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If you love to travel, chances are, you have your eyes open for good deals. Wouldn’t you like to get a hefty discount off the usual airfare rates? Sure. An upgrade from a standard hotel room to a junior suite with a terrace? But of course! And clever hacks that help your dollars go further whether you’re sipping a cocktail, signing up for a surfing class, or shopping? Yes, yes, and yes.

Being a frugal traveler can deliver those perks and pad your bank account. With a little research and knowledge of some insider tips and tricks, you can have a great experience on vacation and cut costs, too.

Want to be a more frugal traveler? To snag some bargains on your next trip, try these smart tactics.

Time Your Trip Right

One of the first steps in becoming a frugal traveler is picking a place where you want to go and can also afford to go. The good news is that no location is necessarily off-limits, as long as you can be flexible on the timing of your vacation.

While you’re not likely to get a great deal on a hotel on Cape Cod for Fourth of July weekend or a cheap flight to the Caribbean over Christmas, you may be able to score a sweet deal if you decide to go to either of those places during what is referred to as “shoulder season.”

The term “shoulder season” is used by professional travelers and agents around the world to denote the time in between busy seasons in any given destination.

It may be viewed as a less desirable time to visit by some travelers, but to the seasoned voyager, it’s often seen as the ideal time to go. Not only may you find better deals on flights, accommodations, and more, but you can also avoid the intense crowds you may encounter during the high season.

Take Mexico as an example. According to Frommer’s, Mexico’s high season begins around December 20, peaks over New Year’s, then winds down at the end in April.

If you plan a visit during this time, you can expect to pay a premium on just about everything, from your plane ticket to those tacos al pastor, as you’re competing with other travelers for space.

If you opt to visit just prior to this, say in November, or just after, in May or June, you will likely be able to find better deals. Since there will be fewer people around, you might be able to take excursions with smaller groups, get restaurant reservations at highly sought-after spots, and even luck out with a free room upgrade at your hotel.

Recommended: How Families Can Afford to Travel on Vacation

Find Flight Deals

One of the most expensive parts about traveling is the actual act of travel itself. While driving can sometimes be a cheaper mode of transportation, it might not be an option depending on the destination you have in mind.

But there are still ways you can save. Here are a couple of travel hacks that may help you get better deals on airfare.

Use the big travel sites. Sites like Expedia, Booking.com, and Kayak search multiple airlines for the best deals and can often offer you clever ways to lower your costs. For instance, they can tell you whether prices for your itinerary are likely to rise or fall in the near future. They can show you how much you can save if you are flexible with your dates or are willing to fly out of a nearby airport rather than your closest possible hub. For instance, if you’re Paris-bound from the New York City area, you might get a better deal departing from Newark, NJ, vs. JFK airport in the city itself.

What’s more, these sites sometimes offer clever hacks, such as flying outbound on one airline and back on another to save you cash. They can also keep you posted on new deals that become available on your route if you’re not ready to buy right away.

Sign up for email alerts. Some good news for busy travelers: There are other sources for flight pricing alerts beyond the big travel sites. For instance, if you are willing to subscribe to an email newsletter, you might try Next Vacay. It’s a website where users can input their destination, then simply wait for the site to send them daily emails with flight deals. You may also want to check out Skyscanner, which allows users to set alerts for price drops so you can strike when the iron is hot.

Some of these services will send you deals for both your destination and others in case you need a little inspiration. You may also want to download a few travel apps that will send you price alerts as well.

Work that airline credit card. If you have a preferred airline or airline network, you can earn points or miles with an airline credit card that can be applied to the cost of flights or help you snag upgrades.

Book at the right time. There used to be a rule that Tuesdays were the best (cheapest) day to go flight shopping, but a recent Google Flights study found that you won’t really save much that way, maybe just 1.9%.

However, you are likely to get a nice price if you purchase your ticket well in advance of your travel date (around three months for domestic travel and often six to 10 months for international) or else be spontaneous and book your flights last minute. And it is true that you are likely to save if your flights are on a midweek date or a Saturday; that can shave the price versus heading off on vacay on a Friday, along with everyone else.

Score Deals on Accommodations

Ready to save on hotel costs on your next vacation? Try these smart tactics:

•   Hotels base prices on supply and demand, so when there is less demand (say, in shoulder season), prices tend to fall. Beyond the season, you can also try looking into checking in and out on less popular days.

If you can check in at a vacation destination on a Monday and out on a Friday, for instance, you may be able to save, since mid-week pricing can be cheaper than weekends.

•   Even if you’re booking at a travel site, it’s also a good idea to frequently check the website of any hotel you’re interested in staying at. There, they may announce different deals and sales. At the very least, you may be able to spot a free room upgrade or free breakfast.

•   It can also be wise to sign up for a travel credit card. These can help you earn points to apply to future travel and offer perks at your favorite hotel chain.

Entertain Yourself on a Frugal Vacation

While you’re traveling, you’re likely going to want to participate in activities. And you can likely find ways to save on those also.

