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If your budget is tight, you may find yourself juggling bill payments, skimping on savings, and living paycheck to paycheck. But while it may seem as if that’s just the way it has to be, there are likely some ways to budget and save better during these times in your life.

Maybe you are a recent college grad with educational loans to pay back and you’re looking for a job. Or perhaps you are navigating some major medical or dental bills in addition to your usual living expenses. Or you might simply bring in a lower income or live in an area with a sky-high cost of living.

Whether you are dealing with a brief budget crunch or some ongoing financial issues, you can take the reins. With the right intel and tactics, you can make the most of your money and stretch further.

Here’s what you can do when money is tight.

Does Budgeting Help When Money Is Tight?

Yes, budgeting can definitely help when your money is tight. By drilling down and seeing just how much money is coming into your checking account each month, what your basic living expenses are, what your discretionary spending looks like, and how your savings are growing, you are better in touch with your money.

You can then move ahead and finetune things to make your money work harder for you. You might see ways to economize or eliminate some expenses or otherwise improve your cash flow.

What follows are 11 strategies that can help when money is tight.

1. Getting Honest With Your Budget

When most of your income already goes to essentials, you may wonder if there is really enough money left over for a spending plan.

But taking a close look at your monthly spending can be especially key when money is tight because the less money available, the more important it is to keep those dollars under control.

To get a full picture of your spending, you may want to actually track your spending (every cash/debit/credit card transaction and every bill you pay) for a month or so. You can do this by carrying around a notebook or saving all of your receipts or by using a budgeting app on your phone.

Once you have a sense of your average monthly spending, it’s a good idea to compare this to what’s coming in. You can look at your bank statements for the past few months to get an idea of how much after-tax income you are taking in on average per month.

Once you have a sense of average monthly spending, it’s a good idea to compare this to what’s coming in. You can look at your bank statements for the past few months to get an idea of how much after-tax income you are taking in on average per month.

Comparing what is coming in vs. going out will help you know exactly where you stand when money is tight can be a critical first step toward easing the strain.

Recommended: 7 Tips to Managing Your Money Better

2. Finding Ways to Save

Once you have a good sense of your monthly spending, the next step in tight-budgeting is to group expenses into categories, and then list them in order of priority, starting with the essentials and going down to the “nice to haves.”

Once you’ve established which expenses are the most important, you can start looking for places to reduce overspending. Cutbacks may not feel fun, but they can be extremely beneficial when money is tight.

For example, if you are spending a lot on restaurants and take-out, you might consider cooking at home a few more nights a week.

Or, if you tend to be an impulsive buyer of clothing, it might make sense to institute a short-term spending freeze on new clothes or a freeze on spending money at a certain store for a period of time.

If you want to save money on at-home entertainment, you might consider ditching streaming services you rarely watch or rotating your subscriptions. If you love buying the latest best-sellers, it might be a good time to renew your library card and borrow instead.

You may also find you’re paying for memberships and services you no longer need or want. These are line items you may be able to scratch from the expense list completely.

3. Negotiating With Service Providers

It can be hard to save money when your budget is tight, but you might try to see if you can reduce some of your so-called “fixed” monthly expenses. Some of those recurring bills (like cable, internet, cell phone, car) may not actually be set in stone.

Some of those recurring bills (like cable, internet, cell phone, car) may not actually be set in stone.

It can take little research — and nerve — but you may be able to negotiate for a lower rate from many of your providers, especially if you’re dealing with a company that’s in a competitive market.

Before you call or email a business or provider, it can help to know exactly how much you’re paying for a service, what you’re getting for your money, and how much the competition is charging for the same or similar service. It’s also a good idea to make sure you are communicating with someone who actually has the power to lower your rate and, if not, ask to speak with someone who does.

You may also want to let providers know that if they can’t do better, you may decide to switch to another company.

Worth noting: You can also try to negotiate medical bills. You may be able to explain your situation and get a reduction.

4. Cutting Back on Bigger Expenses

If you’re tight on money right now, it can also be a good idea to take a look at the big items in your overall budget.

For example, is your car payment too high? If so, perhaps you could lease a less expensive car, or buy a used vehicle to cut monthly payments.

If rent is eating up too much of your income, you might want to look into finding a cheaper place to live that’s still nice, taking in a roommate, or moving in with friends. You might also consider moving to an area where the cost of living is lower.

These options may seem dramatic, but they can really help you save a sizable amount of money every month. The lower you keep these costs, the easier it will be to live well within a tight budget.

5. Knocking Down Debt

Having too much debt can make for an especially tight budget, and it can also hurt your chances of achieving financial security down the line. That’s because when you’re spending a lot of money on interest each month, it can be harder to pay all of your other expenses on time, not to mention grow your savings.

Reducing debt may seem like a tall mountain to climb when money is tight, but choosing the right debt reduction strategy may be able to help you chip away and slowly improve your financial situation.

