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If you’ve ever spent a lazy Sunday wandering through the mall, not in need of anything in particular, only to emerge with a couple of bags of purchases, you are not alone. Many of us shop as entertainment and wind up having less cash or more credit card debt as a result.

Shopping in-person can be a fun distraction thanks to the music pumping and the eye-catching displays. It’s easy to be transported and suddenly feel that you need that new jacket, cell phone, or even sofa. And today, shopping online or on your phone can be equally appealing, as a parade of products and coupons pass before your eyes.

But overspending isn’t good for anyone’s budget or debt ratio. Here, you’ll learn 11 tips to stop shopping out of boredom and protect your hard-earned cash.

What Is Boredom Spending?

Boredom spending, or shopping to fill free time, happens for many reasons. It often occurs when you’re feeling unstimulated or there’s a lack of anything demanding your attention. You might find you’re prone to boredom shopping when you’re procrastinating about work. Going out and buying something can make you feel as if you’ve accomplished something with your time. Or perhaps you do it when you want to escape certain negative emotions such as anxiety, depression, or loneliness.

Some people turn to boredom shopping because it’s easy to do. Technology has allowed us to mindlessly scroll social media, install apps, and instantly link to retailer websites without having to leave the couch. And if you’ve already stored your payment information online, it’s even more convenient to buy on a whim.

Shopping while bored can be harmless if it’s small-scale and infrequent. But if it’s a habit or your go-to activity the minute you’re freed up, shelling out money on unnecessary purchases can bring on extra debt and bust your budget.

Examples of Boredom Spending

The habit of buying when you’re bored can happen anywhere and anytime. For instance, it can occur when you need to kill time before an appointment and wander into a store to browse and then you wind up purchasing a couple of things because a “buy one, get one” sale was advertised. Or you might suddenly have a free afternoon because a friend canceled plans, so you check Instagram where you see engaging ads for exercise equipment you never knew you needed.

Life offers up many opportunities for boredom shopping. As long as you find yourself with gaps in your schedule, there’s time to potentially give in to impulse buys. And this impulsive buying can lead to overspending and more credit card debt which, thanks to its high interest rates, can be a challenge to pay off.

11 Tips to Avoid Boredom Spending

If you need some strategies on how to quit spending money when bored, here are tactics to try. They take a variety of angles to keep you from overspending during your downtime.

1. Reducing Time Spent on Social Media

Changing your spending habits to combat boredom buying likely requires stepping away from your laptop, tablet, or smartphone. Social media can contribute to “fear of missing out” (or FOMO) spending. Trying to keep up with others’ buying habits so you’re not left out can affect mental health, causing stress, unhappiness, and feelings of low self-esteem. People dealing with FOMO may go into debt because of overspending.

To resist temptation and cut down on social media use, consider deleting specific apps or turning off the app’s notifications. There are also apps designed to increase focus and productivity that might be helpful. Freedom and StayFree are two examples; they can block social media and other websites for specific periods of time.

2. Starting a Side Hustle or a Second Job

There are several benefits of having a side hustle, freelance gig, or part-time job. For one, it can fill any additional time you might have for boredom spending. Actively pursuing another stream of income can also ignite a passion for something new, increase your professional skills and introduce you to new people.

In addition, having a side gig provides more money to put towards paying bills, decreasing debt, and increasing your savings account.

3. Allowing Splurges in Your Monthly Budget

Expecting yourself to never make boredom purchases may be unrealistic for many people. In that case, you might come up with a specific dollar amount to automatically slot into your weekly or monthly budget rather than quit cold turkey. Making an allowance for this type of shopping spree can help keep you from going completely overboard and having to skimp elsewhere.

Recommended: Developing Good Financial Habits

4. Taking a Break

Unpacking what’s going on when you are feeling as if life is tedious can help stop shopping when bored.

Feeling bored may signal it’s time to relax, switch gears, or engage in some physical activity. That “high” you tend to feel after buying something? You can thank the release of dopamine, a feel-good brain chemical that is part of the brain’s reward system. Dopamine is also released when you’re exercising or doing something you enjoy.

You can experience a dopamine rush by partaking in non-shopping activities, such as going for a hike or brisk walk, gardening, listening to music, and meditating. Relaxing with a book, tackling a jigsaw puzzle, cleaning, or baking your favorite sweet are also ways to reap similar emotional rewards while breaking monotony.

5. Setting Financial Goals

Dig into how boredom buying is impacting your financial health. When you see how it’s making it hard to achieve your aspirations, you’ll have added incentive to stop this behavior.

Creating money goals for yourself is an important step towards gaining control over your finances. It’s also an ideal way to start developing good financial habits. Start by writing down your short-term and long-term goals which could include tracking weekly spending, starting an emergency fund, or saving up for a down payment on a house. Once you’ve got it down on paper or in a spreadsheet, prioritize your objectives, give yourself a reasonable time span to meet those goals, and make a commitment to stick to them. Take note of how unplanned splurges will interfere with your budget.

6. Rewarding Yourself When You Achieve Your Financial Goals

If you’ve avoided boredom shopping for a couple of months, paid off a credit card bill, or managed to stow money in your savings account, it’s okay to treat yourself to a low-cost item such as a favorite meal or a movie. These little rewards can keep you from feeling deprived and inspire you to stay on course.

There are lots of rewards that don’t cost anything, such as a nature walk or a hot bath. But if you do want to spend, be sure to set a price limit based on what you can actually afford. The goal here is to reward good behavior and encourage you to stay on target and not let boredom purchases rock the boat.

