SoFi

Many people hit a period of financial hardship at some point in their lives. Maybe there’s a medical emergency and big bills, a job layoff, or a family member in serious need: These and other scenarios can put your money management in a precarious position.

Approximately 73% of Americans report feeling stressed about money, according to an April 2025 CNBC/SurveyMonkey poll. Financial stress can be triggered by anything from the high cost of living to excess debt to worrying about saving for one’s (and one’s family’s) future.

Here, you’ll learn more about what happens when financial hardship hits and how to take steps to improve the situation, from applying for assistance to negotiating with lenders to discovering new sources of income.

What is Financial Hardship?

Everyone probably has their own definition of “economic hardship” that’s based on their own needs and wants. And the federal government has its own criteria for what counts as a “hardship” when it comes to taking an individual retirement account (IRA) distribution, looking for tax relief, or requesting a student loan deferment.

But generally, a financial hardship is when an individual or family finds they can no longer keep up with their bills or pay for the basic things they need to get by, such as food, shelter, clothing and medical care.

Warning Signs

Sometimes financial difficulties can sneak up on a person, and catch them completely off guard. Other times, the warning signs have been there for a while, but were missed or ignored.

Identifying the root cause of financial distress can help give you a head start on working through your money issues. What follows are some red flags that may signal you are headed for financial difficulty or hardship.

Having Credit Card Balances at or Above the Credit Limit

While using credit cards may seem like a good way to get around a short-term lack of funds, the practice could lead to extra fees and negatively impact your credit. The percentage of available credit someone is using — known as a credit utilization ratio — can indicate to lenders how heavily they’re depending on credit cards to get by. And because it’s one of the major factors in determining a person’s overall credit score, financial advisors typically recommend keeping card balances at or below 30% of the limit.

Juggling Which Bills Get Paid Each Month

It may be tempting to skip a payment from time to time, hoping to catch up eventually — but there can be short- and long-term consequences for juggling bills. Insurance coverage may be lost. There may be a late fee, or a bill could be turned over to a collection agency.

Utilities can also be shut off, and a deposit might be required to restart the account. Making late payments on a credit card could lead to a higher interest rate on the account. And late payments and defaults can hurt credit scores.

Recommended: How to Organize Bills

Only Making Minimum Payments on Your Credit Cards

It may be necessary to make minimum payments if times are especially tight, and there likely won’t be any short-term harm. But even if you stop making purchases, just the interest charged will keep the account balance growing, possibly extending the amount of time it takes to pay down that debt by months or years.

Often Paying Late Fees or Overdraft Fees

A one-time mistake may serve as an annoying reminder to be more cautious with money management, but if late fees, overdraft and non-sufficient funds fees, and overdraft protection transfers become a regular thing, they can add another layer of worry to your financial burden. (Using alerts, automatic payments, and apps from your financial institution may offer a more effective method to track bills as well as deposits and withdrawals.)

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

Having a High Debt-to-Income Ratio

Lenders often use a person’s debt-to-income ratio — a personal finance measure that compares the amount of debt you have to your income — to determine if a borrower might have trouble making payments. If a person’s debt-to-income ratio is high, it could make it more difficult to borrow money, or to get a good interest rate on a loan.

Tapping Retirement Savings to Pay Monthly Bills

In certain cases, the IRS will allow an account holder to withdraw funds from a 401(k) or IRA to cover an immediate and heavy financial need (such as medical expenses, payment to avoid eviction or repair home damage) without paying the 10% early withdrawal penalty. But taxes will still have to be paid on those distributions. And taking that money now, instead of letting it grow through the power of compound interest, could have serious repercussions for the future.

Dealing with Financial Hardship

For those who’ve been struggling for a while, or who’ve had a sudden but substantial financial loss, it might feel as though you’ll never recover. But there are several options you might consider taking to get back on track. Some you can do for yourself, while others might require getting financial hardship help from others. And while some might be temporary, others take a longer view. Here are a few:

Reducing Monthly Spending

Creating a monthly budget can help guide your spending decisions and make the most of the money you have. This may involve prioritizing your monthly expenses, starting with the essentials and going down to the “nice to haves.” Once you’ve established which expenses are the most important, you can then look for places to cut back or things to cut out of your budget altogether. Cutbacks may not feel fun, but they can help jump-start your recovery.

