12 Ways to Save Money on Water

12 Ways to Save Money on Water

Reducing water usage at home is a great way to lower your monthly expenses and be a better steward to the environment at the same time. But how exactly can you save H2O as well as money spent on water in your daily life?

Key Points

•   The average water bill in America is about $40 a month, but this can vary significantly by location and household usage.

•   Reducing water usage can be good for the environment and a person’s finances.

•   To save water, wait to wash clothes until there is enough for a full load and run the dishwasher only when it is completely full.

•   Consider installing ENERGY STAR-certified appliances for better water efficiency.

•   Shorten shower times to conserve water.

What Is the Average Monthly Water Bill Per Household?

The average water bill in the U.S. was approximately $50 in 2023. While that may not seem to be too big a strain on the typical checking account, keep in mind that water bills can vary significantly depending on where you live, how much water your family uses, and the time of year.

On average, families use more than 50% of their water in the bathroom alone. Those living in an apartment without an outdoor space may spend less on water; outdoor water usage (for gardens, lawns, and pools) accounts for about 30% of the average American’s water bill — up to 60% in the summer.

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Does Using Less Water Save Money?

You can save money by using less water. That’s because your monthly water bill reflects water usage: The more water you use, the more money you’ll spend. Beyond financial savings, conserving water is great for the environment and can help to provide reliable water for families today and in the future.

12 Ways to Reduce Your Water Bill and Save Money

If you’re looking to economize on your water costs, here is a list of 12 helpful ways to save on your water bill every month:

1. Only Use the Washer for Full Loads

Washing machines are an essential appliance for keeping our clothes and linens clean, but they require a lot of water to operate. Waiting until you have enough dirty clothes for a full load — or using the machine’s “small load” option in a pinch — can go a long way in reducing water usage.

Bonus Tip: Because washing machines and laundry detergents have improved significantly over the years, you rarely need to use the hot water option. Using cold water only can keep gas or electric bills down as well, providing another way to save money.

2. Use a Dishwasher — But Only If It’s Full

Dishwashers are more efficient at washing dishes than our own hands. The trick? Only run it if it’s fully loaded. That’s how to save money on water usage and your water bill.

Bonus Tip: Save even more water by simply scraping food scraps off your plate before loading it in the dishwasher. No need to rinse it, which wastes water!

Recommended: How Much of Your Paycheck Should You Save?

3. Upgrade to Water-Efficient Appliances

Today’s washing machines and dishwashers are far more efficient than appliances from even 15 years ago. In fact, an ENERGY STAR-certified dishwasher saves nearly 3,800 gallons of water in its lifetime, and an ENERGY STAR washing machine uses 33% less water per cycle (and requires 25% less electricity to run, too).

While replacing home appliances has an upfront cost, you’ll save money on water and energy bills in the long run. Some energy-efficient appliances may even come with rebates.

Bonus Tip: Look for front-load washers; these can use up to half as much water per cycle as top-load units.

4. Upgrade Plumbing Fixtures, Too

Major appliances aren’t all you can upgrade. Plumbing fixtures like toilets and showerheads offer another opportunity to cut back on water usage. If it’s bathroom remodeling time (whether you’re finding a contractor or in DIY mode), search for low-flow (and dual-flush) toilets that use less water per flush. Low-flow showerheads better conserve water (saving up to 2,700 gallons per year) but actually offer superior performance. In both cases, look for the WaterSense label, created by the EPA or Environmental Protection Agency.

5. Taking Shorter Showers

This tip is pretty simple but bears repeating: The less time you spend in the shower, the less water you’ll use. And as long as you keep your showers short, you’ll save water — and money — by showering instead of taking a bath. How’s that for a creative way to save money?

Bonus Tip: Want to reduce your usage and save more money on water? Get wet when you first step into the shower, then turn off the water while you lather and scrub; then rinse.

6. Fix Leaks

Leaky faucets and toilets that won’t stop running are noticeable, but your home may have other, less obvious plumbing leaks to watch out for, like your hot water tank or supply line. Because many drain pipes exist behind your walls, you may only catch a leak by hearing it, so keep your ears sharp throughout the year.

The cost to repair a plumbing leak can be high, but doing so will lower your water bill in the long run — and leaks left alone can develop into larger, more expensive problems down the road.

7.Turn Off the Water When Brushing Your Teeth

Letting the water run the entire time you brush your teeth — especially if you brush them for the ADA’s recommended two minutes — has become the poster child for wasting water. Turning off the water while you brush can be such an easy way to cut back on water usage and avoid the consequences of not saving money.

Bonus Tip: This also applies while shaving; only run the water when you need it.

8. Compost Instead of Using the Garbage Disposal

Have food scraps? Don’t throw them all in the garbage disposal, which uses water; try composting instead. You can compost foods like fruits, vegetables, eggshells, meat, and coffee (filters included!); doing so can be great for your garden.

Bonus Tip: Another way to reduce water usage in the kitchen is to thaw frozen meat overnight in the refrigerator, rather than running it under warm water.

9. Keep a Pitcher of Water in the Fridge

If you let the tap run until the water gets cold enough to fill your drinking glass, you’re wasting water. Consider putting a pitcher of water in the fridge instead so that it’s cold when you want it. As a bonus, you can invest in a pitcher with a water filter for cleaner drinking water.

