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Ways to Avoid Monthly Account Maintenance Fees

Many financial institutions charge a monthly fee just for having an account. Often called “maintenance” or “service” fees, these charges tend to be most common with checking accounts, but some banks levy monthly fees for savings accounts as well.

Maintenance fees are also typically charged on top of other common bank fees, such as overdraft and ATM fees.

Depending on how closely you read your statements, you may or may not be aware of these monthly charges–or how much they can add up to each year.

Not all institutions charge maintenance fees, however. And, many banks will reduce or waive these fees if certain requirements are met, such as maintaining a certain balance or setting up direct deposit.

If you’d prefer to see your money grow (rather than shrink) while it’s in the bank, read on. Below, we break down what these common bank fees are for and how you may be able to avoid them.

What is a Monthly Maintenance Fee?

Banks often charge fees on personal and business checking accounts and sometimes even savings accounts to help them offset operational costs–or help to “maintain” your account.

Institutions may also charge these fees as a way to incentivise customers to make larger deposits. Many banks will waive fees if customers keep their balances high or use their account more frequently, all moves that benefit the bank.

Monthly maintenance fees are usually automatically withdrawn from a customer’s account each month.

How Much are Maintenance Fees?

While not all banks charge a monthly maintenance fee, many of the large financial institutions in the U.S. do charge monthly fees.

How much varies from one bank to another, but the average monthly maintenance fee for a checking account is currently around $13.95 per month, according to a recent MoneyRates.com survey.

While that may not seem like a lot of money when viewed as a one-time charge, it adds up to a whopping $167 per year.

Add in other fees–like for using an out-of-network ATM or overdrafting your account–and these surcharges can start to chip away at your hard-earned money.

Avoiding Account Maintenance Fees

Fortunately, there is often some wiggle room when it comes to maintenance fees. Here are some simple ways you may be able to minimize, or even completely avoid this type of account fee.

Choosing the Right Institution

Fees can vary quite a bit from one major US bank to another. Some charge $7 a month just for maintaining a checking account, while others charge $15 for the same exact service. For that reason, it can pay to do a little digging before you open a new account.

When comparing banks, it can be helpful to understand exactly what the monthly maintenance fee (if any) will be, and if there are any ways to avoid the fee.

Many banks will waive the monthly fee If you meet certain requirements. If you won’t be able to meet those conditions, however, you may want to keep shopping around.

Maintaining a Minimum Balance

Many institutions will waive the monthly account fee if you keep a certain amount of money in your account, known as a minimum balance.

That means If your average monthly balance dips below this amount, the maintenance fee would be triggered for that month and deducted from your account.

If your average monthly balance is above this threshold, the bank would waive the fee for that month.

Opening More than One Account

Many institutions will reward you for loyalty and waive monthly fees if you have multiple accounts with them, such as a savings account, money market account, or certificate of deposit (CD), in addition to a personal checking account.

In some cases, linking your accounts (such as a checking and a savings account) can help you meet the balance requirement to avoid the monthly maintenance fee.

Signing up for Direct Deposit

Many checking accounts are free when you elect to have your paycheck or benefits check automatically deposited into your account.

Each bank may have slightly different qualifying criteria. Some banks waive the maintenance fee if you make a certain number of direct deposits to your account each month, while others might require you to deposit a minimum dollar amount.

Using Your Debit Card Frequently

You may want to find out if your financial institution waives checking account fees if you use the bank-issued debit card linked to the account to make purchases or bill payments a certain number of times per month.

This number will vary from one bank to another, but ten is often the number required to make fees disappear.

Banks are able to ease up on customer fees because they get paid transaction fees from the merchants.

Reading Your Bank Notifications

Your “free” checking account is only free until…it isn’t.

While it’s important to read your account agreement when you first open up an account (and make sure you understand the bank’s requirements to avoid fees), you may also want to keep in mind that your bank can change its rules at any time as long as it notifies you about the change in writing.

For that reason, it’s a good idea to read the notifications the bank sends (via email or snail mail) about changes to its terms and conditions.

This will allow you to keep up to date on what you need to do to avoid monthly service fees–before you start seeing these debits show up on your account.

