Financial Topics Archives

Dec

2024

15 Signs of a Cheap Person

By Alice Garbarini Hurley | Budgeting & Goals, Family Finances, money | Comments Off

There’s a difference between being cheap and being frugal. Penny-pinching, or being a cheap person, can be painful for friends and family and also for you. It can stir up feelings of deprivation and insecurity; possibly even dishonesty. Whether you take a pocketful of “free” peppermints from a cafe or stiff your waitress, the consequences can add up, impacting your well-being across the board, from finances to relationships. On the flip side, being frugal means having a levelheaded attitude about money. Frugal people are usually respected and appreciated.

Need more cheap identifiers? Read on to learn 15 signs you are cheap.

Key Points

• Being cheap can involve feelings of deprivation and insecurity, while being frugal can indicate being wise with money management.

• Extreme stinginess, prioritizing personal gain over others’ losses, often harms relationships.

• Forgetting to pay one’s share during group outings signals cheapness, as can thoughtless regifting and purchasing low-quality items.

• Hoarding free condiments and office supplies and tipping badly can typify cheap behavior.

• If you are cheap, it may be wise to rethink your budget and your behavior for a better relationship with money.

What Does It Mean to Be Cheap?

A person who is cheap is extremely stingy with their money and time, all in the name of having perhaps a few more dollars in their checking account. For instance:

• Are you so tight-fisted that instead of paying postage, you mail things from the office, so your employer foots the bill?

• Do you (over)help yourself to “free” food but refuse to buy a snack or drink at a movie theater?

• Are you stingy with your time, never volunteering for a good cause or putting in extra hours when your work team is in a crunch?

• If the kids’ menu is for ages 12 and under, do you lie about how old your children are so they can partake for less?

If, in these and other ways, you think your personal profit is more important than everyone else’s losses, then yes, it’s safe to say you are being cheap.

How Does Being Cheap Differ from Being Frugal?

Those who are cheap want, at all costs, to keep cash in their own wallets and bank accounts. Frugal people, on the other hand, think calmly and clearly about how to spend mindfully.

A cheap person might go out to dinner with friends and “forget” to bring their money to chip in. A frugal person might suggest the group goes to a mid-priced restaurant (not one with pricey cocktails), and make other careful choices. Then, at the end of the month, they may have enough money for something meaningful, such as a soup kitchen donation or a lavish Mother’s Day experience for Mom and Grandma.

A frugal person tries not to waste money on frivolous purchases but also has a sense of generosity. Guess who’s likely to be more fun to be around?

15 Signs You Are Being a Cheap Person

A few examples of being cheap were mentioned above. Here, dig into signs of being a cheap person in more detail. Watch for these red flags in the game of life. No one wants to be bad with money, but taking scrimping and saving too far can also be an issue.

1. Letting DIY Turn into BIY (Break It Yourself)

Unless you’re an expert, taking the DIY route on repairs can be a sign you are cheap. These fixes are often bad and flimsy, leaving you with leakier pipes or unsafe wiring. Reputable professionals may charge a lot but will stand by their work.

For example, if you go the cheap way and try to fix a car problem by watching a YouTube video before taking a road trip, you could find yourself paying dearly for it. If the vehicle winds up breaking down, it will throw a wrench in your plans and cost you time and money as you get towed, pay for repairs, and have to Uber around while waiting for your car to be road-ready again. So hiring a pro can mean less money to stash in your savings account but actually be more economical in the long run.

2. Sneaking Refreshments Into Movies

Some people do bring their own snacks due to health reasons. But if you have to sneak something in under cover, it’s probably dishonest. Do you feel guilty spending $7 on a small pack of candy? Yes, it’s cheaper elsewhere, but going to the movies is a little splurge, and the treats are part of the fun. It’s also partly how the theaters stay in business.

While many movie theaters allow patrons to enter with their own beverages, that doesn’t mean you should bring all your friends and not spend a penny on refreshments.

3. Hoarding at Home

Many people hoard because they don’t want to part with things that might be valuable. But how many samples of shampoos and makeup, t-shirts, skeins of yarn (in case you take up knitting), Christmas ornaments, and reusable water bottles can you keep? Letting go can be freeing and it feels even better if you donate items to charities that will sell them and give them a second life.

4. Stockpiling Free Condiments

It’s cheap behavior to squirrel bagfuls of little ketchup packets away in your cabinet. Will you ever use them? The same holds true for sugar, soy sauce, and salt and pepper packets. Snagging them for free and hoarding them can be a sign you are being cheap.

5. Reusing Paper Goods

Some people save paper cups that still look pretty clean and recycle soiled paper towels for another chore. But that’s a cheap way of living that likely doesn’t save you much. Better to buy recycled paper products to help save energy, water, and trees. Get dishwasher-safe, reusable party plates; they are sturdy enough to hold large pizza slices and the like.

6. Doing Only Free Activities

Free activities are wonderful and a part of a smart, frugal lifestyle. But cheap people take this to extremes and only want to go somewhere if it doesn’t cost money. This limits their plans accordingly. For instance, if you only go to the beach after 5 pm, when there are no entrance fees, you will never experience a classic sunny day. Plus, there probably aren’t any lifeguards on duty.