10. Care for Your Lawn Strategically

Before watering your lawn, check the weather forecast. If rain is predicted in the next few days, don’t bother watering the lawn at all. Even if it’s hot out and hasn’t rained lately, your grass may not need water. Try stepping on it; if it springs back up, you don’t need to water it yet.

If you must water your lawn, check your sprinkler system to ensure there are no leaks, and don’t overwater. That’s another way to avoid common budgeting mistakes when it comes to water usage.

Bonus Tip: Mowing your lawn less regularly is actually a good thing. Longer grass allows for deeper root growth — and thus a drought-resistant lawn that doesn’t need to be watered as often.

Recommended: APY Interest Calculator

11. Use a Commercial Car Wash

Car aficionados may insist upon washing their car every other week (or every week, if they’re dedicated). While washing and waxing your car is good for protecting its paint and maintaining its value, you can get away with fewer car washes. To keep water usage down, try once a month at most.

You can also cut your own water costs entirely by paying for a commercial wash. Commercial car washes use 60% less water and are designed to prevent water pollution from runoff. Many locations also recycle their wash water multiple times.

Recommended: How Much Auto Insurance Do You Need?

12. Cover Your Pool

Here’s the last way to stay motivated to save money on water costs: Have a pool outside? Make sure you cover it when not in use. Not only does this keep unwanted debris out of the swimming area, but it also helps reduce the amount of water that evaporates each day.

The Takeaway

Saving money on water isn’t just great for your wallet; it’s also great for the environment. From composting to upgrading appliances to cutting back on car washes, you can dramatically reduce your family’s water consumption — and see great savings on your water bill as a result.

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FAQ

How much money can you save on your water bill by using less water?

The average American spends about $50 a month on their water bill. If your family reduces water usage by 25%, your bill could drop to roughly $37.50, putting an extra $150 into your savings per year. How much money you can save on your water bill depends on how much water you’re able to conserve and what the cost of water is in your city.

Why is saving water important?

Reducing water usage does more than lower your water bill. Saving water means that we use less water from rivers, bays, and estuaries — and this is a big deal for our environment. When we use less water, we also reduce water and wastewater treatment costs. Plus, it takes a lot of energy to treat, pump, and heat our water, all of which contribute to air pollution. In areas threatened by drought, reducing our personal water usage ensures our neighbors, friends, and family also have access to the water they need.

How much water is used per household a year?

The EPA estimates that the average American uses 82 gallons of water per day. For a family of four, that’s 328 gallons a day or nearly 120,000 gallons a year. Families can save a lot of water by taking simple measures: For example, the EPA estimates families save 13,000 gallons of water per year by replacing inefficient toilets — and 9,400 gallons of water annually by repairing leaks.


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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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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What Are the Common Types of Payroll Deductions?

Payroll deductions are amounts of money that are taken out of your gross pay, leaving you with net (or take-home) pay. Common types of payroll deductions include taxes, retirement savings, and Social Security contributions, among others. However, it can be confusing (and sometimes a little discouraging) to see how much money comes out before you have cash in hand.

Here, take a closer look at the deductions that are required by law and are out of your control, as well as others that are part of your employee benefits package, which means that you may be able to adjust them. This paycheck breakdown can help you understand more about where your money goes so you can manage it better.

Key Points

•   Payroll deductions include mandatory and elective amounts taken from gross pay, affecting net pay.

•   Common deductions include taxes, Social Security, Medicare, retirement contributions, and employee benefits.

•   Federal taxes depend on W-4 form details.

•   Retirement contributions reduce taxable income but have limits.

•   Managing deductions involves checking pay stubs and updating W-4 forms.

What is Net Pay?

Whether you’re paid hourly or by salary, your rate of pay is the compensation that you and your employer agreed upon when you accepted the job. That said, it’s typically expressed as your annual salary for full-time employees.

This number appears in official contracts and is referred to as your gross pay. However, it does not represent the actual amount that you will be paid.

Net pay, also referred to as take-home pay, is the compensation that is paid out via check or direct deposit to an employee. It is your gross pay with all the deductions taken out, which can make you think, “Wait, where’d my money go?” when it hits your checking account.

What Are Payroll Deductions?

So, to answer that question: Here’s where your money goes before it lands in your checking account:

•   Mandatory deductions: By law, an employer must subtract various mandatory federal and state tax withholdings.

•   Elective deductions: Employers will also subtract costs for employer-sponsored offerings that the employee takes part in, such as healthcare, life insurance, and retirement.

Whether required or optional, these are pulled out of your gross pay and applied where needed. While you may feel disappointed to see these funds siphoned off, they have an upside. They are saving you from owing major taxes come April 15, and they are potentially helping provide important elements of financial fitness, like saving for your future. This knowledge can be reassuring, especially if you are filing taxes for the first time, and are feeling a bit shocked about the difference between your gross and net pay on an annual basis.

How Do Payroll Deductions Work?

As mentioned above, payroll deductions may be required, such as federal or any state taxes, or they may be optional (say, a 401(k) plan or health insurance). The mandatory and elective deductions are subtracted from your paycheck’s gross pay amount.

What remains after these payroll deductions is your net pay. This is the amount that is paid to you. You can typically see a breakdown of exactly what has been subtracted from your compensation by looking at your paystub. If you are paid via direct deposit, you will likely find this information online at your employer’s portal. If you receive a paper paycheck, the paystub is often attached.

