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Money management — how to save, budget, and invest — is a vital life skill that isn’t part of most school curriculums. As a result, it often falls to parents to prepare kids for this aspect of adulthood. The trouble is, talking about things like spending, saving, and taxes with your kids may not come naturally, especially if you were raised in a “don’t talk about money” household.

So when — and how — do you start talking about money with your kids?

Generally, it’s never too early to begin teaching kids about the concept of money. You might start just by normalizing conversations about money, so kids feel comfortable asking questions. Other easy strategies include offering a piggy bank to young kids, to introduce the concept of saving, and providing an allowance to older children, which helps them learn to budget and manage their own money.

Read on to learn more about some of the best ways to teach kids about money and put them on the path towards financial health and independence.

Why It’s Important To Teach Kids About Money Management

Whether it’s the importance of saving or how to open a new bank account, money lessons help ensure that kids will make smart financial decisions in the future.

Children who are introduced to basic financial concepts at an early age are likely to feel more confident about their spending habits and have less financial anxiety when they’re older. Teaching young children simple lessons about money management also makes it easier to impart more complex financial lessons as they get older. This can help set them up for success when they get that first summer job, go off to college, and enter the working world.

Money Management Explained

First, let’s look at the big picture. Helping kids understand the basics of money management is important…but what is money management anyway? Some adults can’t answer that question, let alone explain it to their children.

Simply put, money management refers to how you handle all of your finances. It involves keeping track of what’s coming in and what’s going out (and making sure that latter doesn’t exceed the former), being smart about debt, and setting money aside for both short- and long-term goals.

While adults generally understand that saving money is important, it typically takes an engaging approach to get kids psyched about hoarding their pennies rather than spending them on a video game. With the right strategies, however, teaching kids about money management can wind up being a satisfying and fun experience for the whole family. It might even give you a renewed focus on your own money skills.

Money Management for Kids in 6 Steps

Here’s a look at some of the best ways to boost money management for kids.

1. Start Early

Children as young as three years old can start to grasp the basic concept of “We need dollars to get ice cream.” Talking about money in a positive, or simply neutral, way and being transparent about your own financial life (“I got paid today,” or “I need to pay bills tonight”) begins to ground kids in the ebb and flow of finances. It helps a child learn the value of money.

Parents can use a routine trip to the grocery store to point out price tags and how some things cost more than others. Asking a salesperson or cashier, “How much is this?” can clue children in to a transactional truth: You have to have money to buy something. Paying bills in front of them helps them understand that families also have household expenses.

2. Provide an Allowance

Offering an allowance can be a great way to teach kids to manage money responsibly. The ground rules for a child’s allowance vary from family to family; some start a child off with an allowance at age five, and others at age 14. How much kids get also varies widely and is entirely up to you. One rule of thumb is to match the number of dollars per week with a child’s age, such as $10 a week for a ten year old. You might also ask around among other parents to get a sense of the “going rate.”

Here’s a look at the two common ways to structure allowance.

•   Chore-based allowance: With this set-up, a child does chores in order to get paid. This system can instill a strong work ethic that will benefit children in the future. Some say a drawback of this method is that it could send a message that household chores are optional. But for many families, it works well.

•   Fixed allowance: Here, you agree to pay your child a set amount of money every week or month no matter what. Separately, they are expected to do their chores and help around the house because they are part of the family. This arrangement allows a child to feel part of a greater whole — to be responsible for the tidiness of their room and offer to help with the dishes because that’s what family members do. Some may argue that paying children an allowance that isn’t chore-based could compromise their work ethic or promote a sense of entitlement, but it’s really up to each family to determine what works best for them.

3. Encourage Saving and Goal-Setting

Just as adults are motivated to save when they want to have enough money for, say, a vacation or new car, your child may be incentivized to save a target amount for a specific purpose. Or, you may have a child who just wants to see how high their savings can go — that’s fine too! You can encourage them to save just to find out how much they can stash.

You might also offer rewards for reaching savings milestones. For example, you could make a deal that if your child saves a certain amount, you’ll kick in a little bit more. This rewards them for exercising restraint, and it’s similar to a vesting or “company match” principle, which you could explain to an older child.

4. Give Them a Place to Stash Their Cash

For younger kids, keeping money close at hand can work well. Having their own piggy bank or child’s safe can also make saving more fun. For older kids, you might want to open a savings account in their name. Many banks offer savings accounts specifically geared toward children and teens. Typically, these are joint or custodial accounts that come with parental controls and tools that teach financial education.

5. Introduce Them to Credit

As teenagers become more independent and start driving themselves around, consider enrolling your child as an authorized user on one of your credit cards. This can not only be helpful in the event of an emergency, like a flat tire, it’s an opportunity to discuss how to be responsible with credit. You can explain how credit cards work differently than debit cards and how interest racks up quickly if you don’t pay off what you charge in full by the end of the billing cycle.

