Mar
23
2023
How Does Unemployment Work?
Losing a job can be scary, but help is out there. For many, it starts with getting unemployment benefits.
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Student Loan Consolidation and Refinancing
Mar
21
2023
What You Need to Know About Foreign Currency Bank Accounts
A foreign currency bank account, also known as a multicurrency account, can facilitate transactions made in foreign currencies; that is, not in U.S. dollars. This can be a significant benefit for businesses. They may use multicurrency (or foreign currency) bank accounts for international transactions as well as to support operations overseas. This can offer a major convenience because of the flexibility with different currencies.
But these multicurrency accounts aren’t just for businesses. Some Individuals may also want to fund a bank account with foreign currency in certain situations. Read on to learn more about this topic, including:
• What a foreign currency account is
• How to open a multicurrency account
• The pros and cons of a foreign currency account
• The fees associated with this kind of bank account
What Is a Multicurrency Account?
A foreign currency bank account, or multicurrency account, is an account that’s designed to hold money denominated in foreign currencies. It may also be referred to as a borderless account. It is a simpler way to deal with regular deposits of foreign currencies.
The types of currencies accepted for deposit or used for withdrawals can be determined by the bank. Some of the currencies your bank may process include:
• Australian dollars (AUD)
• Canadian dollars (CAD)
• Euros (EUR)
• Great Britain pound sterling (GBP)
• Japanese yen (JPY).
As mentioned, foreign currency accounts can be opened for business or personal reasons. Businesses that operate globally may require these accounts in order to send payments to vendors or receive payments from international clients.
You might open a foreign currency account for yourself, as an individual, in a few different circumstances. Perhaps you live or are working abroad, Or maybe you regularly make payments overseas or need to send money to friends and family internationally.
How Does a Multicurrency Account Work?
With a multicurrency account, you are able to deposit, hold, and send money in different currencies, just as the name implies. Depending on the financial institution, you may be able to earn interest on deposits, as well.
You may be able to convert funds back and forth into foreign currencies as needed without paying the usual fees associated with these operations.
A multicurrency bank account that’s set up as a savings account might follow typical savings account rules. For example, the bank may limit you to six withdrawals from the account per month (though these regulations have been loosened since the COVID-19 pandemic; check with your financial institution). If that limit applies and you exceed it, the bank may impose an excess withdrawal fee. Keep in mind that any fees assessed for a foreign currency account may be processed in U.S. dollars.
Multicurrency accounts at Federal Deposit Insurance Corporation (FDIC) member banks enjoy FDIC protection, up to the established limit. The FDIC insures banking customers up to $250,000 per depositor, per financial institution, per ownership category. This may well reassure you about the safety of your funds.
One thing to note is that foreign currency bank accounts aren’t used for forex trading. If you’re interested in trading foreign currency as an investment, you’d need to open a separate brokerage account for that. There are a number of online brokerages that offer the option to trade forex alongside other investments, such as stocks and exchange-traded funds (ETFs).
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Typical Requirements to Apply for a Foreign Currency Bank Account
If you’re interested in opening a foreign currency account, it’s important to know what documents you’ll need. That way, you can gather the necessary materials and speed through the application process. The specifics can vary from bank to bank but generally, you must:
• Be of minimum age to open an account, typically 18 or 19
• Have a valid, government-issued form of identification
• Provide identifying information, including your name, address, date of birth and Social Security number
• Meet minimum-deposit requirements
• Provide proof of income and employment
The requirements to open a foreign currency account aren’t that different from those for a foreigner opening an account in the U.S. Whether you can apply for a foreign currency bank account online or not will depend on the bank. Some banks do allow you to start the application online, while others require you to open an account over the phone or in-person at a branch. Check with yours to learn the exact protocol.
You may also need to already have at least one other account open with the bank before you can apply for a multicurrency account. If the bank imposes this requirement, you may also need to maintain a specific minimum balance in that account to qualify.
Pros of Foreign Currency Account
If you’re curious about multicurrency accounts, it may well be because you are tangled in some red tape as you try to bank in, say, both U.S. dollars and euros. A foreign currency bank account can help meet certain money management needs, like toggling back and forth between two kinds of currency.
Here, the pros of multicurrency accounts.
