Oct
09
2024
12 Mobile Banking Features

12 Mobile Banking Features to Look For

By | money | Comments Off on 12 Mobile Banking Features to Look For

In an increasingly digital world, mobile banking is among the cool new tools that can enhance your quality of life. It can make managing your money on the go simple and convenient.

The range of mobile banking features you have access to can, however, depend on where you choose to bank. Some of the most common features of mobile banking include the ability to view transactions, transfer funds, and review statements, all in the palm of your hand.

Understanding how those features work matters if you’re new to mobile banking or, like growing numbers of people, you’re on the hunt for a new bank account with mobile access. In fact, according to SoFi’s April 2024 Banking Survey of 500 U.S. adults, the top reason respondents gave for switching banks was to get better mobile/online banking options. Read on to learn:

•   What is mobile banking?

•   How does mobile banking work?

•   What are some of the top features of mobile banking?

•   What are the pros and cons of mobile banking?

Key Points

•   Mobile banking can provide users with a convenient way to manage their banking accounts and transactions from nearly any location.

•   According to SoFi’s 2024 Banking Survey, a top reason people switch banks is to get better mobile and online banking options.

•   Some of the most common mobile banking features people use include checking account balances and recent transactions, paying bills, and making mobile deposits.

•   Mobile banking apps frequently offer money management services, such as budgeting tools and options for making bank-to-bank transfers or putting a stop on a check.

•   While mobile banking apps generally have strong security measures in place to protect user information, individuals may also use options such as account alerts and secure messaging to help protect their accounts against fraud.

What Is Mobile Banking?

Mobile banking refers to a range of banking products and services that are offered through a mobile device. To access mobile banking, you’ll generally need two things:

•   A compatible and connected mobile device, such as a cell phone or tablet

•   A mobile banking app

Mobile banking is different from online banking, in terms of how you access it. To use mobile banking, you need to log in to your bank’s mobile app. With an online bank account, on the other hand, you access your account through a laptop or desktop computer.

How Does Mobile Banking Work?

Mobile banking works by allowing banking customers to access their accounts from a compatible mobile device. Instead of logging on to your bank’s website from a laptop or desktop, visiting a branch, or calling your bank’s phone banking number, you can manage your accounts right from your mobile phone or tablet.

A mobile banking app is an app that’s designed to be used specifically for banking services. Numerous traditional and niche banks have introduced mobile banking apps to complement their online and in-person banking services. You can also find mobile banking apps offered through fintech companies, neobanks, and other institutions.

Generally speaking, these apps allow you to log in with a unique user ID and password. From there, you can perform different money management tasks, based on the mobile banking features the app offers.

But is mobile banking safe? Generally, the answer is yes, as banks take various measures to encrypt and protect mobile banking app user information.

12 Features of Mobile Banking

What are the features of mobile banking? The answer depends largely on where you decide to bank, as each bank can determine what features to include in its mobile app. That being said, there are some mobile banking app features that are typically common from bank to bank. Here are a dozen features to consider.

1. Account Details

The first thing you’ll see when you log in to a mobile banking app is an overview of your accounts. Specifically, you should be able to review the following at a glance:

•   Available account balances

•   Current account balances

•   Name of each account

•   Identifying details, such as the last four digits of the account number

If you want to see how much you have in checking, for instance, you can quickly log in to your mobile banking app to view your balance.

You may also be able to see other account details, including full account numbers and your bank’s routing number. That information can come in handy if you want to set up direct deposit or schedule an ACH transfer or payment online.

2. Transaction History

One of the most helpful mobile banking features is the ability to view your transaction history. Some of the things you might be able to do with your app include:

•   Reviewing posted and pending debits

•   Reviewing posted and pending credits

•   Cleared checks

•   Filtering transactions by date, amount, or transaction type

Seeing transaction history can be helpful when making a budget; it can help you know exactly where your money is going. You can also review your transaction history to look for anything suspicious. This could include such things as purchases you don’t remember making or micro deposits that could indicate someone is trying to link your account to an external account without your consent.

3. Bill Pay

Mobile banking app features can also include bill pay services. But what is bill pay? In short, it’s a feature that allows you to schedule one-time or recurring bill payments through your banking app. You can add info on those who typically bill you, select a payment account, enter the payment amount, and schedule the date the bill should be paid all from your mobile device.

That can save you time, since you can schedule bills to be paid automatically. It can also save you money if you’re not having to buy postage to mail in check payments. One more bonus: You’re avoiding late payment fees since bills are paid on time.

4. Mobile Check Deposit

Mobile check deposit can be a highly convenient mobile banking feature for people who regularly receive checks. Instead of taking your check to a branch to deposit it, you can snap a pic of it with your mobile device and deposit it from wherever you are.

That’s one of the main benefits of mobile deposit if you use an online bank or neobank that doesn’t have physical branches or offer ATM access. If someone gives you a check, you don’t have to worry about depositing it at a brick-and-mortar financial institution and then initiating a bank transfer from one bank to another. Instead, you can deposit the check in minutes from your phone. It’s a popular option: In the SoFi survey, 43% of respondents say they frequently use mobile check deposits.

