with money to put in your savings account or invest for important goals.
In other words, you aren’t having to borrow money to pay your rent, nor are you building up high-interest credit card debt to cover your monthly spending.
How Much Money Qualifies as Living Below Your Means?
No set amount of money qualifies as living below your means vs. living beyond your means. No matter what your income, living below means is defined as spending less than you earn. If you earn $4,000 every month, but only spend $3,500, then you are living $500 below your means. This makes it possible to build wealth. If you spend $3,900 per month, then you are living $100 below your means.
Any little bit of a cash cushion in your checking account can qualify you as living below your means.
Benefits of Living Below Your Means
Living beneath your means can be a wise financial move — one that pays off in an array of ways. Here are a dozen good reasons to start living on less than you make so you can enjoy the benefits of financial independence.
1. Being Prepared for Emergencies
If you have wiggle room in your finances, you can start putting money into an emergency fund every month and build a safety cushion. This gives you peace of mind when unexpected expenses arise, such as a flat tire, broken washing machine, or a major dental bill.
Planning a family beach vacation or girls’ weekend away? Will you need a new laptop soon? If you live below your means (for example, driving your trusty old car rather than financing a new model), you will have more breathing room in your budget to save for key expenses. Ordering takeout for your family’s dinner every two weeks vs. every week could add up to $100 or more in monthly savings, which could be better used elsewhere.
3. More Financial Freedom and Confidence
A major benefit of living below your means is gaining financial freedom. When you aren’t living paycheck to paycheck, you won’t feel that money stress. You won’t watch your credit card debt continue to climb upwards. You may, however, see your savings grow.
Living beneath your means can help you be a responsible spender and saver. Achieving this financial discipline will give you a feeling of control and confidence, and it can also open the door to more possibilities.
4. Having a Healthier Lifestyle
Living below your means typically gives you the room to be more mindful about both your spending and your lifestyle. When you watch your pennies, you’re more likely to make meals at home, which can be healthier and have more reasonable portion sizes than, say, a stuffed pizza or bucket of fried chicken delivered to your door.
You may also avoid high-priced gas or Ubers and walk or bike more, which is better for you and the planet.
5. Less Stress and Worry About Money
A recent survey found that 73% of Americans said their number-one worry was, not too surprisingly, money. When you are living below your means, you may well eliminate some of this stress. Having some room in your budget means you don’t have to break out your plastic to buy groceries or see your checking account balance head towards negative territory. Phew!
6. Spending Less Money on Consumerism and Materialism
When you are focused on living beneath your means, you may recognize that constant consumerism is bad for the planet and your pocketbook. More and more of us are embracing the minimalist way of life, bypassing new jeans in favor of thrift-shop pairs. Same goes for cookware, furniture, and books.
Reduce, reuse, recycle is a mantra that’s been gaining ground. Too often, our need for new goods is short and they end up in a landfill, where they never die. Buying used can help prevent this while padding out your savings.
7. Having Funds for a Rainy Day…or a Sunny One
Maybe your favorite armchair’s upholstery rips. Wouldn’t it be nice to have funds available to fix it without feeling money anxiety? Or perhaps the kids would love an overnight stay at a lodge with a water park. If you have been living below your means and setting aside some cash, this may be your moment to forge ahead.
That’s where your rainy day fund or splurge savings come in. Neither of these situations are good uses of an emergency fund, but they can be worthwhile expenses drawn upon other cash cushions.
When you live below your means, you have a surplus of cash that you can invest to build wealth. One smart move: If your employer has a 401(k) program, sign up. Money will be swept from your paycheck (before you even see it) into a retirement investment account. This is an example of paying yourself first and is also one of the best ways to build future wealth.
Another idea: If you get a raise (nice work!), invest it rather than amping up your spending to account for the extra money, which is called lifestyle creep. Also, if you are not living paycheck to paycheck, when you get a windfall (say, a tax refund), you can also invest that, rather than using it to buy necessities.
10. Developing a Stronger Money Mindset
How do you think about money: with shame, because of debt burdens? Or with pride and contentment, knowing you have cleared the deck and are even socking away some money by living below your means? The more you take control of your finances and improve your money mindset, the better your outlook on life is likely to be.
11. Having Financial Security
When you live below your means, you know you can handle bills without worry and dread over late notices, collection agency phone calls, fees, and service interruptions. Living on a leaner budget also means you can save extra dough for unexpected expenses that pop up. These might include, for example, new clothes for your college roommate’s wedding or fees for a professional class you really want to take.