In a new place, try googling a few free walking tours, which can give you a wonderful sense of a place without having to spend a dime (though it may be polite to tip your tour guide afterwards).

For cheap or discounted tickets to local attractions, consider checking out sites like Groupon, Airbnb Experiences, Meetup, and local tourism boards.

You may also want to ask your hotel front desk at check-in for tips on things to do and see. Hotels often have partnerships with area attractions and may be able to provide you with a discount.

For restaurants, it can be a bit harder to save, but if there’s one fancy place you’ve simply been dying to try, you can often save a fair amount by going for lunch rather than dinner.

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

Set a Travel Budget

Establishing a budget, and then starting to save for your vacation, can be a key part of the frugal traveler planning process. That’s because your budget can help determine not only where you can go, but what you can do while you are there.

A travel budget can help you to narrow down your choices and also make sure that you are able to enjoy your trip without having to worry that you are spending more than you can afford.

Below are some categories you may want to include in your budget:

Transportation costs: When budgeting for a trip, you’ll want to decide if you’re going to fly, drive, or take the train. For driving (perhaps you’re going to be touring some national parks), consider costs like gas and wear and tear on your car. If you don’t have a vehicle you can use, look for ways to save on renting a car, such as not picking it up at the airport but at a nearby location. You’ll need to account for taxes, insurance, and other related expenses. For flying, you’ll want to be sure to include ticket price, baggage fees, airport parking, and destination car rental or taxi.

Lodging: Accommodation costs can seem clear, but you’ll want to be sure to ask about any resort fees and taxes so you can add it to your budget.

Food: It can be a good idea to come up with a cost for breakfast, lunch, and dinner (including tips) for everyone you’re traveling with. If your hotel offers free breakfasts, you can put that cost towards another meal. Or maybe you’re renting an apartment and can cook while traveling. You’ll still need a grocery budget.

Activities: You’ll want to have a budget for daily activities and entertainment for each participant in your group. Many museums, for instance, can have steep entrance fees, so you may want to search ahead to see what likely costs are. If you’re planning a special outing, like a Jeep tour to see cave paintings in the Southwest, don’t forget to allow for a tip for the driver.

Extras: You never know when an emergency, a fun activity, or an unplanned happy hour will arise. Adding a buffer to your vacation budget can help you prepare for these extra expenses. You might also want to budget for travel insurance or see if your credit card travel insurance offers good coverage.

Once you add up all the costs, you can start saving up for your vacation. You could even create a secondary savings account titled “travel fund” so you’ll be even more excited to save.

The Takeaway

Vacations can be costly, especially if you’re traveling with a family. But with a little bit of research and advance planning, you may be able to significantly reduce the price of your next trip.

Simple frugal traveler tricks, like traveling off-peak, signing up for travel newsletters, booking your flight around two months ahead, and pre-scouting free and discounted local activities, can help you reduce costs without having to skimp on fun.

You can also make traveling more affordable by setting a budget, saving up for your trip in advance, and staying as close as possible to your spending plan while you are away.

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.

SoFi, your one-stop shop for travel.

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**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.

Eligibility: You must be a SoFi registered user.
You must agree to SoFi’s privacy consent agreement.
You must book the travel on SoFi’s Travel Portal reached directly through a link on the SoFi website or mobile application. Travel booked directly on Expedia's website or app, or any other site operated or powered by Expedia is not eligible.
You must pay using your SoFi Credit Card.

SoFi Member Rewards: All terms applicable to the use of SoFi Member Rewards apply. To learn more please see: https://www.sofi.com/rewards/ and Terms applicable to Member Rewards.

Additional Terms: Changes to your bookings will affect the Rewards balance for the purchase. Any canceled bookings or fraud will cause Rewards to be rescinded. Rewards can be delayed by up to 7 business days after a transaction posts on Members’ SoFi Credit Card ledger. SoFi reserves the right to withhold Rewards points for suspected fraud, misuse, or suspicious activities.
©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender. NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org).

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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In light of recent events, some bank customers may wonder how safe a checking account is in terms of stashing their cash.

Banks are far better for protecting your hard-earned cash than you keeping a wad of bills hidden somewhere in your home — mainly because the money you deposit in a bank is insured up to $250,000 or possibly more¹.

But there’s more to the story. So read on, and we’ll tell you in detail how banks make sure your money is well defended — and what you can do to help keep those dollars safe.

Is My Money Safer at a Bank?

It’s only natural to wonder where your money is safest, and keeping your cash on deposit at a bank is one of the safest things you can do. For one thing, carrying cash with you — or, worse, hiding it in your house — leaves you vulnerable to theft or loss (or some other unforeseen event).

In addition, banks are highly regulated and, as mentioned, deposits are insured. And as many people now know, the government is fully invested in protecting the cash of its citizens.