Giving up an Interest-Bearing Checking Account

If you have an interest-bearing checking account with your bank, it may be worth checking to see whether you can avoid a monthly maintenance fee by switching to an interest-free account, and if this could actually help you come out ahead.

Today’s interest rates are so low that the interest you are earning on your checking account may not even cover the monthly service fee you are paying in order to have an interest or “rewards” checking account.

Considering an Online Bank or Credit Union

Because online-only banks typically have lower overhead expenses than brick-and-mortar institutions, they can be less likely to charge their customers monthly fees.

Credit Unions can be worth checking out as well. As nonprofit, member-owned institutions, credit unions typically aren’t as focused on the bottom line as for-profit banks. This enables them to charge lower rates on credit products and levy fewer (and lower) account fees compared to banks.

Asking About Student and Senior Discounts

Many banks will offer a break on monthly fees to students. So, if you are currently in school it can be worthwhile to ask if a discount is offered, what age group is covered, what proof you’ll need to show that you’re a student, and what types of schools are included.

Similarly banks may offer a lower fee or no monthly fee if you’re over a certain age, and qualify as what they consider a “senior.”

Signing up for Electronic Statements

You may be used to getting that statement in the mail and there is something to be said for having it handy, but is it worth paying a fee for?

Since financial institutions save money by not printing and mailing you a paper statement each month, they often pass that savings along by offering discounts to customers who agree to go paperless.

The discount is often a reduced or no monthly maintenance fee.

The Takeaway

You don’t necessarily have to settle for high monthly checking account fees.

Many financial institutions will waive monthly fees if you maintain a certain balance, make a minimum number of purchases with your debit card each month, or sign up for direct deposit.

Looking for Something Different?

Another way to avoid paying monthly fees is to consider going with a cash management account, such as SoFi Money®.

SoFi Money allows you to earn competitive interest, save, and spend all in one account. And SoFi Money doesn’t have any account fees, monthly fees, or many other common fees.

Check out everything a SoFi Money cash management account has to offer today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion 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.
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.

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The Problems with Checking Account Interest Rates

When was the last time you thought about your checking account? If you’re like many people, it was probably the last time you wrote a check or paid a bill that wasn’t set up on autopay.

Checking accounts tend to exist in the background of our lives, warranting so little thought that many of us are still using accounts we first set up in high school or college.

Although we rarely think about their logistics, checking accounts impact almost every aspect of our lives–we use them for everything from buying groceries with our debit cards to transferring money back and forth between friends to paying our monthly bills.

The truth is, however, that your checking account could be hurting your financial health through low-interest rates.

Fortunately, there are alternatives to low (or no) interest checking accounts, such as high-yield checking accounts. And, many people are even choosing to leave checking accounts behind altogether and put their money into cash management accounts that often provide higher interest rates with fewer fees and restrictions.

Here’s what you need to know about checking account interest rates, and what you can do to start earning more on your spending account.

What is the Average Checking Account Interest Rate?

In return for putting money in your checking account, many banks pay interest. Checking account interest is a set percentage of the total amount of money you keep in your account and is paid out periodically. Unfortunately, checking account interest rates have been slowly decreasing.

In fact, the average checking account interest rate is only 0.04%, which means that even if you left $5,000 in your checking account for a year, you’d only earn $2 in interest.

While 0.05% is the average, plenty of banks are only paying out 0.01% in interest rates. Banks with 0.01% interest rate will pay merely 10 cents in annual interest for each $100 in your account.

Sometimes banks with low checking account interest rates also charge fees to maintain your account. Because interest rates are not high enough to offset the cost of these fees, you might actually be losing money by using your checking account.

Checking Account Interest Rates vs. Inflation

There’s another major downside to keeping your cash in a checking account with a minuscule interest rate: inflation. While many of us think that cash is king, the fact of the matter is that the dollar devalues over time as inflation rises.

Inflation, which is the increase in prices over time, means your dollar has less purchasing power than it did when you first got it. In short, each of your dollars is worth less as inflation increases.

When your grandpa complains about having to pay $15 to see a movie when tickets were only 46 cents in 1950, he is talking about the effects of inflation. The value of a movie ticket is the same, but it takes much more cash to make that purchase.