In life, balance is best. There’s no sense being miserly vs. having fun and staying safe. Paying the fee to visit, say, a beach or a majestic national park could provide a view worth a million bucks and a lifetime of great memories.

Recommended: Ways to Be a Frugal Traveler

7. Being Nosy about Other People’s Money

Cheap people tend to dwell on what other people spend, gossiping about or criticizing their purchases, such as a designer handbag or resort vacation. But maybe the buyer is a frugal person who has a solid money mindset and saved for a year to afford those nice things. Frugal does not mean cheap, and judging others’ spending can say more about your own financial habits than theirs.

8. Always Snagging Leftovers

It’s one thing to take home the restaurant meal you couldn’t finish but another to make off with the leftover shrimp at a friend’s party. If the host invites you to take some food, great. But don’t push it. You are a guest, after all.

It’s also a classic cheap move to take back anything you brought that wasn’t entirely devoured. If you brought two bottles of wine and only one was opened, the other one stays put, as a gift to your host for welcoming guests.

9. Saving Almost Spoiled Food

Many people look for ways to save money on food. But safety comes first. No matter how expensive that deli meat was, if it’s past the date that tells you it’s safe to consume, throw it out. If yogurt or cheese grows a layer of mold, out it goes. Only an ultracheap person would cling to it, eat it, and risk their health.

If you’re not sure how long food stays safe in the fridge, open a tab and search. There are many sites that share the full details.

10. Regifting Thoughtlessly

It’s okay to pass along (with honesty) a gift you cannot use or that doesn’t suit your needs, such as a pound of rocky road fudge when you’re avoiding sugar or a sweater that’s not your color. But it’s hurtful to wrap up something you have around, like an extra college sweatshirt or a set of mugs, and pass them off to a friend or relative as a new gift. That can be just plain cheap.

11. Buying Cheap Quality

If you buy cheaply made clothing, it will likely fray, fade, and fall apart way before good quality items do. Same with ultra low-priced bedding and towels. Likewise, if you invest in a good pair of shoes, they will stand up to new heels, soles, and repeated polishing. A cheap pair won’t go the distance.

Keep in mind that the same holds true with household purchases: Cookware with a rock-bottom price tag is likely to disappoint you, and the same may hold true with furnishings. Read reviews before you buy, and snag a good-quality item that’s a little pricier but more reliable.

Recommended: Guide to Practicing Financial Self-Care

12. Depriving Others While You Amass Money

Another sign you are cheap can be that you are totally focused on your own wealth management and never help others. Maybe a miser could make a payment to help a cousin or niece with a heavy student loan debt. That kind of money magic fills the heart of the giver and the recipient. Being selfishly cheap just leaves you with a heart tightened like a fist.

Recommended: Common Money Fights

13. Haggling Over Every Transaction

Bargaining nonstop can make everyone uncomfortable, except the cheap person who’s negotiating. The salesperson, other customers, and especially the cheap person’s friends and family who are present may want to vanish.

There are times and places where haggling is appropriate and can improve your financial life. Overstepping those boundaries can be a sign you are cheap.

14. Helping Yourself to Office Supplies

It’s one thing to take a pad personalized with your name or a paperweight that was a gift from the boss. But it’s another to stock your home office or a kid’s back-to-school list from the office supply closet. Just don’t. It’s veering into stealing.

Same goes for taking condiments and coffee supplies from the staff break room or raiding the bathroom for toilet paper so you don’t have to buy any.

15. Being a Bad Tipper

This may be the most obvious and most common sign of being cheap: looking for any reason to reduce the gratuity after a meal, from too few sugar packets on the table to the entree arriving too quickly or too slowly. Waiters and waitresses often manage many tables and make a low hourly wage. They count on tips to bring up their earnings.

If the food and/or service is awful, it makes sense that the tip would reflect that. But for a typical meal with perhaps a tiny glitch, not leaving a tip can be a giveaway that someone is a miser.

Tips to Avoid Being Cheap

Try to remember this advice next time you feel your inner cheap tendencies emerging.

• Give yourself a fun budget: Find a little breathing room in your budget for things that bring you pleasure even if they are not great bargains. Maybe a fancy coffee on Friday mornings, to end the work week on a high note, can be a nice self-reward.

• Shift your focus from cash. Consider rewards that have no set price attached to them. That means enjoying a movie plus popcorn with your best friend. Or the smile on your mother’s face when you bring her flowers.

• Set up a separate bank account for generosity. Put a certain amount of money in every week, even just $50 or $10 can make a difference. Then, at the end of the month, do something kind for someone.

• If you are dining out or getting coffee, build extra bucks into your budget ahead of time for the tip.

• Look for positive ways to be frugal. Perhaps you could try couponing, selling unwanted items, or signing up for a bank account that offers a cash bonus when you become a customer.

• Instead of clinging to your money, think about how hard behind-the-scenes people work. The staffers who put out the free hotel breakfast buffet, the shampoo girl at the salon: Appreciating their work with a tip goes a long way to make both you and them feel better.

