Budgeting & Goals Archives | Page 10 of 188

Feb

2025

Credit Unions vs. Banks

By Janet Siroto | Budgeting & Goals, Financial Independence | No Comments

A credit union is a nonprofit financial institution that offers products and services similar to banks, such as deposit accounts and loans. However, it may have certain requirements for membership, such as living in a certain geographic area or working in a specific profession.

If you are trying to figure out the kind of financial institution that suits you best, it may be valuable to consider credit unions vs. banks.

Key Points

• Banks operate for profit, while credit unions function as nonprofits.

• Banks do not require membership, but credit unions have specific criteria to be satisfied.

• Banks typically offer a wider range of financial services, but traditional banks may charge higher fees and offer lower interest rates.

• Credit unions are known for more personalized customer service.

• Banks generally provide better technology and accessibility.

What Is a Credit Union?

Credit unions are financial institutions like banks, and they offer products you’d expect such as checking and savings accounts, loans, debit cards, checks, money orders, and more. They can provide apps and online access, just as banks do.

Credit unions may charge fewer fees, often with no minimum or a very low minimum deposit to open an account. In this way, they may be closer to online banks vs. traditional banks.

One difference between a credit union and a bank is that credit unions are run as coops, meaning each member has a stake in the business. Just like buying stock in a company, you own a small piece of the credit union when you join.

Here are some more features of credit unions:

• These organizations are typically smaller than big banks and specific to certain locations, while offering similar services.

• As nonprofits, credit unions are usually designed to serve their members, generally paying higher overall interest rates on deposits and with lower fees and penalties.

Typically, credit unions serve people only within their geographic area, and you need to be a member. Some credit unions have specific requirements for membership, but most make it easy to meet the qualifications, such as:

• Where you work or your industry

• Where you live

• Where you attend school or worship

• Which organizations you are a member of

Pros and Cons of Banks

Here are some of the upsides and downsides of keeping your money at a bank.

Pros of Banks

Consider these benefits:

• One of the biggest overall benefits of choosing a bank, especially a major one, might be that they generally offer a larger array of financial products, including checking accounts and savings accounts, loans, and more. They can be your one-stop shopping for many financial needs.

• Banks may have extensive networks of brick-and-mortar branches, possibly both nationally and internationally.

• They usually have large ATM networks as well.

• Banks are likely to be insured by FDIC (Federal Deposit Insurance Corporation), adding a layer of security in the very rare event of a bank failure.

• Bigger banks can be quicker to adopt new technology, such as launching mobile check deposit.

Cons of Banks

In terms of the downsides:

• Traditional banks may not offer as high interest rates as online banks or credit unions do.

• Similarly, traditional banks vs. online banks and credit unions often charge higher fees.

• A big bank may not provide as specialized, personalized services as credit unions do. Credit unions may provide ATM fee reimbursement and other perks.

Pros and Cons of Credit Unions

Now, take a look at the upsides and downsides of credit unions.

Pros of Credit Unions

On the plus side, credit unions can offer the following:

• Credit unions typically offer many of the same services as banks, satisfying a range of client needs.

• They may offer higher interest rates on deposit accounts than traditional banks because profits go back to the members.

• The fees are often lower than at traditional banks, both on deposit accounts and other financial products. For instance, credit union vs. bank mortgages may have less costly fees.

• Most credit unions are insured by the National Credit Union Administration, or NCUA vs. FDIC, which helps protect funds in the very rare event of a financial institution failing.

• Credit unions are typically known for personalized service and may offer financial literacy classes and more to support their members.

Cons of Credit Unions

Now, some of the minuses:

• Membership is required. It’s possible that a person may not qualify to become a member/shareholder.

• Credit unions are typically local or regional; there may not be many options in a given area. Shared branch credit unions may, however, offer greater reach.

• They may not offer the kind of 24/7 accessibility and extensive customer service options as major banks.

• While many services are offered, they may not have all the bells and whistles that a bank offers, such as money transfer service (such as Zelle) or a next-gen app.

Credit Union vs. Bank

Here’s a comparison of how credit unions vs. banks stack up.

Business Model and Pricing

Banks are for-profit enterprises while credit unions are not. Some banks may charge higher fees and interest rates to borrow money. They may have higher minimum deposit requirements as well and lower annual percentage yields (APYs) on deposit accounts.

Recommended: APY Calculator

Membership Requirements

Banks are open to all who can apply for and be approved for services. Credit unions, however, have requirements to join and become a shareholder. They might cater to members of the military or employees in a certain industry. Or they might simply charge a small fee. But there will be some requirement to be met.

Services

Banks are known for having a full array of services: various kinds of accounts, loans, and other financial products. Credit unions usually have diverse offerings but may not offer quite the breadth as they tend to be smaller institutions.

Customer Care

Credit unions may have the edge here; they are known for personalized attention and coaching to help members gain financial literacy and reach their money goals. A large bank may not be able to take such interest in each client.

Accessibility

Banks may offer many physical branches, 24/7 customer service, and a national and even international network of locations and ATMs. Credit unions are likely smaller and local, with more limited access.

Technology Tools

Larger banks tend to be more advanced in terms of technological innovation than credit unions. They may have state-of-the-art websites, apps, and services like money transfer services.

Here’s how these bank vs. credit union differences look in chart form:

Banks	Credit Unions
A for-profit business that may charge higher fees and interest rates on loans; lower APYs on deposits, especially at traditional banks	A nonprofit that puts profits to work for members and may offer lower fees and interest rates on loans, plus higher APYs on deposits
No membership requirements beyond perhaps initial deposits	May need to meet certain location, employment, or other membership requirements
Full array of financial products and services	Basic array of financial products and services
May not offer intensive personalized attention	Known for personalized customer care and financial literacy coaching
Likely to have 24/7 access and a national or global network of branches and ATMs	May not have 24/7 access to services or a network of branches
Advanced technology, including apps and P2P services	May be less technologically advanced

Finding the Right Credit Union

If you think a credit union may be the right fit for you but are unsure where to start, you could ask your coworkers or neighbors if they use one and if they like it. Since a credit union is a local financial institution, word-of-mouth can make for valuable research.

You could also search in your geographic area, making sure to check the eligibility requirements, and nationally, if you’re able to use a different local branch as part of the network. Then, joining is just like opening up any other bank account if you meet the membership credentials. Additionally, a credit union account may allow you to do most tasks online or over the phone.

