Financial Topics Archives | Page 18 of 795

Oct

2024

My Debit Card Expired! What Do I Do?

By Ashley Kilroy | Budgeting & Goals, Financial Independence, money | Comments Off

If your debit card expired, it can no longer make purchases or payments whatsoever. You’ll need to request a new card from your bank if they haven’t already sent you a new one. Once you have that card, you’ll need to activate it and shred your old one for security reasons.

Your debit card can be a vital player in your ongoing financial life. It’s your primary link to your bank account. It allows you to pay for items at stores, restaurants, and online businesses. In addition, debit cards are quicker than checks and don’t accrue interest charges like credit cards do.

As a result, staying ahead of your debit card’s expiration date is critical to uninterrupted use.

Key Points

• An expired debit card cannot be used for purchases or payments, requiring replacement through the bank for continued access to funds.

• Banks typically send a new debit card before the current one expires, but contacting them proactively can expedite the process if one is not received.

• After receiving a new card, it is essential to activate it and securely dispose of the old card to prevent identity theft.

• Debit cards generally last two to five years and can become inactive on the first day of the month following the expiration date.

• Regular monitoring of account balances and transaction statements can help avoid overdrafts and identify potential fraudulent activities.

What Happens if My Debit Card Expires?

You might not realize that your debit card expired until you try — and fail — to use it. However, it’s best to stay on top of that critical date. Otherwise, if your card expires, the following can occur:

• You can’t make purchases with an expired debit card.

• Automatic payments linked to your debit card, such as subscriptions or utilities, will stop.

• You’ll have to contact your bank about getting a new debit card if they haven’t already sent it.

• You’ll have to use alternative payment methods until you get a new card.

Replacing an Expired Debit Card

What to do when your debit card expires? Generally, your bank will send you an updated debit card in the mail a month before yours expires. However, if that hasn’t happened, keep these steps in mind:

• If you don’t receive one as the expiration date draws closer, it’s best to follow up with your bank about getting a new card. You can usually call your bank or log into your account online and ask for a new card. This can often take a week or so; perhaps less time if you pay a fee for expedited delivery.

• When you receive your new debit card, you can activate it by following the directions on the card. Typically, you can use the website or call the phone number on the activation sticker. You can also likely activate it by inserting it into an ATM (hopefully in-network, to avoid incurring ATM fees), entering your PIN, and withdrawing cash. The process may be somewhat different depending on your financial institution’s policies.

• Once you’re sure your new card works, it’s best to shred your old card. Throwing away an intact card invites the possibility of identity theft or bank fraud. To augment your security measures, you can discard portions of the shredded cards in different trash containers or throw away several bits at a time.

• Lastly, think about where you automatically use your debit card online. It’s vital to update your payment information where you linked your old debit card. For any bills you linked your debit card to (like your phone or electricity bill), log into your account and update your payment information.

The reason: Once your debit card expires, you won’t be able to make payments, and you could fall behind on your bills, which is exactly what you don’t want to happen when you automate your finances.

How Long Do Debit Cards Usually Last Before They Expire?

A debit card usually lasts two to five years from the date your bank issues it. You can use your debit card until the first day of the month after expiration. For example, if your card’s expiration date is January 2024, then your card will work through January 31, 2024. Then, on February 1, your card will become inactive.

Recommended: Features of Mobile Banking

Why Do Debit Cards Have an Expiration Date?

It might seem inconvenient when your debit card expires, but banks require a debit card renewal for practical reasons. Consider the following:

• The change of expiration date and security code combats fraud. In other words, the new card’s information helps prevent criminals from successfully hacking into your funds, thereby keeping your bank account safe online.

• Debit cards can get worn out with use. For example, the stripe or magnetic chip can become defective after several years. Or, the card might suffer scratches or begin to peel. Therefore, getting a new card preempts these scenarios.

• Card technology improves regularly. For instance, cards have gone from swiping to insertion and tap-to-pay in the last decade. As a result, getting a new card can allow you to take advantage of tech advances that increase convenience and security.

Will Transactions Go Through if My Debit Card Is Expired?

An expired card cannot make transactions or payments. Period. So, it’s crucial to get that debit card renewal before your current one expires.

Remember, an expired card doesn’t mean your bank account is frozen, empty, or deactivated. You can still make ACH payments if your card is expired — but an expired card can’t transact payment or let you use an ATM.

Do I Have Debit Card Access Even After It Expires?

The primary issue with an expired debit card is you can’t use it to pay in any context. However, you can access your bank account if your debit card expires, pay by ACH, and use mobile banking features. In addition, your bank account will still be active.

Tips for Using Your Debit Card Wisely

Your debit card is an essential financial tool that enables purchases, provides rewards, and more. In that way, it can contribute to your sense of financial security. Follow these tips to make the most out of your debit card:

• Memorize your PIN instead of storing it on your computer or other device. That way, no one can steal it and gain access to your account. And please: Don’t write it on the back of your debit card either.