For example, could you cut costs if you cooked meals yourself more often? Are you trying too hard to keep up with what friends and family are spending on clothes, vacations, and cars? Are there monthly bills that could be reduced? (For example, you might be able to save money on streaming services, internet, and phone services; manicures and other beauty treatments; or even rent, insurance, or car payments.) It may help to start by tracking expenses for a month or so to get an idea of where money is going, and then sit down and map out a more realistic path for the future.

Creating a Debt Reduction Plan

Along with a budget, it also may be useful to come up with a plan for paying down credit card balances, student loans, and other debt. It’s important to always make the minimum payment on all these bills, if possible, but a personal debt reduction plan could help with prioritizing which bill any leftover money might go toward after all the household expenses are paid each month — or the money might come from a tax refund, bonus check from work, or a gift. Knocking down debts that include high amounts of interest can eventually free up more cash to put toward short- or long-term savings goals.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Looking for Ways to Earn Extra Income

Is there a way to turn a hobby, skill, or interest into some extra funds? Maybe a favorite local business could use some part-time help. Or, if a second job is out of the question, perhaps a side hustle with flexible hours is a possibility. Writers, artists, and designers, for example, may be able to turn their talents into a side business. Babysitting the neighbor’s kids or running errands for an older person are also options. And, of course, on-demand services like Uber and DoorDash are employing drivers, delivery persons, and other workers.

Considering a Loan to Consolidate Bills

Getting a personal loan for debt consolidation won’t make money problems go away completely — but it might make managing payments a little simpler. With just one monthly payment (instead of separate bills for every credit card or loan) it can be easier to keep tabs on how much is owed and when it’s due.

Because interest rates for personal loans are typically lower than the interest rates credit card companies offer (especially if a rate went up because of late payments), the payoff process for that debt could go faster and end up costing less. (Generally, lenders offer a lower interest rate to those who have a higher credit score; borrowers who are already behind on their bills may pay a higher interest rate or have more trouble getting a loan.)

Student loan borrowers also may want to look into consolidating and refinancing with a private lender to get one manageable payment and, possibly, save money on interest with a shorter term or a lower interest rate. Refinancing may be a solution for working graduates who have high-interest, unsubsidized Direct Loans, Graduate PLUS loans, and/or private loans.

Just keep in mind: Federal loans carry some special benefits that private loans don’t offer, including public service forgiveness and economic hardship programs, so it’s important for borrowers to be clear on what they’re getting and what they might lose if they refinance.

Notifying and Negotiating

Ignoring credit card payments and other debts won’t make them disappear. Borrowers who can clearly see they’re headed for financial trouble may wish to notify their credit card company or lender and try to work out a more manageable payment arrangement. (There are debt settlement companies that will do the negotiating, but they charge a fee for their services.)

A credit card issuer may agree to a reduced, lump-sum payment or a repayment plan based on the borrower’s current income, or it may offer a hardship program with a lower interest rate, lower minimum payments, and/or reduced penalties and fees. The options available could depend on why a customer fell behind, or if they’ve had problems before.

Financial hardship assistance is sometimes offered by mortgage lenders. Because these lenders generally don’t want their borrowers to foreclose on their homes, it’s in their best interest to work with borrowers when they get in trouble. The lender may be willing to help the borrower get caught up by forgiving late payments, or they may change the interest rate of the loan or lower the payment.

If you have federal student loans and are experiencing financial hardship, you might qualify for a special repayment plan, such as pay-as-you-earn, or an income-based repayment plan.

It can also be helpful to reach out to service providers (such as water, electricity, internet) and let them know you are experiencing financial difficulties. Providers may be willing to work with you and you may be able to come to an agreement well before any shut-off actions go into effect. This can also save you from late fees, or going into collections.