When we plan for the future and save for retirement, we all tend to assume that our money will be worth the same amount in the future as it is today. That’s why many of us don’t worry about leaving our cash languishing in a checking account with a low-interest rate.

The truth, however, is that your money may well have less purchasing power in the future due to inflation. The pennies that many banks pay you in interest won’t help you avoid inflation.

That means that on top of losing money in fees paid to your bank to keep your checking account open, you may also end up with money that is worth less by the time you wish to withdraw it.

A .05% interest rate is not enough to counteract the current inflation rate in the U.S., which is 2.9% .

Alternatives to Low-Interest Checking Accounts

The good news is that there are a couple of alternatives to leaving your money sitting in a checking account with an extremely low interest rate, or no interest at all.

High-Yield Checking Accounts

One option is going with a high-yield checking account, sometimes referred to as a “rewards” checking account, which are often offered by smaller banks, online banks, and credit unions.

These accounts can have interest rates as high as 4%, but it can be important to read the fine print.

Often, these rates come with restrictions that limit the amount of money that can earn the higher rate, such as only the first $3,000. The rest of your cash may be then subject to a much lower rate.

Also, because many high-yield checking accounts are offered by regional banks or credit unions, you may run into difficulty finding in-network ATMs.

Before opening a high-yield checking account, it can be a good idea to find out about any monthly or other types of fees, including fees for going to an out-of-network ATM, as these could erode the higher interest rate.

You may also want to make sure the institution offers a user-friendly website and mobile app.

Cash Management Accounts

A cash management account is an account that combines the services of a spending account and a savings account in one product.

These accounts are often offered by online financial service providers and can, in many cases, provide above-average interest rates and reasonable or no fees due to the low overhead.

Indeed, some cash management accounts have annual percentage yields that are higher than what many brick-and-mortar banks offer for their savings accounts.

Cash management accounts also often come with mobile check deposits, broad ATM networks, check writing, autopay, money transfers, overdraft programs and more.

The Takeaway

Low interest rates, combined with increasing fees and other restrictions, has created a situation in which many people are actually losing money through fees, or risking the devaluation of their money by keeping it in a low-interest checking account.

Fortunately there are other options that offer easy access to your spending money but also higher interest, such as high-yield (or rewards) checking accounts, which are often offered through smaller and online banks, as well as credit unions.

Looking for Something Different?

You may also want to consider a cash management account, such as SoFi Money®.

With SoFi Money, you can earn competitive interest, spend, and save all in one account. You can also write checks, use a debit card, send and receive money, and withdraw cash at 55,000+ (fee-free) ATMs worldwide.

Check out everything SoFi Money has to offer today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion 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.
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.

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Comparing the Different Types of Deposit Accounts

Maybe you’re saving money for a down payment on a home, or perhaps you’re planning a trip to France to see, once and for all, just how many croissants you can eat in one day.

But where are you going to put that cash as you sock it away? After all, you probably want to earn interest on that money while you’re waiting to use it.

That’s where interest bearing accounts can come into play. There are actually many different types of interest bearing accounts to choose from, and they all have differences in terms of ease of access to your cash, the annual percentage yields (APY) offered, fees, and terms.

If you’re feeling confused or overwhelmed by all the different account options that are available these days, not to worry. Below we break down some of the most common types of deposit accounts, including the advantages and disadvantages of each.

Basic Checking and Savings Accounts

A checking account usually has very low monthly account fees or no monthly account fees. It allows you to write checks and get an ATM card or debit card. You might get access to online and mobile banking apps so that you can mobile deposit money and pay your bills.

These basic checking accounts rarely pay you interest, which means that it may not make sense to keep significant amounts of money in them.

You may be better off using them just as an account to deposit your paycheck into before you either use that money to pay bills or transfer your cash into other accounts to save it.

On the other hand, most savings accounts don’t charge account fees, although some require that you have a certain minimum balance and if you go below that amount they will charge you a fee.

With savings accounts, you can’t usually write checks or get a debit card. You may, however, be able to get an ATM card that could be used to make transactions at any ATM within the bank’s network.