• When you deposit funds into your account, you can hold it as multiple currencies, including leftover foreign currency from travel, in one place. You don’t have to exchange foreign currency before you can use it.
• You typically avoid foreign transaction fees you might otherwise incur.
• Being able to switch among different currencies could allow you to leverage the most favorable exchange rates.
• You may be able to earn interest on your balances.
• If the institution where your account is has FDIC insurance, you are covered for $250,000 per depositor, per ownership category, in the rare event of a bank failure.
• Multicurrency bank accounts can be used for personal or business purposes.
• Sending payments or money in foreign currencies can be more convenient.
A foreign currency account could also come in handy if you travel. You can use a linked debit card to make purchases or withdraw cash in each country you visit, without having to get traveler’s checks from your bank.
So how do traveler’s checks work? If you’ve never used them, you might not know that these are paper financial instruments that can be used the same way you would a paper check or cash. Thanks to the convenience of credit cards and debit cards, however, travelers don’t need to rely on them as much to make payments when visiting destinations outside the U.S.
Cons of Foreign Currency Account
While a multicurrency bank account might be appropriate in some situations, there are a few drawbacks to consider. Specifically:
• Your financial institution might charge you account and minimum balance fees the same as you might pay for any other bank account.
• Interest rates and APYs may be low.
• Initial deposit requirements or minimum balance requirements may be on the higher end.
• Changing currency rates can affect the value of the money in your account.
Another drawback of foreign currency accounts is that not all banks offer them. And some banks may only offer these accounts for businesses, not individuals.
Multicurrency Account Fees
Foreign currency accounts can have fees, just as any other type of bank account may. Depending on the bank, some of the fees you might pay include:
• Monthly maintenance fees
• Excess withdrawal fees (for savings accounts)
• Overdraft or non-sufficient funds (NSF) fees
• Foreign transaction fees
• Currency conversion fees
When comparing multicurrency bank accounts, take time to review the details thoroughly. It’s important to understand which currencies you can hold, which fees you might pay, and whether you’re required to maintain a minimum balance in the account.
Once you’ve scoped those details out, see if the benefits of this kind of account will outweigh the fees. It could wind up being a good way to simplify your banking life if your financial life requires frequent foreign transactions.
The Takeaway
Foreign currency accounts can simplify money management if you regularly send or receive money in currencies other than U.S. dollars. Opening one of these multicurrency bank accounts is not that different from opening any other type of account. It can be a major convenience if your daily life involves receiving and/or sending funds overseas — and a good way to take control of your international financial life.
If you’re looking for checking and savings accounts for your everyday finances, try banking with SoFi. Our Checking and Savings Accounts, when opened with direct deposit, offer you all kinds of terrific perks, like a competitive APY, zero account fees, and, for qualifying accounts, access to your paycheck up to two days early. Plus you’ll enjoy the ease of spending and saving in one convenient place.
FAQ
What is the purpose of a multicurrency account?
A multicurrency or foreign-currency bank account allows you to receive, hold, and send funds in more than one currency. This can be convenient for businesses and individuals who frequently make international transactions and would like to have an account that recognizes multiple currencies.
What types of banks offer multicurrency accounts?
Many but not all banks offer multicurrency accounts. Some of the U.S. banks that offer foreign currency accounts at press time include Citi, HSBC, and TIAA Bank. For businesses, Wells Fargo and PNC offer foreign currency accounts. You can contact your current bank to find out if multicurrency accounts are available.
How does a multicurrency account work?
A multicurrency bank account allows you to deposit, keep, and send funds in more than one currency. You can decide if you keep the funds in different currencies or convert them. This kind of account can help you conduct international transactions without necessarily paying all the usual fees involved.
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SoFi members with direct deposit activity can earn 4.50% 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 4.50% 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 4.50% 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 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://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.
SOBK0123030
Mar
08
2023
How to Study for the MCATs
So you want to go to medical school and become a doctor? Then you know that the MCAT, a rigorous test, is likely in your future. Since it’s an important qualifying test for medical school and can be challenging, you likely want to arm yourself with info and prepare well for it.
Here, you’ll learn some of the most important information, such as:
• What are the MCATs
• How to start studying for the MCATs
• How to pay for the MCATs and medical school.
Read on, and hey: You’ve got this!