Getting Financial Help

There are also a number of government programs designed specifically to help people overcome sudden financial hardships. Those who’ve lost a job may be entitled to unemployment benefits. If that job provided health insurance, you may want to look into COBRA to see if you can maintain affordable health insurance. Those who were injured at work may be entitled to workers’ compensation.

Also, some people facing financial hardship may qualify for state or federal benefits like Medicaid or Social Security Disability.

Though not free, a financial professional who specializes in planning, saving, and investing may be a worthwhile investment. They may be able to offer a fresh perspective and help create a path to financial freedom. There may also be free or low-cost debt counselors available via non-profit organizations.

Preparing for Current and Future Challenges

Once you’ve developed your personal plan for overcoming financial hardship, you can begin working on your goals of becoming more financially independent. If the cause of your hardship is temporary (you were out of work but quickly found a new job, for example), it may take just a few months to get back on your feet. If the problems are more difficult to overcome (you’ve lost income through a divorce, or you or a loved one has an ongoing medical condition that requires expensive treatment), the timeline could be much longer. Once you’ve put your plan in place, you may want to review it on a regular basis, and perhaps do some fine-tuning.

The Takeaway

Many people go through periods of financial hardship, and often for reasons that are beyond their control. But that doesn’t mean they are out of options. There are many simple and effective steps you can take. Cutting monthly expenses, consolidating debt, and getting outside assistance are moves that can help you get back on the right financial track.

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.

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

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

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

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

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

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

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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-Q225-031

Staying motivated to save money can involve simple habits like building a better budget and automating your finances. If you find your focus on setting aside cash is losing steam, these and other easy moves can help you boost your financial reserves without feeling too much of a pinch.

Whether you’re saving to realize the dream of booking a beach house next summer or putting away enough for your baby’s future education, you’ll see that there’s no mystery to being a smarter saver.

1. Finding the “Why”

Saving just to save may not be enough for some to stay motivated. Instead, it could be helpful to figure out your own personal “why.” Why are you saving, what are you saving for, and how long do you need to save to get it?

It can be easy to start saving and lose motivation when life gets in the way: The bills stack up, emergencies happen, the car won’t start, and on and on and on. However, if a person has a reason for saving, or a money goal, in the back of their mind it may be easier to stay the course.

By the way, a person’s savings motivation can be for literally anything their heart desires. Sure, it can be to save for retirement, to buy a house, or to start a family, but it can also be to go on vacation, renovate the kitchen, buy the latest mobile device, or to just have enough in the bank so they can have peace of mind. Make it whatever you want.

When finding money motivation, it can be useful to try to think about financial priorities. A person needs to pay for food, shelter, and clothing, but do they need to have a new phone? Or a new car? A new designer watch or the latest gadget? Before setting a budget and starting a new savings journey, it’s important to think about personal priorities.

2. Building a Budget

To help clarify savings goals, try building a personal budget around the priorities mentioned above. A personal budget makes a great road map for the future and can help keep you motivated to save because you know exactly where your money is going, and how it can help you get the things you want.

•   To create a budget, first, start tracking all personal spending. To do so, gather all account information and sift through a few month’s worth of expenses. Don’t forget about commonly forgotten expenses, such as birthday gifts for friends and family or insurance premiums.

•   Next, determine how to categorize expenses. Getting too granular can make it challenging to track. Consider keeping it generic with categories like “groceries,” “shopping,” “entertainment,” “health,” “home,” “bills,” “medical,” “car payment,” etc. Try to make sure every dollar spent has a home somewhere.

•   Then, plot out the next few months of anticipated expenses and see how much cash is left over. This can go into some type of savings account, such as a high-yield savings account.

•   If you want to save more, you can take a critical eye to your purchases and see where you can cut back on spending. For example, not using that gym membership? Cut it. Every little bit can help.