By living below your means, you are likely taking a giant step or two toward achieving financial security and not feeling on the brink of money trouble.
12. Being Able to Invest Your Money
This is empowering. When you have some extra cash, contact a financial advisor (ask friends and relatives for a referral or see if your bank has one on the team) and consider investing in the stock market, which can be both fun and financially wise.
Historically, the market returns approximately 10% per year, which can boost your long-term savings, such as your retirement fund. Some risk is involved, though.
If you are risk-averse, you might prefer to put some funds into a high-yield savings account that’s insured by the Federal Deposit Insurance Corporation (FDIC). Your money will grow, thanks to the power of compound interest.
Tips for Living Below Your Means
If you’re convinced of the value of living beneath your means, the next step can be to take action to do so. Here are some strategies to make that happen.
Tracking All of Your Spending
Recording where your money goes is the first step to living below your means. For one month, track every dollar that leaves your wallet, from a tip at the coffee place to a gift for your sister. Not just rent and gas, but also pharmacy co-pays, the juice you got on your way to work, and parking meter charges. Look into a free budgeting app to help you stay on task; many financial institutions (such as online banks) provide these for their clients, or there are plenty of third-party options available online.
Budgeting
Once you know what you spend in a given month (including debt payments), compare this to your take-home income. Re-evaluate what you truly need and what can be eliminated in your quest to live below your means.
Some expenses are fixed, like a monthly mortgage or commuter fare. But others are more variable. Take a close look at grocery bills, streaming services, dining out, and shopping. Consider a town library card vs. buying books; making your own iced tea vs. spending $4 to have the barista pour one; and perhaps give up your gym membership in exchange for free online-taught workouts or jogging in a local park.
Take time to consider your lifestyle and goals; you can do this solo or with a financial planner. Things to consider are your short-, medium-, and long-term aspirations (from funding a wedding to building a robust retirement fund), boosting an emergency savings fund, having an investment portfolio, and possibly an estate plan.
When you trim expenses and live below your means, you can sock money away to achieve all this and more.
Downsizing
Could you consider downsizing? Moving to a smaller space or more affordable city, trading in your gas guzzler for a greener car? These moves can reduce the cost of your monthly needs and deliver the wiggle room in your budget you seek.
You might also consider selling things you no longer want or need, whether that’s gently worn clothing, furniture sitting in your basement, or an iPad you haven’t touched in months. Depending on the item, you might be able to sell it on eBay, Etsy, Facebook Marketplace, Poshmark, or ThredUP, among others.
Eliminating Unnecessary Expenses
Get serious about axing unnecessary expenses. In addition to ditching a cappuccino-a-day habit, scroll through your monthly credit card statement and cancel any excess services. You may have forgotten how many streaming services you signed up for during the early days of the pandemic, or perhaps you are paying for a fax or postage service you almost never use, or a meal-kit plan that keeps raising its prices. Keep what you cannot part with, and trim the extras to bring your spending in line. It’s a key aspect of living within your means.
Having Multiple Streams of Income
While cutting costs is one way to help live beneath your means, another tactic is to increase your income. More money coming in, minus your current spending, should yield some spare cash. Perhaps you could take in a roommate for a while, or start a part-time gig (whether dog-walking or website design) in your free time. One of the benefits of a side hustle in bringing in extra funds.
Organizing Bills and Monthly Expenses
Above all, when learning to live below your means, stay organized at tracking money in and money out. As noted above, use an online finance tool (easy to find from your bank, in the app store, or online). This can help you always know where you stand financially as unexpected expenses and bills pop up.
Improving Your Money Mindset
Take stock of, and pride in, what you do day by day to live below your means. Recognize your progress, no matter how minor. Every dollar you don’t spend is helping you live below your means.
Hopefully, you can bid farewell to money shame (which can lead to overspending and still more money shame), FOMO spending, and splurge-related regrets. You will be more aware of where your money goes and hopefully on a path to building wealth.
The Takeaway
Living below your means, or spending less than you earn, is possible with the right budgeting steps and a healthy money mindset. Following a trimmer budget on your existing income can help you put away funds for important milestones, such as the down payment for your first house. It can also help you get past living paycheck to paycheck and accumulating credit card debt.
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FAQ
What is considered living above your means?
Living above or beyond your means is defined as spending more money than you earn. Three signs of this pattern: Running out of money and having to use credit cards to get through the month; not having an emergency fund; and not having money in savings.
Why is it important to live below your means?
Living below your means is important for your mind and your finances. Instead of overspending, you’ll be able to set money aside for tangible goals, from a savings cushion to a college fund. When you conserve money rather than blowing it, you can reap the reward of watching it grow, building your wealth, and reducing your financial stress.
