What Is Historical Volatility & How Do You Use It?

A Guide to Historical Volatility


Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Historical volatility (HV) measures the range of returns on a market index or security over a given time period. When an asset’s historical volatility is going up, that means its price is moving further away from its average (in either direction) more quickly than usual.

A stock’s historical volatility is commonly expressed as one standard deviation using daily returns, and it’s one factor that investors often look at to gauge the risk of a potential investment. An asset’s historical volatility is different from its implied volatility. Read on to learn what historical volatility is, how historical volatility works, and how to calculate historical volatility.

Key Points

•   Historical volatility measures deviations from a stock’s average price over a period of time.

•   The historical volatility of a stock is typically calculated using the standard deviation of daily returns.

•   Historical volatility is expressed as a percentage, but differs from forward-looking implied volatility.

•   High historical volatility suggests larger price swings, while low volatility indicates smaller movements.

•   Traders may use historical volatility alongside implied volatility — which indicates the expected future volatility of an option’s underlying asset — to inform their trading strategy or assess a security’s riskiness.

What Is Historical Volatility?

Historical volatility measures how much the price of a stock or index goes up and down over a certain period. Investors calculate historical volatility by measuring how much an asset’s price deviates from its average price during a certain time period. Historical volatility typically looks at daily returns, but some investors use it to look at intraday price changes.

Analysts can use any number of trading days when calculating historical volatility, but options traders typically focus on a time period between 10 and 180 days to balance capturing short-term fluctuations with longer-term trends. Options traders may use historical volatility and implied volatility when analyzing trading ideas.

Historical volatility is typically expressed as a percentage that reflects the standard deviation from the average price, based on past price behavior. But there are also other methods they can use to determine an asset’s historical volatility. For example, unstable daily price changes often result in high historical volatility readings.

How Historical Volatility Works

Historical volatility, expressed as a percentage, tracks how much a stock’s price fluctuates in relation to its average price during a certain period. This is usually calculated using the standard deviation of past price returns, which is then demonstrated as an annualized figure.

When a stock sees large daily price swings compared to its history, it will typically have a historical volatility reading. Historical volatility does not measure direction; it simply indicates the deviation from an average.

When a stock’s historical volatility is rising or above average, it means daily price changes are larger than normal. When it is lower than average, a stock or index has been relatively calm.

How Historical Volatility is Calculated

The historical volatility formula is typically a standard deviation measurement. It typically takes a stock’s daily price changes and averages them over a period. There are several steps to calculating historical volatility:

1.    Collect historical prices.

2.    Calculate the average price over the chosen period.

3.    Find the difference between each day’s price change and the average price.

4.    Square those differences.

5.    Find the sum of those squared differences (this finds the squared deviations).

6.    Divide the sum by the total number of prices (this finds the variance).

7.    Calculate the square root of the variance.

You can then calculate the annualized volatility of a stock in two ways:

•   Daily returns: multiply the standard deviation by the square root of 252 (the approximate number of trading days per year)

•   Monthly returns: multiply the standard deviation by the square root of 12 (the number of months per year)

Working through the historical volatility formula can be a lengthy process, but most brokerage platforms will automatically calculate it for you. Many brokers even offer historical volatility charts. With a historical volatility chart, you can easily compare changes through time.

For example, if a stock reacted sharply to an earnings release, its historical volatility charts may show a jump right after the earnings date, while implied volatility might drop sharply as the market makes adjustments to its expectations following the earnings results. Implied volatility measures market expectations of price fluctuations for a certain asset in the future, which is reflected in how its options are priced.

How to Use Historical Volatility

Traders may use historical volatility when analyzing a stock, fund, or index to get a sense of its riskiness. High or low historical volatility stocks are not inherently bullish or bearish. Day traders might seek high historical volatility stocks as candidates for high-profit trading opportunities (but they also come with high loss potential).

Traders sometimes use historical volatility to help set stop-loss levels, which are predetermined prices at which a trade will automatically close to limit losses. For example, a day trader might use three times a stock’s daily average range – a measure of historical volatility – to set a stop price. This is known as volatility ratio trading.

You can also use historical volatility to help determine whether a stock’s options are expensive to help determine an options trading strategy. If implied volatility is extremely high when compared to a stock’s historical volatility, traders may decide that options on the stock are undervalued and suitable as an investment.

Historical volatility can help traders understand the potential range of price movements, which may inform their risk management strategies and decisions about position sizing or exit points.

Recommended: Increase your buying power with a margin loan.

Historical vs Implied Volatility

Like historical volatility, implied volatility measures fluctuations in an underlying stock or index over a period of time, but there are key differences between the two indicators. Implied volatility is a forward-looking indicator of a stock’s future volatility.

The higher the historical volatility, the more risk-prone the security has been in the past. Implied volatility, on the other hand, uses option pricing to arrive at a calculation and estimate of future volatility. If implied volatility is significantly less than a stock’s historical volatility, traders typically anticipate a relatively stable period of trading, and vice versa.

Typically, when implied volatility is low, options tend to also be priced lower, which may make them more appealing to buyers who seek to capitalize on potential future price movements. Sometimes investors will use a graph to determine how an option’s implied volatility changes relative to its strike price, using a volatility smile.