You can experiment with different budgeting methods. One popular one is the 50/30/20 budget rule, in which you allocate 50% of your after-tax pay to needs, 30% to wants, and 20% to savings and/or additional debt payments.

Recommended: 50/30/20 Budget Calculator

3. Saving Little by Little

Once your priorities are in focus and your budget is set, it’s time to actually start saving. Yes, it can be thrilling to drop a whole heap of cash into a savings account, but the thrill can wear off after a while. Instead, try saving little by little. This way, you won’t feel the pinch and it won’t feel like you are missing out on the fun stuff just to save for a hypothetical future.

One strategy is to automate your finances and set up recurring transfers, so that money is saved without much effort. This can help a savings account add up without feeling like an effort, which could have major effects on your motivation.

4. Try Walking Away From Impulse Spending

There are a lot of spending triggers in this world. Sales, pretty items, shiny objects, nights out, the list goes on and on. Sometimes, the best thing people can do is walk away before purchasing or saying “yes.” Take a night out with friends as one example. Before immediately responding “Sure,” you could say, “Can I get back to you?” and then really think about whether you really want to attend or if it’s just a habit. Set an alarm for 30 minutes, and decide when the timer is up. Allowing yourself a minute to step back, can help you be intentional with your spending.

For bigger purchases, people can try the 30-day rule. It’s a financial strategy that can help people regain control over impulse shopping. Basically, if you see something you want to buy but don’t necessarily need, you just stop and walk away. Not just for a minute, but for a full 30 days.

Next, write down the item you want to buy and where you can find it, along with the price. Put it away and set a calendar reminder 30 days from that date.

At the end of that timeframe, if you really still want the item, you could return and purchase it. However, after a month has passed, you may no longer feel the urge to buy or may have forgotten the item altogether. As a bonus, if you get to the end of the 30-day block and decide you no longer need the item, you could put the amount you didn’t spend into a savings account to use the money toward your priority list instead.

5. Setting Short-Term Savings Goals

Saving for long-term goals, like retirement, is important, but don’t overlook the small stuff. Setting a savings goal can help people know there is an end in sight.

One place to start is establishing an emergency fund. Having an emergency fund can provide stability should you run into, well, an emergency.

Other shorter-term goals might include things like new furniture, a vacation, or a renovation. Having these smaller goals can make saving for something as grandiose as retirement seem less intimidating.

Recommended: Guide to What Is and Isn’t a Financial Emergency

Whatever it is, find a number and stick to it. Then, once you hit that goal, you can set another and start the entire process over again.

6. Remembering to Reevaluate Every Now and Then

After setting a priority, budget, and goal, it’s important to also set reminders to reevaluate those markers from time to time too. One way to do this could be making it a New Year’s resolution to look at money goals and see if they are still in line with your personal goals.

Life changes and finances may need to change with it. It’s okay to reallocate the money already saved and put it in a new bucket.

Perhaps you began saving for a vacation but had a baby along the way and want to start saving for their college education instead. Or maybe someone switched jobs within the last year and is making more money now. They can readjust their budgets and savings plans to fit their new financial outlook. The same goes for those who may have lost work too. Reevaluating, reprioritizing, and reallocating can help make financial change more manageable.

7. Telling Others About Savings Goals

Sometimes, the best thing one can do to stay motivated is to let others know about their plans. You can let your inner circle in on your savings goals and priorities and ask those trusted few to help you stay on track.

By letting people in on plans, you can also avoid any tricky situations, like having to say “no” to events, parties, or nights out because people already know you are trying to save. The inner circle could also help keep you on the straight and narrow when it comes to wants vs. needs and help to keep financial goals in sight.

Recommended: How to Reward Yourself Without Breaking the Budget

8. Organizing Your Savings

Being able to see your savings grow is perhaps the best money motivator out there. There are a number of financial apps that can help you see your finances all in one place. Some even offer visual representations, such as bar charts and graphs, so you can see just how much your savings have grown over time. That can be very motivating!