Does living below your means deprive you of fun?
Living below your means does not deprive you of fun. You can save for and budget for splurges like vacations and dining out; the important part is making that intentional and not going into debt. You’ll also find plenty to see and do for free or at a low cost, from bike rides to free town concerts.
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College is a transformative phase of life filled with opportunities, challenges, and self-discovery. But between classes, social activities, and newfound independence, college can also be an overwhelming experience. There are numerous opportunities to better yourself, but where do you start?
To get the most out of your time in school, it can be helpful to set and achieve some specific goals. These goals can serve as guideposts, providing direction, motivation, and a sense of purpose during your college years. And, your goals don’t have to be all centered around academics — they can encompass personal development, financial stability, and preparing for the professional world.
Read to learn about the importance of setting goals in college, types of goals to consider, and how to set yourself up for success with S.M.A.R.T. goals.
Good Goals to Complete in College
Setting goals in college can help you identify what you want to achieve academically, personally, and financially, providing a roadmap to follow. Whether you’re just starting school or have a few semesters under your belt, here are some goals you might consider.
Academic Goals to Achieve
Earning a good GPA: At the top of many students’ minds is getting top grades. There are plenty of positives to achieving a high GPA, including more potential for scholarships or landing on the dean’s list. It might be a great resume-builder, too. You could aim for a certain GPA, or work on improving your number from last semester.
Increasing professor facetime: Along with earning good grades, actually making an effort to get to know your professors could go a long way. Using your instructors’ office hours to clarify confusing topics might help you understand class concepts better. And who knows, their references might lead you to a really cool internship down the road.
Completing challenging courses: Rather than choosing the path of least resistance, you might aim to conquer challenging courses that align with your academic interests and career aspirations.
Paying for college: There are all kinds of ways to cover the cost of college, including scholarships, grants, work-study, federal student loans, and private student loans. You’ll want to find the best combination, plus look for ways to save money in college.
Setting up a budget: Establishing a budget might seem pointless when you have little money to work with, but learning how to set up and stick with a simple spending plan can serve you well during your lean college years — and beyond.
Finding an internship: A key objective in college is to get a degree so you can get a great job in your chosen field. One great way to set yourself up for a job that pays well after you graduate is to land an internship related to your major.
💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.
Personal Goals to Set in College
Signing up for extracurricular activities: College can be a great time to discover new interests. Curious to learn Japanese? There might be a club for that. Want to blow off some steam on a basketball court? There could be an intramural team for that. You could check with your college’s campus life department to see what’s available.
Improving communication skills: Consider engaging in activities that help develop communication skills, such as public speaking or writing for publications. No matter what your major, these are skills that can take you far in your career and life.
Exploring a new country: Whether you choose to spend a semester in Rome or Rio de Janeiro, studying abroad in college can do more than give you a change of scenery. It can provide the opportunity to expand your cultural views and learn more about people across the world.
Should You Set More Than One Goal in College?
It’s not only okay, but recommended to set more than one goal in college. Pursuing diverse goals allows for a well-rounded college experience and personal development. However, it’s crucial to strike a balance between ambition and feasibility. Setting too many goals simultaneously might become overwhelming and lead to decreased effectiveness in achieving any one of them.
The key to setting — and achieving — multiple goals in college is to:
• Prioritize It’s important to identify the most crucial goals and allocate more time and resources to them.
• Break goals into manageable tasks You’ll want to divide larger goals into smaller, actionable steps to avoid feeling overwhelmed.
• Manage your time Try to manage your time efficiently by creating schedules and allocating specific time blocks for each goal.
What Is a SMART Goal?
S.M.A.R.T. is an acronym that provides a framework for creating well-defined goals. This acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Here’s a breakdown of each component:
• Specific Goals should be clear and precise, answering the questions of what, why, and how. Specific goals provide a clear focus, avoiding ambiguity.
• Measurable Goals should have quantifiable criteria for tracking progress and determining when they’ve been achieved. This helps in monitoring advancement and staying motivated.
• Achievable Goals should be realistic and attainable within your capabilities and resources. They should challenge you but remain within the realm of possibility.
• Relevant Goals should align with your values, aspirations, and long-term objectives. Ensure that pursuing a goal contributes meaningfully to your overall vision.
• Time-bound Goals should have a deadline or a timeframe for completion. Setting a timeframe creates urgency and helps in planning and prioritization.