Savings accounts typically pay more in interest than a checking account, but they typically still don’t pay a lot. You may also be limited to making no more than six transfers or withdrawals from a savings deposit account per statement cycle, or pay extra if you go over your allowed transactions. While the Federal Reserve has lifted the six-transaction limitation on savings accounts due to the pandemic, many banks still impose some transfer and withdrawal limitations on savings accounts.

Other Interest-Bearing Deposit Account Options

High-Interest Savings Accounts

Some banks offer special, high-interest savings accounts that can offer much higher rates than traditional savings accounts. Some institutions don’t charge monthly fees for these accounts while others do but will waive them if you meet a balance minimum.

As with all savings accounts, you may be limited in terms of the number of withdrawals or transfers you can make each month.

One good place to look for this type of account is at an online bank. Because these institutions typically have lower operating expenses than brick-and-mortar banks, they can often offer rates that can be considerably higher than traditional banks, and may also be less likely to charge monthly fees.

Money Market Accounts

A money market account is a type of deposit account that pays interest on deposits and allows withdrawals.

Money market accounts are similar to standard savings and checking accounts, except that they typically pay higher interest rates, require higher initial deposits, and may also require minimum balances, which can run anywhere from $100 to $10,000.

Some money market accounts require a minimum of $25,000 to earn the best interest rates.

Unlike standard savings accounts, some money market accounts also come with a debit card and checks, although institutions may require that they not be used more than six times per month.

You may want to keep in mind that a money market account is very different from a money market fund. A money market account is a federally insured banking instrument, whereas a money market fund is an investment account.

Typically, money market funds invest in cash and cash-equivalent securities. It is considered low risk but doesn’t have a guaranteed return.

Certificates of Deposits (CDs)

A certificate of deposit (CD) is a product offered by consumer financial institutions, including banks and credit unions, that provides a premium interest rate in exchange for leaving a lump-sum deposit untouched for a certain period of time.

The bank determines the terms of a CD, including the duration (or term) of the CD, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties will be applied for early withdrawal.

CDs offer different term lengths that can range from one month to 20 years. Interest rates tend to be higher for longer terms. Some CDs have a minimum deposit amount that can be over $1,000 or more, though there are banks that offer CDs in any amount.

Sounds good? Well, it is if you know you won’t be touching that money for the entire term length. If you suddenly need the money, then you will likely have to pay a penalty to withdraw money early from your CD.

While you can get no-penalty CDs or early withdrawal CDs, it’s a good idea to make sure to read the fine print, as many of these accounts only have no penalties or withdrawal fees if you take money out during the first few weeks after you invest. In return for that withdrawal window, you often give up a significant amount in APY.

If ease of access is a concern, it might make sense to invest in CDs that feature fewer restrictions around withdrawals. Or, you could set up a CD ladder strategy where you buy CDs that have different maturity dates, ensuring access to funds as your CDs mature at staggered intervals.

High-Yield Checking Accounts

Though interest is normally associated with savings, and not checking, accounts, many financial institutions offer high-yield checking accounts.

These interest-bearing accounts, sometimes called rewards checking, work like regular checking accounts and come with checks and an ATM or debit card.

In return for getting a higher interest rate, these accounts often come with rules and restrictions. You may, for example, only earn the higher rate on money up to a certain limit. Any money over that amount would then earn a significantly lower rate.

You may also be required to make a certain number of debit card purchases per month and sign up for direct deposit in order to earn the higher (or rewards) rate and to avoid a monthly fee.

The benefit of an interest-bearing checking account is that you’ll always have access to your money and you may have fewer limitations on how you can use your account than you might with a savings account, all while still earning a bit of interest.

Cash Management Accounts

A cash management account is a cash account offered by a financial institution other than a bank or credit union, such as a brokerage firm. These accounts are designed for managing cash, making payments, and earning interest all in one place.

Cash management accounts often allow you to get checks, an ATM card, and online or mobile banking access in order to pay your bills. They also typically pay interest that is higher than standard savings accounts.

Cash management accounts also generally don’t have as many fees or restrictions as traditional savings accounts, but it’s important to read the fine print.

