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Saving $10,000 in a year may sound like a lofty or even impossible goal, but it is indeed doable. Provided you take the right steps, that is. And saving that five-figure chunk of change can have many benefits, such as helping you get out of debt, save, and invest.

How you go about saving $10,000 a year is up to you. You can accomplish it through budgeting, a side hustle, and other means. It’s a matter of finding what makes sense for your personal situation and financial style.

If you’re interested in achieving this kind of savings, read on. You’ll learn the scoop on:

•  Is saving $10,000 a year possible?

•  What are the benefits of saving $10,000 a year?

•  What are the best ways to save $10,000 a year?

Is Saving $10,000 a Year Possible?

Wondering how to save $10,000 in a year? It’s possible if you can create at least that large a difference between your income and expenses. In other words, it’s just simple math.

If you don’t have at least $10,000 a year left over after all of your expenses are accounted for, you have two options to close the gap. You can either increase your income or reduce your expenses, or try a combination of the two techniques. Of course, you will also need systems in place to save that extra money, too.

Socking away $10,000 can be well worth your while. It can set you up with a significant amount of money that can help improve your financial wellness today and tomorrow. Next, take a closer look at how that could play out for you.

Benefits of Saving $10,000 a Year

The benefits of saving $10,000 may vary depending on your finances, but there are several ways it can be beneficial to the average person. Here are some things you can accomplish:

•  Start an emergency fund

•  Pay off debt — credit cards, student loans, personal loans, etc.

•  Invest money in a portfolio

•  Take a vacation

•  Fund a wedding

•  Save for retirement

•  Add to one’s savings for a down payment on a house

•  Help you buy a car

•  Tackle a home renovation project

•  Lower your stress levels and boost your self-esteem.

These are just a few of the potential benefits of saving $10,000 a year, but there are limitless ways in which putting that much money away can help. It may not be easy at first to save such a big sum ($833.33 a month in after-tax dollars), but you will likely be glad you did it.

12 Helpful Tips for Saving $10,000 a Year

As mentioned earlier, there are two basic ways to help you save $10,000 a year: decreasing your expenses and increasing your income. Saving money is important, for sure, but saving five figures in a single year can require true dedication, sacrifice, and smart financial management. Here, powerful steps to take to succeed in this money mission. Saving $10,000 in a single year will probably require a few of these tactics simultaneously:

1. Setting Your Goals

Setting financial goals is important because once you have a large aspiration in mind, you can then create smaller, actionable steps that can ultimately lead to success.

If saving $10,000 in a year is your goal, you might then see how you can alter your budget to get there. Having your goal might motivate you to save. For instance, if you typically go out for lunch Monday through Friday, you might pursue the smaller, actionable goal of ratcheting that down to once or twice a week. At the same time, you might set a goal of bringing in an extra $100 or $200 a month in income (more on that below). The idea is, by establishing your goals, you can take the right steps to achieve them. .

2. Creating a Budget

Creating a budget is worthwhile for two big reasons:

•  It helps you see where your money is going. It’s possible you are spending a lot of money on things that are not very important to you. Thus, you might identify some areas where you can cut back.

•  Budgeting helps hold you accountable. Having a budget means you can’t always spend money however you please. While that can be a harsh reality check at times, it will likely help keep you progressing towards saving $10,000 a year.

One important aspect of creating a budget is finding one that works for you. For some people, that means going all in on the 50/30/20 budget rule. For others, it might be keeping track of expenses with an app. Experiment a bit, and find a method that suits your personal and financial style.

3. Spending Less on Eating Out

One way to cut back on spending is to eat out less, as briefly mentioned above. The average American spends $198 a month on food prepared away from home, according to the Bureau of Labor Statistics’ Consumer Expenditure Survey.

Not only is to-go food pricey, it can be less healthy than what you prepare at home. While going cold turkey and abandoning takeout altogether may make you feel deprived and lead to your abandoning the effort, why not take a smaller step? If you vow to, say, cut down on your to-go mochaccino every morning and make it an only-on-Friday treat, it might become a ritual you look forward to that much more. This treat at the end of the week can help reinforce that you’re doing a good job saving. Go on, pat yourself on the back for your success!

4. Tracking Your Progress

Tracking your savings is a good idea because you probably aren’t saving $10,000 all at once. You don’t want 11 months to go by and find that you’ve only saved $1,000.

It isn’t necessary to assess your progress every day, but seeing where you are at the end of each month tends to work well. You can do this at the same time as paying your bills, reconciling your budget, and any other month-end tasks. When you know you are on track, it will keep you motivated to save.

Another way to check your savings is to use the tools your bank provides; many have online or mobile methods to see your balance and how well you’re advancing toward a goal. There are also apps available, separate from your bank account, that can help you keep tabs on your savings.

5. Automating Your Finances

Thanks to online banking, it’s possible to entirely automate your savings strategy. For example, you can set up a high-yield savings account and schedule a transfer to it from your checking account each time you get paid or once a month.

Automating your finances is a good idea because not only is it convenient, but it also facilitates your staying on track. If you have to set money aside manually every month, you might wind up spending some of it instead because friends invite you to join a pricey dinner or there’s a sale on something you’ve been eyeing. When you automate a transfer, though, you likely raise the odds that the cash makes it into your savings.

6. Having No-Spend Months and Weeks

Also known as a no-spend challenge, another strategy is to have certain periods when completely cut out some of your spending. This can come in the form of spending no money whatsoever on certain days. Or you might completely cut out certain categories for 30 days, such as buying new clothing. However you decide to cut back, this gamified technique may make it more engaging, delivering a big boost to your savings.