7. Utilizing the 30-Day Spending Rule

The 30-day spending rule is a strategy to help reign in impulsive spending. Basically, the rule is simple — if you see a nonessential item either online or in a store, do not buy it. Instead, make a note in your calendar for 30 days later with details about where you saw the item and its price. When you reach that date, if you still want to purchase the item, and can afford it, you can do so, knowing it’s no longer an impulse buy. Instead, the purchase constitutes a well-considered financial choice.

There’s a good chance, however, the urge to make that purchase will have faded and you simply move on.

8. Unsubscribing from Email Lists

Retailer emails or newsletters touting sales, discounts, and deals can clutter your inbox and awaken the boredom spending monster. You can remove these temptations by unsubscribing from the company mailing lists.

Usually when you open their email, there’s an “unsubscribe” button at the bottom of the correspondence. It may be in small print but if you click or tap it, you should be able to opt out of emails. Take note it will probably take a few weeks for communications to stop.

You can also opt out of text messages that broadcast sales and special deals to your mobile phone. This can help minimize the temptation to shop when bored.

9. Learning New Skills That Interest You

What sparks your interest? Maybe you want to learn web design, become a real estate professional, or hone your cooking skills. Expanding your abilities in an area of interest can keep boredom at bay, whether you choose to study in person or online. Acquiring new skills could also make you more marketable and increase your income.

But even if learning something new doesn’t impact your earning power, it can still enrich your life. Getting involved in anything that stimulates your brain — whether it’s learning a new language, taking up knitting, or signing up for that novel writing class — can help you feel more fulfilled and increase your self-esteem.

10. Making Shopping Harder

As mentioned above, shopping can be super easy, increasing the odds that you might do some boredom buying. Why not fight back with tricks and tools that help you cut back on spending? The first thing you can do to reduce online and in-app shopping is delete your credit card or payment information from your favorite sites and your phone. This will add a few steps to the checkout process which may reduce the likelihood of spontaneous buying. It will give you time to be mindful about your spending and reconsider.

If you’re out and about, try leaving your credit cards at home to avoid boredom-driven buying.

11. Connecting With Others

Shopping can be a way of coping with being alone, and studies have shown loneliness leads to higher levels of boredom. Interacting with other people is key to cutting down on social isolation. Make plans to see friends and loved ones you enjoy. Volunteering for a local organization, political campaign, or charity is another great way to network. You’ll meet like-minded people and hopefully stay away from stores.

Saving Money With SoFi

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

FAQ

How do I train myself to stop spending money?

The first thing you’ll want to do is stop and ask, “Do I need this or just want it?” If the answer is want, try waiting 30 days and then deciding whether to make the purchase. Also helpful: Find other, non-shopping ways to use those times you feel bored, such as meeting friends, starting a side hustle, or pursuing a hobby. Put the money you save towards a goal like paying down credit card debt, and congratulate yourself for your hard work.

What can I do instead of spending money?

Life presents many other options and healthier ways you can deal with ennui besides spending money. When you’re bored, engaging in another activity such as reading, cleaning, or decluttering can take your attention away, allowing you to feel productive and have a sense of purpose. Spending time with loved ones is another good use of time. Most likely, when you become engrossed in something else besides shopping, the impulse to buy will subside.

What are some spending triggers?

Shopping can stem from both psychological reasons and outside factors. Some people may be triggered to shop because of fear of missing out on what others have; others may need a mood lift when feeling sad, anxious, or lonely. Retailers are also known to use specific sensory stimuli both online and in stores to inspire spending.

Photo credit: iStock/Vadym Pastukh

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

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

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

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

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

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

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

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

SOBNK-Q324-017

Couponing can help you save money, whether when buying a favorite brand or trying a new product. However, you must also take into account the amount of time you spend on couponing as part of this equation. In addition, couponing might lead you to buy more than you intended because it feels as if you can snag a discount.

Here, you’ll learn the ropes of smart couponing, plus its pros and cons.

What Is Couponing?

Couponing means redeeming discounts on goods and services, which can seem like an easy way to save money. Coupons are created by businesses and retailers as a customer acquisition tool (that is, they encourage people to try a product for the first time) or they could be a customer loyalty device (a way of rewarding steady consumers with a discount).

Coupons take several forms, including:

•   The old-fashioned way; paper coupons clipped from newspapers, store ads, and mailers.

•   The instant way, via apps for discount codes on everything from dinner out to Target finds (20% off dresses, anyone?).

Coupons tug at a person’s budget-wise motivation to save money. But read on to learn if coupons are worth your time and energy.

How Does Couponing Work?

Merchants want you to shop for their brands, so they dangle discounts. When these arrive in the mail or email, on a cash-register receipt, or in a print publication, you will likely need to clip them out and bring them with you to a retail location or enter the pertinent information when purchasing online.

In terms of digital coupons, you will often have to create an account with your email address and a password to get coupons or discount codes. This is an important trade — you get, say, a 10% off welcome code and in exchange, the merchant gets your contact information to potentially reel you in with more deals.

Both paper and virtual coupons typically have expiration dates. More and more often, online merchants do “flash sales” and short-term offers with a tight time window to get you to click spend your money without much pause. This can lead to impulse purchases.

Keep in mind, the business goal behind coupons is to get you to spend money, not put it into your bank account.

Recommended: How to Coupon for Beginners

Are Coupons Used Today?