Why Your Money Is Safer in the Bank

Here are some of the protections your checking account may have:

•   FDIC insurance

•   NCUA insurance

•   Capital requirements

•   Protection from fires, floods, and thefts

Read on for a brief description of these protections.

FDIC Insurance

The Federal Deposit Insurance Corporation (FDIC) protects people who deposit money into FDIC-insured financial institutions against loss. This kind of insurance is backed by the federal government and depositors are automatically insured, generally up to $250,000 per depositor, per FDIC-insured institution, per ownership category. (Some banks participate in programs that extend the FDIC insurance to cover millions.) If your bank were to go out of business, you’re covered up to the cap.

NCUA Insurance

Maybe you’re the kind of person who prefers to keep your cash at a credit union. Don’t worry; it’s still safe. Congress created the National Credit Union Administration (NCUA) in 1970 to insure deposits of up to $250,000 at federally insured credit unions. The $250,000 is for each member, per insured credit union, per ownership category. Basically, NCUA is an agency that provides coverage for credit union members that’s comparable to what FDIC does for bank customers.

Capital Requirements

Banks and other financial institutions that accept deposits must have enough liquid assets to cover their expenses while still being able to provide cash when depositors request withdrawals. Formulas to calculate capital requirements can be complicated, but know that they are in place and are protecting you.

A financial institution is required to have a risk-to-asset ratio of at least 4% to safeguard people who deposit funds into their institution.

Protections From Fires, Floods, and Thefts

Banks purchase banker blanket bonds, which protect the institution in case of fire, flood, robbery, embezzlement, earthquakes, and other causes of lost funds. As a result, even if the bank loses money, customers won’t lose their funds.

Advantages of Keeping Money in a Checking Account

Now, let’s pull back and take a big-picture look at why a checking account is such a sweet spot for protecting your money. Some of the pluses:

•   Your money is covered from loss when deposited in an FDIC-insured bank or an NCUA-insured credit union.

•   If your funds exceed the amount of these significant coverages ($250,000), then you can simply open accounts at an institution that offers an insurance program with a higher amount. Or you might open additional accounts at other insured banks and be covered through those institutions.

•   Interest-bearing checking accounts (though not all checking accounts do pay interest) allow you to earn money simply by keeping it in the account.

•   You can easily use your deposited funds by writing a check, withdrawing money from the bank or by an ATM, or transferring it.

•   Checking accounts that come with debit cards make it simple to make purchases through a card reader in person or by entering data online. (Note: There are cons of using a debit card online, like less fraud and purchase protection.)

•   Mobile banking makes it easy to conduct financial transactions wherever you go. You may be wondering, Is mobile banking safe? The answer is yes, most of the time, but you do need to take some precautions to avoid potential hacking activity (more on that below).

•   You can have your paycheck automatically/directly deposited into your checking account. This eliminates a paper check that could get lost or stolen; plus, you don’t have to physically deposit it yourself on payday.

•   A checking account can provide a record of what you spent — and when and where — which is helpful with budgeting, at tax time, and more.

•   Some banks allow you to get paid up to two days early — meaning that your direct deposit is available 48 hours before it’s actually deposited.

Your Role in Protecting Your Money in the Bank

You’ve learned about how banks safeguard your deposits…but what about your role in protecting your money? Yes, even when your dinero is locked up tight at a bank, your actions can impact its security. Consider the following points:

•   If you have any reason to believe that fraudulent activity is occurring or has occurred with your checking account, contact your bank immediately as well as local law enforcement.

•   Create a unique password for your checking account; consider storing it in a secure password management system. Then regularly change your password.

•   Regularly check your balance and balance your statements. This way, you can spot suspicious-looking activity early and address any discrepancies. Identity theft is not unusual and a proactive approach is the best way to protect yourself.

•   Be especially careful when using public Wi-Fi at libraries, coffee shops, and the like. While they’re convenient for information gathering, when you’re conducting financial transactions on them, the open connection makes it easier for hackers to do bad things.

•   Keep your own computer up to date, installing appropriate software updates, malware blockers, and so forth.

•   Sign up for fraud alerts with your bank. Receiving real-time transaction info through texts, emails, or mobile apps allows you to quickly respond to any attempts at fraud.

•   Also, don’t share your banking information with anyone by phone or email. For example, if someone claims to be a representative from your financial institute, hang up. Then use the contact information you have for your bank and share what happened.

The Takeaway

So, how safe are checking accounts? At insured institutions, depositors enjoy deep levels of protection. Besides being safe, there are numerous advantages to having a checking account. Definitely a win-win versus hiding your bucks somewhere at home. But depositing your funds is just part of the bargain: Then you have to do your share and keep vigilant and make sure that fraudsters don’t get their fingers on your dough.

If you’re looking for a bank that protects your money with 24/7 account monitoring, apply for an online bank account with SoFi. SoFi recently announced that deposits may be insured up to $2 million through participation in the SoFi Insured Deposit Program. But here’s what else: If you sign up for direct deposit with us, you’ll earn a competitive APY. Plus, you’ll pay no account fees, and you’ll be able to access your paycheck up to two days early.

