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You have probably heard about the importance of having an emergency fund, typically one that holds at least three to six months’ worth of living expenses in a secure but easily accessible way. However, that figure may vary depending on such factors as your age, your cost of living, how many dependents you have, and your health status. And the best place to keep your fund may differ, too, depending on your personal preferences and financial style.

While the amount of money you keep in an emergency fund may not match what, say, a sibling or best friend socks away, there is no denying the value and importance of having this kind of account. An emergency fund can be one of the best ways to ensure that you don’t rely on high-interest credit cards if you’re low on cash and the unexpected happens.

To help you figure out how much you should keep in an emergency fund, read on.

How Much Emergency Fund Should I Have?

Most experts recommend that you have at least three to six months’ worth of basic living expenses in the bank.

This amount can seem daunting, but remember, you aren’t expected to have it set aside in one lump sum. You will save up to reach this goal. And if you can’t accumulate that amount, know that something (anything) is better than nothing. Don’t feel defeated and not save at all. If you can put away $1,000 over the course of a year, do it.

One clarification: You may hear the terms emergency fund vs. a cash cushion used interchangeably, but they are actually not identical. The words “cash cushion” are often used to describe a smaller sum kept in your checking account as a hedge against overdrafting.

Recommended: Check out SoFi’s emergency fund calculator to help you determine how much you should save.

How to Calculate Your Emergency Fund Amount

If you’re convinced of the value of an emergency fund, it’s time to drill down on just how much to save.

•  Conventional wisdom says you should have between three and six months’ worth of living expenses set aside for an emergency. To calculate your expenses, you might create a line-item budget to see how much money you have coming in and going out. Once you’ve determined your take-home pay, calculate all your necessary monthly expenses including rent or a mortgage, insurance, healthcare, utilities, phone, car, etc. And of course, factor in student loan or credit card debt.

After you track your expenses, deduct that amount from your take-home pay and then see what is left. This is where you’ll need to figure out how much you can realistically set aside each week or pay period for your emergency fund. Aim to accrue your goal amount in a year, if possible.

•  Another method for saving is to look at your insurance deductibles for your medical, dental, household, and car policies. Although it’s no fun, imagine having some kind of accident and needing to pay a couple or even all of those deductibles at once. Make sure you have enough in the bank to cover that amount.

•  You might also see what unemployment would pay you per month if you were to lose your job. See how that compares to your living expenses, calculate the shortfall monthly, and work toward saving, say, six times that amount.

Factors That Determine How Much to Save for Your Emergency Fund

When considering, “How much emergency funds do I need?” you have already learned that three to six months’ worth of living expenses is a good baseline. That said, there are certain situations that may require a bit more saving, perhaps six months’ or a year’s worth. Some factors to consider:

•  Health: If you or a member of your immediate family has a medical condition, you probably will want to stash a bit more in your emergency fund. You might have additional doctors’ or lab expenses or prescription costs. Or you could be in a situation where your insurance company isn’t paying quickly or at all. Your emergency fund could help you pay the bills.

•  Amount of Debt: If you have a fair amount of debt, it can be a good thing to have extra cash in your emergency fund. Let’s say you have student loan debt, car payments, a mortgage, and credit card debt, as many Americans do. An unexpected expense or loss of work could mean you can’t make all those payments, triggering late and overdraft fees. An emergency fund is protection against that scenario.

•  Cost of Living: It’s no secret that inflation has been extremely high lately. An emergency fund can help make ends meet if a big bill hits when your budget is stretched thin.

Also, if you live in an area with a high cost of living, you may be more vulnerable and need extra emergency funds. For instance, a huge rent increase could make it hard to afford your monthly bills until you recalibrate. An emergency fund could help if a major rent hike comes your way.

•  Job Security: There are no guarantees in life or work, and downsizing is a frequent occurrence these days. An emergency fund can provide backup in a worst-case scenario. Also, if you are a freelance or seasonal worker, your income could be unpredictable vs. those with full-time jobs, so you might want to stow more money in your emergency fund.

