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From cash to credit cards to payment apps to cashiers checks, there’s no shortage of ways to make payments these days. One option that’s falling somewhat out of fashion? Paper checks. One modern alternative is to use an electronic check, which functions similarly to an old-school check but is managed completely digitally.

What is an electronic check? Keep reading to learn more about how this popular payment method works, including:

•   What is an electronic check or e-check?

•   How does an electronic check work?

•   What are the pros and cons of e-checks?

•   How do electronic checks differ from credit card payments and wire transfers?

•   Are e-checks safer than traditional checks?

What Is an Electronic Check?

An electronic check (also known as an e-check) serves the same purpose as a traditional paper check but works digitally. When someone uses an electronic check, the amount they wrote the check for will be withdrawn from their (the payer’s) checking account and will be transferred via ACH network to be deposited into the payee’s checking account.

The ACH (Automated Clearing House) network is an electronic network that U.S. financial institutions utilize to make payments digitally—eliminating the need for paper checks.

Recommended: How to Verify a Check Before Depositing It

How Does an Electronic Check Work?

An electronic check works in much the same way as a traditional paper check. It’s possible to use electronic checks to make a variety of purchases and payments online. Someone can use an electronic check to make significant recurring payments such as their monthly rent or loan payments. It’s fairly common for businesses to make it possible to make purchases using an electronic check. Here’s why: This method helps them avoid the processing fees required to accept credit card or debit card transactions. This is especially popular with small businesses who are hit harder by these fees.

It can take about three to five days for an electronic check to process. Why does it take so long? To start, the funds have to be verified as actually being available to make the purchase and then need to be cleared by the ACH. Next, the funds have to be deposited and made available to the recipient so they can withdraw the funds from their bank account.

There are two main ways a consumer can use an electronic check. These are the options, which are slightly different but achieve the same result:

•   Fill out an online payment form with information such as checking account number (whether you have a standard or a premium checking account), payment amount, and bank routing number. The payer will then submit the payment to the payee, thereby authorizing them to withdraw the check amount from the payer’s checking account.

•   Complete an automated online process that involves inputting payment information and bank account information and then authorizing the payment.

Processing Electronic Checks

Processing an electronic check works is similar to processing a paper check. It may move along faster (you don’t mail an e-check, for instance), while eliminating the use of paper which leads to waste. The exact processing time will vary, depending on the institutions involved; funds might be made available the next day, or (as noted above) it might take a few days for the payment to clear. Paper checks typically take two days or somewhat longer to clear.

These are the steps that occur to process an electronic check:

•   Approve authorization. The payer needs to authorize the payee to complete the transaction. Usually this is done over a recorded phone call, an online payment form, or a signed order form.

•   Set up payment. Once the purchase is authorized, the payee can add the payment information included on the electronic check and form into their online payment processing software. If the payer wants to set up a recurring payment, they can specify what that recurring payment schedule is.

•   Finalize and submit payments. After all required information is added to the payment software, the payee can submit the payment and begin the ACH transaction process.

•   Deposit the funds. The payment will be withdrawn from the payer’s bank account and deposited into the payee’s account. At this point, the payer should receive a payment receipt confirming the payment went through.

Recommended: How to Balance Your Account Monthly

Advantages of E-Checks

These are some of the advantages associated with electronic checks.

•   Electronic checks are usually protected by more security measures than paper checks like multi-factor authentication, digital signatures, and multiple forms of digital encryption which helps protect against hackers.

•   It’s unlikely that the payment amount can be altered or changed like on a paper check (by adding extra zeros).

•   Electronic checks are likely less expensive than paper checks as the payer doesn’t have to pay to order them, buy stamps to mail them, or spend gas money to drive and deliver them to the payee. Fees for a business to process electronic checks are also cheaper and only costs about $0.10 compared to $1 for paper checks. (Worth noting: Sometimes, there may be fees for cashing a paper check for consumers as well.)

•   There can be less work involved to deposit the check on the payee’s side since the payment goes through digitally.

•   This payment method may process a bit faster than paying by paper checks (although a paper check known as a cashiers check typically pays very quickly).

Disadvantages of E-Checks

There are not many disadvantages associated with electronic checks, but some people may be concerned about these issues.

•   Hackers may try to gain access to them.

•   Not all merchants may accept them (although many do).

•   Paper checks can be signed over to someone else, which can in some situations make them more convenient than an e-check.

Another point to consider: If you are the kind of person who likes to write checks to yourself or to cash, you probably can’t do this with electronic checks.

E-Checks vs Credit Card Payments

Electronic checks and credit card payments can feel similar since they are both cashless and don’t require you to write a paper check to process a payment. However, they do function differently.

•   An electronic check pulls funds from a checking account, while a credit card payment means the payer borrows money to make a purchase. That also means a payer who uses an e-check avoids interest charges if they are the type to carry a balance on their credit card.

•   While electronic checks rely on the ACH to process payments, credit cards use credit card networks for their processing.

•   Making payments with a credit card can lead to earning rewards like travel points and cash back. Electronic checks typically don’t earn any rewards.

Recommended: What Is a Second-Chance Checking Account?

E-Checks vs Wire Transfers

Electronic checks and wire transfers may sound similar, but they function differently. Here are some ways they differ:

•   A wire transfer electronically transfers funds from one bank account to another, but doesn’t use an ACH network to do so.