Before opening a cash management account, you may want to ask about monthly account fees and minimum balance requirements.

Some brokerage firms require a sizable opening deposit and/or charge monthly fees if your account falls below a certain minimum. Others will have no monthly fees and no minimums.

The Takeaway

If you’re looking for a safe, convenient place to keep your money and also earn some interest while you’re at it, there are a number of great options to pick from.

You might consider opening a high-interest checking or savings account at a traditional or online bank, or, if you don’t need to access the money every day, you may also want to look into a money market account or CD.

Looking for Something Different?

Another option is to open a cash management account, such as SoFi Money®. With SoFi Money, you can earn a competitive interest rate, spend, and save–all in one account.

You can also write checks, set up bill pay, and have access to 55,000+ (fee-free) ATMs worldwide.

Check out everything a SoFi Money cash management account has to offer today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion 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.
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.

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Different Ways to Earn More Interest on Your Money

Different Ways to Earn More Interest on Your Money

When you work hard for your money, it can be frustrating to see it sitting idle in the bank earning little to no interest.

Getting your money to work harder for you can sometimes be as simple as finding a different savings account.

In fact, getting your money to work harder for you can sometimes be as simple as finding a different type of checking or saving account.

If you’re willing to take some risk–for potentially higher rewards–you may also want to consider investing some of your money in order to help build wealth over the long term.

Read on for some simple ways you may be able to start earning more interest than a standard savings or checking account.

High-Interest Savings Accounts

Some banks offer special, high-interest or high-yield accounts that can offer higher rates than traditional savings accounts, yet still offer fairly easy access to your money.

Typically, these accounts limit you to six withdrawals or transfers per month per Federal Reserve requirements. While this rule is not currently being enforced due to the coronavirus pandemic, some banks will still charge a fee so be sure to check with your bank.

You may also want to look at high-interest savings offerings at online-only banks.

Because these institutions tend to have lower operating costs than brick-and-mortar banks, they often offer rates that are higher than traditional banks. They may also be less likely to charge monthly fees.

You may also want to keep your eyes open for high-yield savings accounts that offer a sign-up bonus or an interest rate bonus. These incentives can boost your earnings, though you may have to maintain a high minimum balance in the account to earn the higher rate.

A high-yield savings account can be a great place to build an emergency fund or save for a vacation or home repair while providing safety and liquidity.

Rewards Checking Accounts

While checking accounts are traditionally used for storing money that you use everyday and to pay bills, rather than savings, some banks offer rewards checking accounts, which may offer higher interest rates than traditional checking and savings accounts.

However, there may be some restrictions. For instance, the balance that earns the elevated rate may be limited, and you may have to meet certain direct deposit or debit card transaction requirements each month to earn the higher rate.

Some banks also offer cash bonuses to customers who open new checking accounts. While this may also come with some requirements, such as setting up direct deposit and/or keeping your account open for a certain number of months to earn the bonus, it can be another good way to increase the income you earn on your bank deposits.

Like other checking accounts, rewards checking accounts are highly liquid and typically come with check-writing privileges, ATM access, and debit cards. Plus, deposits can be withdrawn at any time.

If you’re considering a rewards checking account, however, you may want to first make sure that the requirements to earn the elevated interest rate are easy for you to meet. Otherwise, you could potentially earn less interest than a standard savings account.

Credit Unions

Credit unions, unlike banks, are owned by the people (or members) who hold accounts at the credit union. Because of this, these financial institutions work for the benefit of account holders instead of shareholders.

In some cases, that can translate into lower fees, better account perks, and higher interest rates. To join a credit union, you typically need to live or work in a certain geographic area or work for a certain employer.

If you have a credit union near you, you may want to check the rates it offers and see if you can get a good deal.

Money Market Accounts

A money market account is a type of deposit account that often requires a higher minimum balance to open than a standard savings account and typically earns a higher interest rate.

Some money market accounts also come with a debit card or checks (which you generally won’t find with savings accounts), but financial institutions may require that they not be used more than six times per month. Some will charge a fee if you go over that number.

If you are looking to earn more interest than a standard savings account without meeting the transaction requirements of a rewards checking account, money market accounts can be worth considering.