•  Children or Dependents: Do you have children or dependents? Then you are probably more vulnerable to having emergency expenses. A kid might have, say, more dental bills than expected. An older relative who relies on you might need you to take time off work unpaid to care for them, or they might have significant healthcare expenses.

•  Having Financial Support: If you don’t have close friends or relatives who might lend you money in an emergency, then it’s even more important to plump up your emergency fund.

•  Your Age: Usually, saving goals vary by age, and so should the amount of cash in your emergency fund. If you’re retired or reaching retirement age, you may want to keep more in your emergency fund, since your medical expenses will likely rise over time and your income might well decrease.

💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

The Takeaway

Having an emergency fund is an important element of your financial fitness. It’s a cushion of money socked away, to use if you have unexpected, urgent bills or face a loss of income. The amount you should save will vary depending on a variety of personal factors, but typically three to six months’ worth of living expenses is a good figure to aim for. Whatever the amount you want to have in your emergency fund, it’s important to start saving, little by little, so you can enjoy the peace of mind that this account can bring.

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

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

FAQ

How often should I review and update my emergency fund?

It’s wise to review your plan at least once a year. Also take a look when you have a significant change in status, such as getting married, having a child, changing jobs or getting a raise, buying a home, and so forth. You want to be sure the amount in the fund is keeping up with your potential needs.

How do I balance saving for an emergency fund with other financial goals?

It can be wise to put 20% of your take-home pay toward savings, according to the popular 50/30/20 budget rule. Of that 20%, you should definitely put some cash into your emergency fund, since that is a short-term, high-priority goal. Even if you only save $20 or $25 a month toward your emergency fund, saving consistently is a solid financial move.

Can you have too much in an emergency fund?

It’s wise to have at least three to six months’ worth of basic living expenses in an emergency fund. Depending on your specific situation, you might even want twice that. However, since emergency funds are usually held in savings accounts, which don’t earn all that much interest, you might look elsewhere if you have more than that sum to invest and grow.

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

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

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

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

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

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

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

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.

Our account fee policy is subject to change at any time.
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If you’ve ever wanted to check your credit score and do so without dinging your score or paying a cent, guess what? It’s possible. You can get that important three-digit number from a number of sources. In fact, your bank or credit card company may provide just what you are looking for.

Why is your credit report intel such a gift? Because keeping tabs on your credit scores can help you spot potentially fraudulent activities or discrepancies. It can also help you monitor your progress if you’re working hard to establish your credit or have a stellar financial profile. Higher scores may well unlock lower loan rates and other benefits.

Read this guide to learn:

•  What a credit score is and why you should check it

•  How and where to check your credit score for free

•  Whether checking can hurt your credit score

•  How often to check your credit score.

What Is a Credit Score?

A credit score is a three-digit number that lenders and creditors use to assess your creditworthiness. In other words, it helps lenders decide the probability of you repaying a loan or a line of credit in a timely manner based on your past behavior.

Credit scores are usually broken down into two types: custom and generic scores, and this may explain why you have different credit scores depending on where you check.

While different algorithms are used, your credit score usually reflects such factors as how much money you have borrowed, whether you manage it well and pay it back on time, the length of time you’ve been borrowing money, and what kinds of credit lines you have used (you’ll learn more about this below).

•  What are known as generic credit scores are the ones reported by the three major credit bureaus, Experian, Equifax, and Transunion. They utilize Information from lenders and businesses to come up with their figures.

•  Conversely, individual lenders may create custom credit scores to determine your likelihood of repayment. These scores include credit reporting from the three credit bureaus and other data. This type of credit score is often meant to determine your creditworthiness with regard to a specific type of lending (like a mortgage) or a particular lender.

Examples of custom scores are FICO® scores and VantageScore®; these companies have their own guidelines to determine your credit score. Worth noting: FICO scores are the ones that many lenders and creditors use when they evaluate a candidate for credit.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.40% APY, with no minimum balance required.