6. Explain Budgeting When They Graduate From College

Once your kids are earning money regularly and responsible for paying their own room and board, it’s a good idea to help them draw up a budget based on their salary and estimated expenses.

There are all kinds of budgeting methods, but they might start with the basic 50/30/20 approach. This involves putting 50% of their earnings toward needs, 30% toward wants, and 20% toward savings (including any money they are putting into a retirement plan offered by their employer). If their employer offers any matching contributions to their retirement contributions, encourage them to take full advantage, since this is essentially free money.

Fun Ways To Teach Kids Money Management

To make financial literacy fun and engaging, try one of these four money activities for kids.

Go Thrifting

Buying second-hand clothes can be a great way to teach kids how to be smart spenders. You might first go to a regular clothing store and look at the price tags on new clothing, then head to a local thrift store and compare prices. Consider giving your child a set amount they can spend on second-hand clothing. You can then enjoy watching them try to get as much as they can for their money.

Encourage Some Sibling Rivalry

If you’re teaching more than one child about money, consider setting up a competition to see which sibling can save more by a certain date. You might set a goal, such as saving a specific amount or towards a specific item, then offer a reward to the winner.

Set Up a Lemonade Stand

Letting kids set up and run a lemonade stand can help them learn valuable lessons about money, including earning income and entrepreneurship. It can also help them build confidence, resilience, and management skills. Plus, it’s fun. Just be aware that many states require kids to have a permit to operate a lemonade stand, so the first step is doing a bit of research.

Play Financial Board Games

Classic board games like Monopoly and Payday can also be great money activities for children. In Monopoly, for example, players buy and trade properties, develop them, and collect rent. There is even Monopoly Jr. for younger kids. Other fun money board games for your next family game night: the Game of Life, the Allowance Game, the Stock Exchange Game, and the Sub Shop Board Game.

Recommended: 52 Week Savings Challenge (2024 Edition)

The Takeaway

Teaching kids about money and how to manage it can prepare them to be financially responsible adults. By offering an allowance or payment for doing extra chores, kids can learn the value of money and rewards of saving and delayed gratification. Helping older kids learn how to budget and set up a bank account can instill a sense of confidence and independence, not to mention pride.

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

FAQ

When should you start teaching kids money management?

Children as young as three years old can begin to understand the concept of paying for something and saving money in a piggy bank. Some parents start giving kids an allowance between the ages of five and seven, which can help them learn basic financial literacy concepts like saving, spending, and sharing. As kids get older, you can gradually introduce more complex concepts like budgeting, investing, and “good” vs. “bad” debt.

What are the benefits of teaching kids money management?

Teaching kids about money has numerous benefits. It instills financial responsibility, fosters good habits early on, and prepares them for real-world financial challenges. It also encourages critical thinking, goal-setting, and independence in making financial decisions.

How do you teach kids the value of money?

You can teach the value of money through hands-on experiences and age-appropriate activities. Encourage earning money through chores or tasks, involve them in family budgeting discussions, and demonstrate the consequences of spending choices. Emphasize the importance of saving for goals and how to differentiate between needs and wants.

How do you organize your kids’ money?

You can organize a kid’s money by helping them establish savings goals, allocate their money into different categories (such as saving, spending, and giving), and track their progress regularly. Consider using tools like jars, envelopes, or savings accounts to physically or digitally separate their money.

What is the 3 piggy bank system?

The “three piggy bank” system involves dividing money into three categories: saving, spending, and sharing. Each piggy bank represents a different purpose, teaching kids to allocate their money wisely. They learn the importance of saving for future goals, budgeting for everyday expenses, and contributing to charitable causes or sharing with others. This system helps instill foundational money management skills in a simple and practical way.

Photo credit: iStock/kate_sept2004

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 3/31/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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

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

SOBK-Q224-1855684-V1

Business bank accounts can help owners keep professional transactions separate from personal banking and aid in their business cash management. These accounts often come with special conditions and requirements, and they may have various fees.

Here, we’ll take a closer look at these accounts, their pros and cons, and what it takes to open one. Read on to dive into the details about business bank accounts.

What Is a Business Bank Account?

There are three main types of business banking accounts: checking accounts for everyday use, savings accounts for intermediate and long-term savings, and merchant accounts for accepting debit and credit card payments. In this article, you’ll learn about business checking and savings accounts, available from both online and brick-and-mortar banks.

Recommended: What Is Business Banking?

What Is a Business Checking Account?

A business checking account works much the same way a personal checking account does. You use it to deposit payments and make withdrawals, usually an unlimited amount. Like personal checking accounts, business checking accounts typically pay low to no interest on your balance.

What Is a Business Savings Account?

A business savings account will pay more interest than a checking account, so it can be a good place to park cash on an interim basis. You will likely be limited on how many transactions you can make per month without a penalty (typically six), and there may be a monthly minimum balance to maintain. Many business owners find using both a business checking and savings account can meet their banking needs.

How Long Does Opening a Business Bank Account Take?

