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Checking accounts and savings accounts are typically considered assets, since they have a positive financial value. They represent accessible money that’s part of your personal wealth and can be used as you like. Other types of bank accounts, including certificates of deposit (CDs) or money market accounts, are also assets.

Knowing what kind of assets you have, including checking and savings accounts, can make it easier to calculate your net worth. Learn more about how your bank accounts and assets work.

What Is an Asset?

An asset is something you own that has intrinsic value. Examples of assets can include bank accounts, cash, a home or other real estate, vehicles, retirement accounts, and brokerage accounts. In addition, assets can include art, antiques, jewelry, and other objects of value.

Some assets can increase in value over time.

•   For instance, real estate can appreciate or grow in value over time.

•   Similarly, as you earn interest on your savings account, your wealth can increase. Or if you get a bonus at work and deposit it, that too can build your net worth.

Assets may also diminish or lose value over time.

•   For example, if you had $20,000 in your emergency fund but have to withdraw $10,000 for major dental work, that asset has decreased. You still have $10,000 in the account, but that’s less than you previously had in the plus column, financially speaking.

•   Stocks can also lose value due to shifting economic and other forces. So, a stock you paid $100 per share for yesterday might be worth $75 per share tomorrow.

However, as long as your savings account has a positive balance and those stocks have some value, they’re still considered to be an asset.

Assets vs Liabilities

Assets are one part of the equation when you’re calculating net worth. Your net worth is a measure of what you own versus what you owe. To find your net worth, you’d subtract your liabilities or debts from your assets.

•   When your net worth is positive, that means you have more assets than debts. When net worth is zero, it means your assets and liabilities are equal to one another. Effectively, they cancel each other out.

•   Can you have a negative net worth? Certainly, if your debts exceed your assets. For instance, if your only assets are $5,000 in a checking account and $10,000 in a savings account, but you owe $40,000 in student loan debt, your net worth would be -$25,000 at this moment in your life.

Keep in mind that it takes time to build wealth. Assets tend to accumulate over time (say, as savings in your retirement account grow), so don’t be discouraged if you’re early in your career and in negative net worth territory.

How Are Assets Categorized?

There are different ways to group assets, depending on the context in which you’re discussing them. You can think of assets in terms of liquidity.

•   Liquid assets are assets that can easily be converted to cash. For instance, if you have $10,000 in your savings account, you could quickly access those funds in a variety of ways (electronic transfer, for instance). If you own 100 shares of stock, you could sell them for cash.

•   Illiquid assets, on the other hand, are assets that can’t easily be sold for cash. Real estate is an example of an illiquid asset, since it can take time to find a buyer and complete the sale. Your grandmother’s diamond engagement ring, which might be sitting in a safe deposit box, is another example. While it has value, it would likely take some time to have it appraised and find the right buyer.

In business and accounting, assets can also be categorized as tangible or intangible.

•   Tangible assets are things that you can physically see and touch. If you own a restaurant, for example, then kitchen equipment is a tangible asset. (If someone were to ask you if you had tangible assets, they might be referring to, say, artwork or jewelry.)

•   Intangible assets include things such as trademarks, patents, and copyrights. You might also think of intangible assets as intellectual property, or IP.

In addition, if you’re talking about investments, you might group assets into such categories as stocks, bonds, commodities, and other categories.

Recommended: Explaining the Different Types of Asset Classes

Is a Savings Account an Asset?

A savings account is an asset since it has financial value and is something you own, not something you owe money to (which would be what’s known as a liability). That’s true, regardless of whether you have $5 in your savings account or $500,000.

Savings accounts are secure places to keep assets that you can access fairly easily. If you’re saving in a bank that’s insured by the Federal Deposit Insurance Corporation (FDIC) — and most banks are — then your deposits are insured up to $250,000 per depositor, per ownership category, per insured institution. Credit unions typically offer similar coverage via the National Credit Union Administration (NCUA).

Depending on where you choose to keep your savings, you could also earn a competitive interest rate (expressed as annual percentage yield, or APY, which reflects the power of compounding interest) on deposits.

Different savings account types include:

•   Basic or standard savings accounts

•   High-yield savings accounts, which can offer as much as several times the interest rate that standard savings accounts deliver

•   Money market accounts, which combine the features of checking and savings accounts

A CD can also be considered a savings account, but it works somewhat differently. Rather than allowing you to dip into savings whenever you like, CDs are term deposits, meaning they have a set maturity date at which you can either withdraw or roll over the funds. Taking money out before the maturity date typically triggers an early withdrawal penalty.

Recommended: How to Switch Banks

Is a Checking Account an Asset?

A checking account is an asset, just like a savings account. The main difference between a checking account and a savings account is how they’re meant to be used.

•   Checking accounts are designed for spending. You can use a checking account to pay bills online, transfer funds to friends and family, or make purchases using a linked debit card. Unlike savings accounts, checking accounts typically don’t earn interest, though some may earn a small amount. But it’s for this reason that you probably don’t want too much cash just sitting in a checking account. Moving some of the funds to a savings account could help your money grow into an even bigger asset.

•   Savings accounts are designed to hold money that you don’t plan to spend right away. You might use a savings account to stockpile your emergency fund or set aside money for an important short-term goal, such as buying a new car or paying for a wedding. Because the money typically sits in a savings account for a while, the depositor is rewarded with interest.

You can keep your checking account and savings account at the same bank for convenience. However, if you’re using a brick-and-mortar bank for checking, you might get more bang for your buck by keeping your savings account at an online bank. Online banks typically pay higher rates to savers than traditional banks.

Checking and Savings Accounts on a Balance Sheet

Here’s an overview of how your banking assets can be viewed in a business context. Businesses use a balance sheet to see at a glance how much money is moving in and out. Checking and savings accounts can be included on a balance sheet and are usually listed under “current asset, cash.”