Recommended: Passive Income Ideas

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The Takeaway

A credit union is a nonprofit financial institution that offers many of the same products and services as a bank, with each account holder being a shareholder and often enjoying highly personalized service. However, credit unions may have membership requirements and may lack a major bank’s ATM network, accessibility, and tech features. Credit unions often have lower fees and higher interest rates than traditional banks, making them more similar to online banks in this realm.

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 it better to have a credit union or a bank?

Whether it’s better to have a credit union or a bank depends upon a person’s individual needs. If you need a financial institution with a national or global network of branches and ATMs, a bank might suit you best. If you are looking for personalized, local service, lower fees, and financial literacy training, a credit union might offer those features.

What is a disadvantage of a credit union?

One potential disadvantage of a credit union is that you need to qualify as a shareholder. This might mean that you need to live or work in a certain geographic area or work in a specific profession. Not everyone may qualify.

What are the biggest risks to credit unions?

The biggest risks to credit unions are similar to the biggest risks to banks. These include cyberthreats (hacking, for instance), uncertain interest rates, and the potential loss of deposits, although the latter is a very rare occurrence.

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SOBNK-Q125-036

Feb

2025

What Is Zero-Based Budgeting?

By Janet Siroto | Budgeting & Goals, money | No Comments

Zero-based budgeting is one method that can help you account for every dollar so you better understand your cash flow situation. This in turn can help you better manage your money and hit your financial goals.

You may be among those people who feel as if your money disappears as you pay for groceries, gas, utility bills, dining out, student loans, and everything else on your plate, without really knowing how much you earned or how much you are spending. That’s where a budget like the zero-based budgeting method can help.

A budget provides a framework to see how much is coming in and what it’s being spent on. It gives you the chance to recalibrate so you can, say, put more into savings. Here, learn more about zero-based budgeting and whether it would be a good fit for you.

Key Points

• Zero-based budgeting allocates every dollar of income to specific expenses, savings, or debt payments.

• Steps in zero-based budgeting include listing income, identifying fixed expenses, and allocating remaining funds.

• When using zero-based budgeting with an irregular income, maintain a buffer and adjust budgets based on monthly earnings.

• Compared to the 50-30-20 budget method, zero-based budgeting is more detailed but can be time-consuming.

• Zero-based budgeting may be made faster and easier with tech tools and apps.

How Zero-Based Budgeting Works

When building a zero-based budget (sometimes referred to as 0-based budget), your income minus your expenses should equal zero. In other words, with zero-based budgeting, every dollar of your income has purpose.

This doesn’t mean you won’t have any money in your bank account, since you might want to allocate some of your budget to savings. Rather, using this method could help you know exactly how much you will spend, save, and invest in any given month. And depending on your monthly needs, these figures may change or stay the same.

Recommended: How to Deposit a Check

How to Build a Zero-Based Budget

As with most budgeting techniques, you might want to start the zero-based budgeting process by making a list of your expenses.

• Start with your fixed and necessary expenses first, such rent, utilities, groceries, transportation, insurance payments, and debt payments. You know that these payments have to be covered each month, so you could allocate income to each necessary expense.

Tally these expenses and subtract them from your total income. The resulting figure could be the amount available for discretionary expenses.

• Next, you could allocate those remaining discretionary funds. You might consider such spending as dining out, gym memberships, travel, and entertainment.

• Also consider savings. That could include money that you pay to yourself to save for short-term goals such as an emergency fund. Or you might target longer-term goals such as stocking an online retirement account or saving for the down payment on a house.

• Keep in mind that some expenses might be seasonal, such as vacations or holiday gifts. You might want to determine how you’d like to save for these expenses. You may choose to allocate funds in a single month, or it may make sense to set aside a small amount over each monthly period.

It might take a little bit of extra planning to figure out how much you’ll need and how to divide up the cost. When doing so, don’t forget about one-off expenses, such as paying for an annual homeowners insurance premium.

• Some expenses may also be variable — for example, say you’re hit with an unexpected bill when your car needs a new transmission — and these can be tricky to deal with. One way you could build them into the budget is to have a line item such as “savings for variable expenses” to help you cover them. This line item would be different from your other savings. You could keep the funds in a high-yield savings account so it earns some interest.

A simple example of a zero-based budget for someone who makes $6,000 a month might look like this:

Rent/Housing	$3,500
Utilities	$200
Car payment	$300
Gas	$200
Groceries	$400
Savings	$750
Eating out	$200
Entertainment	$150
Student loan payments	$200
Credit card payments	$100
Total	$6,000

In this example, the person’s income less their total expenses — $6,000 minus $6,000 — equals $0. As mentioned above, every dollar has a job to do.

Finally, remember that with a zero-based budget every dollar should have a purpose. So if at the end of figuring out your expenses, you find yourself with some extra cash, it needs to go somewhere. You might want to put a little extra toward savings or pay off some debt quicker.

But if you don’t allocate the funds, they might get spent. The problem is you may not know where you spent that money, and keeping track of it is the whole point of this exercise.

Tracking Your Budget

You might want to keep an eye on your spending throughout the month to make sure you’re sticking to your budget. This process could be dynamic, meaning it shifts in real time. If you find that you don’t need to spend as much on one budget item one month, you could shift that extra cash into another category the next month.

• If you find yourself needing extra money in your checking account to cover an expense, you could look for places to save.

• If you find yourself with little wiggle room in your budget and need to add to or boost your existing expenses, you might want to increase your budget with extra sources of income, like a side hustle.

Tools and Tips for Tracking a Zero-Based Budget

There are several tools that can make it easier to manage a zero-based budget. A few ideas to consider.

• There are various online calculators for different budgeting tasks, such as emergency fund calculators. Search and find one that could help you with the math for your zero-based budget.

• To better track your spending, see what tools your bank offers. Many have budgeting apps and/or trackers that can help you understand where your money is going.

• You might also investigate third-party budgeting apps. Some are available for free; others require payment.

• Tech tools can also help with managing your money when budgeting, from direct deposit to facilitate receipt of your paycheck to online bill pay to cover expenses seamlessly.

• Some people will like to manage their budget with pencil and paper (a ledger-style pad can be helpful) or an online file, such as Excel or Google Sheets. It’s your choice.