7. Spending Less on Entertainment

Going out can be fun, whether it’s to see a movie, a concert, or to a bar. But these nights out can also be expensive, especially when you are looking for easy ways to save money.

Of course, the goal doesn’t have to be to cut these things from your budget entirely. If you usually go to the movies a few times a month, you can make it once a month instead. If you are taking your whole family to the movies, that alone can easily save you over $100 per month.

Also take a look at your at-home entertainment costs. How many streaming platforms do you really need? It’s not uncommon for people to have several pricey ones, which can add up over the course of a year. Try canceling a couple and enjoy putting those savings towards your goal of $10,000.

8. Having a Side Hustle

Cutting back on expenses can be an obvious way to save, but some of us already have quite low expenses. If that is the case, you can earn money with a side hustle and use that income to bolster your savings.

One of the easiest ways to start a side hustle is to use the skills you already have to do some work on the side. For example, if you work as a programmer, you can do some extra coding on the side on a freelance basis. You might also consider opportunities that are possible in your free time, such as driving a rideshare on the weekends or walking dogs.

9. Selling Items That You Do Not Use

Many of us have items lying around that we don’t really use, whether it’s that espresso machine you never got the hang of or a leather jacket that just didn’t suit your style. Why not try selling some of your stuff? Items like electronics, jewelry, and furniture can be valuable, but any bit of cash can help pump up your savings.

Selling your gently used items can be relatively easy on sites like eBay and Facebook Marketplace. Take a look around, and see what you have that might be worth something.

The Takeaway

If you’re wondering how to save $10,000 in one year, know that it’s possible if you find the right combination of smart budgeting, expense whittling, and income building. The solution will be different for each person, depending on their income, expenses, lifestyle, and financial style. By budgeting carefully, cutting costs, and finding ways to bring in more cash, you can accomplish this goal.

Looking for a great place to save your extra money and get some tools to help you budget and track your progress? Consider a high-yield bank account with SoFi. You’ll spend and save from one convenient place, as well as have tools to help you save while earning a hyper competitive interest rate. And with no account fees and a competitive APY, you’ll get the most out of your money.

FAQ

Is saving $10,000 a year good?

Saving $10,000 a year is great. It can help you accomplish a variety of financial goals, such as saving, investing, and paying off debt.

Is $10,000 a lot to save in a year?

It is, for many people, a considerable amount. Here’s a point of reference: More than half of Americans can’t cover an unexpected $1,000 expense. And it may be unlikely that the rest of the population have $10,000 saved. While saving $10,000 a year is a lot, it is possible.

How much do you need to earn to be able to save $10K a year?

How much you have to earn to save $10K a year depends largely on your expenses. The average annual household expenses were $61,334 in 2020, according to the Bureau of Labor Statistics. Thus, if you are like the average household, you would either have to earn at least $71,000 after taxes to have a margin to save $10K, reduce your expenses by $10K, or do some combination of earning more and spending less.

Photo credit: iStock/AndreyPopov
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® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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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Quality of life is surprisingly tough to describe, but most of us know we want to make the most of ours. Broadly speaking, the “quality of life” definition is a subjective perception of one’s overall well-being that includes both positive and negative aspects of our lives. When we say we want a better quality of life, most of us know what that means: We are seeking a “good life,” with positive finances, a comfortable lifestyle, happy professional and personal lives, and not too much stress.

In other words, quality of life includes many realms — our work, our money, our personal connections. All of these elements (and more) are things we can boost if we want to improve our quality of life.

Read on to learn:

•  What is quality of life?

•  What factors influence quality of life?

•  What are financial and other ways of improving quality of life?

What Is ‘Quality of Life’?

What does quality of life mean? It is a subjective measure of one’s overall well-being. It typically includes several components. For example, quality of life includes personal finances, physical and mental health, and relationships. All of these components can positively or negatively influence one’s perceived quality of life.

This means that focusing on one of these aspects at the expense of others could reduce your quality of life overall. For example, suppose you accept a job promotion that brings a hefty salary increase, which you imagine will boost your quality of life. You begin to daydream about a new car and luxe vacations. While higher pay can improve your finances and quality of life, it can also have some hidden downsides. What if you wind up working more, sleeping less, and spending less time with loved ones? You might find your stress levels increase and your quality of life therefore decline. .

In this way, it’s obvious that finding the right balance between personal, professional, and financial factors is important to achieving a good quality of life.

What Factors Define Quality of Life?

As noted earlier, quality of life is not a singular measure but instead captures many aspects of your life. Factors that define quality of life can include:

•  Physical health

•  Sleep habits

•  Mental health

•  Physical safety

•  Job satisfaction

•  Work-life balance

•  Leisure time

•  Financial resources

•  Caring, adequate healthcare

•  Personal and professional relationships

•  Transportation and ease of mobility

•  A comfortable home

As you can see, quality of life captures almost every aspect of our lives.

How Can Finances Affect Your Quality of Life?

Finances can have a major impact on your quality of life. This is simply because money can improve many (but not all) aspects of quality of life.

For example, if you don’t have a lot of money, you might be forced to live in a small, cramped house with your family of five and have a long commute to work. In this case, finances are negatively affecting your quality of life. Perhaps you can’t afford healthy food, a gym membership, or vacations. In that way, finances might also reduce your physical and mental wellness, which are important factors in your quality of life.

But perhaps you get a raise and can afford to move into a bigger house that is closer to your job. Your finances are now positively affecting your quality of life. You can afford to eat better and pay for a yoga class, too. There can be many examples of how money can affect and improve nearly every aspect of our lives.