SMART Goal Example for Students
If you really want to get down to business on your goals in college, you could use the S.M.A.R.T criteria to start building them out. For example, what if you’re a commuter student who wants to be more involved on campus? The goal of “being more involved” by itself would not fit the S.M.A.R.T. criteria—it’s too vague.
To be more specific, you could re-word your goal by stating, “I want to join two campus organizations this semester and be on the leadership team for one of them.” In this way, you have specifically called out your goal.
It’s also measurable because the goal requires joining two organizations and serving on the leadership team for one. The goal is attainable because you have access to campus organizations. And, it’s relevant to your college experience.
Then you could break down your S.M.A.R.T. goal into mini-milestones. Going along with this example, you might make a goal to check out the activities fair during school. You could also research campus organizations online and narrow your list down to the two you want to become involved with the most.
Another S.M.A.R.T. goal example for students could be paying for college. Breaking it down using the S.M.A.R.T. criteria, for example, could look something like this:
Specific: I need to come up with $10,000 for college tuition by next year. Measurable: I can measure this by figuring out how much money I have and how much I need. Attainable: I can achieve this because there are a variety of resources I can use to help me pay for college. Relevant: The total amount needed is the same cost as one year of tuition at my school. This will help me continue going to school to get my degree. Time-bound: This needs to be completed in 12 months so I can deliver the funds to the financial aid office.
💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.
The Takeaway
Setting goals in college can be pivotal for personal, academic, and financial development and success. By adopting the S.M.A.R.T. goal framework, you can effectively plan and pursue objectives that lead to a fulfilling college experience and pave the way for a successful future beyond your college years.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
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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.
Cheers! Here you are again at the start of the New Year. It’s a fresh start and a great time to think about your goals for the 365 days ahead and how to meet them.
For many people, that may mean taking control of their finances and maximizing their money. There are, of course, all kinds of ways to do this, from bringing in more income to spending less to saving and investing well.
Read on to learn 37 smart, creative ideas that can help you enrich your bank account and net worth in 2024. Try one or a bunch, and see how they can contribute to your financial health this year.
Smart Financial New Year’s Resolutions
Start 2024 by getting on the path to financial wellness. Here are 37 money-saving resolutions to help you maximize your cash in the year ahead.
1. Save 20% Every Month
Here’s our first New Year’s resolution: Consider ramping up your savings by following the 50/30/20 budget rule. This wise formula says to save 20% of your income every month. The other 50% of your money should go toward your needs (housing, food, utilities, debt), and 30% can go toward discretionary items, or the wants in life.
2. Try a Weekly Budget
With so many transactions coming in and going out (and so many of them being automated these days), keeping a monthly budget can seem intimidating. How do you track and manage all of the credits and debits? Are you going to overdraw your account?
There are many different budget methods, but with a weekly vs. monthly budget, the amounts you have to track are smaller and more manageable, and you may be more likely to stick to them. Try making a spreadsheet of all your weekly income and expenses, and then decide where you can cut back to save money.
3. Decrease Discretionary Spending
Has your once-a-week matcha latte habit become a daily thing? And exactly how many streaming platforms do you subscribe to? Spending money on entertainment, takeout, coffee, and other wants can add up quickly. So when you create your budget, figure out ways that you can reduce spending on things you don’t actually need. Put the savings towards a goal like creating an emergency fund or saving for that trip to Croatia.
4. Switch Up Your Budget Cuts
Is one of your New Year’s resolutions to reduce your spending, as noted above? If so and you try to slash everything at once, you can wind up feeling deprived and losing motivation. Instead, you might try cutting back on, say, those fancy coffees one month and on movies the next. You’ll still save money, but the rotating nature of cuts and the challenge of “no flat whites this month” can keep it interesting.
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5. Stop Storing Your Credit Card Information
Yes, adding your credit card details to your online accounts makes it super easy to check out, which is exactly the problem. That simplicity can also lead to increased spending on impulse purchases. Instead, remove those saved cards and force yourself to manually type in your credit card number when you want to purchase something. If you have to get up to find your card, that can be a way to reflect for a moment and potentially avoid impulsive purchases that you don’t actually need.
6. Find a Savings Buddy
Economizing can be easier when you have a kindred spirit to support you. If you have a friend or relative who is also trying to save money or has succeeded at doing so in the past, recruit them to help you. The two of you can text when you need advice on a big purchase you are contemplating or when bills pile up and then stay strong together.
7. Schedule Automatic Transfers
When your paycheck hits your checking account, it likely makes you feel flush and ready to splurge a little. Instead, pay yourself first. Make it a 2024 resolution to set up automatic transfers from your checking to your savings account. All you have to do is set the amount and the date you want the recurring transfer to occur.
