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A financial plan is a document used for managing your money and investments to help you achieve your goals. Having this kind of document allows you to map out the actions you need to take as you work toward important milestones, like paying down debt or saving for retirement.

You can create a financial plan yourself or with the help of a financial planner or advisor. Anyone can benefit from creating a financial plan, regardless of their age, net worth, or goals.

Understanding Financial Plans

While the exact meaning will vary among individuals, typically, the definition of financial plan might go something like this:

•  A financial plan is a roadmap or blueprint for your financial life. It includes your most important financial goals and priorities, the action steps you’ll take to meet them, and guidelines for how to track your progress.

With that in mind, here’s a closer look at financial plans and how they work.

Purpose and Importance

Simply put, financial planning is designed to help you make the most of your income and assets so you can achieve specific objectives with your money.

It can be harder to do that if you’re not in touch with your money. If you don’t know how much you’re bringing in vs. what you’re spending, for instance, you might find it difficult to save anything. Worse, you may be incurring debt on credit cards to cover the gap between income and expenses.

A financial plan means you don’t have to guess about where your money goes. Instead, you can use your plan as a guide to save and invest strategically to make your money work harder for you.

Components of a Financial Plan

Financial plans, regardless of who is creating them or why, usually have some common elements:

•  Specific, measurable goals or objectives

•  A breakdown of income and spending

•  Detailed information about your assets and liabilities (debts)

•  Information about your personal risk tolerance and time horizon

Some financial plans are more complex than others. For example, if you’re 30 years old and only a few years into your career, your goals, income, debt, and net worth are likely to look very different from someone who’s in their early 60s heading into retirement.

Types of Financial Plans

Financial planning can be divided into different categories, based on your purpose for creating the plan. Examples of financial plan uses include:

•  Cash flow planning and budgeting

•  Insurance planning

•  Investment planning

•  Tax planning

•  Retirement planning

•  Estate planning

•  College planning, if you have children (this could also apply to those going back to school for a degree or certificate)

You may also create a succession financial plan if you run a family-owned business that you’d like to eventually pass on to someone else. Financial advisors may offer planning in all of these areas or specialize in just one or two. For example, you might work with an advisor who only assists with estate and tax planning.

Creating a Financial Plan

Approximately 53% of Americans say they work with a financial planner, according to the CFP® Board. You don’t need to have a financial planner or advisor to make your plan, though it can help to have that added expertise and a second set of eyes.

That being said, here’s how to put together a financial plan yourself.

Assessing Your Current Situation

To make a financial plan you’ll need to know where you’re starting from. Here are some of the most important things that will shape your plan.

Income and Expenses

The first step in making a financial plan is knowing how much you make and how much you spend. If you don’t have a budget yet, this is a great time to make one.

•  Determine how much you make each month from a full-time job, part-time job, self-employment,

side gigs, and/or passive income

•  Add up all of your necessary expenses, meaning bills you have to pay each month to survive (e.g., housing, groceries, utilities, insurance, minimum payments on loans and lines of credit, etc.)

•  Add up what you spend on your wants (or discretionary expenses), such as dining out, entertainment, travel, etc.

•  Add up amounts that you send to savings or additional debt payments

Once you know what you spend, subtract it from what you make. This will tell you if you’re starting your financial plan in the red (meaning you are in debt, or living beyond your means) or the black (defined as accumulating wealth).

If you’re not sure how to track income or expenses, there’s a simple fix. First, see what your banking app or website offers in terms of tracking. You may be able to categorize and review your transaction history, including deposits of income and withdrawals for purchases or bills. Or you might use a third-party app to do this.

Recommended: Online Banking vs. Traditional Banking: What’s Your Best Option?

Assets and Liabilities

Now it’s time to look at what you own and what you owe. Make a list of your assets and their value, including:

•  Your home

•  Vehicles

•  Checking accounts

•  Savings accounts and CDs

•  Items of value, such as artwork or jewelry

Now, list out your debts. This can include:

•  Credit card balances

•  Student loans

•  Mortgage

•  Medical bills

•  Personal loans

•  Any other debts, such as money borrowed from a relative or a home equity loan

You’ll need this information to shape your goals and calculate your net worth.

Recommended: What Is a High-Yield Checking Account?

Investments and Retirement Accounts

If you have money in investment or retirement accounts, you’re already a step ahead. Make a list of all your investment and retirement accounts and their value. Include your:

•  401(k) (or 403(b), 457 plan, etc.