Financial Ways of Improving Quality of Life

There are many ways to improve your quality of life through financial means. This includes having job security, setting savings goals, and more. Here’s a closer look:

Having Job Security

Having job security can enhance your quality of life. Perhaps the most obvious way is that it makes your income stable. You know exactly how much you will make every month and can budget accordingly.

But job security can improve your quality of life in other ways. Consider a job that isn’t secure, where you could experience a loss of income at any moment. That could hurt your mental health by potentially sending your anxiety and stress soaring.

If you don’t have job security, you might want to consider seeking a new job, training for a different career, or starting a side hustle to bring in more money. These are ways to create stability and improve your financial health.

Knowing Your ‘Why’ Financially

Knowing your “why” financially means you understand where you find fulfillment in terms of money and your overall life direction. You have identified what your financial goals are, and you recognize the most valuable benefits of the money you earn. In this way, you have clear goals that you can pursue. This kind of clarity can represent a form of financial self-care.

For example, perhaps you value and deeply care about education. This might lead you to open a 529 plan to help you save money so your child can attend college. Or maybe you want to make the world a better place, so you work hard so you can donate to a favorite charity.

Until you know your “why,” it is difficult to know how to direct your efforts and how to achieve your financial goals. Once you figure out your motives and goals, you are likely on a better path to improving your quality of life. Invest the time and introspection in figuring this out.

Setting Savings Goals

Setting and achieving your savings goals is a great way to improve your quality of life financially. There are many savings goals you may want to set — an emergency fund, a down payment on a home, retirement, etc.

Some goals will be short-term financial goals, others will be farther into the future. Not only does hitting your goals allow you to achieve dreams like having a destination wedding or buying a house, it can also build your sense of confidence and personal agency. You can see your progress and reach your aspirations.

It’s important to set specific, achievable goals rather than generally having a desire to save money. Getting specific allows you to take specific steps to achieve your goals while also holding you accountable for them. By specifying dollar amounts and automating savings on payday you can make improving your financial quality of life that much easier.

Increasing Your Financial Knowledge

Increasing your financial knowledge means learning about money and how it works. Achieving financial literacy can deepen your knowledge about all things finance, such as budgeting, saving, and investing. The more you learn, the more you will be able to tweak and optimize your finances to help your money go further.

There are many ways to improve your financial literacy, which can include reading articles, subscribing to newsletters and podcasts, and taking online courses. You can also likely find a wealth of articles on your bank’s website or app as well as many apps that help you manage your money and learn smart tactics.

Investing Your Money

Historically, the stock market is a great way to build your personal wealth and quality of life. But people are sometimes hesitant to start investing because they don’t think they have enough cash or enough knowledge. That’s a common money misconception: You don’t need much money to start investing, and it’s a great way to build wealth.

If you keep your money in a savings account, for example, it likely won’t keep pace with inflation. Even high-yield savings accounts don’t usually earn as much interest as the rate of inflation. If you want your money to grow over time, whatever your goal might be, investing is one of the best ways to achieve that. You might work with a financial professional to get started or, to save money in fees, try a robo advisor, an algorithm that can help you economically pick stocks that fit with your financial goals.

Non-financial Ways of Improving Quality of Life

Money plays a big role in improving your quality of life, but in some cases, your quality of life depends on things money can’t buy. Keep reading to understand some of the most important aspects to consider.

Having Time to Yourself

So many of us lead always plugged-in lives with very little downtime. While it may not be fodder for an amazing social-media post, having time to yourself can have many benefits. It can help you unwind and can ease stress. Many people engage in meditation, which can reduce negative emotions and increase self-awareness.

If meditation doesn’t interest you, there are still plenty of ways to benefit from time to yourself. You could go hiking on a nature trail, exercise, or even just stream some movies or TV at home. There’s no shortage of things you can do alone and still have a good time. You may find your life feels more relaxed and rewarding when you build in some pockets of “you” time.

Recommended: 15 Creative Ways to Save Money

Having Meaningful Relationships

Humans are social creatures, and that means we need other humans. This dates all back to our primate ancestors, who often lived in groups for the sake of survival.

While most of us today aren’t worried about being hunted by lions, tigers, or bears, we still depend on one another. Healthy relationships are associated with several benefits, such as less stress, healthier behavior, and even living longer.

In terms of improving quality of life, you may want to put some effort into prioritizing your personal relationships. Perhaps you and your college roomie schedule a Zoom call for the first Friday of every month, or you meet your work mentor regularly for coffee. Or you and your partner might agree to have an unplugged, no-texting-allowed evening every now and then or pursue a new hobby together to strengthen your bond.

Exercising and Staying Healthy

Your physical health is a key part of your quality of life, and it doesn’t have to be expensive to maintain. You can easily spend money on gym memberships or a personal trainer. However, there are ways to be healthy without spending much.

You can go running, walking, biking, or do a home workout (you can find all sorts of classes, from kickboxing to Pilates, online).

Eating well is another part of good health. Check out the produce at local farmers’ markets; search online for Meatless Monday recipes to help cut back on high-fat forms of protein. You might partner with a friend on these pursuits to have extra support.

Recommended: Are You Bad With Money? Here’s How to Get Better

Getting Good Sleep

Another ingredient in the quest for a better quality of life: getting a good night’s sleep. Sleep needs vary from person to person, but most adults need seven or more hours of sleep per night. It’s also important to maintain a consistent sleep schedule.