Coupons are still quite popular today. According to a recent CouponFollow report, over 90% of U.S. households used at least one coupon in the last 12 months. Many people prefer digital coupons to paper ones. Downloading coupons on your phone is quicker than using scissors to cut along the dotted lines. The average percentage saved with an online coupon was found to be 21.9%.

How Many People Use Coupons?

As noted above, over 90% of American households say they used a coupon in the most recent year. This figure isn’t necessarily related to income. One study found that 86% of households earning $200,000 or more per year used coupons in a given year.

Another sign of coupons’ popularity: A full 80% of shoppers said they only sign up for store or brand emails to get the coupons offered.

Types of Coupons

Merchants are getting more inventive with the kinds of coupons and discounts they offer shoppers. Here are some of the popular ways you can likely access deals.

•   Set up a user account with email and password on favorite shopping sites. By joining the rewards club, if there is one, they can also unlock digital codes and get merch rebates.

•   Download your grocery chain’s app and link weekly digital coupons to your account.

•   Follow brands on Instagram and Facebook to watch for discounts and free shipping codes on social media.

•   Use couponing and discount services that add an extension to your browser and then let you know about coupon codes available when you shop online. Check reviews and ratings of these before downloading, however. Honey and Ibotta are popular for couponing, but many have mixed reviews.

•   Look for the physical coupon with purchase. Yes, some companies still do coupons the old-fashioned way. Boxes of powdered laundry detergent may come with coupons inside, or frozen pizzas may have stickers on the pack that you peel off to get a discount.

Why Do People Coupon?

Consumers coupon to save money or get things free. A discount or freebie can inspire a person to try a new product or a brand other than the one they usually buy. In this way, the company issuing the coupon may build their customer base and their sales. Coupons can also reward loyalty. For instance, you might get a coupon for 10% off your next purchase from a particular brand or retailer.

A bit of history: The first coupon reportedly came out in 1888, when Coca-Cola offered them, good for a free sample.

Benefits of Couponing

Couponing has its pros, for sure. These include:

•   Trimming your expenses, and using the money saved to reach other financial goals.

•   Having fun. Couponing has some aspects of a game, which can make it feel like a fun way to save money.

•   Sharing the wealth with your family and finding better deals, thanks to coupons, on such expenses as school supplies and uniforms, sneakers, electronics, and home furnishings.

•   Scoring discounts on lodging, car rental, and other travel expenses.

Recommended: Why Saving Money Is Important

Drawbacks of Couponing

The chase for discounts can, however, have downsides, such as:

•   If you scoop up items you would not have otherwise bought just so you use a coupon, you could wind up buying things you don’t need or even really want. Do you need tropical fabric softener, or are you just eager to use the coupon?

•   Coupons can encourage over-buying. For example, if you need to purchase four boxes of cereal to reap a discount, you may have food sitting unused. (That said, buying in bulk to save money can be an effective tactic if done properly.)

•   Consumers may feel under pressure to use coupons before they expire in order to be a “good shopper.” It’s a misconception that not using a coupon is losing “free” money. It’s not free; you’re still spending your dough to get the discount.

•   Coupons can be inconvenient. Remembering to carry and use paper coupons requires financial discipline. Plus, it’s too easy to forget to redeem coupons attached to products in-store. Customers and cashiers may not detach the manufacturer coupon and scan it.

•   Ironically, you might be tempted to overspend on other things after saving with a coupon. For instance, a 50% discount code on a clothing site may prompt you to buy other items you didn’t plan to purchase or really need.

Recommended: How Much Money Should I Save a Month?

Do Stores Lose Money by Couponing?

In general, stores do not lose money from offering or accepting coupons. In fact, they are more likely to profit.
Coupons encourage people to shop by offering an incentive: free merchandise or lower-cost goods. These offers entice people to try new products (and hopefully become loyal customers) and buy items that they might not have otherwise considered.

In addition, for brick-and-mortar stores, coupons encourage foot traffic. They tempt shoppers to come inside, where they might find more than just the coupon item that catches their eye. In these ways, coupons actually build sales.

Does Couponing Ultimately Save You Money?

Couponing can save you money if you are offered a discount on an item you were already planning to buy. Or perhaps offers you free shipping from an online retailer you love.

However, you could end up losing money in the long run if you’re not careful. If you spend two hours a week combing through coupon fliers just to save a dollar, it’s probably not worth it. Your time is valuable.

Lastly, coupons can lead to price creep. For instance, did you really save money if you budgeted, say, $50 for a skirt and got waylaid by a coupon for $25 off a purchase of $100? You went in planning to spend $50, not $75 (that is, $100 minus the $25 discount).

Recommended: Guide to Practicing Financial Self-Care

The Takeaway

Couponing and discount codes can be a smart, frugal move if you stick to buying products and services you would have purchased anyway and don’t get sucked into getting unnecessary items just to save a buck (or a few). But the coupon game takes time, patience, and organization.

If you want to track your spending and save money with minimal effort, here’s an option.

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

FAQ

Can you go to jail for couponing?

The typical act of redeeming a coupon is not illegal. However, Illegally creating, copying, or using coupons can land you in jail. A Virginia couple went to prison in 2021 for a combined 19 years after the FBI uncovered one of the largest coupon fraud schemes in U.S. history. Retailers and manufacturers lost more than $31 million when the couple used social media sites such as Facebook to sell counterfeit coupons to groups of couponers.

Is extreme couponing possible?

