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A high-yield checking account is a secure place to deposit, store, and withdraw money, but with an enhanced interest rate vs. other similar accounts. Typically, money in a checking account doesn’t earn any interest — or maybe a nominal fraction of a percent.

With a high-yield checking account, there’s the potential to turn your regular deposit account into a passive income machine. While it’s unlikely to make you rich, a high-yield checking account can help pad your pockets with a few extra interest dollars, which can add up over time.

However, these accounts can come with certain conditions that may or may not make them the right choice for you. Here’s what you need to know.

How High-Yield Checking Accounts Work

High-yield checking accounts, as their name implies, are checking accounts that offer a high “yield,” or interest rate, on the balance held in the account.

Whereas the national average for an interest-bearing checking account is about 0.07% APY (annual percentage yield) per the FDIC, a high-yield account might offer 3% to 5% APY or even higher — which still might not make you a fortune, but is a significant upgrade and on a par with some savings accounts.

High-yield checking accounts make it possible to create a passive income stream, albeit a small one, just by holding money in your checking account (which you likely already do). A high-yield checking account can augment interest earnings from other financial products you may hold, such as a high-interest savings account or investments like high-yield bonds.

However, there can be account minimums to contend with or potential fees.

Does a High-Yield Checking Account Come With Fees?

Although some high-yield checking accounts come with monthly maintenance fees that could easily eclipse whatever interest you stand to earn, these fees can commonly be waived so long as you maintain a certain minimum monthly balance or meet other requirements. These may include making a certain number of debit card transactions or receiving a certain threshold in direct-deposit income each month.

These days, there are even some free high-yield checking accounts — usually offered through online banks — but the level of interest you’ll earn may depend on your ability to meet the same kind of transaction minimums we just mentioned. (If you don’t meet the requirements, you might not earn any interest at all.)

So, in short, while you might not have to pay for your high-yield checking account, you’ll likely need to perform the basic minimum monthly transaction requirements in order to glean the full benefits of the account.

Top 3 Pros of a High-Yield Checking Account

High-yield checking accounts can be very beneficial — here’s how.

1. More Earnings

These accounts offer an opportunity for interest earnings simply by holding a checking account. In some cases, the interest rate may rival that of certain kinds of savings accounts.

2. Motivation to Keep More in Your Account

These high-yield checking accounts can incentivize account holders to keep a higher minimum balance due to interest-earning requirements — which can help you generate a cash cushion.

3. Availability

These accounts are becoming increasingly available, especially thanks to the proliferation of online-only banks. You likely don’t need to invest much time and energy in research when looking for one.

Cons of a High-Yield Checking Account

On the other side of the coin (pun totally intended), high-yield checking accounts can have their drawbacks.

Transaction Requirements

These high-yield accounts may come with transaction requirements to secure interest earnings. If the account holder doesn’t meet them, little or no interest will be earned. These obligations might suit your money style, or they might prove to be a major hassle.

Modest Interest (If We’re Honest)

Many interest-bearing accounts generate just a fraction of a percentage in interest. Even the highest-yield checking accounts currently only offer about 5.00% APY. Yes, every little bit helps but this certainly isn’t enough money to retire on.

Additional Fees

In some cases, high-yield checking accounts may come with fees. Waiving them may require holding a significant minimum monthly balance — which can be challenging for individuals and families living paycheck to paycheck.

Here, you can review the pros and cons again in table format:

Pros of High-Yield Checking Accounts	Cons of High-Yield Checking Accounts
Potential to earn interest on checking, which normally offers little or no earning potential	May have many monthly transaction minimums to meet in order to qualify for interest earnings
Can incentivize account holders to keep more money in their accounts	May have fees that can only be waived by maintaining a significant minimum monthly balance or meeting minimum transaction requirements
Are increasingly available — and increasingly fee-free — from online banks	Even the best high-yield checking accounts typically offer far less than the average return on stocks and bonds (though when FDIC-insured, these checking accounts can be a safer investment vehicle)

Recommended: What Is a Certificate of Deposit (CD)?

Is a High-Interest Checking Account Worth It?

Whether or not a high-interest checking account is worth it will probably depend on a couple of key factors.

•   First of all, how high is the interest rate? If it’s just a fraction of a percentage above the norm, it may not be worth it. But if it’s a multiple of the standard rate, it might be a good way for your money to make money.

•   Next, what fees or minimum requirements are involved? If your money would make $10 more in interest per year in a high-yield account but you need to tie up funds that could be working harder elsewhere, then it’s probably not a money-wise move.

Factors to Look For in a High-Yield Checking Account

If you’re shopping for a high-yield checking account, consider these factors:

Interest Rate

Of course, you will likely want to shop around and see what are the highest rates available for a checking account. Currently, the highest rates are 5.00% or slightly higher.