A balance sheet is intended to capture how a business’s assets compare to its liabilities over a specific time period. Businesses can use balance sheets to get an idea of how financially healthy they are. When applying for loans, lenders may ask to see an up-to-date balance sheet, along with a profit and loss statement or cash flow statement.

The Takeaway

Understanding that checking and savings accounts are assets can be an important step in building your financial literacy. What’s more, recognizing that these bank accounts add to your net worth can help you make smarter decisions with your money. One of those decisions centers on where to keep your bank accounts.

If you’re interested in helping the money in your bank accounts grow, then SoFi could be a great fit.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

What kind of asset is a savings account?

A savings account is a liquid asset, since you can easily tap into the cash in your account if needed. Savings accounts offer a convenient way to set aside money for emergencies or other goals, while earning some interest in the process. These assets can contribute to your net worth calculations, along with your other assets.

Is your savings account a liability?

A savings account is an asset (meaning it contributes to your net worth and personal wealth), not a liability, which is an obligation to pay another party. The only way that a savings account could become a liability is if you were to overdraw your account. In that case, you would need to make a deposit to bring your account balance to or above zero.

Is a savings account an asset or equity?

Savings accounts are assets since you own the money in them outright, and this applies to checking accounts, too. Equity is a term you’ll hear when talking about investing. For example, when you buy a share of stock, you’re getting equity, or an ownership stake, in the company.

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photocredit: iStock/andresr

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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


¹SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

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Gap years are less popular in the U.S. than in many other countries, but still, data shows that 3% of students take a gap year between high school and college. The idea of taking a break before, during, or after college is likely one that many students can relate to.

Obtaining an education involves a lot of hard work. From long days in the classroom to late-night study sessions, the rigors of academia can take their toll. And college can carry a hefty price tag. It’s understandable that someone might want to take a gap year before they start college or after they finish college to regroup before they begin working.

There are a lot of benefits associated with taking a gap year, but getting ready for a year off requires quite a lot of financial planning to make this choice sustainable.

What Is a Gap Year?

Before diving into how much to save in your bank account for a gap year, it’s helpful to understand exactly what a gap year is. Essentially, a gap year involves taking a year off from school or work to travel, do an internship, take on a temporary job, volunteer, develop a skill, or do a combination of those activities. Some students design their own program, while others sign up with an organization that, say, leads them on travel or volunteer projects.

More often than not, people take a gap year between when they graduate high school and start college, but it’s possible to take one during college or after graduation, before starting a job or going to graduate school.

A gap year can give someone the time they need to discover what they want their next move to be, to rest, to learn about an area of interest, or to simply get out of their comfort zone.

What Are the Benefits of Taking a Gap Year?

Some parents may look down on the idea of a gap year, fearing that their child won’t get “back on track” with their studies or postgrad life. But there are many benefits associated with taking a gap year.

•   Time to rest and recharge. After many years of academic pressure, some students need a year off to recover from burnout before they start their next big endeavor.

•   Room for discovery. Students who aren’t sure what path they want to take next may find that taking a gap year gives them the opportunity to discover or deepen their interests and formulate next steps.

•   Exploring passions. If a person knows they’re interested in a certain industry or job role, they can spend some time interning, pursuing a fellowship, or researching that career path before they pursue a degree toward that job.

•   Developing independence. A gap year can provide the opportunities young adults need to become more self-sufficient. That could mean traveling solo or taking on a job in a new town, not to mention getting better with money.

Is a Gap Year Beneficial Financially?

If you’re contemplating taking a gap year, it’s natural to wonder how much to save to make it a reality. You may also be curious if a gap year could be a boost or a bust for your finances. In truth, a gap year can be beneficial financially, and in other cases, it can be financially damaging — it just depends on how the person chooses to spend that year. For instance, if you’re working at a local business while living at home, you might open a high-yield savings account and really plump it up with your earnings. If, on the other hand, you go on a gap-year guided tour of another continent, that could cost $10,000, $20,000, or more.

There’s some concern that gap years can hurt someone’s overall lifetime earnings. By pushing off entering the working world with a college degree in hand by a year, they can lose a year’s earnings as well as a year’s progress toward a higher-paying job.

That being said, someone may spend their gap year interning, working as a fellow, or finding other ways to earn income or boost their resume. They may find their efforts propel them forward financially or at least help them break even. On the other hand, if a person spends the year traveling and relaxing, their finances might take a major hit if they don’t plan and budget appropriately.

Typical Expenses to Prepare for During a Gap Year

Parents may not be able to (or eager to) fund a child’s gap year, so a student can benefit from preparing to pay some or all of their expenses. Saving in advance or working part-time during the gap year can help make it a reality. (Planning for a gap year can actually be a great way to get your finances in order and learn how to budget.)

Here are some of the expenses to consider:

•   Rent and utilities or other housing (say, youth hostels if you’re traveling)

•   Transportation

•   Travel costs

•   Food

•   Entertainment (movies, concerts)

•   Clothing

•   Personal-care products

•   Health insurance

•   Medical costs

•   Car insurance

•   Cell phone/data plan, internet access

•   Student loan payments, if applicable

•   Credit card debt payments

•   Gym membership/fitness costs

Financial Tips to Save for a Gap Year

The very act of planning and saving for a gap year can be a great exercise in money management for college students. It’ll definitely give you a new perspective on saving and spending.

Budgeting While Planning a Gap Year

Budgeting for a gap year takes quite a bit of forethought and planning regarding your personal finances. It’s a good idea to plan for a gap year a full 365 days in advance to make it easier to build up a savings fund. It can be helpful to put your cash into either a savings account, a money market account, or a certificate of deposit (CD) to gain interest and help build your funds.

You might want to determine how much you need to save over the next year, divide that amount by 12, and then add that amount into your budget so you can set the money aside each month. This can be a great time to familiarize yourself with different budgeting techniques (such as the envelope system or the 50/30/20 budget rule) and see which one suits you best.