If you open up a bank account — whether it’s checking, savings, or both — the time commitment needed is usually similar to that of opening a personal checking and savings account. It will likely take just a matter of minutes if you have the necessary information on hand.

•   You will need to provide some details about yourself, your business, and any additional business owners involved in your enterprise.

•   You’ll deposit funds.

•  Keep in mind it can take up to seven business days for final approval before you can actually access funds.

What Is Needed to Open a Business Bank Account?

Whether you open your bank account online or in person, you’ll need documentation of several personal and business details. Different banks may have their own verification requirements, depending on the type of business you own and the type of account you’re looking to open.

Here is a general list of what you might need to open a bank account for your business:

•   Your name, birthdate, and Social Security number

•   Mailing address and all contact information

•   What percentage you own of the business (anyone who owns 25% of the business or more will likely have to disclose personal details and identification)

•   A government-issued photo ID, such as driver’s license or passport

•   Business name and DBA (“doing business as” name) or trade name, if applicable

•   Business address and employer identification number (EIN) (Note: sometimes Social Security numbers suffice)

•   Industry/type of business

Depending on the type of business you own, you may be asked for the following documents:

•   Sole proprietorships may need the business name registration certificate and the business license.

•   Partnerships may need the partnership agreement, business name registration certificate, business license, and the state certificate of partnership.

•   Limited Liability Companies (LLCs) may need the articles of organization, LLC operating agreement, and business license.

•   Corporations may need articles of incorporation, corporate bylaws, and business licenses.

Recommended: Business Cash Management: Tips for Managing Cash

What to Look for in a Business Banking Account

Traditional banks, online banks, and credit unions all offer business bank accounts. All have different fee structures and provide different services. There are many fees and restrictions to consider when choosing a business banking account. But consider this overarching factor: online accounts are usually best for businesses that don’t need to make bank deposits.

Here’s what to compare when you’re looking for an account:

•   Monthly fees, such as account maintenance

•   Any minimum balance requirements

•   No-fee transactions

•   ATM access (for deposits and withdrawals)

•   Transfer, wiring, and payment capabilities

•   Incidental fees (such as, stop payment, overdraft, and nonsufficient funds)

•   Online and mobile banking tools

•   Additional features, such as invoicing, bill pay, or integrations with other business tools (especially tax reporting software)

Benefits of Opening a Business Banking Account

A business account can be a smart tool for a variety of reasons. Business owners may need to keep their personal and business accounts separate for tax and liability reasons. A business bank account also helps you establish a banking relationship that you can draw on in the future for lending or other services that may help your business grow. You will also establish a financial record that can come in handy when it comes time to file taxes and help your concern establish a good credit rating.

Recommended: How to Open a Business Checking Account

Cons of Opening a Business Banking Account

There are very few cases when a business banking account is a bad idea. Some very small sole proprietors may find they don’t need the extra fees and bookkeeping involved. But for most business owners, a separate account can be an efficient tool.

That said, one of the potential drawbacks of a business account is the cost of bank fees. High fees that you may not have anticipated can eat into your business profits. Some fees to look out for include:

•   Monthly fees

•   Transaction fees

•   Monthly balance transfer fees

•   Cash deposit fees

•   ATM fees

•   Wire transfer fees.

These fees add up fast. Be sure to check thoroughly what fees are involved and compare from one financial institution to another.

Choosing a Business Bank Account

Now that you’ve looked at fees, here are some other considerations as you choose your business bank account:

•   Banking online: Business bank accounts with online-only banks can be great for virtual businesses or any business that is not handling daily cash transactions. Many online banks do not require a monthly minimum balance.

•   Network: If you’re banking in person, be sure there is a conveniently located branch near your business. Also, find out how many no-fee ATMs are available in your area.

•   Electronic services: Check if online bill pay, electronic fund transfers, and other electronic services that can support your business are available for low or no fees.

•   Electronic payments: Does your bank accept Zelle and Venmo? If so, are there additional fees involved? How long will it take for transactions to post? Electronic payments are increasingly becoming the lifeblood of many businesses.

•   Software compatibility: Is the bank account you’re considering compatible with the bookkeeping software you use? That can make life easier when you need to track or get access to cash flow, outstanding receivables, and other items each month.

Other support: Does the bank offer small business loans, lines of credit, business credit cards, and other financial support for entrepreneurs that you may need in the future?

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 3/31/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

Photo credit: iStock/Deagreez
SOBK-Q224-1837020-V1

Most people who live and work in the U.S. need to file an annual tax return. Depending on your financial situation, your tax return may be simple or complex. If your tax return or financial situation is complicated, with many forms of income, deductions, or credits, you may end up making mistakes on your tax return. Even with a simple return, it’s possible that you might make a mistake that could cause the Internal Revenue Service (IRS) to impose fees, interest, or additional payments.

What follows are 15 of the most common tax filing mistakes — and how to avoid making them.

How Common Are Mistakes on Tax Returns?