Minimum Balance

With this kind of checking account, you may be required to make a specific size of deposit to open the account. You may also need to keep a certain balance in order to earn the high interest rate or to avoid fees. If that’s the case, make sure you can meet that number.

Fees

In addition, when opening a checking account, be sure you understand what fees might be charged. These can include maintenance, overdraft, ATM, and foreign transaction fees, among others. You’ll probably want to avoid being charged fees so that they don’t eat away at the interest you are earning. Online banks may be more likely to waive such fees.

How to Qualify for High-Yield Checking Accounts

In order to qualify for a high-yield checking account — and actually get the benefits — you’ll need to be able to fulfill whatever that account specifies as far as transaction requirements or minimum opening deposits.

In addition, if your banking history is marked by overdrafts and other negative factors, this may be reported by ChexSystems, which is kind of like a credit score bureau but for banking. If you have many negative factors (unpaid fees, say, or many overdrafts), you may not be able to qualify for a high-yield checking account — or other types of deposit accounts, either. (If your ChexSystems report contains errors, you can always dispute false information with ChexSystems online.)

How to Open a High-Yield Checking Account

Now that you know what it is, you may wonder how to open a high-yield checking account. The process is similar to opening any other type of account. You’ll be asked to provide:

•   Basic personal information, such as your name and address

•   Proof of address (such as a utility bill)

•   Government-issued photo ID

•   Your Social Security number or other taxpayer identification number

In addition, your chosen bank may also require a certain minimum opening deposit, which you’ll need to provide to activate the account. The bank will offer specific details as far as what documentation is required and how to deliver it.

High-Yield Checking Accounts vs High-Yield Savings Accounts

If you are comparing high-interest checking and high-yield savings accounts, you will likely want to consider the following points:

•   A high-interest checking account does generate money on your deposit, but it may come with minimum transaction or balance requirements. These could be difficult for some people to meet.

•   A high-interest savings account can offer good earning power, but the number of transactions you are allowed could be limited. Although Regulation D, which limits savings accounts to six transactions a month, was largely suspended since the pandemic, some financial institutions may still apply this rule and charge fees if you conduct more transfers.

Depending on your needs, one of these may be a better option than the other. Also, it is likely to be easier to find a solid interest rate with a high-yield savings account than with the checking variety. In other words, many high-interest checking accounts don’t offer all that much earning power.

Opening a Checking and Savings Account With SoFi

A high-yield checking account is a great way to augment whatever passive income you might earn from savings accounts, investments, and other holdings. Some interest is better than none, after all — every little bit of interest earned counts.

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

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

FAQ

Is a high-yield checking account worth it?

This all depends on whether or not you can meet any minimum monthly transaction requirements. If you can fairly easily do so, a high-yield checking account is an easy way to earn passive income just by keeping an active bank account. But if you can’t, you might not earn any interest at all — or even pay additional fees for the account.

What is the difference between a high-yield checking and savings account?

A high-yield checking account is designed to be the hub of your financial life and typically doesn’t have any limits on the number of transactions you may make; savings accounts may restrict this. However, this kind of checking account likely pays less interest than a high-yield savings account, which may do a better job of helping you generate passive income.

Can you withdraw money from a high-yield savings account?

Yes, you can withdraw money from a high-yield savings account. However, there may be restrictions on how many transactions you can make per month. Going over that number could result in fees or the account being converted to a checking account.

What bank has the highest checking interest rate?

Currently, some of the banks offering the highest checking interest rates are Axos Bank, Presidential Bank, Heritage Bank, and Quontic Bank.

Can you ever lose your money with a high-yield savings account?

A high-yield savings account is typically a very safe place to keep your money, especially if it’s FDIC- or NCUA-insured. The risk of losing money is extremely low.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Our account fee policy is subject to change at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

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A decent salary — one that allows for necessities, fun, and savings — might start around $69,000 for a single, childless person in Florida and $94,500 for a couple.

Why those figures? Using the 50/30/20 budget method, start with what MIT calls a living wage in Florida, which covers basic needs (50% of a salary). Add entertainment, vacations, restaurant meals, more shoes for the collection, and other “wants” (30%). Factor in 20% to be saved.

Even adding one child to a household greatly increases expenses (as if any parent needs to be reminded). A looser definition of a good salary for a working adult with a working partner and a child, based on the MIT Living Wage Calculator, could be somewhere in the neighborhood of $129,800.

Of course, your actual cost of living will depend on the city, size of your household, and your spending needs and habits. Read on for a breakdown of what it may take to say you earn a good annual salary in Florida.