• Don’t use an obvious PIN that anyone could easily guess, such as your birth year or 1234.

• Shred and then throw away all expired cards.

• Stay up to date on your account balance, so you don’t overdraft your account.

• Use cash instead of your card if the merchant charges a card usage fee. (Some retailers require a minimum purchase of $5 or more to prevent the card fee.)

• If your debit card provides points or cashback rewards, use it as much as possible without overspending. Also, keep in mind whether your card might have a daily spending or withdrawal limit, restricting card usage.

• Check account statements monthly, and let your bank know about any unfamiliar transactions, as they could be a sign of fraud.

• Be aware of transaction fees, when they will be charged, and whether the fee varies, depending on where you use your debit card.

Lastly, notify your bank immediately if you lose your debit card, so you aren’t financially responsible for fraudulent charges. Here’s how this works:

• When you report your card stolen within two days, there is a $50 cap on the fraudulent charges you must pay for.

• When you report within 60 days, a $500 cap applies to fraudulent charges you’re responsible for.

• You’re financially responsible for all fraudulent charges if you don’t report your card stolen within a 60-day window.

Quickly reporting the loss will help you avoid financial responsibility for extra charges that aren’t yours.

Recommended: Debit Card vs. Credit Card

The Takeaway

A debit card that’s expired can threaten to derail your financial life for a period of time, inconveniencing you as you try to pay for transactions and access cash. Being suddenly unable to use your card for purchases is frustrating and can even cause you to miss payments on crucial bills. Therefore, proactively communicating with your bank about a card that will expire soon can save you a headache.

If you’re in the market for a new debit card, you can open an online bank account with SoFi and enjoy many perks. For instance, you’ll have access to the global Allpoint Network of no-fee ATMs. In addition, you’ll enjoy spending and saving in one convenient place, earning a competitive annual percentage yield (APY), and paying no account fees. All this can help you manage your money more easily and maybe even grow your funds faster.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

Do I need to reach out to a bank if my card expires?

Reaching out to your bank if your card expires allows you to obtain a replacement debit card as soon as possible. Although banks usually send your new card ahead of time, it’s possible the card went to the wrong address or was never sent. Calling your bank or chatting with a bank representative online if your card expires can help minimize the waiting period for a new card.

Do the debit card numbers stay the same after they expire?

When your debit card expires, you’ll receive a replacement card with a new expiration date and security code. These numbers change to improve the security of your bank account.

What should I do with my old debit card?

You should shred or otherwise cut up your old debit card after you receive and activate the new one. Throwing away an intact card without shredding it means someone could easily steal your financial information.

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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% 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 4.20% 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.

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Interest rates are variable and subject to change at any time. These rates are current as of 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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Oct

2024

6 Tips for Making a Financial Plan

By Julia Califano | Budgeting & Goals, Financial Independence | Comments Off

One critical step for creating financial security is establishing a financial plan. A well-crafted financial plan can help you achieve your goals, like buying a house, crushing your debt, or saving for retirement. Knowing that you’re prepared financially to face what’s ahead can help create peace of mind.

A solid financial plan will be different for everyone, but there are a few cornerstones to consider as you build your personal financial road map.

Key Points

• Establishing a financial plan involves setting specific goals such as building an emergency fund, growing retirement accounts, and eliminating high-interest debt.

• Analyzing resources requires gathering financial documents to assess income, expenses, assets, and liabilities, ultimately calculating net worth to measure progress.

• Understanding monthly cash flow helps identify spending habits by categorizing expenditures into essential and non-essential items, revealing opportunities to cut costs.

• Creating a budget aligns spending with priorities, with methods like the 50/30/20 rule helping to allocate income effectively towards needs, wants, and savings.

• Investing in long-term financial growth becomes possible once debts are managed and an emergency fund is established, allowing for contributions to retirement and taxable investment accounts.

6 Steps To Creating a Financial Plan

A financial plan is not just another word for budget or debt-reduction plan. It’s the long-term roadmap that could help make your vision for the future a reality. The smaller pieces, like budgets and debt-payoff strategies, are tools to help you get there.

And whether you sit down with a financial planner or do it yourself, the act of writing down not only what you want, but how you plan to get it, could help take it out of your head and make it real.

While the idea of coming up with an overall financial plan for yourself might seem overwhelming, you can make the process manageable by breaking it down into these six basic steps.

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1. Setting Your Goals

While everyone’s financial goals will be different based on their individual situation, these are some common goals that tend to rise to the top of the list:

• Having an emergency fund. Generally, you’ll want to have to have at least three to six months worth of living expenses set aside in an emergency savings account. (If you’re self-employed or your income fluctuates, you might aim for six to 12 month’s worth of expenses.) This can be used to cover those unexpected expenses that invariably pop up, or float you through a loss of income, without wrecking your plan.