The IRS does not release detailed statistics about how common mistakes on tax returns are, but they do say that mistakes are much more common when filing paper returns. The agency suggests that taxpayers use software to prepare their returns or work with a reputable tax preparer. This can help eliminate some of the common mistakes that occur with tax returns.

Does the IRS Care About Small Mistakes?

Yes, the IRS definitely cares about small mistakes on tax returns, though the penalties may not be as large as they are for substantial mistakes. The IRS potentially levies two different kinds of accuracy-related penalties:

•   Negligence or disregard of the rules or regulations penalty

•   Substantial understatement of income tax penalty

In cases of negligence or disregard of the rules or regulations, the penalty is 20% of the amount that was underpaid due to negligence or disregard. For a substantial understatement, the penalty is 20% of the amount that was underpaid due to the understatement on the return.

These potential penalties are on top of still having to pay the tax that you owe.

Recommended: How to File Taxes for Beginners

16 Common Tax Mistakes

Here are a few of the most common tax mistakes.

1. Not Filing Your Taxes on Time

Each year, the IRS sets the deadline for filing your federal income tax return. This date is usually April 15, though it can be extended sometimes if April 15 falls on a weekend or holiday. Not postmarking or e-filing your return by the tax filing deadline can lead to a penalty.

2. Not Putting in the Right Social Security Number

The IRS uses Social Security numbers to match up information it receives from you with information it receives about you from your employer, bank, and other entities. Messing up even a single digit in your Social Security number will disrupt this process and could cause the IRS to reject your return.

Be sure to enter your Social Security number exactly as it is shown on your Social Security card. Do the same with your spouse and anyone else listed on your tax return.

Recommended: Guide to Understanding Your Taxes

3. Not Filing Your Taxes at All

Generally, most people who work in the U.S. and have income over the filing threshold are required to file an annual income tax return. The penalty for not filing is 5% of the unpaid taxes for each month that a tax return is late, not to exceed 25% of your unpaid taxes.

4. Filing Too Early

While you don’t want to file your taxes too late (after the deadline), you also don’t want to file them too early. You want to make sure that you have received all the W-2, 1099, and other tax forms that are due to you. If you get additional forms after you’ve already filed your taxes, you may need to file an amended return.

5. Inputting the Wrong Bank Information

The IRS encourages people to e-file and choose to have their refund sent via direct deposit. But if you put in the wrong bank routing and account information when filing your tax return, you may delay your refund.

6. Incorrect Information

It’s not only your bank account and routing information that needs to be correct — you need to make sure that all of your other numbers and details are correct. This includes any information from your W-2 or 1099 forms you manually input into your tax return. Using software or a reputable tax preparer can help to minimize the chances you enter incorrect information.

7. Missing Information

If you have more than one bank account and/or a number of investment accounts, you may forget to report income (or losses) from one, or more, of these financial accounts. This is an immediate red flag to the IRS. Keeping track of all your financial paperwork throughout the year can help avoid this problem.

8. Forgetting to Sign the Forms

The IRS says that your return is not valid unless it is signed. If you file a paper return, you (and your spouse, if you’re filing a joint return) must sign the return. E-filed returns can be signed electronically by selecting an electronic PIN.

Recommended: The Fastest Ways to Get Your Tax Refund

9. Forgetting Important Paperwork

If you are working with a tax preparer, make sure to bring, or electronically send, all of your tax-related paperwork. This includes all income statements (such as W-2s and 1099s) and all tax deduction documents (such as Form 1098 for mortgage interest and Form 1098-T for college tuition paid). This will help prevent errors stemming from missing information.

10. Not Taking Advantage of Tax Breaks

You are legally allowed but not required to take any tax deductions or tax credits that you are eligible for. The IRS generally does not care if you pay more tax than necessary. But not taking advantage of tax breaks you’re eligible for can cost you money.

11. Writing the Check to the Wrong Entity

If you owe money to Uncle Sam, be sure to make the check out to the U.S. Treasury. If the check isn’t filled out correctly, the IRS likely won’t cash it. This can result in a late payment — and a penalty. Keep in mind that you can also pay any owed taxes online via IRS Direct Pay or use the electronic payment options in your tax software.

12. Math Errors

The IRS says that math errors are among the most common tax filing mistakes. This is especially true when filling out your tax return on paper, since tax software will generally do all the math for you.

13. Not Claiming All Streams of Your Income

Even if you are paid in cash or don’t receive a W-2 or 1099 form, you are legally required to report all income received in a tax year. Not claiming an income stream, even if it was part-time or “gig work,” may open you up to additional taxes, interest, and/or penalties.

14. Filing Your Taxes Under the Wrong Status

There are requirements that come with the different filing statuses that are available to you, and filing under the wrong status is a common tax filing mistake. For example, you can’t use the “head of household” status just because you make the most money in your family — this tax filing status is only for unmarried people who have to support others. If you’re married, you have a choice of two different types of filing status, and one will likely be more advantageous to you than the other.