Is It Expensive to Live in Florida?

Florida was one of the two fastest-growing states in the U.S. in 2023, the Census Bureau says, and it’s easy to see the draw.

It’s a state with no income tax, moderate property taxes, lots of sunshine, and plenty to do and explore. Corporate and sales taxes are lower than those of most other states.

Despite those perks, it isn’t the cheapest state to live in. Florida had the 29th lowest cost of living in the U.S. in 2022, according to data gathered by the Missouri Economic Research Information Center (MERIC). That means 28 states had a lower cost of living, with Oklahoma the cheapest place to live.

Some cities are as sizzling as the summers. If you’re Miami-bound and plan to rent or buy, for example, that’s when you’ll especially need to check your finances. Miami-Dade is the second-least affordable place in the U.S. to live, according to the February 2024 RealtyHop Housing Affordability Index.


💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

What Is the Average Annual Salary in Florida?

Whether a salary can be considered “good” or not in Florida can depend on several factors, including where you choose to live. Proximity to a big city or beach can draw residents who are willing and able to pay more. So can living in an area known for high-end amenities (like shopping, nightlife, and cultural attractions) and luxurious homes.

The median household income among Floridians is $67,919, according to the latest data from the U.S. Census. That means, of course, that half of the state’s households bring in more than that, and half bring in less.

That figure compares with the median household income in upscale Collier County (which includes Naples and Marco Island) of $82,011. In Monroe County (Key West), it was $80,111. In Palm Beach County (Palm Beach, Wellington, Boca Raton), it was $68,874. And in St. Johns County (St. Augustine, Ponte Vedra), it was $100,020.

On the other hand, the median household incomes in landlocked and lesser-known Glades and Hendry counties in the south, and Hamilton County on the Georgia border, were $37,221, $49,259, and $47,668, respectively.

So what is a good salary in Florida, if you’re talking about one that goes beyond basic needs and allows for “wants” and savings?

A registered nurse pulls in an average base salary of nearly $79,000, according to Indeed. That’s a good income for a single person with no children in most parts of Florida as viewed through the 50/30/20 budget lens.

One Floridian with no children needs to net $46,645 to cover necessities like groceries, a modest rental, health care, and transportation, the MIT Living Wage Calculator shows. Doubling that provides room for discretionary spending (30%) and savings (20%).

Recommended: What Is Competitive Pay?

What Can Affect Affordability in Florida?

As you can imagine, one of the biggest factors affecting how far your salary will go in Florida is housing. Housing costs can vary widely, depending on where you decide to settle and on whether you buy a house or condo. But home and rent prices across the entire state have risen sharply over the past few years.

The cost of insurance coverage — homeowners, health, and auto — also is generally higher than in many other states. Many home and condo owners also must pay for federal flood insurance, which is on the rise.

Still, owners of primary homes may get a property tax break with the homestead exemption, which decreases the property’s taxable value by as much as $50,000.

That doesn’t mean that everyone who lives in the Sunshine State is living large. The state’s median household income in 2022 (the Census Bureau’s most recent number) was just over $67,000 — while the median U.S. household income was closer to $74,580.

And although the state’s minimum wage will rise to $13 this year with more bumps expected in 2025 and 2026, Florida is one of the states impacted most by inflation, according to the U.S. Congress Joint Economic Committee.

What Are Some Average Annual Expenses in Florida?

How should you expect to divvy up your income if you live in Florida? Here are some costs you may want to plug into a money tracker app:

Housing

Whether you rent or buy a home, a major portion of your paycheck will likely go toward putting a roof over your head.

A couple of Florida cities appear on this price-to-rent ratio list. The ratios can be useful when considering whether to rent, buy, or invest.

Also useful if you haven’t owned a principal residence in the past three years or you’re a veteran: first-time homebuyer programs in Florida.

If you’re buying …

Florida’s housing market continues to be red hot, with prices in January 2024 up 4.5% compared with the same period last year, according to Redfin.

Here’s a look at median sale prices in cities across the state for that same period.

Cocoa: $227,500

Daytona Beach: $262,200

Marco Island: $1.34 million

Miami: $599,000

Ocala: $239,450

Orlando: $369,000

Palm Beach: $1.9 million

Stuart: $370,000

Tampa: $393,000

If you’re renting …

Rents are all over the place in Florida, as you can see from the list below. Here are some recent median monthly rents for two-bedroom properties, according to Zillow.

Cocoa: $2,000

Daytona Beach: $1,695

Marco Island: $8,000

Miami: $3,250

Ocala: $1,725

Orlando: $2,095

Palm Beach: $12,000

Stuart: $2,850

Tampa: $2,117

Groceries

The U.S. Census Household Pulse Survey Family Budget Calculator ranked Florida 5th highest for food costs in the U.S. in 2024.