•   Electronic checks are usually cheaper than a wire transfer, which can cost as much as $50 in some situations.

•   Wire transfers may process faster than electronic checks. If a wire transfer involves two accounts at the same institution, funds can arrive within hours.

Are E-Checks Safer than Traditional Checks?

As noted above, electronic checks are seen as a more secure option than paper checks as there are more protections in place surrounding them. Because electronic checks are created and processed without “hard copies,” there are less opportunities for the check to be stolen, lost, or altered fraudulently.

Banking With SoFi

Electronic checks are an easy and convenient payment method. As a bonus, e-checks can process faster than paper ones and are usually more secure. These can be good reasons to use these financial tools and enjoy more efficient, less stressful banking.

Which is also what SoFi is all about. When you open an online bank account with direct deposit with SoFi, you’ll pay no fees and enjoy a terrific APY. Those two factors mean your money could grow faster with us. Plus we make everything about banking, from opening an account to transferring funds, convenient.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How do you pay with an electronic check?

There are two main ways to pay with an electronic check: Either by filling out an online payment form or completing an automated online process. Both of these options are typically secure payment methods.

How do I send an electronic check?

Typically, you would either fill out an online payment form with your banking information and the payment amount or complete an online process and input your payment information and bank account information. In both cases, you, the payer, needs to authorize the payee to process the payment.

Can you get scammed with e-checks?

E-checks are usually viewed as a safer payment option than a paper check. The process involves fewer gaps in which fraud can occur. Also, there isn’t the opportunity for an electronic check to become lost or stolen, the way a paper one might. There are also additional security measures in place to help prevent digital fraud with e-checks.

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Photo credit: iStock/kazuma seki

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 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 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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You know the saying that nothing in life is certain except death and taxes? There’s another pair of sure things in every life: time and money. They are two of the most precious commodities: the things we all want more of, or to make the most of.

Unlike death and taxes, your finances and time, if managed well, can elevate your quality of life significantly. Finding ways to make the most of these two resources can enhance how secure and enjoyable your days are.

Read on to understand the time-money relationship and how to make it work as well as possible. You’ll learn:

•   What “time is money” actually means?

•   What the relationship between money and time is?

•   Tips for managing time and money as well as possible.

What Does ‘Time Is Money’ Actually Mean?

The phrase “time is money” means that a person can translate their available hours into money by getting paid to work. If you’re sitting around relaxing, for instance, you could instead be working and earning cash.

This saying can be further explained in terms of opportunity cost. Let’s say a person has an hour to spend. That person can choose to work for that hour or they can choose to do something that does not yield any income, like reading a book. The person who reads the book loses the opportunity to earn income for that hour. If the person can earn $50 an hour, the opportunity cost of choosing to read a book is $50. Thus, time is money.

Of course, it’s every person’s decision about how much they want to work versus enjoy their free time as they see fit. Some people are driven to work 60 or more a week; others, craving work-life balance or, say, taking care of children, work much less (if at all). They have chosen a different path.

What Is the Relationship Between Time and Money?

Balancing time and money can involve a trade-off. To make more money, some people spend more time on their careers and have less time for the other obligations and pleasures in life, whether that means spending time with family, relaxing, or pursuing hobbies and passion projects. Working long hours can mean less time to clean, shop, and otherwise handle chores. If one makes enough by working, they can perhaps delegate those duties and hire someone to handle them.

For example, a lawyer might be able to afford to pay a landscaper $50 an hour to do yard work while they earn $300 an hour working with a client. The lawyer nets $250 by doing so. If the lawyer does the yardwork and not the landscaper, the lawyer loses the $300 they could have earned doing legal work. Seen through a financial lens, it could be sensible to embrace strategies that maximize your earning power with the limited time you have. If, however, you are a person who earns less than a lawyer and/or you love to garden and care for your property, you might well decide to do the yard work yourself.

Recommended: What Is the Time Value of Money (TVM)?

Tips for Managing Time and Money

As you may see from the yard work example above, good time management is not just about working every waking hour. It’s about allocating time for tasks wisely and balancing work and personal lives. Otherwise, your health, mood, and personal relationships could suffer. Not every minute of your time should have a price tag on it.

Here are some time and money management tips to get you started.

Prioritizing Tasks

You only have so many hours in a day to get things done, so prioritizing is critical. Work, picking children up from school or daycare, grocery shopping, and preparing food are daily and weekly priorities. So too are things like exercise, meditation, seeing loved ones, and doing whatever feeds your spirit, from rafting to reading. Plan your priorities daily, but typically no more than three or you could feel overwhelmed.

Writing Down Your Schedule

Your daily schedule is critical, but planning your time weekly and monthly can also keep you on-task and organized. More than that, it can help you visualize your available time and consolidate tasks so you can make your life more manageable. For example, can you combine one task with another? Can you go to the grocery store while your child is on a playdate, saving you a trip? Can you fit in a workout during your lunch hour? Organizing your time and life can make you much more efficient and reduce stress.

There are many calendar-keeping tools available, from cool journals to apps. Using alerts on your mobile phone can also help you keep track of the “musts” on your daily schedule.

Putting Time Limits on Tasks

Spending more time on enjoyable tasks and putting off the less palatable ones is human nature. But it’s also procrastination that can leave you short on time and stressed about deadlines at work and at home.