15. Not Getting Help When You Need It

If you have a relatively simple tax return, you may feel comfortable filing your tax return on your own. But as your taxes get more complicated, it may make sense to work with a reputable tax professional. Not getting help when you need it may end up costing you a significant amount of money.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

16. Name/Misspelling Errors

Our final tax filing mistake that is common is, yes, name spelling errors. Make sure that you are checking and double checking all of the names entered into your tax return. Misspelling a name may cause the processing of your return to be delayed.

Tips on Avoiding Tax Mistakes

If you’re looking to avoid tax mistakes, here are a few things to keep in mind:

•   Consider using tax software that can do the math for you and automatically select the right forms for your situation.

•   If your financial situation becomes even more complicated, consider working with a tax professional.

•   Include all the information and tax documents you’ve received from all sources.

•   Make sure to wait to file until you’ve received all your documents, but early enough that you don’t go past the April filing deadline.

The Takeaway

In life, mistakes happen. However, you generally want to avoid them when you’re filling your tax return. Even a small misstep could hold up your return, delay any refund, and lead to interest and penalties. It’s wise to take time to understand your taxes or rely on a tax professional for help. Getting it right the first time around can help you save time — and money.

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

FAQ

Does the IRS penalize you for tax filing mistakes?

The Internal Revenue Service (IRS) charges penalties for certain — though not all — tax filing mistakes. Mistakes that can lead to penalties include:

•   Not filing your return and paying your tax by the due date

•   Failure to pay proper estimated tax

•   Substantially understating your tax liability

•   Understating a reportable transaction

•   Filing an erroneous claim for a refund or credit

Even if you don’t get hit with a penalty, you may still get an unexpected (and unwelcome) tax bill, either right away or possible years later.

How often does the IRS make mistakes with tax returns?

The IRS does not release statistics about how often they make mistakes, but it is almost certainly less often than taxpayers make mistakes. If you think that the IRS has made a mistake when processing your return, you can either contact the IRS directly or work with a reputable tax professional to rectify the situation.

How do I know if I filed my taxes right?

The IRS generally will accept your tax return within a few days. This means they’ve received it and scanned it for basic errors, like missing information or major red flags.

Once your return is accepted, the agency will begin a more detailed process of examining your return — they’ll check your income reports, verify the deductions and credits you’ve claimed, and ensure everything aligns with the tax laws.

If you’re due a refund, the IRS will approve it once they are satisfied your return is accurate. Typically, you can expect a refund within 21 days after you’ve e-filed.

Keep in mind, though, that the IRS has three years from the date you filed your return (or April 15, whichever is later) to perform an audit and potentially charge you additional taxes. That’s why it’s a good idea to keep your tax records around for at least three years.

Photo credit: iStock/kynesher

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 3/31/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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Are you a little obsessed with planning your next big trip? We hear you! The excitement of seeing new places — whether that means a faraway tropical island or a neighboring state — is a powerful lure. But there’s one thing that may get in the way: Money.

Let’s be real, travel can be expensive. Even if you’re hopping in the car for a short weekend road trip, the cost of gas, food, entertainment, accommodations, and more can get a bit overwhelming. Fortunately, with a little bit of planning, you can make your travel dreams a reality. And it can all begin by creating a travel fund.

What Is a Travel Fund?

A travel fund is exactly what it sounds like — a fund exclusively used for gallivanting around the world. It’s a place to stash some cash that you don’t use for rent, bills, repaying student loans, or any other monthly financial obligations. This fund is just for your passion in life. And your passion is clearly traveling.

How to Fund Traveling

Unfortunately, a travel savings account will not grow by magic. If only! You’ll need to find ways to funnel some cash towards your travel plans. There are a variety of ways to do this. Perhaps you got a raise recently (nice!) and can put that amount directly towards travel. Or, maybe you can automatically whisk $25 or $50 per paycheck into your savings. Or, you might give up concert tickets or takeout food for a while to allow some wiggle room in your budget that goes towards paying for your next getaway. There are many options — some of which we’ll explore below.

Recommended: 15 Easy Ways to Save Money

Setting Up a Dedicated Travel Savings Account

There are a few options for where to keep your travel fund. Yes, you could keep your vacation fund in the same account as your day-to-day savings, but separating the fund could provide even more clarity.

Keeping your travel fund in a separate account can make it easy to see how close you are to reaching your travel goal. It allows you to see exactly how much money you’ve saved for the cause with ease. Having the money in a separate account also allows you to set up automatic contributions, just as you might already be doing with your other accounts.

Automating your savings towards travel means you can eliminate another task from your to-do list. You’ll be making progress toward your dream of cruising down the Nile without even having to think about it. And since it’s stashed separately, you don’t need to worry that you’ll use it on, say, entertainment or new shoes without realizing it.

Tips on Selecting an Account to Use

When it comes to setting up a dedicated travel fund, the first order of business is usually to pick an account type. There are a variety of options to choose from. Part of what will likely influence your decision is how long you plan on saving. If you want to take a trip in just a few months, a savings account may be a good vehicle. You can easily contribute to it, and you’ll earn some interest.