Types of Payroll Deductions

As you look at your paystub and see all the deductions that are being taken out of your gross pay, you may want a bit of help understanding what’s what. Below are explanations of some of the most common paycheck deductions:

Federal Taxes

Federal taxes include all the taxes you are required by law to pay to the federal government. These taxes (which are often referred to as being withheld vs. paid) help fund the federal government, allowing them to invest in things such as infrastructure, education, and national defense, and provide services to the American people.

It’s common to wonder what tax withholding is and how much must you allocate towards it. When you were first hired, you likely filled out an Employee’s Withholding Certificate or W-4 form form and claimed the number of tax exemptions you have. This amount tells the federal government how much money to take out of each paycheck to cover your taxes. The more allowances you take, the less federal income tax the government will take out of your paycheck.

One way to ensure that you have the right amount of tax withheld for each pay period is to use the Internal Revenue Service’s IRS Tax Withholding Estimator or speak with someone in your company’s HR department. You can tell them if you’re single or married, how many dependents you have, and if you have any other sources of income, and they should be able to help you fill out your form accurately.

It’s also a good practice to revisit your IRS Form W-4 selections annually as significant life events may change your withholding and also because the W-4 form is periodically updated. It can be wise to think about your exemptions regularly

During tax season of each year, individuals who have overpaid in federal taxes receive a refund from the government. Those who’ve underpaid, however, are required to pay additional funds and possibly a penalty.

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State and Local Income Taxes

There are other types of taxes that will possibly be withheld from your gross pay. Many states require a state tax to help fund government projects and services. To learn more about your state’s taxation policy, you can look at this map for details.

Just as with federal taxes, your state income tax will get deducted from your paycheck to cover taxes you may owe at the end of the year.

Social Security and Medicare

Another common paycheck deduction you’ll see: Social Security and Medicare taxes that are part of the Federal Insurance Contributions Act (FICA) tax, a group of payroll taxes collected from both the employer and the employee. As the name implies, these taxes fund our nation’s Social Security and Medicare programs, helping with income and insurance needs once you reach retirement age.

The tax rate for social security is currently 6.2%, and Medicare receives an additional 1.45% (employers match these tax rates, bringing the total of FICA tax contributions to 15.3%).

Wage Garnishments

Another possible payroll deduction to know about: wage garnishments. These are legal procedures designed to repay delinquent, outstanding debts, such as unpaid child support, overdue credit card payments, or even unpaid taxes.

Most wage garnishments are initiated by court order. However, the IRS and other tax collection agencies also levy for unpaid taxes in the form of wage garnishment.

Garnishments are made on earnings leftover after all legally required deductions are made. The actual amount of any garnishment will depend on the amount of debt owed and income earned.

Employee Benefits

Depending on where you work, you may be able to opt into a variety of benefits. Typically, these costs are automatically deducted from your paycheck.

If you sign up for your employer-provided health insurance, at least some of the cost is likely to be a type of paycheck deduction.

Under the Affordable Care Act, employers with 50 employees or more must offer affordable health insurance. As part of an employee’s compensation package, many companies will pay half, or another percentage, of the insurance premiums. The employee’s portion of those premiums is represented on a pay stub as a deduction.

Other benefits, like flexible spending plans, commuter plans, and life insurance, may also be deducted from your pay, depending on whether or not you opt into them and if your employer picks up the bill fully or partially.

Health insurance and other benefits typically come out before your taxes, and you may be able to reduce your taxable income by signing up for them.

Retirement Contributions

Employee 401(k) savings plans are a common benefit offered in the workforce.

If you opt into this benefit, your employer will deduct funds from your wage earnings and deposit them into a retirement account. (How much of your paycheck should you save? Experts often recommend 20% should go towards saving for retirement and other short- and long-term goals.)

Employees are typically able to choose the amount they would like deducted from their earnings for retirement savings. In some cases, employers may contribute an additional percentage of your salary into your retirement account.

Contributions to your 401(k) can not only help you save for the future but also lower your taxable income, since they come out of your paycheck before taxes get assessed.

You’ll want to keep in mind, however, that there are yearly retirement plan contribution limits set by the federal government through the IRS.

Other Common Payroll Deductions

Depending on your workplace and career, other payroll deductions are possible. Among the ones you may find are:

•   Charitable giving plans

•   Payment for job-required items, such as tools or uniforms

•   Union dues

•   Professional certification or tuition fee deductions

Examples of Payroll Deductions

You’ve learned details about many types of payroll deductions above. In list form, examples of payroll deductions include:

•   Federal income tax

•   State and local income taxes

•   Social Security and Medicare taxes

•   Wage garnishments

•   Employee benefits

•   Retirement contributions

Steps to Calculate Payroll Deductions

Calculating payroll deductions is typically something done by employers, not employees. Here’s a quick overview of how the process typically works:

1.    Obtain a W-4 from employees indicating their withholding.

2.    Determine employees’ gross earnings, whether salary pay or hourly.

3.    Calculate any overtime for those employees who are not exempt and worked over 40 hours a week.

4.    Take any pre-tax deductions.

5.    Calculate and deduct federal income tax based on pay, withholding status, what tax bracket an employee is in, and other factors.

6.    Determine and deduct Social Security and Medicare payments.

7.    Calculate and deduct any state and local taxes.

8.    Take any other deductions, and move funds to the appropriate entity.

Tips to Manage Payroll Deductions

If you are an employee seeking to tweak your deductions, you will have a few options. You might update your W-4 to reflect more or fewer exemptions, depending on whether you want to reduce or increase the taxes withheld.