Historical Volatility

Implied Volatility

Measures past price data to gauge volatility on a security. Uses forward-looking option-pricing data to gauge expected future volatility on a security.
Higher historical volatility often leads to higher options pricing and higher implied volatility. Imminent news, like a company earnings report or a key economic data point, may drive implied volatility higher on a stock or index.
May inform traders’ risk management strategies and decisions about position sizing or exit points. Traders may use implied volatility to find stocks expected to exhibit the biggest price swings.

The Takeaway

Historical volatility can be a useful indicator for both institutional and retail investors looking to monitor the level and frequency of a stock or index’s price fluctuations. It measures a security’s dispersion of returns over a defined period. Implied volatility is a similar tool, but it is forward-looking and uses option pricing to arrive at its output.

Investors who are ready to try their hand at options trading despite the risks involved, might consider checking out SoFi’s options trading platform offered through SoFi Securities, LLC. The platform’s user-friendly design allows investors to buy put and call options through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.

Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors. Currently, investors can not sell options on SoFi Active Invest®.

Explore SoFi’s user-friendly options trading platform.

FAQ

What is considered a good number for historical volatility?

It depends. Although one stock might have a high historical volatility reading, perhaps above 100%, another steady stock might have a low figure around 20%. The key is to understand the securities you trade. Historical volatility can be an indicator of a stock’s volatility, but unforeseen risks can make future volatility drastically different than the historical trend.

What is a historical volatility ratio?

The historical volatility ratio compares short-term and long-term historical volatility as a percentage of the price of a financial asset. You can interpret the historical volatility ratio by looking at short versus long historical volatility. If short volatility on a stock drops below a threshold percentage of its long volatility, a trader might think there will be a jump in future volatility soon.

This is similar to analyzing volatility skew in options. It is important to remember that the interpretation and technical rules of historical volatility can be subjective by traders.

How is historical volatility calculated?

Historical volatility calculations require finding the average deviation from the average price of an asset over a particular time. An asset’s standard deviation is often used. Historical volatility is usually stated as one standard deviation of historical daily returns.

Many trading platforms automatically calculate historical volatility, so you may not have to do the calculations manually.


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19 Tips on Saving Money on Pet Care

19 Tips to Save Money on Pets

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

America loves its furbabies. As of 2024, 66% of U.S. households (86.9 million homes) own a pet. That’s a lot of snuggles and pats, but they do come at a price. A price that, thankfully, is more negotiable than you think, without skimping on love or care.

Pet parents are vulnerable to the same heartstring tugs that parents of human babies feel. You want to keep them happy and healthy, paving the path to a long life, and you are willing to pay the price.

Smart shoppers, however, know how to save money on pets and where they can safely trim costs. Here, we offer 19 tips for lowering costs.

Key Points

•   Buy prescription and over-the-counter pet medicines online for lower prices.

•   Keep up with vet appointments to prevent costly health issues.

•   Adopt pets instead of buying to save on initial costs.

•   Groom pets at home to avoid expensive grooming services.

•   Buy pet food in bulk to save money.

Common Pet Costs

Whether you select a Labradoodle from a breeder on a rustic Pennsylvania farm, adopt a tabby kitten from a crowded West Coast shelter, or anything in between, you will likely face these basic expenses:

•   Neutering or spaying

•   Collar, leash, harness

•   License fees

•   Microchipping if you choose, to track a lost pet

•   Vaccinations

•   Food, treats, and toys

•   Vet bills

•   Boarding or pet care if you travel


💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your < a href = "https://www.sofi.com/banking/savings-account /" > online savings account.

19 Money-Saving Tips for Pets

Pet care can get pricey. Hidden fees can pad your expenses, and even if you pay the average cost of pet insurance, your critter’s care may not be cheap.

But you can make costs more manageable. Be sure to comparison-shop and ask friends and neighbors for recommendations. These tips will also help you navigate the road to being a good pet parent without going broke.

1. Buying Pet Medicines Online

When the vet prescribes meds, it’s to help heal whatever is ailing your pet. Sites like Chewy.com and PetMeds.com generally charge less for prescribed pills and ointments than your vet’s office. They also typically sell heartworm, flea and tick, and other non-Rx medicines at lower prices. You can typically schedule autoship and qualify for free shipping at a certain spend threshold.

Recommended: 5 Ways to Achieve Financial Security

2. Keeping Up with Vet Appointments

Keeping up with preventive care can be an example of how to save money on pets. Better to stay on track than skip well visits and find out an eye infection has gone untreated or that your pet has heartworm (generally detected in a routine stool sample test). A vet will typically check joints, ears, eyes, teeth, and weight, and keep your pet up to date on vaccines. (Some areas offer free rabies vaccination clinics. Check your town website.)

3. Researching Pet Insurance

Pet health insurance can cover well care or illness/accident treatment, depending on the policy, and averages $27 a month for a cat and $51 a month for a dog (for a policy that covers 80% of bills after a $250 deductible, with a $5,000 annual cap). It’s advised to insure a young pet; later, a pre-existing condition may prevent coverage.