•  Individual Retirement Accounts (IRAs)

•  Brokerage accounts

Here’s a tip: Look for “lost” or “forgotten” retirement accounts. If you’ve changed jobs a few times, you may have some old 401(k)s floating around that you could add to the pile.

If you’re thinking of working with a financial planner, check their credentials. Some financial planners are certified by the CFP Board, meaning they’re held to the highest ethical standards. Others are registered with the Securities and Exchange Commission (SEC) as investment advisors. They’re fiduciaries, meaning they’re obligated to act in your best interest at all times.3

Working with a credentialed financial planner can ensure that the advice you’re getting is backed by expertise, knowledge, and a strong code of ethics.

Key Elements of a Financial Plan

Your financial plan should be tailored to your situation. That being said, the most important elements in a financial plan include:

•  A personal budget

•  Debt management strategies (if you have credit cards, student loans, or other debt)

•  Emergency fund savings

•  Insurance planning, including life insurance and property insurance

•  Tax planning

•  Estate planning

Your plan should reflect your goals in each of these areas. For example, when you’re talking about budgeting, your goal may simply be to stick to a budget month after month. If you’re planning for emergency fund savings, then you might set a specific target of saving $15,000 in 12 months. (Experts usually say to aim for three to six months’ worth of living expenses.)

Financial plans are not set-it-and-forget-it. It’s important to adjust your plan as you go through life changes. For example, changing jobs, getting married or divorced, or having a child can impact your financial goals and the steps you need to take to reach them. Also, if you are investing, your risk tolerance may change as you approach retirement. You might want to play it safer to protect your nest egg from, say, market fluctuations.

Benefits of Having a Financial Plan

Can you manage money without a structured financial plan? Certainly, but there are some benefits to creating one. Financial planning can help you to:

•  Identify what’s most important to you financially

•  Set realistic goals to help you create the life that you want

•  Stay motivated as you work toward the goals you most want to achieve

•  Be better prepared for life changes or unexpected events that might affect you financially

•  Feel more confident in your financial decision-making

•  Experience less stress over money or the future

According to one recent survey, 87% of Americans say they feel stress at least once a week surrounding their finances. Rather than hiding out from your checking account balance, you could implement a financial plan to help you feel more in control over your money and getting where you want to go.

Financial Plan Examples

Financial plans can help you manage a variety of goals from starting a business to retirement planning to saving for education. You could also use your plan to account for windfalls, either expected or unexpected.

For example, say your parents plan to leave you the entirety of their estate when they pass away, which is valued at $1.5 million. Your financial plan should reflect how you go about managing an inheritance of that size, including:

•  Where your parents’ assets are held (e.g., 401(k) plans, IRAs, savings accounts, etc.)

•  Whether any special restrictions or requirements limit what you can do with the inheritance

•  What your tax obligations will be and what strategies, if any, you can employ to minimize taxes owed on an inheritance

•  How you plan to put the assets you’re inheriting to work and what your goals are for their performance

•  Who you would like to inherit your assets when the time comes

By mapping out different scenarios in a plan and tracking how this inheritance could best be utilized, you can be prepared for the future. As noted above, you might want to work with a financial professional to guide your thinking.

Another scenario might be planning how you will achieve saving for both your child’s college education and your own retirement. If you are feeling as if hitting those two goals is both necessary and extremely challenging on your current income, planning can help you explore and utilize different techniques to attain your aspirations.

The Takeaway

Financial planning can give you clarity on your money situation and help you decide what you need to do to realize your goals. There are different kinds of financial planning for different needs, but at its most basic, it involves assessing your current financial status, your money goals, and how you could reach them. If you don’t have a financial plan yet, it’s never too late to create one, whether on your own or with a financial professional.

One part of smart financial planning can be to find a banking partner that helps you grow your money. See how SoFi can work with you.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

When should I create a financial plan?

There’s no set time at which you need to create a plan, though sooner is usually better than later. If you’re making money and spending it, then you can benefit from having a financial plan even if you don’t have a lot of assets yet. Also, many people find pivotal life moments, such as getting married or divorced, or changing careers, to be a good moment to reflect on their financial status and goals.

How often should I review and update my financial plan?

Reviewing your financial plan at least once a year is a good way to track the progress you’ve made over the last 12 months. You could also institute biannual or quarterly reviews if you have some big goals you’re working on, like paying down $40,000 in student loans or saving $50,000 toward a down payment on a home. Also, life events like the birth of a child or buying a home may be a good time to reassess your financial plan.

Can I create a financial plan on my own?