The Takeaway

Knowing the difference between being cheap and being frugal is an important life lesson. The former leans toward miserly (stockpiling office supplies at home and leaving little or no tips) and is unpleasant to be around. The frugal person however usually spends mindfully and can afford to be generous in meaningful ways.

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FAQ

Are there benefits to being a cheap?

A true cheap person may be able to reach financial goals, which is a benefit. But they might be so focused on saving that they cannot enjoy life. They are likely so busy not spending that they don’t know how to give back, chip in, be honest, and have fun with loved ones.

Is being cheap a personality trait?

Being cheap can be a personality trait, but it need not be a permanent one. It could be a habit developed because you grew up poor and wished for more money or possessions or it can stem from other insecurities. It’s possible to change this behavior if you become more aware of it and are motivated to be less stingy.

How do you deal with cheap people?

If you value the person and your relationship with them, do your best not to argue with them. That is unlikely to get them to spend more freely. Set expectations on get-togethers early; if something sounds too pricey for them, make another, less expensive plan. Avoid those situations that are likely to provide a forum for their cheap tendencies.

Photo credit: iStock/Morsa Images

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Dec

2024

Implied Volatility vs Historical Volatility

By Dan Miller | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Whether you are a new investor or a seasoned trader, it’s common to hear the word “volatility” when discussing the movements of a stock price or index. More volatile stocks tend to have larger swings in value, both up and down.

There are two forms of volatility, however. Historical volatility, which measures past price movements, and implied volatility, which estimates future price fluctuations based on options pricing. It’s crucial for participants in these markets to understand the difference between implied vs historical volatility.

Key Points

• Historical volatility measures the range of returns on a market index or security over a given time period.

• Traders use historical volatility to set stop-loss levels and analyze riskiness.

• Historical volatility is different from implied volatility, which is forward-looking.

• Implied volatility measures expected future volatility based on options prices, reflecting market expectations.

• Higher implied volatility tends to lead to higher options premiums since the price is more likely to jump to a trader’s advantage (or disadvantage).

Historical Volatility Definition

As the name suggests, historical volatility measures a stock’s price as compared to its average, or mean. The most popular way to calculate a stock’s historical volatility is by calculating the standard deviation of its price movements during a period of time.

Investors use historical volatility to get an idea of how likely the stock is to make large movements in price. A stock with higher volatility may indicate elevated risk, because there is a higher potential that the stock’s price could rise or drop significantly.

Highly volatile investments purchased with leveraged accounts can create additional risk. On the other hand, a stock with higher historical volatility could also be potentially more rewarding, since there is also a possibility that the stock’s price could make a big jump upward (or downward). Stocks may become more volatile during times of recession or uncertainty.

Investors measure a stock’s historical volatility as a percentage of the stock’s price, and not as an absolute number. That makes it easier to compare historical volatility between stocks — even if they have very different values — while assessing investment opportunities. When comparing the volatility of stocks, it’s important to look at them during the same time period.

Implied Volatility Definition

Implied volatility measures a stock’s expected future price fluctuations, derived from options prices, and is commonly used by traders to assess market uncertainty. While historical volatility is backward-looking, implied volatility attempts to quantify a stock’s volatility going forward.

Implied volatility reflects the prices of the options contracts associated with a particular stock. Options traders often assess implied volatility using metrics like Vega, one of the Greeks in options trading, which measures how sensitive an option’s price is to changes in implied volatility.

A stock with a higher implied volatility generally has options contracts with higher premiums. This is because there is more uncertainty around the direction of the underlying stock.

Historical vs Implied Volatility

Although both implied volatility and historical volatility measure the volatility of stocks, they measure it in different ways. Historical volatility reflects the past price movements of a particular stock or index, while implied volatility gauges future expectations of price movements based on the prices of options contracts. Traders use implied volatility when they are determining the extrinsic value of an option.

When to Use Historical vs Implied Volatility

Historical volatility is used for assessing a stock’s past price movements. It demonstrates a stock’s value fluctuation over a specific period, and may provide an idea of the risk associated with it. Investors use historical volatility to gauge the potential for future price swings based on historical data.

Implied volatility may help an investor evaluate options pricing or forecast potential future price movements. This figure reflects the market’s expectations for future volatility, based on the prices of options contracts. Traders often use implied volatility to determine whether options are overpriced or underpriced relative to expected price movements.

For example, a trader could look at options with implied volatility that differs from its historical volatility. If an option’s implied volatility is lower than the historical volatility of the underlying stock, that may be a signal of an undervalued option premium.

Comparing Implied and Historical Volatility

Here is a quick summary of the differences between historical and implied volatility:

Historical Volatility:

Historical volatility is used to analyze a stock’s past price movements, regardless of whether the investor is purchasing the stock itself or trading its options. It can help assess the stock’s risk or potential for large price swings, which is valuable for both stock investors and options traders.

Implied Volatility:

Implied volatility is specific to options because it’s derived from options prices, reflecting the market’s expectations of future volatility. Implied volatility isn’t just for options traders, however. It can also be useful for stock traders as an indicator of market sentiment about the stock’s future price movements.