What Are the MCATs?
MCAT stands for Medical College Admission Test® (MCAT®). The test, which the Association of American Medical Colleges (AAMC) creates and administers every year, is multiple-choice and standardized. Some important facts:
• Medical schools have been utilizing it for more than 90 years to determine which students should gain admission.
• Most medical schools in the United States and some in Canada will require that students take the MCATs. Every year, more than 85,000 prospective medical school students take it.
• There are four sections to the MCATs:
◦ Critical analysis and reasoning skills
◦ Biological and biochemical functions of living systems
◦ Chemical and physical foundations of biological systems
◦ Psychological, social, and biological foundations of behavior.
• Students will receive five scores: one for each section, and then one total score.
◦ In each section, they can get a score ranging from 118 to 132, and the total score ranges from 472 to 528.
◦ Generally, a competitive MCAT score is a total of 511 or above, which would place a student in the 81st percentile.
The average MCAT score for all medical school applicants is currently 501.3. Usually, students will receive scores 30 to 35 days after they take the exam.
Keep in mind that MCAT scores, while important, are just one part of a medical school application. Medical schools often review other factors, including things like a student’s:
• GPA
• Undergraduate coursework
• Experience related to the medical field, including research and volunteer work
• Letters of recommendation
• Extracurricular activities
• Personal statement.
Because of this array of inputs, If a student has a high GPA from a competitive undergraduate school, for instance, and they don’t score very high on the MCATs, they may still have a chance of getting into a medical school.
Getting a competitive score on the MCAT can give applicants an edge, especially when applying to ultra-competitive medical schools. One way students can help improve their chances of getting a desirable score on the MCAT is to learn how to study for the unique demands of this test.
💡 Quick Tip: Ready to refinance your student loan? You could save thousands.
Studying for the MCAT
One of the first things a student can do when determining how to prepare for the MCAT is to create a study plan. A well-crafted study plan will review what materials the student should review in order to prepare for the exam.
That said, there’s no one best way to prep for the MCAT. Consider these options; you might use one or a variety of techniques.
The AAMC Website
One great place to get started is the AAMC website, which provides an in-depth outline of the test on their website. Obviously, the same questions students will see on the actual exam won’t be listed, but sample questions that are similar to the real questions are. Students may find helpful tutorials and other content as well.
Online Resources
There are a variety of other online resources students can explore to help them review. For example, the AAMC currently recommends students take a look at Khan Academy’s MCAT Video Collection, where there are more than 1,000 videos as well as thousands of questions that students can use to review.
There are also MCAT study apps like MCAT Prep from Varsity Tutors and MCAT Prep by Magoosh that students can download and use to study.
Books, Textbooks, and Class Resources
How else to prep for the MCATs? It may also help to buy or borrow books from the library that go into detail on the MCAT. One word of advice: Students should just make sure that the books they’re reading are up to date. Information (and the MCAT) get refreshed often; you don’t want to be studying yesterday’s medical data.
It can also be helpful to review class notes and study guides from courses you’ve taken that are related to MCAT materials. Some schools have study groups and other academic support resources for students who are studying for the MCAT. If you’re currently enrolled in classes, take a look to see what might be offered at your campus. You might luck out with some great ways to learn more.
Practice Tests
AAMC offers official sample MCAT practice exams online. You can access two for free, and others for a cost of $35 each. Taking practice tests can help students familiarize themselves with the exam. Taking practice tests can also be important in helping students understand the timing of each section.
Study Groups and Tutors
Here are other ideas for how to start studying for the MCAT:
• Getting an MCAT tutor who has taken the test could also be helpful. A tutor will generally be able to provide guidance on what kind of questions a student can expect. Plus, they will likely have hands-on experience with effective methods and tips for studying.
If you decide that how to prep for the MCAT should involve a tutor, ask friends and fellow students who have taken the MCATs recently for recommendations. There are also test preparation companies that provide resources for students to find tutors online or in person. Do check reviews and references.
• Study groups can also be a tool to help students who are preparing for the MCATs. Students can find others who are on the same path and work together to build proficiency. If possible, find a group where each student has a different strength and weakness. This can maximize students learning from one another.
• It may help to use a shared calendar or another tool to make sure everyone is on the same page for dates, times, and locations for when the study group will meet.