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5. Person to Person Payments

Mobile banking features increasingly include the option to send person to person payments to friends and family. You can log in, navigate to the payments section of your mobile banking app and schedule a payment to someone using their email address or phone number.

Depending on where you bank, those payments might be completed in real time, meaning the money transfers from your account to theirs in minutes. That’s much easier and more convenient than withdrawing cash or writing a check and you can avoid the fees that other payment apps like Venmo or Paypal might charge.

Recommended: Pros and Cons of Online Banking

6. Cardless Withdrawal

A cardless withdrawal allows you to get cash at an ATM without needing your debit card. Instead, you can withdraw money using a secure code that’s sent to your mobile device either via text or in your mobile banking app messaging feature. That’s a nice feature to have if your debit card is lost or stolen and you need to make a withdrawal.

7. Card Management

Credit cards often offer a card lock feature that allows you to freeze your card temporarily if it’s lost or stolen. The same feature is increasingly being offered with mobile banking. If you misplace your card, you can log in to the app, select the card, and freeze it with the tap of a button. You can unfreeze your card the same way if you find it. If you don’t, you can leave it locked until you’re able to contact customer service to report the loss.

8. Account Alerts

Setting up account alerts and notifications can be a great way to stay on top of your money and potentially head off fraud. Some of the alerts you might be able to set up with your mobile banking app include:

•   New credit and debit transaction alerts

•   Alerts notifying you of changes to your account information, such as your address or contact email

•   Failed login attempts

•   Updates to your user ID or password

•   Low account balances

You may be able to set up individual alerts for each account that you have or blanket alerts that cover all of your accounts. And you might be able to choose from email alerts, text alerts, or both, depending on your bank.

9. Statements and Documents

Opting in to electronic statements can help you avoid wasting paper. You might also avoid a fee if your bank charges you to get statements in the mail. In addition to viewing your statements through your mobile device, you might also be able to review other documents as well such as tax forms if you’re earning interest with a savings account. Or you could check investment account statements if you have a brokerage account at your bank as well.

10. New Account Opening

Need to open a new bank account? You might be able to skip the branch and set up a new checking, savings, money market, or CD account through your mobile banking app. You can save some time if you’re a customer and are already logged in, since the bank will have the relevant information needed to open the account. And you can easily arrange to transfer money from one of your existing accounts to the new account to cover your initial deposit.

11. Secure Messaging

Mobile banking apps can also include a message center where you can send and receive messages with your bank securely. If you’ve set up account alerts or notifications, for example, you can review those notifications through the message center as they come in. Your bank may also use the message center to send other secure notifications regarding your accounts.

12. Money Management Services

Your mobile app could save you time if you’re able to complete certain banking services from your device without having to visit or call a branch. For example, some of the things you might be able to do include:

•   Ordering checks

•   Putting a stop payment on a check you’ve written

•   Linking external accounts

•   Schedule bank to bank transfers

•   Managing overdraft protection

•   Reviewing fee schedules for your accounts

•   Ordering foreign currency

•   Requesting copies of checks

•   Finding bank locations near you

•   Connecting with customer support

You might even be able to use budgeting tools offered by your bank, like 23% of SoFi’s survey respondents do.

These features might be listed under a section called “Service Center” or “Services” in your mobile banking app. While you may not need most of them on a regular basis, being able to access them at your fingertips is a nice incentive to use mobile banking.

Banking With SoFi

Weighing the pros and cons of online banking and mobile banking can give you perspective on what’s good (or bad) about either one. If you’re specifically interested in being able to bank on the go, then finding an account that offers a robust mobile banking app is a must.

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

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

FAQ

What are the benefits of mobile banking?

One of the main benefits of mobile banking is convenience. You don’t need to go to a branch or log in to your laptop to manage your money. Instead, you can transfer funds between accounts, view balances, pay bills, and send money to friends and family from your mobile device.

Are there any disadvantages of mobile banking?

The main disadvantage of mobile banking is that you can’t deposit cash through an app. If you need to deposit cash, you’ll need to take it to a bank branch or ATM to do so. Otherwise, there are very few drawbacks to mobile banking apps.

What is the purpose of mobile banking?

The purpose of mobile banking is to allow you to manage your bank accounts from anywhere as long as you have a compatible device and an internet connection. Mobile banking can save you time since you don’t have to go to a bank branch to complete basic transactions with your accounts.

Photo credit: iStock/Kawanilaz

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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

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

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

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Oct
09
2024
Are Payment Apps Safe?

Are Mobile Payment Apps Safe?

By | money | Comments Off on Are Mobile Payment Apps Safe?

Mobile payment apps are certainly convenient, and, when compared to other payment methods, they are quite safe. They allow you to make payments with devices like smartphones and smartwatches, and can be even faster than using, say, a debit card.

That said, you should know a few details before deciding to use a payment app and when deploying one in daily life to keep your hard-earned cash as safe as possible. This guide will help you with such questions as:

•   What are mobile payment apps?

•   Are mobile payments secure?

•   What are the pros and cons of mobile payments?

•   How do I use a mobile payment app?