Here are the monthly costs for some Florida counties, based on a family of four (two adults and two children in a household where most food is purchased at a grocery store and prepared at home), according to the Economic Policy Institute Family Budget Calculator.

Brevard County: $1,081

Collier County: $1,173

Hamilton County: $960

Hillsborough County: $1,070

Miami-Dade County: $1,143

Monroe County: $1,304

Palm Beach County: $1,183

Washington County: $853

Utilities

Florida ranks 2nd in the U.S. for utility costs, according to data gathered by Statista. Of course, utility costs can vary depending on whether you rely on natural gas or solar, the size and age of your home, your appliances, etc. But here’s what Statista says are the average monthly utility costs in Florida.

Electricity: $128.64

Natural Gas: $61.69

Water: $45.44

Phone: $114

Broadband Internet: $59.99

Gasoline

According to GasBuddy’s interactive gas price map, Florida’s gas prices are about average compared with other states. But again, the cost can vary depending on where you live.

Here are GasBuddy numbers for some Florida counties in March 2024.

Brevard County: $3.02 per gallon

Hillsborough County: $3.10

Miami-Dade County: $2.79

Orange County: $2.99

Palm Beach County: $2.99

Sarasota County: $3.21

St. Johns County: $3.09

Walton County: $3.09

Child Care

The cost of child care can depend on how old your kids are and if you choose an at-home or classroom setting. According to CostofChildCare.org, the average cost per month in Florida is $989 per child for home-based family care, $1,364 for an infant classroom, $790 for a toddler classroom, and $702 for a preschool classroom.

Which City in Florida Has the Lowest Cost of Living?

According to NewHomeSource, the Florida city with the lowest overall cost of living is Titusville, followed by Winter Haven, Lauderdale Lakes, Daytona Beach, Sanford, Largo, Lakeland, Deltona, Jacksonville, and Pinellas Park.

A few of those, as well as more affluent cities, have a sizable retiree population. Yes, Florida is a senior magnet. (See: Winter Haven.) By 2030, the number of seniors in Florida is expected to top 6 million.

How Much Money Do You Need to Live Comfortably in Florida?

“Comfort” is a subjective term in any context, as we all have different wants and needs when it comes to our lifestyle.

If you plan to spend more time outside doing things that are inexpensive or free, you may find it’s easier to embrace financial minimalism by living in the Sunshine State.

If, on the other hand, you long to reside in one of Florida’s bigger cities or near the beach, you may have to ask for a bigger salary than you’d need in a less expensive location. That’s especially true if you’ll be living on a single income.

Either way, it may be useful to consider your priorities and whether your income will cover those costs. Can you be happy without owning a boat or being a member of a golf club? Do you tend to live below your means or overspend? Are annual passes to Disney a must?


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

Florida can be an expensive place, mostly because the cost of renting or owning a home has gone up so much. But with a good salary — by one definition at least $69,000 for a single, childless person — and a solid spending plan, you can enjoy the laid-back Florida lifestyle.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

What is a livable salary in Florida?

MIT’s Living Wage Calculator says a livable salary for a single person in Florida with no children is about $46,000 before taxes.

What job in Florida pays the most?

Cardiologists, emergency room physicians, and orthopedic surgeons are the highest earners in the state, according to the Bureau of Labor Statistics.

Can you live on $30,000 a year in Florida?

You may find it challenging, especially when it comes to finding a place to live. But if you share a home and other expenses, find affordable health care, and budget carefully, $30,000 a year could be enough to get by on in Florida.

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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.

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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What’s considered a “good” salary in Texas depends on your household size and lifestyle, but most Texans make between $45,000 and $100,000 annually.

Texas cities have differing costs of living, of course — Austin is much pricier than Amarillo — so where you live in the Lone Star State also matters. Let’s break it down further.

What Is a Good Salary for Texas?

A good salary, in many people’s minds, is one that allows an earner to save, take vacations, eat out, and so on. But before we can calculate that amount, we need to look at the average income required to cover basic needs in Texas.

Each year, MIT releases living wage figures — the income that one or two working adults, with or without children, must earn to pay for basic living expenses. Living wage numbers are expressed as an hourly rate, and it’s assumed that the person will work full time.

Wages needed to cover basic needs are as follows:

Recommended: What is The Difference Between Transunion and Equifax?