Getting a Job or Internship

Getting a part-time job or a paid internship while in school can make it easier to save for a gap year. Your school may have an online board where you can scan for opportunities. You might also consider a side hustle, whether that means selling photographs you took while hiking or doing a weekend shift at a local coffee shop.

Cutting Unnecessary Expenses

As mentioned, it’s a good idea to budget for a gap year. Now it’s time to up the ante. You can take a cold, hard look at your budget to see where you can cut your spending (hello, subscription services and those pricey daily smoothies). The money you save can be put toward your gap year fund.

Selling Items You No Longer Use

From clothes to workout equipment to electronics, most people have things they simply no longer use. If you’re trying to fund a gap year, you can cut the clutter and make some extra cash by selling this stuff. You might offer items up online (eBay and the like) or organize a yard or stoop sale.

Reduce Credit Card Spending

Credit card debt has a way of snowballing and getting very expensive. With credit card interest rates at 21.00% as of February 2026, owing money on your plastic can be an expensive thing. Aim to only use your credit card for purchases you can afford to pay off right away. That way, you can use any cash-back and travel-point bonuses to help fund your gap year without carrying a balance. It’s wise to focus on managing your money in a way that doesn’t require relying on a credit card.

Consolidate Credit Card Debt

The above strategy may not be possible if you’ve already racked up a good deal of credit card debt and are feeling as if you’re in financial trouble. (Yes, this can happen quickly, even if you’re a student who’s only had a card for a short time.) You may find that consolidating multiple sources of credit card debt can help you get a lower interest rate (which could save money) and streamline your debt, making it easier to pay off.

For instance, you might find a balance-transfer card that offers breathing room thanks to an introductory, interest-free period. Or perhaps you would do better with a credit card consolidation loan that lets you pay off the debt and then pay back the funds at a lower interest rate. If you need guidance, consider talking with a debt counselor at the nonprofit National Foundation for Credit Counseling (NFCC).

Cook at Home

Eating out will almost always cost more than eating at home. To save extra cash, get comfortable in the kitchen and build your meal-prep repertoire. In addition, you might start making your own lunch. Those popular salad bars can be a budget-breaker if you go often.

Recycle, Reuse, Rewear

One way to save big is to be planet-friendly. Did you know the average American spends about $100 per year on bottled water? Buy yourself an insulated reusable water bottle in a color or design you love and use it.

Also consider that individuals typically spend almost $2,000 on clothes per year. Commit to wearing what you own or perhaps shopping second-hand (there are plenty of cool things to be found at thrift and vintage stores) to whittle that expense way down.

Think Carefully About Big Purchases

If you’re planning for a gap year, you may want to hold off on making big purchases, wherever possible. Upgrading to the latest cell phone or buying a premium mattress as you enter adult life may seem enticing right now. However, if you delay gratification, you may be closer to making your gap year dreams a reality. Better money management can sometimes mean knowing how to say “no” to things you think you have to have.

The Takeaway

A gap year can be a great way to intern, explore, volunteer, destress, and more. But it typically isn’t free. If you want to enjoy this kind of experience, you likely need to save more in your bank account and spend less. Yes, this can help your gap year become a reality, but it has another bonus: It teaches you money management skills that can last a lifetime.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

How much money is needed for a gap year?

How much money you need for a gap year depends on your goals. For instance, if you want to travel the world during that year, you’ll require a lot more money than if you plan to live at home and intern in an industry you’re interested in.

Can taking a gap year help you save money?

Usually, a gap year doesn’t help students save money, other than the fact that no tuition will be due that year. The exception would be if you live with your parents during your gap year and work during that time.

How can a gap year hurt?

A gap year can potentially hurt someone’s lifetime earning potential. By delaying entering the working world for a year, the individual misses out on a year’s salary and career growth that can lead to a higher salary down the road. However, a gap year could also be a positive: It could involve an internship or connections that eventually lead to a dream job.

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Photo credit: iStock/ijeab

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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

We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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.

3.10% APY
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Between inflation and rising prices, being frugal with your spending is a good idea. But you can go a step further: By learning some valuable life skills and DIY-ing more activities, you can save money.

Mastering skills such as cooking, cleaning, riding a bike, and doing your own taxes means you don’t have to pay professionals for expensive services. While it can be time-consuming, harnessing new skills can make you more independent, help you keep more of your money, and maybe even inspire a few new hobbies.

This article looks at 20 basic money-saving skills that almost everyone can learn. They can be fun to dig into, build confidence, and free up funds to put toward your financial goals.

How Life Skills Are Essential to Your Financial Freedom

Life is built on financial transactions. We pay for food at restaurants, spend money on haircuts, reach deep into our wallets at the gas station, and shell out for repairs when something in our home breaks.

While we can’t possibly learn enough life skills to replace all these transactions, it’s possible to take up a few new skills, such as cooking, painting, and sewing, so that you can hoard a little more money each month.

That little bit of money adds up, and honing several life skills can be an important step toward your financial freedom. The money you save can go into your emergency fund, paying down student loan debt faster, or gathering the down payment on a house.

20 Life Skills That Can Help You Save Money

So which life skills are worth learning? Here are 20 of the top money-saving skills that, when mastered, can help you avoid spending your cash on basic goods and services. They’ll help put you on the path to becoming financially disciplined.

1. Cooking

Eating out now and then is perfectly fine. It can be a well-deserved reward after a long week at the office or a celebratory dinner for a major milestone. But eating out for lunch or dinner every day can be unhealthy (those portion sizes!) and can get quite expensive. Learning the basics of cooking can keep you out of the pricey restaurants and in your own kitchen instead.

Cooking can require an investment in cookware and staple ingredients, but overall, it’s bound to be cheaper than getting food to go or at an eatery. Just think about the price difference between avocado toast whipped up in your kitchen and what you’d pay at a cute cafe. Search for recipes online, and follow tips to save money on food before you head out to the grocery store.