• Want to find a study group as part of how to prepare for the MCATs? Search engines, professors’ recommendations, school bulletin boards/online groups, and fellow students are good bets.
💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.
Important Dates to Keep in Mind
Now that you know the ins and outs of preparing for the MCAT, what about taking the test itself? Students can take the MCATs several times throughout the year, from late January through September. There are hundreds of test locations around the U.S. and Canada as well as select locations around the globe.
If a student’s preferred MCAT test date or location is not available, they can sign up for email notifications to see if it becomes available down the line.
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Paying for the MCATs and Medical School
As you explore the best way to prepare for the MCAT and plan your medical school journey, you’ll likely be keeping costs in mind. Here are details to note.
Paying for the MCATs
The registration fee for the MCAT exam is $330, and that includes distribution of scores. There may be additional fees for changes to a registration, a late registration, and for taking the test at international sites.
The AAMC does offer a Fee Assistance Program to students who are struggling to pay for the test and/or medical school applications. To be eligible for the Fee Assistance Program, students must meet the following eligibility requirements:
• Be a US Citizen or Lawful Permanent Resident of the US.
• Meet specific income guidelines for their family size.
Note that the Fee Assistance Program will review financial information of the student and the student’s parents, even if the student is considered independent.
Keep in mind that along with the MCAT fee, applying to medical school can be quite expensive. Most medical schools in the US utilize the AAMC’s American Medical College Application Service® (AMCAS®). To apply to medical schools, students will generally pay a first-time application fee of $170, as well as $40 for each additional school.
Some medical schools may require a secondary application, and those fees range depending on the school. Students may also need additional money to travel to and tour schools.
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Medical School Costs
The application process is just one portion of the expense of med school. After being accepted, there’s the cost of tuition, books, and more, and these medical school costs have been rising steeply lately.
• The average cost of the first year of medical school at a public school with in-state tuition is $67,641, which includes tuition, fees, and living expenses.
• The average cost for the first-year at a private medical school is $93,186. The average debt for medical school graduates is currently $202,453. Debt after medical school can go even higher when you add in undergraduate loans.
Obviously, that’s a significant number and can make you wonder how to pay for medical school. First, do remember that medical school is a path to a rewarding and challenging career, as well as potentially a lucrative one. The average medical school graduate earns more than $150,000, with high earners enjoying salaries above the $400K mark, according to ZipRecruiter data.
Paying for School with the Help of SoFi
Paying for the MCATs and medical school can be a challenge. SoFi understands this, which is why they offer students private student loans and the opportunity to refinance their current student loans.
Keep in mind, however, that if you refinance with an extended term, you may pay more interest over the life of the loan. Also note that refinancing federal student loans means forfeiting their benefits and protections, so it may not be the right choice for everyone.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
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.
SOSL1123006
Mar
02
2023
2024 Salary Inflation Calculator Table with Examples
Inflation’s effects have been especially obvious over the past couple of years, thanks to the soaring prices of groceries, gas, rent, and childcare. But even when inflation is low, it can have an impact on your finances.
“Inflation” means the same amount of money will pay for less in the future, and that change can happen quickly or slowly. Either way, unless your pay raises are keeping pace with the rising cost of living, you can expect your purchasing power to erode. To compensate, you may have to downsize your lifestyle or your long-term goals.
A salary inflation calculator is a specialized tool that can help you understand the impact inflation has on your paycheck, from year to year or over decades. Read on for more information on historic and current inflation rates, how to use an inflation calculator to assess your salary, and how to plan for what’s next.
What Is a Salary Inflation Calculator?
A salary inflation calculator can be used to illustrate the effect inflation has on your hard-earned money. It shows you how much buying power your salary (if unchanged) gained or lost from one year to the next. Or you can use it to gauge how well your salary has held up over a period of several years.
For example, you can enter how much you made in December 2021, and calculate how much more that salary would have to be in December 2022 to maintain the same purchasing power. (Although you might not want to know.) Or you can spread the dates out further, from 2012 to 2022.
There are several different versions of salary inflation calculators online. The U.S. Bureau of Labor Statistics (BLS) provides one that’s both reliable and easy to use at https://www.bls.gov/data/inflation_calculator.htm.