You can create a financial plan on your own; an advisor is not required. You’ll need to know how much you’re making and how much you’re spending, what you owe to debt, what assets you have, and how much you have invested. Then you can identify your current outlook and your goals and develop an action plan. That said, working with a financial planner can allow you to access deep professional knowledge as well as provide support as you work toward your goals.

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

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

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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When deciding between online classes (also called e-learning) and in-person classes, both have perks and drawbacks. Online learning may offer more flexibility, while in-person classes might provide better face-to-face interaction and networking opportunities.

Since the 1950s, schools have used e-learning tools, starting with slide projectors and TV-based classes. Online learning gained significant traction during the pandemic when students couldn’t attend in person, forcing schools to rethink and redesign the learning process. Although enrollment in online courses has dipped a bit recently, it’s still a popular choice, with about 53.5% of higher education students enrolled in online or distance learning programs in 2022.

Even though more than half of college students opt for some form of online learning, the choice between online and in-person classes ultimately depends on what works best for you.

Keep reading to learn the differences between online vs in-person classes and find out which one might be a good fit for you.

Advantages of Online Classes

As technology advances and more schools launch online learning opportunities, the appeal of distance learning may pique your interest. So if you’re wondering whether online classes are right for you, here are some of the advantages to consider.

Flexibility

Whether you’re juggling a full-time job, raising a family, or handling a bit of everything, it can be a challenge to balance it all. This can make finding time for in-person classes feel nearly impossible. Online classes let you fit your studies into a schedule that works for you, as long as you meet the deadlines. Plus, with internet access, you can usually work on your courses from just about anywhere.

Convenience

Driving from appointments to work and then to school can quickly eat up your free time and your gas budget. Online classes can save you that commute time, giving you more time to study and do the things you enjoy.

Cost Savings

Online courses are often more budget-friendly than in-person programs. A big reason is due to the fact that you don’t have to worry about extra costs like gas, parking, and meals. Plus, some schools even offer online learning credits, which can help lower your tuition bill when you choose to take classes online.

Self-Paced Learning

Everyone learns differently. Some people are visual learners, while others need to listen to grasp the coursework. Online courses can give you the flexibility to learn in the way that works best for you. For example, your school might offer different options for how you receive coursework and resources, like e-books, PDFs, lecture recordings, and more.

Recommended: Tips for Navigating Night Classes

Advantages of In-Person Classes

In-person classes also come with perks. Here’s a look at some of the benefits of attending classes in person.

Face-to-Face Interaction

Interactive learning can make it easier for some students to absorb and comprehend the material. Joining group discussions and working on projects may help you understand the content better and allow you to connect with your classmates and professors.

Structured Environment

Some students need structure to learn effectively. In-person classes in classrooms, labs, and lecture halls offer a focused, distraction-free environment where you can stay fully engaged in your lessons. It’s a place where you can really concentrate on your studies without worrying about distractions like car alarms, barking dogs, or ringing phones breaking your focus.

Access to Resources

When you attend school in person, you have access to a wide range of resources right at your fingertips, like libraries and tutoring programs. One of the most valuable resources is your professor, who you can ask questions, get feedback from, and visit during office hours for extra support. With online classes, you might have to wait a bit to get a response, and some resources may require a visit to campus to use them.

Networking Opportunities

In-person classes offer unique networking opportunities that are hard to match online. If you thrive in a classroom setting, enjoy face-to-face interactions, and like getting involved in clubs and organizations, in-person classes could be a great fit. Being on campus helps you naturally connect with peers, professors, and guest speakers, which can build valuable relationships and a strong professional network for when you’re ready to launch your career.

Recommended: College Freshman Checklist for the Upcoming School Year

Challenges of Online Classes

While online classes offer plenty of benefits, there are also some drawbacks to keep in mind.

Self-Discipline and Time Management

Taking online classes, like working from home, requires self-discipline and time management skills. Without a set class schedule that keeps you in a specific place at a certain time each week, it can be tough to stay on track, especially if you’re prone to procrastination. If managing your time is a challenge, you might find it harder to fully benefit from what online learning has to offer.

Technical Requirements

To take online courses, you’ll usually need access to a computer and the internet. For some students, this can be a costly challenge if they need to upgrade their computer or increase storage space. Plus, if your internet goes down or your computer crashes, it can keep you from completing important coursework.

Limited Social Interaction

While online students will get to know their professors, they might never actually meet them in person. Also, it can also be harder to build relationships with classmates since interactions aren’t face-to-face. Connecting with your professor and other students might require more effort, which could be a drawback for some when it comes to taking online classes.