Recommended: How Much Should I Spend on Groceries a Month?

2. Painting

Ready to pick up a paintbrush and unlock another savings skill? According to Angi (formerly known as Angie’s List), homeowners spend more than $3,100 on average to paint the exterior of their home, and renters and homeowners alike might pay painters even more to paint the interior. The current rate for painting the interior typically runs from $2-$6 per square foot.

While painting the exterior of your home can be a little more challenging, painting the interior isn’t complicated at all. If you’re willing to take the time to learn, you can save yourself thousands of dollars every time you want to change up the inside of your living space. You could use that extra money to open a savings account or add to the one you already have.

3. Gardening

Yes, professional landscapers can weave a certain kind of magic. But doing your own gardening can be a tremendously satisfying and creative pursuit, not to mention that it can save you a lot of money. Spending time learning the basics about what zone you live in and which plants will thrive, plus wandering around nurseries and garden centers, can provide plenty of inspiration.

You can grow fresh produce for the small price of starter seeds and the occasional watering, which means less money spent at the grocery store.

What’s more, when selling your house, landscaping is an important part of curb appeal. A well-cared-for garden might attract potential buyers and help your home sell more quickly.

4. Plumbing

Plumbing emergencies, such as a flooded basement or a broken water heater, are probably still better left to a licensed contractor, but teaching yourself to be handy with a wrench and a screwdriver might save you on smaller problems, like a leaky faucet or a running toilet.

This money-saving skill can serve you well over the years. Calling a plumber for every small problem that your house encounters over the years can add up. In fact, most plumbers charge $45-$200 an hour and may charge a fee of $100-$250 just for a service call.

Beyond plumbing, you can teach yourself basic electrical and carpentry skills so that you can tackle some straightforward home improvement projects for beginners.

5. Budgeting

Knowing how to make a budget and sticking to it is a crucial life skill. When you are able to analyze your monthly expenses against your monthly income in an easy-to-read format, you can quickly discover which spending habits you need to scale back. Many people like the 50/30/20 rule, which spells out that you should spend 50% of your after-tax income on needs, put 30% toward wants, and tuck 20% into your savings.

And you don’t even need to pay for fancy budgeting software. Many online banking platforms make it easy to access and review your transactions, and you can use a simple spreadsheet to design a budget that works for you.

6. Haggling

Not every price is negotiable, but when it is, it’s important to know how to haggle with confidence. While you might immediately think of haggling at a used car lot (and that’s a great place to do it), you can also haggle over things such as your monthly cell phone bill, your rent, and even credit card interest rates. Politely asking, “Is there any flexibility on the price?” may yield a surprising positive response.

Even if you’re only successful in lowering one expense, that’s money in your wallet that you wouldn’t otherwise have had.

Recommended: How to Negotiate Medical Bills

7. Sewing

You might not ever create your own clothes from scratch (though you certainly can), but knowing how to sew can come in handy when you get a rip in your favorite shirt or a parka’s zipper starts to detach. Instead of throwing out clothes with holes or lost buttons, sew them back together. For instance, if you mend the torn back pocket on your favorite jeans, you can avoid dropping $50 or more on a new pair.

8. Cutting Your Family’s Hair

Haircuts at chain salons are certainly not cheap, often ranging from $15-$75, and boutique salons are even more expensive. Learning to cut your family’s hair (or your own, if you’re brave) can cut out one monthly expense. Check out the tutorials on YouTube and other video platforms, and see if you can hone your skills.

9. Investing

The average stock market return over the last 10 years has been more than 10%. And though you can certainly pay a traditional broker to manage your portfolio, it’s totally possible to do it yourself.

In fact, there are many platforms for investing to choose from, some of which enable automated investing. Plus, you can help build your financial know-how by reading blogs and books on investing, as well as listening to podcasts or taking an online class to sharpen your skills. Just remember that investing entails risk, so make sure to choose an investment vehicle you’re comfortable with.

10. Changing Your Car’s Oil

Done by a professional, the average oil change costs from $20-$100, but the cost of doing it yourself is about $40. Being able to change your car’s oil by yourself (typically twice a year, depending on how much you drive) can mean you save up to about $60 each time, depending on what a professional service would have cost. It’s a great life skill to learn, and you can stash the cash you save year after year.

11. Cutting Firewood

If you have ample trees in your yard — or a generous neighbor has just taken down a tree and doesn’t mind sharing the spoils — you can chop the wood yourself for an outdoor firepit or your fireplace. If your home has a fireplace, you can use that wood to heat a single room while leaving the heater setting lower in the rest of your home, cutting down on your utility bill.

12. Doing Your Own Taxes

If you have a complicated tax situation, an accountant might be a good investment, especially if they can help you maximize your credits and tax deductions even if you’re a student. However, if you have a straightforward income and financial situation, it might be beneficial to skip the accountant fees and file by yourself.

Check out the IRS Free File hub to find programs that will help you do it all by yourself.

13. Bartering

The time-honored tradition of bartering, or trading goods and services, can help you lower your expenses. Let’s say there’s a spinning class you love that’s beyond your budget. Could you offer to swap your digital savvy (say, filming videos and posting on social media for the studio) in exchange for no-cost sessions? Think creatively about the skills you have and how you might use them to get some freebies. It never hurts to ask about such arrangements, and it could help.

14. Roasting Your Own Coffee

Buying a latte at a coffee shop every morning may be convenient (and relaxing), but it also gets expensive. If you spend $5 (or more) every day on a cup of coffee, that’s more than $1,800 a year. Instead, learn how to save on coffee expenses. Brew coffee at home, and better yet, learn how to grind and roast your own coffee beans for maximum savings. You’ll find that whole beans are typically less pricey than preground ones at the supermarket.