There are many benefits of quality sleep, and they all improve your quality of life. These include getting sick less often, reducing stress, and lowering your risk of health problems, such as diabetes and heart disease.

If you want to improve your sleep hygiene, as it’s called, look into ways to improve your bedtime habits. Try turning your phone off so you aren’t tempted to reply to texts or check the latest news. Keep your bedroom cool; between 60 and 67 degrees Fahrenheit is considered optimal, according to the Cleveland Clinic. Waking up well refreshed can help contribute to a better quality of life.

The Takeaway

Quality of life is a subjective measure of our overall well-being. Typically, both financial and non-financial factors contribute. For instance, if you have a well-paying job that is also super stressful, your quality of life might not be great despite having plenty of spending money. To optimize your quality of life, it’s wise to consider both your money habits and your financial goals, as well as such aspects as mental and physical health, career stability, and the quality of your personal relationships.

One way to improve your quality of life is to have the right banking partner. When you open a SoFi online bank account with direct deposit, you’ll earn a competitive APY and pay no account fees, which can help your money grow faster. Plus, you’ll have access to a suite of tools that can make budgeting and saving that much simpler.

FAQ

Do you need to be rich to have a high quality of life?

There are many factors that affect quality of life. Having a lot of money can help you have a high quality of life but it certainly doesn’t guarantee it. People with a lot of money may wind up with more stress. It’s possible to achieve a high quality of life without a hefty bank balance.

Why is quality of life important?

Quality of life is important because it touches every aspect of our lives. It involves our physical and mental health, finances, job satisfaction, free time, and much more. Having a high quality of life means having an overall satisfaction across all of these realms.

How can we achieve quality of life?

There is no one way to achieve a high quality of life; it very much depends on personal circumstances, both financially and in other realms. To optimize yours, you might start with improving your finances, sleeping and exercising more, or deepening your personal relationships. In general, you can start by identifying the areas of your life that you feel are most lacking.

Photo credit: iStock/AsiaVision
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® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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.

SOBK0822027

It’s a simple equation: The higher the interest rate is on a savings account, the more money you will earn on your savings. And who wouldn’t want to see their savings grow faster?

In your quest to find the highest rate possible, you may wonder, “Can you negotiate interest rates on savings accounts?” While it is indeed possible to talk your way to a higher interest rate, there’s no guarantee that all banks will grant this.

To stack the deck in your favor, keep reading to gain insight and learn some strategies, including:

•   What is the current national average for savings account interest rates?

•   Can you negotiate savings account interest rates?

•   How can you get a better rate on savings accounts?

What Is the Current Average National Savings Rate for 2022?

Savings rates ebb and flow over time and specifically throughout the year. They can vary greatly based on market conditions.
According to a Bankrate survey, the national average for interest rates on savings accounts was 0.13% at the end of the summer in 2022. While that is the average, you will likely find a great deal of variation in the numbers, possibly due to how banks calculate interest on savings accounts.

The type of financial institution that holds your money can also impact the rate offered. For instance, when looking at online banks vs. traditional banks, digital banks typically pay a higher rate than their bricks-and-mortar counterparts. Since they aren’t spending on building and staffing bank branches, they can pass the savings on to their customers. As of August 2022, several online banks were offering in the 1.7% to 2% range of interest on savings accounts.

Can I Negotiate a Higher Savings Rate?

The answer to “Can you negotiate savings interest rates?” is: It’s possible. There’s no guarantee a bank will agree to raise your interest rate, but they might. That being said, it can be easier to convince a bank to raise their interest rates for an individual if you have a longstanding relationship with the bank.

Typically, the key to making this request be approved is to be in good standing with the bank. For example, if you have held a business or personal loan or mortgage at a bank for many years and reliably made on-time payments to that loan, the bank may be willing to increase your personal checking and savings account interest rates to hold onto a good customer (that means you).

If you have bank accounts at a variety of different banks, you may find that a banker is willing to offer you a better interest rate if you agree to move all of your account balances to this single bank.

Tips for Negotiating a Higher Savings Rate With Your Bank

The answer to whether you can negotiate interest rates on a savings account will depend on two factors: how you approach this request and how receptive the bank is. While there’s no guarantee of success when asking for a higher interest rate with a bank, these tips can help improve your odds of getting that rate boost and helping your money grow faster.

Contact Local Banks to Compare Rates With Your Current Bank

Before you start the negotiation process, do some research. Take a look at what types of interest rates other banks (including local small banks) and credit unions are offering to see if any of those rates are higher than your current one.

This research serves two purposes. Firstly, you can take this research to your bank and ask them to match their competitors or even exceed that rate. If the bank says no, then you have already done the legwork of finding a bank that can offer you superior rates. You can then decide whether you want to switch banks so you can earn more money on your savings.

Review Account History With Your Bank

As briefly noted earlier, the better someone’s history is with a bank, the more likely the financial institution will be to negotiate a higher interest rate. Consider your account history and whether you have made on-time payments to loans and credit cards issued by the bank, not overdrafted when using your debit card, and kept your account balance at the required minimum amount.

If you have had a troubled history with your bank, you might be better off opening an account at another bank that offers a higher interest rate and starting fresh.

Ask the Bank for a Higher Savings Interest Rate

As the saying goes, it never hurts to ask. One of the best ways you can improve your odds of getting your savings interest rate increased is simply by requesting an increase and seeing what the bank says. Contact a representative in person (if you bank at a traditional bank), via chat, phone, or email with a polite request vs. a threat to pull your money out, and see what response you get. The worst they can say is no, so there’s really no harm in asking.