A Zero-Based Budget on an Irregular Income

Many people earn a variable income, whether that means being a seasonal worker or a freelancer whose earnings ebb and flow. A variable income can pose some challenges to building a zero-based budget, but they’re not insurmountable.

Adapting Zero-Based Budgeting for Inconsistent Income

First, you could consider maintaining a buffer of cash, or a cash cushion, to help cover your expenses as your income varies.

You could then use your previous month’s budget as a base for the current month, using the buffer to cover any shortfalls. You might want to replenish this buffer when you have extra money in a month. You may also try building your budget based on a low estimate of your monthly income to increase the odds that you’ll be able to stay within your budget.

An irregular income means that you might spend more time adjusting your budget as your income fluctuates. You might need, say, multiple budgets. A seasonal worker could have, say, a high season and a low season budget that they use at various points during a typical year.

Recommended: How to Transfer Money

Other Budgeting Strategies to Consider

There are other budgeting methods that may be worth a try. One rule of thumb, called the 50-30-20 rule, allocates percentages of your income to different categories. When using this rule, 50% of income goes to necessities, like housing, utilities, and food. The next 30% of income goes to discretionary spending, and the final 20% is allocated to savings or additional debt payments.

You may also consider a budgeting system known as reverse budgeting, in which you focus on savings goals rather than expenses. To use this method, you might want to determine your short- and long-term savings goals, such as a down payment on a house, paying down student loan debt, and retirement.

You could figure out how much you need to save for those goals and then automate the savings. The money could be taken from your checking account and put into a savings account each month. You might use the money left in your checking account to pay for necessary expenses first, and the rest you could use however you’d like.

Comparing Zero-Based Budgeting to Other Methods

Finding the right budget to fit your needs is an important process, and it may take some trial and error. It can be wise to experiment with a couple of techniques to find one that feels like a good fit.

For example, some people may find the granular “every dollar has a job to do” approach of zero-based budgeting suits them. They may find it very helpful to know every single expense that occurs during a week or a month. Other people may prefer, say, the 50/30/20 budget rule, since they only need to stay focused on three key buckets of spending their money.

Pros and Cons of Different Budgeting Styles

Here are some points to consider as you decide whether zero-based budgeting is right for you.

• Pros: For a personal budget, a zero-based budget can provide insight on expenses and spending habits which can help a person manage their money better. In a business context, this budget can also be used, allowing managers to delve into their operations and cost savings and maximize their resources.

• Cons: No doubt about it, zero-based budgeting can require considerable time and effort. It may be too detailed for some people’s tastes. They might prefer a simpler approach or to use tech tools to manage their finances.

Recommended: Money Management Guide

The Takeaway

Zero-based budgeting is a technique in which every dollar you earn has a job to do. By managing your money this way, you can have a very in-depth understanding of your finances and your spending and saving habits. However, this technique can be time-consuming and may not suit an individual’s needs. Budgeting in general, though, is an important way to see where money is going and to fund the things you care about most. Your bank may offer valuable tools that can assist with this process.

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

How much time does zero-based budgeting take each month?

The amount of time it takes to manage zero-based budgeting each month will vary depending on each person’s situation, needs, and speed with organizing their financial details. That said, it may initially take several hours per month to establish this kind of budget, and then a few hours per month to keep it running.

What tools can simplify zero-based budgeting?

There are a variety of tools that can simplify zero-based budgeting. For some people, using a ledger pad or an online file (such as Excel or Google sheets) can be helpful. Others may want to use an online budget calculator, tools provided by their bank, or third-party apps to track and optimize their spending and saving.

Are there challenges to maintaining a zero-based budget?

There are challenges for most budgets, and the zero-based system is no exception. Some people may find tracking their expenses and accounting for every single dollar earned to be a very involved process that takes too much time and effort. In addition, those with a fluctuating income (such as seasonal workers) may find zero-based budgeting to be a challenging technique.

How can I stay consistent with a zero-based budget?

Staying consistent with zero-based budgeting requires diligent tracking of your income, spending, and savings. It can be a detailed process, and it can involve re-evaluating the figures on a regular basis, especially if you earn a fluctuating income. While this sounds as if it must be a time-consuming pursuit, there are tech tools that can help automate this process somewhat.

What should I do if I exceed my budget in a category?

If you exceed your budget in a category, there are a couple of options. You could cut your spending in that category, or you could borrow funds from another category and economize there. For instance, if your spending on dining out is running high, you can either rein it in or borrow funds from, say, your entertainment or travel spending to cover it.

SOBNK-Q125-080

Feb

2025

Stop Living Paycheck to Paycheck: 6 Tips

By Kim Franke-Folstad | Budgeting & Goals, Money & Life, relay | Comments Off

Living paycheck to paycheck is defined as spending almost all of your income on essentials and everyday expenses so you may not be able to save for future goals nor deal with a financial emergency.

According to a December 2024 report by PYMNTS.com, more than 67% of respondents reported they were living paycheck to paycheck at the end of last year. What can you do if you want to beat those odds and get ahead of your bills? Read on for some steps that may help you achieve financial breathing room.

Key Points

• Living paycheck to paycheck means your earnings are going towards essential and everyday expenses, meaning you have little for savings or emergencies.

• To stop living paycheck to paycheck, track your spending for at least 30 days to understand your financial habits.

• Prioritize the essential expenses, such as food, utilities, shelter, and transportation, as well as gradually building an emergency fund in a separate savings account.

• Reduce your debt using the snowball or avalanche method, and try to increase your income.

• Set financial goals and use budgeting apps to manage money efficiently.

6 Ways to Stop Living Paycheck to Paycheck

Maybe it’s inflation eating up your paycheck these days. Or maybe it’s just… life.

Either way, there are likely adjustments you can make — both big and small — to get yourself to a better place financially. Here are a few basics to consider if you’re wondering how to stop living paycheck to paycheck.

1. Set a Budget

Admit it: You knew the b-word was coming.

Making a budget is the best way we know of to get a better handle on your spending and saving. It can show you where your hard-earned money is going every month — and help you nudge it in a different direction if you don’t like what you see.

Yes, it involves sitting down and doing math. You can look at how much money is going in (say, the amount of direct deposits of your paycheck) and how much is flowing out to debt payments, living expenses, and one-off charges (like your home insurance).

If this feels daunting, know that spending apps that can help you set up budget categories and monitor your money movements all in one place, the process isn’t nearly as tedious as it used to be.