Living Wage for 1 Adult
No children	$20.92
1 child	$35.39
2 children	$43.60
3 children	$56.61

Living Wage for 2 Adults, 1 Working
No children	$28.89
1 child	$34.44
2 children	$38.55
3 children	$41.27

2 Adults, Both Working
No children	$14.44
1 child	$19.78
2 children	$24.20
3 children	$27.97

If you multiply the hourly figure by 40 hours a week and 52 weeks, you’ll get the living wage as an annual salary. For an individual with no kids, that comes out to around $43,500.

That income would pay for rent and utilities, minimal food, healthcare, child care, and other basics. But it’s not enough to cover takeout, restaurant meals, a deluxe apartment, vacations, or savings for retirement or a house.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

Average Annual Salary in Texas

So what is a good yearly salary in Texas? According to MIT, the top three professions in Texas pay an average of $113,000, while the three lowest paying fields average out to around $28,000. Most Texans then make somewhere in the middle. However, statewide figures can’t tell you what constitutes a good salary in larger cities like Austin, where the cost of living is much higher.

Another measure of what constitutes a good salary: one that allows you to purchase an average-priced home. The average home price in the Woodlands, one of the most popular suburbs in the country, is around $540,000. A buyer would need to make over $100K to qualify for a mortgage. In the Panhandle or Dallas, however, home prices are considerably lower.

Average Annual Expenses in Texas

When determining a living wage, MIT considers these expenses: food, child care, medical, rental housing, transportation, internet and mobile, civic, and annual taxes (including individual income tax, payroll tax, corporate income tax, and excise tax, but not property tax). By the way, “civic” is a catchall category that includes cultural attractions, hobbies, and pets, while “other” groups together clothing and personal care items.

As noted above, one adult with no children requires a gross income of $43,500 on average. This is how that income might allocated:

•   Food: $3,812

•   Child Care: $0

•   Medical: $2,992

•   Housing: $13,367

•   Transportation: $10,216

•   Civic: $2,165

•   Internet & Mobile: $1,468

•   Other: $3,903

•   Taxes: $5,584

Supporting a family of two working adults and three children requires an income of about $116,350, which breaks down as follows:

•   Food: $13,662

•   Child Care: $26,381

•   Medical: $9,734

•   Housing: $22,290

•   Transportation: $17,116

•   Civic: $5,191

•   Internet & Mobile: $2,048

•   Other: $9,841

•   Taxes: $10,088

To compare your spending to these figures, sign up for a free money tracker app.

How Much Money Do You Need to Live Comfortably in Texas?

Comfort is in the eye of the beholder. Some people want luxuries while others embrace financial minimalism. This is a “less is more” attitude to spending. People who follow this philosophy focus on purchases that will add meaning to their lives.

When determining the income you need to live comfortably, factor in where you fall on the minimalism to luxury spectrum. There’s no “bad” answer; it’s just important to be honest when budgeting. Also, what changes are you willing to make in order to save more? For instance, would you downsize your home?

Texans with a financial minimalist philosophy will be comfortable with less money than someone who strives for luxury. Minimalists often reap the benefits of living below their means, which can make room for having an emergency fund, spending in ways that are better for the planet, and stressing out less about finances.

If you’d like a more structured approach to saving and spending, the 50/30/20 budget can help. The three numbers represent the percentage of income that will be allocated to needs, wants, and savings, respectively.

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

Which City in Texas Has the Lowest Cost of Living?

Harlingen (pop. 71,925) has a cost of living that’s 20.4% lower than the national average, according to recent data from the Council for Community and Economic Research. Harlingen is in the Rio Grande Valley about 30 miles from the Gulf of Mexico. Its median home sale price was $290,600 in March 2024.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

What is a good salary in Texas? It depends on your family size, location, and spending habits. Most individuals make between $45,000 and $100,000. You’ll need an income on the higher end of that range if you’re living in Austin, with its high cost of living. In Harlingen, on the other hand, where the cost of living is 20.4% lower than the national average, you can get by on much less. With that in mind, a good salary in Texas is between $55K and $73K. To live comfortably anywhere, it helps to track your spending and saving.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is a livable salary in Texas?

The answer depends on your spending habits, locale, and how many people live in your household. The living wage for a single worker with no children is $43,500 before taxes, which is just enough to cover necessities. Two working adults with two children need a gross income of $100,689 to cover basic needs

What is considered rich in Texas?

To be considered middle class in Texas, you’ll need to earn between $44,865 and $133,926, according to 2023 data from SmartAsset. In order to move into the upper class, you’ll likely need to earn more than $133,926.

What is the top 1% income in Texas?

You need to earn more than $631,000 per year to be in the top 1% in Texas. This is similar to the national average.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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.

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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Having multiple credit cards brings certain benefits. On average, Americans use two to three credit cards at a time, often to take advantage of various perks and rewards programs. Another reason to own multiple credit cards is they can boost your credit score when managed sensibly.