One good solution: Set time limits for activities and schedule them wisely. Tackle a difficult project when you have the most energy, such as first thing in the morning. Block off an hour or two. If you split up challenging tasks into manageable chunks, you won’t become overwhelmed. Just getting started and seeing some progress can motivate you to continue.

Focusing on One Task at a Time

Multitasking can be a fast track to inefficiency. Walking the dog and listening to a podcast is one thing, but trying to write a report while your child is doing homework (and asking for help), is another — and probably not efficient — one.

Given a quiet room and time to focus, you might knock out the report in an hour or two. Multitasking, on the other hand, can mean for many of us that nothing receives your full attention and is done well.

Removing Interruptions While Working

Social media, pop-up notifications, emails, phone calls, colleagues who want to chat on Slack, family members, and pets all can enrich and inspire your life, but when you are balancing time vs. money, face the facts. They pull you away from work and from being efficient. Find ways to eliminate interruptions, and you’ll likely accomplish more things, more quickly.

If you have an urgent task and work at home, consider going to a coffee shop or a library where you might have more peace. If colleagues at work are a problem, ask to use a conference room temporarily to get your work done or say you are on deadline and pull back from chat apps and email alerts. To avoid technology distractions, try putting your phone away in a drawer so that it is out of sight and out of mind while working.

Creating a Realistic Budget

When it comes to the financial aspect of money vs. time, budgeting can really optimize your efforts to wrangle your funds. A budget helps you account for your income, expenses, and savings so there are fewer surprises and so you hit your goals. Many people, in fact, believe that being disciplined with money or more accountable for it is a major key to wealth.

Making a budget typically involves looking at your monthly after-tax income, including keeping track of money from side hustles and the like. Then, you will subtract the cost of your monthly necessities (housing, food, medical care), as well as debt, and then allocate what’s left to spending and saving. This process should reveal if you are living within your means, or are you spending more than you earn?

If your expenses exceed your income, look for ways to cut back on spending, such as eating out less, biking to work instead of driving or calling an Uber, or perhaps consolidating high-interest credit card debt with a lower-interest personal loan. The ultimate goal is to create a budget that you can live with and with room to save for long-term goals, like the down payment for a house or for retirement.

Finding Ways to Invest Your Money

A reasonable goal for long-term financial planning is to set aside 10% of your income and invest it. You can educate yourself with books, podcasts, websites, and apps to, say, learn the pros and cons of stocks vs. bonds. A professional financial advisor can also help you to find the best vehicles to build wealth. For example, a 401(k), a diversified portfolio of stocks and mutual funds, or a passion like watch investing or whiskey investing can all play a role in your investing.

Remember, however, the golden rule for investments, though, since they are not covered by the FDIC, or Federal Deposit Insurance Corporation: Only invest what you can afford to lose.

Using Time for Yourself Wisely

Work-life balance is increasingly a goal for Americans, and a number of companies are experimenting with four-day workweeks as one path to achieving this.

Overwork and burnout are real dangers for those who Incessantly strive to capitalize financially. It’s definitely wise to schedule time for yourself. It can be as simple as meditating, spending time with family, working out, volunteering, or pursuing a hobby. Spending time on things that bring you joy can spur you to be your best when you are working, too.

Automating Your Bills and Payments

Automating your monthly bills can be a win-win. Paying bills on time is the biggest single contributor (at 35%) to your credit score, and taking care of those charges before they accrue late fees also makes good money sense.

What’s more, in terms of the time vs. money equation, setting up automated bill payments will also free up some space in your schedule. Your bills will be paid on time each month, without you having to click around websites or write checks and buy stamps to mail them. It will take a few minutes of work up front, but the task is then much easier.

Watching Your Spending

Remember that budget you diligently prepared? Stick to it by following the 30-day spending rule. Wait 30 days before purchasing an item to avoid overspending and racking up debt. If you do spend too much, you’ll pay unnecessary fees on overdrafts or credit card interest payments.

The Takeaway

There’s little doubt that time and money are two valuable but limited resources. Making the most of each requires some smart strategies, such as budgeting, scheduling, reducing overspending, and finding work-life balance. But by respecting the value of time and money — and managing them well, you’ll likely enjoy a better quality of life, today and in the future.

Want to have more time and watch your money grow faster? With a SoFi bank account, that’s totally possible. We’re an online bank, so we provide a quick and convenient way to manage your finances 24/7. And sign up for our Checking and Savings with direct deposit, and you’ll earn a competitive APY, pay no account fees, and have access to a network of 55,000+ fee-free ATMs.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Is time worth more than money?

The answer to this question is subjective. To a person who is terminally ill, time is clearly the most precious commodity; they might rather have less money and more time. In another scenario, someone might say money matters more. They might be willing to work every free minute for years to ensure they have a high-paying career, even if they don’t have much free time to enjoy the luxurious life they lead.

Is it worse to waste my time or money?

Neither wasting time nor money is a great idea, though many of us of course do so from time to time. A better approach can be to minimize the waste and balance your life so you have both enough time and money. This often requires prioritizing, planning, and budgeting.

What are the benefits of managing time and money wisely?