What Your Credit Score Means

Now, here’s how to understand the number itself. Credit scores typically range between 300 and 850. Usually, the higher your credit score, the less risky you are perceived in the eyes of lenders. That may mean you get a better (lower) interest rate on loans, among other perks.

A bad credit score can result in your paying more to borrow money or even being declined.

The FICO ranges look like this:

•  Poor: 300-579

•  Fair: 580-669

•  Good: 670-739

•  Very good: 740-799

•  Exceptional: 800-850.

Credit Score vs. Credit Report

Here’s one important distinction to be aware of: Your credit score and credit report are two very different things, even though they may sound similar.

•  Your credit score is the three-digit number that reflects your creditworthiness; that is, how likely you are to manage a line of credit or loan well and pay it back on time.

•  Your credit report, however, is a record of your credit activity and history. It will reflect how much you’ve borrowed, how promptly you have paid, and more details. Typically, negative information on your record can go back seven years.

Both of these sources of information can help lenders (say, for a mortgage, car loan, or new credit card) evaluate how well you have handled credit in the past and how well you might do so in the future.

How Do I Check My Credit Score for Free?

Next, here’s how to find out your credit score for free.

•  Check with your bank. Most banks provide customers with their FICO number or another credit score for free. Your bank is the hub for so many aspects of your financial life, it’s likely they will help you out by allowing you to view your score at no charge.

•  Ask Experian. You can get your free FICO score from Experian.

•  Ask your credit card company or lender. You might be able to view your credit score by logging into your account. If not, your creditor or lender can point you in the right direction to access your score.

•  Ask a credit counselor. Often, credit counselors can help you scratch that “How can I check my credit score for free?” itch. To find one in your neck of the woods, you can visit the nonprofit National Foundation for Credit Counseling, or NFCC.

•  Sign up for a free money management app. Lots of choices are out there if you are looking for a money tracker app that lets you view your accounts, budget, and optimize spending. Many offer a free credit score.

You can get free credit reports but not credit scores from AnnualCreditReport.com. It’s a good idea to check your credit reports at least once a year.

Recommended: Track your credit score for free with SoFi.

How Are Credit Scores Determined?

Knowing what contributes to your credit score can help you get yours into the desired range. Here are some of the key factors that influence a FICO score:

•  35%: Payment history, or the timeliness of past payments

•  30%: Amounts owed, or how much credit you have used, especially vs. your available credit. (This can include your credit utilization ratio, which is the percentage of credit you’re using versus your limit. Ratios of 30% is often considered the limit of what you want to use, and many believe that 10% is a more financially prudent number.)

•  15%: Length of credit history; a longer credit history tends to be positive. How long you’ve had accounts and how frequently you have used them can matter.

•  10%: New credit, or whether you’ve opened a number of accounts recently. Doing so can make you look like more of a risk to a lender.

•  10%: Credit mix, or what kinds of accounts you’ve had, such as a home loan, retail accounts, car loans, and so forth. There isn’t a specific assortment you need, but this is a variable that will be factored into your score.

Learn more about credit here:

Can I Check My Own Credit Score Without Affecting It?

You may have heard that a credit score check can lower your number. In some cases, it can. Typically, this happens when what is known as a hard pull or hard inquiry happens, which is when a potential lender or other entity reviews your credit details.

But when you check your own credit score, it won’t affect those digits. Pulling your score is referred to as a soft inquiry, and you can do so without affecting your credit score. At the very least, you should review your numbers before applying for any financing like a home or auto loan or a new credit card.

💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

What Credit Checks Can Hurt My Score?

You may wonder when credit checks can hurt your score. When you apply for new credit, the lender or creditor will conduct what’s known as a hard inquiry. This can indeed impact your score. For every new hard inquiry, your credit score may drop up to five points.