That said, juggling credit lines can get out of hand, and it’s easy to fall behind with payments and face hefty interest charges. Here’s a guide to managing multiple credit cards: when to use certain cards, how to know if you have too many, and more.

Steps for Managing Multiple Credit Cards

Here’s how to manage your credit cards wisely and the steps to take to avoid unnecessary interest charges and fees.

Keep Track of Terms

Know what you are signing up for when you apply for a credit card. While a card may offer perks like sign-up bonuses, free vacations, and 0% interest rates initially, it may also charge high fees and exorbitant interest rates later on. Every credit card has different terms and conditions that are often buried in the small print.

Before applying for a new credit card, check the interest rate, or APR. Also look for penalty APRs, purchase APRs, and cash advance APRs. A penalty APR is charged if you don’t comply with the card’s terms and conditions. A purchase APR is the interest rate charged for purchases or carrying the balance over to the next month. A cash advance APR applies if you use your credit card to borrow cash.

A card may also offer an introductory 0% APR, for a limited period. However, once that period is over — or if you miss a payment — the interest rate can skyrocket. Many cards also charge an annual fee for card ownership, a maintenance fee, cash advance fees, foreign transaction fees, returned payment fees, and late payment fees.

If a card offers cash back, find out how much you need to spend to accumulate points or cash back. Check the fine print to find out what types of purchases are qualified and if there are any caps on earning cash and points. Also, read the rules on redeeming rewards, such as when they might expire or be forfeited.

For a sign-up bonus, you might be ineligible if you have owned the same card previously or another family member has the same card.


💡 Quick Tip: Check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Pay on Time and in Full

You will likely incur fees if you miss payments due on your credit card. Also, if you make only the minimum payment on your credit card, you will increase your debt and pay unnecessary interest. But if you pay off your balance in full each month, you are in effect getting a free loan.

If you have multiple credit cards to juggle, it will take dedication to monitor the balances and due dates to avoid late payments, interest charges, and fees. However, managing credit cards responsibly can build your credit history.

Set Up Autopay

Once you understand the terms, conditions, and payment due dates of your various credit cards, set up automatic payments to avoid missing a payment. Missing a payment will mean that you are charged interest, and depending on the balance on the card, the interest payments can be steep.

Set Reminders

Managing multiple credit cards may require setting reminders. For example, if you signed up for a card with an initial period of 0%, you should know when that period ends. Also, keep track of when rewards expire, and when you should redeem points or rewards.

Recommended: What Is a FICO Score?

Simplify Your Payment Due Dates

You may want to change the payment due dates for your cards to make budgeting easier. For example, if the payments for multiple cards all fall on the same day or week, it can be difficult keeping enough cash on hand.

Consider scheduling due dates close to a payday or soon after a direct deposit. It might take one or two billing cycles for your request to take effect.

Know When to Use Each Card

There’s little point juggling multiple credit cards if you don’t use the right card for the right purpose. That’s why studying each card’s terms and conditions is crucial to optimizing the benefits of your cards. For example, some travel cards come with travel protections that will reimburse you if a trip has to be canceled, and co-branded airline cards may offer free checked bags or upgrades.

Keep a Record of Your Credit Card Features

Organization is the key to managing multiple credit cards. You can use a notebook, spreadsheet, or a personal finance app — whatever it takes for you to be able to access the information you need easily.

Some key data to have at your fingertips are the interest rate, credit limit, issue date, annual fees, and payment due dates, the balance from month to month, and the key facts about the rewards program (minimum spending limits, expiration dates, qualified items).

Give Each Card a Purpose

Allocating a purpose for each card will tell you what type of card you might want to get next. For example, you might have a card that offers travel rewards, another card for cash back on groceries, but you might want to also get a card that offers rewards for buying gas. Keep a record of which card serves what purpose.

Carry Only the Cards You Use

Don’t carry all your cards with you all the time. You risk losing them, plus it will make your wallet uncomfortable to carry! There’s no need to carry an airline card that you only use to book flights. Make sure you know which cards charge an inactivity fee, and set up reminders to use the card to avoid such penalties.

Recommended: Find Out Your Credit Score for Free

Use an App to Track Your Card Balances

It’s a good idea to use an app to track your card balances. Apps are particularly useful because they alert you when a payment is due or delinquent. Some apps perform free credit monitoring, help you find a credit card for a specific merchant, and track your loyalty programs.

Signs You Have Too Many Cards

How many cards is too many? That depends on how well you manage them. Here are some indicators that you should consider closing some accounts.