Key Points

•   Mobile payment apps allow you to make contactless payments and conduct other financial transactions using your mobile device.

•   While no payment app may be 100% secure, mobile payment apps typically use a number of features to enhance security, including tokenization, encryption, and two-factor authentication.

•   To authenticate each transaction, a mobile payment app may require a PIN or use biometrics, such as a fingerprint or face ID.

•   There are steps mobile app users can take to help minimize risk, such as setting up payment notifications, enabling two-factor authentication, and allowing automatic updates, which might include security features.

•   Always double-check recipient details to avoid sending money to the wrong person or to potential scammers — once funds are transferred, it can be hard to get them back.

What Are Mobile Payment Apps?

Mobile payment apps enable contactless payments by waving a smart device at a payment terminal. This can be faster and touchless versus pulling out a debit card or credit card and then inserting it into a reader.

In addition, mobile payment apps allow you to send and receive money with friends and family. These apps can be installed on devices like smartphones, smartwatches, and tablets. Many payment apps are available, but common choices include Apple Pay, Google Pay, Samsung Pay, and Venmo.

Some mobile payment apps have a wallet feature that allows you to store credit and debit cards and things like boarding passes and tickets. Instead of having to carry each card individually, you can load them all into your mobile wallet.

Another way to conveniently manage your money is with a high yield bank account. You can typically do online and/or mobile banking with these accounts.

How Mobile Payments Work

Typically, you link payment cards in a mobile wallet or a while on a screen that uploads your payment method. You’ll need basic information such as the card number, expiration date, and CVV (those few digits, often found on the back) to link your card. When you finish filling in your card’s information, you may have to verify it with your bank.

Then, instead of paying with the card directly, you use your device to pay using the payment app. Your device sends your necessary information via what’s known as near field communication (NFC) but without revealing your actual account numbers, which is a welcome security feature.

Benefits of Mobile Payments

Mobile payment apps have several benefits that can make them preferable in our increasingly connected world. Some of those benefits include:

•   Convenience: On any given day, you may find you need to carry a wide variety of cards. Not just credit cards and debit cards, but also things like loyalty cards, boarding passes, and sporting event tickets. All of these can be loaded into popular mobile payment apps, so you have everything you need in one place.

•   Security: When you wave your device to pay with your mobile app, it doesn’t share your card number. Instead, it generates a series of random numbers (called a token) for each transaction you make. Plus, mobile payment apps require you to enter a PIN (personal identification number) or authenticate with biometrics like a fingerprint or face ID with every transaction. So, even if someone gets access to your device, it’s unlikely they would be able to use it to make purchases.

•   Speed: Paying with a mobile payment app tends to be much quicker than paying by swiping or inserting your card. In fact, it can be a way to send money instantly (or close to it), while swiping or inserting can take several seconds. This benefit may seem minor in the grand scheme of things, but it can make a big difference when you’re in a rush.

Are Mobile Payments Safe?

Usually, mobile payment apps are safe compared to other payment methods. Most of that safety comes down to the tokenization mentioned in the previous section. Not only are these tokens different from your card number, but they are also encrypted and unique for each transaction.

This renders “sniffing” of mobile payment data (a common hacking method) virtually useless. Indeed, mobile payments are usually safe in most scenarios in the same way that mobile banking is safe. However, this doesn’t mean mobile payment apps are completely guaranteed to never have security issues or other glitches.

Consider this scenario:

•   Most of these apps allow you to send money directly to friends and family to cover the portion of the meal you had together. To be sure, that can be more convenient than dealing with cash.

•   However, there may not be a lot of safeguards in place when you send money with a mobile payment app. If you have a new person in your friend group and they accidentally send money to the wrong person (whose username is just one letter or digit different), it can be difficult to get it back.

This shows that mobile payment apps are safer in some contexts but aren’t perfect. The answer to “Are payment apps safe” may never be 100% certainly “yes.” One good way to protect yourself from problems is to always check that your money is going to the right place when paying with a mobile payment app.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Drawbacks of Mobile Payments

Like all technologies, mobile payments have their pros and cons. Here are a couple of the downsides:

•   While the popularity of mobile payments has rapidly expanded, there might still be some merchants that don’t accept them.

•   You may find that the payment terminal has a technical issue preventing it from accepting mobile payments. Thus, you might occasionally find you aren’t able to make a purchase by, say, waving your phone.

•   There are many different players in the mobile payments field, all of whom may have different policies. For example, the guidelines can be murky around things like data sharing. In addition, many mobile payment apps are available, which can create confusion as people navigate this new technology.

•   While rare, money scams and hacking involving mobile payments are possible.

Features of Payment Apps to Look Out For

Because there are so many mobile apps available right now, you should look out for certain features. Here are some key features to keep in mind:

•   Ease of use: One of the best aspects of mobile payment apps is they tend to be convenient and easy to use. If you find yourself struggling to link your cards or make payments, the app you are using may not be the best choice for you.

•   Security: The other great thing about mobile payment apps is that they sometimes provide greater security than credit cards alone. You’ll want to ensure your payment app has security features like two-factor authentication and PIN or biometric verification for purchases. It should also never display your full card number in your wallet or payment method screen.