When a potential lender looks into your file, it indicates that you may plan to take on more debt. Hence, the score drops. If you have several hard inquiries back to back, your credit score may decrease more than a few points. Some hard inquiries that could affect your credit include:

•  Applying for a mortgage, auto loan, or personal loan

•  Submitting a new utility application

•  Applying for a new credit card

•  Requesting a credit limit increase

•  Renting an apartment.

Take note, though: Credit bureaus consider rate shopping a financially responsible move and treat it differently than a standard hard inquiry.

When you’re rate shopping, FICO considers all inquiries when applying for student loans, auto loans, or mortgages a single inquiry as long as applications are submitted within a 45-day window. However, some lenders use the older FICO model, which has only a 14-day window for application submissions. If you are looking for a loan, keep these time frames in mind so your research doesn’t wind up decreasing your credit score.

Recommended: How Student Loans Affect Your Credit Score

Why You Should Check Your Credit Scores

Monitoring your credit scores is important, and to do it for free is that much better. Here are some of the most important reasons to review your numbers:

•  You can spot discrepancies or potential fraud. Out-of-the-ordinary activities will reveal themselves when you keep tabs on your credit scores. You can immediately spot red flags when something seems unusual (say, a score drops 40 points for no reason). This way, you can act right away, work toward getting your score back on track, or file a dispute if you detect fraud.

•  You can gain insight into your financial situation. Understanding your credit scores can help you determine if you’ve been tracking your spending and debt vs. your income well.

It might also reveal if it could be a good time to purchase a home or refinance your mortgage. For example, if a score is less than ideal, you may want to hold off on making big moves until you work on your score. The delay may help you qualify for more favorable terms and interest rates.

•  You can better compare financial products. Lenders have different criteria and credit score requirements to qualify for specific products. So knowing your credit scores can help you determine if applying for a particular product is worth it or if you should explore other options.

•  You can pinpoint ways to positively impact your scores. If your score isn’t where you’d like it to be, don’t just assume the answer to “Am I bad with money?” is yes and stagnate. Instead, you might use it as motivation to build your financial literacy.

Having a handle on a credit score as well as the factors used to calculate it can help you optimize it. Some resources and websites may offer simulations so you can see how changing certain factors will alter your credit score. Then you can summon some financial discipline and work to improve your money habits as necessary.

How Often Should You Check Your Credit Scores?

Financial experts usually recommend checking your credit score and credit report at least once a year. If you have reason to believe you are vulnerable to fraud (say, your credentials were involved in a data breach) or you are gearing up to apply for a loan, you may want to check more often.

The Takeaway

There are several free ways to access your credit scores, such as through your bank, a lender, a credit monitoring website, or a credit counselor. Accessing your score regularly can help you ensure there is no fraudulent activity while also making progress toward your financial goals. It can also help you optimize your scores so you can enjoy the best possible rates on credit as well as other benefits.

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

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

FAQ

What are some resources available to help me improve my financial literacy?

To improve your financial literacy, you might want to start with your bank. They likely have a library of content about financial topics and tools for improving your financial health. In addition, there are plenty of well-regarded books and podcasts on the topic.

How can I involve my family in developing good financial habits?

To involve your family in developing good financial habits, you might have family meetings and share information about the household budget and how you are managing the money. You could then set short-term goals they can have input on and participate in achieving, such as cutting the food or entertainment budget or finding ways to save for a family vacation.

How can I stay motivated to continue developing good financial habits over time?

There are several ways you can stay motivated and keep developing good money habits. Try surrounding yourself with like-minded people or those that share a specific goal, such as paying off student debt, to support one another and share ideas. Use apps to simplify your financial life and perhaps boost your financial health (say, with a roundup function). Reward yourself within reason when you do a good job meeting a financial goal, like adding to your emergency fund for several months.

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Photo credit: iStock/Anchiy

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

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

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

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

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

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

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

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

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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You likely already know it can be wise to save money every month. Whatever your income or age, putting money aside for the future can help you maintain financial stability and achieve your goals.