A key benefit of managing time and money wisely is better quality of life. Effective time and money management will make all aspects of your life easier because you gain peace of mind and may stress less about your money and your schedule. You can take control of two very important variables.

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Photo credit: iStock/busracavus

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 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 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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

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

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At face value, money appears to be simply about dollars and cents passing from one hand to another.

But in reality, our purse strings have deep ties to our emotions. We get elated, sad, and angry over money matters. And it’s certainly not uncommon to feel guilty about spending money, even when it’s a necessary purchase.

Some purchases trigger more guilt than others, and some people are more prone to experiencing this unpleasant sensation than others. Understanding why this happens can help you avoid negative feelings about money, which is one of the top stressors in many people’s lives.

Keep reading to learn:

•   Why do I feel guilty when I spend money?

•   Is it a bad thing to spend money?

•   How can I stop feeling guilty after spending money?

Is Spending Money a Bad Thing?

Spending money in and of itself is not a bad thing. In fact, it’s a necessary reality of life. It would be hard to imagine navigating daily life without spending cash to, say, buy food or commute to work.

But there are a lot of opinions out there about how people should spend their cash, which can lead to conflicting emotions. Treating oneself can stir up feelings around self-worth, and spending money on a big-ticket item can trigger anxiety about future finances. (You’ll learn more about these scenarios in a moment.)

Despite money’s necessary role in life, feeling guilty about spending it is fairly common. Most Americans — 60% in fact — report feeling anxiety around their personal finances. That stress can snowball, getting tied up with guilt and creating free-floating money worries.

Spending cash is an inescapable reality, but the guilt associated with it doesn’t have to be.

Recommended: How to Cut Back on Spending

Reasons Why We Feel Guilty About Spending Money

Often, guilt and anxiety around spending money come from the motivation for the transaction, not the purchase itself. Learning to stop feeling guilty after spending money may require people to notice when they feel guilt or shame after a purchase and change their mindset or spending behavior accordingly.

Everyone has different emotional triggers around their spending, but there are some common scenarios when someone might feel guilty, such as these:

Buying Items to Keep Up With Friends

FOMO, or the “fear of missing out,” may be a silly acronym, but it’s a powerful motivator for spending.

People may spend more so they don’t miss valuable time with friends or feel they are fitting into their group of pals. That could mean paying too much for a vacation or buying high-end fashions or a cool new watch they see friends wearing. These expenses can be small, subtle purchases, too, like meeting a friend at a pricier restaurant than you’d usually visit, or it could reflect a significant financial decision, like buying a new instead of used car to “keep up with the Joneses.”

FOMO spending may make someone feel guilty about spending money because it’s tied to the deep desire to fit it. It is often more about self-image and self-esteem than a particular item.

Recommended: How to Save Money on Hotels

Buying Items That Do Not Align With Our Financial Values

Similar to FOMO spending, cultural messaging about “the right way” to spend can lead to a sense of guilt or buyer’s remorse.

It may be the influence of social media encouraging someone to buy a certain brand or societal pressure (the American dream) to own property. Whatever the purchase is, guilt could crop up because it’s not something the individual truly wants — and deep down, they know that.

Saving Goals Impacted by Impulse Spending

An impulse or unexpected purchase could lead to feeling guilty after spending money.

It could be something as simple as forgetting lunch at home and having to buy something expensive near the office. Or maybe it’s buying something you totally didn’t plan to but saw it was on sale. It may be a small purchase, but it eats into your budget and savings goals because it’s unexpected.

Many of these purchases arise from a lack of planning, leading to guilt. You feel as if you messed up, and now you are literally paying for it. Buying a new set of luggage, for instance, is not a good reason to use emergency funds or money in your savings account, so you may be upset with yourself.

Having a Money Mindset Tied to Emotions and Past Experiences

Guilt about spending money may have little to do with the individual and be more connected to their family or upbringing.

People who grew up with parents or guardians in debt may experience feelings of scarcity around money. If you grew up always hearing there wasn’t enough money and getting calls from collection agencies, you may hold a sense of guilt with every purchase.

Or, if someone’s experienced debt in the past, any transaction may trigger anxiety as they remember their old patterns of overspending.

Recommended: Managing Finances When Dealing With Depression

Tips to Help You Stop Feeling Bad About Spending Money

Instead of agonizing over every purchase or waking up worried about bills, it may be time to stop feeling guilty when you spend money. Here are some strategies to help combat those negative feelings while improving your financial wellness.

Taking Care of Financial Responsibilities

When people prioritize financial responsibilities, they may feel less guilty spending the surplus, or leftover money, in their budget.

That means enacting a “paying yourself first” mindset, which can be one of the most important personal finance basics. When a paycheck deposits, immediately put money away towards future goals, like retirement or savings. Setting up automatic transfers makes it easy.

Taking care of financial responsibilities first can give someone the freedom to use the remaining cash relatively guilt-free.

30-Day Savings Rule

To avoid guilt over impulse spending, try implementing a 30-day rule on purchases. If you want to purchase something, whether it’s a new laptop or a new coat, wait 30 days. After 30 days, you can buy it. But in many cases, you may find you don’t even want it anymore.

Slowing down the purchase process can help separate needs from wants, as well as quit spending money impulsively.

If impulse purchasing is a major source of guilt, consider a 30-day freeze on shopping, buying only necessities for a month. This can be a good tip to stop overspending. It can help you reset your spending behaviors.