There’s also the possibility that you can earn a higher interest rate on your savings if you keep more money in the account. Some financial institutions will pay a higher rate on what are known as premium accounts or high-yield accounts, which may have a minimum balance requirement. If that’s the case, you might see if you and the bank can meet in the middle in terms of the amount required to be on deposit to snag that higher annual percent yield, or APY.

Recommended: What’s the Difference Between APY vs. Interest Rate?

Will My Bank Be Willing to Negotiate?

Some banks may be willing to negotiate savings interest rates, and others may not — it really just depends on their policies. That being said, if someone has a good relationship with their bank, the financial institution may be more likely to up their interest rate to keep a good customer happy.

Another angle on this: If you have multiple accounts with a bank (say, a couple of different kinds of savings accounts, plus a business checking account), they may be more likely to raise your interest rate. For instance, if you keep both your checking and savings at a financial institution and also have a mortgage with them, you may have a better shot at a rate hike.

Is it Worth Switching if You Find a Savings Account With Higher Interest Rates?

It can be worthwhile to switch banks if doing so will result in a higher savings interest rate, but this isn’t the only factor to keep in mind. The type of bank, the services they offer, and the fees they charge can also be taken into account. It’s important to look at the overall picture before making a move.

Earning a small percentage more in interest may not be worthwhile if you wind up with account fees, minimum balances, or other inconvenient and costly issues. So do your research before you make a shift.

Variables to Take Into Account When Looking To Switch Banks

Before switching banks, keep the following factors in mind to make an informed decision.

•   Type of bank. Traditional banks with bricks-and-mortar locations, online-only banks (some of which offer high-yield savings accounts which pay higher interest rates), and credit unions can help meet different consumer banking needs.

•   Features. Most banks and credit unions offer basic checking and saving accounts features, but you may want to keep the extra features in mind. For example, you may want to choose a bank that also issues a variety of loans, creates incentives to save money, has tax-free savings accounts, or offers free access to credit scores.

•   Interest rate. Of course, savings interest rates are a great thing to keep in mind as banks that offer higher savings rates make it easier to earn more money and increase savings.

•   Fees. See how much it will cost to work with each bank. While some banks charge monthly account maintenance fees, others do not. Some banks charge overdraft fees as well, which can be steep, around $35 per incident.

Can I Expect the Savings Account Rate to Change Soon?

Although interest rates are considered to be relatively low right now, some experts expect that savings rates will increase throughout 2022 and possibly beyond. However, there’s no guarantee that these predictions will be accurate.

Banking With SoFi

It is possible to negotiate interest rates on savings accounts, and there could be an upside to asking for a boost. Specifically, you might earn a higher interest rate so your money can grow faster, whether it’s earmarked for a rainy-day fund or for a future vacation.

Among the best deals you can find for savings accounts: SoFi’s Checking and Savings. It’s a high-yield bank account where you can spend, save, and earn an ultra competitive APY. Plus, you’ll pay no account fees.

FAQ

Can you negotiate savings account interest rates?

So, can you negotiate interest rates on savings accounts? Yes, it is possible to negotiate a savings account interest rate hike, but there’s no guarantee a bank will agree to this increase. That being said, asking for an increase and being shot down doesn’t do any harm.

Can you get a higher interest rate on a savings account?

It is possible to get a higher interest rate on a savings account. Account holders can ask their bank for an increase any time. It helps to have a good history with the bank. So if you always make your loan payments on time, don’t overdraft your checking account, and meet minimum balance requirements every month, the bank may want to give you this perk to retain a good customer.

How can I negotiate with a bank for a better interest rate?

There are a few ways you can increase the odds that your negotiation with your bank will be successful. To start, do competitor research so you can point out if other banks are offering higher interest rates. You can also offer to close other bank accounts and move all of your money into this one account if you get an interest rate increase.

Photo credit: iStock/matdesign24

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® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

SOBK0622011

Figuring out how to live on one income, either by design or circumstance, can seem daunting. And it may put a lot of financial pressure on that one wage earner.

But did you know that almost half of all American households live on a single income? While 53.3% of Americans are dual-income according to the latest federal data, that leaves 46.7% as one-paycheck households. There’s strength in those numbers, proving that it can be done.

If you are learning how to live off one income, read on for 12 smart strategies that will help you make the most of your money and live well, including:

•   Making a realistic budget

•   Reducing food expenses but still eating well

•   Downsizing your home

•   Earning extra income

•   Focusing on what you have.

Is It Possible to Live on One Income (After Living on Two?)

Maybe you or your spouse is now a stay-at-home parent, you’re caring for an elderly relative, or one of you lost your job.

No matter the reason, stepping off the full-time work wheel appears to be trending. The U.S. Census Bureau’s latest report reveals that the number of full-time, year-round workers dipped by about 13.7 million in a single year. The COVID-19 pandemic likely played a role in that, but it does indicate fewer people in the workforce and potentially a rise in single-income households.

While today, dual-income households hold a slight majority, single-paycheck households can sail smoothly. Think of how many of our ancestors navigated life with one breadwinner per family. It is indeed possible to survive on one income and even thrive.

12 Tips for Living on a Single Income

How to make it on one income? Start with a newly streamlined (but livable) budget and move on to other changes one by one.

1. Making a Budget

First step, reality check. To successfully live off one income, document your household’s take-home pay. Also take stock of the kinds of income you could count among your assets, such as money you might earn from a side hustle or dividends from any stocks you might own.