You’ll probably have to tweak your budget from time to time — to deal with quarterly or seasonal bills, for example, or if costs go up. And if you’re a freelancer or seasonal worker, it can be tough to budget on a fluctuating income. But creating a comprehensive and realistic budget you can stick to through thick and thin can help you make your paycheck go further.

2. Focus on the Essentials

As you determine your personal budgeting categories, you’ll also be setting spending priorities. That starts with focusing on the essentials. Unless you’re still living with your parents rent-free, it can be a good idea to figure out the amount you’ll need for food, utilities, shelter, and transportation before anything else.

After that, you can play around a bit with what’s most important to you — your “needs” vs. “wants.” You may have to let go of a few things (sorry, Netflix) when you run out of money to spend. That can help keep you from teetering on the edge of overdrafting your checking account.

No matter what happens, you’ll have a roof over your head and something to eat. The lights, heat, and water in your home will keep working. And you can get where you need to go.

Prepare for the Unexpected

If you’re worried that an unexpected bill could come along at any time and take a huge bite out of your finances, you aren’t alone. About 59% of Americans are unable to cover a $1,000 surprise bill with their savings, according to a 2025 survey by Bankrate.

Financial advisors typically recommend keeping at least three to six months’ worth of expenses stashed away in an emergency fund. If that amount is too daunting, you can start with a much smaller amount. Anything you can put away will help if you suddenly have to pay a medical, home, or car repair bill.

You might want to start an automatic savings program, transferring a small amount of money every paycheck into a dedicated savings account. That can help your emergency fund grow with a minimum of effort.
Two more tips:

• Consider keeping your emergency fund in an online bank account which often offers low or no fees and higher interest rates, which can help your money grow faster.

• If you want help doing the math, you can use an online emergency fund calculator.

4. Get Out of Debt

If debt payments (credit cards, student loans, etc.) are a big part of your monthly budget, you may want to rethink your debt payoff strategy.

To truly dump your debt burden — and reclaim the money you’re paying in interest every month so you can save it or use it for other things — it can help to have a debt reduction plan. There are many options to choose from, including these popular strategies:

• The snowball method: With this strategy you put any extra money you can toward paying off your smallest debt — while making the minimum payment on the others. When that balance is paid off, you can move on to the next smallest bill, and so on — slowly eliminating all your debts.

• The avalanche method: The avalanche method focuses on high-interest debt. With this strategy, you would put any extra you can toward the credit card or loan with the highest interest rate. When that bill is paid off, you move on to the bill with the next highest interest rate, and so on.

If you’re using credit cards just to keep your head above water, you could end up drowning in debt — especially as interest rates are rising. Try to budget with your credit card wisely, instead of thinking of it as a life raft. Charge only what you can afford to pay off each month.

5. Increase Your Income

If your main income stream just isn’t enough — and a pay raise isn’t coming anytime soon — you may want to consider your options for earning extra cash.

That might mean taking on a side hustle (something you can do when you’re not at your regular job), selling stuff you don’t use any more, or maybe renting out a room in your home. Whatever you choose, try to make it fun (or at least bearable), so you aren’t tempted to give up. And make sure the hours, effort, and money you put into the side gig (for supplies, uniforms, etc.) are worth it and you’re really getting ahead.

6. Increase Your Down Payment

If you’re on the verge of buying a house, consider your options. You may want to think about ways to lower your ongoing monthly mortgage expenses. That’s another idea for how to stop living paycheck to paycheck.

A 20% down payment usually isn’t required to finance a home purchase, and most buyers put down less. Yes, your Realtor® and your lender can help you decide how much your down payment should be. But keep in mind that if you can scrape together more, you’ll borrow less, which means you can have lower monthly payments. You’ll also have more equity sooner, and you’ll pay back less interest over the life of the loan.

More Tips to Budget and Save Money

Okay, now that we’ve covered the basics, let’s drill down to some other lifestyle changes that can help you spend less and save more.

See the Benefits of Owning Less

It’s tough to say no to buying new, or better, or more — especially when you can make online purchases with just a couple of clicks and use a credit card to pay. But embracing financial minimalism and the mantra that “less is more” can help you change your spending behavior.

Budgeting is a great way to focus on needs vs. wants, and tracking your spending with an app, or even going old-school and writing down every penny you spend in a notebook, can help you set priorities.

Sit Down and Do the Math

It’s easier to get where you want to be if you know where you are. So it can be helpful to pull out all the paperwork when you’re creating your household budget. That means sitting down with purchase receipts, bank and credit card statements, income info, etc., to figure out how much you’re spending every month, what you’re spending it on, and how much you actually have to spend.

Look for Things to Cut

This is the painful part. If you really want to stop living paycheck to paycheck, there’s a good chance you’re going to have to get rid of some of the things you love.

That might mean cutting back on concert or theater tickets (or just choosing cheaper seats). You might have to back off on the morning trips to Starbucks. Or cancel app subscription services. The good news is, you get to pick your priorities — as long as those things track with what you realistically have and want to spend each month.

Embrace a No-Spend Period

It’d be pretty difficult to not spend any money at all for a year — or even a week. (Although some people are trying as part of the “no-spend challenge” trend.)

But by challenging yourself to only spend on things you absolutely have to have for a pre-set period of time, you can really get a feel for what’s important to you. And of course, you save money.

You can go big or small. You can challenge yourself for a year, or a month, or a week. You can try to go without buying anything new, or limit yourself in a specific category: no spending on clothes, shoes, or jewelry; no movies (at the theater or streaming); or no eating at restaurants, for example. And you can post your progress on Twitter or Instagram — if that helps push you to keep going — or you can keep it all private in your diary.

Put Your Savings into a Separate Account

It may seem super convenient to put all your money into a checking account. But that can also make that money super easy to spend.

Funneling some of your funds into a separate savings account can help you keep your hands off your cash as you set up your emergency fund or save for other short- and long-term goals.

And if you put the money into a high-yield online savings account, you typically can earn a higher interest rate than you would with a traditional checking account.

Don’t Be Afraid to Consider Drastic Changes

Some people need to make only a few minor changes to pull out of the paycheck-to-paycheck cycle. Others may need to get more radical. If you can’t get your spending under control, for example, you may need to cut up your credit cards. If you can’t afford your car payments or gas, it might make sense to take the bus or carpool to work. Or you may have to make some uncomfortable budget cuts — like going without cable or shopping at less expensive clothing stores.