• Growing your 401(k) or other retirement accounts. If your employer offers a matching contribution, consider contributing at least 100% of what they’ll match. Combine that with the magic of compound interest, and you could see your balance grow at a nice pace.

• Eliminating high-interest debt. It’s no secret that eliminating your credit card debt could not only save you a significant sum in the long run but also help improve your credit profile.

While those three objectives often top the list, here are some other goals you may want to include in your financial plan:

• Establishing (and maintaining) good credit. If your dreams include large purchases, or even starting a small business, a bad credit score can be a deal-breaker. Generally, the minimum number needed to buy a home is 620 for a conventional loan. (If you’re struggling with bad credit, there are strategies that could help you build your credit profile.)

• Paying off your student loans. If this is one of your financial goals, you’re in good company — more than 43 million Americans currently carry student loan debt. And while a student loan is generally considered “good” debt, it still accrues interest.

• Living within your means. Ideally, you don’t want to put anything on your credit card that you can’t pay off in full at the end of the month (or relatively soon thereafter), since this is an expensive form of debt.

• Saving for your kids’ education. No one can predict what the higher-ed landscape will look like when your kids are ready to start filling out applications. But we do know that the average cost for tuition and living expenses in the U.S. is $36,436 per student per year, and that costs have had an annual growth rate of 2% over the past 10 year.

• Growing your investment portfolio. This might include items like your 401(k) or individual retirement account (IRA), but it can also mean a foray into the world of stocks and mutual funds. Becoming a smart investor can not only be a goal by itself, but one avenue to achieving other financial goals.

The goals that you choose as part of your financial plan may be on vastly different timelines, and you may need to accomplish one before you can move on to another. It can help to group financial goals into categories based on their time horizon — short term, mid-term, and long-term goals.

2. Understanding Your Resources

Knowing exactly what you have to work with might be one of the most important keys to building a plan that works. To put the entire puzzle together, though, you’ll need to find all the pieces.

One way to get started is to gather up all your paper and electronic bank statements, billing accounts, and portfolio documents. This might include:

Income: Salary, investment income, alimony
Expenses: Bank statements reflecting withdrawals or other debits, monthly billing statements, and other sources of everyday spending
Assets: Savings accounts, home equity, or physical items you own (car, collectibles, etc.)
Liabilities: Credit card debt, student loans, mortgage(s), and any other sources of debt

Next, you can use these documents to calculate your net worth. While you may not think you have much or any net worth, this is a worthwhile exercise because it establishes a baseline you can later use to measure growth in your net worth over time.

To create a net worth statement, simply list all of your assets (such as bank and investment accounts, real estate, valuable personal property) and then all your debts (like credit cards, mortgages, student loans). Your assets minus your liabilities equals your net worth.

If you find that your liabilities exceed your assets, don’t panic. This is a common scenario when you’re just starting out, particularly if you have a mortgage and student loans. With a financial plan in place, your net worth should grow over time.

3. Analyzing Monthly Cash Flow

Next, it’s a good idea to get a sense of your monthly cash flow — what’s coming in and what’s going out. You can use your bank statements from the last three or so months to come up with an average cash inflow and outflow.

If you find that your monthly outflow equals your monthly inflow (i.e., you’re not saving anything) or your outflow actually exceeds your inflow (meaning you’re living beyond your means), you’ll want to drill further down into the outflow column.

Start by making a list of all your spending categories and the average you spend on each per month. Then divide the list into two main categories: essential spending (e.g., rent/mortgage, utilities, groceries, insurance, debt payments) and non-essential spending (such as entertainment, shopping, travel, clothing). This exercise may immediately reveal some simple ways to reduce spending and expenses.

4. Updating Your Budget

While a budget sounds restrictive, it’s really nothing more than a plan to make sure that your spending aligns with your priorities. There are all different kinds of budgets but one simple approach is the 50/30/20 rule. To use this rule, you divide your after-tax income into three categories:

• Needs (50%)

• Wants (30%)

• Savings and debt repayment beyond the minimum (20%)

If you found (in the above step) that your outflow equals or exceeds your monthly inflow, you’ll want to take a closer look at your non-essential spending list and look for places to cut. Every dollar your free up can then be diverted into saving for your short- and long-term 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.

5. Tackling High-Interest Debt

Getting out from under high-interest debt (such as credit card balances, payday loans, or rent-to-own payments) is an important part of any financial plan.

There are several ways to go about paying down debt. With the avalanche method, for example, you list your debts from the highest interest rate to the lowest. You then throw all of your extra cash to the highest interest debt while continuing to make the minimum monthly payment on the others. Once you’ve paid off the highest interest debt, you move on to the next-highest interest debt, and so on.

With the snowball method, you list your debts from smallest to largest based on balance size. You then put all your extra cash toward the debt with the smallest balance, while making the minimum monthly payment on the others. When that is paid off, you move on the next-smallest debt, and so on. This approach can help you stay motivated by achieving early wins.