But let the buyer beware: An online search can produce a dozen lists of the “best” insurance, but most are on sites that make money from a brand if you click and purchase. Check to see if your “human” health insurer has a pet policy. Other reputable organizations, such as the ASPCA, offer pet insurance, too.

4. Walking Your Pet Yourself

If you are home to walk your pooch, you can save a bundle. Professional dog walkers can get pricey, with rates ranging between $10 and $35 per 30-minute walk. You’ll pay even more for group doggie daycare. The going rate for a hired kitty sitter is often about $20 for 20 minutes. Doing the job yourself or asking a young person in the neighborhood to step in can be the most money-smart option.

5. Adopting Instead of Buying

Learning how to budget for a dog? It’s generally more affordable to adopt from a shelter or rescue organization than to buy a pet from a breeder or pet store. Standard adoption fees for dogs can range from $129 to $767; for cats, costs typically run from $39 to $317. Fees may vary by breed but typically cover a veterinary evaluation, vaccinations, deworming, flea/tick treatment, and the cost of spaying/neutering.

Recommended: Guide to Practicing Financial Self-Care

6. Spaying and Neutering Your Pets

If it’s costly enough to house and feed one dog or cat, what will happen if she delivers a whole litter? Spaying and neutering is the safe, recommended option for dogs and cats.

7. Researching Human Food Pets Can Eat

Avoid chocolate and other foods that can be toxic to pets (the Humane Society lists potential poisons ). Otherwise, though, some owners make their own say, rice, steamed carrots, and chicken dinner or dog biscuits (using ingredients such as peanut butter, oatmeal, and/or pumpkin). There are even some doggos with refined palates who turn up their nose at store-bought biscuits but love the home-baked ones.

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8. Buying a Smaller Pet

The bigger the pet, the higher the cost may run to feed, house, and even board or travel with the critter. So before you set your sights on Lassie or Marmaduke, think it over. Can you afford a large pet? A smaller animal may be a cheaper pet to own.

9. Storing the Pet’s Food Properly

Safeguard your pet’s nutrition; you don’t want to waste your investment. Keep dry kibble tightly sealed in a cool, dry place. House mice love to hoard and nibble it. Store any refrigerated pet foods in the fridge and check expiration dates.

10. Joining a Loyalty Club at a Pet Store

Consider signing up for no-cost rewards programs at stores like Petco and PetSmart to earn coupons or discounts. When you enroll in the PetSmart Treats Program, for example, you can earn points for every $1 spent in stores and online and redeem them on services including Grooming Salon, PetsHotel, Doggie Day Camp, and Dog Training.

11. Making Your Own Pet Furnishings & Toys

Here’s how to save money on pet supplies: Get creative. Why buy a cute tent for your kitten? The rascal will prefer to curl up in an open sock drawer or suitcase, or inside a shopping bag. Toys? Cats adore an empty box, a ping-pong ball, or an empty paper towel tube. For dogs, forfeit a designer bed. A cute, washable throw rug on sale makes a soft sleeping pad.

12. Buying Pet Food in Bulk

If you’re driving distance to an animal feed store, price dry pet food in bulk. You may save a bundle. Costco also sells pet food and supplies in multi-packs, a bargain compared to the supermarket.

13. Grooming Your Pet at Home

Shampoos, blowouts, and pink satin bows at the groomer are pricey, and keeping a curly dog coat from matting and knotting requires frequent visits. Early on, get your pet used to at-home grooming. Buy the right tools to clip your cat’s nails and trim your dog’s hair. Brush their teeth and clean their ears, too. You can save a nice amount by DIYing it.

14. Shopping Pet Goods at Discount Stores

Below-retail stores like T.J.Maxx and HomeGoods carry pet holiday costumes, beds, and bowls. Dollar stores often stock pet items, too. (As with human food, check expiration dates on discounted pet food.)

15. Finding a Veterinary Discount Plan

Your job could help you cut petcare costs. Some workplaces offer the perk of being pet-friendly, eliminating the need for doggie daycare or a professional walker. Others provide pet health benefits for employees. Pet Assure can help you know how to pay vet bills because they lower costs at clinics in the network; ask your HR department about it.

16. Training Your Pet Yourself

To save money on obedience training, learn the basics with a guidebook and YouTube videos, or sign up for more affordable group classes at a big-box pet store.

17. Handling Your Pet’s Dental Care

This can take a big bite of your budget, especially when a dog’s teeth decay, requiring anesthesia for extractions. Ask your vet early on about the best brush and toothpaste, how often to brush, and recommended dental chews.

18. Finding Cheaper Pet-Friendly Hotels

It can be challenging to find a hotel that accepts pets when you’re traveling, and harder still to find one that doesn’t add a surcharge for the privilege.

Nearly all Red Roof Inns welcome one pet for free and charge $15 per night for the second pet. (They can’t top 80 pounds, so maybe not an option if yours is Clifford-size.) Other hotels may charge up to $50 or more per night or up to a $75 pet fee per stay, on top of your rate as a human. Doing your research before you hit the road can help you identify the cheapest way to travel with pets.

19. Getting Free Secondhand Crates and Carriers

Rather than buying new, check swap sites for dog crates and cat carriers, or ask on your Facebook page. Many people no longer have a pet but still have a crate or carrier in the basement. As any new parent knows, the importance of saving money is an even bigger issue when you add a new member to your household, even if a canine or feline.