Historical Volatility	Implied Volatility
Calculated using the historical prices of a stock or index	Determined indirectly based on the prices of options contracts
Used by investors as well as traders to analyze a stock’s movements	Used primarily for options and based on options prices, which are based on market expectations of volatility
Measures past performance based on historical data	Projects future performance, representing an indicator of future volatility

How to Use Implied and Historical Volatility Together

Because implied volatility and historical volatility measure different things, it can be useful to employ them both. The historical volatility of a given stock or index will measure how much the price has historically moved up and down. If you’re interested in investing in options for a stock, you can look at how its historical volatility compares to the implied volatility denoted by the prices of its options contracts.

One way you can incorporate some of these ideas into your trading strategies is through a volatility skew. A volatility skew depends on the difference in implied volatility between options contracts that are in the money, at the money, and out of the money.

Another relevant concept when it comes to implied volatility is a volatility smile, a graphic representation of the strike prices and the implied volatility of options with the same underlying asset and expiration date.

💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.

The Takeaway

Options traders often look at both historical and implied volatility when determining their options trading strategy. You may also use these tools while investing, or you might look at other factors to evaluate potential investments.

SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.

With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.

Explore SoFi’s user-friendly options trading platform.

FAQ

How is implied volatility calculated from historical volatility?

The historical volatility of a stock or index reflects the changes in historical stock prices. It is often, but not always, calculated as the standard deviation of a stock’s price movements. Implied volatility is not calculated directly from historical data. Rather, it is derived from the market prices of options contracts for the underlying stock.

Is there a difference between implied and realized volatility?

Realized volatility is another name for the historical volatility of a stock. So while implied and realized volatility both measure how volatile a stock is, they have different definitions, and investors use them in different ways.

Photo credit: iStock/kupicoo

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Dec

2024

What Is Historical Volatility & How Do You Use It?

A Guide to Historical Volatility

By Mike Zaccardi, CMT, CFA | Growing Wealth, invest, Investing, Terminology | Comments Off

Historical volatility (HV) measures the range of returns on a market index or security over a given time period. When an asset’s historical volatility is going up, that means its price is moving further away from its average (in either direction) more quickly than usual.

A stock’s historical volatility is commonly expressed as one standard deviation using daily returns, and it’s one factor that investors often look at to gauge the risk of a potential investment. An asset’s historical volatility is different from its implied volatility. Read on to learn what historical volatility is, how historical volatility works, and how to calculate historical volatility.

Key Points

• Historical volatility measures deviations from a stock’s average price over a period of time.

• The historical volatility of a stock is typically calculated using the standard deviation of daily returns.

• Historical volatility is expressed as a percentage, but differs from forward-looking implied volatility.

• High historical volatility suggests larger price swings, while low volatility indicates smaller movements.

• Traders may use historical volatility alongside implied volatility — which indicates the expected future volatility of an option’s underlying asset — to inform their trading strategy or assess a security’s riskiness.

What Is Historical Volatility?

Historical volatility measures how much the price of a stock or index goes up and down over a certain period. Investors calculate historical volatility by measuring how much an asset’s price deviates from its average price during a certain time period. Historical volatility typically looks at daily returns, but some investors use it to look at intraday price changes.

Analysts can use any number of trading days when calculating historical volatility, but options traders typically focus on a time period between 10 and 180 days to balance capturing short-term fluctuations with longer-term trends. Options traders may use historical volatility and implied volatility when analyzing trading ideas.

Historical volatility is typically expressed as a percentage that reflects the standard deviation from the average price, based on past price behavior. But there are also other methods they can use to determine an asset’s historical volatility. For example, unstable daily price changes often result in high historical volatility readings.

How Historical Volatility Works

Historical volatility, expressed as a percentage, tracks how much a stock’s price fluctuates in relation to its average price during a certain period. This is usually calculated using the standard deviation of past price returns, which is then demonstrated as an annualized figure.

When a stock sees large daily price swings compared to its history, it will typically have a historical volatility reading. Historical volatility does not measure direction; it simply indicates the deviation from an average.

When a stock’s historical volatility is rising or above average, it means daily price changes are larger than normal. When it is lower than average, a stock or index has been relatively calm.

How Historical Volatility is Calculated

The historical volatility formula is typically a standard deviation measurement. It typically takes a stock’s daily price changes and averages them over a period. There are several steps to calculating historical volatility:

1. Collect historical prices.

2. Calculate the average price over the chosen period.

3. Find the difference between each day’s price change and the average price.

4. Square those differences.

5. Find the sum of those squared differences (this finds the squared deviations).

6. Divide the sum by the total number of prices (this finds the variance).

7. Calculate the square root of the variance.

You can then calculate the annualized volatility of a stock in two ways:

• Daily returns: multiply the standard deviation by the square root of 252 (the approximate number of trading days per year)

• Monthly returns: multiply the standard deviation by the square root of 12 (the number of months per year)

Working through the historical volatility formula can be a lengthy process, but most brokerage platforms will automatically calculate it for you. Many brokers even offer historical volatility charts. With a historical volatility chart, you can easily compare changes through time.