Then, tally all expenses that are musts, such as:

•   Mortgage or rent

•   Groceries (even that annual Costo membership fee)

•   Health insurance costs

•   Transportation, such as car payments, gas, insurance, and repairs

•   Utilities

•   Child care

•   Work-related expenses (commuting, clothing, etc.)

Discretionary income is what is left after your “fixed” or “necessary expenses” are covered. This would be money to use on a weekend brunch with friends, taking the kids to the theme park, or other moderate splurges. But you don’t want to spend all of that money; you also want to allocate some towards paying down debt and saving towards other financial goals, such as an emergency fund or retirement.

To streamline the budget-making process, you may want to use an online tool (many banks provide them) or try an app that helps with this process. If you’re raising kids on your own with one paycheck, it can be especially important to learn how to budget as a single parent.

2. Freezing Extra Food

This can save a lot of dough and consolidate your food prep time, too. Take a few hours a week to cook foods that freeze and reheat well, such as lasagna, chili, soup, or pot pie. Bake and stash muffins and bread for weekday or game-day breakfasts. The homemade food you prepare is likely to be more wholesome (no preservatives) and less expensive than store-bought.

To make freezing a breeze, make sure you have some containers and foil wrap on hand; then use masking tape or stickers to mark and date contents and reheating instructions.

3. Transitioning to One Car

Becoming a one-car household is not only better for your budget (gas, insurance, new tires, car repairs) but it helps the planet, too. Perhaps your partner can take public transportation to work and leave the car home for grocery runs, doctor appointments, and shuttling kids.

If one of you has to drive to work and thereby leaves the other without wheels, drill down on clear communication and scheduling. For instance, you need the car back by 6 p.m. to make a meeting. Otherwise, you might take public transportation or call the occasional Uber to get places. Carpools can also work for kids’ activities and work commutes.

If you’re a newly single parent balancing car costs along with everything else, create a reasonable post divorce budget to guide you. Transportation is often vital but can be delivered at a nice price.

4. Monitoring Utilities and Electricity

Saving money on utilities is increasingly easy with tools like smart thermostats. Lower it when the family is out (say, during school hours) and at night when everyone is under blankets in winter. In summer, keep the house warmer if you’re at work; no need to cool an empty house.

Keep maintenance appointments for your home’s heating and cooling systems; just like a car, it needs tune-ups to run best. Teach the whole family to switch off lights and T.V. when they leave a room. Target “phantom” energy use, which is the energy appliances (especially electronics) use when “sleeping” but still plugged in. These dollars add up.

5. Downsizing Your Home

If you’re living on one income and housing costs are eating up a big chunk of your budget (which is common in this hot housing market), you might want to consider moving to a smaller house, apartment, or condo. You’ll be on trend with the tiny-house movement and the shift toward minimalist living.

When you shrink your footprint, you generally save money on property taxes, utilities, electricity, and lawn and snow care. In most cases (depending on location), the smaller the space, the lower the bills. All of this can feel freeing.

Another way to downsize (though not literally) can be to move to a home with fewer amenities or one that’s in a neighborhood a bit farther away from downtown. You may be able to get the same square footage for less.

Recommended: What’s Net Worth vs. Income?

6. Doing Meal Planning and Buying Groceries on Sale

Even on a budget ,you can eat well — even better than grabbing unhealthy, overpriced takeout. Plan meals around what’s in your pantry and what’s on sale each week. It can be fun to explore the budget-priced recipes online; plenty of sites have “meals under $10” and similar categories to help provide inspiration.

You might enjoy scheduling meals by day of the week (Meatless Monday, Taco Tuesday, and Sunday Roast Chicken are a few examples), and shop based on what’s in season and on sale. Summer tomatoes (maybe from your garden) yield gazpacho or homemade spaghetti sauce. Winter vegetables like carrots are perfect for roasting and or adding to soups.

7. Paying Off High-Interest Debt

High-interest debt, the kind you accumulate on credit cards, can have steep interest rates (they’re currently ranging from 15% to 19% in many cases). If you carry a balance, that means everything you buy with plastic is costing you significantly more than what the receipt says because you take on that hefty annual percentage rate (APR).

If you’re dogged by this kind of debt, work to control any impulsive or compulsive shopping. You might try to negotiate a lower interest rate with your credit card issuer, or make the switch to a balance transfer card, which offers no or low interest for a period of time. A personal loan at a lower interest rate can also help consolidate your high-interest debt.

Recommended: How Does APR on Credit Cards Work?

8. Getting a Roommate

Sharing housing expenses by renting out a spare room can immediately free up funds in your budget. And you might like it. Many people get a budget boost by sharing the costs of rent, laundry detergent, coffee, utilities, and the cable bill. And you may also like having an additional member of the household with whom you can chat and bond.

9. Using Credit Cards Responsibly

The old rule still holds: Don’t use credit, generally not even for gas or food, unless you can pay off the balance every month. If not, you will incur interest that will build and build.

Before making a big, unplanned purchase, you might try the wait-and-see method, which means walking away for anywhere from 48 hours to 30 days (it’s your choice), and then seeing if, after some time has elapsed, you still feel you have to have it. In many cases, the desire has faded.

Still having trouble with debt? Consider working with a non-profit like the National Foundation for Credit Counseling (NFCC ).

10. Earning Extra Income

Another angle on being a single-income household is to see how you might bring in more money. It’s not just side hustles (moonlighting as a writer or web designer, for instance) or cleaning offices at night after your full-time job at school.

Consider new ideas for how to create your own passive income, from rental properties to advertising on your car.