You Can’t Pay the Balance Off Each Month

If you can’t pay off all the balances on your cards each month, you are in danger of falling deeper into debt and having to pay interest. You also risk increasing your credit utilization ratio. When your ratio gets too high, credit card companies may turn you down and credit checks for future employment may be affected..

You’re Missing Payments

If you find it hard to keep track of your credit cards, miss payments, or lose rewards, it’s a sign you might have bitten off more than you can chew. Simplify your financial management by choosing three or four of the most advantageous cards for your lifestyle and cancel the rest.

You’re Earning Too Few Rewards

If you rarely redeem rewards, it might not be worth keeping the card. Not only are you paying a fee for a card that gives you little benefit, but you also have the hassle of keeping track of the card’s features and balance. It might be best to nix these credit cards.

Which Cards Should You Stop Using?

When deciding which credit cards to stop using, list out the benefits of each card. Look at your spending history with that card over the past year and look at what you have gained. If you have spent little and gained little, it’s time to lose the card.

Similarly, if a card charges high annual fees and provides few benefits, don’t keep the card. Also look at the interest rate. If you have a balance on a high-interest card, pay off that debt and close down the card.

When Does It Make Sense to Close a Card?

It makes sense to close a card when you only use it to avoid an inactivity fee, if it provides few benefits, if the fees and interest rate are high, or if you are having trouble paying off the balance each month.


💡 Quick Tip: One way to raise your credit score? Pay your bills on time. Setting up autopay can help you keep your account in good standing.

The Takeaway

Having various cards can be advantageous because you can benefit from rewards and loyalty programs, build your credit history, and take advantage of interest-free credit if you pay off the balance each month. However, each credit card charges various fees, and managing multiple credit cards can be a headache.

When opening a new credit card, make sure the fees, rewards, limitations, and penalties that come with the card make sense for you. Also consider if you can manage the card and pay off the balance each month on time. Lastly, review your portfolio of cards regularly in case it makes sense to close down an account.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How do I manage multiple credit cards?

Managing multiple credit cards comes down to organization. Keep track of all your cards and their various features, including due dates, what you should use them for, the rewards they offer, balances, interest rate, and penalties and fees. There are apps and online tools that help you to manage cards and monitor your credit score.

What is the 15/3 credit card rule?

The 15/3 credit card rule is a strategy to lower your credit utilization ratio. A credit utilization ratio of 30% or below makes you more attractive to lenders. Most people make one credit card payment a month by the due date, but with this strategy, a cardholder makes two payments each month, which reduces your credit utilization ratio significantly. Even if you regularly pay your credit card balance in full each and every month, you may still be carrying a large balance throughout the month, and your credit score may be affected.

How many credit cards is too many?

How many credit cards you should have depends on your lifestyle and how well you manage them. Feeling overwhelmed and making mistakes like not paying off balances on time are indicators that you cannot keep track of your cards. Other indicators that you may have too many credit cards are that you are not seeing much benefit in the way of rewards but are paying high fees, or you have a significant balance on a card with a high interest rate.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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

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College tuition inflation since 1980 has been rising. In fact, widely cited statistics have consistently shown college tuition rising faster than inflation.

It’s no secret: College tuition is on the rise, and it has been for years. According to the most recent data from the National Center for Education Statistics, during the 2021-2022 academic year, tuition and fees costs at undergraduate institutions were:

•   $9,700 at public institutions

•   $17,800 at private for-profit institutions

•   $38,800 at private nonprofit institutions

Between 2008-2009 and 2018-2019, costs rose 28% at public institutions and 19% at private nonprofit institutions. However, the costs for private for-profit institutions have reduced 6% in 2018-2019 compared to 2008-2009.

In comparison, public institutions cost $9,100 in 2010-2011, private for-profit was $19,400, and nonprofit institutions cost $34,000 in the same year, according to NCES , a subagency of the U.S. Department of Education.

Why has college tuition outpaced inflation, anyway? We’ll walk you through a complete guide to understanding college tuition vs inflation and the reasons college tuition has outpaced inflation over time.

What Is the College Tuition Inflation Rate?

First of all, inflation refers to a decrease in how much individuals can purchase with their money, based on increases in the prices of goods and services. According to Macrotrends, the general U.S. inflation rate for 2022 was 8%. Inflation peaked at 13.55% in 1980, at its highest levels since 1960.

Each college has its own tuition rate increase per year, so to get an accurate measure of an individual college’s tuition inflation rate, you can use the Bureau of Labor Statistics (BLS) inflation rate calculator to calculate the current inflation of college tuition rate for each institution based on previous tuition costs.

Ultimately, the average cost of tuition has increased nearly 180% over the past 20 years, even after accounting for inflation.

How Does Inflation Affect College Tuition?