Improving Your Money Mindset

Understanding needs versus wants can be a helpful way to understand and improve money mindset.

For some, the idea of a want is “bad,” translating to guilt when a purchase isn’t absolutely necessary. But, wants can make life more comfortable and bring pleasure — two very good things. So the key is differentiating between needs and wants, and understanding where wants fit into a budget. Perhaps not every want can or should be satisfied, but recognizing they are part of life and budgeting for them is important.

You might try the 50/30/20 budget rule, which says to put 50% of your after-tax earnings towards needs, 30% to wants, and 20% toward savings.

Creating a Personalized Budget

Sometimes guilt stems from the unknown. If someone doesn’t know how much cash they have in their bank account, they may feel guilty purchasing something.

This is where a personalized budget comes into play and can help you manage your money better. Everyone’s budget will be a little different, but feeling knowledgeable about and in control of one’s money can help alleviate guilt.

For example, if someone looks forward to having brunch out every Saturday, they may create a line item in their budget for it. That way, they don’t feel guilty spending the money as it’s earmarked for that purpose. They eliminate the possibility of anxiety spiraling over that cost.

Only Spending Money That You Have

It sounds like common sense, but only spending money that’s available can help prevent guilt around money. It’s an unhappy fact that many Americans carry credit-card debt: The typical balance is currently over $5,000, and the average rate on existing credit-card accounts is more than 15%.

There are of course times when paying with a credit card and carrying a balance are necessary, such as when your hot-water heater breaks or you get hit with a major dental bill. But in general, it’s wise to pay with a debit card or cash so you don’t wind up getting stuck with high-interest debt. By only spending the money you have, you can avoid guilt, worry, and a lower credit score to boot.

Guilt isn’t constructive and won’t change your financial situation. However, working on financial discipline can improve the overall outlook on spending and make sure your purchases are ones you can truly afford.

The Takeaway

People feel guilt about spending money for many different reasons, even when they can afford their purchases. Getting rid of that guilt is possible through:

•   Understanding why spending makes someone feel guilty.

•   Learning financial responsibility to prevent guilt altogether.

One place guilt shouldn’t crop up? In a bank account. Avoid it by knowing that you have an account that pays you a terrific interest rate while charging you no fees. That’s what you’ll enjoy online banking with SoFi. You’ll earn a hyper competitive APY with direct deposit while paying no monthly or maintenance fees, plus you’ll have access to the Allpoint network of more than 55,000+ fee-free ATMs.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How do I get over my guilt of overspending?

First, figure out what kind of spending makes you feel guilty and why. Perhaps it’s based on childhood or past experiences. Then, consider creating a budget and planning purchases to avoid buyer’s remorse or impulse spending.

What is the psychology behind overspending?

People may overspend because they’re afraid of missing out on experiences, they want a self-esteem boost, or they want to fit in with their peers.

How do you forgive yourself for not saving money?

Understanding the emotional triggers behind overspending and not saving can help build a sense of self-compassion. Many people overspend or fail to prioritize saving. Dwelling on it won’t change the past. For these reasons, forgiving yourself and moving on is best.

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

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The Covid-19 pandemic has changed the way people shop. While ecommerce sales have been on the rise for years, the need to stay home accelerated the growth of online shopping in the U.S.

To learn more about today’s online shopping trends, we used a multi-pronged approach that included:

•  A Survey: We surveyed over 1,000 people who regularly shop online (meaning at least once a week) to gain insights into current trends, especially as they relate to the new shopping landscape post-pandemic.

•  Social listening data: We analyzed 30,000 Twitter posts from March 2021 to March 2022, and leveraged customized research from Meltwater to gain further insights about online shopping while drunk, online shopping regrets, and online grocery delivery.

Read on for the 13 most compelling online shopping trends we’re seeing today.

1. Social influence: People buy what they see on social media.

The power of social media as a purchasing tool can’t be overstated.

According to our research, 74% of respondents say they’ve bought something they’ve seen on social media platforms like TikTok, Instagram, and Facebook. In 2017, only 40% of adults said they’d bought something after seeing it on social media.

What’s more, men are more likely to make these purchases than women: 78% of men say they’ve purchased something they’d seen on social media, compared to 70% of women who say the same.

2. Buy now, think later: Most online purchases are impulse buys.

If you’ve bought something on the spot while browsing online, you’re not alone: 56% of people say that more than half of their online purchases are impulse buys.

Comparing age groups, millennials are the most impulsive online shoppers, with 63% of respondents saying their online purchases are not planned.

Gen Z may be the most prudent online shoppers. Of all the age groups, they had the highest percentage of respondents who said none of their online purchases are impulse buys (12%). Boomers, at 10%, were a close second.

3. At some point, most people shop online while not totally sober.

One interesting finding from our research: A majority (53%) of respondents admit they haven’t been sober when making an online purchase.

Men are more likely to shop while intoxicated than women, with 60% saying they’d shopped online while not sober, compared to 40% of women who said the same. When looking at age groups, millennials (60%) are most likely to shop while not sober, and Boomers (37%) are the least likely to do so.

Online shopping while drunk isn’t necessarily a private activity. Some shoppers have shared their intoxicated online shopping adventures on social media.