When you’re thinking about what moves might help you get ahead, consider crunching the numbers first to see if the change really makes financial sense. Then, try to stay motivated by thinking about what you can do with the money you’ll save. Consulting money management guides can also give you a deeper understanding of how to make changes and spend less.

Avoid Lifestyle Creep

Another idea for how not to live paycheck to paycheck is to be aware of “lifestyle creep.” That’s when your personal cost of living increases as your income increases, perhaps so slowly that you may not notice until you are scrambling to pay your bills.

Maybe you got a raise and thought you could afford to spend a bit more on the things you want. Or maybe your friends are earning more money than they used to — and keeping up socially is hurting you financially.

If you’re overshooting your budget every month and can’t figure out why, it may be time to reexamine your priorities and focus on the larger goals (saving for a house or college for your kids) that could slip away if you can’t get a handle on your spending.

Set Financial Goals

When you’re just winging it financially from month to month and year to year, it can be much harder to live within your means. Setting short- and long-term goals — whether it’s to reduce your debt, build your emergency fund, or save for a new car or home — can motivate you to stay on track.

When you’re setting your goals:

• Think about what you hope to accomplish and how it would make your life better. (Be specific.)

• Give yourself a timeline. (Be realistic.)

• Try to make your goals measurable. (Baby steps are akay!)

Be Patient and Stay Positive

Getting your finances on track can be a little like dieting. You’re bound to slip up from time to time. And getting to your goals may take longer than you planned.

You may even be tempted to give up completely.

But if you stick with your plan, you can improve your financial health — and feel better about yourself and your future.

Track Your Spending with an Eye Toward Saving

If your goal is to save more, you’ll have to spend less. And one way to get the ball rolling is to track your spending for at least 30 days to see where your money is going.

Once you spot the things you can change, you can start cutting back on current and future spending, and catch up on old debts. Then you can move more and more money to savings — and get closer and closer to your goals.

It may help to choose a budget strategy that focuses on saving, such as the 70-20-10 budget rule, which divides after-tax income into three basic categories: 70% to monthly spending, 20% to savings and debt repayment, and 10% to donations (or to more saving and investing).

The Takeaway

Living paycheck to paycheck is like treading water: You may not be drowning in debt (yet), but you also aren’t getting any closer to your goals.

By taking six critical steps, including budgeting and reducing debt, you can be on a path to end the paycheck-to-paycheck cycle. Doing so can allow you to start building up more money in your bank account.

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 is the 70-20-10 rule for money?

The 70-20-10 rule is a budgeting strategy that focuses on both spending and saving. It says that, from your take-home pay, put 70% toward living expenses, 20% toward savings and debt repayment, and 10% toward donations (or you could put more toward saving and investing).

What is considered not living paycheck to paycheck?

If you aren’t living paycheck to paycheck, you’re living comfortably within or below your means, you’re putting savings away for future goals, and you have an emergency account set up so unexpected bills don’t send you spiraling.

What’s the best way to stop living paycheck to paycheck?

A good first step toward ending the paycheck-to-paycheck cycle is to find out where your money is going every month, and to set up a budget that prioritizes smart spending and saving.

Is living paycheck to paycheck stressful?

Yes, living paycheck to paycheck can be stressful. Living this way can create financial anxiety since you know you likely don’t have enough money to cover unexpected expenses, nor can you save for future financial goals.

How many Americans live paycheck to paycheck?

According to a study conducted in December 2024, fully two-thirds (67%) of Americans were living paycheck to paycheck. That can be seen as a sign that people need to manage their money more carefully to free up funds for savings and long-term goals.

Photo credit: iStock/jacoblund

SOBNK-Q125-077

Feb

2025

Can You Negotiate Rent?

By Brian O'Connell | Budgeting & Goals, money | Comments Off

If you’re wondering whether you can lower your rent, the answer may be yes in some situations.

The prospect of bargaining down your rent may sound futile or intimidating. But, thanks to a little research and a well-planned approach, it may be possible to land a better deal.

The odds of successfully lowering your rent will probably depend on a few factors, including how much comparable rentals in your area cost, the value you represent to your landlord, and the general state of the economy and the rental market. Learn effective negotiating techniques here.

Key Points

• Negotiating rent can be a common part of the landlord-tenant relationship and might lead to significant savings for tenants.

• Timing negotiation during slow rental periods can increase success.

• Highlighting one’s value as a tenant can strengthen a negotiation position.

• Offering a lump sum payment or longer lease term can improve leverage.

• If rent reduction is not possible, consider asking for alternative perks.

The Benefits of Negotiating Rent

The obvious payoff of reducing your rent is more cash left over at the end of the month.

But you may also want to consider the longer term benefits. Say you’ve successfully negotiated your monthly rent down by $100. Over the course of a year, that monthly savings adds up to $1,200. There are many benefits to that:

• If you applied that $1,200 yearly savings to paying down credit cards or a student loan debt (rather than paying the minimum), you might be able to save significantly on interest payments and also build your credit score. That last factor could help you save money in the future by helping you to get loans and credit cards with better terms.

• You could funnel that monthly $100 saved into a high-yield savings account (these are often offered at online banks) and start building a down payment on a home (if you’d prefer to own vs. rent) or an emergency fund or working towards another savings goal.

• If you were to transfer money (the extra $100) into your 401(k) retirement fund or other retirement savings each month, it could yield a significant income stream decades from now. (If you’re already contributing to these accounts, be aware of the annual limits.)

In addition, by learning how to negotiate, you’re also developing a lifelong skill of standing up for yourself and cutting better deals as an experienced negotiator, which could pay off in other areas of your life.

9 Tips for Negotiating Rent

If you’re convinced of the value of negotiating and interested in giving it a try, here are some pointers to help you do so effectively. A quick word of caution: Simply saying “I can’t afford my rent” is unlikely to get your rent lowered. You want to illuminate for the landlord good reasons to reduce what you pay and keep you as a valued tenant.

1. Time it Right

Here’s an important tip for how to negotiate rent: As eager as you may want to cut a good deal and do so as quickly as possible, it can be wise to time your approach to maximize your chances of success.

That means negotiating at the right moments, when your landlord may be more amenable to cutting a deal.