The Takeaway

It can be easy to lose motivation when saving money, but with a little effort, you can adopt new habits to help you through. Those might include building or tweaking a budget, trying the 30-day rule, setting short-term goals, and sharing your financial goals with a few trusted friends or relatives. Using the tech tools your financial institution provides to see your money grow may also be a valuable boost.

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 can I motivate myself to save money?

Some ways to motivate yourself to save money include budgeting wisely, setting clear savings goals, tracking your spending, and automating your savings. Talking about your savings plan with trusted friends and relatives can be a wise move, too, along with giving yourself regular small rewards.

What is the 30-day rule to save money?

The 30-day rule says that, before making a significant impulse purchase, write down the item and the location in your calendar for 30 days in the future and then walk away. If, after 30 days you still want the item and can afford it, go ahead and buy it. If that “gotta have it” feeling has passed, you’ve avoided an impulse buy.

What is the basic motivation for saving?

Saving money is motivated by the desire to achieve financial and personal goals and have security. For example, you might want to save for an emergency fund, or you might be accumulating money for the down payment on a house or your child’s educational expenses.

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.

^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.

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

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

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

SOBNK-Q225-026

Often, there are two camps of people when it comes to wrangling financial documents: Some keep everything — every ATM receipt, every bank statement — sometimes in a drawer or box with little to no organizing principle. Others throw away (hopefully after shredding) just about everything that arrives in the mail.

The best approach is likely somewhere in between. Read on to learn how to keep just what you need, organize it well, and dispose of financial documents properly when they no longer serve a purpose.

The Importance of Financial Statements

“Out of sight, out of mind” is a cliché for a reason. Once taxes are filed, paychecks are deposited, and the rent or mortgage is paid, we tend to forget about these transactions, dumping the receipts in a deep file cabinet or throwing them away altogether.

However, the consequences of financial documents and bank statements stick around long after they’ve been settled. For example, the IRS can come calling years after a person files taxes if the organization suspects that income was misreported. Or, in the event of loss or damage, having a record of purchase for big-ticket items like electronics or jewelry can make it easier to file a claim.

Keeping track of financial statements can help serve as protection or proof if a transaction is challenged or misreported. Without the statement, you might spend days trying to obtain duplicate records, when you could have just had them neatly filed in the first place.

Not everything needs to be saved forever, but some things should be safely filed away for a rainy day.

What to Keep and For How Long

Like items in a grocery store, each type of financial document has its own expiration date. Some will be relevant years after they’ve been filed; others can be tossed within months. Here’s the general rule of thumb of how long you should keep each statement:

Tax-Related Documents: 3–7 Years

The IRS can audit anyone up to three years after they file if the agency suspects that an error was made in “good faith,” aka an accident.

That also applies to the opposite situation: If a filer thinks the IRS made an error, the filer can submit an amended income tax return up to three years after the fact for a refund.

Additionally, the IRS has six years to follow up on returns if it thinks the filer underreported income substantially, meaning by 25% or more. However, the IRS can go back as far as seven years in some situations.

It’s not a bad idea to keep the tax return, in addition to supporting documents, for seven years to cover your bases. That could include evidence of:

•   Retirement plan contributions

•   Charitable contributions

•   Interest payments on a mortgage

•   Alimony or child support payments

•   Records of stock sales

•   Records of home sale

Paycheck Stubs, Certain Bills, Bank/Credit Card/Investment Statements: 1 Year

If you aren’t using direct deposit for payday, you’ll want to keep your physical paychecks for a year. Once you receive your W-2 and confirm that the amounts match, the stubs can go.

Bank and credit card statements should stick around for a year, just to be safe. Budgeters can use them to compare balances month over month. It also can be a helpful habit to check over bank and credit card statements each month. It’s a chance to catch and dispute fraudulent or incorrect charges. In addition, bills for services like medical treatment and auto repair should be kept for at least for a year for reference.

Investment statements that are distributed quarterly should be kept on hand until the annual statement is revealed and the numbers are lined up.