Yes, extreme couponing, in which people save a huge percentage off their costs, is real. Everyday people have saved hundreds of dollars in grocery stores. For instance, the top extreme couponers have shaved more than 90% off their bills in a study conducted more than a decade ago. But this is a serious endeavor demanding much time, energy, and planning, plus you might end up stuck with items you don’t want, need, or will ever use.

Is extreme couponing stealing?

No, extreme couponing is not stealing, but it’s not uncommon for stores to resent it if a shopper brings in a stack of coupons and spends very little money in the end.

Photo credit: iStock/monkeybusinessimages

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

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

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

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

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

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

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

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

SOBNK-Q324-047

A letter of credit is a document from a bank or financial institution guaranteeing that a buyer’s payment to a seller will be made on time and for the correct amount. As part of a sales agreement, a seller may require the buyer to deliver a letter of credit before a deal takes place.

Letters of credit are often vital in international trade where the two parties involved are not yet familiar with one another. Letters of credit facilitate new trade and prompt payments.

Read on to learn more, including:

•   What a letter of credit is

•   How a letter of credit works

•   What the different types of letters of credit are

•   The pros and cons of letters of credit

•   How to get a letter of credit.

What Is a Letter of Credit in Banking?

A letter of credit in banking is a document that a bank issues to a seller that guarantees payment from their customer for an order or service. The bank where the buyer’s business account is held usually assumes responsibility for the payment for the goods. However, the conditions laid out in the letter of credit must be fulfilled. If the buyer is unable to fulfill the purchase, the bank must pay the seller the purchase amount. The bank or financial institution charges the buyer a fee for guaranteeing the payment and issuing the letter.

Letters of credit are common in international trade situations because various factors can affect cross-border transactions. For example, the deal might involve different legal frameworks, a lack of familiarity between the parties involved, and geographic distance.

If you are a buyer who is planning to be involved in international trade, you will likely want to open a bank account that can provide you with a letter of credit when you need it.

How a Letter of Credit Works

When used properly, letters of credit can work to minimize credit risk and help international trade go smoothly. A vendor selling products or services overseas may want assurance that a buyer of their products or services will pay. Perhaps the buyer is new to them or just a new business, period.

So how does a letter of credit work? It serves as a guarantee from a bank that payment will be made to the vendor once the requirements are met. The letter lays out the conditions of payment, such as the amount, the timing of the payment, and the delivery specifications. The letter may help the business placing the order build their credit, too.

The bank charges the buyer a fee for issuing a letter of credit (often around 0.75% to 1.5% of the amount of the deal). It also does the due diligence to verify the buyer’s creditworthiness. The bank requires collateral or security from the buyer for the payment guarantee. In essence, the bank acts as a third party facilitating the deal.

Recommended: Why is Having a Good Credit Score Important?

Types of Letters of Credit

Here are four types of letters of credit.

•   Commercial Letter of Credit: This is a method in which the issuing bank pays the seller directly. For a stand-by letter of credit, which is a secondary method of payment, the bank only pays the seller if the buyer cannot transfer funds.

•   Revolving Letter of Credit: With this type of letter of credit, the bank guarantees payment for a number of transactions, such as a series of merchandise shipments within a set period of time.

•   Traveler’s Letter of Credit: With this kind of letter, travelers can make withdrawals in a foreign country because the issuing bank guarantees to honor any withdrawals.

•   Confirmed Letter of Credit: A seller using a confirmed letter of credit involves a secondary bank, typically the seller’s bank. This bank guarantees payment if the first bank fails to pay.

There is also an irrevocable letter of credit. This is a letter of credit that can’t be changed or canceled unless all parties agree.

Letter of Credit Example

Here’s an example of a letter of credit: A bank provides commercial letters of credit and stand-by letters of credit within two weeks. The funds are secured through deposits at the bank, and the terms are renewable. These documents can help reassure parties doing business internationally with new businesses or clients who have recently started a business.

The Money Behind a Letter of Credit

So where do the payment funds for a letter of credit originate? The party paying for the goods or services typically deposits funds in advance to the bank that issues the letter of credit to cover the payment. Alternatively, the amount might be frozen in the payer’s account or the payer might borrow from the bank using a line of credit.

When Does Payment Happen?

Payment usually occurs when the seller has completed all the stipulations in the letter of credit. For example, the seller might have to deliver the goods to a specific address or onto a ship for transportation in the case of international trade. In the latter case, shipping documents would serve as proof that the requirements for payment have been fulfilled. They might then trigger the payment transaction.

What to Watch Out for

Here are some common mistakes sellers may make when relying on a letter of credit for payment.

•   Failing to check all of the requirements in the letter of credit.

•   Failing to understand the documents required for the deal.

•   Failing to confirm whether the time limits for delivery and payment are reasonable.

•   Failing to meet the time limits.

•   Failing to get the necessary proof of delivery documents to the bank.

Letters of Credit Terminology

Here are some terms and phrases to know if you may be using letters of credit.

•   Advising bank: This is the bank that informs the seller that the letter of credit has been completed. The advising bank is also called the notifying bank.

•   Applicant: The party or buyer of products or services who applies for the letter of credit from the bank.

•   Beneficiary: The party, or seller, who will receive payment. The seller usually requests a letter of credit to guarantee payment.

•   Confirming bank: The bank that guarantees the payment of the required funds to the seller. If a third party is involved, the confirming bank is often the seller’s bank.

•   Freight forwarder: A shipping company that provides the transportation documents to the seller.