To help your travel fund grow faster, you may want to go with a high yield savings account. These accounts typically pay a much higher annual percentage yield (APY) than traditional savings accounts, giving you the ability to earn more on your money while still enjoying the security of a federally insured account. These days, many high-yield savings accounts offer APYs of up to 5% or more — many times more than the average national rate of 0.46%.

Some of these accounts may come with certain restrictions, like a limited number of withdrawals a month or maintaining a minimum balance, so be sure to read the fine print on each account you might be considering.

Another is a certificate of deposit (CD), which locks up your money for a particular term, typically from six months to a few years. This type of account can sometimes offer a more competitive interest rate than a traditional savings account but comes with withdrawal restrictions. If you choose to withdraw the money before the term ends, you’ll likely have to pay a penalty or fee.

Yet another option is to use a cash management account with a brokerage firm. These accounts are meant as an option for your uninvested money. They can also be great for putting away some extra money to save, but again — do read the fine print. Fees may be involved, plus commissions if a broker steps in to help you with your investments. Make sure that these won’t cut into your savings.

All of these options will allow you to keep your vacation fund separate from your checking account, emergency savings, or regular savings account. You may even be able to give it a unique name like “travel fund” or even more specific like “Tahiti fund.” It’s much more exciting to watch “dream trip to Bali fund” grow than just “account: 3283052.”

Growing Your Travel Fund

After you’ve created your unique travel fund, it’s time to put in some savings work. And that begins with your budget. If you already have a budget, that’s great. All you need to do is add in “travel fund” as a new line item and shift as much money as you feel comfortable moving to this new account each month.

But, if you’re starting from scratch, that’s OK too. Trying to save for the trip of a lifetime is just as good an excuse as any to start budgeting.

To build a budget, you’ll want to start by figuring out your average monthly take-home income (what you earn after taxes are taken out). Next, it’s good to create a list of all your monthly expenses. You’ll want to include all the basics like rent or mortgage, car payments, student loans, credit card statements, food, gas, insurance, gym memberships, streaming accounts, and any money you currently put towards saving and investing. Make sure to get as granular as possible about your spending.

Next, subtract your average monthly expenses from your average monthly income to see how much you have leftover. If it’s more than $0, that’s excellent news! You can put the excess towards your travel fund. If not, you’ll need to find some places to cut back on spending.

Recommended: How to Make a Budget in 5 Steps

Finding Extra Cash for Your Travel Account

If you’d like that leftover number in your budget to be higher, maybe it’s time to take a look at both your spending and your current income level. Perhaps you can see where changes can be made.

One of the potentially easiest ways to create more cash for your travel fund is to look deeply at your monthly spending. Are you still subscribing to that streaming service you never (or rarely) watch? Are you signed up for the premium version of that social media platform you haven’t been on in months?

What about that gym membership? How’s that going for you? Go ahead and get rid of things that aren’t bringing you joy or are dispensable. Then, refocus those funds in your travel fund.

If there’s no room for cuts, then it might be time to increase your income. Of course, you could always ask for a raise at work, but if that doesn’t come through, explore some other options — like a side hustle. A side hustle is a gig you take on outside your normal work to make some extra money. If you can, pick something you really enjoy doing so it feels less like “work.” For example, if you love dogs but aren’t ready to own one, maybe walking dogs before work would be fun for you.

If you are a handy person who likes to fix things, creating a listing on a site like Thumbtack or TaskRabbit may be a good idea. If you have other talents like photography, writing, or graphic design, you might do some networking to see if you can drum up some freelance work. That way, you can get paid for what you love to do and save for what you love too.

Recommended: How Families Can Afford to Travel on Vacation

SoFi: Your Partner in Creating a Travel Fund

By now, you’ve committed to adjusting your budget and setting aside cash in a new fund. The only thing left to do is find the best place to stash your cash.

When choosing where to put your travel fund, you’ll want to find an account that pays a competitive yield, keeps your money safe, and allows you to easily access your funds when it’s time to set off for your next adventure.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

FAQ

How much should I keep in my travel fund?

To come up with a travel savings goal, you’ll want to determine how much you’ll need for your trip and when you want to take it. From there, you can determine how much you’ll need to transfer into your travel fund each month to reach your goal. For example, if your trip will cost $2,500 and you plan to travel in six months, you’ll need to set aside around $33 a month.

How do I set up a travel fund?

Setting up a travel fund can take only a matter of minutes. It can be as easy as opening a savings account online and then directing money towards it. You can also go into a brick-and-mortar bank to set up an account.

How can I save money on a travel fund?

To save money on a travel fund, look for a savings account that doesn’t charge monthly fees and offers a competitive interest rate. These two factors will help boost your savings and get you on your dream vacation as quickly as possible.