Recommended: Ways to Create Residual Income

11. Finding a Travel Buddy

When budgeting for single-income life, you don’t have to give up vacations indefinitely. Instead, find ways to save money on travel. Whether you’re visiting the West Coast or the Mediterranean, sharing a hotel room or Airbnb with a friend brings big savings.

A travel buddy can also chip in for the rental car, gas, toll, park entrance fees, and taxi/Uber costs. Many tours and trips offer more economical shared rooms and charge extra for private rooms. Or you could consider camping with a friend or family member; that’s another great way to enjoy an inexpensive getaway.

12. Focusing on What You Have

As you trim expenses and get into your groove as a one-paycheck household, don’t lose sight of the gifts you have, riches that can supersede a second income. That includes more family time, good health, companionship, a roof over your head, heat, food in the freezer, a car that runs. Remember, wealth comes in many forms.

One last tip: If luxury-focused social media accounts are making you feel as if you’re missing out on the good life, unfollow them! Most are unrealistic representations that fail to reflect real life.

The Takeaway

Learning how to live on one income after having two may take practice and require some smart budgeting hacks, but it can be done without major deprivation. By experimenting with a variety of strategies, you’ll find the ones that work best for you, financially and personally. You’ll also likely feel a surge of pride when you hit on the right combination of moves that lessen any money stress and enhance your financial wellbeing.

SoFi can also help you make the most of your money. Try banking smarter with our linked Checking and Savings account, which lets you spend and save in one convenient place. And when you open an online bank account with direct deposit, you’ll earn a competitive APY and pay no fees, which can help your money grow that much faster.

FAQ

How do you budget for a single income?

To budget for a single income, start with the take-home earnings you will live on and subtract essential expenses, such as a roof over your head, food, debt, and health insurance. Then look at wrangling your negotiable costs, such as owning one car vs. two or how much you budget for meals, to make ends meet. An online budgeting tool or consumer finance app can help.

How many families live off of one income?

An estimated 47% of family households live off one income, according to recent U.S. Census data.

What is the average income for a single person in the U.S.?

The median annual income in 2021 in the U.S. was $45,760, according to government data.

Photo credit: iStock/insta_photos

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® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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

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

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

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

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

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.

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.

SOBK0722013

Budgeting can take some work to get just right. One of the common areas that trips people up is understanding exactly how much you spend each month. Figuring that out can take some trial and error as well as fine-tuning. And even if things are humming along well for a few months, you can suddenly get hit with a surprise bill or a colossal credit-card statement that jeopardizes your finances.

To help avoid that scenario and make budgeting easier, it can be wise to consider some of the items that are all too often omitted from the expenses list when accounting for one’s money. This can really ensure that your hard work managing your finances stays on track.

Read on to learn about commonly overlooked expenditures and how to work them into your budget. That way, you’ll know exactly where your money is going, which can help you avoid debt.

What Are Some Expenses That Are Commonly Budgeted?

When thinking about a basic living expenses budget, some items are so major, recurring, and important that it would be hard to overlook them. These likely include:

•   Rent or mortgage payments

•   Homeowners association fees

•   Utilities

•   WiFi

•   Cell phone bill

•   Car and/or student loan payments

•   Groceries

•   Daycare or tuition

•   Gym memberships

•   Medical insurance and pet insurance premiums

•   Transportation

Why Is It Important to Budget for Forgotten Expenses?

It’s understandable that some expenses may slip your mind when creating a budget. The typical person probably has dozens of things they are paying for in a given month. But these sneaky forgotten expenses can wreak havoc on your budget and prevent you from reaching your financial goals.

That’s why it’s important to pay close attention to your spending so you can adjust your budget as needed. These are some of the reasons that it’s important to budget for forgotten expenses:

•   Creating a successful budget requires knowing what you spend each month.

•   If you forget to add an expense and run out of funds to pay for it, you may end up pulling funds away from your savings goals to cover it.

•   If you really overspend due to forgotten expenses, you may have to turn to high-interest credit card debt to make ends meet.

Recommended: How Much Should I Save a Month?

20 Commonly Forgotten Budget Items

If you are convinced of the importance of accounting for all of your expenses, then it’s time to move ahead. Let’s look at some commonly forgotten budget items to make sure they don’t fall through the cracks.

1. Home Maintenance

While it’s hard to forget to make a mortgage payment, the other expenses of homeownership are easy to forget about and add up fast. From hiring a gardener to regular carpet cleanings to random handyman repairs, it makes sense to leave room in a budget for home maintenance as those charges are always popping up.

2. Vehicle Maintenance

Budgeting for a car payment is probably top of mind. No one wants to risk paying interest fees or losing their car. The same holds true for car insurance. But those aren’t the only car expenses worth planning for. Drivers also need to make room in their budget for such car-related expenses as tune-ups and repairs. Additionally, remember to include gas, insurance, parking and toll road fees; they have a way of adding up.

3. Taxes

Income taxes may be withdrawn from our paychecks, but county, local, and property taxes aren’t. Forgetting about these bills is a common budgeting mistake. Then, when the payment does come due, it’s a nasty surprise that can throw your budget out of whack.

4. Medical Expenses

It’s easy to forget about or overlook your medical expenses, including OTC and Rx drugs, dental cleanings, regular checkups, or getting new glasses or contacts. These are all vital expenses worth planning for. Budgeting for medical expenses can help improve your financial health too by helping you avoid debt.

5. Donations/Giving

Perhaps you donate when you see a worthy cause on social media or sponsor a colleague who’s doing a charity walk. This kind of spending is easy to forget about, so make sure to put it into your budget so you don’t wind up short of funds when you want to help others.