You might also consider debt consolidation, which involves transferring your credit card debt to a balance transfer card or personal loan with a lower interest rate — allowing you to focus on just one monthly payment.

6. Investing in Your Future

Once you have a solid emergency fund in place and expensive debt under control, you can start focusing on ways to grow your wealth over time.

While you may think of investing as something for rich people, investing can be as simple as putting money in a 401(k) and as easy as opening a brokerage account (many have no minimum to get started).

Part of your financial plan might include increasing your contributions to your retirement accounts. You might also look at allocating any other available income to a taxable investment account that can add to your net worth over time. Your plan for investing should take into account your investment risk tolerance and future income needs.

Monitoring and Reviewing

It’s been a few months since you implemented your financial plan, and so far, so good. But things may have changed a bit.

You paid off one credit card, so you need to reallocate that payment to the next debt. Or, a goal that used to be at the top of your list isn’t so important any more.

Reviewing your plan can mean not only making adjustments, but simplifying. This can include automating any new payments, consolidating new debts, or opting out of paper statements to reduce clutter.

Are There Any Downsides To Creating a Financial Plan?

Financial planning can help you feel more confident and in control over your personal finances. But it does come with a few downsides. Here are some to keep in mind:

• It can be time-consuming. The process of going through your finances and understanding your income, expenses, and savings takes time, effort, and patience. It can also take some time to see tangible results of your efforts.

• Financial predictions may not come to pass. You may set financial goals based on how much you expect to earn in a high-yield savings or an investment account. However, interest rates and investment returns are subject to conditions you can’t control or always predict.

• It’s not one and done. It is not enough to make a financial plan and stick with it. It’s important to keep track of your progress and regularly reassess and adjust your plan as your financial situation, your goals, and market conditions change over time.

Is Creating a Financial Plan Viable for Everyone?

Yes. Financial planning is a tool that anyone can use, regardless of age, income, net worth, or financial goals. While it sounds fancy, financial planning is simply a way to document your personal and financial goals, come up with a plan to reach those goals, and make sure you stay on track to meet those goals.

What’s more, you can create a financial plan at any time, whether you’ve just started working or have been part of the workforce for years. You can hire a professional financial planner to help, or you can write a financial plan yourself (with the help of the steps listed above.)

The Takeaway

Creating a financial plan is an important step toward financial security. To get started with your personal financial plan, you’ll want to prioritize your financial goals, review your current income and spending, and then analyze and make changes in a way that will help you meet the financial goals you set.

Keep in mind that a financial plan isn’t set in stone. As your life changes, you’ll want to adjust your financial plan to fit your needs.

Having the right accounts in place can go a long way toward helping you achieve your financial goals.

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FAQ

How do you write a financial plan?

You can enlist the help of a professional financial planner or write a financial plan yourself. Generally, the first step is to write down your financial goals, assess your net worth. and identify your spending habits. From there, you can come up with a spending, saving, and debt reduction plan that will help you achieve your goals and build your future financial security.

What are the components of a financial plan?

A financial plan can be customized to your individual needs, but generally includes the following components:

• Financial goals (short-, medium-, and long-term)

• Statement of net worth

• Cash flow analysis

• Monthly spending budget

• Debt repayment plan

• Retirement savings plan

• Investment plan for other goals

What are examples of financial plans?

There are many different types of financial plans, and you don’t need to do them all at once. Some examples include:

• Cash flow planning and budgeting This involves looking at how much money you have coming in and going out and establishing a plan as to how you will spend your money each month.

• Insurance planning This assesses your risk exposure and develops strategies to protect against those risks.

• Retirement planning This aims to calculate how much money you will need in your retirement fund to live comfortably after you retire.

• Investment planning This involves looking at all of your future goals, such as purchasing a house, sending kids to college, and retirement, and coming up with a savings and investing plan to meet those goals.

• Tax planning This looks at ways to reduce your income taxes with tax deductions, tax credits, and any other opportunities that are available to taxpayers.

• Estate planning This involves making arrangements for the benefit and protection of your heirs.

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Oct

2024

What Is Cost of Living?

By Rebecca Lake | Budgeting & Goals, money | Comments Off

When planning a move to a new city or state, the cost of living is an important consideration. Here’s why: Cost of living tells you how much money it takes to maintain a basic standard of living in a given place. If you were offered your dream job in a city 1,000 miles away, you’d want to know whether the salary would allow you to live well…or whether you’d have to be on a super tight budget.

Location typically plays a major role in determining the level of income needed to finance your lifestyle. For instance, a dollar doesn’t buy as much in New York as it would in Des Moines. If the cost of living is higher because you live in a major city, you’ll likely have to allocate more of your budget toward everyday expenses, such as housing, food, and transportation.

It’s important to understand the factors that affect cost of living calculations and what a higher or lower cost of living means for your finances. Otherwise, you could wind up with an uncomfortable level of “sticker shock” if you relocate.

Key Points

• Cost of living refers to the expenses required to maintain a basic standard of living and varies significantly across different cities and states.