The Takeaway

Owning a pet can be costly, from vet visits to food bills. But the roughly 87 million families and singles with pets is a number that’s growing because of the unconditional love and loyalty a furry friend can bring. You can find plenty of ways to embrace the affection but trim the costs, from DIY grooming and dental care to bargain-hunting at discount stores for accessories.

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Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Are pets worth the expense?

While it’s a highly personal assessment whether a pet is “worth it,” the fact that roughly 87 million U.S. households own pets says a lot about how much people value them. Pets can’t pay us back in money but do lavish intangible dividends, such as love, friendship, joy, loyalty, and companionship. These are gifts you cannot put a price on.

How much does a typical pet cost?

Standard adoption fees for dogs can range from $129 to $767; for cats, costs typically run from $39 to $317. If you buy an animal, there’s a wide range of costs. You could spend very little with someone locally whose cat had a litter or you might pay top-dollar for a purebred dog. After the first year, cat owners can expect to pay from $710 to $2,865 a year and dog owners can expect to pay from $1,000 to $5,225 a year in standard expenses.

What is generally the biggest expense to owning a pet?

Typically, the biggest expense of pet ownership is vet care. A new pet will cost more, due to spaying/neutering. But even after that, you can easily spend several hundred dollars annually to cover well checks and vaccines. For this reason, some people investigate pet health insurance to help with the cost.


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How Much Money Should I Have After Paying Bills?

When All Your Money Goes to Bills

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Do you pay all of your bills and then feel as if the amount of money you have left over for your financial goals is a big zero? Unfortunately, many Americans live paycheck to paycheck (78% of us according to a 2023 “Getting Paid In America” survey conducted by PayrollOrg) and economic trends such as inflation can strain even the most financially stable households.

It’s a frustrating feeling not to have cash to put towards longer-term goals like, say, buying a house or retirement. While every person’s financial circumstances differ, your budget should allow room for important goals, such as building an investment account or padding out an emergency fund.

The question is, how much extra money should you have after paying your bills? The answer will depend on your income, expenses, and financial goals. Here’s a closer look.

Key Points

•   Ideally, you want to have 20% of your take-home pay left over after paying all of your bills.

•   Track spending using an app or spreadsheet to determine why there isn’t more money left over after bills.

•   Consider cutting unnecessary bills (like cable, streaming networks, gym memberships) to save money.

•   Sell unused possessions to increase available funds.

•   Budgeting and managing money can reduce stress and help achieve financial goals.

What Is a Good Amount of Money to Have After Paying Bills?

Everyone’s financial circumstances are different, so it’s hard to pinpoint a good amount of leftover money after bills. For example, you might have a medical bill weighing down your otherwise healthy budget. Or you could have limited income as a student or retiree.

In most cases, it’s vital to prioritize spending on your needs and stay motivated when paying off debt. You’ll also want to start stashing away cash for other goals.

With this perspective in mind, the 50/30/20 rule represents a good way to allocate money. The numbers act as a guide: 50% of your take-home income pays for necessary expenses like food, housing, and debts. Unnecessary expenses, like entertainment or dining out, are considered wants, not needs, and they account for the next 30%. Finally, 20% of your income goes toward investments and savings (as well as debt payments beyond the minimum).

Based on this framework, it’s recommended to have at least 20% of your income left after paying all of your essential and nonessential expenses, which will allow you to save for both short- and long-term goals.

Tips for Managing Your Bills

Sometimes, though, putting aside 20% of your paycheck can be a real challenge. Here are some strategies that can help you pay your bills — and still have some money leftover to put towards your goals.

Getting to the Root Cause

If you often scramble to make it to payday, there’s likely a problem lurking in how your income and expenses are aligning. Fortunately, dozens of apps and banking tools are available to help you see where each dollar goes every month. Of course, you could also keep paper receipts and bill statements the old-fashioned way. Either way, keeping tabs on your cash flow can show you if you’re spending too much at restaurants or if you should up your income through a new job or a low-cost side hustle.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your < a href = "https://www.sofi.com/banking/savings-account /" > online savings account.

Organizing Your Bills

Most of us have monthly obligations. One thing that can help you get on top of those living expenses is to take some time to organize your bills. For example, you might make a master list of all of your monthly bills, listing the amounts and when payment is due. It’s also a good idea to set up automatic bill payment — this ensures everything gets paid on time and helps you avoid late fees and interest. Just be sure you have enough funds in your checking account to cover these debits so you don’t wind up overdrafting your account (and triggering bank fees).

What Are the Bills That Are Necessary to Pay?

The following bills are essential for the average American household:

•   Rent or mortgage for housing

•   Food and toiletries

•   Utilities such as gas, water, and electricity, as well as WiFi

•   Transportation expenses, such as a car, vehicle upkeep, or bus pass

•   Minimum debt payments on student loans or credit cards

•   Premiums for health coverage, car insurance, and renters/homeowners insurance

Identifying these bills as top priority and knowing how much of your paycheck they account for can help you budget better. It can help you answer the question “How much extra money should I have after bills?” and hopefully tweak your spending to make sure you can save.