•   Intermediary: These are companies that link buyers and sellers and may use letters of credit to ensure transactions are executed.

•   Issuing bank: The bank that issues the letter of credit.

•   Negotiating bank: If a third party is involved, the negotiating bank works with the beneficiary and the other banks involved. They likely determine the letter of credit requirements to complete the transaction.

•   Shipper: The transportation company that ships goods.

•   Stand-by letter of credit: A secondary letter of credit that’s used when a deal requirement has not been met. For example, if payment does not occur within the specified timeframe, a stand-by letter of credit would then be used to help guarantee that the deal goes through.

Pros and Cons of Letters of Credit

A letter of credit provides security for both parties involved in a trade, but it can also add costs and time to business transactions.

How to Get a Letter of Credit

Getting a letter of credit usually requires a few steps. It’s wise to get the necessary paperwork together first. Various documents will usually be listed as requirements for a trade, such as a shipping bill, a commercial invoice, insurance documents, a certificate of origin, and a certificate of inspection.

Here are the steps typically taken to obtain a letter of credit.

1.    The buyer and seller come to agreement on the sale terms and the use of a letter of credit.

2.    The buyer contacts their bank where they have a checking account and requests a letter of credit and provides necessary documents.

3.    The issuing bank prepares the letter based on the terms of the sales agreement and sends it to the confirming bank or advising bank, which is typically in the seller’s home country.

4.    The confirming bank verifies the terms and forwards the letter to the seller.

5.    The goods can then be shipped, and the exporter sends documentation to the advising or confirming bank.

6.    Document verification and settlement of payment can then occur.

When to Use a Letter of Credit

A letter of credit is beneficial for sellers entering into a new trade relationship or an international trade relationship. It can provide assurance that the seller will receive payment because the issuing bank guarantees payment once the requirements have been met. Sellers may also use the guarantee of payment to borrow capital to fulfill the buyer’s order.

The Takeaway

A letter of credit is usually requested by an exporter or seller to minimize credit risk. The buyer of the goods or services applies to a bank and requests a letter of credit based on the sales agreement. This document helps guarantee that payment will be made. It can provide priceless peace of mind when conducting international trade or doing business with a new customer.

Another path to financial peace of mind: Choosing the right bank account. Whether you’re looking for a business account or a personal account, it’s wise to shop around to find the best banking fit for your needs.

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

FAQ

How much does a letter of credit cost?

A typical fee for a letter of credit is typically 0.75% percent to 1.5% of the amount of the deal, but the rate will vary depending on the country and other factors.

How do you apply for a letter of credit?

Once the terms of a trade are agreed upon between the buyer and the seller, a buyer contacts their bank to request a letter of credit. They then gather the required documentation and fill out an application with that bank.

Why do you need a letter of credit?

The parties involved in a trade typically use a letter of credit to minimize risk. For the seller, a letter of credit can guarantee payment for goods once certain requirements have been met and the buyer confirms their creditworthiness as a trade partner.

Photo credit: iStock/Lesia_G

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

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

This article is not intended to be legal advice. Please consult an attorney for advice.

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.

3.30% APY
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

SOBK-Q224-1916963-V1

You’re likely familiar with the term “pay it forward.” It describes an act of kindness and giving, from passing along soccer cleats to the younger player next-door to volunteering in a soup kitchen, as a way of giving back. It’s all about putting generosity into action and participating in a cycle of giving that empowers both you and others.

By paying your good fortune (financial, healthwise, or otherwise) forward, you both help others and may inspire people to also give what they can to assist others and lift spirits.

As part of their ActNow campaign, the United Nations lists 17 Sustainable Development Goals, along with small things individuals can do in their daily lives that can improve life for all of us. They note that “a lot” can happen “when millions of people act together for our common future.”

Interested in joining this movement towards positive change? Read on to learn 23 ways to pay it forward, including:

•   Gestures that lift spirits, from running errands to letting people take your place in line

•   Giving back to your community

•   Passing on meaningful possessions instead of tossing them.

Is Paying It Forward the Same as Karma?

The concepts of paying it forward and karma are similar yet different.

Paying it forward involves helping others without expecting anything in return, except the hope, perhaps, that the recipient might keep the cycle going, thus making the world a better place. You may also have heard of this concept called “random acts of kindness.”

The word karma, on the other hand, comes from the Hindu and Buddhist religious concept that a person’s actions in this and previous states of existence decide their future fate when reincarnated.

In everyday usage, the idea is that if we send the universe positive energy, also known as good karma, it will come back to us. On the flip side, bad karma is often believed to bring more bad events or bad luck.

Simple Ways to Pay It Forward

If you’d like to test-drive some pay-it-forward ideas, there are plenty of options. Here, you’ll find 23; notice how doing one can make you want to try another.

1. Letting Someone Go in Front of You in Line

This is a present to a harried parent with a sick child at the pharmacy or a driver merging into a crowded highway toll lane. Kindness is connection in a busy world and is applicable anywhere, from an airport restroom to Home Depot aisles.

2. Paying for a Stranger’s Coffee or Meal

At Starbucks, numerous customers have kept drive-through pay-it-forward chains going, each covering the tab of the customer in the car behind them. But you could also buy someone a java at any coffee shop or drive-through, or be kind and give the cashier money to pay for a full meal of another patron, just to make their day.

3. Sharing Your Green Thumb

Tend the flowers in a public patch to give beauty to your town. Donate homegrown veggies to a food pantry, or leave extra zucchini, beans, rhubarb, and more by your mailbox for others to take for free. It could really help someone who is struggling to pay for groceries in a given month.