• Calculating the cost of living involves assessing essential expenses like housing, food, transportation, and healthcare, which can fluctuate over time.

• The cost of living index helps compare the affordability of living in different locations, indicating how much income is needed to sustain a particular lifestyle.

• Regions with higher demand for housing and services often experience increased living costs, affecting purchasing power and lifestyle choices.

• Strategies to lower the cost of living include reducing unnecessary spending, refinancing debts, and potentially relocating to more affordable areas.

What Is the Cost of Living?

The cost of living is the cost to cover basic household expenses. The cost of living can vary from state to state and city to city. As you might guess, renting a 1,500-square-foot home is likely to be much more affordable in a small town in the middle of the country than doing so in a hip neighborhood in San Francisco.

That said, you can also have different costs of living within the same metro area. For example, someone who owns a home in the suburbs of a major city may have higher or lower expenses compared to someone who lives downtown.

In terms of what the cost of living is used for, it’s a gauge for determining affordability. Before moving to a new location, you might look at the cost of living in that area to help you decide if it’s realistic for your budget.

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How Does the Cost of Living Work?

Cost of living calculations work by measuring how much it costs to live in a specific location, using basic living expenses as a guide. The cost of living is not static; it can go up or down over time. Looking at cost of living trends for a certain city, region, or state can give you an idea which way consumer prices are trending.

There are a number of entities that perform cost of living calculations. The Council for Community and Economic Research, for example, maintains a cost of living index for participating cities across the U.S. Other organizations calculate cost of living for locations around the world.

On a personal level, the most important question to ask is, “What does the cost of living mean for me?” The simple answer is that cost of living can determine how far your income is able to go toward funding your lifestyle.

Factors That Determine Cost of Living

When discussing cost of living and expenses, you’re talking about necessities. In other words, the things you need to spend money on to live each month. According to the Economic Policy Institute, that includes:

• Housing

• Food

• Childcare

• Transportation

• Healthcare

• Taxes

• Other necessities, such as clothing, household supplies, and personal care items

Cost of living calculators use prices for those types of expenditures in a particular area to determine how much it costs to live there on average. Consumer prices for goods and services are largely a product of supply and demand, and what’s happening with inflation. Inflation is a general upward trend in prices over time.

When inflation is higher, prices tend to rise across the board, which brings a higher cost of living. Even when inflation is lower, prices may still be higher in some areas than others if there’s higher demand for goods and services.

Calculating Cost of Living

Cost of living indexes collect information about various costs for different cities and locations, then use average prices to determine how much it costs to live there. If you’re comparing two cities, you can use a cost of living index to see which one is less expensive.

If you’d like to calculate your personal cost of living, you’d use your spending history to determine your average monthly expenses for these categories:

• Housing

• Food

• Transportation

• Utilities

• Childcare, if applicable

• Healthcare

• Taxes

• Other necessary expenses

Using those numbers can tell you how much it costs to maintain your basic standard of living each month. You can also add in your average monthly spending for debt repayment or non-essentials or discretionary expenses, like dining out, travel, or recreation, to get a sense of what your actual cost of living adds up to.

What Is the Cost of Living Index?

Generally speaking, a cost of living index is a measurement of average prices. Similar to a stock market index, a cost living index is meant to provide a benchmark for comparison. The Consumer Price Index (CPI) is often referred to as a cost of living index, though that description isn’t entirely accurate.

The CPI measures the average change in prices over time for a market basket of consumer goods and services. That’s how the U.S. Bureau of Labor Statistics (BLS) defines the Consumer Price Index. The CPI isn’t a true cost of living index but an inflation index. Changes to the CPI can be an indicator of how inflation is changing; whether it is rising, falling, or remaining flat.

Does Cost of Living Vary State by State?

The cost of living by state is not uniform and what you might pay to live in one state could be very different from what you’d pay to live in another. That’s important to keep in mind if you’re considering moving across state lines to a new location. The more expensive a state is, the less purchasing power your money holds.

For example, the California cost of living index is much higher than the Texas cost of living index. So why do some states have a higher cost of living? Again, it depends largely on things like supply and demand, though taxes and average incomes can also play a part.

When the average income in a state is higher and job opportunities abound, that can lead to an increase in people moving to the state. That means more demand for housing, which can send home and rental prices soaring. More people can also mean more demand for everyday goods and services, such as food or utilities. As demand rises, prices can follow suit.

So, in our example above, if you were living in Texas in a two-bedroom rental apartment and were offered a job at the same salary in California, you’d face a higher cost of living. If you moved there, you might have to rent a smaller home. Your groceries would likely be more expensive as well as your other monthly necessities. You might find you couldn’t eat out or go to concerts as often since prices are higher.

Which State Has the Lowest Cost of Living?

As of 2024, West Virginia had the lowest cost of living in the U.S., with a cost of living index of 84.3. For perspective, cost of living indexes are generally based on 100 as an average. So an index of 84.3 means that the cost of living in West Virginia is 15.7% less than the national average.