💡 Quick Tip: Bank fees eat away at your hard-earned money. To protect your cash, open a checking account with no account fees online — and earn up to 0.50% APY, too.

Which Bills Are Expenses That Can Potentially Be Canceled?

Cutting back on luxuries and treats can be painful, but there’s no feeling quite as rewarding as ending the month with your bills paid and a substantial deposit to your retirement account with money to spare. If you need to make room in your budget, consider canceling the following expenses:

•   Cable television or streaming subscriptions you rarely watch

•   Smartphone upgrades and high data plans

•   Gym or workout memberships

•   Shopping memberships

•   Digital cloud services

•   Overly expensive gifts for holidays and birthdays

•   Dining out and takeout

•   Cigarettes, vapes, and alcohol

•   Items that you can buy used instead of new, such as clothing, books, and more

Budgeting All Expenses

One of the best ways to ensure that you can cover your bills and still have money leftover is to set up a simple budget. A budget will act as a spending and saving plan to help you stay on track.

To do this, you’ll need to comb through your bank and credit card statements from the last several months and list all of your monthly expenses, including both necessary and unnecessary spending. Next, you’ll want to tally up your average monthly income. Once you see how your cash inflows and outflows line up, you may find that you need to make some adjustments in your spending.

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Getting Another Job or Side Hustle

If you reduce your bills to a minimum but still experience financial challenges, picking up a side hustle can help you make ends meet. Whether you find a part-time job with an employer or work independently for a company like a ride-sharing or food delivery app, an extra 10 to 15 hours weekly can make a substantial difference in your budget. On the other hand, if your day job meets all your expenses, a second job can help you beef up your retirement account or pay for an expensive hobby.

Tracking Your Spending

Coffees and checkout impulse purchases at the grocery store can stealthily ding your budget. Luckily, there are more apps and tools than ever for tracking every expense. You can ditch pens, paper, and envelopes for a spending tracker on your phone or an Excel budget spreadsheet. Your bank might provide a free financial management app to help as well. Use these tools to help maximize how much money you should have leftover after bills.

Being Frugal for a Temporary Time

If you have lingering debts or want to save up a specific amount of money, being thrifty for several months can propel you into financial wellness. For example, you could make grocery shopping lists based on the coupons you clip each week. Or, if online shopping is your Achilles’ heel, you may want to unsubscribe from sales email lists for a while.

Some people enjoy monthly spending challenges. One month, you might say you are not going to spend any money on movies or music and put the savings towards your emergency fund. The next month, you might order takeout only twice and deposit the money you saved versus your usual habits into your travel fund.

Downsizing Your Possessions

Just as some monthly payments are unnecessary, you may have toys, gadgets, unused appliances, and more lying around that you don’t use regularly. You can pad your wallet by selling your stuff through Facebook Marketplace, eBay, or ThredUp. If selling online doesn’t appeal to you, a garage sale could be an option. These moves can help you have more money after bills.

Why Money Management Is Important

Life gets expensive, and making the most of your hard-earned dollars is crucial. Here are some principles to consider:

•   Failing to manage your money could cost you hundreds or thousands of dollars annually. Solid financial management can transform your spending habits, quality of life, and retirement income.

•   Money management can help you become more financially disciplined, which can be a key characteristic of successful people. The fortitude you build from sticking to a budget can help increase your overall stability in life.

•   Budgeting can help you achieve your future goals. For example, managing your money is vital for saving for your child’s education, affording a down payment for a house, or creating an emergency fund.

•   Actively managing your money can help you make more intelligent financial decisions. For example, you might have two main goals — building an emergency fund and repaying debts. However, you might only have enough income for one of the two. You can analyze your finances to understand whether it’s wiser to save or pay off debt.

•   Having your finances under control can reduce stress. Constantly worrying about money can present mental and physical health challenges. Getting a grip on your money is an excellent way to improve your life circumstances and create a bright future for you and your family.

The Takeaway

So, how much money should you have after paying bills?

Your financial situation will help determine the right amount of leftover money after bills. If you’re struggling to find leftover money at the end of the month, organizing your bills, setting up a budget, cutting back on nonessential spending, and picking up some extra income can help ensure you have money left after covering all of your bills. You can then use these funds to grow your savings, achieve your goals, and build wealth over time.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How do I avoid living paycheck to paycheck?

You can avoid living paycheck to paycheck by tracking your spending, following a budget, and cutting back on unnecessary expenses such as entertainment and dining out.

How do I get a second job when I do not have the time?

You might find a second job that fits into your off-hours, like walking dogs when you have free time on the weekend. Also if you can find a gig that pays well enough, you may be able to reduce how much you’ll have to work. It’s a good idea to map out a schedule to help divide work from leisure and maintain a healthy work-life balance.

Is the 50/30/20 budget the only good rule of thumb?

The 50/30/20 budget rule can be a helpful guideline. It states that you should spend up to 50% of your after-tax income on needs; 30% on wants; and 20% on saving and debt payments beyond the minimum. However, it’s fine to play with the percentages. If you live in an area with a high cost of living, for example, you may be better off with a 70/20/10 budget. The idea is that you include saving as part of your monthly spending plan.


Photo credit: iStock/RichVintage

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.


SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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

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Worst Cases of Hyperinflation Throughout History

Worst Cases of Hyperinflation Throughout History

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Inflation has been all over the news in recent years. But what exactly is inflation? By definition, inflation is the gradual increase in the average price of goods and services over time. When a country experiences inflation, its currencies’ purchasing power gets reduced. People feel the pinch, and their money doesn’t go as far.

Inflation can adversely affect an economy, including reduced output and increased unemployment. Hyperinflation, or incredibly rapid, out-of-control price increases of more than 50% per month, does the same, only worse.

The U.S. inflation rate hit record highs in the years following the pandemic. In 2022, the average inflation rate was 8%, the highest since 1981. That said, if we look at other countries, we’ll see that there are far worse cases when it comes to inflation.

In this article, we’ll review 10 incidents of some of the worst hyperinflation in history and its consequences.

Key Points

•   Hyperinflation leads to economic chaos, loss of savings, and destabilization, as seen in historical cases like Germany 1923.

•   Countries may adopt foreign currencies during hyperinflation, exemplified by Yugoslavia’s switch to the German mark in 1994.

•   Severe shortages and social unrest often accompany hyperinflation, highlighted by Zimbabwe’s 2008 crisis.

•   Government interventions, such as currency reforms, are common responses to hyperinflation, demonstrated by Germany’s introduction of the Rentenmark.

•   Recovery from hyperinflation is prolonged, with Greece’s post-WWII stabilization taking years.

Worst Hyperinflation in History

While some inflation can be good for the economy, high inflation can have negative effects on both consumers and businesses.

Inflation is typically considered high when it exceeds the rate of economic growth. For example, when prices rise faster than wages, then workers’ purchasing power declines. This can lead to a decrease in demand (such as less spending and travel), which can cause businesses to reduce production and result in a recession.

What follows are 9 examples of when inflation got really out of hand.

💡 Quick Tip: Tired of paying pointless bank fees? When you open a bank account online you often avoid excess charges.

1. Greece: October 1944

Greece faced a severe period of inflation that began when the Germans occupied the country during World War II and continued to get worse. In 1944, prices doubled every 4.3 days and the monthly inflation rate peaked at 13,800%. The government responded by introducing price controls and rationing. However, it took many years before they were able to bring inflation under control. At the beginning of 1947, prices finally began to stabilize and national incomes began to rise, lifting the country out of one of the worst hyperinflation periods in history.

Recommended: How Rising Inflation Affects Mortgage Rates

2. Yugoslavia: October 1994

In the early 1990s,Yugoslavia was hit by an inflation crisis that caused the value of their currency, the Dinar, to drop sharply. Prices doubled every 34 hours. As a result, it was difficult for citizens to purchase everyday items like food and clothing. Many resorted to smuggling goods to get by.

The government attempted to fix the problem by introducing new bills with higher denominations, but this caused more chaos and confusion. In the end, Yugoslavia abandoned its currency altogether and adopted the German mark as its official currency.

3. Germany: October 1923

In October 1923, Germany faced a period of extreme inflation. The government had printed too much money to finance war operations, and prices were skyrocketing. More than a wheelbarrow full of bills was needed just to buy a newspaper. People were losing their life savings, and the economy was in chaos.

To halt inflation, the government introduced a new currency called the Rentenmark. This stabilized the currency, and Germany began to recover from the crisis.

4. Zimbabwe: November 2008

Thanks to years of economic mismanagement by the government of Zimbabwe, in November 2008, inflation hit its peak. The country’s inflation rate was, month over month, 2,600%, or more than 231 million percent on a year-over-year basis. Those mind-boggling numbers meant that a loaf of bread cost what 12 new cars did a decade prior.

To mitigate the issue, the government printed large amounts of money without backing it with gold or other assets. This resulted in a rapid depreciation in the value of the currency. As prices increased, people started losing faith in the currency, leading to even more hyperinflation.

The situation became so desperate that most people could not afford necessities such as food and medicine. The high inflation rate also made it difficult for businesses to operate, and many companies went out of business.

Recommended: How Does Inflation Affect Your Retirement?

5. Hungary: 1946

Hungary experienced a high level of inflation after the end of World War II. The country’s currency, the Forint, was not pegged to the U.S. dollar or any other currency. As a result, it was vulnerable to sharp devaluations. In addition, Hungary was still recovering from World War II, and the government was trying to stabilize the economy by printing money, a factor that can cause inflation, to finance its reconstruction efforts.

As a result, prices doubled every 15.6 hours, and the average person’s standard of living declined sharply. In the second half of 1946, Hungary was home to the most worthless currency in the world, with a banknote carrying a denomination of 1,000,000,000,000,000,000.

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No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

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6. Argentina: 1975

Starting in 1975, Argentina’s inflation rate increased by an average of more than 300% per year until 1991. Several factors caused the situation, including an increase in the money supply without an equal increase in goods and services. This led to a spike in prices. Another trigger was the decline in agricultural production, which led to higher food prices. Political instability also contributed to high levels of inflation.