According to Meltwater data, there was a 496% increase in the number of Tweets about drunk online shopping from 2020 to 2022.

While our survey found men to be more likely to engage in drunk online shopping, women were more likely to post about their intoxicated online shopping experiences on social media. According to our social listening data, millennial moms and wives made up the largest cohort of Twitter users who posted about drunk online shopping.

Clothing was the most discussed shopping category in the social posts we analyzed. About 10% of people who mentioned drinking and online shopping discussed buying items for their children.

Amazon was by far the most mentioned shopping source (83%) in posts about drunk online shopping in which the name of the store was included.

People are most likely to talk about drunk online shopping on Saturday between 9am and 10am, and Sunday from 6am to 7am (possibly recounting the night before). Interestingly, Thursday morning between 10 and 11 is also a popular time to discuss drunk online shopping.

4. Beer is the top drink of choice for intoxicated online shopping experiences.

Beer is the top drink for drunk online shoppers, with 54% of respondents saying they typically consume it before an intoxicated shopping experience. Wine (52%) was a close second, followed by cocktails (47%), and seltzers (42%).

The drinks of choice vary by age group. The most popular drinks for each generation are:

•  Boomers: Cocktails (30%)

•  Gen X: Beer (30%)

•  Millennials: Beer (28%)

•  Gen Z: Wine (31%)

5. Shoppers may not remember purchasing something online until it arrives.

Have you ever forgotten ordering an item until it arrived on your doorstep? A full 65% of our survey respondents say they have.

Of all the age groups, millennials were the most likely to order something and forget about it, with seven out of 10 respondents saying that’s happened to them. Boomers were the least likely to forget making an online purchase.

6. Just because stores have reopened doesn’t mean people are coming back.

The pandemic caused a massive ripple in worldwide markets due to government shutdowns. Apparently, the reopening of stores hasn’t done much to convince consumers to return.

The percentage of Americans who have recently visited a mall is less than half of what it was pre-Covid. Before the pandemic, about 56% of Americans said they visited a mall within the last 30 days. Now, just 26% of respondents say they’ve shopped at a mall in the last month.

Even with stores reopening, 39% of consumers say they will continue shopping online the same amount, and 37% say they plan to shop online even more. In other words, a majority of people will maintain or increase the online shopping habit they picked up during the pandemic.

7. Men spend more online shopping now than they did pre-pandemic, compared to women.

The pandemic has changed all kinds of consumer shopping habits, including the amount of money people spend online now versus what they spent before the pandemic. When comparing men and women, we found that:

•  25% of men are spending over $500 more on online shopping now than they did pre-pandemic

•  17% of women are spending over $500 more on online shopping now than they did pre-pandemic

•  37% of women are spending $100 or less on online shopping now compared to pre-pandemic days

•  29% of men are spending $100 or less on online shopping now compared to pre-pandemic days

8. People tend to order from Amazon at least three times per month.

People are ordering more from Amazon than ever before. The company’s profits increased 220% in 2021 from the previous year when the pandemic was in full effect.

A majority of respondents (65%) place three or more orders on Amazon each month. And 16% place more than five Amazon orders every month.

9. Shoppers are split on in-store vs. online clothes shopping.

Despite the convenience of online shopping, there was a near-even split between the percentage of people who prefer to shop for clothes online (52%) versus in-person (48%).

Boomers had the largest percentage of respondents (60%) who prefer to shop for clothes online. Gen Z had the largest percentage of respondents who prefer to shop for clothes in-person (55%).

While many online retailers have made it easier to return clothes, the inconvenience of having to ship items back may outweigh the inconvenience of having to drive to a store to try things on.

10. Items that look different online vs. in-person are a common source of purchase regret.

Buyer’s remorse is not new. However, with the rise of online shopping, we wanted to find out the most common reason people regret their online purchases specifically.

Apparently, it’s because items can look a lot better on-screen than in-person. The biggest reason our respondents regretted an online purchase was because they felt it looked different in real life compared to how it was presented online (26%). The second-most popular reason was overspending on an online purchase (22%).

Here’s a breakdown of the reasons people regret online purchases:

•  It looked better on the screen than in real life – 26%

•  I spent too much money on it – 22%

•  I do not use or wear it – 14%

•  It wasn’t what I wanted but I was too lazy to return it – 14%

•  I meant to return it but missed the window for returns – 13%

•  I don’t know what I was thinking when I bought it – 10%

When we analyzed social posts that discussed online shopping regrets, we found that the posters tended to be Gen Z women who are mothers, have dogs, and/or are writers or artists.

According to the social listening data, people regret buying clothing the most, and they regret buying beauty and health products the least.

11. Buy Now Pay Later: Convenient or confusing?

When looking at social posts about shopping regrets from March 2021 to March 2022, we noticed a spike in negative sentiment in February 2022. The spike was caused by a viral Bloomberg article that discusses the dangers and confusion around buy-now-pay-later (BNPL) options while shopping online.

The article talked about how BNPL models can be misleading about how much they charge consumers, especially compared to credit cards. It discussed how using a buy-now-pay-later option can end up being more expensive than using a credit card.

Buy-now-pay-later is a relatively new concept for online shoppers, but it’s already gained popularity: More than one in 10 of our survey respondents (14%) say they prefer to use a BNPL service to finance their online purchases. If you choose to use buy now pay later, read all the terms carefully and make sure you fully understand how much you’re being charged. You may find that paying with a credit card is a more cost-effective option.