15. Baking

Going to the bakery when you said you’d bring a dessert to your family’s holiday get-together may be convenient, but buying fresh cakes and cookies can get expensive. Baking can be a little more challenging than cooking, but it’s certainly a great way to save money. And it can be a wonderful, creative pursuit and a new pastime. Need inspiration? Just watch any of the addictive shows on TV, such as “The Great British Baking Show.”

16. Upcycling

Upcycling is a buzzword for reusing an item instead of buying something totally new. For example, you might use reclaimed wood or an old door to make a desk or table, turn a sweater with torn elbows into a vest, or use old towels as cleaning rags for a while before tossing them. Upcycling can help you save on common expenses, and it’s great for the environment because less goes into the trash.

17. Cleaning

Most people probably don’t like to clean, but it’s a big part of being an adult. Whether it’s scrubbing the bathroom, vacuuming the rug, or wiping down kitchen counters, these are chores that just need to be done.

It might be tempting to pay for a cleaning service, but doing so is expensive. Cleaning professionals typically charge $30-$65 per hour or more than $500 for an extra-large home.

Don’t give in to that temptation to farm it out. Grab a rag (or an upcycled towel), a bottle of cleaning solution, and a monthly house maintenance checklist. You’ve got this!

18. Riding a Bike

Gas is expensive (and you probably know its impact on the environment). While you probably can’t bike everywhere you need to go, each trip on a bike you make — to work, to school, or just to a friend’s house — means you won’t be spending money on gas or bus fares.

19. Hosting

Hanging out with friends at your favorite bar is nice, but a fun night out adds up quickly when you do it every weekend. Instead, host your next friend or family gathering at your own home. Stock some wine, cold beer, and snacks, and you’re good to go. You can be next level and make a pitcher of a signature cocktail, which is a fun way to build your mixology skills.

Or switch things over to a morning meet-up with a pot of coffee and some homemade muffins. You’re likely to save big.

20. Doing It Yourself

Our final life skill ties all the rest together: Do things yourself instead of paying someone else to do them. If you don’t know how to do something, research online or find someone who does and learn. Once you’ve mastered the skill, share your knowledge with others.

Whether mowing your lawn, washing windows, or doing yoga or Pilates at home, you can really open up room in your budget when you DIY.

The Takeaway

Honing these valuable money-saving skills is a great way to establish financial freedom, and having a quality bank account will elevate your efforts. That way, you can immediately stash all the money you’re saving into your account so you won’t be tempted to spend it.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

Is saving money a life skill?

Saving money is an important life skill. By learning to do various tasks yourself around the house and in your daily life, you can avoid paying for a lot of expensive goods and services. Also, being a smart consumer and comparison shopping will help you save money, which is especially important when making a big purchase, so look around for competitive prices, coupons, and other discounts.

How do I find the time to develop these life skills?

Most of these life skills can fit into your regular day. If you normally spend a couple of hours going out to dinner, you can instead spend that time finding a recipe and trying to cook it at home. You may also find that some of these tasks (cooking, gardening) become hobbies in which you happily invest time.

What is the most valuable life skill?

Learning to do things yourself, from cooking to filing taxes to changing your car’s oil, can be the most valuable life skill. This can give you confidence, know-how, and self-reliance, plus it requires you to be curious and willing to educate yourself, all of which are important traits.

---

Photo credit: iStock/blackCAT

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.

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

SOBNK-Q226-036

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If you enjoy driving and have a car, you may be able to use that everyday skill to make money. There are numerous ways to drive and make money, whether through ridesharing, delivering food, or being a tour guide.

Not only is this an easy way to bring in some cash, it can be a very flexible gig. You can set your own hours or get behind the wheel when your schedule allows.

Want to learn more about all the ways you can get paid for driving? Then read on, and get ready to start your engine. Here are 11 tips on how to make money with your car.

What to Consider Before Using Your Car to Make Money

Before you set out on your new road to earning extra income, it’s wise to make sure that driving to make money is right for you and that it will help you with saving for your goals.

Driving to make money with your car isn’t necessarily a low-cost side hustle, since you’ll be responsible for gas, vehicle maintenance, and repairs. But as a self-employed worker, you’ll be able to write off some expenses on your tax return.

Consider the following before embarking on ways to make money with a car.

Vehicle Wear, Tear, and Depreciation

Using your car to drive and make money can rack up a lot of miles. An uptick in use will put stress on your vehicle, leading to its overall car depreciation and potentially more trips to the mechanic.

Special Insurance Requirements for Gig Workers

You will need proper insurance to cover yourself and possibly a passenger. There are usually specific insurance requirements to be eligible for ridesharing and other driving gigs, so scrutinize your policy to see what car insurance covers for you in this situation. You may need to buy additional insurance, such as commercial insurance.

Self-Employment Taxes and Mileage Tracking

If you earn more than $400 while driving your car to make money, the IRS considers you an independent contractor. Along with a Form 1040, you’ll have to fill out a Schedule C form as you file taxes as a freelancer. You’ll also be subject to the self-employment tax.

Additionally, you will need to carefully track your mileage while driving to earn money. You can only deduct the miles you use while performing your job, and not commuting to and from home to your work location. The IRS has set the mileage rate for tax year 2026 at 72.5 cents per mile.

11 Ways to Earn Money by Driving

If you own a car and could use some extra cash, chances are you may have wondered, How can I make money with my car? The answer depends on where you live, the kind of car you own, other skills you may have, and your personal preferences.

Whether you own your car or lease it, however, the opportunities are out there for starting a small business. Here are 11 ways to make money with a car.

1. Driving for Rideshare Apps (Uber, Lyft)

Rideshare driving has become a popular way to earn money in recent years. You can drive as often as your schedule allows, and rideshare companies such as Uber and Lyft generally make the driver sign-up process as streamlined as possible.