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Historical Inflation Rates, Compared
To make its inflation calculations, the BLS uses the Consumer Price Index, which measures the overall change in consumer prices based on a representative basket of goods and services over time. The BLS began collecting spending data in 1917, and with a few tweaks over the years to update its process, continues to do so today.
The table below shows the annual rate of inflation from 1920 to present. The first column notes the year the data was collected; the second column represents the Consumer Price Index for All Urban Consumers (CPI-U) for that year; and the third column shows the annual percent change/annual rate of inflation.
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| Year | Annual Average CPI-U | Annual Percent Change (Rate of Inflation) |
|---|---|---|
| 1920 | 20.0 | 15.6% |
| 1921 | 17.9 | -10.9% |
| 1922 | 16.8 | -6.2% |
| 1923 | 17.1 | 1.8% |
| 1924 | 17.1 | 0.4% |
| 1925 | 17.5 | 2.4% |
| 1926 | 17.7 | 0.9% |
| 1927 | 17.4 | -1.9% |
| 1928 | 17.2 | -1.2% |
| 1929 | 17.2 | 0.0% |
| 1930 | 16.7 | -2.7% |
| 1931 | 15.2 | -8.9% |
| 1932 | 13.6 | -10.3% |
| 1933 | 12.9 | -5.2% |
| 1934 | 13.4 | 3.5% |
| 1935 | 13.7 | 2.6% |
| 1936 | 13.9 | 1.0% |
| 1937 | 14.4 | 3.7% |
| 1938 | 14.1 | -2.0% |
| 1939 | 13.9 | -1.3% |
| 1940 | 14.0 | 0.7% |
| 1941 | 14.7 | 5.1% |
| 1942 | 16.3 | 10.9% |
| 1943 | 17.3 | 6.0% |
| 1944 | 17.6 | 1.6% |
| 1945 | 18.0 | 2.3% |
| 1946 | 19.5 | 8.5% |
| 1947 | 22.3 | 14.4% |
| 1948 | 24.0 | 7.7% |
| 1949 | 23.8 | -1.0% |
| 1950 | 24.1 | 1.1% |
| 1951 | 26.0 | 7.9% |
| 1952 | 26.6 | 2.3% |
| 1953 | 26.8 | 0.8% |
| 1954 | 26.9 | 0.3% |
| 1955 | 26.8 | -0.3% |
| 1956 | 27.2 | 1.5% |
| 1957 | 28.1 | 3.3% |
| 1958 | 28.9 | 2.7% |
| 1959 | 29.2 | 1.08% |
| 1960 | 29.6 | 1.5% |
| 1961 | 29.9 | 1.1% |
| 1962 | 30.3 | 1.2% |
| 1963 | 30.6 | 1.2% |
| 1964 | 31.0 | 1.3% |
| 1965 | 31.5 | 1.6% |
| 1966 | 32.5 | 3.0% |
| 1967 | 33.4 | 2.8% |
| 1968 | 34.8 | 4.3% |
| 1969 | 36.7 | 5.5% |
| 1970 | 38.8 | 5.8% |
| 1971 | 40.5 | 4.3% |
| 1972 | 41.8 | 3.3% |
| 1973 | 44.4 | 6.2% |
| 1974 | 49.3 | 11.1% |
| 1975 | 53.8 | 9.1% |
| 1976 | 56.9 | 5.7% |
| 1977 | 60.6 | 6.5% |
| 1978 | 65.2 | 7.6% |
| 1979 | 72.6 | 11.3% |
| 1980 | 82.4 | 13.5% |
| 1981 | 90.9 | 10.3% |
| 1982 | 96.5 | 6.1% |
| 1983 | 99.6 | 3.2% |
| 1984 | 103.9 | 4.3% |
| 1985 | 107.6 | 3.5% |
| 1986 | 109.6 | 1.9% |
| 1987 | 113.6 | 3.7% |
| 1988 | 118.3 | 4.1% |
| 1989 | 124.0 | 4.8% |
| 1990 | 130.7 | 5.4% |
| 1991 | 136.2 | 4.2% |
| 1992 | 140.3 | 3.0% |
| 1993 | 144.5 | 3.0% |
| 1994 | 148.2 | 2.6% |
| 1995 | 152.4 | 2.8% |
| 1996 | 156.9 | 2.9% |
| 1997 | 160.5 | 2.3% |
| 1998 | 163.0 | 1.6% |
| 1999 | 166.6 | 2.2% |
| 2000 | 172.2 | 3.4% |
| 2001 | 177.1 | 2.8% |
| 2002 | 179.9 | 1.6% |
| 2003 | 184.0 | 2.3% |
| 2004 | 188.9 | 2.7% |
| 2005 | 195.3 | 3.4% |
| 2006 | 201.6 | 3.2% |
| 2007 | 207.3 | 2.9% |
| 2008 | 215.3 | 3.8% |
| 2009 | 214.5 | -0.4% |
| 2010 | 218.1 | 1.6% |
| 2011 | 224.9 | 3.2% |
| 2012 | 229.6 | 2.1% |
| 2013 | 233.0 | 1.5% |
| 2014 | 236.7 | 1.6% |
| 2015 | 237.0 | 0.1% |
| 2016 | 240.0 | 1.3% |
| 2017 | 245.1 | 2.1% |
| 2018 | 251.1 | 2.4% |
| 2019 | 255.7 | 1.8% |
| 2020 | 258.8 | 1.2% |
| 2021 | 271.0 | 4.7% |
| 2022 | 288.6 | 6.5% |
| Data courtesy of the U.S. Bureau of Labor Statistics | ||
How to Calculate Salary Adjusted for Inflation