•  Since credit card debt typically costs the most in interest, you might consider tackling these debts first, and then move on to the debt with the next-highest interest rate, and so on.

•  Another approach is to pay the minimum toward all your accounts, and then pay any extra you can afford toward the debt with the smallest balance. When that debt is wiped out, you can move on to the next smallest balance, and so on.

•  If you can qualify for a lower interest rate, another option might be to take out a personal loan that consolidates all those high-interest debts into one more manageable payment.

6. Starting an Emergency Fund

While it might sound crazy, if not impossible, to put cash into savings when money is tight, here’s why you may want to make building an emergency fund a priority: If you’re living on a tight budget, just one unexpected expense — like your car breaking down or a visit to an urgent care clinic — could put you over the financial edge.

If you start putting just a small amount aside each month into an emergency fund, it won’t be long before you have a decent financial cushion that could prevent you from having to run up high interest credit debt the next time something unexpected rolls around.

Good places to start — and grow — your emergency fund include: a high-yield savings account or money market account. These options typically offer higher interest than a standard savings account, but keep the money liquid so you can access it if and when you need it.

7. Spending Only Cash for Everyday Expenses

There’s something about plastic that can make it feel like you are not really spending money. While it might not be practical to pay your rent or utility bills in cash, switching to cash (and leaving the credit cards at home) for other expenses can be a great idea when money is tight.

The reason is that paying with cash places a harder limit on your spending and helps you become more aware of your choices. When you can literally see your dollars going somewhere, you may find yourself becoming much more intentional in the way you spend it. This can be a very good thing when money is tight.

Groceries and entertainment can be great categories for going cash-only. Cash can also be a good option for clothing and the (occasional) restaurant meal.

Another benefit of cash is that it’s more difficult to get into debt since you can’t spend cash you don’t have.

Recommended: The Envelope Budgeting Method

8. Starting a Side Gig

Once you’ve made a basic budget, it may be clear that additional income could help ease things while money is tight.

Sometimes all it takes is some extra time and energy to earn some extra cash, whether it’s selling things you no longer want or need (and decluttering at the same time), taking on a low-cost side hustle, or using your talents to pick up some freelance work.

Some ideas for generating extra income include:

•  Selling things on eBay, Craigslist, or Facebook Marketplace

•  Having a garage sale

•  Creating an Etsy store and selling homemade goods

•  Driving for a rideshare or food delivery service

•  Giving music lessons

•  Renting out a room on Airbnb

•  Walking dogs

•  Cleaning houses

•  Babysitting

•  Handling social media for small businesses

•  Selling writing, photography, or videography services to clients.

9. Traveling for Less

Just because you are on a tight budget, that doesn’t mean you don’t get to travel. But you’ll want to spend some time looking for deals and perhaps using points or miles to whittle the cost down.

Also, consider the kind of trip you take. Sure, it would be nice to work your way across Europe or Asia, but you can have a wonderful and more affordable vacation by sticking closer to home. Camping is almost always a bargain, and exploring a historic town or beach that’s just a few hours’ drive from your home helps you avoid costly airfare.

10. Saving on Insurance

Insurance is important to have, but you can often save via two tactics:

•  Conduct an online search to see what rates are available for coverage that matches what you already have.

•  Look into bundling your insurance if you don’t already. That typically means getting both your home and auto coverage from one provider for a tidy savings.

•  See if you can lower your premium by paying once annually vs. monthly.

11. Using a Budgeting App

“Consider using budgeting apps to help you keep track of your spending and savings,” suggests Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Your time is likely better spent planning and monitoring your budget than it is manually entering your purchases and transactions.”

There are numerous digital tools available that will automatically track and categorize your spending. Some will even round up purchases to the next whole dollar and put the extra bit of money in savings for you. Your bank may already offer these kinds of tools for free.

The Takeaway

If money is feeling tight right now, you may be able to regain a sense of control by taking a deep breath, sitting down, and digging into how your income, spending, and saving all line up. Then you can take steps to reduce unnecessary spending, negotiate to lower monthly bills, chip away at expensive debt, and even start building a financial cushion.

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

FAQ

What does a tight budget mean?

A tight budget is one without much margin for error; you might also think of it as living paycheck to paycheck. It may be hard to save or to afford discretionary expenses, and an emergency (a major medical bill or the loss of a job) could prove difficult to manage.

How do you run a tight budget?

If you have a tight budget, it’s important to track your income, spending, and saving carefully. Then, you can look for ways to better manage your money, such as cutting spending, negotiating bills, using budgeting apps, and/or starting a side hustle.

How do you fight money anxiety?

There are various ways to lower your money stress, even when you are tight on money. You might start slowly building up your emergency fund so you feel more prepared for uncertain times. It can also be a good idea to look for ways to rein in spending and/or bring in more income so your money isn’t so tight. If you are carrying considerable debt, you might refinance or work with a nonprofit debt counselor for solutions.

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 11/12/25. 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.