Before opening an account, however, it can be a good idea to ask about fees, such as monthly account fees and penalties.

Certificates of Deposit

Certificates of deposit (CDs) typically offer higher interest rates than traditional savings accounts in exchange for reduced withdrawal flexibility.

When you put money in a CD, you have to agree to leave the money in the account for a set period of time, known as the term. If you withdraw your deposit before the term expires, you’ll have to pay an early withdrawal penalty.

One benefit of CDs is that you lock in the interest rate when you open the CD. Even if market rates drop, you’ll keep earning the same rate. On the other hand, if rates rise, you’ll be stuck earning the lower rate until the CD matures.

One way to work around this is to open several CDs that mature at different times, a technique known as CD laddering. Having a mix of short- and long-term CDs allows you to take advantage of higher interest rates but still have the flexibility to take advantage of higher rates in the future.

A CD ladder also helps with the lack of liquidity that comes with CDs. With a CD ladder, you can take advantage of the higher rates that CDs may offer without tying up your entire savings balance for multiple years.

Other Ways to Make Your Money Work For You

If you’re planning to park your cash for at least five years or so, and you are willing to take some risk, you may want to consider investing your money in the market.

While an investment might generate a higher return, all investments come with the risk that you could lose some or all of your money.

You can better weather this risk by investing for the long term, which essentially means only investing savings that you would not likely need to touch when the market is down.

There are a variety of ways to start investing. If your employer offers a 401(k), that can be one of the easiest ways to start investing. Another option for retirement is an individual retirement account (IRA).

You could also open a brokerage account for financial goals outside of retirement. This is a taxed account, typically opened with a brokerage firm, that allows you to buy and sell investments like stocks, bonds, and mutual funds.

If you’re ready to start investing, you may want to speak with a qualified financial advisor who can help you establish your savings goals and risk tolerance and help you develop a personalized investment strategy.

The Takeaway

If you’re looking to make more interest on your money, you may be able to increase returns by opening a high-yield account at a traditional bank, online bank, or credit union.

Other options that may pay more than you’re earning now include money market accounts and CDs.

Looking for Something Different?

You may also want to consider opening up a cash management account, such as SoFi Money®.

With SoFi Money, you can earn a competitive interest rate, spend, and save all in one place. Plus, there are no account or minimum balance fees, and withdrawing cash is fee-free at 55,000+ ATMs worldwide

Learn how SoFi Money can help you build your savings today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion 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.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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7 Steps That Can Help Get Your Financial House in Order_780x440

7 Steps That Can Help Get Your Financial House in Order

Just like having your home in order can help make life easier and less stressful, having your financial house in order can save you time and worry. It can also help you spend less, save more, and work more effectively towards your financial goals

Your “financial house” refers to all the aspects that go into your financial wellness, including the information found on your financial statements, any debt you have, your budget, and your retirement planning and accounts.

Getting your financial house in order typically involves taking stock of what you have, getting rid of things (or accounts) you don’t need, creating a budget, and setting up a few systems to make it easy to achieve your financial goals.

Below is a simple step-by-step for doing a financial clean-up.

1. Taking Stock

A person can’t organize what they don’t know they have, so a good first step to organizing your finances is to track down all of your financial statements and accounts, or access them online.

If the password or log-in is long forgotten, you can reset your accounts or call customer service lines to get access.

You can then make a master list organized by category. This might include:

•   Assets: This includes bank accounts, retirement savings, and other investments.
•   Liabilities: These are loans, such as mortgages, credit card debt, student loans, or other forms of personal debt.
•   Income: This would include all sources of income, such as salary, investments, and alimony.
•   Fixed expenses: These are bills you pay every month, such as rent, mortgage, and utilities.

This step can help people discover unpaid bills, as well as savings accounts or retirement accounts they may have forgotten about.

2. Going Paperless

Electing to go paperless on bills and bank statements can not only be good for the planet, but can also help you keep your finances in order by creating less physical mess.

Getting bills in the mail and seeing them pile up can also evoke a sense of dread. When you go paperless, you can designate a day for tackling monthly expenses.