💡 Quick Tip: Whether your check comes the first Wednesday of the month or every other Friday, if you sign up for direct deposit, you know when the money will hit your account. This is especially helpful for scheduling the payment of regular bills. No more guessing when you’ll have sufficient funds.

Purchase receipts, ATM Slips, Most Bills: 1 Month

Unless a purchase has a warranty or is tax-related, you can generally toss the receipt once it shows up on your credit card or bank statement. This is also the case for utility bills — you only need to hold on to them long enough to verify the charges on your bank account and bank statements.

As for bank deposits/withdrawals, including mobile check deposits, you can get rid of these records as soon as the transactions show up in your bank account.

Three Ways to Store Sensitive Documents

It won’t matter what you save if you don’t know where to find records in the long run. Safely storing sensitive financial documents doesn’t really mean tucking them away and forgetting about them. Here are a few ways to store and organize financial records:

•   Use an old-school filing system. Finding an affordable, fire-safe file box to keep statements in is already a massive step up from the bottom of a junk drawer. Everyone will have their own approach to logical filing, but it could be done by year, type of record, or institution the record comes from.

Some might be tempted to go extra safe and take this paperwork to a safety deposit box at the bank. However, if the documentation is needed, it won’t do a person much good sitting miles away in a bank vault. Keeping it close and safe is probably preferable.

•   Scan and save online. Many smartphones come with the capability to scan documents, and there are other well-reviewed scanning apps on the market. Those who tend to lose paper might choose to scan everything and save it online. The only hitch is keeping up with the scanning, and saving all documents to the cloud instead of just on the phone.

•   Go paperless. Many institutions offer paper-free transactions, meaning customers don’t get statements in the mail. Online banks vs. traditional banks have made this a priority. Going paperless means you don’t have to organize and file your financial records, but it’s still a good idea to come with a folder system on your computer so you can access what you need when you need it.

Recommended: Are Online Bank Accounts Safe?

The Takeaway

As a general rule of thumb, you want to keep any document that verifies information on your tax return for seven years, to play it safe. You can generally toss any non-tax-related financial documents (like pay stubs and bank/credit card statements) after one year, and get rid of monthly bills, ATM slips, and receipts for most purchases after one month.

With online banking, you can typically find past statements by logging into your account. Most financial institutions make electronic statements accessible for at least five years, and these statements usually come in printable formats. You can check with your bank to see how long it will keep your online monthly statements.

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.

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

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

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

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

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

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

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

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

SOBNK-Q225-029

A money order is a secure way to send money to another party without using cash or a personal check. It’s often used when the recipient wants a fast, guaranteed form of payment, or when you don’t have access to a bank account. You pay for the money order up front, which ensures the funds are there when the recipient cashes it.

Read on for a closer look at how money orders work, their pros and cons, and how they compare to other forms of payment like a personal check, cashier’s check, or wire transfer.

What Is a Money Order?

A money order is a paper document that guarantees the recipient will receive a specific amount of money, generally up to $1,000. Because it’s not tied to a bank account, a money order can be a safer option than a personal check when paying someone you don’t know well. It can also be a good payment option if you don’t have a bank account, since you don’t need to have access to a checking account to get a money order or cash one.

You can buy a money order for a small service fee from many banking institutions and other locations. To fill out a money order, you typically need to provide the recipient’s name and address, as well as your own name and address. You’ll have an option to add notes to the memo field (such as what the payment is for or an order/account number that identifies the bill being paid), and will need to sign the front of the money order.

Typically, you can pay for a money order with cash or a debit card. In some cases, you may be able to buy a money order with a credit card, but keep in mind this may count as a cash advance, which typically comes with interest and fees. However you pay, you’ll need enough money to cover the value of the money order plus any issuing fees.

You’ll get a receipt for the money order that has a tracking number you can use to verify that the money order got to the recipient. It’s wise to keep this in a safe place until the money order has cleared. Should the money order get lost or stolen, you’ll need the tracking number to replace it.