Housing, which is typically the biggest expense most people have, is nearly 40% cheaper in West Virginia compared to the U.S. average. The median sale price for a home there was $284,000 as of January 2024.

Which State Has the Highest Cost of Living?

Hawaii is the most expensive place to live in the U.S., with a cost of living index of 188.4. Housing is more expensive there than in any other state in the country, with a median list price of $714,100 as of January 2024. A home buyer would have to shell out considerably more to live in Hawaii’s natural paradise than elsewhere in America.

But housing demand isn’t the only factor. Higher taxes and higher costs for transporting goods and materials to the state are some of the other factors that drive up the cost of living in Hawaii. Other states that rank among the most expensive include New York, California, and Massachusetts.

How Much Should Your Cost of Living Be?

Your cost of living should be a figure that, given your income, you can reasonably afford to pay. When your expenses exceed your income, that can cause shortfalls in your budget each month. You may need to use credit cards or loans to fill the gap, which can leave you with a pile of bills, wondering how to pay off high-interest debt.

When calculating your ideal cost of living, start with your income. Then work your way backwards to determine how much you should be spending on things like housing, food, transportation, utilities, and other necessities. If your income comfortably covers those things, you can then decide how much to allocate to savings, debt repayment, or “wants” like travel and entertainment.

Also, consider your household size. The cost of living for a single person can be very different from the cost of living for a family of four. So you may need to allocate more of your budget for necessities if you have a spouse, partner, or children in your household.

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.

Tips to Improve Cost of Living

If you’ve run the numbers and your cost of living is higher than you’d like it to be, you aren’t necessarily out of luck. There are some things you can do to try and bring it down. Here are some ideas for ways to reduce your cost of living:

• Eliminate unnecessary spending from your budget.

• Move your money to a different financial institution to avoid bank fees and/or earn higher interest.

• Plan meals at home, and cut down on restaurant meals.

• Consider refinancing student loans or your mortgage to lower your interest rate.

• Consolidate credit card debt using a 0% balance transfer offer.

• Shop around for better rates on auto, homeowners, or renters insurance.

• Aggressively pay off debt.

• Consider moving to a cheaper area.

• Take on a roommate to share expenses.

• Downsize into a smaller home.

• Sell a vehicle if you own more than one.

Some of these money-saving ideas are relatively easy to implement; others may seem a bit more extreme. But the more you can cut your expenses, the easier it may be to improve your cost of living.

You can also research different ways to make more money. That might mean taking a different job, getting a part-time gig, or starting a side hustle. If you’re contemplating a move for a higher-paying role, remember to factor in the cost of living in a new location to see how far a higher salary might go. A higher cost of living could eat up the salary boost you’ll receive, and so you’d want to be prepared for that.

Managing Finances With SoFi

Achieving a manageable cost of living starts with keeping a close eye on your budget and spending. Even making small changes, such as cutting out high banking fees and earning more interest, can free up more cash that you can use to save and fund your financial goals.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

https://www.sofi.com/signup/banking/v1“>

FAQ

What is a cost of living adjustment?

The Social Security Administration (SSA) applies a cost of living adjustment to Social Security benefits, based on changes to the Consumer Price Index. That means benefits can rise as the cost of living does. In other words, these adjustments are designed to ensure that recipients’ benefit payments are able to keep pace with inflation.

How can I compare the cost of living between two cities?

The easiest way to compare the cost of living between two cities is to use a cost of living index, which measures the relative cost of living in different areas of the U.S. You can subtract the cost of living index for the city that’s lower from the one that’s higher to figure out how much cheaper it is.

Which country has the highest cost of living?

Monaco is the most expensive country to live in. The average monthly cost of living there, as of 2024, is $6,538.

Photo credit: iStock/artisteer

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with direct deposit activity can earn 4.20% 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 4.20% 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 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found 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.

Our account fee policy is subject to change at any time.
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.

SOBNK-Q324-097

Oct

2024

What to Do if Your Check is Lost or Stolen from the Mail

By Kim Franke-Folstad | Budgeting & Goals, money | Comments Off

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

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

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

Key Points

• Taking immediate action is crucial if a check is lost or stolen; reporting it to the bank and requesting a stop payment can minimize potential financial loss.

• Gathering detailed information about the missing check, such as account and check numbers, can help expedite the process when contacting the bank.

• Monitoring bank accounts regularly allows individuals to quickly identify any unauthorized transactions and take necessary action if a check is cashed in error.

• It is advisable to notify both the sender and local authorities if a check sent to you is lost or stolen, particularly to prevent identity theft.

• Implementing preventive measures, such as mailing checks securely and tracking transactions, can help reduce the risk of check theft and associated complications.

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

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

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

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

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

How to Report a Lost or Stolen Check

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

Gather Details about the Check

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

• Your account number

• The check number

• The routing number

• The name or names on the bank account

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

• The check amount.