In addition, if you could use some breathing room in your budget during a financial crunch, you might decrease retirement contributions a notch to free up a little more money for bills.

If you are in a position to be managing payroll deductions, consider these tips for making the process run smoothly:

•   Develop organizational systems to manage forms, deadlines, and other aspects of the process. There are many digital and online tools you can use for this.

•   Keep up to date with federal, state, and local tax laws to make sure you are deducting the proper amounts; know the guidelines about, say, equal pay provisions; and more.

•   Automate the entire process with payroll software. This can save time and boost accuracy versus doing things by hand. Or consider outsourcing the responsibilities to an external agency.

•   Regularly update training for payroll and HR teams, if you employ them.

•   Don’t touch payroll taxes that are only paid quarterly. It may be tempting to dip into those funds before they are due and use them for other business expenses, but this is a very risky path to pursue. If you wind up being short when the taxes must be paid, you could face penalties.

Recommended: 50/30/20 Budget Calculator

The Takeaway

While you may be surprised to see all the deductions coming out of your paycheck, once you know what number to expect to see landing in your bank account each pay period, you’ll be able to plan your spending and budget accordingly. Deductions can include those you can’t change, such as taxes, and those that you may be able to alter, such as retirement contributions.

It’s a good idea to check your pay stubs periodically to ensure that the deductions being taken out are accurate and align with your financial goals.

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.


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FAQ

What are some common incorrect payroll deductions?

Examples of incorrect employee payroll deductions are expenses that have to do with running the business, workers’ compensation premiums, and some personal protective gear costs. In addition, payroll deductions should not bring an employee’s income below minimum wage.

How do I report payroll deductions?

If you are an employee, your payroll deductions will be reflected in the end-of-year W-2 form that you receive. If you are an employer, you are likely filing IRS Form 941, Employer’s Quarterly Federal Tax Return, or Form 944, Employer’s Annual Federal Tax Return, which shows the wages you’ve paid and various taxes withheld.

What are the pros and cons of payroll deductions?

Payroll deductions are a fact of life. On the plus side, they whisk away taxes regularly so you don’t face a huge tax bill come April 15, and the money paid in taxes can help quality of life in America. Also, deductions like health insurance and retirement savings go towards achieving financial security. The main con, of course, is that you take home less pay than your gross earnings and may need to budget wisely to balance your spending and saving.

What are the categories of payroll deductions?

The main categories of payroll deductions are federal, state, and local taxes; Social Security and Medicare; employee benefits; and retirement contributions.


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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


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 Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.


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.

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What Is a Reseller?

Guide to Reselling

A reseller is a critical link in the commerce chain, purchasing items from manufacturers, dealers, and other businesses and individuals, and offering them for sale to consumers. Resellers may do business on major platforms like Amazon and eBay or via smaller outlets.

There are real profits to be had by setting up a resale ecommerce platform. However, it requires taking the right steps professionally, such as finding initial capital, establishing a supplier network, and marketing your services as a reseller. Read on to discover if this career could be right for you.

Key Points

•   Reselling involves purchasing goods from manufacturers or wholesalers and selling them to consumers, often online, with flexibility and scalability as key benefits.

•   Startup costs include sourcing inventory, storage, marketing, and shipping, with significant capital needed for high-end items.

•   Reselling differs from dropshipping as it requires owning inventory, offering potentially higher returns but also higher risks.

•   Success in reselling depends on building a reliable supplier network and managing costs effectively.

•   Reselling can be a side hustle or full-time job, with income potential varying based on market demand and business strategy.

What Is a Reseller?

Resellers buy merchandise, such as clothes, shoes, toys, electronics, jewelry, and appliances, and resell it on online marketplaces or physical discount stores for profit. Online resellers often buy merchandise in bulk and at a discount from wholesalers and manufacturers. They then resell items individually on digital platforms like eBay and Poshmark.

Because the reseller does not manufacture the goods they sell, they typically have no production costs. However, they can face steep marketing costs. Depending on how well a seller manages these costs, they could see a steady stream of profits flowing into their checking account.

Another factor to consider is that resellers in the luxury goods or collector markets, such as watches, jewelry, or high-end fashion items, often have decades of industry experience and are experts in their field. They use this expertise to ensure the products they trade are authentic and not fake.

Recommended: 36 Places to Sell Your Stuff

How Does Reselling Work?

Resellers first have to source their merchandise or inventory. Some may seek liquidation pallets of customer returns or overstocks from big retailers. E-commerce resellers then market their inventory on their platform.

Once customers purchase products, the reseller ships packages and manages returns. Other than buying inventory, shipping and managing returns may be the biggest expenses for resellers, so they build these costs into their markups on the items they sell.

For luxury goods, like collectibles, watches, jewelry, and high-end fashion, resellers must authenticate the products to show that they are not fakes. Some buyers may only buy these items from dealers they know are trustworthy.

Recommended: 50/30/20 Budget Calculator

Common Reselling Industries

Practically any item you need or want can be found on the secondary market, except for perishables like food. Here are some common examples.