Challenges of In-Person Classes

Here are a few drawbacks to consider if you’re thinking about enrolling in on-campus classes.

Commuting and Scheduling Conflicts

For students who don’t live on campus, commuting to in-person classes can be time-consuming, tiring, and costly, not to mention the stress of dealing with traffic every day. If you’re considering an on-campus program, it’s important to think about how the daily commute might impact your schedule and energy levels.

Potential Distractions

Being on campus can sometimes mean dealing with unexpected distractions, like noise in common areas, interruptions from classmates, use of devices, or other activities going on around you. Certain distractions can make it harder to stay focused during study sessions or class time.

Higher Costs

In-person classes often come with extra expenses, such as gas, parking, and on-campus meals. While these expenses can add value by providing access to facilities and resources, they are something to consider when budgeting for your education.

Recommended: What Is the Cost of Attendance in College?

Choosing the Right Format

Even after weighing the pros and cons of online versus in-person classes, it can be hard to choose. Each has their benefits, so it really depends on your learning style, flexibility, and what you need.

To help you decide, consider:

•   How you like to learn

•   Your other responsibilities, like a job or family commitments

•   Whether commuting is easy for you

•   Your academic and career goals

For example, if you’re self-motivated and good at managing your own tasks, online classes might be a great fit. But if you find home distractions make it hard to focus, the structure of an in-person classroom might work better.

Also, remember that some schools offer hybrid learning, where you can mix both in-person and online classes. This way, you can enjoy the best of both worlds.

The Takeaway

Deciding between online and in-person classes (or a mix of both) is all about finding what works best for you. Each option has its perks and drawbacks.

Online classes might give you more flexibility and help you save money, which can make them a good choice if you’re on a budget or have a busy schedule. On the other hand, in-person classes often offer a more structured environment, which can be ideal if you thrive on routine. No matter your learning style, it’s all about choosing what fits your needs best and sets you up for success.

And finally, you’ll need to find a way to pay for your classes. Your options include cash savings, scholarships, grants, and federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Are online classes easier than in-person classes?

Online classes aren’t necessarily easier than in-person classes; they require self-discipline, time management, and motivation. While online courses offer flexibility, they often have similar workloads and expectations as traditional classes. Success depends on a student’s ability to adapt to the online learning environment and stay engaged with the material.

Can online classes be just as effective as in-person classes?

Yes, online classes can be just as effective as in-person ones, maybe even more so, depending on how you learn. If you need hands-on experiences and face-to-face interaction, in-person classes might be a better fit. But if you like working at your own pace and managing your own schedule, online classes could be the way to go.

How do I stay motivated in an online class?

To stay motivated in an online class, set clear goals and create a study schedule. Break tasks into manageable steps, participate actively in discussions, and stay organized. Find a quiet, dedicated workspace, connect with classmates for support, and reward yourself for meeting milestones to maintain engagement and accountability.

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Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

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It’s entirely possible to find, when looking at your credit card statement, that you don’t owe any money this month. In fact, you have a negative balance on your credit card. You may assume there is a glitch in the system, but there are several reasons this can happen.

Read on to learn what a negative balance means on a credit card, how it can occur, and what to do if you see a minus figure on your statement.

What Is a Negative Balance on a Credit Card?

A negative credit card balance is when the credit card issuer owes the cardholder money instead of the cardholder owing money to the credit company. If you have a negative balance on a credit card, your outstanding balance is below zero.

How Does a Negative Balance Happen?

A negative balance on a credit card usually occurs for one of several reasons, which include:

You Overpaid Your Credit Card Bill

The first reason you may have a negative credit card balance is that you may have overpaid. For example, say you entered a specific payment amount that exceeded the amount due. Or, perhaps if you used autopay to cover your credit card minimum payment but made a manual payment simultaneously, you could end up having a negative balance on a credit card.

You Returned Something You Bought With the Credit Card

If you return an item and the amount of the refund exceeds your current credit card balance, it could result in a credit card negative balance. For example, perhaps you bought a $50 frying pan from your local home supply store. If you paid off your credit card and then decided to return the frying pan, your credit issuer will refund the $50. This refund will now make your new balance -$50, meaning you have a credit card with a negative balance.

You Cashed Out Too Many Rewards

Some credit cards let you redeem your rewards in the form of a statement credit. If you redeem your rewards and also pay off your revolving balance in full, for instance, you could end up with a negative credit card balance.