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/.
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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-063

Shopping is part of daily life and often a fun experience (glossy stores, cool new objects), but it can impact your budget in some not so wonderful ways. That’s where smart purchasing habits come into play.

If you know some clever ways to rein in overspending with tactics like comparison shopping and using coupons, you can help avoid blowing your budget. What’s more, you may be able to dodge excessive credit card debt, save regularly, and reach your financial goals.

9 Tips for Building Better Buying Habits

Here are nine tips for building better, more mindful purchase habits.

1. Having a Financial Goal in Mind

Motivation is a wonderful tool. To kick off better consumer habits, you may want to think about what your financial aim is and what you want to save money for in the first place.

This could be as small as wanting to save money for the perfect new handbag or to go to a hot new restaurant for an omakase dinner.

Or, it could be something much larger like saving for a vacation, a wedding, a home, or even for retirement somewhere down the line.

Having a financial goal might make it easier for you to sidestep an impulse purchase or spend money on something you don’t actually need.

To double-down on this habit, try writing down any and all financial goals in a notes app, diary, or even on a piece of paper. Then, stick it in your wallet or mobile phone case so it’s with you wherever you go. Tempted to tap or swipe your way to an impulse purchase? Check that note, and think twice.

2. Giving Every Purchase — Big or Small — a Little Time

Sometimes all it takes to reverse a buying decision is to just sit and think about it for a second. Is this new dress really all that great, and will it be worn more than once? Do you truly need a new mobile phone just because a flashy new model was released? Here are some tactics to try to decide whether or not to buy:

•   Try the “take a walk” method, which is to literally leave a store, go for a walk, and think about the item a bit more. This way, the initial adrenaline rush and excitement can wear off just a bit so you can clearly consider the purchase with fewer emotions attached.

Then, come back, look at the item again. If it still elicits butterflies, then it could be worth the purchase. If not, that’s great. Confidently walk away.

•   Want to take this habit to the next level? Try the 30-day rule. Just as the name implies, those looking to purchase anything nonessential must put the product back on the shelf and step away for a full 30 days. Put a note in your calendar, and if you still want the item after a month, you can then buy it (finances permitting), knowing it will bring them a little more joy.

Here’s one more trick to try when using the 30-day rule. Over the 30 days, try saving little by little to purchase the item. At the end of the month, if you decide that product is no longer needed, that cash could be put right into savings.

Recommended: Different Types of Budgeting Methods

3. Coming Up With a Personal Spending Mantra

If taking a walk isn’t an option, try a different method for forging better consumer habits. It may be time to come up with a personal spending mantra. This could be a saying like “Keep the memory, get rid of the object,” or Marie Kondo’s question, “Does this spark joy?”

You can briefly focus on your mantra before making any purchase. This can help determine if that object really deserves to take up space in your life and in your monthly budget.

4. Learning to Be a Comparative Shopper

Shopping around can be another way to improve your purchase habits. You never have to settle for the first price tag you see. Spending wisely can mean finding a better deal, often with just a quick online search.

To become a great comparative shopper, you can start small by investigating prices on everyday purchases like groceries. Try looking up a price comparison for milk between high-end grocery stores versus the neighborhood grocer vs. a discount store. Then, think about monthly expenses like the internet, cable, telephone bills, and even things like gym memberships or subscriptions.

Can you find a better price for any of these items or negotiate the price down? Could you wait for a sale to kick in? Go for it, and save along the way. That means more money stays in your savings or checking account.

5. Falling in Love With Coupons and Discount Codes Again

Another better buying habit to adopt: Take a minute when shopping to find a few coupons to use in physical stores and discount codes to use online.

Here’s how to coupon for beginners: Look online. There are a number of coupon websites such as RetailMeNot, Coupons.com, and The Krazy Coupon Lady that can help shoppers hunt down a few discounts when they need them.

There are also services like Honey, which is an extension you can add to your dashboard that will automatically scour the web for discount codes and plug them right in at checkout.

6. Maintaining the Things You Already Have

A hole in a sweater, a scratched coffee table, and a tiny crack in a dish can be enough to send some people hunting for an entirely new item to replace the old.

However, rather than tossing something just because it’s a little worn, it can be wise to learn how to give things a new life. Or, find an expert who can.

For example, rather than buying all new shoes just because the tread is a little worn down, try bringing them to the local cobbler (aka shoe repair). They may be able to replace the thread for a fraction of the price of new shoes. This same idea goes for big-ticket items too.

Consider keeping a maintenance calendar for things like a car’s oil changes, a home’s roof inspections, and more. That way, things will always stay in tip-top shape for longer, and you may, say, save money on your car or home repair costs.

7. Understanding Shopping Triggers

To create better spending habits, it can be worthwhile to take a bit of time to self-reflect and discover why you like to spend money in the first place.

•   Do you suffer from FOMO (fear of missing out), spending and buying things because friends, family, or a favorite influencer is sporting it on social media?

•   Do you shop when bored, as a way to add excitement to an otherwise dull day?