•   Apparel

•   Shoes

•   Luxury goods (high-end fashion, handbags, jewelry, and vintage jewelry)

•   Collectibles (wine, art, watches, whiskey, vintage cars)

•   Household goods (exercise equipment, household appliances, furniture)

•   Technology goods(smartphones, tablets, and tech accessories)

•   Electronics (stereo components, home entertainment systems)

•   Video games, DVDs, and Blu-ray discs

•   Vehicles

•   Baby products (toys, strollers, accessories)

•   Musical instruments

•   Power tools and garden equipment

Depending on what product you select to resell and how much time, energy, and investment you put into your business, reselling could be a job that pays daily or one that provides only occasional income.

Types of Resellers

Resellers assume various positions in the supply chain. To better understand what “reseller” means and what one does, here’s a look at the different types: wholesalers, retailers, and distributors.

•   Wholesalers: This involves buying products in bulk and at a discount from manufacturers or distributors. Wholesalers sell the products to retailers or resellers at a markup and in smaller quantities. They typically don’t sell directly to consumers.

•   Retailers: These professionals are further down the supply chain. Retailers buy from the wholesaler or distributor and sell directly to the consumer. They usually have a range of products and sell in small quantities.

•   Distributors: This involves buying products from manufacturers and selling them to others in the supply chain, usually wholesalers. Distributors tend to have close relationships with manufacturers who feature buying and marketing contracts with free samples and discounts.

Common Startup Costs for Resellers

Startup costs for resellers mainly involve sourcing inventory, storage, marketing, and shipping.

•   Inventory: The costs for inventory will depend on what you are selling. You will need significant capital if you plan to resell high-end items like designer handbags or jewelry. Clothing resellers will need capital to buy oversupply or liquidation pallets from big retailers like Nordstrom Rack or Costco or other wholesale clubs.

•   Storage costs: Resellers need to store their inventory, particularly if they buy in bulk from wholesalers.

•   Marketing: Marketing costs run high for resellers and focus on email outreach and ads, often on social media platforms like Facebook, Instagram, and TikTok.

•   Shipping: Shipping and returns may be the highest cost for resellers. Vendors need enough capital to ship items and cover returns costs.

Recommended: 15 Low-Cost Side Hustles

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Reselling vs Dropshipping: What’s the Difference?

Reselling is different from dropshipping because the former requires owning and storing inventory, while the latter is more of a middleman. Here are the key differences between dropshipping and reselling.

•   A reseller buys stock from wholesalers or distributors to sell at a profit.

•   Dropshippers don’t ever take physical ownership of products. They accept orders from customers and then buy the products from suppliers who package and ship the products to the customers.

•   Dropshippers require less capital than resellers because they do not buy or stock significant inventory.

•   The potential returns for resellers are higher than for dropshippers. Because resellers buy in bulk, they pay less per unit to their supplier and add more mark-up. Dropshippers often may buy single items, which can be more expensive.

•   Reselling is riskier because merchants may be left with inventory that they cannot sell but that they have paid for and still need to store. In this situation, it could put a strain on money in your traditional or online bank account.

Pros of Reselling

The beauty of reselling is flexibility in the products offered and the ability to run one’s own business. However, the success of a reseller largely depends on the relationship between the reseller and the suppliers. If you can succeed at that, you may well be taking a step towards making quick cash.

•   Resellers can make money without having to manufacture a product.

•   Once a reseller has established suppliers, they can scale and acquire new customers and find new products to sell.

•   Reselling is flexible. Merchants can change the products they offer according to market demand and depending on how much inventory they carry.

•   Resellers can scale quickly if they have reliable suppliers and market demand.

•   Reselling can be a way to make money from home.

Cons of Reselling

The disadvantages of reselling are that merchants must work hard to build a network of reliable suppliers, and a steady income is not guaranteed.

•   Finding inventory at the right price could be difficult until a reliable supply chain is established. This could drain funds in your savings account if you haven’t planned adequately.

•   Resellers must work hard to negotiate deals with suppliers and build relationships.

•   Quality control may be difficult because sending products back to manufacturers will mean delays for customers.

•   Shipping and storage costs can be considerable.

•   Your earnings may fluctuate, especially if you sell seasonal products, requiring you to create an irregular income budget.

•   Resellers are self-employed and have no health or retirement benefits from an employer.

Do Resellers Work from Home?

Whether you can work from home depends upon your particular situation and the kind of items you are hoping to resell. If working from home is an important consideration, it might make sense to focus on small goods, such as fashion accessories, that don’t require much storage space.
Whether you can work from home depends upon your particular situation and the kind of items you are hoping to resell.What are ways I can make money from home.

Reselling Alternatives

Becoming an entrepreneur and achieving financial freedom by reselling can often involve starting with eBay. While eBay is a popular and successful platform, it’s not the only game in town. Some alternatives to consider include:

•   Craigslist

•   Etsy

•   Facebook Marketplace

•   Poshmark

•   Rakuten

•   DePop (clothing)

•   The RealReal (fashion)

•   Mercari (home goods)

•   Ruby Lane (vintage items)

The Takeaway

Reselling involves purchasing goods from a manufacturer, wholesaler, dealer, or other source and then selling it to consumers. Typically, the selling happens online. This is a broad industry and a competitive one, but the flexibility of the work and ability to scale quickly can be major benefits. The disadvantages are similar to any entrepreneurial venture. New resellers must find capital to set up their business, buy inventory, and market that inventory.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Is reselling best as a side hustle or full-time job?

Reselling can be a replacement for a full-time job, but it will take time to establish sourcing and learn how to make reselling profitable. It’s best to resell on the side until you are confident that your income is sufficient and you can afford to leave your full-time or part-time job. Remember, you will not receive employer benefits and contributions as an entrepreneur.