7. Sudan: 2021

Inflation in Sudan has been an ongoing problem for several years. The main drivers of Sudan’s hyperinflation are:

•   The depreciation of the Sudanese pound

•   The high rate of population growth

•   The increase in government spending

To address these problems, the government has implemented several measures, including devaluing the currency and reducing spending. Unfortunately, though, these measures have not been fully effective, and inflation continues to be a major issue. As of October 2024, the annual inflation rate was 200.1%.

8. Iran: 2022

Inflation in Iran is a problem that has been going on for many years. The value of the Rial has decreased significantly, and the cost of living has increased dramatically. Undoubtedly, this has caused significant hardship for the people of Iran. In May 2022, inflation was impacting food and beverage prices at a rate of over 80%.

To combat the high levels of inflation, the Iranian government has put various price controls in place. Fortunately, the controls have had an impact: As of October 2024, the annual inflation rate was 31.7%.

9. United States: 1917

The worst inflation rates in U.S. history reflect how harsh life during wartime can be. The highest figure ever observed was in 1776, when the rate of inflation was 29.78%. But, that was more than 100 years before the CPI (consumer price index) was introduced. Since its inception, the highest inflation rate ever recorded in the United States was 20.49% in 1917. The country went to war and had to finance that effort by printing more money.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

What Is the Most Inflated Currency?​​

In the world of finance, there’s a variety of currencies that get used in different countries. While some currencies are more valuable than others, the Venezuelan bolívar is one of the most inflated currencies in the world. That’s due to Venezuela’s astounding inflation rate, which was 360% in 2023. That was the tenth consecutive year that Venezuela earned the distinction of having one of the highest inflation rates in the world. The rate in 2023, however, was a significant improvement over 2018, when it was 65,000%.

The Takeaway

Inflation affects everything from the cost of a loaf of bread to your kids’ college tuition. While Americans got hit with high inflation in years after the pandemic, it’s been far worse at other times in U.S. history, and throughout the world.

One of the best ways to beat inflation is to earn a competitive interest rate on your savings. If your bank pays less than the current rate of inflation, your money actually loses value over time. Generally, online banks offer yields on savings accounts that are many times higher than those offered by traditional banks.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.


Photo credit: iStock/AlexSecret

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.


SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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

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Cheap Ways to Live: 12 Low Cost Housing Alternatives

13 Cheap Ways to Live

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

The cost of housing is the biggest living expense for most people, and lately, it’s been rising fast. If you’re struggling to make ends meet, finding cheaper housing alternatives could be the solution to mending your money woes. There are less expensive ways to live that don’t involve selling your worldly possessions and couch-surfing indefinitely. With a little creativity, and a willingness to simplify your life, you may be able to find affordable, comfortable housing.

Key Points

•   Explore moving to cheaper areas to significantly reduce housing costs.

•   Consider living in unconventional spaces like RVs, tiny homes, or shipping container homes for affordability.

•   Renting out a room or becoming a live-in caretaker can lower expenses.

•   Living on a boat or abroad offers unique, cost-effective housing options.

•   Mobile homes and guest houses provide budget-friendly living alternatives.

What Is Considered Affordable Housing?

The average American spends $2,120 per month on living accommodations. A sound financial goal is to allot 30% of your gross monthly income toward your housing budget, including electricity, heat, and water.

The cost of living by state can vary tremendously, but with rents and utilities rising across the country, the suggested 30% rule can be unrealistic. In certain cities and areas with a high cost of living, housing can eat up 50% of a person’s budget, straining their ability to save and meet financial goals.

13 Cheap Housing Alternatives

When thinking about the cheapest ways to live and trying to open up some breathing room in your budget, ask yourself, “Is my housing situation affordable?” If you are living paycheck to paycheck and not saving, your living situation may have to change. Fortunately, there are a range of possibilities when it comes to seeking cheap housing.

Here are 13 housing alternatives to help cut the cost of living and bring balance to your budget.

💡 Quick Tip: Bank fees eat away at your hard-earned money. To protect your cash, open a checking account with no account fees online — and earn up to 0.50% APY, too.

1. Moving to a Cheaper Area

When looking for cheaper accommodations, one of the biggest moves you can make is a literal one: Move to a place with lower housing costs.

For instance, the costs of the Los Angeles housing market are typically far more than in rural Idaho. Your choice of locale can add hundreds, sometimes thousands of dollars to your monthly bill.

If your job and life situation permits, you could look for a less pricey neighborhood nearby or something more affordable that is within commuting distance of your work. If that doesn’t help make ends meet, it might be wise to consider relocation to another state where the rents are cheaper.

Unfortunately, relocating can be expensive. It can be difficult to tabulate how much money you’d need to move. Resettling in another state may involve the cost of typical moving expenses and supplies, getting a new license and vehicle registration, and other costs.

2. Living in a Recreational Vehicle (RV)

The use of recreational vehicles surged during the pandemic, with people itching to get out of their quarantines and onto the open road. Having an RV can do more than satiate your wanderlust, it can be an affordable housing option.

While a new RV is not cheap, you can find used ones for around the price of a used car. Despite their somewhat restrictive quarters and the constant need for parking, the sense of freedom, including financial, could be worth it, especially if you’re a nature lover. While it may not be a forever move, it can give your budget a break for a while.