•   Do you tend to shop when you are feeling sad or stressed? Retail therapy is a common way to lift a mood, but it can have an impact on your financial standing.

It can be important to delve into why you shop. Doing so could also help you identify your overspending triggers and rein in habits that make you an impulse shopper.

8. Getting in on the Financial Buddy System

Here’s another tip for improving purchasing behavior. Everything’s better with friends — and that includes developing better spending habits. Here’s an example of the power of pairing up:

•   According to one landmark study by researchers at the University of Aberdeen, Scotland, people who work out with a friend are more likely to hit the gym more often than those who choose to work out alone.

That lesson can easily be applied to finances too. Find a trusted friend or family member who can offer advice or simply understanding and support as you cultivate better shopping habits.

Make a pact to call one another every time either of you needs a second opinion about making big purchases or when you need someone to talk you out of an impulse buy.

9. Knowing Where Money Is and Where It’s Going

A major part of creating better buying habits is understanding where your money stands and where it’s going. Don’t shy away from making a personal budget. Tracking apps (perhaps provided by your financial institution) can help in this effort too.

Monitoring your checking account will also help you get in touch with your spending habits. Some people find checking in every couple of days a good move.

These moves can reveal patterns that you might be unaware of and also help you see where you might cut back on expenses. That, in turn, can free up some funds so you feel better about splurging when the opportunity arises.

Recommended: 50/30/20 Budget Calculator

Smart Buying Habits Last a Lifetime

Establishing smart purchasing habits like these can set you up for a lifetime of living frugally but without deprivation. If you learn how to get the best possible deals on a daily basis and rein in overspending, you will likely be in a better position to reach your goals.

That might mean watching your retirement fund grow steadily, avoiding high-interest credit card debt, or knowing you’ll be able to afford the down payment on a house in a few years time.

Once you get in the groove of improving your habitual buying behavior, you may also feel less money stress and a greater sense of financial control.

Watch Out for Lifestyle Creep

Another way to embrace better purchasing habits is to be on the lookout for what is known as lifestyle creep. This happens when, as you earn more, your expenses rise, so building wealth is a challenge.

For example, if you change jobs and get a nice salary bump, you might decide to swap your current car lease for a pricier luxury car. After all, you deserve it, right? And you might book a trip to celebrate your new position as well. Moves like these can quickly eat up your raise and then some.

Celebrating within reason is of course part of life (and a good one, at that). However, doing so extravagantly and on an ongoing basis can wind up preventing you from reaching your financial goals.

The Takeaway

By focusing on improving your purchasing patterns, you can likely save more money. This can mean applying the 30-day rule, using coupons, and having a buddy to help you rein in overspending. It can also be wise to bank with a financial institution that not only helps your cash grow but also offers tools to help you track your spending and save smarter.

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

FAQ

What are smart buying habits?

Smart shopping habits can include budgeting, comparison shopping, avoiding impulse buys, couponing, and putting a pause on spending.

How do you change your buying habits?

Changing your buying habits can involve recognizing your shopping patterns and triggers (such as impulse buying when bored or trying to keep up with friends) and then adopting new behaviors. This might mean comparison shopping, buddying up with a friend who is also trying to save, and unsubscribing from retailer emails that can lead to overspending.

What are buying habits?

Buying habits refers to the way a person purchases, such as whether they have a budget or usually shop online or in-store. It might also include whether they make a list or tend to make impulse purchases and if they use discounts and coupon codes or not.

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 11/12/25. 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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-072

Many people don’t carry cash these days, preferring to make a purchase by tapping or swiping a debit card or credit card. However, there are times it can actually pay to dip into your wallet and break out the bills. Using cash can be more secure and less costly, among other benefits.

Here, you’ll learn when it can be better to buy with cash and when plastic is preferable.

The Benefits of Cash

Here are some of the pros of using cash:

You May Get a Discount

You may be rewarded for paying cash, like paying a lower price at the gas station or when you get take-out at a restaurant.

Many businesses pay a fee for accepting credit and debit cards, so they may be willing to charge you less if you’ll pay in cash. If you frequently fill up your tank, saving even 10 to 20 cents per gallon can add up to significant savings over time.

It Can Help You Avoid Overspending

When you tap or swipe your credit or debit card, you don’t physically see your money leaving your account. Since there’s no sense of immediacy or consequence, it can be easy to spend more than you originally intended. That can lead to debt and overdraft or NSF charges.

If, on the other hand, you leave home with only the amount of money you need for the day in cash, your spending is likely to be more mindful. That could mean you may have a better chance of sticking to your budget and avoiding overspending.

There Are Fewer Security Risks

Yes, someone could rob you when you are carrying cash. However, there is less risk of identity theft or your information getting stolen when you pay with cash vs. a debit or credit card.

You Can Avoid Fees

Cash is a one-shot deal — the purchase you made won’t end up costing you a penny more. With credit and debit, however, you can end up paying additional charges down the line, from late fees to interest payments on debt.