You Had a Charge Removed from Your Statement

Here’s another example of a scenario that could leave you with a negative balance on a credit card: Say you reported a fraudulent charge on your credit card. If you decide to repay the entire amount that’s due without accounting for the fraudulent charge, you could have a negative balance once the charge is reimbursed to your account.

Also, if you had a fee canceled or removed from your account, this could happen as well. This could also happen in the case of a credit card chargeback.

How to Get Your Money Back From a Negative Balance

If you see a negative credit card balance, it’s not something you necessarily need to worry about. However, if it’s bothering you, there are actions you can take to bring your balance out of the negative.

Here are your options if your credit card balance is negative:

Leave the Balance Alone and Decide Later

If you discover a negative balance on your credit card, you don’t need to take immediate action. Instead, you can just let it be and decide how to move forward at a later time. Because you’re owed money from the credit card issuer, you won’t need to worry about credit card interest accruing.

Use Your Credit Card for Additional Purchases

One of the easiest ways to resolve a negative balance is to make other purchases. Given how credit cards work, spending money on your card can help your balance get back to zero.

For example, if you have a -$100 balance and then make a $100 purchase, your credit card balance will even back out. Then, you don’t have to do anything until you receive another bill, nor will you have to worry about the APR on your credit card yet.

Get Your Money Back as a Credit Balance Refund

If your negative balance is an amount that’s more than you’re comfortable with or you need the money for other expenses, you can request a refund from the company. To comply with the Truth and Lending Act, credit issuers must refund negative credit card balances that exceed $1 within seven business days of receiving a written request from the cardholder.

You can expect the refund to come in the form of a check, money order, or direct deposit to your bank account. In some cases, you might be able to get a cash refund if the card issuer has physical locations.

Is a Negative Balance a Bad Thing?

A negative credit card balance isn’t a bad thing. However, if you need the funds for other bills, it’s wise to request a refund immediately.

And if you’re concerned, a credit card negative balance could impact your credit score, don’t fret — it won’t. Credit scoring models generally treat negative credit card balances as the equivalent of a $0 balance. In fact, if you have a negative balance, it likely means you’ve been staying on top of paying your balance off each month and are in good standing.

Also, keep in mind that although a negative balance may temporarily allow you to spend beyond your credit card limit due to the addition of the negative funds, it won’t actually increase your limit.

Recommended: How Many Credit Cards Should I Have?

The Takeaway

While a credit card negative balance isn’t a bad thing, it’s always wise to keep tabs on your credit card activity. Not only should you monitor what you owe, but you should identify credits or refunds you’re entitled to and factor those in when paying your balance each month. If your balance does end up in the negative, there are steps you can take to bring it back to zero, but you’re also fine to just leave it alone — unless, of course, you need the funds for other things.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Will a negative credit card balance affect my credit?

No, a negative credit card balance will not affect your credit score. This is because credit bureaus consider negative balances as equivalent to a $0 balance.

Can I close my account with a negative balance?

Yes, you can close an account with a negative balance. In most cases, your card issuer will process a refund automatically. If they don’t, you can request one when closing the account.

What do you do with a negative balance on a closed credit card account?

Usually a credit issuer will refund your negative balance before completely closing the account. However, if the credit card is canceled and you lose access to your credit card login, you’ll need to contact your credit issuer to process a refund.

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

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Being a mystery shopper (or secret shopper) can sound like a dream come true: A company pays you, as an independent contractor, to hit the stores and buy things. You earn money by posing as a patron at a place of business and help evaluate the quality of the products and services.

However, not all mystery shopping jobs are legit (there are plenty of scams out there) and even the real jobs generally don’t pay enough to allow you to leave your day job. Still, working as a secret shopper can be a fun way to earn some extra cash. Read on to learn more about this type of marketing work and how to become a mystery shopper.

What Is Mystery Shopping?

Mystery shopping means a company hires you to use its services covertly. For example, you might bring your car into a shop for an oil change, buy a new pair of jeans at the mall, or eat at a new restaurant. The crucial factor is that the company’s employees don’t know by whom you are employed or that you are evaluating them, so you’ll gain insight into what typical operations are like. The purpose is for the company to gather your feedback to improve their business.

What Happens During Mystery Shopping?

During mystery shopping, you’ll head to the assigned business location and act like an average customer. You might have the job of returning something or noting the tidiness of the workspace.

After you complete your task, you’ll likely submit a write-up or complete a survey describing your experience, including what went well or how the company could sharpen their services. Generally, once the company receives your feedback, they will pay you.

How Much Do Mystery Shoppers Make?