Where to Get a Money Order

Many banks and credit unions offer money orders, though you generally need to be an existing customer to purchase one. These institutions usually charge a fee of around $5, but the fee may be waived for premium account holders.

You can also purchase a money order at some large retailers (like Walmart), convenience stores, grocery stores, drug stores, stores that offer check cashing or money services (like MoneyGram or Western Union), and at a U.S. Post Office. Fees vary by issuer. Walmart tends to have the lowest fees — up to a maximum of $1. Postal Service fees, at the time of publication, are $2.35 for a money order of up to $500, and $3.40 for one between $500 to $1,000.

Advantages of a Money Order

Money orders can be a useful financial tool for several reasons:

•  Security: A money order is safer than cash, since it can only be used by its intended recipient. And since it’s prepaid, there’s no risk that a money order could bounce due to insufficient funds. This form of payment also offers privacy, since it doesn’t include sensitive personal information like your bank account and routing number.

•  Accessibility: Money orders are available to anyone, including those who are unbanked. You don’t need a bank account or credit history to use this form of payment — you can use cash or a prepaid debit card to buy a money order. Money orders also offer flexibility for recipients, since you can cash them at multiple locations (such as your bank or a check-cashing store).

•  International use: Some money orders can be sent internationally, making them a simple and secure way to send money overseas. Just keep in mind that not all providers offer international money orders. And as of October 1, 2024, the United States Postal Service no longer sells international money orders.

•  Paper trail: Each money order includes a receipt and tracking number. This makes it easy to trace the transaction if the recipient claims they did not receive the money or if it gets lost in the mail. Just keep in mind that you’ll likely need to pay a hefty processing fee to replace a lost or stolen money order.

Disadvantages of a Money Order

While money orders can be useful, they are not without their drawbacks:

•  Fees: While the fees are small, they can add up — especially if you need to send multiple money orders. If you receive a money order, you also typically need to pay a fee for cashing a money order somewhere other than your own bank or credit union.

•  Payment limits: Domestic money orders typically cap out at $1,000. If you need to send more, you’ll need to buy multiple money orders and pay separate fees for each one.

•  Inconvenience: You must travel to a physical location and speak with someone in person to purchase a money order, then deliver or mail it to the recipient, all of which can be time-consuming. You can’t complete the transaction online.

•  Use in scams: Money orders can potentially be forged or used in banking scams. If you deposit a money order from someone you don’t know in the bank, it’s a good idea to wait until the money clears before spending it. Also be wary of sending a money order to an unknown party — once it’s cashed, it can be difficult (if not impossible) to get your money back, even if it was due to a scam or fraud.

Recommended: How to Deposit a Check

Alternatives to Money Orders

Depending on your needs, you might consider other options for sending and receiving money:

•  Cashier’s check: Issued by banks, a cashier’s check is backed by the institution’s own funds and generally has no upper limit. This form of payment can work well for larger dollar amounts, preventing the need for buying multiple money orders, and some payees specifically request them. However, you generally need to have an account at the issuing bank, and fees tend to be higher than those for money orders.

•  Personal checks: If both parties have bank accounts and trust each other, a personal check can be a simple and free way to make a payment. They’re easy to track and don’t incur fees. However, they can bounce if the payer does not have sufficient funds in their account.

•  Wire transfers: A wire transfer is a way to electronically move funds from one person’s bank account to another person’s account, often within the same day. Wire transfers can be a good way to send large sums of money quickly, but are generally more expensive than money orders.

•  Mobile payment apps: Apps like Venmo and PayPal offer instant, convenient ways to send money digitally. These can be ideal for personal use but may not be accepted in formal transactions or by certain businesses.

•  Bank transfers: You can make a payment directly from your bank account to a merchant’s account through online banking. This can be a good choice for regular payments, such as rent or utility bills. It’s free and fast, but does require both parties to have bank accounts.

The Takeaway

Money orders can be a useful payment method when you need to send money securely. They don’t include your bank account number and can’t be rejected for insufficient funds. And unlike cash, only the recipient can use it.