For example, if a stock reacted sharply to an earnings release, its historical volatility charts may show a jump right after the earnings date, while implied volatility might drop sharply as the market makes adjustments to its expectations following the earnings results. Implied volatility measures market expectations of price fluctuations for a certain asset in the future, which is reflected in how its options are priced.

How to Use Historical Volatility

Traders may use historical volatility when analyzing a stock, fund, or index to get a sense of its riskiness. High or low historical volatility stocks are not inherently bullish or bearish. Day traders might seek high historical volatility stocks as candidates for high-profit trading opportunities (but they also come with high loss potential).

Traders sometimes use historical volatility to help set stop-loss levels, which are predetermined prices at which a trade will automatically close to limit losses. For example, a day trader might use three times a stock’s daily average range – a measure of historical volatility – to set a stop price. This is known as volatility ratio trading.

You can also use historical volatility to help determine whether a stock’s options are expensive to help determine an options trading strategy. If implied volatility is extremely high when compared to a stock’s historical volatility, traders may decide that options on the stock are undervalued and suitable as an investment.

Historical volatility can help traders understand the potential range of price movements, which may inform their risk management strategies and decisions about position sizing or exit points.

Historical vs Implied Volatility

Like historical volatility, implied volatility measures fluctuations in an underlying stock or index over a period of time, but there are key differences between the two indicators. Implied volatility is a forward-looking indicator of a stock’s future volatility.

The higher the historical volatility, the more risk-prone the security has been in the past. Implied volatility, on the other hand, uses option pricing to arrive at a calculation and estimate of future volatility. If implied volatility is significantly less than a stock’s historical volatility, traders typically anticipate a relatively stable period of trading, and vice versa.

Typically, when implied volatility is low, options tend to also be priced lower, which may make them more appealing to buyers who seek to capitalize on potential future price movements. Sometimes investors will use a graph to determine how an option’s implied volatility changes relative to its strike price, using a volatility smile.

Historical Volatility	Implied Volatility
Measures past price data to gauge volatility on a security.	Uses forward-looking option-pricing data to gauge expected future volatility on a security.
Higher historical volatility often leads to higher options pricing and higher implied volatility.	Imminent news, like a company earnings report or a key economic data point, may drive implied volatility higher on a stock or index.
May inform traders’ risk management strategies and decisions about position sizing or exit points.	Traders may use implied volatility to find stocks expected to exhibit the biggest price swings.

The Takeaway

Historical volatility can be a useful indicator for both institutional and retail investors looking to monitor the level and frequency of a stock or index’s price fluctuations. It measures a security’s dispersion of returns over a defined period. Implied volatility is a similar tool, but it is forward-looking and uses option pricing to arrive at its output.

Explore SoFi’s user-friendly options trading platform.

FAQ

What is considered a good number for historical volatility?

It depends. Although one stock might have a high historical volatility reading, perhaps above 100%, another steady stock might have a low figure around 20%. The key is to understand the securities you trade. Historical volatility can be an indicator of a stock’s volatility, but unforeseen risks can make future volatility drastically different than the historical trend.

What is a historical volatility ratio?

The historical volatility ratio compares short-term and long-term historical volatility as a percentage of the price of a financial asset. You can interpret the historical volatility ratio by looking at short versus long historical volatility. If short volatility on a stock drops below a threshold percentage of its long volatility, a trader might think there will be a jump in future volatility soon.

This is similar to analyzing volatility skew in options. It is important to remember that the interpretation and technical rules of historical volatility can be subjective by traders.

How is historical volatility calculated?

Historical volatility calculations require finding the average deviation from the average price of an asset over a particular time. An asset’s standard deviation is often used. Historical volatility is usually stated as one standard deviation of historical daily returns.

Many trading platforms automatically calculate historical volatility, so you may not have to do the calculations manually.

Photo credit: iStock/Eva-Katalin

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q324-064

Dec

2024

19 Tips to Save Money on Pets

By Alice Garbarini Hurley | Budgeting & Goals, Family Finances, money | Comments Off

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

America loves its furbabies. As of 2024, 66% of U.S. households (86.9 million homes) own a pet. That’s a lot of snuggles and pats, but they do come at a price. A price that, thankfully, is more negotiable than you think, without skimping on love or care.

Pet parents are vulnerable to the same heartstring tugs that parents of human babies feel. You want to keep them happy and healthy, paving the path to a long life, and you are willing to pay the price.

Smart shoppers, however, know how to save money on pets and where they can safely trim costs. Here, we offer 19 tips for lowering costs.

Key Points

• Buy prescription and over-the-counter pet medicines online for lower prices.

• Keep up with vet appointments to prevent costly health issues.

• Adopt pets instead of buying to save on initial costs.

• Groom pets at home to avoid expensive grooming services.

• Buy pet food in bulk to save money.

Common Pet Costs

Whether you select a Labradoodle from a breeder on a rustic Pennsylvania farm, adopt a tabby kitten from a crowded West Coast shelter, or anything in between, you will likely face these basic expenses:

• Neutering or spaying

• Collar, leash, harness

• License fees

• Microchipping if you choose, to track a lost pet

• Vaccinations

• Food, treats, and toys

• Vet bills

• Boarding or pet care if you travel

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19 Money-Saving Tips for Pets

Pet care can get pricey. Hidden fees can pad your expenses, and even if you pay the average cost of pet insurance, your critter’s care may not be cheap.