Is reselling considered “scalping”?

Scalping is a type of reselling where the seller takes advantage of an inelastic market (meaning one where there’s always demand, even if the price is high) to make a profit. For example, scalpers often resell tickets for a popular sporting event at a major markup. Because the tickets are scarce, people are willing to pay a lot to attend. While some resellers are scalpers, many charge a reasonable markup on goods.

Do you need to have a college education to resell?

You don’t need any qualifications to resell. Succeeding as a reseller takes hard work, an ability to negotiate and find suppliers, and good business sense. That said, a business degree would be an advantage and provide knowledge that would help you with accounting, budgeting, inventory management, and marketing.


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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


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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15 Low-Cost Valentine’s Day Gifts Your Sweetie Will Love

15 Low-Cost Valentine’s Day Gifts Your Sweetie Will Love

Here comes Valentine’s Day, when your heart may be full of love but your bank account could be low on cash. How can you mark the day with a great gift that won’t further deplete your funds? You’re in the right place to find out.

Typically, February 14 triggers a spending frenzy. In 2024, spending on all things red, heart-shaped, or otherwise lovey-dovey was projected to hit $25.8 billion, according to the National Retail Federation. But to stick to a budget, consider this list of 15 sweet but affordable Valentine’s gift ideas.

Key Points

•   To express their love, many people splurge on Valentine’s Day gifts and celebrations, but lower-cost or free festivities can be just as meaningful.

•   Create a small bag of your partner’s favorite candy bars with a handmade card.

•   Gift a low-maintenance potted succulent as an alternative to expensive roses.

•   Cook a special meal at home to enjoy a personal dining experience.

•   Craft a personalized Valentine’s Day card with heartfelt sentiments.

Valentine’s Day Gifts on a Budget

Valentine’s Day has been celebrated for hundreds of years now, with the first messages declaiming love appearing in the 1500s. Commercially produced valentines swept across the U.S. in the mid-1800s and have been going strong ever since. The image of Cupid, the Roman god of love, with his bow and arrow, has been a long-time favorite representation, and birds (who often mate in February) also became a symbol of love.

These days, there’s no need to stick with those icons. Expressing your devotion can be done in an array of ways, often for very little cash that won’t blow your budget, as you’ll see in this list.

1. Sweet Treats

You could easily spend a bundle on top-tier chocolate truffles, but candy bars from the impulse rack at the checkout line can be equally satisfying. Put together a small bag of your honey’s favorite treats. Add a handmade card noting, “I’m sweet on you!” for a thoughtful and cute Valentine’s Day gift without going overboard or depleting your checking account.

2. Plant Power

While roses are a classic V-Day gift, price gouging can kick in around the holiday, making this a very expensive way to say “I love you.” Instead, why not avoid credit card debt and buy an adorable (and low-maintenance) potted succulent instead? It can show your affection and brighten your honey’s home. Look for them on Amazon or at The Home Depot or Lowe’s; they can cost just $7 each. Add tissue paper and some ribbon, and you’re good to go.

3. A Favorite Home-Made Meal

Skip the $100 dinner, and opt for a delicious meal at home. (Stash the money saved in an emergency fund or start a travel account with it.) Maybe that’s a chef’s recipe for three-cheese mac and cheese and a nice bottle of red wine or a good steak and salad with French vinaigrette. Choose something you don’t normally make that feels first-class but stays within a sensible budget.

4. S’mores

Here’s another affordable luxury that won’t bust your line-item budget on Valentine’s Day: While chocolates and fancy candy are delicious, sometimes a good old-fashioned treat from your childhood can feel more fun and meaningful. Grab a bag of marshmallows, graham crackers, and bar chocolate to roast over a fire.

Don’t have access to an open flame? No problem. Heat an oven to 350 degrees and layer a small baking dish with graham cracker squares, chocolate, and marshmallow halves. Repeat with another layer, topping it off with remaining marshmallow halves. Bake for nine to 11 minutes until marshmallows are puffed and golden brown on top.

5. An Over-the-Top Valentine’s Day Card

What’s an extravagant Valentine’s Day card? You know the splurge-y ones: Maybe they are three-dimensional, cut-paper pop-ups or encrusted with dried flowers. Some play music when you open them. Others are embossed with metallic designs. Whatever the details, even at their most expensive, they are likely to give you change on a $10 or $20 bill and put a smile on your sweetheart’s face.

6. A Handmade Valentine’s Day Card

On the other hand, what could be more wonderful than a handmade card? You might make a collage with magazine images or doodle a little drawing. When a heartfelt sentiment is added, that can be quite the Valentine’s Day keeper. And the money you saved vs. buying a major gift can go into your savings account for that vacation you two are planning.

7. Cupid Coupons

Show your appreciation for your significant other through cupid coupons to be cashed in for loving gestures. These money-saving coupons don’t skimp on thoughtfulness. You can make them for a 10-minute massage, cooking dinner one night, doing their laundry, or watching their favorite reality show (which you really don’t like) together.

Come up with different coupon ideas and place them in a decorative jar or envelope. Your partner can then redeem these gifts throughout the year.

Recommended: 5 Ways to Achieve Financial Security

8. Low-Cost Local Activities

There are plenty of fun, free activities that you can take advantage of locally. Head back to your favorite spot in the park for a stroll, or drive up to a local scenic overlook. Search your city for free museums (many museums have times or days when you can visit at no cost) or points of interest that you haven’t been to together.