But money orders typically come with caps and fees. They also require a fair amount of legwork to buy and send. For large or frequent transactions, a cashier’s check, online payment, or payment app may be more efficient and cost-effective.

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

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

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

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

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

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

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

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

SOBNK-Q225-030

There are times in life when you might wonder if you should merge bank accounts. One obvious trigger is marriage: You and your spouse may decide to combine all or some of your accounts into joint reserves. Or perhaps you have a number of bank accounts, and they are becoming unwieldy. Maybe you opened one in college, then another when you moved to start your first job, and then yet another to get a special promotional bonus.

Whatever you’re craving financial simplicity or otherwise need a fresh approach to your accounts, read on for learn how to combine bank accounts, plus a look at the pros and cons of merging multiple accounts into one.

How to Combine Bank Accounts in 4 Steps

If you decide that merging bank accounts is the right step for you, here’s how to make it happen:

1. Decide Where to Keep Your New Account

Whether you are downsizing for yourself or joining two individuals’ finances together, a good first step is to decide where you want to open your new account. You might start by comparing offerings at traditional vs. online banks, looking at specifics like interest rates, fees, and minimum balance requirements.

If you or your spouse have multiple accounts across different financial institutions, you could evaluate which institution is offering the best benefits and lowest fees. You might stick with the one existing account you like best or potentially open a joint account somewhere new.

2. Start Shifting Accounts

Here’s the next step in how to combine bank accounts: If you’ve decided you want to combine accounts, you could start moving your direct deposits, automatic credit card payments, and other similar transactions over from your old accounts to the new one. You might also want to make sure any subscriptions or other deductions are switched over as well.

Recommended: How to Switch Banks

3. Check That Your Account Is Up and Running

After about a month, you might want to double-check and make sure that everything has transferred properly. You don’t want to end up paying a late fee or have a check bounce because you weren’t monitoring your accounts.

Once you see that all your scheduled payments, deposits, and withdrawals are happening in your new account, it’s time to transfer any remaining money in the old account/accounts to your new account. It’s generally easiest to do this via online bank-to-bank transfer.

4. Close the Unnecessary Accounts

The final step in combining bank accounts is to close the old account or accounts. This might involve a trip to a branch in person. Or, you may be able to close an account simply by calling your institution or logging into your online banking portal. If there is anything left in your old account, the bank will typically issue you a check for the remainder.

Recommended: Guide to Reopening a Closed Bank Account

Benefits of Combining Bank Accounts

If you’re wondering whether to merge bank accounts, it can be helpful to consider the pros and cons of combining accounts. Here, the upsides:

Drawbacks of Merging Your Accounts

Now, consider the downsides of merging accounts:

If you’re concerned about only having a joint account, you could open a joint account specifically for shared bill management with each person depositing a specific amount every month.

You could even have three separate checking accounts — yours, mine, and ours — maybe if one person is a spender and one is a saver. That way, both people manage their checking accounts on their own.

The Takeaway

To combine bank accounts, start by deciding on which account you want to keep or where you want to open a new bank account. Next, you’ll need to transfer direct deposits and recurring payments to the chosen/new account. Once everything has been successfully moved over, you can transfer any remaining funds from your old account(s) to your chosen/new account and close the account(s) you no longer need.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can you merge two bank accounts together?

Yes, you can combine bank accounts. You can do this either by transferring the funds from one account into the other one, or by opening a new account and transferring the funds from both old accounts into the new one. Once you’ve updated any direct deposits or automated transfers, you can close the old account(s).

When should you combine bank accounts?

You may want to combine bank accounts when you get married, if that suits your and your spouse’s financial needs and style. You might also merge accounts if you find you have multiple accounts and want a more simplified financial life.

How do you link two bank accounts from different banks?

You can link accounts at two different banks without merging them. Typically, you can do this on your financial institution’s website or app. You’ll look for the option that says “link external accounts,” and you’ll need the bank routing and account numbers of the external bank account handy.

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

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

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

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

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

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

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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-Q225-032