Probably the easiest way to calculate your income’s buying power adjusted for inflation is to use an online inflation calculator. Simply enter the starting year of your choice, your salary in that year (before or after taxes), and the current year. Then the calculator will do the math for you.
For example, if you made $60,000 in December 2018 and you want to see the inflation-adjusted equivalent for December 2022, just plug in those numbers. The calculator will tell you the inflation-adjusted amount is $70,881.69.
What does that mean for you? In a perfect world, companies help valued employees combat inflation with appropriate annual pay increases. If you haven’t had a pay bump since 2018 and you’re ready to talk to your employer about a raise, you might mention that $70,881.69 is the minimum it would take to keep up with the increased cost of living. And if you’re in a field where employers are offering competitive pay and benefits to attract good candidates, you might be able to negotiate for even more.
What Is Inflation and How Does It Work?
Inflation occurs when the cost of goods and services increases — not in just one or two categories, but across the economy — and consumers’ buying power decreases. As a result, it becomes necessary to earn more just to maintain the same standard of living.
A mild to moderate inflation rate is considered healthy for the economy. It can encourage consumers to buy now rather than later if they expect prices could go higher. Factories may produce more to meet demand from stores that are selling more. Hiring and wages tend to go up. And more people may be motivated to invest their money to grow it for the future.
The Federal Reserve’s target inflation rate is 2% over the long term, and the U.S. hadn’t strayed far from that so-called “sweet spot” for decades — until recently. A number of factors can cause inflation to increase to an uncomfortable level, and thanks to a pandemic-related perfect storm (supply chain issues, stimulus payments, soaring gas prices, and an employment rollercoaster), that’s where we are now.
Still, the U.S. economy isn’t anywhere close to hyperinflation, when prices rise uncontrollably, typically at rates of more than 50% per month.
How Is Inflation Calculated?
The BLS and the Bureau of Economic Analysis (BEA) both track inflation, and use similar methods and formulas. But because the data they use comes from different sources, their results aren’t the same.
• The BLS calculates Consumer Price Index (CPI) inflation by tracking what Americans are actually buying. The government uses the CPI to make inflation-related adjustments to certain federal benefits, such as Social Security.
• The BEA calculates Personal Consumption Expenditure (PCE) inflation using information reported by the companies that sell goods and services instead of the consumers who purchase them. The Federal Reserve focuses more on PCE inflation, but also considers other economic data when setting monetary policy.
Recommended: Should I Sell My House Now or Wait?
How Inflation Impacts You
High inflation can have an immediate impact on your budgeting and spending, and no one likes that much. But your feelings about whether inflation is good or bad may depend on where you are in life and how your overall finances are affected.
• If you’re a first-time homebuyer, for example, higher prices and rising mortgage rates could be pushing your dream out of reach.