According to Indeed, mystery shoppers across America earn $12.23 per hour on average, which would equal $28,597 if employed full time. Typically, you receive compensation per task instead of per hour. However, mystery shopping can be time-consuming, which is why the hourly pay is relatively low. Additionally, some mystery shopping opportunities don’t offer compensation.

While some side jobs, such as renting out a portion of your home, help you build passive income streams, mystery shopping pays by the gig. Therefore, to make continuous money, you’ll have to repeatedly take on mystery shopping jobs.

Can Mystery Shopping Be a Full-Time Job?

Companies pay mystery shoppers for their help, usually in the form of a flat fee. They may also repay all or part of the expenses you incurred performing the work. In either case, mystery shopping isn’t typically profitable enough to be a full-time job, though it can be a fun, low-cost side hustle. Remember, the time that mystery shopping takes and the hidden expenses such as unreimbursed travel expenses can reduce the value of your reimbursements.

Additionally, as independent contractors, mystery shoppers don’t receive benefits, such as health insurance and paid time off. Also, if you are self-employed, saving for retirement is on you.

As a result, you’ll need to subtract those costs from what you think you could earn as a full-time mystery shopper. With an average salary of $28,597 a year, it may be challenging to make ends meet.

Would Mystery Shopping Be Considered Variable or Fixed Income?

Fixed income is a set sum of money that you can expect on a regular basis. For example, when you earn a salary, you will usually get paid the same amount weekly or bi-weekly.

On the other hand, variable income fluctuates weekly or bi-weekly. Since the income earned from mystery shopping can vary by company and project, your mystery shopping income is usually variable.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Do Mystery Shoppers Pay Taxes?

The IRS requires you to file an income tax return if your net earnings from mystery shopping (or any side hustle) were $400 or more for the year. If you netted less than $400 from mystery shopping, the IRS stipulates that you still have to file an income tax return if you meet any other filing requirements listed in the Form 1040 and 1040-SR instructions. Remember to keep records of your expenses so you can maximize your deductions.

Becoming a Secret Shopper

If you strategically acquire legitimate mystery shopping jobs, you can make quick cash to pad your budget every month. Here are steps to becoming a secret shopper:

•   Search online for mystery shopping opportunities from businesses.

•   Vet the advertisement and company to ensure the opportunity isn’t a scam.

•   Apply to the mystery shopping job.

•   If necessary, submit a background check and sign any related disclosures or professional agreements.

•   After the company grants you access, check their website for jobs and select one you’d like to complete.

The Mystery Shopping Providers Association (MSPA) has an online database to help you find honest, authentic mystery shopping jobs. In addition, the organization offers two certifications that make you a more desirable mystery shopper for companies. You can earn the MSPA’s silver certificate online and participate in a day-long workshop for the gold certification.

Recommended: A Guide to Ethical Shopping

Benefits of Becoming a Mystery Shopper

By becoming a secret shopper, you’ll enjoy the following perks:

•   You earn money for shopping, trying a delicious meal, or spending the night at a hotel.

•   You can create your own schedule and practice a healthy work-life balance.

•   You may get to keep what you buy.

•   You can often work during evenings and weekends if that is your only available time.

•   You decide for whom you want to work, meaning you can be selective when choosing jobs.

•   You are your own boss to a large extent, setting your schedule.

•   You can supplement income from your day job with mystery shopping or even try going full time.

•   You’ll have variety and excitement from new experiences every day.

•   You can help companies you like improve their products and services.

Drawbacks of Becoming a Mystery Shopper

If you’re considering becoming a mystery shopper, it’s a good idea to be mindful of potential downsides:

•   You likely won’t have steady earnings like a typical job, meaning some weeks will be more lucrative than others. In addition, each job may pay differently.

•   Frequent travel can put extra miles on your car and possibly cause damage. Even if you’re reimbursed for miles, you may still lose more money through oil and tire changes.

•   You’ll probably have to sift through countless scams while looking for jobs. If you fall prey to one, you’ll likely lose money or waste time.

•   Payment could take up to 90 days to receive.

•   Starting out, you usually won’t be able to access some of the better assignments available only to seasoned shoppers.

Recommended: How to Earn Residual Income

Tips Before Becoming a Mystery Shopper

If you’re planning on becoming a secret shopper, consider this advice on staying organized and achieving success.

Keeping Receipts

You’ll likely submit receipts for many mystery shopping jobs. Therefore, you may spend time mailing, faxing, or scanning receipts. It’s recommended to make copies for your own records to ensure you retain proof of completed jobs.