But you can make costs more manageable. Be sure to comparison-shop and ask friends and neighbors for recommendations. These tips will also help you navigate the road to being a good pet parent without going broke.

1. Buying Pet Medicines Online

When the vet prescribes meds, it’s to help heal whatever is ailing your pet. Sites like Chewy.com and PetMeds.com generally charge less for prescribed pills and ointments than your vet’s office. They also typically sell heartworm, flea and tick, and other non-Rx medicines at lower prices. You can typically schedule autoship and qualify for free shipping at a certain spend threshold.

Recommended: 5 Ways to Achieve Financial Security

2. Keeping Up with Vet Appointments

Keeping up with preventive care can be an example of how to save money on pets. Better to stay on track than skip well visits and find out an eye infection has gone untreated or that your pet has heartworm (generally detected in a routine stool sample test). A vet will typically check joints, ears, eyes, teeth, and weight, and keep your pet up to date on vaccines. (Some areas offer free rabies vaccination clinics. Check your town website.)

3. Researching Pet Insurance

Pet health insurance can cover well care or illness/accident treatment, depending on the policy, and averages $27 a month for a cat and $51 a month for a dog (for a policy that covers 80% of bills after a $250 deductible, with a $5,000 annual cap). It’s advised to insure a young pet; later, a pre-existing condition may prevent coverage.

But let the buyer beware: An online search can produce a dozen lists of the “best” insurance, but most are on sites that make money from a brand if you click and purchase. Check to see if your “human” health insurer has a pet policy. Other reputable organizations, such as the ASPCA, offer pet insurance, too.

4. Walking Your Pet Yourself

If you are home to walk your pooch, you can save a bundle. Professional dog walkers can get pricey, with rates ranging between $10 and $35 per 30-minute walk. You’ll pay even more for group doggie daycare. The going rate for a hired kitty sitter is often about $20 for 20 minutes. Doing the job yourself or asking a young person in the neighborhood to step in can be the most money-smart option.

5. Adopting Instead of Buying

Learning how to budget for a dog? It’s generally more affordable to adopt from a shelter or rescue organization than to buy a pet from a breeder or pet store. Standard adoption fees for dogs can range from $129 to $767; for cats, costs typically run from $39 to $317. Fees may vary by breed but typically cover a veterinary evaluation, vaccinations, deworming, flea/tick treatment, and the cost of spaying/neutering.

Recommended: Guide to Practicing Financial Self-Care

6. Spaying and Neutering Your Pets

If it’s costly enough to house and feed one dog or cat, what will happen if she delivers a whole litter? Spaying and neutering is the safe, recommended option for dogs and cats.

7. Researching Human Food Pets Can Eat

Avoid chocolate and other foods that can be toxic to pets (the Humane Society lists potential poisons ). Otherwise, though, some owners make their own say, rice, steamed carrots, and chicken dinner or dog biscuits (using ingredients such as peanut butter, oatmeal, and/or pumpkin). There are even some doggos with refined palates who turn up their nose at store-bought biscuits but love the home-baked ones.

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8. Buying a Smaller Pet

The bigger the pet, the higher the cost may run to feed, house, and even board or travel with the critter. So before you set your sights on Lassie or Marmaduke, think it over. Can you afford a large pet? A smaller animal may be a cheaper pet to own.

9. Storing the Pet’s Food Properly

Safeguard your pet’s nutrition; you don’t want to waste your investment. Keep dry kibble tightly sealed in a cool, dry place. House mice love to hoard and nibble it. Store any refrigerated pet foods in the fridge and check expiration dates.

10. Joining a Loyalty Club at a Pet Store

Consider signing up for no-cost rewards programs at stores like Petco and PetSmart to earn coupons or discounts. When you enroll in the PetSmart Treats Program, for example, you can earn points for every $1 spent in stores and online and redeem them on services including Grooming Salon, PetsHotel, Doggie Day Camp, and Dog Training.

11. Making Your Own Pet Furnishings & Toys

Here’s how to save money on pet supplies: Get creative. Why buy a cute tent for your kitten? The rascal will prefer to curl up in an open sock drawer or suitcase, or inside a shopping bag. Toys? Cats adore an empty box, a ping-pong ball, or an empty paper towel tube. For dogs, forfeit a designer bed. A cute, washable throw rug on sale makes a soft sleeping pad.

12. Buying Pet Food in Bulk

If you’re driving distance to an animal feed store, price dry pet food in bulk. You may save a bundle. Costco also sells pet food and supplies in multi-packs, a bargain compared to the supermarket.

13. Grooming Your Pet at Home

Shampoos, blowouts, and pink satin bows at the groomer are pricey, and keeping a curly dog coat from matting and knotting requires frequent visits. Early on, get your pet used to at-home grooming. Buy the right tools to clip your cat’s nails and trim your dog’s hair. Brush their teeth and clean their ears, too. You can save a nice amount by DIYing it.