•   Privacy: Privacy is increasingly an important part of any app’s policies, especially as more and more of our data lives online. However, it can be tough to know how your data is being used without diving into documents like the app’s terms of use and privacy policy. Still, it may be helpful to at least skim them if privacy is important to you. If the app sells your data to advertisers, it should be disclosed in these documents.

You may also feel safer going with a widely recognized mobile payment app, one that has many users and very positive reviews.

How to Use a Mobile Payment App

Each mobile payment app is different, but there are usually just a few steps to using one. Typically, this is how they work:

•   Start by downloading your payment app of choice. Or you may already have a payment app loaded on your device, like Apple Pay, Google Pay, or Samsung Pay.

•   Once you have your payment app on your device, link the payment card(s) you want to use with it. At this stage, you may have to complete a two-step verification process. For example, you might receive a verification code from your bank, or you may have to call the bank.

•   After completing the verification process with your bank, your payment app should be ready to use with your linked cards. You can use your payment app (or a contactless credit card) if you see the NFC symbol when you pay. There are a few different versions of the NFC symbol, but it usually shows an image of waves that increase in size.

•   Note that payment apps usually require you to add a PIN or biometric unlock (your fingerprint or face, for instance) to your phone and enter it before each payment.

•   Once you unlock and hold your device near the terminal, you will likely see an indication on your phone screen that the transaction is successful. You may also hear an alert sound. When that happens, ta-da: You’ve paid with your mobile payment app.

Recommended: How to Send Money to Someone Without a Bank Account

Tips to Safely Use Mobile Payment Apps

Although mobile payment apps can be safer than other payment methods, there are a few steps you should take to ensure they are secure:

•   Set up payment notifications: These will alert you to any payments on your card, so you will know immediately if someone gains access to your information.

•   Enable two-factor authentication: Two-factor authentication is an extra layer of security that makes it more difficult to gain access to your account. For example, you must enter a code from a text message or email to verify it after you link a payment card.

•   Enable automatic updates: Mobile payment apps frequently receive updates, which might include security features. Auto-update is often toggled on as a default setting, but double-check it’s enabled on your device.

   For instance, open the Google Play Store app on Android and tap the menu icon > Settings > Auto-update apps. On iPhone, open Settings > iTunes & App Store and enable App Updates.

•   Check that you are sending money to the right person. It can be difficult to get your money back if you send it to the wrong person using a mobile payment app. Before sending money, double-check (and perhaps triple-check) the details on your screen match those of the person who should receive the money.

•   Beware of scams. Mobile payment apps are a common way for scammers to get money from unsuspecting victims. An easy way to prevent this is to avoid using a payment app to send money to people you don’t know.

Recommended: Key Features of Mobile Banking

The Takeaway

Mobile payment apps allow you to pay using a smart device like a smartphone, smartwatch, or tablet, and to do so in a fast, contact-free manner. They may also allow you to send and receive money with friends and family. These apps can be safer than other payment methods, like credit cards. However, they can sometimes be fallible, so you should always be careful when sending money.

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

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

FAQ

What are the pros and cons of mobile payment apps?

The pros of mobile payment apps include their convenience, security, and speed of payment processing. Cons include that they aren’t yet accepted everywhere and are sometimes used by scam artists.

Does card fraud happen on payment apps?

There have been some instances of card fraud on payment apps, like when scam artists use flaws in the app’s design to extract money from victims. However, thanks to features like tokenization (encryption of your personal financial information), most payment apps make fraud much more difficult.

Are payment apps stealing my information?

Some payment apps might use your information in certain ways, like capitalizing on it to market products or selling it to advertisers. However, these details are often laid out in the app’s policy documents.

Photo credit: iStock/Ridofranz

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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

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

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

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Oct
09
2024
Guide to Improving Your Money Mindset

Guide to Improving Your Money Mindset

By | Budgeting & Goals, Financial Independence, money | Comments Off on Guide to Improving Your Money Mindset

Achieving your financial goals in life isn’t just about how much you earn; it’s also about your money mindset. Some of our most deeply held beliefs are about money. What does financial success look like to you? Do you think of yourself as a spender or a saver? Do you avoid talking or thinking about money? The answers to these questions all reflect your money mindset. Changing these ideas can be challenging but worth it.

To create a solid financial future, it’s essential to have a strong, positive money mindset. So, if your financial habits need a little (or a lot of) work, here’s how to change your money mindset. Read on to learn:

•   What is a money mindset?

•   What is a negative money mindset?

•   How can I change my money mindset?

•   Why is reshaping my money mindset important?

What Is a Money Mindset?

Your money mindset is your approach to handling money. It determines your spending and saving habits as well as your motivations for your financial management.

Whether you are aware of it or not, everyone has a money mindset — a collection of beliefs starting from childhood that shape what you do with your money. (Your money mindset could even be, “I never think or talk about money.”)

Your money mindset can lead to both positive and negative financial decisions.

For example, have you automated your savings, or do you think saving isn’t something you need to or can focus on just yet? Do you use a budget? Can you treat yourself occasionally, or is buying a $5 coffee not a part of your financial plan? Your money mindset characterizes your relationship with money, and so it is essential to understand and possibly tweak it.