12. Haul videos are an influential source of shopping inspiration.

Our data shows that haul videos are an influential source of shopping inspiration. In fact, one-third of our respondents said the main reason they watch haul videos is to discover new products they might want to buy.

More than half (53%) of our respondents say they’ve bought something they saw on a haul video. When comparing different age groups, younger people appear to be the most influenced by haul videos, with 70% of Gen Zers saying they’ve bought something after watching one. Looking at men versus women, men are more likely to have purchased something they saw on a haul video (60%) than women (46%).

13. Online grocery delivery is here to stay.

While in-store grocery shopping continued during the pandemic, reluctance to be out in public opened the door for more options, such as grocery delivery apps and DIY meal kits.

In fact, 38% of respondents now use grocery delivery services but didn’t before the pandemic. And 48% of people have food or groceries delivered to their house at least once a week. Before the pandemic, only 3% of grocery spending occurred online!

We also found that 22% of people use meal kits such as Blue Apron and Hello Fresh currently, but did not use them before the pandemic.

And on days when people don’t feel like cooking, online food delivery comes to the rescue. In fact, 28% of respondents said they now order meals from services like UberEats and DoorDash but never used to pre-pandemic.

When we asked respondents what they get when ordering food or groceries online, the most common answers were:

•  Sweet snacks (such as candy, cookies, ice cream): 45%

•  Salty snacks (such as chips, jerky, nuts): 43%

•  Vegetables and fruit: 42%

The Takeaway

Mass shutdowns and the reluctance to go out in public made consumers rely more on online shopping during the pandemic. And now that stores have reopened, people plan to continue shopping online at the same rate, or even more.

With so many consumers now embracing the convenience of online grocery and food delivery, leaving the house for necessities may become a thing of the past. One reason people might consider venturing out, however, is to buy new clothing. Nearly half of shoppers still want to try things on before they buy them.

A majority of people say most of their online purchases are impulse buys—and they’ve even forgotten they ordered something until it arrived at their door. Perhaps that has some correlation with the fact that more than half of our survey respondents say they haven’t been sober when shopping online.

There has also an increase in the use of the buy-now-pay-later model, which became popular during the pandemic. In fact, over 10% of our respondents say it’s their preferred payment method when shopping online. But buy-now-pay-later models can be misleading, and may ultimately end up costing buyers more than they expected.

Credit cards offer a similar type of financing, but are typically much clearer in their repayment terms and interest rates. They also often offer rewards.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

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¹See Rewards Details at SoFi.com/card/rewards.

New and existing Checking and Savings members who have not previously enrolled in direct deposit with SoFi are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 25-day period. Cash bonus will be based on the total amount of direct deposit. The Program will be available through 12/31/23. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC.

SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet
The SoFi Credit Card 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.

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.

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

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Lately, it’s been hard to avoid the news that inflation is rising and fast. It’s been equally hard to not feel the sting when paying for groceries or other basics. Those are ka-ching moments, but not in a good way.

One option for dealing with high prices, whether now or during a period of less intense inflation, is to buy food and household items in bulk. It can help reduce your monthly spending.

How much money you can potentially save will vary depending on the item, but some experts estimate that bulk buying can cut your bills by 20%, and sometimes significantly more.

Keep in mind, though, that buying in bulk doesn’t always save. Indeed, buying multiples or large quantities of some items can be a losing proposition if much of it ends up going unused or entices you to consume more than you normally would.

To help you avoid the potential downsides, here are some smart shopping strategies for buying in bulk, including:

•   The pros and cons of buying in bulk.

•   What to stock up on?

•   What you may want to skip?

•   What tips to try when buying in bulk?

•   Where to buy in bulk.

Why Buy in Bulk?

As mentioned above, inflation can be intense; it soared to 9.1% in June of 2022. Food prices are heading upwards, too. The average cost of groceries to feed a family of four in the United States runs between $682 to $1,361 a month.

Families, as well as individuals, may be able to reduce spending on food and other household goods and improve their financial health by buying in bulk, since the cost per unit (or ounce) is generally lower. Here are some of the key benefits of shopping this way:

•   Lower costs, as noted above. A benefit of buying in bulk is saving cash.

•   Convenience, since your home will be well-stocked. You’ll save time since you won’t have to run out and purchase items as often.

•   Lower gas costs. Fewer trips to the store, in turn, saves on gas.

•   Eco-friendliness. Driving to the store less often reduces your carbon footprint. What’s more, buying one, say, 10-pound bag of rice is likely to involve less packaging than 10 one-pound containers.

•   An easier time managing emergencies. Another reason why stockpiling can be a smart buying habit is that if there’s a bad storm or heatwave, you’ll be well-supplied and won’t have to brave the elements.

Drawbacks of Buying in Bulk

Despite all the great reasons above to opt for jumbo sizes of toilet paper and family packs of drumsticks, buying in bulk isn’t always a smart money rule to follow. There are few downsides to consider. These include:

•   Having to pay upfront, rather than spacing out the purchases. For instance, a grocery run with a mega-pack of burgers and loads of juice boxes will cost more than a small-scale supermarket visit.