14. Shopping Pet Goods at Discount Stores

Below-retail stores like T.J.Maxx and HomeGoods carry pet holiday costumes, beds, and bowls. Dollar stores often stock pet items, too. (As with human food, check expiration dates on discounted pet food.)

15. Finding a Veterinary Discount Plan

Your job could help you cut petcare costs. Some workplaces offer the perk of being pet-friendly, eliminating the need for doggie daycare or a professional walker. Others provide pet health benefits for employees. Pet Assure can help you know how to pay vet bills because they lower costs at clinics in the network; ask your HR department about it.

16. Training Your Pet Yourself

To save money on obedience training, learn the basics with a guidebook and YouTube videos, or sign up for more affordable group classes at a big-box pet store.

17. Handling Your Pet’s Dental Care

This can take a big bite of your budget, especially when a dog’s teeth decay, requiring anesthesia for extractions. Ask your vet early on about the best brush and toothpaste, how often to brush, and recommended dental chews.

18. Finding Cheaper Pet-Friendly Hotels

It can be challenging to find a hotel that accepts pets when you’re traveling, and harder still to find one that doesn’t add a surcharge for the privilege.

Nearly all Red Roof Inns welcome one pet for free and charge $15 per night for the second pet. (They can’t top 80 pounds, so maybe not an option if yours is Clifford-size.) Other hotels may charge up to $50 or more per night or up to a $75 pet fee per stay, on top of your rate as a human. Doing your research before you hit the road can help you identify the cheapest way to travel with pets.

19. Getting Free Secondhand Crates and Carriers

Rather than buying new, check swap sites for dog crates and cat carriers, or ask on your Facebook page. Many people no longer have a pet but still have a crate or carrier in the basement. As any new parent knows, the importance of saving money is an even bigger issue when you add a new member to your household, even if a canine or feline.

The Takeaway

Owning a pet can be costly, from vet visits to food bills. But the roughly 87 million families and singles with pets is a number that’s growing because of the unconditional love and loyalty a furry friend can bring. You can find plenty of ways to embrace the affection but trim the costs, from DIY grooming and dental care to bargain-hunting at discount stores for accessories.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Are pets worth the expense?

While it’s a highly personal assessment whether a pet is “worth it,” the fact that roughly 87 million U.S. households own pets says a lot about how much people value them. Pets can’t pay us back in money but do lavish intangible dividends, such as love, friendship, joy, loyalty, and companionship. These are gifts you cannot put a price on.

How much does a typical pet cost?

Standard adoption fees for dogs can range from $129 to $767; for cats, costs typically run from $39 to $317. If you buy an animal, there’s a wide range of costs. You could spend very little with someone locally whose cat had a litter or you might pay top-dollar for a purebred dog. After the first year, cat owners can expect to pay from $710 to $2,865 a year and dog owners can expect to pay from $1,000 to $5,225 a year in standard expenses.

What is generally the biggest expense to owning a pet?

Typically, the biggest expense of pet ownership is vet care. A new pet will cost more, due to spaying/neutering. But even after that, you can easily spend several hundred dollars annually to cover well checks and vaccines. For this reason, some people investigate pet health insurance to help with the cost.

Photo credit: iStock/alexei_tm

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. 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 NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi 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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOBNK-Q424-029

Dec

2024

Worst Cases of Hyperinflation Throughout History

By Rick Orford | Budgeting & Goals, money | Comments Off

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Inflation has been all over the news in recent years. But what exactly is inflation? By definition, inflation is the gradual increase in the average price of goods and services over time. When a country experiences inflation, its currencies’ purchasing power gets reduced. People feel the pinch, and their money doesn’t go as far.

Inflation can adversely affect an economy, including reduced output and increased unemployment. Hyperinflation, or incredibly rapid, out-of-control price increases of more than 50% per month, does the same, only worse.

The U.S. inflation rate hit record highs in the years following the pandemic. In 2022, the average inflation rate was 8%, the highest since 1981. That said, if we look at other countries, we’ll see that there are far worse cases when it comes to inflation.

In this article, we’ll review 10 incidents of some of the worst hyperinflation in history and its consequences.

Key Points

• Hyperinflation leads to economic chaos, loss of savings, and destabilization, as seen in historical cases like Germany 1923.

• Countries may adopt foreign currencies during hyperinflation, exemplified by Yugoslavia’s switch to the German mark in 1994.

• Severe shortages and social unrest often accompany hyperinflation, highlighted by Zimbabwe’s 2008 crisis.

• Government interventions, such as currency reforms, are common responses to hyperinflation, demonstrated by Germany’s introduction of the Rentenmark.

• Recovery from hyperinflation is prolonged, with Greece’s post-WWII stabilization taking years.

Worst Hyperinflation in History

While some inflation can be good for the economy, high inflation can have negative effects on both consumers and businesses.

Inflation is typically considered high when it exceeds the rate of economic growth. For example, when prices rise faster than wages, then workers’ purchasing power declines. This can lead to a decrease in demand (such as less spending and travel), which can cause businesses to reduce production and result in a recession.

What follows are 9 examples of when inflation got really out of hand.