Better banking is here with  up to 3.30% APY on SoFi Checking and Savings.

FAQ

Is your money safe in a checking account?

Yes, your money is safe in a checking account. Federally insured banks and credit unions automatically protect depositors like you for up to $250,000 per person, per insured institution, per ownership category (or possibly more). These financial institutions are even covered in case of fire, flood, and earthquakes, as well as when crimes, such as robbery and embezzlement, occur.

What are the risks of a checking account?

Checking accounts come with plenty of benefits and, at federally insured financial institutions, with solid protection against risk. That said, there are a couple of potential disadvantages to checking accounts. For example, not all of them pay interest (although some do). Some come with monthly fees (which can get pricey). And some financial institutions will require a minimum balance in your account.

There’s also some risk of criminal activity: If you ever suspect that someone has hacked into or otherwise fraudulently used your checking account, contact your bank and local law enforcement.

Can someone steal your checking account?

Physical checks and debit cards can be stolen, and your account could be hacked. So keep all personal data in a secure place and, if any items are lost, contact your financial institution immediately. If you believe your checks or debit card to be stolen, also inform your local law enforcement.

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Photo credit: iStock/akinbostanci

¹SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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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Taxes are inescapable: You likely have income taxes withheld from every paycheck; if you’re a homeowner, you pay your property taxes; and yes, when you tap your card at the register, you pay that additional sales tax.

You may wonder why you have to fork over that extra bit of your hard-earned cash. This guide will help with that. Read on to learn:

•   What is sales tax?

•   How does it work?

•   What are the different kinds of sales tax?

•   How much is sales tax on average and in each state?

•   What are the pros and cons of sales tax?

What Is a Sales Tax?

Sales tax is a form of revenue for state and local governments. States and localities levy sales taxes on certain purchases of goods and services. For every eligible purchase you make, you’ll pay a sales tax — a percentage of the sale price.

State and local governments use the revenue generated from sales taxes to fund their budget. That means your tax dollars could pay for things like libraries, law enforcement, parks, infrastructure, and schools.

States and localities can charge separate sales taxes, though they don’t always do this. Five states currently do not charge sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. Of those five, only one state (Alaska) has cities/counties that charge local sales taxes. States without sales taxes may generate revenue from other types of taxes, like income taxes and property taxes.

How Does Sales Tax Work?

Now that you know what sales tax is, consider this: How does sales tax work? As a consumer in the United States, prices on items in the store typically don’t display the sales tax. You’ll either need to do the math in your head (or using your phone) or wait until you get to the register to see how much you’ll owe in sales tax. When shopping online, e-commerce sites usually tabulate sales tax near the end of the transaction as well.

When you pay for the item (or service), the merchant (or service provider) collects the sales tax owed. Your job as a consumer is finished — but the business must then submit the taxes to the state and local governments. That means it’s on the business, not you, to keep records of sales taxes.

PRO TIP: Although you don’t submit the sales taxes to the government yourself, you may want to keep track of sales taxes paid throughout the year. Why? If you’re itemizing deductions when preparing your tax return, you can take the SALT deduction (sales and local taxes). You can choose to deduct your state and local income taxes or your state and local sales taxes, whichever delivers a bigger tax benefit.

Deductions can help to lower your taxable income and reduce your tax burden. Working with an accountant or using tax software can help you make sure you capture all appropriate deductions.

Types of Sales Tax

While you may be accustomed to thinking of sales tax as a single entity, there are actually three different kinds that you might encounter.

•   General sales tax: This is the amount added to everyday purchases, such as a new suitcase or some beach reads come summer. When most people wonder, “What are sales taxes?” this is likely the kind of surcharge that pops into their head.

•   Excise tax: You may also hear this referred to as “sin tax,” and it’s imposed on cigarettes, alcohol, and gambling, among other goods, activities, and services. These taxes are applied when the government may consider something potentially harmful.

•   Value-added tax (VAT): This is a tax that is imposed at various stages of production when an item or service is created. In the U.S., this tax isn’t levied separately; it’s rolled into the cost of a product. However, you may hear VAT referred to when you travel overseas, where this tax may be added onto the price of goods or services.

What Is the Average Sales Tax Percentage in the US?

The average sales tax percentage in the United States is 6.55% — but this number may not be what you find where you live. To calculate this number, we used 2022 data from the Tax Foundation, but these data points are subject to change as states and cities update their tax code.

In addition, this number represents a combination of the state sales tax and the average local sales tax rate for each state. Though it’s a good representation of local sales tax in a state, it may not be an actual tax rate being charged anywhere.

Here’s a table, based on that same data set, showcasing state sales tax rates, average local sales tax rates per state, and combined sales tax rates for each state and Washington, D.C.