What Is a Negative Money Mindset?

A negative money mindset is a set of unhelpful financial beliefs that can lead to poor resource management. It often involves a constant feeling of stress or guilt regarding money or simply disorganization. It may also involve the belief that “if I just made more money, things would change or all my problems would be solved.” While a higher salary or inheritance might help you toward your financial goals, having more money won’t necessarily change your financial mindset.

While it may seem counterintuitive, your income level doesn’t automatically determine your sense of financial freedom. Additionally, it’s worth noting that your money mindset exists whether you’re conscious of how it influences your behavior or not.

Here are some examples of the ways in which a negative money mindset might have a bad influence on your life:

•   You might spend too much money due to comparison with others. You see a friend or colleague renting a pricey apartment and think you should too. That can be an aspect of lifestyle creep, in which your spending increases as your income grows, preventing you from saving and acquiring assets.

•   You might not save for long-term goals, like a house or retirement, because your parents never wanted to talk about money when you were growing up.

•   Because money stresses you out, you might fail to set financial goals, like paying off your student loans on time.

If it feels like you’re in this negative zone when it comes to your finances, know that you are not saddled with it for life. We’ll explore how to develop a money mindset that’s more positive and productive later in this article.

How Your Beliefs on Money Affect Your Finances

Your primary, most powerful beliefs about money most likely come from your parents and your childhood. Children typically absorb financial beliefs from the most influential people in their life. Then, as they grow older and begin handling money, they live out those financial beliefs, for better or worse.

For example, if your parents modeled money as a way to pamper yourself, you may find that you impulse-shop when life becomes challenging. Your money mindset is that spending equals financial self-care.

On the other hand, you may have a reputation among your friends as “cheap” because you grew up in a penny-pinching household that considered luxuries a waste of money. In both cases, your money mindset puts your financial habits into motion.

These examples underscore that children tend to mimic the behaviors of their parents and adopt their money habits in their own adult life. But in some cases, it’s the opposite. Some people will go to great lengths to not be like their parents. For example, if your parents refused to buy anything that wasn’t on sale when you were growing up, you may make a point of never looking at price tags as an adult.

Why Reshaping Your Money Mindset Is Important

It’s crucial to address negative money mindsets. Otherwise, you’ll likely continue to act on the same faulty beliefs, which can keep you from building the balance in your savings account and reaching your financial goals.

Recognizing an unproductive facet of your money mindset gives you the power to change it. By asking yourself questions about how you currently treat your money and how you’d like to change, you can reorient yourself and create a long-term financial plan. In fact, reshaping your money mindset may include setting financial goals for the first time in your life.

By changing your money mindset you can take full control of your finances, break bad spending habits, and reach your goals.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


How to Change Your Money Mindset

While your upbringing and core experiences impact you in significant ways, you have the ability to recast your money mindset or create an all-new one. When reshaping your money mindset, the following tips can help you transform unhelpful financial behaviors into life-changing, literally enriching habits.

Success With Money Is a Possibility

One key to changing your money mindset is to increase your confidence in your abilities. Don’t count yourself out because of your background or financial circumstances — it’s possible to change these patterns.

Whether you’re working up the courage to sit down and make a beginner’s budget, tackle lingering debts, or give yourself permission to make a fun but totally unnecessary purchase, believing it’s possible is crucial for your success. Perhaps saying affirmations will help you, or maybe reading about others who have attained what you are dreaming of will work best. The right technique is a personal decision.

Understanding Why You Feel This Way

Money is emotional for everyone. Feeling anxious, worried, or excited about your money is normal. Our emotions are rooted in beliefs; therefore, you might feel elated or stressed on payday depending on the beliefs you’re associating with your money. You might crave the feeling of going shopping or you might wake up in the middle of the night worried about your car payments.

Delving into how much money you have coming in and going out can help you better manage your funds. If you have a financial plan that allows you to sock money away and also treat yourself a few times a month, getting paid might create feelings of satisfaction or confidence. Hence, your money mindset is creating positive emotions for you. However, if your paycheck reminds you of your mounting bills, it’s probably time to identify where these feelings are coming from. This way, you can start shifting your money mindset to elevate the stress and anxiety.

Additionally, the more you avoid money, the more intimidating it can feel. Even people with plenty of income might run from figuring out their living expenses because it sparks negative emotions.

Avoid Comparing Yourself to Peers or Social Media Standards

Parents aren’t the only ones who influence your money mindset. Peers and mainstream culture send messages about what success looks like or how to best manage your money.

But what others do or think is irrelevant to your money situation. Also, what works for someone else may or may not work for you, especially if you have different goals. Plenty of general financial principles are worth adhering to, but even those aren’t set in stone. For example, a common guide for budgeting is the 50/30/20 rule, which advises dividing up your take home income like so: 50% on necessities, 30% on wants, and 20% for savings and debt repayments beyond minimum. If you live in a high-cost area, however, earmarking 50% of your income for your needs may not be enough, since you may need to put a large portion of your income towards housing. So, you may need to adjust certain “rules” to fit your situation

Overcoming Your Financial Fears

Change can be scary, and so can money, so cut yourself some slack if you’re afraid of changing your money mindset. It can be comfortable to settle back into the familiar, even when it’s not working.