1. Greece: October 1944

Greece faced a severe period of inflation that began when the Germans occupied the country during World War II and continued to get worse. In 1944, prices doubled every 4.3 days and the monthly inflation rate peaked at 13,800%. The government responded by introducing price controls and rationing. However, it took many years before they were able to bring inflation under control. At the beginning of 1947, prices finally began to stabilize and national incomes began to rise, lifting the country out of one of the worst hyperinflation periods in history.

2. Yugoslavia: October 1994

In the early 1990s,Yugoslavia was hit by an inflation crisis that caused the value of their currency, the Dinar, to drop sharply. Prices doubled every 34 hours. As a result, it was difficult for citizens to purchase everyday items like food and clothing. Many resorted to smuggling goods to get by.

The government attempted to fix the problem by introducing new bills with higher denominations, but this caused more chaos and confusion. In the end, Yugoslavia abandoned its currency altogether and adopted the German mark as its official currency.

3. Germany: October 1923

In October 1923, Germany faced a period of extreme inflation. The government had printed too much money to finance war operations, and prices were skyrocketing. More than a wheelbarrow full of bills was needed just to buy a newspaper. People were losing their life savings, and the economy was in chaos.

To halt inflation, the government introduced a new currency called the Rentenmark. This stabilized the currency, and Germany began to recover from the crisis.

4. Zimbabwe: November 2008

Thanks to years of economic mismanagement by the government of Zimbabwe, in November 2008, inflation hit its peak. The country’s inflation rate was, month over month, 2,600%, or more than 231 million percent on a year-over-year basis. Those mind-boggling numbers meant that a loaf of bread cost what 12 new cars did a decade prior.

To mitigate the issue, the government printed large amounts of money without backing it with gold or other assets. This resulted in a rapid depreciation in the value of the currency. As prices increased, people started losing faith in the currency, leading to even more hyperinflation.

The situation became so desperate that most people could not afford necessities such as food and medicine. The high inflation rate also made it difficult for businesses to operate, and many companies went out of business.

5. Hungary: 1946

Hungary experienced a high level of inflation after the end of World War II. The country’s currency, the Forint, was not pegged to the U.S. dollar or any other currency. As a result, it was vulnerable to sharp devaluations. In addition, Hungary was still recovering from World War II, and the government was trying to stabilize the economy by printing money, a factor that can cause inflation, to finance its reconstruction efforts.

As a result, prices doubled every 15.6 hours, and the average person’s standard of living declined sharply. In the second half of 1946, Hungary was home to the most worthless currency in the world, with a banknote carrying a denomination of 1,000,000,000,000,000,000.

6. Argentina: 1975

Starting in 1975, Argentina’s inflation rate increased by an average of more than 300% per year until 1991. Several factors caused the situation, including an increase in the money supply without an equal increase in goods and services. This led to a spike in prices. Another trigger was the decline in agricultural production, which led to higher food prices. Political instability also contributed to high levels of inflation.

7. Sudan: 2021

Inflation in Sudan has been an ongoing problem for several years. The main drivers of Sudan’s hyperinflation are:

• The depreciation of the Sudanese pound

• The high rate of population growth

• The increase in government spending

To address these problems, the government has implemented several measures, including devaluing the currency and reducing spending. Unfortunately, though, these measures have not been fully effective, and inflation continues to be a major issue. As of October 2024, the annual inflation rate was 200.1%.

8. Iran: 2022

Inflation in Iran is a problem that has been going on for many years. The value of the Rial has decreased significantly, and the cost of living has increased dramatically. Undoubtedly, this has caused significant hardship for the people of Iran. In May 2022, inflation was impacting food and beverage prices at a rate of over 80%.

To combat the high levels of inflation, the Iranian government has put various price controls in place. Fortunately, the controls have had an impact: As of October 2024, the annual inflation rate was 31.7%.

9. United States: 1917

The worst inflation rates in U.S. history reflect how harsh life during wartime can be. The highest figure ever observed was in 1776, when the rate of inflation was 29.78%. But, that was more than 100 years before the CPI (consumer price index) was introduced. Since its inception, the highest inflation rate ever recorded in the United States was 20.49% in 1917. The country went to war and had to finance that effort by printing more money.

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What Is the Most Inflated Currency?

In the world of finance, there’s a variety of currencies that get used in different countries. While some currencies are more valuable than others, the Venezuelan bolívar is one of the most inflated currencies in the world. That’s due to Venezuela’s astounding inflation rate, which was 360% in 2023. That was the tenth consecutive year that Venezuela earned the distinction of having one of the highest inflation rates in the world. The rate in 2023, however, was a significant improvement over 2018, when it was 65,000%.

The Takeaway

Inflation affects everything from the cost of a loaf of bread to your kids’ college tuition. While Americans got hit with high inflation in years after the pandemic, it’s been far worse at other times in U.S. history, and throughout the world.

One of the best ways to beat inflation is to earn a competitive interest rate on your savings. If your bank pays less than the current rate of inflation, your money actually loses value over time. Generally, online banks offer yields on savings accounts that are many times higher than those offered by traditional banks.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

Photo credit: iStock/AlexSecret

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. 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 NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q424-026