4. Donating Blankets, Pajamas, Socks, and Toiletries to Shelters

Unhoused families might move from shelter to shelter for available beds. Consider donating new blankets, PJs, socks, and unopened mini shampoos, lotions, and soaps from hotel stays for the gift of personal care.

Recommended: How to Make End-of-Year Donations

5. Leaving a Big Tip for a Server or Waiter

Servers and waitstaff are on their feet, catering to our whims (dressing on the side, hold the onions), and their base salary is generally low. Tips help even the score. Yes, there are guidelines of how much you should tip, but occasionally, it can be nice to go a bit overboard. For a server that goes above and beyond, consider slipping them a generous cash bonus before you leave.

6. Returning Another Person’s Shopping Cart

Here’s an easy way to pay it forward with a random act of kindness: Grab another customer’s card after they are done with it. This saves them the extra steps and, if you’re on your way on, you won’t have to hunt for a cart.

7. Sending an Email of Gratitude

Amid spam, advertising, and billing statements, a note of gratitude is a grace. Maybe it’s time to thank unheralded people like the school reading teacher or your family doctor for all they do every day.

8. Sharing Your Food With Someone

If you enjoy getting bargain prices but Costco multipacks are just too big to store, consider sharing a few with a friend or neighbor free of charge.

Recommended: 31 Tips for Cutting Your Grocery Bill

9. Learning the Names of People You See Every Day

Get to know the crossing guard, train conductor, and neighbor who walks her poodle by your house every morning. (Learn the poodle’s name, too.) This is a sign of respect and appreciation that says “I see you and notice you. You are not anonymous.”

10. Leaving Extra Quarters at the Laundromat

These shiny silver timesavers can be a real boon for the next person lugging in dirty wash and detergent.

11. Asking for Charitable Donations Instead of Gifts for Your Birthday

More and more kids and adults share this kind of gift request on Facebook and in party invitations. Money goes to good causes, from the Breast Cancer Research Foundation to the World Wildlife Fund, rather than material gifts. Need inspiration? Spend a bit of time researching the best charities to support.

12. Helping Someone With a Task

Give a neighbor a hand raking leaves, shoveling snow, or with a work-related task, such as proofreading a resume or printing a document. Offering to help without any payment expected can deepen your bonds.

13. Writing a Recommendation for a Coworker

Leave a golden review on LinkedIn or write a glowing letter someone can take along when leaving a job. This can help them move ahead in their professional pursuits.

Recommended: 22 Money Moves To Make This Month

14. Writing a Message to Someone Who Made a Difference in Your Life

Did your fifth-grade teacher see in you skills other people missed? Did your first boss train you in a way that’s made your work life so much easier? A handwritten note or card sent by snail mail is one of the best pay-it-forward examples. You’ll probably make their day and then some.

15. Giving Away Items Online

Your daughter’s riding boots from all those lessons at the horse barn deserve a good home. So does the dollhouse your brother built her. Instead of tossing them in haste, consider posting them on sites like Freecycle, Nextdoor, or a local Facebook group, so someone else can nab them. Reduce/reuse/recycle helps the planet, too.

16. Encouraging Someone Who Needs It With a Few Words

We all need some positive encouragement now and then. You can offer it by saying “You got this” to a parent who is job-hunting or “Good for you, walking” when you pass someone on a steep hill.

Recommended: 5 Ways to Achieve Financial Security

17. Leaving Coupons Next to Corresponding Products in the Grocery Store

That diaper coupon you can’t use because your baby is too big now? Leave the coupon on a package for another shopper. Same with any other coupons that could brighten someone else’s day.

18. Purchasing Extra Food to Leave at Shelters

When you go grocery shopping, you might add some shelf-stable products, like pasta, sauce, rice, nuts, boxed milk, nut butters, wholesome cereals, and canned fruit, to your cart for others in need. You can then drop them off at a local shelter or other nonprofit.

Recommended reading: Things to Do with Your Tax Refund

19. Cleaning Up Your Local Beach or Public Area

Bring trash bags, gloves, and perhaps family members to help collect garbage that clogs our natural areas. You can also help keep plastic out of our bodies of water this way.

20. Running an Errand for a Busy Loved One

Is your sister a full-time nurse raising two kids? Once a week, drop off a heat-and-eat dinner or shuttle kids home from activities.

21. Volunteering Your Time

Whether you make it a regular or a once-in-a-while activity, an easy and rewarding way to pay it forward is to give a couple of hours of your time. Help at a religious institution, the school library, or the local soup kitchen, or pitch in at a town park or garden cleanup. Volunteering can prove to be a fun, free way to spend your leisure time.

22. Donating Blood

Sign up to donate blood or give platelets (the latter takes longer but meets critical needs.) You leave on a high, knowing hospitals, patients, and their families are waiting for your vital gift.

23. Giving up Your Seat to Someone

Do it on the subway, bus, or train. If you’re hailing a taxi and other people are waiting, too, why not let them get the first one? It’s an easy way to be charitable.

Banking With SoFi

Paying it forward can help improve our world, little by little. You might give money, time, skills, or all of the above. A random act of kindness in your apartment or office building, or even with courteous driving, can turn someone’s bad day around. Looking out for another person, not just for yourself, makes everyone feel better.

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

FAQ

How do I pay it forward at work?