However, overcoming financial anxiety and developing a positive money mindset is possible. Forge ahead at your own pace, and explore your money mindset: What are the things that worry you about money? Where are your biggest fears coming from?

As you unpack that, remind yourself of your motivation to change. Keep your goals at the forefront, and encourage yourself to take a step in that direction. Taking a small but concrete action toward your goals is how to develop resilience, a key characteristic for succeeding in life.

Recommended: Should You Pay Off Student Loans or Invest?

Avoid Dwelling on the Past

As you attempt to change your money mindset, there may be errors from the past sticking in your mind, reinforcing the idea that you are bad at financial management. Dwelling on the past can stop you from creating a different future. The failures, mistakes, and traumas from the past are real — but they don’t have to define you. For example, if you’ve endured a romantic breakup, that doesn’t mean you can’t date again and find love. In the same way, just because you had too much credit debt recently doesn’t mean you can’t get that issue wrangled.

It’s a good idea to jettison this kind of looking-back viewpoint. Instead, try putting your efforts toward what you can change in the present and strive to achieve in the future.

The Takeaway

Your money mindset is the attitude and beliefs that form your relationship with your personal finances, and it drives your financial habits. Since most people pick up unhealthy financial habits along with healthy ones, it’s crucial to recognize the financial beliefs that aren’t serving you. Then you can set about changing your money mindset and shifting your behavior to better achieve your 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.


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

FAQ

How do I get rid of a money scarcity mindset?

The belief that you never have and never will have enough money is part of your money mindset. To change that belief, identify where the mindset came from and make a positive change, such as setting a small savings goal and achieving it.

What is a poor money mindset?

A poor money mindset consists of unproductive beliefs about money that lead to negative financial decisions and habits. An unhealthy relationship with money when growing up or having made past financial mistakes can create a poor money mindset.

How is a money mindset formed?

You form your money mindset through the financial beliefs you hold as true. Your childhood, peers, and financial successes and failures help define your money mindset.

Photo credit: iStock/gorodenkoff

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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

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

SOBNK-Q324-099

Read more
Oct
09
2024
16 Ways to Reward Yourself Without Breaking Your Budget

16 Ways to Reward Yourself Without Breaking Your Budget

By | Budgeting & Goals, Financial Independence, money | Comments Off on 16 Ways to Reward Yourself Without Breaking Your Budget

You know how important it is to budget and save. But every once in a while it’s okay to reward yourself for a job well done. Whether you got through a stressful week, completed a tough work project, or did a good deed for a friend or neighbor, it’s important to pat yourself on the back. And there’s room in almost any budget for a little reward. Low-cost and free treats can serve as positive reinforcement without launching you on that slippery slope of overspending.

Why Treating Yourself Is Essential

Treating yourself is a form of self-care, which is a way of showing yourself kindness by doing things that make you feel good. Studies on self-care have found it can help reduce or eliminate anxiety and depression, manage stress, and increase happiness.

Treats or self-rewards are a way of recognizing that you’re doing a good job and meeting goals. Fortunately, there’s room in almost any budget for them. Whether it’s an occasional bouquet of supermarket roses or a TGIF beer with friends, these purchases are unlikely to wreak havoc on your finances or trigger a situation in which you can’t stop overspending.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Rewarding Yourself: 16 Different Ideas

Maybe you asked for and got a raise at work, buckled down on your budget, finally cleaned out your closets, or just feel you need a lift after a draining week. It’s time to treat yourself. Consider these free or low-cost rewards:

1. Drop in for a Single Yoga Class

Yoga provides a plethora of physical and mental benefits, such as helping to relieve back and neck pain, improve sleep quality, and reduce stress. Many yoga studios offer drop-in classes, with the average price about $15 to $25 a class. If that’s a bit steep, YouTube features an array of free yoga videos led by experienced instructors.

2. Get a Cup of Fancy Coffee

Making coffee at home saves tons of money, but there’s nothing like the occasional barista-made cappuccino or flat white from your favorite coffee shop. Whether you have one as Monday motivation to start your week off right or reward yourself on a weekend AM, it can be a low-cost bit of self-care.

3. Pick up a Bouquet of Flowers

Treat yourself to some colorful blooms from your local grocery store. Research has shown flowers can improve mood and increase happiness.

4. Buy Yourself Your Favorite Ice Cream

Many of us have cheered up a kid with an ice cream cone. Why not do the same thing for yourself? Mint chip, strawberry, and good old vanilla just begin to describe the possibilities.

5. Go for an Inexpensive Mani-Pedi

Many nail salons offer weekly specials that include a manicure, pedicure, and perhaps a short massage. It can be an affordable way to help you look and feel good. Go ahead and pamper yourself on a budget.