But how much of your paycheck should you save each month? Financial experts often recommend putting at least 20% of your monthly take-home income into savings for future financial goals, such as buying a home and funding your retirement.

Exactly how much you should save each month, however, will depend on your income, current living expenses and financial obligations, as well as your goals.

Here are some guidelines to help you figure out how much of your income you may want to set aside each month, plus some simple ways to jump start (or build) your savings.

Knowing What You’re Saving For

It can be difficult to know how much money you should save each month without having a sense of what you are saving for. Setting a few financial goals can also help motivate you to save, rather than spend all of your income.

There are some savings goals that can make sense for everyone. If you don’t already have at least three to six-months worth of living expenses stashed in an emergency fund, for example, that can be a good place to start.

Without a solid contingency fund, any financial set-back -– such as a job layoff, large medical bill, or costly home or car repair — can throw you off balance and cause you to rely on high interest credit cards.

Many people will also want to save for retirement. At the very least, savers may want to take advantage of company matches offered in their workplace retirement plan by contributing the maximum amount the company matches.

After emergency savings and retirement, goals may start to look different from person to person. One person may want to save up for a down payment on a home, another may want to save up to start a business, and yet another may be interested in college savings.

How Much to Save Each Month

A rule of thumb that is sometimes used in personal financial planning is a spending/saving breakdown of 50/30/20. Using this guideline, you would spend 50% of your take-home income on essentials (including minimum payments towards debts), 30% on nonessential (or “fun”) spending, and 20% on savings goals, including debt payments beyond the minimum.

To use the 50/30/20 method to determine how much you should save, you can simply calculate 20% of your monthly after-tax pay. For example, if you earn $3,000 each month after taxes, $600 would go towards savings or other short term financial goals.

You may want to keep in mind that your 20% savings goal can include the money you’re saving for retirement. You can determine how much you’re putting toward retirement each month by looking at your pay stub or electronic payment record. If your employer is automatically depositing money into your 401(k), you may be able to put less into savings each month.

While the 50/30/20 can be a helpful guideline, how much you should — and can afford — to save each month will ultimately depend on your individual circumstances, such as your current income, monthly expenses, and future goals.
If the cost of living is high in your area, for example, you may not be able to swing 20% savings each month.

On the other hand, if you make a significant amount more than you need to live on each month, you may want to put away more than 20%, especially if you’re working towards a large short-term savings goal, such as buying a home in the next couple of years.

Recommended: Cost of Living by State Comparison

Where Should You Put Your Savings?

The best account for building savings will depend on what you are saving for.

If you are saving up for retirement, for example, you’ll likely want to use a designated retirement account, like a 401(k) or IRA, since they allow you to contribute pre-tax dollars (which can help lower your annual tax bill).

You may want to keep in mind, however, that there are annual contribution limits to retirement funds.

For an emergency fund or other short-term savings goals (within three to five years), you may want to open a separate savings account, such as a high-yield savings account, money market account, or a checking and savings account. These savings vehicles typically offer more interest than a traditional savings account, yet allow you to easily access your money when you need it.

Easy Ways to Boost Savings

Below are some strategies that can help make it easier to start — and build — your monthly savings.

Automating Savings

One great way to make sure you stick to a money-saving plan is to automate the process. You may want to set up a recurring transfer from your checking into your savings account on the same day each month, perhaps the day after your paycheck clears. Even setting aside just a small amount of money each month now can, little by little, add up to a significant sum in the future.

Putting Spare Change to Work

There are apps that will automatically round-up any amount paid on a credit or debit card and then put that little bit of extra money into savings accounts or even invest it. This “pocket change” can add up over time.

Using Windfalls Wisely

If a lump sum of cash, such as a bonus or monetary gift, comes your way, you may want to consider funneling all or part of it right into savings.

Or, if you get a percentage raise on your salary, you might want to boost your automatic monthly transfer from checking to savings by the same percentage.