Contact Your Bank

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

Monitoring Your Bank Accounts

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

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

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

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

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

Sending a New Payment

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

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

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

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

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

Issuing a Stop Payment on a Check

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

• Fees for stopping a check vary from one bank to another but can run around $15 to $35. Some banks will waive the fee for customers with premium accounts, and some don’t charge fees if the missing checks are blank.

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

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

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

Recommended: What Is a Routing Number?

Protecting Yourself From Fraud and Identity Theft

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

What can someone do with a stolen check?

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

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

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

Filing a Police Report

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

Reporting Stolen Mail

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

Reporting Identity Theft

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

Watching Bank Accounts Closely

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

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

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

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

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

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

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

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

What If Your Checkbook or Multiple Checks Are Missing?

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

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

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

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

How Can You Help Prevent Check Theft?

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

Guarding Your Checkbook

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

Mailing Checks with Extreme Care

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

Using Your Check Registry

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

Checking Your Transactions Daily

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

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

Being Cautious When Writing Checks

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

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

Paying with Checks Only When Necessary

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

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

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

The Takeaway

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

To make money transfers and all your other everyday financial transactions fast, simple and safe, consider opening an online bank account with SoFi. You’ll be able to send money to any person with a U.S. bank account at no charge. For those times when you do need to write a check, SoFi Checking and Savings offers paper checks at no cost, not to mention we never charge you account fees.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

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

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

How long before a check is considered lost?

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

Can someone steal your bank info from a check?

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

How do thieves cash stolen checks?

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

SoFi members with direct deposit activity can earn 4.20% 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 4.20% 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 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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

SOBK0223042

Oct

2024

Can I Use Checks With an Old Address?

By Jacqueline DeMarco | Financial Independence, Life & Career, money | Comments Off

If you’re wondering if it’s okay to use checks with an old address, the answer is yes — most of the time.

Having a checkbook with your old address isn’t so unusual these days. Checks can come in handy sometimes, but many of us don’t need to use them too often in this era of online electronic payments. Because of this, it’s easy to see how the address on checks might become outdated.

Key Points

• Using checks with an old address is generally acceptable as long as the routing and account numbers remain accurate for processing payments.

• Informing recipients about an outdated address on a check is advisable to ensure smooth communication regarding payments or receipts.

• New checks should be ordered if there are changes to the bank account number or routing number due to bank mergers or account closures.

• Checks do not expire as long as the bank account is open and the check details are accurate, but closed accounts render checks unusable.

• Alternative payment methods like money orders, cashier’s checks, or P2P transfer apps can be considered if using checks is not preferred.

Can You Use a Personal Check With an Old Address?

It is possible to use a personal check with an old address on it as long as it still has the correct routing and account numbers on it. If those numbers properly identify which bank and account the money should come from in order to pay a check, you’re good to go. However, it’s a good idea to let the bank know about a change of address to ensure they send statements and other important information about the account to the correct location.

In addition, it can be helpful to let the check recipient know that the address on the check is old just in case they need to send a receipt or any other correspondence regarding the payment via mail.

It’s a different story if you get a new bank account number or the bank changed routing numbers — this can happen, for instance, when one bank merges with another. In this situation, it is necessary to order new checks with the correct information on them.

It’s important to make sure a check’s routing numbers and account number are accurate. If someone knowingly writes a check for an account that has already been closed, this is considered writing a bad check, which is a form of fraud. Because of this, it’s a good idea to confirm check details, including your address, are current and accurate whenever you move or switch banks or set up a new checking account.

Can You Use a Business Check With an Old Address

It is possible to use a business check vs. a personal check that has an old address on it as long as the account number and routing number are accurate. The main difference between business checks and personal checks is that business checks are drawn on personal accounts and business checks are drawn on business accounts.

Can You Use a Personal Check With a Wrong Address?

It’s fair to wonder, is it really okay if my checks have the wrong address? Whether it’s a typo on the check or you moved, this situation definitely happens.

While writing a personal check with the wrong address on it isn’t ideal, it is possible to use one. As mentioned earlier, as long as the routing number and account number for your checking account are accurate, the check can be cashed properly. However, as noted previously, you may want to inform the check recipient of your current correct address in case they need it. And, of course, if you open a new bank account, you’ll want to make sure that your address on the checks you order is correct.

Can You Use a Business Check With a Wrong Address?

Even if the address on a business check isn’t just outdated but wrong, it is still possible to write a business check with the wrong address on it as long as the routing number and account number listed on the check remain accurate.

Most businesses will want to order new checks with the correct address on them to avoid confusion about where their business is located and where correspondence should be directed. But they don’t need to worry if they have old checks left to use up. Those checks should still be fine to use.

Do Unwritten Checks Expire?

As long as an individual keeps their account open and the correct account number and routing number remain on a check, the check won’t expire. There is an important exception, however. If someone closes a bank account, this means the checks associated with the account become unusable.