If you have a good driving record, a flexible schedule, and newer four-door vehicle, working for a rideshare app can potentially be a good source of extra income, especially if you’re willing to give up your Friday and Saturday nights to earn prime-hour cash. Your specific earnings will depend on how often you drive, when, and for how long, as well as where you are located. Uber drivers can earn anywhere from $7.65 to $39.30 per hour, with the average coming in at $20.47, according to Indeed.

2. Delivering Restaurant Food (DoorDash, UberEats)

Another way you can start driving to make money: by delivering anything from a smoothie to Pad Thai. When you sign up with food delivery apps such as DoorDash and UberEats, you’ll get notifications to pick up food from participating restaurants and drive them to hungry patrons. For every delivery, you’ll get paid.

Drivers for Door Dash can earn around $17 and $24 per hour, according to some reports, but the national average hourly pay is $18.70, according to Indeed.

Recommended: The Best Self-Employed Jobs

3. Grocery Delivery Services (Instacart, Shipt)

If you want to earn money driving without delivering takeout food, consider delivering groceries instead. Apps such as Instacart and Shipt rely on independent drivers to shop and deliver groceries to people’s homes.

Grocery deliverers can make between $11.95 and $35.90 an hour, with a national average of $23.76 per hour. Be sure and check for any requirements. For example, to work for Instacart, you need to be age 18 or older, have a bank account, be eligible to work in the U.S., and be able to lift 40 pounds.

4. Delivering Packages and Retail Goods (Amazon Flex)

Food isn’t the only thing you can deliver to earn money while driving. There’s a whole world of goods out there that people want delivered. Amazon Flex allows independent drivers to deliver packages on their own schedules for an hourly wage. They do require you to have a mid-size, four-door sedan or a larger vehicle and you must be at least age 21.

5. Hauling and Moving Large Items (TaskRabbit, GoShare)

If you own a van, SUV, or truck and can do some heavy lifting, you could use your vehicle and your strength to make big bucks by helping move items.

Maybe a recent grad can finally afford to move out from their parents’ place, or someone is moving to a new, nearby neighborhood. People like these often need help moving oversized items such as furniture or multiple heavy boxes a short distance.

You can check out websites like Taskrabbit to see if someone needs moving assistance, or register with an online service such as GoShare that will connect you with clients.

Recommended: Emergency Fund Calculator

6. Shuttling Children and Trusted Carpooling

With the proper qualifications, you can drive to make money by transporting children. Many working parents need help getting their kids to and from school or to their after-school activities. You can search Care.com or other childcare employment sites for part-time gigs driving children where they need to be.

Companies such as HopSkipDrive work with school districts and independent drivers to solve child transportation issues. Most of these types of jobs require around five years of caregiving experience working directly with kids, in-person interviews, and background checks among other mandatory requirements.

7. Medical Transport and Senior Assistance Driving

Some seniors need help getting around town but prefer not to use rideshare services. Check with elder-care services in your community. They may need drivers to help get their clients to a doctor’s appointment, a store, or an activity.

You will likely need similar vetting to that mentioned for chauffeuring children.

8. Hosting Local Driving Tours

If you love talking to other people and have insider knowledge of your area, being a tour guide could be a fun way to make money while driving. You could register with online companies such as ToursByLocals and create a private driver profile to promote your insider savvy.

This could involve showing tourists local highlights, or sharing hidden treasures that they might not otherwise learn about. It’s a win-win when you use your hometown smarts to boost your financial security.

9. Wrapping Your Car for Advertising (Wrapify, Carvertise)

Here’s a unique passive income idea, though it’s not for everyone: Consider turning your car into a mobile billboard. Companies such as Wrapify and Carvertise will match you with a local advertising campaign and supply you with temporary “wraps” for your car that promote a product. Depending on where you drive and the size of your car, you could make an average of $100 and $400 a month.

Typically, these businesses want to wrap cars that are on the road and visible for much of the time. If you are doing deliveries by car, this might be a way to bring in more cash to deposit in your savings account.

10. Renting Out Your Car (Peer-to-Peer Car Sharing Like Turo)

You can make money off your car without even driving it. Companies such as Turo allow you to rent out your vehicle. They will vet borrowers and cover insurance.

If you don’t want to do ridesharing, let others do it for you. Companies like HyreCar arrange to lend your car to other vetted drivers who want to earn money for Lyft or Uber. But to really make some dough, you would have to be willing to part with your vehicle often.

11. Earning Cash Back for Safe Driving (Telematics Apps)

Here’s another way that driving can bring in some cash: If you are a safe driver, you may be eligible for a bit of money. These potential perks are something to explore as you’re doing financial planning for freelancers and figuring out your income and expenses. For example, Allstate will reward you with a Safe Driving Bonus every six months if you don’t get in a fender-bender.

The State Farm insurance app will track your car to determine if you are driving safely — it monitors things like staying within the speed limit and coming to a complete stop versus a rolling one. You could get up to a 30% discount on your auto insurance.

The Takeaway

If you have a vehicle, you can use it to make extra money. Signing up with the right apps and online services can get your car (and your new income stream) up and running. Whether it’s doing deliveries, transporting a sofa, or helping a person get to their destination, it’s possible to turn your vehicle (plus your driving skills) into a profit-mobile.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

Do I need commercial auto insurance to make money driving my car?

You may need commercial auto insurance if you transport people or goods in your car to earn money. Check with your current car insurance provider as well as the company you are working for to find out more details, including what their policies cover.

Can I deduct gas and mileage on my taxes if I drive for a delivery app?

Yes, you can deduct the mileage you use while driving for a delivery app or the actual gas costs (you cannot deduct both mileage and gas). Choose either the 2026 mileage rate of 72.5 cents per mile set by the IRS or the actual cost of the gas you use for your job. You will need to keep detailed records of your work mileage and costs as documentation for your taxes.

Which driving app pays the highest hourly rate in 2026?

The app TaskRabbit, through which you can haul and move things for people with your vehicle, pays workers the highest hourly rate of $38 per hour, according to a 2026 report from Gridwise Analytics.