Reviewing Your Budget

If you feel like your budget is too tight to save anything at the end of the month, you may want to review your monthly and habitual expenses.

You can do this by combing through your checking and credit card statements and receipts for the past few months. Or, you may want to actually track your spending for a month or two.

You can then come up with a list of spending categories and determine how much you are spending on average for each.

Once you can see exactly where your money is going each month, you may find places where you can fairly easily cut back, such as getting rid of streaming subscriptions you rarely watch, quitting the gym and working out at home, or cooking more and getting take-out less often.

The Takeaway

The right amount to save each month will be unique to you and includes factors such as your financial goals, how much you earn, and how much you spend each month on essential expenses.

One of the most important keys to saving is consistency. No matter how much of your income you choose to set aside each month, depositing small amounts regularly can build to a large sum over time to achieve your goals.

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

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

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

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

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

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

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

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

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

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.

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.

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It may feel like there’s nothing easy about money. The older you get, the more obligations you may have. Between checking, savings, IRAs, 401(k)s, bills, loans, mortgages, and more — it can be a lot to keep track of and manage.

If thinking about your finances causes you to feel stressed and/or you find yourself putting off important financial decisions, it may be time to simplify. While streamlining your personal finances can take a little bit of time and effort in the short term, it can end up saving you time, effort, as well as money, over the long haul.

Here are seven simple moves that can help you manage your money more efficiently — and more effectively.

1. Automating Your Bills

One of the easiest ways to simplify your finances is to set up auto payment whenever possible. Putting all of your bills — including credit cards, utilities, insurance, loans, mortgage, and even rent — on autopilot can save you significant time and hassle each month. Plus, you won’t have to worry about late payments — or late fees.

You can often set up automatic payments for your bills by going to the website of the service provider and inputting your bank account information.

If a business doesn’t offer an automatic payment program, you may be able to set up a recurring payment through your bank by logging on to your checking account or using your bank’s mobile app.


💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure online banking app.

2. Going Paperless

A major culprit of personal finance-related headaches is paperwork. Keeping track of the many documents — all those receipts, investment reports, bank statements, tax returns — can be a struggle.

Many services allow you to opt-in to a paperless experience instead. You’ll typically have access to all of the documents when you log into your account. And, with everything just a click away, you won’t have to worry about finding misplaced paper documents.

If you’re interested in leveling up your organization, you could even set up a digitized archive of your important information and files on your computer or an external hard drive, so you never have to spend hours searching through file cabinets and miscellaneous envelopes.

You can also reduce physical — and mental — clutter by taking advantage of the many retailers and service providers that offer email, rather than paper, receipts. Or, you may want to consider getting an app that scans, organizes, and stores receipts, such as Smart Receipts .

You can also get an app for filing and organizing your paperless statements. Some not only capture receipts, but will also seek out your online statements and bills and automatically download and file them to the cloud.

3. Consolidating Accounts

Whether you’re married with three kids or single with two Labradoodles, there’s a good chance that you have more financial accounts than you need. Consolidating multiple bank accounts into just a few can help simplify your financial life. In some cases, it can also help you save you money.

If you’ve done a lot of job hopping in your career, for example, you could have multiple 401(k)s floating around. When you leave a company but don’t roll over your 401(k), you’re often subject to fees that your employer may have been covering while you were employed.

By rolling your 401(k) into an IRA, you may be able to minimize fees. Another plus is that you’ll also have all of your funds in one spot. And, you may be able to select from a wider selection of funds and investments than the ones selected by your previous employer.

If you have more than one checking or savings account, you may want to see if you can pare it down to one of each, ideally under the same roof. Or, you might want to consider switching to a checking and savings account, which functions as both a spending and saving account in one product.

You may also want to look at bundling your insurance policies. Many companies offer substantial discounts if they write both your auto and homeowner’s policies.

4. Using One Credit Card

If you signed up for a variety of credit cards, chasing the promised rewards they offered, you may have racked up more than a few credit accounts.