Or you can likely send part of your paycheck’s direct deposit into your savings (ask your HR team how to set this up). Either way, you can watch your savings blossom automatically.
8. Earn Credit Card Rewards
If you’re not already earning rewards with your credit card, make 2024 the year to do so. With credit card rewards, you can get cash back when you make purchases. Then, once you reach a certain amount, like $25, you can transfer it into your savings account or to pay down your balance. As long as you don’t overspend and wind up with debt issues, credit cards can be helpful in this way when it comes to reaching your savings goals.
9. Round Up Prices
If you haven’t already tried a round-up app, consider doing so this New Year. These work by, say, charging you $7 for a purchase that really cost you $6.35, and depositing the additional 65 cents into savings or putting it towards your debt. Acorns is an example of this kind of app, but there’s a good chance your bank offers this feature as well. Rounding up can help move you towards financial security.
10. Pay Off High-Interest Credit Cards
Credit card interest rates are notoriously high, with rates topping 20% on average at the end of 2023. If you’re not careful, you could be spending hundreds of dollars every month on credit card interest. Create a plan to become debt-free for 2024, and prioritize paying off your high-interest credit cards. For example, you could use the debt avalanche method, where you pay off the card with the highest-interest rate first and then move on to the card with the next highest interest rate, and so on.
11. Sign Up for a Balance Transfer Credit Card
If you have credit card debt, you may want to pay it down faster as a New Year’s resolution for 2024. Signing up for a balance transfer credit card could help. You’ll typically pay 0% interest on your debt for a certain period of time (say, six to 18 months), before your interest shoots back up.
Just make sure you pay off your balance before that introductory period is over, or else you’ll be right back where you started. And if the interest rate is higher than your current credit card, your situation could be made worse if you don’t pay it off in time.
12. Recycle
Yes, it’s more convenient to toss cans and bottles in the trash. But each one probably could net you five to 10 cents if you redeem them, which is typically easily done at your local supermarket. Plus it’s good for the planet. While it may not yield the down payment for a house, every little bit of cash put into savings can help, especially when compound interest kicks in.
13. Find a Side Hustle
If you have any free time at night or on the weekends, then you can freelance or work some other sort of side hustle. Whether it’s tutoring school children or driving for a rideshare service, those extra dollars can make a serious impact on your savings. There are plenty of low-cost side hustles to consider. Even renting a room in your house on Airbnb could put hundreds or thousands of extra dollars in your account as the months go by.
Decluttering your home may be another New Year’s resolution you have for 2024. How about merging that resolution along with a money-saving resolution? There are plenty of places to sell your stuff, from clothing to electronics to cookware, whether it’s gently or never used. Consider sites like eBay, Craigslist, and Facebook Marketplace.
15. Save for Retirement
If you’re young, you may feel like you don’t have to worry about retirement just yet. But the truth is that time is likely to pass faster than you think it will. Plus, if you start saving right away, you’ll make more money on your investments through the power of compound interest. Take advantage of your company’s 401(k) matching policy, if they have one, and beef up your retirement savings in the New Year.
16. Create an Emergency Fund
If you were to lose your job tomorrow, would you have enough money to last you until you found something new? What if you had a medical emergency or your house suddenly flooded? Having at least three to six months’ worth of savings in an emergency fund will help you cover any sudden, unexpected expenses, and help ensure that your budget and financial goals won’t be derailed.
17. Use Coupons for Groceries
If you’re not a couponer already, 2024 is a great time to start saving this way. Check websites like Coupons.com and P&GGoodEveryday or your weekly newspaper for the latest deals and discounts at your local grocery stores and other retailers. It can be an easy way to make sure you aren’t leaving money on the table.
18. Buy Generic
Did you know that generic products might be the same as name-brand products you love but without the fancy label? Whether you’re at a grocery store or a pharmacy, look into buying those store-brand and generic products instead, because you could end up saving money while still purchasing high-quality products.
19. Choose a Day to Review Your Finances
In order to stay on top of your financial goals in 2024 (or any year, in fact), it’s helpful to set aside one day a week to go over your spending. Pay your bills and check your accounts on this day as well to ensure you’re meeting your benchmarks.
20. Create an Investment Portfolio
The average interest you’ll earn on a traditional savings account is only 0.61% as of the end of 2023. But if you research different investments like stocks and bonds, you’ll see that the market historically earns 10% annually on average, though past performance is no guarantee of future returns.