9. A V-Day Party

Why not do a group Valentine’s Day happy hour at home? Ask friends to BYOB, and celebrate together with simple snacks. Whether you make it a surprise for your beloved or not, you’ll have fun as a group, and you won’t have to worry about spending a ton of money.

Recommended: 23 Ways to Make Quick Cash

10. Selfcare Supplies

Who can resist a little pampering? Head to a shop like Ulta or Sephora or look online at Amazon and other e-tailers for not-too-pricey moisturizers, masks, or shower gels. These often come in cleverly packaged sets for the Valentine’s Day holiday. These low-cost gifts are not only a treat for the recipient; their affordability can also make them a form of financial self-care for the gift giver.

11. A Love Letter

The written word goes a long way. If it’s been a while since you’ve confessed your love or you have yet to do so, express your feelings in a handwritten letter. Reflect on the past year with your bae, and tell them why they are so special.

If you’re short on words, write the top reasons why your partner makes you smile. Put each reason on a Post-it note, and leave them throughout their house or in their car.

12. DIY Roses

They may not smell as sweet as what Mother Nature makes, but LEGO Roses ($13) can be a fun gift. You can pre-assemble, or let your love go crazy building the 100-plus-piece blooms.

13. Scavenger Hunt

If you’re really crafty, come up with a scavenger hunt. You can make it themed according to your loved one’s favorite book, TV show, or movie. There’s nothing better than solving a Harry Potter-themed riddle that leads your partner to the Gryffindor House Cup or Tom Riddle’s diary.

Try coming up with four to five clues that lead to a small gift. A gift card to a local coffee shop feels more significant when you put together a scavenger hunt with your honey’s favorite things in mind.

14. Movie Night for Months

Research and write up a list of movies you’d love to watch together. Maybe they’ve never seen your favorite Hitchcock flicks or the “Lord of the Rings” saga. Leave a bunch of blank lines on your list for your love to fill in the movies they would like to stream with you, and have fun sharing together time while checking off each entry.

Trying to save money on streaming services? Check out services like Hoopla and Kanopy that can allow library-card holders to watch films for free.

15. Class Gift

Embark on an adventure together. Check your local library, community center, or arts organization for free or low-cost one-time classes, and sign both of you up. For instance, you might take a memoir-writing workshop, calligraphy tutorial, or strength-training class to spark a new hobby.

Valentine’s Day Explained

Curious about this holiday that’s all about love and how it got its name? Here’s a bit of history: Valentine’s Day may have been so named in honor of a priest who was martyred around the year 270. He was said to have signed a letter to his jailer’s daughter “from your Valentine” as that was his name. Legend has it that he befriended the young woman and healed her from blindness. His example may have helped to inspire today’s tradition.

Other versions of the day’s history also exist; no one is 100% certain of the origin.

Valentine’s Day by the Numbers

Here are a few interesting statistics related to the Valentine’s Day holiday and gift shopping:

•   Men spend $235, or almost twice as much as women do at $119, on average for Valentine’s Day.

•   In a recent year, Americans spent $6.4 billion on jewelry, $2.6 billion on flowers, and $4.9 billion on an evening out for Valentine’s Day, according to the National Retail Federation.

•   Online dating activity tends to be busiest on the first Sunday of the New Year (messaging on Tinder has seen a 22% surge in years past) and can stay strong until Valentine’s Day, perhaps signaling that many people don’t want to be alone on that holiday.

If you do decide you want to splurge this holiday, you might think of how to finance it. Cash back rewards could help, or perhaps you can get a bonus when opening a new checking or savings account at an online bank or elsewhere.

The Takeaway

You are now armed with great Valentine’s Day ideas that maximize the moment without blowing your budget. You might try writing an old-fashioned love letter, hosting a scavenger hunt, or even giving your sweetie some everlasting toy roses. With these tactics, being financially savvy doesn’t have to take a holiday while you celebrate.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.


Photo credit: iStock/Prostock-Studio

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


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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New Year Financial Checklist: 7 Things to Do in 2023

New Year Financial Checklist: 7 Things to Do in 2025

As 2025 kicks into gear, now’s the perfect time to refresh your finances. While this may not be an activity that most of us look forward to, rethink it in a positive light. Completing this checklist can ultimately leave you in a better frame of mind and quite likely a better financial position.

Of course, each person’s economic situation is unique, so some of these items may be more important than others. In addition, it can be wise to speak to a trusted financial advisor or money coach about how to ensure you’re well-situated financially. That said, here’s how to start this year’s financial planning.

Key Points

•   The start of a new year can be a good moment to review and revise your financial goals to prepare for the 365 days ahead.

•   It can be wise to budget to understand income and expenditures, as well as establish spending guardrails.

•   Assessing debt (including credit card, mortgage, and student loans) and considering consolidation options can be a good financial move.

•   Other New Year’s financial moves include updating savings goals and understanding the impact of compounding interest.

•   Start tax preparation early, and review insurance policies to ensure adequate coverage, especially after major life changes.

1. Your Budget: Time to Review & Revise

A budget gives you a deeper understanding of how much you have coming in and going out, and it helps you establish guardrails around expenditures. As time passes, your income, spending, and saving patterns change. Perhaps you get a new job, expand your family, or pay off your student loans. Or maybe you have a series of pricey home repairs to manage, which leave your checking account not as flush as it usually is.