Can I rent out my leased or financed car on peer-to-peer apps?

If you lease your car, the lease contract may prohibit you from renting out the vehicle. Check the contract for more details. If you own a car and you’re financing it, you should be able to rent out the vehicle. But you may want to read over your financing contract to be sure.

Is it worth making money with an older, high-mileage vehicle?

It depends on the type of work you’re hoping to do. An older, high-mileage car might be fine for delivery work like food delivery or grocery delivery, but ridesharing apps require newer vehicles that don’t have high mileage. In general, jobs that require transporting people typically require newer cars without high mileage.

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Photo credit: iStock/Hispanolistic

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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

SOBNK-Q226-047

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Everyone feels the effects of inflation: Groceries cost more, and child care seems to be a luxury service. But that’s subjective. To nail down the real-world impact of inflation, economists like to compare rising prices to salaries, which are more static. This is where the wage inflation calculator comes in. The tool illustrates how much buying power your earnings currently have compared to past years.

We’ll take a closer look at how wage inflation calculators work and what they can tell you about making a living in the U.S. in 2026. It also examines what inflation is and how much wages have increased compared to home prices, gold, and other metrics.

What Goes Behind an Hourly Wage Inflation Calculator

A wage inflation calculator may go by other names, such as an inflation wage calculator, an hourly wage inflation calculator, a minimum wage inflation calculator, or a wage- adjusted-for-inflation calculator. But they all refer to the same thing. You can see an example at https://www.bls.gov/data/inflation_calculator.htm.

The calculator is one way to see the effects of inflation, which is the change in the price of goods and services. It tells you how much buying power a dollar amount has on a certain date compared to another date — typically today’s date or a year-over-year equivalent. For example, someone may enter what their hourly wage was on Jan. 1, 2010, and then compare how much that same wage bought them on Jan. 1, 2026.

Recommended: What Credit Score Is Needed to Buy a Car?

Historical Inflation Rates, Compared

The table below shows the annual rate of inflation from 1920 to the present. See the next section for more information on how to read the table.

Year	Annual Average CPI-U	Annual Percent Change (Rate of Inflation)
1920	20.0	15.6%
1921	17.9	-10.9%
1922	16.8	-6.2%
1923	17.1	1.8%
1924	17.1	0.4%
1925	17.5	2.4%
1926	17.7	0.9%
1927	17.4	-1.9%
1928	17.2	-1.2%
1929	17.2	0.0%
1930	16.7	-2.7%
1931	15.2	-8.9%
1932	13.6	-10.3%
1933	12.9	-5.2%
1934	13.4	3.5%
1935	13.7	2.6%
1936	13.9	1.0%
1937	14.4	3.7%
1938	14.1	-2.0%
1939	13.9	-1.3%
1940	14.0	0.7%
1941	14.7	5.1%
1942	16.3	10.9%
1943	17.3	6.0%
1944	17.6	1.6%
1945	18.0	2.3%
1946	19.5	8.5%
1947	22.3	14.4%
1948	24.0	7.7%
1949	23.8	-1.0%
1950	24.1	1.1%
1951	26.0	7.9%
1952	26.6	2.3%
1953	26.8	0.8%
1954	26.9	0.3%
1955	26.8	-0.3%
1956	27.2	1.5%
1957	28.1	3.3%
1958	28.9	2.7%
1959	29.2	1.08%
1960	29.6	1.5%
1961	29.9	1.1%
1962	30.3	1.2%
1963	30.6	1.2%
1964	31.0	1.3%
1965	31.5	1.6%
1966	32.5	3.0%
1967	33.4	2.8%
1968	34.8	4.3%
1969	36.7	5.5%
1970	38.8	5.8%
1971	40.5	4.3%
1972	41.8	3.3%
1973	44.4	6.2%
1974	49.3	11.1%
1975	53.8	9.1%
1976	56.9	5.7%
1977	60.6	6.5%
1978	65.2	7.6%
1979	72.6	11.3%
1980	82.4	13.5%
1981	90.9	10.3%
1982	96.5	6.1%
1983	99.6	3.2%
1984	103.9	4.3%
1985	107.6	3.5%
1986	109.6	1.9%
1987	113.6	3.7%
1988	118.3	4.1%
1989	124.0	4.8%
1990	130.7	5.4%
1991	136.2	4.2%
1992	140.3	3.0%
1993	144.5	3.0%
1994	148.2	2.6%
1995	152.4	2.8%
1996	156.9	2.9%
1997	160.5	2.3%
1998	163.0	1.6%
1999	166.6	2.2%
2000	172.2	3.4%
2001	177.1	2.8%
2002	179.9	1.6%
2003	184.0	2.3%
2004	188.9	2.7%
2005	195.3	3.4%
2006	201.6	3.2%
2007	207.3	2.9%
2008	215.3	3.8%
2009	214.5	-0.4%
2010	218.1	1.6%
2011	224.9	3.2%
2012	229.6	2.1%
2013	233.0	1.5%
2014	236.7	1.6%
2015	237.0	0.1%
2016	240.0	1.3%
2017	245.1	2.1%
2018	251.1	2.4%
2019	255.7	1.8%
2020	258.8	1.2%
2021	271.0	4.7%
2022	292.7	8.0%
2023	304.7	4.1%
2024	313.7	2.9%
2025	321.9	2.6%
2026 (March)	330.2	3.3%

Data courtesy of the U.S. Bureau of Labor Statistics

How to Read Our Historical Inflation Rate Table

To understand the table above, you first need to know what CPI means. The CPI comes from the U.S. Bureau of Labor Statistics (BLS), which began collecting family expenditure data in 1917. The annual average CPI-U in the second column represents urban CPI data. The annual percent change between each year’s CPI represents the rate of inflation.