Recommended: How to Avoid Overdraft Fees

Times When You Should Pay in Cash

Your Tab is $10 or Less

It can be a good idea to carry cash for small purchases. Many retailers have a minimum amount of money you must spend in order to use debit or credit. If your purchase is under, you’ll have to throw in extra things (you probably don’t need) to meet the minimum.

When Shopping at a Small or Local Business

Small businesses often offer discounts for cash payments, since it helps them save on bank fees. This can be an easy way to support your local businesses and save a few dollars at the same time.

You Want to Keep Advertisers at Bay

You may have noticed that after you buy something with a credit or debit card, you often get hit with ads and offers for similar products. That’s because retailers can track their customers’ spending and share their information with a third party, who can then target them with ads.

This can be annoying, and also lead to more spending if you’re enticed by an offer. Using cash makes it much harder for businesses to collect and share your information.

Times When You Shouldn’t Pay With Cash

Next, learn about the times when you should keep your wallet shut and find another, non-cash way to pay.

Buying a House

While not an everyday occurrence, some people may have the option to plunk down cash they’ve stashed in their savings account to buy a property.

While buying a home with cash vs. getting a mortgage may get you the house, it may not be the most prudent move in the long run, especially if it wipes out all of your savings.

A mortgage has tax benefits and timely payments can help you build good credit. Also, there could be better uses for all that cash, like investing in the stock market or elsewhere.

Business Expenses

If you own your own business, have a side gig, or do freelance work, it can be better to use credit (or even a check) to pay for business-related purchases. You’ll likely want a paper trail so you can deduct these expenses on your tax return.

Another potential perk of using credit is that it may offer some purchase protection in event something you buy for your business that breaks or gets stolen soon after you purchase it.

Paying Service Providers

You may think a service provider, whether it’s an electrician or an auto mechanic did a good job, but only time will tell. Using credit can offer you some protection in the event that you experience problems with a service after you’ve already paid for it.

Renting a Car

Often your credit card will provide insurance on car rentals (which can help you save on renting a car), but only if you use that form of payment, as opposed to debit or cash. Using credit for the car rental can help you avoid paying for something you don’t need to purchase.

You’re Looking to Build Credit

If you need to build your credit score, one way to accomplish that is to use your credit card on a regular basis and show that you’re responsible by paying what you owe each month, consistently and on time.

When Buying Electronics

Using your credit card instead of cash for electronics can be a big advantage if your credit card offers extended warranties as a cardmember benefit. This allows you to get peace of mind without having to pony up for the store’s warranty. And, you can simply pay off the balance as soon as the bill comes.

You’re Looking to Track Your Spending

If you’re looking to see where your money is going so you can track your spending and set up a monthly budget, it can be easier if you pay with credit or debit.

Your financial institution may even offer you a pie chart of your spending from your bank account, broken down into categories. Seeing everything in black and white can help you become better at budgeting.

Alternatives to Using Cash

Paying in cash has its pros and cons. If you decide that you want to pay with something other than cash, here are some alternatives.

Cash vs Credit Cards

A credit card can be a good alternative to cash if you are able to pay it off in full every month, and you do. If managed well, credit cards (even secured credit cards) can help you build credit to buy a home or another large purchase in the future.

Cash vs Debit Cards

A debit card can be a good substitute for cash, as long as you know there’s money in the bank. By using a debit card, you’re not incurring any new high-interest debt. As long as you are not incurring any overdraft fees or withdrawing money from ATMs that charge high fees, debit cards can be a simple way to make purchases.

Cash vs Financing or Loans

It can sometimes be better to pay for a major purchase, like a car or a home, with a loan rather than cash if the interest rate is lower than what you could likely earn by investing that money.

However, you’ll also want to keep in mind that there is risk involved in investing in the stock market, so there is always a chance that you could lose money.

Recommended: Leasing vs. Buying a Car: What’s Right for You?

The Takeaway

While there’s a movement toward a cashless society, paying in cash can help you garner discounts at local businesses, stick to your budget, avoid paying overdraft and interest fees, protect against identity theft, and keep advertisers from targeting you.

If you’re looking for a safe place to keep your cash when not spending it, where it can earn some interest and grow, take a closer look at your banking partner.

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

FAQ

When should you pay with cash?

Cash can be a good option when paying for a small purchase (say, under $10 or $20) or when paying at a small retailer who may add a fee for credit card purchases. Cash can also help you be more mindful about spending and can be good when trying to rein in discretionary expenses.

Is it better to pay in cash?

It can be better to pay in cash if it can help you avoid high interest (which can accrue if you carry a credit card balance) or get a discount on a purchase (say, at a small retailer that offers a discount for cash). However, a person could earn rewards when using a credit card or could enjoy cash advantages when getting a mortgage vs. paying for a property with cash.

Is it smart to keep money in cash?