**Terms, and conditions apply: This SoFi member benefit is provided by Expedia, not by SoFi or its affiliates. SoFi may be compensated by the benefit provider. Offers are subject to change and may have restrictions, please review the benefit provider's terms: Travel Services Terms & Conditions.
The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Your mind and body may be ready for a sunny beachside spring break in Cancun, but if you’re living that broke college kid life, you may imagine your spring break looking more like a week at home, scrolling through Instagram and binging Netflix.

However, it is possible to plan a spring break trip on a limited budget. And yes, even a college student’s budget can be stretched for spring break fun! If you’re wondering how to plan a spring break trip without living off instant noodles for the next month, we have some tips to help you get a well-deserved vacation from those long nights spent studying in your dorm room.

Keep reading for some of our best tips on making your spring break trip dreams happen on a budget.

1. Start Planning Early

Waiting until the last minute to plan a trip could mean missing out on cheaper flights, hotels, and even popular ticketed attractions. If you’re going to a hot destination during a peak travel season, which includes spring break for many destinations, then you could blow your travel budget on the flight alone, leaving you without enough money for food and lodging.

2. Make a Budget & Stick to It

Before you even leave for your destination, it’s smart to create a travel budget. What can you reasonably afford to spend on accommodations, transportation, entertainment, meals, and shopping? Having a budget could help you avoid splurging on expensive dinners or overspending at local shops.

Recommended: How to Save for a Vacation: Creating a Travel Fund

3. Find Off-Season Destinations

If Cancun for spring break is too pricey for your college student budget, don’t stress. There are a number of great destinations that are off-season in the spring, ranging from the more rugged Jackson County, North Carolina to the Big Apple.

4. Only Travel as Far as You Can Drive

It’s about the journey, not the destination, right? You can make that (semi) true by taking a road trip with a few friends. On a road trip, you don’t need to follow any set schedule. Since there’s no flight or train to catch, and often no hurry to reach a destination, you can make spontaneous decisions and discover hidden gems along the way.

5. Avoid Tourist Traps

Doing spring break on a budget generally means skipping touristy destinations like Miami, New Orleans, and Cabo. However, there are plenty of cheaper alternatives to these locations that can save you money and that will probably be far less crowded, too.

6. Reach out to Friends & Family

If you have friends or family in another city, reach out and ask if they’d be willing to host you. If they agree, you could get some free lodging and meals out of it. Plus, you’d be connecting with locals who could guide you through the city and give some tips on cool and free stuff to do that you might not have found otherwise.

Recommended: How to Balance the Urge to Travel and the Need to Save

7. Ditch the Plane Ticket

Planes and cars aren’t the only way to land at your tourist destination. You can do spring break on a budget by hopping on an Amtrak train or a Greyhound bus, both of which have destinations all over the country. The best part? You can catch up on some work, sleep, or relaxation while you enjoy the ride.

8. Don’t Forget about Cruises

You could spend a fortune going to just Miami or Los Angeles. Or, you could check out some cheaper cruise options that could potentially take you all over Alaska, the Caribbean islands, or a slew of other destinations for less. There are even cruise options designed specifically for college students.

9. Consider Pitching a Tent

Do you get motion sickness in cars or boats? With camping, your feet will be firmly planted on the ground, and your budget will also likely stay down to earth. You can camp out in many destinations across the U.S. and even abroad, be it under the stars near a national park or near a great fishing hole in the Carolinas.

10. Look For a Deal

Sites like Groupon and LivingSocial offer a number of travel and hotel deals both for individuals and for group travel. Checking out which hotels are offering promotions could help you save when booking accommodations. You can also find deals on attractions near where you’re vacationing, too.

11. Sign Up for a Spring Break Volunteer Experience

Many colleges offer a program called “alternative break,” which allows students to travel and volunteer during their spring break. If your college doesn’t offer any alternative break trips, you can still find some opportunities through organizations like Habitat for Humanity and United Way.

12. Be a Tourist in Your Own State

If airfare is out of the question for your spring break budget, a budget-friendly alternative could be touring your own state. You can take a spring break road trip around your state or even take multiple day trips, the latter of which could allow you to have most of your meals at home with no hotel needed.

13. Fly on Unpopular Days

No, it’s not just your imagination: There are some days that are cheaper to fly on than others. If you’re not tied to a set departure and/or return date, use the flexible date search on a travel or airline site. This can help you find the cheapest travel dates for your trip.

14. Sign Up for Price Alerts

One helpful way to ensure you’re getting the best possible deal on your trip is to sign up for price alerts, a free service offered by several travel companies, such as Kayak, Skyscanner, and Google Flights. These sites track prices daily and alert you in real-time when the price changes for a flight, hotel, or rental car you want.

15. Ask for Extra Snacks

If you’re flying to your destination, be sure to grab the airplane snacks. And if you like the snacks, ask for seconds! You may be able to snag a free snack to help tide you over between meals when you land. The worst thing that can happen is that they say no.