Signing Up for Multiple Sites and Companies

To make substantial income, you’ll probably work with numerous companies. As a result, you’ll typically have to become well-versed in the methods and preferences of a plethora of businesses. It can be a good idea to organize your work into files for each company to keep you from getting mixed up.

Watching Your Income and Taxes

You’ll likely owe taxes on the income if you earn more than $400 as a mystery shopper. Therefore, it’s recommended to meticulously track your earnings to ensure your income level is accurate on your tax return.

Watching for Scams

Unfortunately, not all mystery shopping jobs are legitimate. Scammers devise websites and advertisements to look authentic. Here, some signs to watch out for:

•   A dead giveaway of a scam is typically the requirement that you must pay to access a job. Companies with legitimate mystery shopping opportunities won’t charge you or demand that you transfer money from your bank account. Additionally, since MSPA lists mystery shopping jobs at no charge, you should not have to pay to view opportunities.

•   Any mystery shopping job that promises you’ll make thousands of dollars during your first month is also likely to be fraudulent. While it is possible to generate significant income by mystery shopping, it takes time and certifications to access better-paying work. Even then, you would have to work at least 40 hours per week to earn enough to live on.

•   Beware scammers who use the MSPA name to con you into their fraud. MSPA is an excellent resource, but scammers posing as the organization try to lure mystery shoppers. The MSPA posts jobs but does not directly employ mystery shoppers. It can be wise to avoid advertisements for jobs with the MSPA, as they tend to be fake.

Knowing What You Signed Up For

It’s easy to get carried away when perusing mystery shopping opportunities. So before you click away, it’s a good idea to read the details about the opportunity first. For example, although you might see a job at your favorite store, the location might be an hour away instead of the one that’s a five-minute drive from home. Therefore, it’s wise to study jobs carefully before committing to something you may not enjoy or receive enough compensation for it to be worthwhile.

The Takeaway

Mystery shopping can be a fun way to earn extra money. Just keep in mind that it may not be the most profitable side hustle out there, and finding legitimate opportunities can be challenging. Still, the added perks of trying new products and having new experiences can make mystery shopping an enjoyable hobby that also puts a little extra padding in your bank account.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Is mystery shopping too good to be true?

Mystery shopping is a viable side gig that can increase your income by completing jobs for businesses that are looking to improve. However, scammers try to lure in would-be mystery shoppers by promising huge paychecks for quick jobs. Any mystery shopping job that sounds too good to be true probably is. That said, a wide array of mystery shopping jobs pay modest rewards that can pad your wallet.

Do mystery shoppers get to keep what they buy?

Mystery shoppers sometimes get to keep what they buy. It depends on the company’s policies for the specific job. The business might allow you to keep purchases in some cases and ask for you to return them in others.

Do mystery shoppers get paid upfront?

In most cases, mystery shoppers do not get paid upfront. It usually takes 30 to 90 days to receive payment for a mystery shopping job.

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

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

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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Money pools provide a platform for friends, relatives, or colleagues to combine their savings. The purpose of this arrangement is to leverage each member’s financial resources to save money, reach short-term money goals, or create financial security.

While money pools gained popularity centuries ago in developing countries, such as India and Southern Africa, they have continued to provide a banking solution for migrant communities in the U.S. Here’s a look at how money pools work and how they benefit folks that don’t have access to traditional banking products like savings accounts.

Read on to learn:

•   What is a money pool?

•   How do money pools work?

•   What are the pros and cons of money pools?

What Is a Money Pool?

So, what are money pools exactly?

A money pool is when a group of individuals (friends, family members, neighbors, or coworkers) combine their savings into one pot. The group decides on a monthly contribution amount they will each put into the pool.

Then, every month, one person from the group will receive the total sum of the money pool to do as they wish. The group can either draw names to decide who gets the money or make an arrangement based on a mutual understanding. Funds are distributed monthly until the entire pool is depleted. In this way, it’s somewhat akin to peer-to-peer lending.

However, money pools don’t just happen; they must have a responsible party that organizes the group. The money pool organizer tackles tasks such as collecting the money, tracking contributions, and planning distributions. The organizer keeps order, so each member understands and adheres to the group’s guidelines.

Money pools mainly exist in developing countries, with minimal access to credit or banking solutions like savings accounts. However, many U.S. immigrant communities nationwide use money pools as a solution for helping people within the community pay bills or save for financial goals. It can also serve as an example of pay-it-forward finance and helping those close to you.

Recommended: Short-Term Financial Goals to Set for Yourself

How Do Money Pools Work?