It can be smart to keep a small sum of money in cash for unexpected and/or pressing expenses, such as tipping a service person for a repair. But cash is usually safest in a financial institution, where it can’t get lost or stolen and in most cases is insured up to the limits of the Federal Deposit Insurance Corporation or National Credit Union Administration.

Photo credit: iStock/towfiqu ahamed

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 11/12/25. 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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-075

If you are thinking about getting a car, you may be deciding between buying or leasing. And if leasing seems like the right option for your finances and lifestyle, then you probably want to know what is needed to seal that deal.

Leasing a car typically requires both some cash and a solid credit score. If you have a high credit score, you may snag the best possible (meaning lowest) interest rate. If your credit history is not solid, then you may face higher rates or have difficulty getting approved.

Here, we take a closer look at car lease requirements, including the minimum credit score you’ll need, plus whether leasing a car can hurt or help your credit moving forward.

What Are Car Lease Requirements?

A car lease is essentially a long-term rental agreement where you pay to use a vehicle for a specific period, rather than buying it outright. When you apply for the lease, the financing company will want to make sure that you are a responsible borrower. One way they can assess that is by looking at your credit score.

So do you need good credit to lease a car? The answer is, typically yes. Having good credit may make it easier to lease a car because a leasing company may not see you as financially risky as someone who has poor credit. Not all leasing companies will necessarily approve a car lease for someone who has a low credit score.

You might also need to prove that you have a job with a certain income when you’re leasing a car. Minimum income requirements vary by lender, but you typically need to provide pay stubs or tax returns to prove your employment and salary.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

What Credit Score Do You Need to Lease a Car?

Credit scores typically go from 300 to 850, with five credit score ranges:

•  Poor credit score: 300-579

•  Fair credit score: 580-669

•  Good credit score: 670-739

•  Very good credit score: 740-799

•  Exceptional credit score: 800-850.

There is no one specific credit score you need to lease a car, since the minimum credit score requirement varies by dealership. According to Experian® data, however, customers leasing new vehicles in 2024 had an average credit score of 755, which is just above “good” credit, edging into “very good” credit.

While it’s possible to lease a car with a lower credit score, you might end up having to pay a higher-than-average interest rate or put down a big down payment to get approved.

Recommended: How to Manage Your Money Better

Leasing With a Credit Score Above 680

The credit score to lease a car and get favorable rates is one that’s considered at least “good,” meaning between 670 and 739, or higher. Having good credit typically makes it more justifiable for lenders to approve you for the lease because it’s less of a risk to them.

Just as with any type of financing, applicants who have good or better credit may be offered lower interest rates on auto leases. Having an above-average credit score could give you more negotiating power over the rates and terms of the car lease.

💡 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.

Leasing With a Credit Score Lower Than 680

Having a lower credit score means you’ll likely have difficulty finding a company willing to lease to you or you’ll pay more to lease a car. Leasing companies may see you as a risk, based on your credit history. You might find that having a trustworthy cosigner on the lease could help you get a lower interest rate or better terms than if you’re applying on your own.

If your credit score is lower than 680, you might want to work on building your credit profile before leasing a car so you can get a better deal. A good place to start is by checking your credit reports from the three major credit bureaus, which you can do for free at AnnualCreditReport.com.

It’s important to check your reports for accuracy — if there are any errors, contact the credit bureau that issued the report.

Recommended: How to Save Up for a Car

Building Your Credit Before Leasing

There are several ways to build your credit profile before leasing a car. Two of the most important to consider:

•  Pay down debt. This will lower your credit utilization ratio or rate, meaning the percentage of your credit limit you are using. “One way to positively impact or maintain your credit score is keeping your credit utilization low,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Keeping it below 30% is a good starting point, but the lower the better.”

•  Pay on time. Be meticulous about paying your bills on time or even early. Just one or two late payments can have a negative impact on your credit profile.

•  Limit new credit applications. Each application for new credit results in a hard inquiry on your credit report, which can slightly lower your score.

Can Leasing a Car Build Credit?

Any time you apply for credit, you have the opportunity to build your credit. A car lease is credit, just as a car loan would be credit.

How you manage your lease payments affects your credit reports just as a loan would. Making regular, on-time monthly payments can impact your credit in a positive way. Late or missing payments, on the other hand, can have a negative influence on your credit.

In addition, a diverse credit mix, which can include a car lease, may have a positive impact on your credit profile, especially if you have limited credit history.

Can Leasing a Car Affect Your Credit Score?

As mentioned, paying a car lease on time can be a positive thing. However, missing payments or being late with payments could negatively impact your credit, making it harder to secure loans and leases with good terms in the future.

You may also see a small drop in your credit score when the lease begins because your credit report will show a new account is open. You may see a similar small drop when the lease is terminated because the account is closed. Both of these credit events — opening and closing a credit account — can have a temporary negative effect on your credit.

If you’re shopping around at different leasing companies over the course of a few weeks and apply for leases at those places, there will be inquiries into your credit history by the leasing companies. However, those multiple inquiries may show up as just one query on your credit report and minimally impact your credit.