When the cost of goods goes up, colleges and universities offset the increased cost of operating by increasing tuition costs.

The Higher Education Price Index (HEPI), which measures the price changes of items that allow universities to stay afloat, doesn’t align exactly with the Consumer Price Index, which refers to what consumers pay for goods.

It can be difficult to make an apples-to-apples comparison between rising tuition at colleges and universities and changes in inflation because the HEPI is affected by more than just the cost of goods. For example, administrators, professors, financial aid professionals, admission counselors, and others also require salary increases on top of the miscellaneous expenses associated with keeping college and university facilities running.

Why Is the Cost of College Rising?

There are other reasons that cause tuition, room, board, and fees to increase from year to year. In the next section, let’s explore the reasons that it becomes more expensive to run a school. We’ll discuss state funding availability, demand, and financial aid.

Less State Funding

Declining state funding has influenced tuition costs at state universities as health care and pensions increase for state employees.

As a direct result of the last two economic recessions, education appropriations remain 6% and 14.6% below 2008 and 2001 levels, respectively, according to the 2022 State Higher Education Finance (SHEF) report produced by the State Higher Education Executive Officers Association (SHEEO).

However, state funding for financial aid has increased steadily for two decades. State and local funding reached $100 billion for higher education for the first time in fiscal 2019.

More Demand

As demand rises, costs increase as well. More than five million more students attended U.S. colleges in 2017 than in 2000, though between fall 2010 and fall 2021, total undergraduate enrollment decreased by 15% (from 18.1 million to 15.4 million students), according to the most recent data from NCES.

Despite recent statistics, it’s still evident that the demand for higher education has continued to increase over the past few decades. The dependence on a highly skilled workforce and growing wage differences between college and high school graduates means more students choose to attend college and drive up the demand for higher education. Higher education prices must increase in response to a growing student population.

More Federal Aid

The 1987 Bennett hypothesis (named after President Ronald Reagan’s secretary of education, William Bennett), stated that colleges will raise tuition when financial aid increases, especially subsidized federal loans that offer low interest rates. In other words, the theory was that colleges can raise prices because federal financial aid will cover the excess costs and students can offset the cost increase with federal student loans.

Is the Bennett hypothesis still a worry today?

The New York Federal Reserve compiled a 2015 study that supports that finding. It found that student credit expansion of the past fifteen years has risen with college and university tuition.

Why Has College Tuition Outpaced Inflation?

It’s not easy to pinpoint one single reason for the rise in college tuition — you might be quick to blame governments that face deep deficits and cannot subsidize the full costs of higher education. However, the truth is that the costs of outpaced inflation are multifaceted.

Colleges often attempt to raise tuition to appear competitive with similar institutions, increasing costs across the board. University presidents also face enrollment demands and increases in HEPI also inflate budgets. That’s why high school students, together with their families, may want to carefully plan for the costs of attending a particular institution.

Some options for students who are looking into financing their education might include finding work during the summer, applying for financial aid, or looking into payment tuition plans.

College Tuition Inflation Since 1985

According to data from the NCES, since 1985 the average college tuition at all institutions has increased nearly $20,000 from $4,885 to $24,623 during the 2018-2019 school year. That number is even higher when considering the cost of attending a four-year institution, which in 1985 was $5,504 and during the 2018-2019 school year increased to $28,123

College Tuition vs Inflation

The increase in college tuition and fees have outpaced the rise of inflation for decades. According to Forbes, the cost of attending a four-year college or university during the 2021-2022 school year was increasing at double the rate of inflation. The cost of attending a two-year community college is increasing a third faster than the rate of inflation.

However, in light of the COVID-19 pandemic, this has changed slightly. From the 2020-2021 school year and the 2021-2022 school year, tuition and fees increased by about 0.6% on average, while overall prices in the U.S. increased by 3.2%, according to Bloomberg based on data from the BLS.

The Takeaway

College tuition has increased dramatically — increasing by nearly 180% in the past 20 years. The reasons for such an rise in tuition can be attributed to a variety of factors including less state funding, an increase in demand, and even an increase in the amount of federal aid awarded.

Despite the seeming downsides to inflation and college costs, SoFi can offer some major perks to help you pay for school with our private student loans. Note because private student loans don’t offer the same benefits as federal student loans (like income-driven repayment options), private student loans are generally considered only after students have carefully reviewed all other sources of funding and financial aid.

But, if private student loans seem like an option, you can check your rates and apply in minutes and easily add a cosigner if you so choose.^* Borrowers can choose from four flexible repayment options and there are no fees.

Get a quote for a private student loan in just a few minutes.

Photo credit: iStock/TARIK KIZILKAYA

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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

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.

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