To make it easier to keep track of your spending, you may want to pick the card that offers you the most in return, whether that’s cash back, travel rewards, or other perks, and focus on using only that credit card.

By putting everything on one card, you’ll only have one credit card bill to pay each month, a single statement to monitor for errors and fraud, and one rewards program to track. Plus, you won’t have to think about which card to pull out whenever you’re making a purchase.

Rather than canceling your other cards (which could negatively impact your credit score), you may want to just store them away in a secure place.

5. Knocking Down Debt

One of the most effective ways to reduce financial stress is to get rid of high interest debts.

Paying off even one sizable credit card or loan can not only ease worry, but can also reduce the number of financial obligations you have to deal with each month. It can also free up money that you can then put towards something else, whether that’s getting rid of other debts or something fun like a vacation.

Two common strategies for paying off debt are the debt snowball and debt avalanche method.

With the debt snowball method, you list your debts in order of size, then put any extra money you have towards the debt with the smallest balance, while paying the minimum on the others. When that debt is paid off, you tackle the next-smallest debt, and so on. Paying off debts in full can help you feel accomplished, simplify your life, and inspire you to continue crushing your debt.

With the debt avalanche method of paying off debt, you list your debts in order of interest rate, then focus on putting extra money towards the debt with the highest interest rate first, while paying the minimum on the rest. When that debt is paid off, you put extra money towards the debt with the next-highest interest rate. While it may take you longer to see progress on your loans, you’ll likely pay less money in interest over time using this method.

6. Putting Saving on Autopilot

The set-it-and-forget-it approach can be highly effective when it comes to saving money. For one reason, you don’t have to remember to transfer money from your checking to your savings each month. For another, the money will get whisked out of your checking account before you ever have a chance to spend it.

You can automate savings in just a few minutes by setting up a recurring transfer from your checking to your savings account for a set amount of money on the same day each month (perhaps the day after you paycheck clears).

Even if you can only afford to transfer a small amount each month, it can be worth automating this task. Since the savings will happen every month no matter what, your savings will gradually build over time.


💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

7. Focusing on Fewer Goals

It can be great to have financial goals. Many of us have plans to buy a home, put kids through college, and pay for our retirement. But if you set too many goals at one time, you can end up losing focus, and not making any progress on any of them.

A better approach can be to set just one or two goals to fully focus on at one time. Ideally, one should be saving for retirement, since the earlier you start saving for retirement, generally the easier it is to reach your goal.

The other goal might be paying off your credit card debt or student loans, saving for a down payment on a home, or putting money aside to help pay for your kids’ college education.

By focusing your energy on just one or two specific goals, you may be able to make real headway. Once you start seeing progress — or actually achieve the goal — you’ll likely be inspired to set, and accomplish, other goals.

The Takeaway

Simplifying your financial life may take a bit of legwork up front but, in the long run, it can help alleviate stress and also help you better plan for your financial future.

Strategies that can help you simplify your finances include paring down the number of accounts you have, crossing off debts, automating monthly tasks like paying bills and transferring money to savings, and focusing your efforts on just one or two financial goals at a time.

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

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

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

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

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

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

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

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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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Here comes another school year, and that can mean it’s time to get shopping for some nice new pencils, notebooks, backpacks, and cool clothes. But don’t expect it to come cheap: Last year, the cost was estimated at $661 per school-age child, and this season could well top that.

No one wants to go into credit card debt to get their kid outfitted for the first day of school, so here’s help.

Read on for 31 back-to-school shopping tips that will save you money while getting your kids prepped for a great year ahead.

1. Check the Circulars

You might receive weekly circulars in the mail that include coupons to local stores that can help you save money on school supplies. If you don’t receive any circulars or you want more, using a website like Flipp can give you access to digital circulars and coupons you can use at the store.

2. Download Honey

The Honey browser extension is helpful when it comes to back-to-school savings. Installing Honey on your web browser will enable the extension to automatically search for coupon codes and deals when you check out online, saving you both time and money.