State	State Sales Tax Rate	Average Local Sales Tax Rate	Combined Sales Tax Rate
Alabama	4.00%	5.24%	9.00%
Alaska	0.00%	1.76%	1.76%
Arizona	5.60%	2.80%	8.40%
Arkansas	6.50%	2.97%	9.47%
California	7.25%	1.57%	8.82%
Colorado	2.90%	4.87%	7.77%
Connecticut	6.35%	0.00%	6.35%
Delaware	0.00%	0.00%	0.00%
Florida	6.00%	1.01%	7.01%
Georgia	4.00%	3.35%	7.35%
Hawaii	4.00%	0.44%	4.44%
Idaho	6.00%	0.02%	6.02%
Illinois	6.25%	2.56%	8.81%
Indiana	7.00%	0.00%	7.00%
Iowa	6.00%	0.94%	6.94%
Kansas	6.50%	2.20%	8.70%
Kentucky	6.00%	0.00%	6.00%
Louisiana	4.45%	5.10%	9.55%
Maine	5.50%	0.00%	5.50%
Maryland	6.00%	0.00%	6.00%
Massachusetts	6.25%	0.00%	6.25%
Michigan	6.00%	0.00%	6.00%
Minnesota	6.875%	0.61%	7.485%
Mississippi	7.00%	0.07%	7.07%
Missouri	4.225%	4.06%	8.285%
Montana	0.00%	0.00%	0.00%
Nebraska	5.50%	1.44%	6.94%
Nevada	6.85%	1.38%	8.23%
New Hampshire	0.00%	0.00%	0.00%
New Jersey	6.625%	-0.03%	5.595%
New Mexico	5.125%	2.71%	7.835%
New York	4.00%	4.52%	8.52%
North Carolina	4.75%	2.23%	6.98%
North Dakota	5.00%	1.96%	6.96%
Ohio	5.75%	1.47%	7.22%
Oklahoma	4.50%	4.47%	8.97%
Oregon	0.00%	0.00%	0.00%
Pennsylvania	6.00%	0.34%	6.34%
Rhode Island	7.00%	0.00%	7.00%
South Carolina	6.00%	1.44%	7.44%
South Dakota	4.50%	1.90%	6.40%
Tennessee	7.00%	2.55%	9.55%
Texas	6.25%	1.85%	8.20%
Utah	6.10%	1.09%	7.19%
Vermont	6.00%	0.24%	6.24%
Virginia	5.30%	0.45%	5.75%
Washington	6.50%	2.79%	9.29%
Washington, D.C.	6.00%	0.00%	6.00%
West Virginia	6.00%	0.52%	6.52%
Wisconsin	5.00%	0.43%	5.43%
Wyoming	4.00%	1.22%	5.22%

Again, this table has a lot of caveats: The latest data comes from early 2022. Tax rates are subject to change, and the data has a lot of fine print, which you can find on the Tax Foundation website.

Recommended: Best States to Retire in for Tax Purposes

Why Are Sales Taxes Different in Every State?

Sales taxes are levied at the state and local levels. Because each state is permitted to form its own tax code, sales taxes can vary depending on which state you live in or visit.

In many states, cities and counties can also leverage their own sales taxes.

How Is Sales Tax Calculated?

To see how sales tax is calculated, let’s look at an example. Suppose you want to buy a new shirt for $20. The combined (state and local) sales tax rate is 7.5%. At the register, you’d pay $21.50. The store keeps its $20, and the $1.50 (7.5% of the sale price) goes to the government.

Here’s that math broken down:

Sale Price	$20
Total Sales Tax Rate	7.5%
Sales Tax Calculation	$20 x 0.075 = $1.50
Total Price	$20 + $1.50 = $21.50

What Kinds of Items Are Taxed?

Almost all goods and services have sales taxes, though there are exceptions. For example:

•   States commonly do not charge sales tax on prescription drugs.

•   Most states don’t charge sales tax on food purchases, either. Those that do may offer a reduced tax amount on food.

•   Though it varies by state, some services — especially digital services — may currently be exempt from sales taxes.

In addition, certain items may have an excise tax, which is different from the typical sales tax rate. Common excise tax goods include alcohol, tobacco, and gasoline.

Worth noting: Many states have sales tax exemptions for Rx and OTC drugs, textbooks, and other items. States may also have sales tax holidays, when certain goods are sold tax-free (such as school supplies during the back-to-school season).

Recommended: Tax-Friendly States for Pensions and Social Security Income

Pros and Cons of Sales Tax

So what are the pros and cons of sales tax? Let’s break them down:

•   Pro: They’re easy to calculate. Compared to income taxes (from estimating tax withholdings to filing a tax return), the process of paying and collecting sales taxes is easy. It’s a flat rate, after all.

•   Con: It puts a heavier tax burden on low-income taxpayers. Income taxes in the U.S. are a progressive system: The more you make, the more you pay. Opponents of higher sales taxes — especially in states without income taxes — argue that this disproportionally puts the burden on low-income earners, since the sales tax rate is the same no matter how much money you have.