Perhaps 2024 is a good year to invest in the market or invest more if you are already in the market. Just make sure you invest according to the risk you are willing to take. For instance, if you don’t have much to invest, then you might stick to investing in high-performing, more established and stable companies. But if you have money to spare, you may try investing in riskier, smaller and newer companies.
21. Look Into a High-Interest Savings Account
A high-interest savings account is going to give you more bang for your buck when it comes to your savings. The rates frequently fluctuate, but you may find annual percentage yields between 4% and 6% as of December 2023 — significantly higher than the rate of a standard savings account rate.
Get up to $300 when you bank with SoFi.
No account or overdraft fees. No minimum balance.
Up to 4.00% APY on savings balances.
Up to 2-day-early paycheck.
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22. Use Cash Instead of Credit Cards
If you use cash instead of credit and debit cards, you may be less likely to spend money in 2024. Credit and debit cards can make it easy to swipe and tap without thinking about the consequences. Paying $100 in cash for your groceries can often have much more of a psychological effect than simply swiping your card, and it can help encourage you to save more money.
23. Look Into a New Bank
Are you aware of all the monthly bank fees you’re paying just to keep your account open? If you overdraft your account, do you get charged a hefty fee? Does your bank charge you to use an ATM outside of their network? Examine all the fees you are currently paying and then look into competitors to see if they charge lower fees — or perhaps no fees at all. Online banks vs. traditional banks typically charge fewer (or no) fees and pay higher interest rates.
24. Start a Coin Jar
Why not go old-school in 2024? Put all your loose change into a coin jar, and then at the end of the month, take it to your bank to cash it in. This is better than using a Coinstar machine, which will typically take 11.9% of your money when you convert it into cash. Note: You may have to roll the coins before depositing at the bank, but this can be done while listening to your favorite podcast. Or consider it a mindfulness moment.
25. Use Financial Apps
Financial apps are an easy way to keep track of your spending in the New Year. All you have to do is link your financial accounts to these apps to see how much you’re spending and what you’re spending your money on. These apps will even give you suggestions on how to save money and improve your finances, as well as remind you when bills are due. Your bank is likely to offer a tool like this, which can be especially convenient as you track your spending and pay bills.
26. Negotiate Your Bills
Think you’re spending too much on cable? Is your cell phone company ripping you off? Be a savvy consumer, and tackle it in 2024 to save more. Call your service providers, and try to negotiate a lower monthly rate. If you aren’t successful, you could always use services like Trim to negotiate your bills down so you can save more every month.
27. Do Meal Prep
You know how it goes: Suddenly, it’s 7pm, you’re starving, and haven’t even started to think about dinner so you wind up ordering in. Avoid that in the New Year by preparing your meals in advance. That way, you will have food in the fridge when you’re hungry, and you won’t be tempted to eat out. It’s also a good idea to bring lunch to work so that you won’t be tempted to purchase pricey food on your break with coworkers.
28. Cancel Automatic Subscriptions
Go through your bank statements to see if there are any automatic subscriptions you don’t need or remember signing up for. Cancel them immediately. If a company was charging you without your knowledge, you may be able to request your money back.
29. Decrease Energy Costs
Not having an energy-efficient home can be costly. You may be wasting hundreds of dollars each month because you’re leaving the lights on or running the heater or A/C for hours on end. You can make a few changes like sealing up drafty windows and attics to start saving money on your utility bill in 2024.
30. Unsubscribe from Email Lists
If you have a problem with making impulse purchases, then unsubscribe from your favorite retailers’ email lists. That way, you won’t be as tempted to spend because you’ll no longer receive news about flash sales or buy-one-get-one offers.
31. Trade in Your Gas-Guzzling Car
Gas prices have fluctuated considerably lately but can still be quite high. Trading in your SUV for a more efficient vehicle could be a smart move. Hybrid and electric vehicles are good options as well. Though you may pay a premium for them up front, you’ll save a lot on gas in the long run.
32. Ask for Discounts
Here’s a New Year’s resolution to adopt: Whenever you’re purchasing tickets, booking a hotel, or going to an event, ask if there are any discounts. You may be able to snag a discount if you’re a student, a senior, a member of the military, a resident of the state, or even an AAA member.
33. Stop Buying Retail
When you go to retail stores, you’re going to pay full price. Instead, when reasonable, look for used items on sites like eBay and Facebook Marketplace (though be wary of fraud and scams that can happen when purchasing this way). Flea markets and thrift stores may also have the goods you might need (cookware, lamps, you name it) at steeply discounted prices.