•   When you have a large quantity of something on hand, you might be tempted to overuse it or overeat it.

•   Buying in bulk requires storage space (plus a large enough car to transport purchases).

•   Buying in bulk means less variety in the products you use.

•   Items bought in bulk can sit around past their expiration or “best by” dates. It can be hard to use up a large container of, say, fresh fruit before they go bad.

•   Bulk buying for many products requires a warehouse club membership or other additional cost.

Things To Buy in Bulk

Bulk buying can be a great way to save on household items and foods that you use or consume daily or have a long shelf life. These include:

•   Household supplies (e.g., toilet paper, paper towels, napkins, tissues, trash bags)

•   Cleaning supplies

•   Laundry detergent

•   Pet food (though keep in mind that some pet food is perishable)

•   Pasta

•   Rice

•   Dry beans

•   Toiletries (e.g., shampoo, conditioner, toothpaste, moisturizer, soap)

•   Canned goods

•   Peanut butter

•   Cereal

•   Flour

•   Vitamins

•   Diapers/wipes

•   Beverages that are safe to store at room temperature

•   Batteries

•   School and office supplies

•   Lightbulbs

Recommended: 15 Creative Ways to Save Money

What Not to Buy in Bulk

While there’s often lots of temptation when buying in bulk, hit the pause button in some cases, or you may be wasting your hard-earned money. In general, buying perishables in bulk may not make good economic sense. For instance:

•   Fruits and vegetables. While the jumbo packages of strawberries or avocados may be cheaper per unit than your grocery store, that’s only a good deal if you actually eat them all.

•   Buying meat in bulk may only make sense if you have a large freezer where you can store it (keeping in mind that some meats should not be frozen for more than six months).

•   Avoid stocking snack foods and treats in bulk if you think that you or other members of the household might overindulge.

Recommended: How to Protect Yourself from Inflation

Tips for Buying in Bulk

Buying in bulk can be an easy way to save money. To get the most out of it, you may want to keep some of these shopping strategies in mind.

Shop With a List

Write a shopping list before going to buy in bulk. Otherwise, you might be tempted to buy more than you need or can afford. For instance, products you sample in store or see at the end of the aisle, as you make your way to the registers, can cause you to blow your weekly budget.

Keep a Calculator Handy

When buying in bulk, it’s wise to keep in mind that it’s not the price of the item, but rather the price per unit (or ounce) that matters. If the unit price isn’t listed, using the calculator on your phone (or bringing a separate one) when bulk shopping can help ensure you are getting a good deal.

Recommended: The 50/30/20 Budget Rule, Demystified

Consider Quality

Typically, buying generic and store-brand versions of products is going to be cheaper than buying brand-name items. But before you go totally in that direction, remember that quality can count too. If a cheaper paper towel isn’t very absorbent, you may end up using more each time you use it, and erasing that savings. Buying a 12-pack of store-brand peanut butter, only to discover you don’t care for the taste at all is another example of why this is an important consideration.

Keep an Eye on Expiration Dates

Before purchasing something in bulk, it’s a good idea to check the expiration date and then calculate how long it will likely take you to consume the product.

If you won’t go through it before the expiration date arrives, any savings could be wiped out when you toss it in the garbage.

Protect Bulk Items From Pests

Because moths, roaches, and other pests may go after food, it’s a good idea to seal food products well when they are not being used.

Keeping flour, pasta, and other bulk food items in airtight containers can help with pest control.

Go in on Bulk Purchase With Friends

If you want to get the savings from buying in bulk but don’t have the storage or a large enough household for it to make sense, why not buddy up? You might want to ask some friends or neighbors if they want to split the product and the costs. Maybe you buy bulk meat, bread, snacks, and cereal, and a friend takes care of the produce and beverages. Then you each swap half to the other, and settle up costs as needed. That way, everyone can save money.

Where to Buy in Bulk

You can generally buy in bulk at any grocery store or mass market retailer, simply by buying larger than usual sizes. That said, there are certain stores that are specifically designed for it.

Popular bulk stores include Costco, BJ’s Wholesale Club, Sam’s Club, Smart & Final, and Big Lots.

Costco, BJ’s, and Sam’s Club all require a membership fee, which can range from $45 to $60 per year.

Along with being able to buy food and household products in bulk, these stores may also have perks, like convenient on-premises tire centers and pharmacies, plus discounts on entertainment and travel expenses, which can help defray that annual membership charge.

In addition to these locations, there are also a growing number of environmentally-friendly bulk food stores that may ask you to bring your own containers or sell reusable ones. Stocked with items like grains, nuts, dried fruits, coffee, tea, soaps, and more, they may describe themselves as “zero-waste.” You can find a directory in your area on Litterless .

The Takeaway

Buying in bulk can be a great way to save cash if the product bought is something you use regularly, won’t go bad before you can use it all, is cheaper per unit at a bulk store, and is not lower in quality than what you typically buy. While not appropriate for every item on your shopping list, it can help you make a dent in the costs of some basics and stay on budget.

Now, what to do with all that money you’re going to save by buying in bulk?

If you put it into an high-yield bank account, like SoFi Checking and Savings, you can start earning a competitive interest rate on that money right away, plus you won’t pay any account fees. Additionally, withdrawing cash is fee-free at 55,000+ Allpoint network ATMs worldwide.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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