•   Pro: Sales tax provides revenue for your state and city. Sales taxes fund things like the fire department, parks, and road construction.

•   Con: Sales taxes take more money out of your pocket. If you already pay income and property taxes, shelling out more money to the government in addition to what you pay when you file your tax return might feel painful.

The Takeaway

Sales taxes are a common way for states and municipalities to generate revenue to fund programs and departments that serve the public. In most states, you pay a sales tax every time you purchase goods and services, though there are exceptions.

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.

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

FAQ

Do all states have sales tax?

All but five states currently have sales taxes. The five states without sales tax include Alaska, Delaware, Montana, New Hampshire, and Oregon. In Alaska, however, local municipalities can charge a sales tax.

Are states with zero sales tax cheaper?

States with zero sales taxes may seem cheaper on the surface, but to get a full picture, it’s important to look at the state’s income taxes, property taxes, and overall cost of living. For example, Oregon has no sales tax, but it has the fourth-highest income tax rate.

What is the purpose of sales tax?

States and localities rely on sales taxes to fund services for the public. This might include supporting police and fire departments, parks and recreation, libraries, schools, and infrastructure.

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Photo credit: iStock/pixdeluxe

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. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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If you’re a fresh arrival to the United States, you’ll be glad to know that even if you’re undocumented, opening a bank account is possible. Which is very good news; after all, taking care of bills and everyday purchases is a lot easier — not to mention safer — when your cash is safely stashed in a checking account.

However, you will have to follow certain steps and perhaps a workaround or two. Probably the most important is that you’ll just need to provide an alternative for the Social Security number you don’t have. You may well find that a Tax Identification Number, or ITIN, along with the other required identification, can get the job done.

Read on for more about how an undocumented immigrant can open a bank account and the benefits of doing so.

What Do Immigrants Need to Open a Bank Account?

Like anyone else who opens a bank account, immigrants will need to provide and verify basic identifying information, such as their name and date of birth, using government-issued identification. This requirement may be met by a driver’s license, passport, birth certificate, or consular ID — and you’ll likely need to provide two different types of identification.

In addition, you’ll need to prove your residence. This can probably be done by presenting a utility bill, lease contract, or other official statement that includes your current address.

Finally, you’ll need either a Social Security number (SSN) or Tax Identification Number (ITIN). As an immigrant, the latter may be easier to obtain.

So, to recap, to open a bank account, you’ll want to check the eligibility requirements of the financial institution to which you’re applying, but you’ll probably need:

•  Official identification documentation

•  Proof of address

•  An SSN or ITIN

•  Anything else the bank might require (such as a minimum opening deposit)

💡 Additional help: What Are All the Requirements to Open a Bank Account?

What Is an ITIN?

As just mentioned, an ITIN may be an option to an SSN at many financial institutions. You may wonder what exactly that is. Here’s the scoop: ITIN is short for Individual Taxpayer Identification Number. It’s an official form of identification that the IRS (Internal Revenue Service) issues to immigrants in order to make it possible to file taxes.

But your ITIN has other perks, too — such as allowing you to open a bank account with financial institutions that accept this form of identification instead of an SSN. These days, there are plenty of banks that fit that category, but you should always contact the bank you’re considering to verify that they’ll process an account application without an SSN.

Keep in mind, too, that you aren’t automatically issued an ITIN once you arrive in the U.S. In order to obtain one, you’ll need to apply for one with the IRS directly. You can do this by mail or in person.

How to Open a Bank Account With an ITIN Instead of a SSN

Here’s the good news: Once you have an ITIN, using it in place of an SSN to open an account should be a fairly straightforward process. At many banks, you’ll simply supply that number instead of your SSN on that part of the application. If you apply online for a bank account, the application process may take only a few minutes.

The rest of the application will involve the bank gathering documentation, accepting your opening deposit, and issuing your bank account number and debit card. The process of establishing the account may take a couple of days. In addition, you may need to wait a week or more to receive your debit card in the mail.

And then, voila: You’re the proud owner of a U.S. bank account!

Benefits of Opening a Bank Account for Undocumented Immigrants

If you’ve been doing most of your financial transactions in cash for a while, you may wonder if going through the steps it takes to open a bank account is even worth it.

For many immigrants, it definitely is. A bank account makes it safer and easier to store and use your money. What’s more, it can also help you establish history and move toward legitimizing yourself as an American resident.

Personal Safety

Carrying cash is always risky. If you accidentally drop some (which can easily happen while you’re lugging bags in one hand and a coffee in the other), it’s gone forever. That’s not to mention the risk of others eyeing your cash. Paper money is liable to theft, and carrying large amounts of cash could even put you at risk of physical violence.

Having a checking account makes it possible to store larger amounts of money with a lower risk level. You’ll still be able to access cash when you need it using an ATM or your debit card. For these reasons, opening a bank account could increase your level of physical safety as an immigrant.