34. Join a Warehouse Club
Enlist a friend to join, too, and then share the spoils of buying in bulk. Since the likes of Costco and BJ’s tend to have mega-sizes and packs, you can split the low-cost food and other items you purchase. Say, you buy a dozen burgers and keep half; your friend buys the same number of buns and gives you six. It’s a win-win.
35. Go on a Spending Freeze
Don’t spend any “out and about” money for a week and see how you feel. This means you’ll need to brew your own morning coffee and eat homemade meals. You’ll also need to avoid downloading movies, but at the end of the week, you should be able to more easily distinguish your wants from your needs. This can help make budgeting that much easier.
36. Save Your Tax Refund
What to do with your tax refund? If you get one this year, instead of spending it on a new mobile device or a vacation, put it into your savings. It’ll accrue interest, and you can then put it toward a larger purchase or goal down the line.
37. Work Out at Home
This one is a double whammy if you want to get fit in the New Year, too. Purchase some weights online, and tune into your favorite trainers on YouTube to start burning fat and gaining muscle. You can cancel your expensive gym membership and forget pricey personal trainers while feeling better about yourself in 2024.
Looking Into SoFi Checking and Savings
Here’s another good New Year’s resolution: Make sure you’re happy with your banking partner.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
When you think about your health, your mind likely goes first to your physical health and then maybe your mental and emotional health. But there is another key component to your overall well-being, and that’s your financial health.
While you may never discuss it with your doctor —- and may go months or years ignoring it —- your financial wellness has a significant impact on your daily life, as well as your future. What’s more, having poor financial health can in turn affect your physical and mental health.
But what exactly is financial health? How do you measure it? And, more importantly, how do you achieve it? Read on to learn all about financial health, from how to assess it to how to improve it.
Understanding Financial Health
Financial health is defined as the current state of your monetary situation, such as your credit, debt, savings, investments, and income. Being financially healthy means you can meet your monthly financial obligations, are on track to achieve your financial goals, and have enough cash in the bank to be able to absorb a financial setback.
Indications of Financial Health
Below are six signs that your finances are in good health:
• You make enough money to cover your monthly expenses
• You pay all of your bills on time
• You have no debt or have debt that is manageable and being repaid on schedule
• You’re saving enough to meet your short- and long-term goals
• Your credit score is strong enough to help you qualify for whatever loans you might need at low rates
• You feel comfortable with your financial situation
💡 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.
Metrics and Measurements
There are several core components of financial health. Here’s a look at how to measure the current state of your finances and discover areas where you may need improvement.
• Your debt-to-income ratio: Carrying too much debt can be harmful to your financial health. Lenders use a calculation called debt-to-income ratio (DTI) that compares a person’s monthly debt payments to their monthly gross income to determine how manageable someone’s debt load is. Lower is generally better. Lenders often like to see DTI ratios of 36% or less.
• Your credit score: Having a strong credit score is an indicator of good financial health. Factors that impact your score include amounts you owe on your debt accounts, repayment history, your credit mix, and the length of credit history. FICO® Scores range from 300 to 850. Having a score above 700 is generally considered good credit, while above 800 is considered excellent.
• Your emergency fund: A key measure of financial health is having enough cash in the bank to weather unexpected setbacks like a medical emergency, car breakdown, or job loss. Experts generally agree that you should have an emergency fund with three to six months’ worth of living expenses saved.
• Your retirement savings: Because there are so many variables, it’s hard to know exactly how much you need to save for retirement. One rule of thumb is to aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Check how your savings compares to ideal retirement savings by age to know if you’re on track or if you need to catch up.
Improving Financial Health
You might feel that achieving optimal financial health is a long way off. Don’t get discouraged. The good news is that implementing just a few good financial habits — such as tracking your spending and saving at least something each month -– can boost your financial well-being right away, and even more so over time.
Below are seven practical tips to help you move forward.
Get up to $300 when you bank with SoFi.
No account or overdraft fees. No minimum balance.
Up to 4.00% APY on savings balances.
Up to 2-day-early paycheck.
Up to $2M of additional FDIC insurance.
1. Get on a Budget
When it comes to money in and money out each month, many of us leave it to chance — and hope that the numbers work out. Taking some time to actually crunch the numbers and set up a monthly budget, however, can help ensure that you are living within your means, spending in line with your priorities, and working towards your future goals.
A simple way to get started is to collect the last few months of financial statements and calculate the average amount coming in (after taxes) each month, and average amount going out each month. Subtract the latter from the former and see what you get. If you’re spending more than you are bringing in, or it’s so close there is little left over for saving, you may want to take a closer look at your spending.