• People with high credit card debt can be negatively affected by inflation. As the Federal Reserve continues to raise the federal funds rate in an effort to cool the economy, borrowers can expect the annual percentage rate (APR) on their revolving credit to increase.
• Savers, on the other hand, may benefit as financial institutions slowly begin offering a higher annual percentage yield (APY) on savings accounts, money market accounts, and certificates of deposit.
• That may sound like especially good news to risk-averse retirees looking for a safe investment. But retirees on a fixed income are typically among the first to feel the painful squeeze of inflation.
• So are small business owners, who often have to deal with higher costs for goods and services, employees who want cost-of-living increases, and customers who aren’t happy when their prices go up to cover those expenses.
• Homeowners may not like the high prices they encounter when shopping for goods and services. But on the plus side, inflation may be pushing up the value of their home and their home equity. And if they have a fixed-rate mortgage, they may find some comfort in knowing they’re paying less for that loan than they did when they took it out.
Recommended: Does Net Worth Include Home Equity?
The Takeaway
Using a salary inflation calculator can help consumers understand how the rising cost of living might affect their finances. If paychecks can’t keep up with the cost of living, they might have to downsize, adjust their plans, or practice financial minimalism for a while.
Inflation can be calculated in different ways, depending on the organization and its purpose. For instance, the Bureau of Labor Statistics (BLS) measures inflation by the Consumer Price Index (CPI), which tracks household purchases. The information is used to make adjustments to federal benefits such as Social Security.
If inflation is affecting your bottom line, SoFi’s money tracker app can help you get a better handle on your budget. Set up spending categories, track your money, and monitor your credit score. All in one place, and at no cost.
FAQ
What will $100,000 be worth in 10 years with inflation?
It’s difficult to predict what $100,000 could be worth 10 years from now without knowing what inflation will look like in the future. But let’s say the average inflation rate levels out to a moderate 3% over the next decade. If that’s the case, it will take about $134,392 in 2033 to have the same buying power as $100,000 has in 2023.
How much would $50,000 in December 2018 be worth in December 2022 with inflation?
If you had $50,000 in December 2018, it would take about $59,068 to have the same purchasing power in December 2022.
What is $120,000 in 2000 worth today?
If you made $120,000 in 2000, you’d have to make $204,688 to have the same buying power today.
Photo credit: iStock/Prostock-Studio
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Mar
02
2023
Benefits of Working From Home for Employees
Since 2020, work-from-home opportunities have become easier to find. While it can take some adjustments on both sides, working from home has significant benefits for employees and employers.
Read on to learn some of the advantages of work-from-home roles, as well as how to find these jobs.
What Are the Benefits of Remote Work for Employees?
While no two jobs are exactly alike, you can generally expect these benefits in working from home.
• Workday flexibility. Depending on company policy, you may be less tied to your desk while working from home during the day. That could give employees the time to attend to housekeeping chores or to take a walk between meetings and tasks. Similarly, employees may be able to start their workday earlier or later based on preference.
• No commute. With no commute to or from the office, employees who work from home free up time during the day. They may also save money on public transport or gas and car maintenance.
• Fewer interruptions. With no water cooler to gather around or coworkers to people-watch, working from home often has fewer social interruptions than a traditional office setting.
• Less formality. The work-from-home dress code is usually less formal than the office. Not only are employees more comfortable during the day, they can save on wardrobe costs.
• Location. Many work-from-home employees have the luxury of choosing where they work geographically — though they may still be required to work hours that align with their employer’s time zone.
Compared with a traditional office job, working from home can take some getting used to, but many employees feel that it’s worth it.
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Examples of Remote Work Benefits for Employees
The benefits of working from home for employees are far ranging and vary by role and company. But the examples below help explain why remote work is appealing to many office workers.
Saving Money
People who work from home save money on things like lunches out and an office wardrobe. Employees who can prepare meals in their own kitchen are less likely to rely on takeout. Similarly, employees save money without a commute, whether that means reduced trips to the gas station or fewer public transit passes.
Setting up a home office can involve new expenses, but if workers are smart about managing their work-from-home budget, they usually come out ahead.
A spending app can quickly show you how much money you’d save by working from home.
Recommended: Does Net Worth Include Home Equity?