Establishing History

Opening a bank account shows people that you’re here on at least a semi-permanent basis, and may even help you establish state residency. While the process of naturalization is, of course, long and complex, having a bank account can be one small step toward legitimizing your status as a U.S. resident.

Ability to Save Money

Most banks offer both checking and savings accounts—the latter of which is an excellent vehicle for building up a rainy day fund. Having a separate savings account makes it a lot easier to put some money “out of sight, out of mind” so you’re prepared for an emergency. And, of course, it’s a lot more secure than stuffing cash into a coffee can or under the mattress.

Earning Interest

In addition to being physically safer, bank accounts also give you an edge against inflation. Here’s why: Many of them make it possible to earn interest on your balances—even on a checking account. The interest you earn might be pretty low, but it’s still better than no growth at all. Plus, it’s a low-risk investment given that money in a legitimate bank account is FDIC-insured up to $250,000.

The Takeaway

While it may take a few extra steps, it’s totally possible for an undocumented immigrant to open a bank account. You may just have to apply for an ITIN to use in place of your SSN, and find a bank that accepts ITINs. But once you get that taken care of, you’ll have access to a safe, potentially interest-earning place to stash your cash.

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

FAQ

How do undocumented immigrants open a bank account?

An undocumented immigrant will need an alternative to the Social Security number, or SSN, in order to open a bank account. This number is called an Individual Taxpayer Identification Number, or ITIN, and you can apply for one through the RIS. Many financial institutions will accept an ITIN in place of a SSN.

Can I open a bank account without an SSN or ITIN?

Unfortunately, you’ll likely need one or the other of these official, identifying numbers in order to open a bank account.

Can a U.S. citizen open a bank account abroad?

Yes, but it can be tricky. Many U.S. citizens have offshore bank accounts, though the process of applying for one may vary depending on which country you’re hoping to open an account in. It can involve a lot of paperwork, and starting this kind of account may have tax ramifications in both the U.S. and the foreign country in question.

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Photo credit: iStock/Bilgehan Tuzcu

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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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Cash management is a term often used by businesses to determine how much revenue coming in is available for day-to-day operations, and how much is available for investing in the future of the business.

But cash management is important for individuals, too. Your own personal balance sheet is not unlike that of a business. You want to determine how much of your income is available for covering expenses, discretionary spending, and investing for your future.

When you take control of your spending and saving in proportion to your income, you’re engaging in cash management. Here, we’ll explain the process in more depth, highlight the benefits you’ll reap, and guide you through this process, step by step.

What Is Cash Management?

You may wonder about the meaning of cash management; it can sound like a complicated term. But here’s the simple truth: Cash management is all about managing the money that’s coming in and the money that goes out in the best way possible for your day-to-day living. You can also think of it as cash planning, as it helps you stay in good financial shape today and tomorrow. Let’s look at this through a somewhat different lens: Solid money management strategies like the ones we’ll explore help you maintain healthy cash balances, stay on budget, earn a return on your savings, and reduce expensive debt.

💡 Recommended: Business Cash Management, Explained

Why Is Cash Management Important?

Good cash management is essential for a business’s financial stability. By the same token, borrowing cash management techniques that businesses use can help individuals enhance their overall financial wellness.

Cash Management Strategies

The concept of cash management is straightforward, but implementing it can become a bit more complex as individuals deal with financial ups and downs. These five strategies can help you adopt an efficient cash management process worthy of any corporate Chief Financial Officer.

1. Create a Realistic Budget

Think of your budget like a personal cash flow statement, which is a financial statement businesses often use to monitor income and expenses each month. Your personal budget can work the same way, becoming your personal cash flow statement.

If you’re often wondering at the end of the month where all your money went, that’s likely a sign it’s time to create a realistic budget. This can give you a clear picture of your monthly cash flow (money you earn) and your monthly cash outflow (money you spend).

From there, you can take the necessary steps to manage your cash flow to help you avoid too much debt, set financial goals, and save for the future. Once you accomplish that, you’ll be enjoying a good example of cash management. And it’s easier than you might think! Creating a budget isn’t difficult. You’ll simply need to gather some of your financial information and do some calculating. Let’s explore what financial info you’ll need below.

Income

Income includes your salary, bonuses, self-employed income, rental income, and all investment income including interest, dividends, and returns.

For the purposes of cash flow budgeting, you want to work with after-tax income, or the money that’s actually available to you instead of pretax gross numbers. So, this means take-home pay, not your gross salary.

Any extra money — such as bonuses, tax returns, or money from side gigs — should be factored in, as they are earned and with taxes owed in mind.

Expenses

Essential expenses should include things like the following:

•   Housing and utilities

•   Food

•   Childcare

•   Medical expenses

•   Insurance premiums

•   Car payments and maintenance

•   Public transportation costs

•   Clothing

Expenses can also include discretionary spending. This includes the things you want but don’t necessarily need, such as entertainment, travel, and other non-essential items.