Whatever the scenario, to know exactly how much you’re spending, preparing a budget is vital. That way, you can track how your actual spending will compare to whatever you’ve budgeted and when necessary, make adjustments. The start of the year can be a great time to evaluate and determine your desired spending habits, and you can experiment with various budgeting methods to help you complete the process.

It can also be wise to see what tools your financial institution offers. Many traditional and online banks provide tools such as dashboards and spending trackers to assist you with budgeting. There are also plenty of third-party apps to consider.

Recommended: 50/30/20 Budget Calculator

2. Debt: Reviewing Progress & Setting New Goals

If you’re sitting on a lot of debt — credit card debt, in particular — you’re not alone. Year over year, credit card balances are up 8.6% in the second quarter of 2024, to a total of $1.05 trillion, according to TransUnion®, a leading credit bureau.

There is also mortgage debt, personal loans, student loans and auto loans to name a few. Itemize all of them, along with their respective interest rates and minimum monthly payment amounts. You may be able to consolidate some of your debts, examining the terms closely and always reading the fine print. Balance transfer credit cards can be another option.

3. Savings: Reviewing Progress & Setting New Goals

The reality is that with so many Americans living paycheck to paycheck (estimates range from one-quarter to half of all Americans), having savings can be a luxury. Nevertheless, it’s important to remember that every little bit counts (especially, thanks to the miracle of compounding interest), and having enough savings on hand can help keep surprise expenses from derailing your financial goals. Any financial adviser will tell you, it’s a good idea to have at least six months’ worth of living expenses set aside, just in case, but beyond emergency funds, the impact of long term savings can be pretty profound.

As a compound interest calculator will show you, if you were to put away $100 a month starting at age 25, at 6% interest, you’d have nearly $185K in the bank by your 65th birthday. And just doubling that contribution would net you over $370K.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $3M of additional
FDIC insurance.


4. Tax Review and 2025 Tax Withholding

It’s a good idea to start collecting and reviewing your statements as tax season approaches, particularly if you experienced any big life changes this year such as marriage, divorce, children, etc. Though taxes aren’t due until April 15, getting an early start on reviewing your documents will give you time to find and address any issues or discrepancies well before the tax deadline. You can do this with your tax advisor or on your own with the help of a tax preparation guide. You might find that you are even due a refund.

Furthermore, remember to adjust your tax withholdings according to your changing financial priorities and life events for 2025, and submit an updated W-4 to your employer.

5. Insurance Policies

There are so many different types of insurance these days — health insurance, homeowners insurance, renters insurance, life insurance, disability insurance, auto insurance and many, many more. It’s easy to simply forget about them and just pay the premiums, but you’d be wise to take a look at each and make sure you’ve got the right coverage for the year, particularly if you’ve made any meaningful changes that should be accounted for in the policy — such as changes to your home or expensive items that should be reflected in your homeowners policy, for example.

6. Credit Score & Credit Reports

Americans typically each have three credit reports from three different credit bureaus (Equifax®, Experian® and TransUnion®), which document credit account balances, whether we pay bills on time, or miss payments entirely. These reports are used to calculate credit scores, which in turn are used by financial institutions when determining whether an individual will qualify for loans and what the interest rates will be.

Generally, you’re allowed a copy of each of those reports once a year. However, the bureaus have allowed consumers to freely pull their reports once a week at AnnualCreditReport.com. It’s important to review the documents regularly (and at least once a year) to ensure that the information on them is accurate. Doing so at the start of the year can give you a clear view of where you stand and how to structure your financial goals for the year.

If you do find mistakes, you can dispute credit report errors directly with the credit bureaus. Remember, though these reports may look similar, they don’t all necessarily contain the same information, so be sure to review each one carefully.

7. Your Financial Plan

Last but not least, it’s important to review your long term financial plan at least once a year, and if you don’t have one, there’s no time like the present to get started. A financial planner can help you put this together and it will encompass most if not all of the items we’ve already covered on this checklist. Financial plans help you prepare for life’s big financial moments — both good and bad. That can mean wrangling student loans, a wedding, creating a savings account for emergency funds, buying a house, losing a job, writing a will and choosing beneficiaries, and, of course, retirement.
All of these goals and challenges can seem overwhelming, which is why it’s important to get them out of your head and down on paper. Reviewing a guide to creating a financial plan can help you get started.

The Takeaway

It’s wise to do a check-in with your money as a new year starts. Staying on top of your budget, keeping up with financial goals, protecting your assets, and preparing for tax season can be smart moves to help you hit your marks and feel confident in your financial situation.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What are some important New Year’s money moves?

At the start of a new year, it can be wise to check in with your budget, review your debt and savings, check up on your insurance and credit score, refresh your financial plan, and prepare for tax season.

Why should I review my finances at the start of the year?

The start of a new year can help you take a fresh look at the year behind you and the year ahead. You can evaluate how well you managed your finances over the last 365 days and look ahead to your goals and challenges. Then you can plan appropriately.

What is the best way to make a financial plan?

You’ll have several choices for making a financial plan. You might do-it-yourself, with guidance from trusted websites, books, podcasts, or other sources. You could ask trusted friends or relatives for advice. Or you might prefer to work with a qualified financial professional. For some people, a combination of methods works best.


Photo credit: iStock/akinbostanci

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.


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 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.

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