Saving Time
Office distractions can challenge productivity. Working from home can have its share of distractions as well — including chores, children, and pets. (Some parents with flexible work-from-home jobs may long for their relatively peaceful days in the office.) But for the most part, employees tend to be more productive when they work from home.
At home, you’re unlikely to fall into conversations on a journey from your desk to the bathroom, and less likely to be interrupted when you’re focused on a task.
Recommended: Best Self-Employed Jobs for Parents
Saving Sanity
While it can be harder to quantify, employees who work from home may feel less stressed during the workday. This can be attributed to everything from setting up an optimal home office to avoiding a stressful commute.
Reducing workplace stressors can benefit productivity, job satisfaction, and employee engagement.
Recommended: 31 Part-Time Remote Jobs with Flexible Hours
What Are the Benefits of Remote Work for Employers?
At first glance, it may feel like remote work is largely more beneficial to the employee than the employer. However, that’s not necessarily the case. The employer benefits are motivating many companies to prepare for a more remote workforce.
• Lower operational costs. Employers save money when they’re not leasing and maintaining an office space. They may also be able to save on things like office equipment and employee benefits.
• Flexible budgets. When a company can hire from anywhere across the country or globe, it may be able to acquire talent at a more affordable rate.
• Higher productivity. Productive employees lead to a better bottom line for employers.
• Less absenteeism. When everyone is working remotely, there’s less likelihood of an office bug that sends half the employees home, reducing sick days.
• Higher retention. Employees who are happy with the remote office policies are more likely to stay with the company. Improved retention rates can save a company significant resources over the long run.
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Examples of Remote Work Benefits for Employers
Employees have more autonomy in a remote culture, but worker satisfaction ultimately benefits employers as well.
Better for the Bottom Line
When a team is fully remote, a company saves money and resources on office space, utilities, maintenance, furniture, and benefits like catered lunches and new equipment.
Remote work also frees office managers and similar roles to focus on things like company culture and worker satisfaction instead of sourcing new carpets and real estate.
Better for the Talent Pool
When geography isn’t an issue, employers can access a much wider talent pool. If a company seeks highly specific roles or qualifications, a national or even international search can yield much better applicants than one limited to a single area.
Remote work can broaden the talent pool in another way. Many qualified candidates cannot spend long hours in an office on a regular basis, either because they have a physical disability or they care for a child or aging parent who needs supervision. Also, retirees who want to bring in some additional income may feel more comfortable in a work-from-home job.
Better for Boosting Satisfaction
Satisfaction may be less noticeable than savings on rent or getting better applicants for an open job. Still, when employees are happy in their roles, it generally leads to less turnover, higher productivity, and a more positive work environment.
When teams are engaged and happy, they’ll do better work, saving the company time and money. Plus, less time is wasted on hiring and training new employees, so employers can focus on growth and building a stronger company culture.
How to Find Remote Job Opportunities
If the benefits of remote work make it sound like a good fit for you, here are some ways to “try before you buy.”
• Consider getting a second job you can devote time to at home after hours.
• Negotiate with your current company to work from home one day a week for a set period — for instance, Fridays during the summer.
• Reach out to friends who work from home for their take on what it’s really like (and maybe a referral!).
• Not all work-from-home jobs are tied to a corporate office. Start your own business inspired by your skills and passions.
The Takeaway
With remote work becoming more common, it’s worth learning about the benefits for employers and employees. Working from home can reduce stress, boost productivity, and even save employees money. For employers, remote work can help their bottom line by reducing office costs and increasing employee retention.
Wondering how much cash you’d save without a commute and daily lunches out? SoFi’s money tracker app allows you to monitor all your accounts in one mobile dashboard.
FAQ
What are the benefits of working from home for employees?
Most of the benefits of working from home for employees have to do with autonomy. Work-from-home employees get to choose where they work, how they work, when they work, and even their dress code.
What are five advantages of working from home?
Five advantages of working from home include workday flexibility, saving time and money, boosted productivity, location flexibility, and setting your own hours.
What is the biggest advantage of working from home?
For most employees, the two biggest advantages of working from home are saving time and money. Employees save time by not commuting to and from work or chatting with coworkers. Similarly, they’ll probably save money in the long run by avoiding lunches out and spending less on workplace attire.
Photo credit: iStock/miniseries
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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