A money pool works like this: Let’s say a group of three friends decide to create a money pool. They decide that they will contribute $400 per month creating a $1,200 money pool. Each month, one friend from the group will receive $1,200. No matter who receives the funds for the month, every person in the group continues to contribute so the money pool amount always has $1,200 in it.

A money pool provides an immediate source of funds for someone needing to pay for unexpected expenses. In other words, the money pool can act as an interest-free loan to pay off medical expenses you can’t afford, car repairs, or tuition costs. A money pool can also provide a forced savings method for the last person who receives the funds.

The organizer usually determines who should receive the funds first. They may consider financial needs to assess the arrangement of the distribution of funds.

Reasons Why People Use Money Pools

For centuries, people have been using money pools around the world as an alternative to traditional savings solutions. However, folks are more likely to use money pools if they have:

•   Limited or no access to traditional banking institutions.

•   A bad credit score that making it challenging to qualify for financing.

•   Minimal financial resources; the money pool can be a way to save money with a low income.

•   The need to borrow or save money.

Examples of Money Pools

Money pools exist around the world and often go by various names. In U.S., Americans usually refer to this type of arrangement as a money pool or rotating savings and credit association (ROSCA).

Different communities call money pools by different names. Some examples of other names for money pools are:

•   Tandas in south and central Mexican communities

•   Cundinas between northern Mexico and Washington state

•   Susus in the Caribbean

•   Pandeiros in Brazil

•   Hui in Asia

•   Arisan in Indonesia

•   Ayuuto in Somalia

Recommended: Creative Ways to Save Money

How to Determine if You Should Join a Money Pool

If a money pool piques your interest, consider a few key points before moving forward with this financial decision.

•   Affordability of recurring payments. Make sure you can afford and have the money discipline to contribute the recurring payment amounts. A money pool isn’t like a traditional savings account where you can pull money out whenever you want. Think carefully to be sure that contributing won’t put you in a financial bind.

•   Trustworthiness of key members. You may feel uncomfortable contributing to a money pool with a group of members you don’t know well. Instead, consider creating a money pool with people you know and trust.

•   Organization of the money pool. Someone must be the organizer if you establish your own money pool. Money pool apps are available to help you organize your group and streamline contributions and distributions.

If you’re still on the fence, you may want to explore Community Development Financial Institutions or CDFIs as an alternative solution. What is a CDFI? These financial institutions cater to underserved communities. In addition, CDFIs offer banking products such as checking accounts to those who may have been turned away by traditional banking institutions. So, if you have a low credit score or are struggling to find a suitable savings vehicle, CDFIs could be worth considering.

Pros of Money Pools

Money pools can be advantageous to consumers for the following reasons:

•   Provide access to cash. A money pool offers an alternative solution for accessing funds if individuals don’t have access to lending institutions.

•   Members instill accountability. The social pressure of accountability encourages the group members to adhere to the money pool commitment.

•   Interest-free loans. Money pools provide an interest-free way to pay for unexpected expenses like medical bills or car repairs.

Recommended: What Is a Lifeline Checking Account?

Cons of Money Pools

While money pools have benefits, they can also have some drawbacks, including:

•   Funds in the account are not interest-bearing. Members can grow their money in other interest-bearing accounts, like a high-yield saving account.

•   Members who don’t make payments put the group at financial risk. Members of the money pool could suffer a financial loss if someone doesn’t contribute when they are supposed to. This is especially true for the last member to receive the lump sum.

•   Risk of social disapproval. You must make an agreed-upon payment or you could be kicked out of the money pool and face social consequences such as being shunned from your community.

Recommended: Different Types of Savings Accounts

The Takeaway

Money pools allow a group of people to combine their savings while helping each other financially. Each member contributes to a fund of money, which is then disbursed to members sequentially, allowing every person involved to receive a lump sum of cash. While this type of savings vehicle is used in the U.S., it’s more prevalent in developing countries since financial resources are often limited.

3 Money Tips

1. Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
2. If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.
3. When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Is there a reason for developed countries to use money pools?

Yes, for communities with limited access to traditional banking and credit, money pools can offer a platform to help individuals achieve their financial goals.

Are money pools safe?

While there is a risk of members failing to contribute to a money pool, the peer pressure of the group usually ensures they will go to great lengths to make timely payments. So even though it’s possible, loss typically occurs only rarely.

Do money pools still exist?

Yes, money pools exist. You may find them in developing countries as well as the U.S.

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About the author

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Photo credit: iStock/bob_bosewell

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.

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

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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