Then there’s debt. Do you have student loans, credit card debt, or any other debt? If so, this is the liability side of your cash flow statement. You’ll need to take a close look at that.

2. Accurately Estimate Costs

Just like a business, the more accurate your budget is, the more efficient your finances will be.This is where tracking expenses comes in. You may find it makes sense to track your expenses for one to three months so you can determine exactly where your money is going. You can do this using your own spreadsheet or budgeting apps such as SoFi Relay.

Here are a few common living expenses that can help you create your own list. Once you have a finalized list, you can then use it to determine how much you’re spending on living expenses.

•  Housing

◦  Rent

◦  Mortgage

◦  Utilities

◦  Maintenance

◦  Insurance

•  Transportation

◦  Car payments

◦  Maintenance

◦  Gas and tolls

◦  Parking

◦  Public transportation costs

◦  Taxis and ride shares

◦  Auto insurance

•  Childcare

◦  Day care

◦  After-school programs

◦  Summer camp

◦  Tuition

◦  Babysitting

◦  College tuition

•  Insurance

◦  Health insurance premiums (if not deducted from your paycheck)

◦  Auto and home insurance premiums

◦  Life insurance premiums

◦  Disability income insurance premiums

•  Food

◦  Groceries

◦  Takeout and restaurants

•  Health

◦  Deductibles, copays, and coinsurance

◦  Prescription drug costs

◦  Over-the-counter (OTC) drugs

◦  Eyeglasses and contacts

•  Entertainment

◦  Concert, theater, and movie tickets

◦  Paid streaming and podcast services

◦  Books

◦  Travel

•  Pets

◦  Food

◦  Flea and tick prevention/other medications

◦  Vet bills

◦  Pet insurance

•  Personal

◦  Clothing/shoes/accessories

◦  Haircare and other grooming

◦  Toiletries/cosmetics

◦  Gym membership

3. Be Mindful of Cash Flow

You can use your income and spending data to better manage your cash flow. One approach to consider: Separating your income into different “buckets” using a percentage system.

With the 70-20-10 rule, you aim to put 70% of your income into essential and discretionary spending, 20% toward savings or paying off debt, and 10% toward investing and charitable giving.

These “buckets” can help you prioritize and achieve your financial goals. If your spending exceeds 70% of your income, you can find ways to reduce discretionary spending. How, exactly? Cutting back on takeout and restaurant meals, streaming services, and clothing purchases can all add up to more savings.

You may also find you need to make more drastic cost-cutting moves, such as finding less expensive housing or transportation. This can be especially important if you are paying off debt. If you are carrying heavy student loans and/or credit card debt, you may find you need to devote even more than 20% of your income to paying that down so you can avoid the high-interest payments and make way for other savings. This could include an emergency fund or health savings account (HSA).

The 10% investing allocation is where you focus on long-term financial goals, such as saving for retirement or future education expenses. It also offers a place to give back with charitable contributions.

4. Invest Extra Cash

Successful companies invest extra cash back into the business so it can grow. The same notion works for personal finances. Where you invest your extra cash that’s destined for short- and long-term savings is an important aspect of cash management.

For short-term savings, high-yield savings accounts, money market funds, certificates of deposit (CDs), and cash management accounts may all pay more interest than a traditional savings account.

Funds earmarked for long-term savings are usually best made as contributions to the following kinds of accounts:

•   IRAs

•   401(k)s

•   403(b)s

•   Self-employed retirement savings plans

•   Other long-term tax-advantaged accounts

This isn’t money you need soon, so it can be invested more aggressively than your short-term savings.

5. Avoid Bookkeeping Inaccuracies

With any cash management or budgeting process, being fluid and staying on top of your finances is key. There are times when you may need to allocate more toward debt payment and other expenditures, as well as times when you can focus on saving.

Regularly tracking expenses and adjusting your buckets accordingly will help ensure no inaccuracies creep in and keep you on track for your financial goals. Also, regularly checking your account balances and reviewing statements (online, in an app, or on a hard copy) is vital too. Accurate bookkeeping enables you to stay on top of cash management while balancing short-term needs with long-term financial planning.

The Takeaway

As you’ve seen from these examples of cash management, it’s a process that need not be complicated. By adopting these cash management concepts, you’ll be able to manage your cash flow, create a budget, and stay on top of your finances. What’s more, they’ll also guide you towards meeting your long-term goals as well by helping you manage debt and save for tomorrow.

Bank Better With SoFi

Cash management strategies work as well for individuals as they do for businesses. But it can help a person along to have a partner in growing your money. A SoFi Checking and Savings bank account can be just that. We offer eligible accounts a super-competitive APY, plus we don’t charge you minimum balance or monthly fees. What’s more, you’ll have access to a network of 55,000 fee-free ATMs. All of this means you’ll have more money to manage!

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

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Photo credit: iStock/ptasha

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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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