There are many different types of budget but one simple guideline you might consider is the 50/30/20 budget. With the approach, you divide your monthly take-home income into three categories: 50% goes to needs (essentials), 30% goes to wants (nonessentials), and 20% to savings and debt repayment (beyond the minimum payment).
2. Track Your Spending
Keeping tabs on how much you are spending each month, and on what, is crucial to financial wellness. Indeed, tracking spending can be both eye-opening and motivating. You might notice, for example, that you’re spending more than you think for certain things, or that your spending is out of line with your priorities. You might also spot some immediate areas for improvement.
One easy way to track spending is to put a budgeting app on your phone (many are free for the basic service). Budgeting apps typically connect with your financial accounts (including bank accounts, credit cards, and investment accounts), track spending, and categorize expenses so you can pinpoint exactly where your money is going.
3. Create a Plan for Debt
Credit cards and similar high-interest consumer loans can drag down your financial health by making it harder to meet your monthly expenses — and even harder to save for future goals. Paying off high-interest debt is an important investment in your financial future.
If you have multiple balances racking up high interest charges, here are two popular strategies that can help you whittle them down to zero.
The snowball method: With the snowball method, you list your debts by size then put an extra monthly payment towards the loan with the smallest balance, while continuing to pay the minimum on the others. Once the smallest debt is paid, you put your extra payment towards the next smallest balance, and so on.
The avalanche method: Using the avalanche method, you list your debts in order of interest rate then focus extra payments towards the debt with the highest interest rate, while continuing to pay the minimum on the others. Once that debt is paid off, you put your extra payments to the debt with the next-highest interest rate, and so on.
4. Look for Ways to Cut Expenses
Trimming back your expenses helps you increase your disposable income, giving you more money to put toward your goals. It also makes it easier to stick with your budget and avoid going into debt.
You might comb through your expenses to look for some easy ways to cut back. While you may assume your “needs” costs are fixed, it may be possible to shop around for a better price on certain monthly essentials, like insurance or a phone plan. Or, maybe you don’t need to drive to work but could spend less by taking public transportation or carpooling with a coworker.
It’s often even easier to find places to cut back in your nonessential sending. For example, you might decide to get take-out less often and cook more nights a week, get rid of streaming services you rarely watch, and/or jog outside instead of going to a gym. Every dollar you save is one more you can put towards saving and debt repayment.
5. Automate Saving
Tackling financial health can feel overwhelming, and it’s not likely something you want to be thinking about all the time. Fortunately, it’s easy to put one of the best financial health-boosters — saving at least something each month — on autopilot.
There are two ways to do this: One is to have a portion of your direct deposit go right into a savings account. The other is to set up a recurring transfer from your checking to your savings on the same day each month (ideally, right after you get paid). You can’t spend what you don’t see. And, chances are, you won’t even miss it.
To help your savings grow faster, consider putting this money in an online savings account. Since online institutions generally have lower overhead than traditional brick-and-mortar banks, they tend to offer better rates and low (or no) fees.
💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.
Build Your Emergency Fund
Without an emergency cash cushion, an unexpected expense (like a car repair or large medical bill) or loss of income can quickly derail your finances. You may be forced to rack up expensive credit card debt. This can put you in a debt spiral that can be difficult to get out of, and take a long-term toll on your financial health.
Even if you do have an emergency fund, it’s wise to periodically check in to make sure it’s sufficient. A good rule of thumb is to keep at least three- to six-months’ worth of living expenses in the bank. (If you’re self-employed or work seasonally, you may want to aim for six- to 12-months worth of expenses.) Ideally you want to keep this money in a savings account that earns a competitive rate but allows you to easily access your money when you need it.
Invest More of Your Income
If you’re putting just a small percentage of your paycheck into your 401(k), or other retirement fund, consider stepping it by 1% or 2% right now. While 1% is a small percentage of your annual earnings today, after 20 or 30 years it can make a big difference in your account balance when you retire. That’s because the longer you give your money a chance to grow, the better.
You might also ask your employer to automatically increase your contribution by a set percentage each year. As your income increases, those extra percentage points of income likely won’t be missed — but they’ll have a big impact on your retirement savings. Your future self will thank you.
Just as with your physical health, establishing and maintaining good habits is key to achieving good financial health.
Some habits that can significantly boost financial wellness include setting up a simple budget, tracking spending, automating savings, building an emergency cash reserve, paying down expensive debt, and investing more of your earnings.
No matter what your income or current state of financial health, putting some smart money habits into place now can go a long way toward boosting your financial security, reducing stress, and building wealth over time.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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.