Recommended: 15 Creative Ways to Save Money

6. Take a Nap

Few things feel as good as a power nap. A snooze of 30 to 60 minutes can refresh you, improve your mood, and increase alertness. It’s also a great way to treat yourself without spending money. Just beware of sleeping more than an hour though; it can leave you feeling groggy and interfere with your nighttime slumber.

7. Stream Some Shows

Heard about a great show but don’t subscribe to the service it’s on? Many streaming channels offer free trial periods ranging from a week to a month. That could be enough time to binge-watch those shows you’ve been hearing about without necessarily signing up for a monthly subscription.

Recommended: 7 Ways to Achieve Financial Self-Discipline

8. Camp Out

Camping for a night or two is typically an inexpensive pursuit. Being out in nature all day and looking up at the constellations at night can be a wonderful treat and spirit-reviver. Not for you? How about an afternoon of “forest bathing” near your home? All that means is spending time in nature, focusing on the sights, sounds, and smells of the woods.

9. Visit a Local Museum

Whether you look at classic paintings or challenging avant-garde works, a museum visit can immerse you in beauty and open you up to refreshing new perspectives. Many museums either have specific days or times when entry fees are free or reduced.

10. Get Crafty

Having a creative outlet is not only a way to relieve stress, it’s also fun. A good self-reward can be to spark your creativity with anything from an adult coloring book to a ceramics lesson.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

11. Have a Nice Lunch or Dinner Out

If you’ve been working hard, you might treat yourself to a meal at a restaurant you’ve been wanting to try or a type of food you don’t usually eat. Invite a friend you’d like to catch up with; that can make it more memorable. To make your outing more affordable, check out special offers, like a prix fixe lunch menu or half-price cocktails before a certain hour.

12. Spend a Day at the Beach

Sun, sand, and surf have a way of restoring one’s spirits. If you live near the shore, consider making a day trip, even if it’s off-season. You might have to pay for parking, but otherwise, this outing can be a very low-cost way to treat yourself.

Recommended: Easy Ways to Save Money

13. Visit a Thrift Shop or Flea Market

Shopping second-hand can be a fun and a low-cost way to reward yourself, even better if the proceeds go to a charitable organization. Treat yourself to some inexpensive clothing, jewelry, books, cookware, or maybe even the perfect acoustic guitar. You’re also helping the environment since thrifting keeps items out of landfills.

Recommended: A Guide to Ethical Shopping

14. Take a Mental Health Day

It may take some planning and organization, but gifting yourself a day off to rest and recharge can help prevent burnout and reduce stress. Spend it however you like — lazing on the couch, taking nature photos, or visiting a friend you haven’t seen in a while.

Recommended: Making Money Through Social Media

15. Listen to Live Music

Sure, you could splurge on a major concert, but local bars, beer gardens, and other spots often have live music without any sticker-shock tickets. Whether it’s folk, Zydeco, or classic-rock covers, you’re likely to feel better for it. Music has been shown to reduce anxiety and improve one’s mood.

16. Buy a Good Book

A good story can transport you away from daily life. Why not treat yourself to one? You can stop by the bookstore and purchase that book you’ve been wanting. Or, you might borrow an audiobook from the library and listen to it while you’re taking a walk, driving, or relaxing at home.

The Takeaway

Everyone needs and deserves a treat now and then: a reward for saving money, getting kudos at work, or finally organizing your coat closet. Self-care can boost your mental health and keep you motivated with your goals. There are endless ways to treat yourself, and plenty of ways to do so without busting your budget. With the ideas described here, you can reward yourself and stay on track money-wise, which is a win-win.

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


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

FAQ

What is it called when you reward yourself?

People use a variety of terms, including a treat, self-reward, self-care, positive motivation, and positive reinforcement.

What if I feel guilty when rewarding myself?

Some people feel guilty when rewarding themselves. This may be because they were raised in a household that felt people should work hard without reward or because they believe rewards will make them “soft” and unmotivated. However, rewards can actually help people recharge, achieve more, and enjoy life more, so try giving yourself permission.

How do I not go overboard when rewarding myself?

It’s wise to have your self-rewards as a line item on your budget to avoid going overboard. That “fun money” doesn’t have to be a lot: Many treats are low-cost or even free.

Photo credit: iStock/Prostock-Studio

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Oct
09
2024

6 Examples of When to Use Your Emergency Fund

By | Budgeting & Goals, Family Finances, money | Comments Off on 6 Examples of When to Use Your Emergency Fund

There are times when urgent, vital expenses pop up that lead you to dip into your emergency fund. Maybe you were laid off and rent is due, or you get into an accident and wind up with a pile of medical bills.

But at other times, it can be hard to know what exactly qualifies as a rainy day and gives you license to dip into your emergency savings. What about a great deal on a used car, which you could really use? Or the opportunity to replace your old fridge at a steep discount? Do those qualify as reasons to dip into your savings? Learn more here.

What Are Things to Avoid Spending My Emergency Savings on?