Another situation to be aware of is that bank routing numbers can change, especially when banks merge. So it’s a good idea to confirm from time to time that a check’s information is up to date.

When Are Checks With an Old Address Unusable?

Checks with an old address on them only become unusable if the routing number or account number listed on the check are inaccurate. This causes problems because these numbers are used to verify that the check is good and identify the account the money needs to be withdrawn from in order to process the check.

Ordering New and Correct Checks

If an individual needs new checks for any reason — such as a desire to update their address — these are the steps they’ll generally take to order new ones.

• Log on to their online bank account. It’s usually possible to order checks online or via a mobile account dashboard.

• Request a counter check. If someone is really in a rush and can’t wait for new checks to come in the mail, they can go to a local bank branch and purchase counter checks. These are temporary checks that will have your account information on them, and they typically cost $1 or $2 per check, though fees may vary.

• Review terms and fees. All banks charge different fees to buy checks or a checkbook, so double check how much doing so will cost.

Changing Your Address on Checks

If you need to change the address listed on the checks in your personal checkbook, order more checks via one of the methods previously mentioned. This can be done online or via your mobile banking app. You may also be able to order checks in person at your bank.

Do You Need to Write Your Address on a Check?

Checks typically have an address already printed on them. Therefore it is not necessary for the check writer to write it on the check themselves. However, some people may prefer that only their name appears on their checks. Maybe they know they’ll be moving soon, or perhaps they simply prefer this for privacy and security reasons.

If you do need to write your address on a check that doesn’t have your address — perhaps because the recipient such as a merchant is requesting it — it’s generally best to:

• Use blue or black pen

• Print your new address under your name at the upper lefthand corner of the check

• See if the business or merchant wants your phone number as well; this is a fairly common request so they can reach you if necessary.

Do Checks Need an Address?

Checks do not need to have an address printed on them. However, if you choose to omit an address (say, because you know you’ll likely be moving soon), some businesses may hesitate to accept the check. They might ask for a form of ID or a phone number in case they need to contact you.

Alternatives to Personal Checks

If an individual doesn’t want to write a check for whatever reason, these are some alternative payment options.

Money Orders

It’s possible to buy a money order from the post office and other locations, including some big box stores and grocery stores. Money orders are a very quick form of payment, and can cost about $2 in fees.

Cashier’s Checks

A cashier’s check, which usually costs a small fee, can be bought at the bank and is a check that is guaranteed by the bank. It will usually require a visit to the bank to get one, though.

P2P Money Transfer Apps

P2P money transfer apps — like Venmo — that allow users to instantly transfer cash electronically to an individual as long as they have enough money in their bank account can be a convenient option. These are often free to use but they can involve a small fee (a percentage of the transaction) in certain situations, such as if you’re sending money via credit card. (Sometimes e-checks, or electronic checks, are a payment option for utilities and other accounts. While not a P2P app, they do allow for a seamless transfer of funds.)

The Takeaway

As long as the routing and account numbers on the check are accurate, it’s possible to use a check with an old, incorrect address on it. That said, it’s a good idea to order new checks with the correct address on them to help lessen any confusion the wrong address might cause with check recipients. Having all your details correct can help make banking as simple as possible.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

Does it matter if the address on my check is wrong?

It is possible to use a check with a wrong address on it. The key is to make sure both the routing number and account number are still accurate on the check before using it.

Can you cash a check with an incorrect address?

Yes, you can cash a check with the incorrect address on it as long as the routing and account numbers on the check are accurate.

Do checks need an address?

Checks commonly have an address on them, but it’s not a requirement. If you are using a check without an address, the business or service you are playing may require some additional ID or info.

Photo credit: iStock/MicroStockHub

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

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

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

4.20% APY
SoFi members with direct deposit activity can earn 4.20% 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 4.20% 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 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found 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.

SOBK-Q224-1902354-V1

My Debit Card Expired! What Do I Do?

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6 Steps To Creating a Financial Plan

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2. Understanding Your Resources

3. Analyzing Monthly Cash Flow

4. Updating Your Budget

5. Tackling High-Interest Debt

6. Investing in Your Future

Monitoring and Reviewing

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The Takeaway

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How to Report a Lost or Stolen Check

Gather Details about the Check

Contact Your Bank

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Monitoring Your Bank Accounts

Sending a New Payment

Issuing a Stop Payment on a Check

Protecting Yourself From Fraud and Identity Theft

Filing a Police Report

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Reporting Identity Theft

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

What If Your Checkbook or Multiple Checks Are Missing?

How Can You Help Prevent Check Theft?

Guarding Your Checkbook

Mailing Checks with Extreme Care

Using Your Check Registry

Checking Your Transactions Daily

Being Cautious When Writing Checks

Paying with Checks Only When Necessary

The Takeaway

FAQ

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

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Can I Use Checks With an Old Address?

Can You Use a Personal Check With an Old Address?

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