16. Consider Airbnbs or Hostels

For those looking for the best tips on how to plan a spring break trip, one not-so-obvious one may be skipping hotels altogether. Staying at an Airbnb or hostel could be a cheaper travel hack than even a budget motel, especially if you don’t plan on spending much time in your room anyway.

17. Use Public Transportation

While Uber may be one of the handiest apps to have while traveling, relying on ridesharing and taxis could end up costing you a small fortune, especially if you’re traveling in a big city. Using public transportation could cost you a fraction of the price of an Uber, plus it will allow you to explore more of your destination as you navigate around subway and bus stations.

18. Bring Your Own Food

Grocery costs may be on the rise, but the cost of dining out can really wreak havoc on your spring break budget. If you want to try the local cuisine, you can typically do so much cheaper by going to a local grocery store and buying premade meals there or, better yet, making your own meals using fresh, local ingredients. This option may only be available if you’re staying at an Airbnb or hotel with a kitchenette, though.

19. Eat Out for Lunch, not Dinner

Eating out for dinner will often cost you far more than eating out for breakfast or lunch. And if you decide to eat out for dinner still, skip the drinks and desserts. These items typically have higher markups than other items on the menu. Plus, when it comes to desserts, the quality (and quantity!) may not be worth it — many restaurants don’t even make the desserts they serve.

20. Ask About Complimentary Hotel Meals

Students looking for spring break trips on a budget won’t want to miss out on this tried-and-true travel budget saver: Before booking your hotel, ask if they have any complimentary meals, such as a continental breakfast. It may not be as fancy or Instagram-worthy as the hottest brunch spot in town, but it will likely be a lot better for your budget.

21. Use The Free Hotel Coffee

Most hotels offer free coffee either in the lobby in the mornings or through small coffee makers in your room. It may not be as fancy as your usual Venti Coconutmilk Latte with two pumps of salted caramel, but it won’t cost you anything.

22. Look out for Free Samples

Looking to score some more free snacks? Add local farmers’ markets to your itinerary. Many markets are full of free samples, so you may even be able to scrounge together a free lunch. You may also be able to score free swag, like t-shirts and reusable bags, from local vendors and businesses, your hotel, or the local visitor’s center.

23. Prioritize Free Activities

Sure, you can spend $50 for a museum ticket. Or, you could search online for some free museums nearby. Many hot spring break destinations offer free walking tours, free museum days, and a plethora of other free activities, such as parks and beaches.

24. Find a Travel Buddy (or Four!)

You’ll find that going on a budget-friendly spring break trip can be a lot easier if you team up with friends. Pooling your college budgets together may even help you to afford nicer accommodations or a more far-flung destination.

25. Cash in Credit Card Rewards…

If you have a rewards or cashback credit card, you may want to save up your points to help fund your epic spring break. Having a travel rewards card can be an easy way to save on travel, especially if you’re able to use that card on purchases before heading out on vacation, which could help you build up even more rewards points.

26. …And Earn More Rewards While Traveling!

Using your rewards credit card on vacation may not help you save for your current trip. But if you rack up more rewards during your trip, you’ll already have a new vacation fund started before you even come back from spring break.

27. Research Student Discounts

Catching a movie or eating out during spring break? Ask about a student discount! You may be able to score some sweet savings even before your vacation, as companies like Expedia often offer student-only travel deals. You can also try StudentUniverse , which helps students get discounts on hotels, airfare, and more.

28. Ask About Membership Discounts

A ton of college discounts exist, but don’t rule out membership discounts you could get from family members. For instance, Costco, Sam’s Club, AAA, and AARP all offer travel discounts to their members. It may be worth asking some relatives about their memberships to save big on your spring break trip.

29. Avoid Transaction Fees

Transaction fees can be a real budget-killer if you’re traveling abroad. And even if you’re stateside, ATM fees can also put a dent in your spring break savings. So you may want to ask your card issuer about fees and plan accordingly to make sure you have enough cash on hand to avoid them.

30. Use Hotel Toiletries

TSA-approved toiletries can be overpriced, and buying them when you arrive at your destination may also mean overpaying for toiletries that you have loads of at home. The best alternative? Decant your own shampoo and conditioner into smaller bottles you can snag at The Dollar Store. Or, better yet, just use the hotel toiletries. They may not be what you’re used to, but your budget will thank you.

The Takeaway

Wondering how to plan a spring break trip on a budget? It may not be as hard as you think. If you’re willing to try off-peak destinations and hunt for discounts, you can save a ton of cash. Spring break trips on a budget don’t have to be a drag, either. You can still go to popular destinations if you create (and stick to) a spring break travel budget. Using rewards and cashback cards can also help you save on airfare and other travel expenses.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

Photo credit: iStock/onurdongel

**Terms, and conditions apply: This SoFi member benefit is provided by Expedia, not by SoFi or its affiliates. SoFi may be compensated by the benefit provider. Offers are subject to change and may have restrictions, please review the benefit provider's terms: Travel Services Terms & Conditions.
The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.