5 Things That Impact Your Credit

Here are factors that can influence your credit profile:

1. Your Payment History

The single biggest factor in your credit score is your payment history, which can boil down to making payments on time, month after month. That can help build your credit. Paying late or not at all can negatively impact your credit.

2. The Amount Owed

This factor looks at the amount of debt you’re carrying relative to your available credit (credit utilization). High credit utilization (using a large portion of your available credit) can negatively affect your credit.

3. The Length of Your Credit History

Having a longer credit history and having managed lines of credit well for years can benefit your credit. It shows that you can successfully borrow and pay back money.

4. Your Credit Mix

Having more than one kind of credit account can show that you manage borrowed funds well. For instance, it could be helpful if you have handled both installment debt (student loans and car loans are examples of this) and revolving accounts (such as credit cards) well.

5. New Credit

If you apply for a number of new lines of credit and have what are known as hard credit pulls done as part of this, your credit could suffer. It can look as if you are applying for a lot of new debt and may soon be overextended rather than financially stable.

The Takeaway

It’s important you consider what credit score is needed to lease a car before you go car shopping. Checking your credit reports in advance will uncover any surprises in your credit history before you’re at the dealership.

If you notice any blemishes in your past, you may want to take steps to positively impact your credit profile, such as making on-time payments and paying down debt, before you lease a car. This may help you save money on your car lease and give you more negotiating power.

The less you have to spend on interest and fees, the farther your money can go while leasing. Successfully managing leases, loans, and credit in general is part of good financial habits. Having the right banking partner can also enhance how well you handle your cash.

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

FAQ

Can you lease a car with a 600 credit score?

While it’s not impossible to lease a car with a 600 credit score, it will likely take more time and energy to find an offer. You will also probably pay a higher interest rate than someone with good or better credit, meaning you will pay more over the long term.

Does leasing a car hurt your credit?

When you apply for a car lease and the leasing company pulls your credit file, you may see a small dip in your credit score in the short term. After that, whether the lease hurts your credit depends on how well you manage the account. If you make on-time payments, it could positively impact your credit profile, but if you pay late or miss payments, your credit could suffer.

Is it better to lease or finance a car?

Whether it’s better to lease or finance a car will depend on your particular financial situation and goals. When you finance a car, you can eventually own it outright. It’s similar to buying a home with a mortgage. Leasing, on the other hand, is similar to renting. You never own the car or have it as an asset, but then again, you might like “trading up” every few years.

Photo credit: iStock/dusanpetkovic

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 11/12/25. 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.

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/.
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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOBNK-Q325-067

Layaway may sound like an old-fashioned concept, but it’s still offered by some retailers and can help people afford an item without running up credit card debt.

Layaway allows you to buy an item over time via installment payments. When you’ve paid the full price, you get to take your purchase home. This can be a helpful financing tool in some situations, but also comes with some potential downsides. For example, there may be fees involved, as well as the possibility of forfeiting your payments if you can’t keep up with them. Here are important things to know about layaway.

What Is Layaway?

Layaway means you make a deposit and a retailer holds your item (or lays it away) and collects the rest of the money over time. When paid in full, you collect your purchase.

Here’s a bit more detail on how layaway works.

•   The customer chooses an item that’s eligible for layaway and makes whatever down payment the store requires to implement a layaway plan. (This amount varies based on the retailer, and may or may not include a service fee.)

•   The customer then makes regular payments over time based on the retailer’s schedule. These payments may be made weekly, biweekly, or monthly. Online layaway plans often let customers buy items according to scheduled deductions from their checking account.

•   At the end of the layaway plan period, when the item has been paid for in full, the customer takes their purchase home or receives it in the mail.

One additional point about how layaway works: If the customer makes late payments or cancels the layaway plan entirely, they may be charged a restocking or cancellation fee. They may also forfeit some or all of the money they’ve put toward the purchase already.

Why Use a Layaway Plan?

From the store’s perspective, layaway offers a low-risk way to make sales to those who might not otherwise be able to afford the purchase all at once.

Although the retailer might choose to charge a small fee to cover the item’s being tied up for the length of the layaway, if worse comes to worse and the buyer defaults, they can simply put the item back up on the shelf for sale.

From a buyer’s perspective, the attractiveness of layaway is even more obvious: It allows those who might not otherwise have the financial leverage to make large purchases affordably, over time.

Layaway is unique among financing options in that it often doesn’t involve interest, which means it can often be a more affordable choice than other types of credit or loans.

Recommended: How to Make Money Fast

Pros and Cons of Layaway

Like any financial approach or product, there are both benefits and drawbacks to layaway plans.

Pros of Layaway

•   You don’t have to go into debt to make a purchase you would otherwise not be able to afford. Using layaway can help you avoid charging an item on your credit card, which typically incurs high interest rates.

•   Layaway plans don’t require a credit check — which also means that your credit won’t be affected if you can’t pay the plan on time or in full.