Those times might include:

• The end of the month, when other tenants may have vacated the property and your landlord may enjoy the stability of a long-term tenant.

• 90 days or so before your current lease expires. That’s enough time to offer to sign another lease, but only at terms favorable to you. If you’ve been a good tenant, and the market is soft for new tenants, your odds of renegotiating a lower rent may be stronger.

• At the beginning of the calendar year. Typically, winter is a slow time for property rentals, especially in the colder climates when moving is more difficult, and it may be harder for landlords to find new tenants. Stepping into the vacuum with an offer to stay another year (even at a lower monthly rental price) might give you some new-found leverage.

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2. Do Your Market Research

The next pointer on how to haggle rent: To build your case when approaching your property owner about a rental reduction, it can help to know the lay of the land.

If you can prove that you could live more inexpensively in a nearby rental based on local housing trends, your landlord may be more inclined to grant a discount, rather than lose your business to the competition.

For that reason, it’s a good idea to do a little digging, consider the cost of living, and comb through online listings to find out the rents of comparable units or properties in the area.

If, however, you are living in an area with a tight housing market, this tactic may not yield the results you hoped for.

Perhaps a similar one-bedroom apartment for rent has an amenity that’s not offered at the apartment you’re currently in or considering. You might point out how these factors make the landlord’s current rental terms somewhat higher than the going market rate.

When you speak to the landlord, it may help to have data on comparable apartments that are slightly lower in rent and, if the unit has been unoccupied, have this information on hand as well.
You may also want to check what other apartments in the same complex or rented out elsewhere by the same landlord currently cost. This can help keep you from overpaying for an apartment and may also help you negotiate a lower rent, which could mean automatic savings for you.

Recommended: Reasons to Switch Banks

3. Offer a Lump Sum

If you can afford it, adding a lump-sum payment (say, three months of rent upfront) may strengthen your bargaining power and boost your odds of reducing your overall rent payment.

That’s because many landlords prefer having rent in hand and not having to worry about late or no rental payment from tenants.

What’s more, offering an upfront, lump-sum payment is one way to show a landlord that you’re serious about being a solid tenant. A landlord may be more amenable to doing business with a tenant who is willing to go the extra mile.

4. Consider a Longer Lease

If you particularly like the house or apartment you’re renting, you might consider offering the landlord a longer lease in exchange for lower rent payments.

If, for example, a landlord is offering a 12-month lease to a new tenant, at a fixed monthly rental price, and you agree to extend that lease to 18 or 24 months, you might be in a stronger position to ask for a rental discount.

All things being equal, landlords tend to favor tenants who’ll be around for the long haul, and may be more likely to green-light a lower rent for a longer lease arrangement.

5. Cash in on a Referral

Landlords typically loathe empty apartments, so if you can help fill a rental unit with a referral or two, it might put you in a better negotiating position to ask for a rental price deduction for helping out.

Rental unit owners usually have to pay for classified ads to lease their open units. In addition, landlords often have to put some sweat equity into showing units, chasing down tenant leads, and vetting potential lease applicants.

By bringing your landlord qualified, stable tenants, you may be able to become a valuable asset for your landlord. This in turn can help build a more robust case for a rental deduction in the process.

6. Don’t Just Focus on Price

When working on how to negotiate rent, yes, the primary goal in a rental negotiation is to bring the price down.

But in case that conversation proves fruitless, you may also want to consider some other perks or benefits you could ask for in lieu or a rent reduction.

Some ideas:

A prime parking space (especially in urban areas)

• New appliances and/or fixtures in your home or apartment

• New or larger storage space

• “First dibs” on better apartments or homes in your complex, once they free up

• A waiver of fees and charges on things like gym memberships, parking privileges, community rooms, water or trash removal, or other services and amenities

• Extra parking passes for guests

• Allowing you sublet for the summer (if you plan to be away)

• One or two months free

Recommended: Passive Income Ideas to Build Wealth

7. Give Your Landlord a Heads-Up

Nobody likes to be ambushed on financial matters. That’s why you might have more success if you call your landlord well ahead of when you need to sign the lease. Politely let them know that you’d like to discuss the terms of the lease and are wondering if they would be open to a price reduction.

You might then suggest having a meeting (in person tends to be best, since it can be harder to say “no” to someone when you’re sitting face-to-face) some time in the next week or two.

This gives your landlord some time to consider the situation while also giving you some time to build your case.

In addition, giving your landlord some lead time shows you’ve put some thought into the matter. It also shows you respect your landlord’s time and schedule.

Keep in mind that you have a right as a renter to negotiate rent, but being diplomatic and respectful to your landlord will likely yield a better result than being aggressive.

8. Highlight Your Value as a Tenant

When you do meet with your landlord to negotiate the terms of your lease, it can be helpful to make a good case for keeping you on (or bringing you in) as a tenant.

For example, you might want to have a record of all your on-time payments or any history of providing referrals for this landlord.

You may also want to mention your willingness to extend your lease, that you’re courteous to other tenants, keep the property in good shape, and any other points in your favor.

Any and all of these factors could help persuade your landlord to give you a better deal.

Get Your New Rental Agreement in Writing

If you’ve successfully negotiated your rent downward or otherwise improved the terms of your lease and have a verbal agreement, it’s a good idea to get the deal in writing.

Having both parties sign off on the new rental agreement provides you with proof that you have a new deal in place, in the event there is any misunderstanding down the road. Congratulations: Getting a rent reduction can give you some breathing room in your budget.

The Takeaway

While rental leases may appear set in stone, they’re more flexible than many tenants think, especially if the rental market is soft in your area (meaning more rentals than renters). You may be able to negotiate a better price if you negotiate well, showing that the rent is higher than similar units in the area and that you are a model tenant who pays rent on time. If you’re successful, you could wind up with more money in your bank account.

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

Can you negotiate apartment rent?

You may be able to negotiate rent on an apartment or home; the possibility varies depending on your situation. You may be more likely to succeed in negotiating your rent if you can show that comparable rents in your area are lower and that you are a reliable tenant.

Can I pay my rent in a lump sum for a discount?

It’s possible that some landlords will accept rent in a lump sum at a discounted rate. This can have benefits: The landlord gets the cash upfront and doesn’t have to worry about potentially chasing a tenant for a past-due payment. But you would need to make this request from the landlord and hear their response.

When is the best time to negotiate rent?