Then, on that day only, you can open those emails and pay them. If you prefer a paper trail, you can print out your receipts and file them away.

Some banks even offer benefits to customers who sign up for paperless billing.

3. Consolidating Accounts

Having abandoned 401(k) accounts or multiple saving accounts across different banks can be confusing and hard to keep track of. If this is the case, it might be time to consolidate and simplify.

You can move old savings into more frequently used accounts by transferring money from one account to another.

You may also be able to roll over your 401(k) from a former employer into a new employer’s retirement plan.

While this step isn’t necessary, tidying up accounts can save you the hassle of dealing with statements and notifications from several different financial institutions.

Recommended: How to Transfer Money From One Bank to Another

4. Tackling Debt

Once you’ve taken stock of your overall financial picture, you will likely have a better sense of how much money you owe. This can feel overwhelming, but also empowering. Once you know the numbers, you can deal with them head on, and come up with a debt reduction plan.

You may want to first determine good debt, such as student loans and mortgages vs. bad debt, like high-interest credit card debt and personal loans. When paying off debt, it can be a good idea to prioritize bad debt first.

There are a number of different ways to make paying off debt feel manageable, such as the snowball method or avalanche method. The key is to find an approach you feel you can stick with and to simply get started.

As you knock off debts, you’ll have fewer minimum payments to juggle. What’s more, you’ll be able to funnel the money you once spent on interest towards your financial goals.

5. Creating a Budget

After you’ve taken stock of all of your accounts and bills, you may want to go one step further and set up a monthly budget.

To do this, it can be helpful to pull out the last three months or so of your bank statements. You can then use them to figure out how much is coming in each month (your average monthly income after taxes are taken out) and how much is going out each month (your average monthly spending).

If the numbers are tight (meaning there’s little or nothing left over to put into savings), or you see you are actually going backwards, you may next want to create a plan to cut your spending.

This might include getting rid of certain monthly bills, such as streaming services you no longer really care about or quitting the gym and working out at home.

You may also want to set monthly spending targets, such as how much you will spend on nonessential categories, such as clothing, eating out, and entertainment, each month.

6. Setting Goals

Setting some financial goals can help motivate you to stick to your budget and put money into savings each month.

If you’re saving up for something fun (like, say, a vacation), you might be more inclined to cook at home instead of ordering in. Money goals can function like a compass that guides the direction of spending.

Not sure of a goal? Here are some common financial goals you may want to consider working toward:

•   Creating an emergency fund.
•   Paying down debt.
•   Increasing retirement savings.
•   Saving for a downpayment on a home.
•   Putting money towards something fun, like a vacation or new wardrobe.

Goals won’t always look the same person to person, but having one (or two) can help guide your financial plan, making it easier to spend and save with confidence.

7. Automating

Saving, spending, and paying bills doesn’t have to mean reinventing the wheel every month. You can significantly reduce the amount of work involved in money management simply by relying more on automation.

One of the benefits of automating your finances is always paying your bills on time. This can save you money by avoiding late fees. Having a history of on-time payments can also help boost your credit score.

In addition to setting up autopay for your regular bills, you may also want to automate savings. This means having a portion of your paycheck (and it’s fine to start small) automatically transferred from your checking account into your savings or retirement account after you get paid.

This ensures that saving will happen each and every month, since the money will be taken out before you have a chance to see it–or spend it.

Automation won’t take all the work out of keeping your financial house in order, but it can eliminate many of the chores–and many of the choices–you have to deal with each month.

Setting and forgetting bills and transfers can make money moves less hectic each month.

The Takeaway

Getting your financial house in order isn’t as complicated or time consuming as many people assume. And, you don’t have to do it all at once.

You may want to set aside an hour or so one day a week to focus on financial house-cleaning, and just take it one step at a time.

Tidying up your financial home can take work, but you don’t have to go at it alone. A cash management account like SoFi Money® can make the complicated a little easier.

SoFi Money allows you to earn, spend, and save–all in one account. With SoFi Money’s “vaults” feature, you can separate your savings from your spending and also set up recurring transfers to help you meet your savings goals faster.

Check out everything a SoFi Money cash management account has to offer today.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion 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.
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