In the office, you might treat co-workers to coffee and fruit as an act of friendship and gratitude. If everyone on your team is now remote, consider making a donation in their names to a nonprofit near company headquarters.

Where did the concept of “pay it forward” begin?

The phrase can be traced back to the 1916 book In the Garden of Delight by Lily Hardy Hammond. In it, she wrote: “You don’t pay love back; you pay it forward.” There was a movie with the title “Pay It Forward” in 2000. Then in 2007, a Pay It Forward Day was launched in Australia. The idea has since been adopted by many counties as an opportunity to do acts of kindness.

How often should you pay for kindness?

The term “pay for kindness” is a misnomer. We do not pay for kindness. Rather, we can pay forward to others the thoughtful gestures and generosity we received by keeping the cycle going. And if we receive an act of kindness, we can repay it by doing one too.

Photo credit: iStock/Vladimir Vladimirov

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.

*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.

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

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

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

SOBNK-Q324-041

We’re a nation of coffee lovers, with java consumption at a two-decade high, according to the National Coffee Association’s 2024 research. Whether you like a cup of basic black coffee or an iced latte with all the bells, whistles, and whipped cream, coffee may feel like an affordable treat.

However, that little indulgence and energy booster is getting more expensive. In fact, between inflation and the higher cost of coffee beans, java prices have increased nationwide. Specifically, in April 2024, the price was 26.5% higher than it was in April 2010, according to U.S. Bureau of Labor Statistics data. This means you’re most likely paying more for your coffee at home and in neighborhood and national chain coffee shops.

While you might not consider spending an extra 25 or 50 cents a cup a big deal, these expenses can add up and mess with your budget. Fortunately, there are lots of ways you can still enjoy your daily cup of joe without going broke. Read on for 17 practical ways you can save money on coffee.

How Much Does the Average Person Spend on Coffee?

It’s estimated that women shell out $2,327 on coffee each year, while men spend $1,934, according to the Perfect Brew. Statistics show Millennials are the biggest spenders with the average 25 to 34 year-old dishing out $2,008 a year on their coffee habit, followed by 35 to 44 year-olds, who spend $1,410 on coffee each year.

Recommended: How Much Should I Spend on Food a Month?

How Spending Money on Coffee Shops Can Add Up

The average price of a cup of coffee-shop joe costs nearly $5 according to the latest data. If you’re buying your coffee five days a week, that’s $25 a week and $100 a month. It might not sound like a lot, but do the math and you’ll find even if you’re only ordering one cup, you’re shelling out $1,200 a year just on to-go coffee. By making a few small changes to your routine, you could potentially save yourself hundreds of dollars and then use that money to open a savings account and sock the funds away for future goals, like a vacation or even a down payment on a house.

17 Great Ways to Save Money on Coffee

Think you might be spending a small fortune on coffee? It may be time to take stock of how much of your money is going towards those pots of Italian roast at home and pumpkin spice lattes when out and about. By incorporating some small changes, you can end up with extra money that can go into savings.

Here are 17 great ideas on how you can lower the cost of buying coffee every day.

1. Grind Your Own Beans

Even though bags of pre-ground coffee and whole beans may cost the same, grinding beans can be more economical in the long run. Why? Whole beans stay fresher longer compared to pre-ground coffee, which is often made with lower quality beans, additives, and fillers, tending to go stale faster. Coffee that’s lost its aroma and flavor may go unused or tossed, resulting in pouring money down the drain along with your brew.

2. Improve Your Brew Method

One reason why you might skip making coffee at home is because it doesn’t taste like it does at the coffee shop. If this is the case, it’s time to up your brewing game. Start by using the right grind size for your coffee method, such as a coarse grind for a French press or a medium-coarse grind for automatic drip. Also try figuring out your preferred coffee strength for the ratio of coffee to water, and understand the best water temperature for your chosen brewing method.

3. Invest in a Quality Coffee Maker

Here’s another smart idea for how to save money on coffee: Get a coffee maker you’re excited about. It will likely inspire you to drink more coffee at home. Purchasing a coffee maker may feel like a bit of a splurge, but in the long run, you’re likely to be spending money wisely. Making coffee at home will offset the cost of daily trips to the coffee shop.

4. Get an Inexpensive Milk Frother

Instead of paying extra for a latte or a cappuccino from your local barista, make your own at home with a milk frother. Milk frothers work by aerating the milk and creating the foam to add to your hot or cold coffee drinks. There are different types of frothers, from handheld to electric, which vary considerably in price, but you can find one on Amazon for as low as $4. Little savings like this can help you live below your means.

5. Drink Your Coffee Black

It might take time to get used to it, but by drinking black coffee, you’ll be saving money on buying milk or creamer in the supermarket and at the cafe. Some national coffee chains charge as much as 80 cents extra or more if you order coffee with certain types of dairy-free milk, such as almond, oat, soy, or coconut. What’s more, when you keep it simple and black, you can really appreciate the coffee’s true aroma and flavor.

6. Switch to a Cheaper Alternative

If you’ve been toying with giving up coffee for a less expensive fix, consider switching to tea, which can cost up to three times less than coffee you make at home. Caffeinated teas such as black, matcha, and Oolong can provide plenty of flavor while still providing you the buzz you need.

The cheapest choice? Decrease the amount of coffee you drink everyday or quit entirely.