3. School Bus Homes

Here’s a quirky way to live more cheaply for a period of time: Get on the bus. A converted school bus is cheaper than an RV. A used school bus can run between $3,000 and $10,000 dollars.

The interior renovations are the biggest cost factor. A school bus conversion, complete with hookups for electricity and water, can cost $20,000 to $30,000.

Parking can be an issue, so do your homework first on everything from national forests to a friend’s roomy property in terms of where to pull up.

💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

4. Living on a Boat

Perhaps you prefer life on the water vs. life on the road. In that case, choosing a boat as your primary residence could satisfy your inner sea captain and your financial needs.

Not including the cost of a boat, maintaining your nautical lifestyle can run an average of $500 to $2,000 monthly for a couple. But you can reduce your costs by spending more time at sea and less on marina fees. Of course, if you have a Monday-to-Friday office job, this will be a challenge. For those with flexible or work-from-home schedules, it could work.

5. Living Abroad

With the cost of living rising in the U.S., some people are looking beyond the borders for affordable housing. Your dollar can go far in places like Vietnam, Costa Rica, and Thailand, as long as you can work and procure the proper visas.

However, establishing a permanent residency in a foreign country can be tricky, and shipping your stuff internationally can be a hefty expense. You’ll want to do the research and do the math before making a move, but it could be an option — and an adventure — for some.

6. Renting a Guest House

You can lower your housing costs by moving into a garage apartment or a mother-in-law suite in someone’s home. What you sacrifice in space and privacy can be made up in savings on rent and utilities. If a friend or acquaintance has one to let, great. Also look at the usual rental listings for options on this front.

Recommended: How Much Should I Spend On Rent?

7. Living in a Mobile Home

What else is among the cheapest ways to live? Purchasing or renting a mobile home can be way more affordable than an apartment or house. Utilities are sometimes included, but be sure to factor in the costs of the lot fees, community fees, and other charges imposed by the trailer park landlord.

Get up to $300 when you bank with SoFi.

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8. Moving into a Tiny Home

Tiny houses have exploded in popularity, popping up on TV shows and social media feeds. The term describes compact dwellings of no more than 600 square feet or so, with many of them being just 225 square feet. If you don’t have enough of a down payment for a traditional house, a tiny home offers a more budget-friendly alternative and hip design options. The cost of a 250- to 300-square-foot prefab tiny home runs between $30,000 and $80,000, a fraction of the figure for a full-sized home.

Not ready to commit to close quarters? Renting a tiny house can run between $600 and $900, still cheaper than a lot of apartment rentals. But you may have to pay for storage for all your oversized belongings.

9. Living in a Shipping Container Home

Believe it or not, one of the newest cheap ways of living can involve cutting-edge high design. Repurposing shipping containers into industrial-chic small homes has become a trend lately. These containers are way cheaper than a house and can be configured in unique ways, combining multiple containers for more square footage.

In terms of how much you’ll spend, converting a container to a livable space with one bedroom and a bath could cost you $25,000 to $82,000.

10. Living as a Live-In Caretaker

If you’re looking for employment as well as more affordable housing, being a live-in caregiver can be an ideal situation. You could look after an elderly or disabled individual in exchange for a free room and a monthly salary. Another option is being an au pair or nanny, which can work well if you love kids.

11. Being an On-Site Property Manager

In terms of finding cheap ways to live, you might explore becoming an on-site property manager if you’re handy. You’d be responsible for superintendent-type duties — garbage removal, cleaning common areas, and the basic upkeep of the building — in exchange for low-cost or free rent.

12. Renting Out a Room in Your Home

Here’s a way to save on housing costs that flips the script. If you are fortunate enough to have a spare room in your house or apartment and don’t mind having a roommate, renting out your extra space can cut your expenses significantly. Just be sure to properly vet the renter before agreeing to an arrangement.

Recommended: 39 Passive Income Ideas to Build Wealth in 2024

13. Move in with Friends or Family

If you need to cut housing costs to the bare bones (perhaps you’re trying to financially survive a layoff), think about family members or close friends who could make room for you. In some cases, you may be able to pay no rent but contribute to the household via cooking, cleaning, and other chores.

While likely a temporary move, it can give you time to save up some funds and, if necessary, break out of habits that make you bad with money and prepare to get your own place again.

The Takeaway

Housing costs can take a big bite out of your budget. If you want to save money or stop living beyond your means, reevaluating your housing situation is a great place to start.

If you are willing to be flexible, and a little unconventional, you can secure an affordable home that suits your lifestyle and your bank account.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Is living cheaply worth it mentally?

Living cheaply and within your means can typically bring financial peace of mind and allow you to save for the future. However, if taken to an extreme, frugality can cause some people a high level of stress.

What are the hidden costs of living in affordable housing?

While affordable housing can save you money down the line, there are expenses such as down payments, first-and-last month’s rent, security deposits, and the costs of moving or storage units to consider. Also look out for broker’s fees when renting if cheap ways to live is your goal.

Are there monthly rent payments at mobile homes?

Yes, you can rent a mobile home by the month. Be sure to ask the landlord about common fees, who covers utilities, and other potential additional costs. Different properties have different policies, and you don’t want any surprises if you move in.


Photo credit: iStock/Marje

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SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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