How to Calculate Hourly Wage Adjusted for Inflation

Using a wage inflation calculator is a simple way to see how your income’s buying power changes with inflation. Just enter the starting year of your choice, your hourly wage, and then the current year.

Let’s say someone was making $25 per hour in March 2018 and wants to know what the equivalent hourly rate is in March 2026. In this case, it’s equivalent to making $33.08 in March 2026. Assuming that this person makes the same money today, this shows that the buying power of their hourly wage has decreased over the years.

If you’re negotiating a raise, you could argue that $33.08 is the minimum you should be making to keep up with the cost of living.

What Is Inflation, and How Does It Work?

Inflation represents changes in the prices of services and goods throughout the economy. The way the government measures inflation is by comparing the current cost of goods and services to prices in previous years.

Inflation weakens the purchasing power of the dollar, as consumers have to pay more for things than they did in previous months and years. Inflation can also deflate the value of cash held in savings accounts.

What Is Actual Inflation?

Actual inflation is a term used to refer to what the current rate of inflation really is versus what consumers perceive the current rate to be, also referred to as their inflation expectations. Consumer expectations influence actual inflation.

Hyperinflation

Hyperinflation is a term used when rapid inflation occurs. This is when prices rise uncontrollably over a period of time. Hyperinflation of 50% a month or more is extreme and, fortunately, rare.

The U.S. has never experienced hyperinflation, and no one believes that it’s on the horizon. The most recent example of hyperinflation is Venezuela, where inflation reached 65,000% in 2018.

Deflation

Deflation is the opposite of inflation, and it’s when the prices of goods and services go down. The U.S. experienced an average deflation of 7% (or -7% inflation) per year during the Great Depression (1930-1933).

Recommended: What Is Stagflation?

How Is Inflation Calculated?

The formula for measuring inflation is:

Percent Inflation Rate = (Final CPI Index Value/Initial CPI Value) x 100

How Is Wage Adjusted for Inflation Calculated?

It’s complex. The simplest way to calculate a wage adjusted for inflation is to use an online wage inflation calculator.

How Inflation Impacts You

There’s some confusion around whether inflation is good or bad. Some inflation is normal and shows that the economy is growing. But for consumers, it feels like a bad thing. It can be especially worrisome for borrowers with variable-rate-interest debt, such as student loan debt.

Economists can measure the impact of inflation on consumers in a number of ways. You’ve probably seen articles discussing college tuition vs. inflation, which show how American incomes have not kept up with rising education costs. Other metrics tell similar stories.

Let’s look at a few different metrics that reveal how consumers may feel the impact of inflation.

Recommended: What Is The Difference Between TransUnion and Equifax?

How Your Wage Is Doing Relative to the Housing Market

Inflation can sneak up on consumers when prices at grocery stores rise slightly. But they really feel it when making a large purchase, such as buying a home. People who have saved for many years to buy a house find that their income and savings are no longer enough to reach their home-buying goals.

That’s because median home prices have far outstripped median wages: Nationwide, the median sales price of a new house rose from $17,800 in 1963 to $403,000 in early 2026 — a roughly 2,165% increase — while median family income rose from $6,249 in 1963 to $105,800 in 2024 — about a 1,600% increase. This may have been great news for our parents and grandparents, who saw their real estate investments soar. But for today’s first-time homebuyers, it’s a disaster.

Also, mortgage interest rates can rise during periods of inflation.

Recommended: Should I Sell My House Now or Wait?

How Your Wage Is Doing Relative to Gold

Because gold tends to hold its value, it makes a good unit of measurement for economists. By converting wages to gold, we can get a better sense of how wages have held up, or not, over the years.

In 1965, the federal minimum wage of $1.25 per hour equaled about $2,600 per year for full-time work, which bought roughly 74 troy ounces of gold at the then-official U.S. price of $35 per ounce. At the current average gold price of about $4,720 per ounce (May 2026), 74 ounces would be worth almost $350,000. Compare that to the current federal minimum wage of $7.25 per hour, or $15,080 annually.

How Your Wage Is Doing Relative to CPI

Remember, CPI represents consumer prices. Inflation impacts prices of essential goods and services such as groceries, gas, and childcare. This means that salaries and savings don’t extend as far as they used to. This is why many people push for raising the minimum wage during periods of inflation.

If you’re looking to take control of your money during inflation, a money tracker app can help you gain valuable insight into your financial life.

The Takeaway

Inflation, and the rising prices that come with it, means your income doesn’t buy as much as it used to. Using a wage inflation calculator is one way for consumers to get a more realistic idea of how much buying power their hourly wage has during periods of inflation. Of course, inflation doesn’t affect all prices equally. That’s why economists use different metrics to measure inflation’s impact, such as the CPI, the housing market, and gold.

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FAQ

How do you calculate wages adjusted for inflation?

You divide the current Consumer Price Index (CPI) by the CPI from the past year, then multiply by the past wage. A wage inflation calculator does this math automatically using historical CPI data from the U.S. Bureau of Labor Statistics.

How much is $15 an hour in 2000?

According to the Consumer Price Index (CPI) Inflation Calculator from the U.S. Bureau of Labor Statistics, $15 an hour in March 2000 had the same buying power as $28.93 per hour in March 2026. It illustrates how inflation erodes purchasing power over time.

What is the inflation rate for 2026?

The 12-month inflation rate as of March 2026 is 3.3%, based on the Consumer Price Index (CPI). Because inflation is updated monthly, check the U.S. Bureau of Labor Statistics for the most current figure.

How do you calculate a real hourly wage from CPI?

Take the current Consumer Price Index (CPI), divide it by the CPI from your base year, and multiply by your nominal hourly wage. The result is your real wage, which shows what your pay is worth after accounting for inflation.

Why should you adjust your hourly wage for inflation?

Adjusting reveals your true purchasing power, not just the dollar amount on your paycheck. It lets you compare wages across years using the Consumer Price Index (CPI) to see whether salaries have kept up with rising prices.

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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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