7. Refrigerate or Freeze Leftover Coffee

Made too much coffee? No problem. Refrigerate it later and drink it iced, or add it to a smoothie with other ingredients such as peanut butter, banana, vanilla extract, and the milk of your choice. Leftover coffee can also be used to make coffee popsicles or fill an ice tray for cubes you can add to iced coffee.

8. Make Your Own Creamer

Those French vanilla and other flavored creamers can liven up your cup of joe, but they don’t come cheap. Cut your grocery bill by saying no to those costly supermarket creamers. Do a search for homemade creamer recipes on the internet, and you’ll find many different variations. Making your own creamer can be as easy as combining 1 can of sweetened condensed milk, 1-¾ cup skim milk, and 2 teaspoons of vanilla extract.

9. Add Your Own Flavorings Instead of Paying Extra

Before you head out to a coffee bar for one of those flavored treats, try spicing up your coffee at home by sprinkling in cinnamon, powdered cocoa, cayenne pepper, or vanilla extract. Fancy syrups used by coffee shops are easy to create yourself and you can find a variety of recipes online. A couple of teaspoons of maple syrup can sweeten up your java too.

Recommended: 30 Ways to Save Money on Food

10. Order the Smallest Size Coffee

The difference between buying a small and a large size coffee can be as much as 80 cents or more. Opting for a smaller cup over the largest size over the course of a week could save you about $5. That’s $20 a month and a yearly savings of $240.

11. Pay with Cash Instead of Credit

When paying for coffee, it’s easy to whip out a credit card. However, using your card each time and not keeping track can be an eye-opener when your bill comes due. If you’re carrying a balance and have an interest rate of, say, 19%, you’re paying almost 20% more by using your plastic for that cup of joe. Instead, switch to cash only for coffee to become more aware of how much you’re really spending — and to avoid getting into a position of having to pay off outstanding debt.

12. Ask for Gift Cards

For special occasions like birthdays or holidays, put a coffee gift card on your wishlist. A $15 or $20 gift card from a loved one can give you a week or two reprieve from spending your own money at coffee shops.

13. Pay with an EBT Card

The USDA’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, provides financial assistance towards groceries for individuals in need. SNAP recipients receive an Electronics Benefit Transfer (EBT) card to buy food items and non-alcoholic beverages at most major supermarkets as well as Amazon, Instacart, and more. This means you can use your benefits in participating retailers to buy such brands as Califia Farms, Starbucks, or Dunkin’ brand packaged coffee, K-cups or cold bottled drinks. Although Starbucks doesn’t accept SNAP at their stand-alone stores, some of its licensed kiosks found inside certain grocery sellers such as Target, Fred Meyer, and Safeway, accept EBT.

The catch? You can only purchase SNAP-eligible items that have a nutritional label. Hot foods and beverages are excluded so barista-prepared coffee isn’t covered. You can check to see what stores in your area take EBT cards with the USDA Snap locator .

14. Check out Coffee ‘Happy Hours’

Look for coffee shop happy hours where you can get your favorite beverages at lower prices. Starbucks, Peet’s, and Ziggi’s Coffee are some national chains that often offer happy hour deals, and your local coffee shop may have them as well.

15. Avoid Hanging Out in Coffee Shops

With more people working remotely, coffee shops have become a popular place to get out of the house and get one’s job done. But, as the hours pass, you’re likely to order more coffee. Just like the price of eating out vs. eating at home can be more expensive, camping out for a longer period of time also means you may feel obligated to purchase food, plus contribute to the tip jar.

16. Budget for Your Coffee

Sometimes you just have to reward yourself with a fancy coffee. This is doable as long as you work it into your weekly budget. That gives your spending some structure and gives you permission to buy that treat guilt-free. As you hone your money-saving skills by sticking to your budget, a PSL can be a great way to celebrate a job well done.

One way to create a flexible budget is to try following the 50-30-20 rule, which teaches you to allocate your take-home income into three categories: needs (50%), wants (30%), and savings (20%). That weekly peppermint mocha can be factored in as a non-essential want.

17. Use a Reusable Cup

In an effort to reduce single-cup waste, some national chains such as Starbucks, Tim Hortons and Peet’s, give customers 10 cents off of each cup of coffee if you bring a reusable cup. Drinking out of an insulated cup not only means you’re helping the environment, but your coffee tends to stay hotter longer too.

Banking With SoFi

Want to find room in your budget for a little more java? Opening the right bank account could help you save and potentially even grow your money. That way you can order a special coffee from time to time and really savor it.

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

FAQ

Is it cheaper to make or buy coffee?

Making coffee at home turns out to be much more affordable than buying coffee at a shop. Depending on the type of coffee maker and coffee you use, you can spend pennies per cup. Using a drip coffee maker can cost about 29 cents a cup compared to $3 or more at a cafe.

How much money do you save if you make your own coffee?

At about 29 cents a cup, making coffee at home can cost as little as $105.85 a year if you drink it every day. On the flip side, getting a $4 coffee at a popular cafe every day can be as much as $1,460 a year. Based on those figures, drinking coffee at home can save you a little more than $1,354 annually. In the bigger picture, over the course of 10 years, you’d save more than $13,540. And that’s without interest.

Is coffee worth the money?

For people who can’t live without their daily coffee, this is a no brainer. Spending money on coffee you love is worthwhile, as long as it fits within your budget. You shouldn’t have to sacrifice your daily pick-me-up. The key is deciding if regular visits to the coffee shop are worth the money, or if you can still enjoy a quality cup of coffee with a less costly alternative.

Photo credit: iStock/Toms93

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.

3.30% APY
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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