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6. Office/School Supplies

Items that keep the household or a student up and running need a spot on your budget too. This means accounting for things like toner, paper, stamps, shipping supplies, and software subscription fees.

7. Renewals for Licenses (Insurance, Drivers, Etc.)

Some expenses only pop up once a year or every few years like driver’s license renewals or insurance renewals, but it can be helpful to split up that expense into smaller chunks and save for it month by month.

8. Seasonal Maintenance

Some home-maintenance needs, like gardening, are ongoing, but others come around seasonally. Similar to license renewals, it can be helpful to save up for pricey seasonal maintenance needs like gutter cleaning and snow removal all year round. That way, you won’t come up short when a bill hits.

9. Items for Pets

Pets bring a lot of love into a home, but also a lot of expenses. From vet fees and pet insurance to toys, food, and doggie daycare, the expenses keep on coming.

10. Personal Items (Hair, Nails, Etc.)

A bottle of shampoo here, a manicure there, plus regular haircuts: These personal expenses that help us look and feel our best can add up quickly. They may only cost a few bucks a pop (hello, body wash) or only happen once in a while (that fresh set of highlights), but it’s wise to be prepared for the cost.

11. Lump Sum Bills

Medical bills, car repairs, and other kinds of large expenses tend to come our way. Many of them are lump sum bills, meaning you are expected to pay them in full, right away. Which is why it can be helpful to save money each month to contribute to an emergency fund that can cover lump sum bills.

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12. Ridesharing

If you rely on ridesharing apps to get around (whether it’s once a month or several times a week), you need to budget for that expense. The convenience can make it feel like a free ride…but it isn’t!

13. Delivery App Fees

Another app-based expense to look out for are the delivery fees that get added when you order dinner or groceries from the comfort of your home. Also, if you tip the driver, make sure to include that as well. These fees definitely add to the price of what’s being dropped off.

14. Business Expenses (Conferences, Trips, Etc.)

Most working professionals incur expenses to work (not necessarily fun, but necessary). These include such purchases as buying professional clothing, renewing professional licenses, or pursuing continuing education to further your career.

15. Entertainment

We all like to have a good time. From travel to movies to museum memberships to concerts, there’s no shortage of entertainment costs that need to make their way into our budgets.

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16. Subscriptions or Membership Fees

Speaking of entertainment, you may be paying for one or more streaming platforms, like Netflix, HBOMax, and Hulu. And you may have other subscriptions, like meal kits, personal-care supplies, gym memberships, or even a wine- or beer-of-the-month club. These kinds of one-click sign-ups may not make it onto your budget, but they should.

17. Gifts for Others

From swanky birthday dinners to holiday gifts to wedding presents, most of us tend to spend a chunk of change every month to make others happy. It can help to save for the costs of gifts all year round. Try adding a “presents” line to your budget, whether or not you give gifts every single month of the year. That way, when these expenses do pop up, you’ll be prepared.

18. Coffee

There’s nothing wrong with enjoying a pricey latte on the go now and then, as long as it finds a spot in your budget. These kinds of little treats can be a good self-care gesture, and budgeting for them properly can be an example of financial self-care.

19. Roadside Assistance Costs

One extra that some drivers may find very worthwhile is roadside assistance service. Keep it in the budget, and stay safe.

20. Laundromat/Dry Cleaners

All of us wind up using expensive dry cleaning services at least now and then, and some working professionals will have quite a bill from the cleaners. In addition, it’s worthwhile to remember that even laundry detergent, dryer sheets, and laundromat visits can add up fast and deserve a spot on your budget.

Why Are These Expenses Commonly Forgotten?

As you can see, that’s quite a list of easily forgotten expenses. It may seem somewhat obvious why these tend to slip our minds. It’s relatively simple to remember to add the really big, recurring expenses — like rent or a car payment — into a monthly budget. But there are plenty of “invisible” expenses that we pay for with a simple click online (whether that means paying for a subscription service or a life insurance policy) that can fail to register.

There are also those very infrequent charges — say, an annual technician visit to clean your heating system — that we can overlook until they hit. Also worth noting are the little, mundane purchases of things like laundry detergent, printer paper, and so forth that can add up over time.

Accounting for as many expenditures as possible will help you hone your budget and be as prepared as possible for the bills that come your way.

Banking With SoFi

Most of us have a lot of expenses to manage, and it’s human nature not to remember them all. But what if your bank were to help you budget, save, and spend better? A SoFi bank account can help you do that. When you sign up for our Checking and Savings, you’ll have one convenient place to stash your money, plus automatic savings features to help you stay organized and meet your money goals. And when you open your account with direct deposit, you’ll earn a competitive APY and pay no fees, which means your money may grow faster.

FAQ

What are common monthly expenses?

Common monthly expenses include rent or mortgage payments, utilities, food, cell phone bills, and loans or credit-card payments. Most of us also purchase clothes, meals or coffee to go, personal care products, medical insurance, and have transportation expenses, which may or may not include car payments and insurance.

What are some hidden expenses you may have?

Some commonly forgotten budget items can include medical expenses, petcare costs, charitable donations, home- and car-maintenance charges, and subscription services, whether that’s a gym membership or streaming channels.

Will my budget be messed up if I do not add these forgotten expenses?

It is possible to mess up a budget if you don’t budget for commonly forgotten budget items. You may wind up with bills to pay and not enough income to cover your expenses. To resolve this, you might have to dip into your savings or start putting things on your credit card, neither of which is ideal. The good news is, each month offers a fresh start to make your budget work better.

Photo credit: iStock/staticnak1983

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

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

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

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

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

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

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