•   Fees associated with layaway plans are generally low and often don’t include interest.

Cons of Layaway

•   Although they’re generally low, layaway plans often do come with associated fees, such as service, restocking, and cancellation fees. These are typically flat fees, however, which could make them proportionately high if you’re purchasing a relatively inexpensive item.

•   If you make late payments or fail to pay in full, you might forfeit some or all of the money you’ve already put toward the purchase (though this varies by vendor, so check with the individual retailer you’re considering for full details).

•   Repayment terms can be inflexible and it’s up to the vendor to set the repayment schedule.

•   Layaway takes time and patience; it’s an example of delayed gratification. It may be less attractive to those who want or need to take home the purchase immediately rather than waiting until it’s been paid in full.

Stores That Offer Layaway Plans

Layaway was originally offered back in the 1930s as a result of the Great Depression, then began fading away when using credit cards became more common later in the 20th century. However, the popularity of layaway surged again during the Great Recession of 2007-2009.

The history of recessions tells us they do happen over the years, and the popularity of layaway surged again during the Great Recession of 2007-2009.

These days, many retailers still offer both in-store and online layaway, either for the holidays or year-round.

In some cases, you may only be able to implement layaway on certain products — generally more expensive ones, like appliances and jewelry.

Layaway programs come and go, but retailers that currently offer layaway include the following:

•   Amazon

•   Burlington Coat Factory

•   Army & Air Force Exchange Service

•   Buckle

•   Gabe’s

•   Hallmark Gold Crown

If you’re unsure whether or not a retailer offers layaway, you can always ask!

4 Alternatives to Layaway

Here are some other ways customers can get their hands on items they might not be able to buy in a single purchase.

1. Similar Pay-Over-Time Plans

Some retailers, especially for online purchases, offer buy-now-pay-later or pay-over-time programs that are similar to layaway — rather than paying the full price today, you pay small installments over time.

On the plus side, customers can often receive their purchases before the payment plan has been completed.

However, some of these programs, like Affirm (a payment option available at checkout at many online retailers), can involve interest charges, particularly if borrowers are late on their payments or don’t complete the repayment plan in full.

2. Credit Cards

Credit cards are an obvious alternative to layaway plans — and using them, of course, means that the purchase can be taken home right away.

In fact, credit cards are sort of like the opposite of layaway: With layaway, you pay for an item and then receive it; with credit cards, you receive it now and pay for it later.

Of course, using credit cards almost always involves compounding interest charges, often close to 20%, which is nothing to sneeze at.

Since it’s easy to carry a revolving balance while making minimum monthly payments, credit cards can quickly lead to a credit card debt spiral that can be difficult to climb out of.

3. Reconfiguring Your Budget

If being unable to make large purchases is more of a systemic problem than a one-time issue, some budget management may be in order.

You might start by looking at how much money is coming in versus going out, then try to find places where you can cut back on spending. This can help free up funds that you can use to pay for purchases you really need or want in full without requiring layaway.

Recommended: How to Make a Budget in 5 Steps

4. Saving Up for a Purchase

Another option to layaway is to save up in advance until you have enough cash to go ahead and buy the item outright. Let’s say you want to buy a new laptop. You might automate your savings and have $25 transferred from checking on payday to a savings account (ideally, a high-yield savings account). Over time, the savings will build up and interest will accrue.

When you reach the amount needed, ta-da! You can go purchase your new laptop, without paying any interest or other fees related to buying it over time.

The Takeaway

Layaway is a purchasing method where you reserve an item by making a deposit and then pay the remaining balance over time before taking the item home. While this approach can cost less than putting the purchase on your credit card, it’s not necessarily cost-free. Layaway plans often involve various fees, such as service fees, restocking fees, or cancellation fees.

If you’d like to start saving for a purchase, it can be wise to find a bank account that offers low or no fees and a solid interest rate to help your money grow faster.

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

FAQ

How does a layaway plan work?

A layaway plan lets you reserve an item by making a small down payment and then paying the remaining balance over time. The store holds the items until it’s fully paid off, at which point you can take it home. Layaway is often interest-free, but some retailers may charge service or cancellation fees. It can be a helpful option for budgeting larger purchases without using credit or paying all at once.

Is it a good idea to buy things on layaway?

Buying on layaway can be a smart choice if you want to avoid credit card interest or don’t qualify for financing. It can help with budgeting by breaking up large purchases into management payments. However, layaway may not be ideal if the store charges high service or cancellation fees. Also, you don’t receive the item until it’s fully paid off, which could be a downside for urgent needs.

What is the difference between an installment plan and a layaway plan?

The key difference lies in ownership. With an installment plan, you typically take the item home immediately and make payments over time, often with interest. With a layaway plan, the store holds the item until you finish paying, and you usually don’t pay interest. Installment plans often involve credit checks, while layaway does not. Each suits different needs: Installment plans provide quicker access, while layaway allow for more controlled, no-credit spending.

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 11/12/25. 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/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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