If you’ve done a good job stashing cash in an emergency fund, you likely want to know what types of expenses are valid uses of the money sitting in your savings account. Here are examples of when not to withdraw funds:

•   Fun purchases. If you want but don’t need something and it isn’t in your budget, don’t pull from your emergency fund. Entertainment, dining out, tech gadgets, and designer clothes (even if on final sale) are all examples of wants, not needs. Set aside some funds for such buys if you like, but don’t deplete your emergency fund savings. It’s always best to ask questions before making an impulse buy. Spend time thinking about a purchase carefully before making it. You may find that new bike you thought you desperately needed doesn’t seem so vital a day or two later.

•   Vacations. It’s very tempting to get away for a little R&R when things get tough, but a vacation isn’t a worthwhile emergency fund expense. If you want to have that week at the beach, go ahead and create a savings plan and a separate savings account to make it a reality. But it’s not a wise spending strategy to pull the money out of your rainy day funds.

•   Debt. Paying down debt is a great goal. It’s also a smart use of any extra money you may have, but not at the expense of draining an emergency fund completely. If you’re chipping away at debt, keep at it but continue to keep some emergency funds aside. If you lose your job or an unexpected expense hits and you don’t have emergency savings, you might end up turning to more expensive forms of credit as a result. This underscores the importance of having an emergency fund.

Earn up to 4.00% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

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Sort savings into Vaults, auto save with Roundups.


How to Know When an Expense Counts as an Emergency

Now, it’s time to consider when to go ahead and use that money you saved for a rainy day. If you’re on the fence about whether an expense counts as an emergency, ask yourself the following six questions to determine if you should tap your emergency funds.

1. Is This Absolutely Necessary?

There’s a difference between things you want and things you need. If you start a new job and have to buy a uniform for it, that’s a necessity. If, however, you begin a new job and simply want some new outfits, that isn’t a necessity. Similarly, pining for a new stove with a commercial-style cooktop is a want; replacing a stove that conked out is a necessity.

2. Is This the Only Way That I Can Pay for This?

Before pulling money from this account, consider if the emergency fund is the only source of money that can cover this expense. Would it be possible to wait a week until payday and use your income instead? Gift cards, coupons, and sale discount codes can make it easier to pay for purchases without draining your emergency fund.

Your goal here is to determine the lowest possible price for a purchase and then see if there’s another (non-emergency fund) way to pay for it.

3. Is This an Unexpected Event?

Emergency funds can be a great way to cover unexpected and necessary purchases, but they aren’t supposed to replace poor planning. If you know a major expense is coming your way (say, the hot-water heater is coming to the end of its lifespan), it’s best to save for it instead of reaching into your rainy day fund.

4. Is This Urgent or Can It Wait?

Even if an expense feels like something that must be dealt with at the moment, there’s a good chance it can be put off. Ask yourself if it can wait until you have saved enough money to pay for it without accessing emergency funds.

5. How Much of My Emergency Fund Will I Be Using?

An emergency fund exists as a safety valve when you unexpectedly need funds. However, before pulling money from an emergency fund, it can be helpful to consider just how much of the emergency fund the purchase will take up. If it’s going to drain the fund and the purchase can wait, it’s likely best to wait. Or maybe you can buy a less pricey version of the item in question.

6. How Long Will It Take To Rebuild My Savings?

If the purchase will take up a big chunk of the emergency savings fund, it can be a good idea to map out how long it will take to rebuild those savings. If it will take more than six months, then it may be best to hold off on making that purchase until the emergency fund is more substantial. It may be better to cut back on spending to cover this expense now without having to touch emergency savings.

Of course, sometimes an emergency is really an emergency, and you can’t hold off. If you are hit with, say, a major medical bill, you may have to use up that emergency fund and work hard to rebuild it later. But it will have done its job and seen you through a tough time.

Recommended: Emergency Fund Calculator

The Takeaway

Before pulling savings from an emergency fund, it’s important to determine if the purchase is truly urgent or simply something you really want. Sometimes, real emergencies do crop up, and you’ll be glad you have money saved. Other times, you may realize that the expense isn’t really so vital. Emergency savings can be a real lifesaver, so you want to protect those funds and make sure you use them properly.

One way to build up an emergency fund faster is to put your money in a savings account that earns a competitive interest rate.

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


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

FAQ

What should you ask yourself before using your emergency fund?

Before you pull money from an emergency fund, ask yourself questions like, Is this expense absolutely necessary? Is this the only way I can pay for it? Is it urgent or can it wait? How much of my emergency savings will I be using up? The answers should guide you towards whether or not it’s worth tapping into your emergency fund.

What should you spend your emergency fund on?

What constitutes an emergency purchase for one person may look quite different for another. That being said, it’s usually best to only spend emergency fund savings on necessities, not wants. Financial emergencies are usually unexpected and may include home repairs, medical bills, and car repairs — or day-to-day expenses after, say, a job loss.

What should you not put in your emergency fund?

While it’s a good idea to put extra money towards an emergency fund instead of spending it frivolously, there are some types of savings it’s best to leave out of an emergency fund. For example, it’s not a good idea to use 401(k) contributions or other retirement savings to build an emergency fund. Saving for retirement is crucial, and employers may match 401(k) contributions, which is basically like getting free money. In this scenario, it may be wise to focus on maxing out retirement contributions before building an emergency fund.

Photo credit: iStock/szefei

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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

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

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