There are a few times when you may have better luck negotiating rent. Those times include the end of the month, when many other tenants may be moving out; 90 days before your lease expires, which is when renewals are typically made available; and the start of a new year, when people may be moving and, since it’s winter, new tenants could be harder to find.

Is it in bad faith to negotiate rent?

It is usually not considered in bad faith to negotiate rent, provided it is done reasonably, respectfully, and honestly. It’s a practice that does take place in the rental market. That said, if a person were to invent reasons for a rent reduction, such as claiming the appliances don’t work when they do, that would be acting in bad faith.

Can a landlord kick me out if I try to negotiate my rent?

A landlord usually cannot kick you out for trying to negotiate rent. This is considered a typical aspect of the landlord-tenant relationship. In order to evict a tenant, the landlord must follow the guidelines for this process determined by the state. Causes for eviction might be non-payment of rent or violating the terms of the lease, such as damaging the property.

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SOBNK-Q125-079

Feb

2025

What Exactly Is a Rainy Day Fund?

By Krystal Etienne | Budgeting & Goals, Growing Wealth, money | Comments Off

The meaning of a “rainy day fund” is savings that help you get through bad weather, financially speaking. The bad weather could mean a medical expense that your insurance doesn’t cover, a car repair, or any number of other “uh-oh” moments.

Many people aren’t prepared to cover this kind of surprise expenditure, even if it’s just $100 or so. Perhaps they are living paycheck to paycheck; are focused on paying down debt; or are saving for a big goal such as a down payment on a house. Having funds set aside can keep little financial storms from wreaking havoc with your monthly budget and longer-term money aspirations.

With that in mind, here’s what you ought to know about rainy day funds, including how to start one and a good amount to save.

Key Points

• A rainy day fund serves as a savings buffer for minor unplanned expenses, typically ranging from $500 to $2,500.

• An emergency fund, in contrast, should cover major financial disruptions and hold three to six months’ worth of expenses.

• To determine the ideal rainy day fund amount, consider potential one-off expenses and adjust savings goals accordingly.

• Effective strategies for building a rainy day fund include cutting nonessential spending, earning extra income, using windfalls, saving change, and setting up automated transfers.

• High-yield savings or money market accounts can be ideal for storing a rainy day fund, offering accessibility and interest growth.

Examples of a Rainy Day Fund

A rainy day fund is a preset amount of savings set aside to cover extra, one-off expenses that may crop up throughout the year like a car or home repair.

They are called rainy day funds because, just as you need to have a backup plan to accommodate bad weather, you’ll also want to have a backup to accommodate sudden extra expenses.

Just like a thunderstorm, a broken dishwasher can occur out of the blue. Being prepared for little financial upsets can keep them from becoming major stressors and disrupting your financial life and/or causing you to go into debt to cover the costs.

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Rainy Day Funds Vs. Emergency Funds

You may wonder how rainy day money differs from an emergency fund. Typically, it’s an order of magnitude.

• A rainy day fund is generally a significantly smaller amount of savings meant to cover expenses that have a good possibility of coming up, you’re just not sure when. These could also be expenses that always come up once or twice a year, such as annual maintenance of your home heating and air conditioning systems.

You may also sometimes hear the term “cash cushion” when people refer to smaller savings vs. an emergency fund.

• An emergency fund is a larger back-up fund typically containing three- to six months’ worth of living expenses. An emergency fund is designed to be used for more extreme financial disruptions, such as a job loss, major medical bill, or the need for a new roof.

Here’s how this information looks as a table:

Rainy Day Fund	Emergency Fund
A small amount of cash to cover predictable, one-off expenses	A fund of three to six months’ worth of living expenses
Used to cover such expenses as home repairs and maintenance or a minor car repair or a special occasion (such as hosting a baby shower)	Used to cover major expenditures such as a large medical, dental, or car repair bill, or to pay bills in the event of job loss

Why Can’t I Use My Emergency Fund?

Technically, an emergency fund’s uses could include covering smaller, short-term expenses.

However, if you’re wondering when to use your emergency fund, depleting it on lesser expenses can chip away at your ability to cover the larger, truly unexpected expenses that could occur down the line. After all, having an emergency fund waiting when you need it is a cornerstone of good money management.

In that scenario, you might need to resort to using credit cards, a personal loan, or even a payday loan. Due to the high-interest rates on some of these types of loans, you would end up paying much more in the long run.

Or, you might have to withdraw from whatever kind of retirement fund you have or from your child’ s college savings, which could hurt your long-term financial health. Having a rainy day fund available can help you avoid that situation.

Do You Need a Rainy Day Fund?

Many people could benefit from having a rainy day fund. It’s a sum of money (often between $500 and $2,500) that’s available for expenses that pop up in a typical year and could otherwise throw a wrench in your budget.

If you have a very well-stocked emergency fund that you don’t mind dipping into, you may not feel as if you need an emergency fund. However, financial experts often advise that you not tap your emergency fund except for true emergencies.

Slowly but steadily, building a small rainy day fund (whether kept at an online bank or a traditional one) can give many people more financial security.

How Much Money Should I Put in My Rainy Day Fund?

As mentioned, a ballpark figure for a rainy day fund could be to have between $500 and $2,500 saved. That can be a reasonable amount to help cover unexpected costs.

How much you’ll want to set aside in your fund, however, is highly individual and will depend on your financial situation and potential upcoming expenses.

One way to figure out a target amount for your rainy day money is to create a list of some possible rainy day expenses that could come up.

For example, if your health care deductible is $1,500, you might want to keep at least that much in your rainy day fund. Car repair prices range, but common fixes on the brakes or alternator cost between several hundred dollars to a thousand (or more). Just in case two rainy days happen close together, it’s a good idea to increase your savings goal.

If you’d like guidance for your unique situation, consider paying the cost of a financial advisor for a bit of advice. They can look at your current finances and help you create an excellent savings plan. They can also help decide how much money to put in a rainy day or emergency fund.

Another way to figure out a target amount for your rainy day fund is to create a list of anticipated larger expenses. These are purchases, costs, and bills that arise only a few times a year, but aren’t always tied to an exact date. They can include:

•   Home gutter cleanings
•   Car maintenance
•   Back-to-school shopping
•   Annual subscriptions
•   Emergency Childcare
•   Emergency room visits
•   Parking tickets
•   Tax bills
•   Birthday and holiday gifts
•   Plane tickets
•   Appliance replacement

You may want to review this list, as well as look at large one-off expenses that came up last year, to come up with a ballpark figure for your rainy day fund.

How Do I Save for a Rainy Day Fund

The process of building up your rainy day fund is similar to saving money for any goal or major purchase. There are several different strategies to choose from, and you may want to combine a few.

• Cutting back on nonessential spending. You may want to take a look at your monthly outlay of money over the past few months. See if there are any simple places you can cut back, such as cooking a few more meals at home each week, getting rid of a streaming service you rarely watch or spending less on clothing each month. The funds you free up can get funneled into your rainy day savings account.

• Bringing in some extra income. Picking up a side hustle (like dog walking, babysitting, or food delivery), selling things you no longer use online, or doing some freelance work can help you build your rainy day savings fund.

• Take advantage of windfalls. A money windfall, or a sudden influx of cash, such as a bonus, cash gift, or tax refund, can be a quick way to build your rainy day fund.

• Keeping the change. Putting all your leftover change in a jar and watching it add up is an old-fashioned but still effective way to save. When the jar is full you can deposit the money in the bank to give your rainy-day fund a bump. Or use a rounding-up tech function (available at many banks) to add to a savings account.

• Setting up automated transfers. Establishing an automatic transfer from your checking into your rainy day savings account on a set day each month (perhaps after your paycheck gets deposited) can be one of the most effective ways to grow this fund. Even if the amount is small, it will add up quickly because the automatic savings will happen every month no matter what.

Recommended: Benefits of Automating Your Finances

Where Should I Keep My Rainy Day Fund?

You’ll want to keep your rainy day fund in an account that is separate from your spending (so you don’t accidentally spend it) but is still easily accessible.

Good options include a high-yield savings account, which are typically available at online banks, often with no or low fees and without deposit or minimum balance requirements.

Other options include a money market account, which typically offers higher interest than a standard savings account but allows you to access your money when you need it. That kind of liquidity is valuable, since you never know when a minor emergency will crop up.

The Takeaway

Setting up a separate rainy day savings account can help you manage those annoying but essential extra expenses that can crop up throughout the year that might otherwise throw you off balance.

As you use your rainy day fund to cover pop-up expenses, it’s a good idea to fill it back up, so you’ll have financial back-up the next time you need it. What’s more, keeping your rainy day fund in an interest-bearing account can help it grow as it sits there, providing you with a sense of security.

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 is considered a rainy day fund?

A rainy day fund is a sum of cash, often between $500 and $2,500, held in an easily accessible account (preferably interest-bearing). The money is to be used for those expenses that crop up during the year, such as purchasing a new dishwasher or paying for holiday gifts.

Is a rainy day fund different from an emergency fund?

A rainy day fund is typically smaller than an emergency fund and designed for smaller-scale expenses, such as home maintenance issues. An emergency fund is usually a sum of three to six months’ worth of living expenses, and it can be used for major medical bills, say, or to pay bills after job loss.

Should I prioritize a rainy day fund over paying off debt?

Both paying off debt and a rainy day fund are important priorities for financial wellness. Some, however, might say that paying off high-interest debt is more urgent than accruing a rainy day fund.

How do I replenish my rainy day fund after using it?

A good way to replenish your rainy day fund after using it can be to set up automatic transfers into your checking account over time or to use a windfall, such as a job bonus or tax refund, to add to it.

Is a rainy day fund different from a sinking fund?

A rainy day fund is typically money that is set aside for fairly predictable (but often overlooked) expenses, such as vet bills or a new water heater. A sinking fund, on the other hand, describes money saved for a specific, planned purpose, such as a home renovation.

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SoFi members with direct deposit activity can earn 3.80% 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 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 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 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 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.

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.

*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.

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Credit Unions vs. Banks

What Is a Credit Union?

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Pros and Cons of Banks

Pros of Banks

Cons of Banks

Pros and Cons of Credit Unions

Pros of Credit Unions

Cons of Credit Unions

Credit Union vs. Bank

Business Model and Pricing

Membership Requirements

Services

Customer Care

Accessibility

Technology Tools

Finding the Right Credit Union

The Takeaway

FAQ

Is it better to have a credit union or a bank?

What is a disadvantage of a credit union?

What are the biggest risks to credit unions?

What Is Zero-Based Budgeting?

How Zero-Based Budgeting Works

How to Build a Zero-Based Budget

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Tracking Your Budget

Tools and Tips for Tracking a Zero-Based Budget

A Zero-Based Budget on an Irregular Income

Adapting Zero-Based Budgeting for Inconsistent Income

Other Budgeting Strategies to Consider

Comparing Zero-Based Budgeting to Other Methods

Pros and Cons of Different Budgeting Styles

The Takeaway

FAQ

How much time does zero-based budgeting take each month?

What tools can simplify zero-based budgeting?

Are there challenges to maintaining a zero-based budget?

How can I stay consistent with a zero-based budget?

What should I do if I exceed my budget in a category?

Stop Living Paycheck to Paycheck: 6 Tips

6 Ways to Stop Living Paycheck to Paycheck

1. Set a Budget

2. Focus on the Essentials

Prepare for the Unexpected

4. Get Out of Debt

5. Increase Your Income

6. Increase Your Down Payment

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More Tips to Budget and Save Money

See the Benefits of Owning Less

Sit Down and Do the Math

Look for Things to Cut

Embrace a No-Spend Period

Put Your Savings into a Separate Account

Don’t Be Afraid to Consider Drastic Changes

Avoid Lifestyle Creep

Set Financial Goals

Be Patient and Stay Positive

Track Your Spending with an Eye Toward Saving

The Takeaway

FAQ

What is the 70-20-10 rule for money?

What is considered not living paycheck to paycheck?

What’s the best way to stop living paycheck to paycheck?

Is living paycheck to paycheck stressful?

How many Americans live paycheck to paycheck?

Can You Negotiate Rent?

The Benefits of Negotiating Rent

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9 Tips for Negotiating Rent

1. Time it Right

2. Do Your Market Research

3. Offer a Lump Sum

4. Consider a Longer Lease

5. Cash in on a Referral

6. Don’t Just Focus on Price

7. Give Your Landlord a Heads-Up

8. Highlight Your Value as a Tenant

Get Your New Rental Agreement in Writing

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