💡 Quick Tip: Help your money earn more money! Opening a high-yield bank account online often gets you higher-than-average rates.

3. Use Online Coupons

Some websites, such as Coupons.com, RetailMeNot, and Savings.com, offer online coupons. Browsing these sites may lead to savings on school supplies you need.

4. Join Target Circle

Doing back-to-school shopping at Target will let you earn rewards through Target Circle . You can access hundreds of deals as well as earn 1% back when you shop (or 5% back when you shop with your Target RedCard). You can redeem your savings on later purchases. Another perk: You may also see special discounts on back to school, such as 20% off a purchase for college students.

5. Use Cash Back Credit Cards

Making school-supply purchases with a cash-back credit card is another option to save some money. Then, you can put your savings towards future purchases or use the cashback to pay a portion of your credit card bill.

6. Get Cash Back for Shopping

On sites like Rakuten and Swagbucks , you can earn cash back when you shop at your favorite stores. Check these sites for cash back offers before heading out for back-to-school shopping.

7. Sign Up for Store Emails

If there are a few stores you know you’re going to be shopping at this year, then sign up for their email list ahead of time to receive coupons and find out when they are running sales. Some stores offer a percent-off coupon or a dollar-amount discount for signing up for their emails or texts.

8. Download Store Apps

Along with signing up for emails, you can also download store apps to receive exclusive savings and deal alerts. You may receive a one-time coupon at the beginning and then additional deals after that.

9. Ask Friends for Their Old Supplies

If you have friends who aren’t using their old supplies anymore, they may be willing to give them to you so they don’t go to waste. This could save you a lot of money, especially when it comes to paying for college textbooks.

Recommended: Comparing the Pros and Cons of Going to College

10. Join Parent Groups

Consider joining local parent groups on Facebook or other social media platforms to see if anyone is giving away supplies or selling them at a steep discount. Connecting with other parents before the first day of school can also be a good way to form friendships and trade back-to-school shopping tips.

11. Look on Used Goods Marketplaces

You may also be able to find the supplies you need on used goods marketplaces such as Facebook Marketplace or Craigslist. Keep safety precautions in mind when meeting strangers to complete a transaction: Consider meeting at a police station, bring someone with you, and trust your instincts if you feel the situation is unsafe.

12. Wait to Make Some of Your Purchases

Your children are not going to need all of their school supplies on the first day, or perhaps even in the first month of school. Instead, you can ask your children’s teachers what they will need right away and then wait to shop for the rest of the supplies when retailers start marking down their inventory, which typically happens in September or October.

13. Create a Budget

Before setting foot into a store, come up with a back-to-school monthly budget so you know exactly how much you can spend and avoid impulse purchases. Without a plan, it can be easy to spend too much and get caught off guard when you get your credit card statement in the mail.

14. Take Inventory of What You Already Have

You may already have what you need for back to school in your home. Look around for extra pencils, art supplies, books, and other items that you thought you needed to purchase but may already own.

15. Pay With Cash

One of the old tricks for sticking to a budget and saving money is to pay with cash instead of a debit or credit card. Paying with cash may make you more mindful of your purchases because you see the cash disappear when you spend it. You might not be tempted to spend as much if you opt for good, old-fashioned dollar bills and coins.

Recommended: Pros & Cons of Living Cash-Only

16. Negotiating on a Cash Purchase

Cash is also helpful for negotiating. Though you may not be able to negotiate prices at a big-box store, you might be able to at a local shop, flea market, or yard sale if that’s where you’re headed for school supplies. Let the merchant know how much you’re willing to pay, and they may just be willing to cut a deal with you.

17. Look for Price Matching

Some stores will match another store’s price if you show them that their competitor is offering a better price on the same product. Prior to going to the store, take a few minutes to compare prices online, and bring proof of the lower price when you shop. Price matching policies vary from store to store and can usually be found on a store’s website.

18. Buy in Bulk

When it comes to how to save on school supplies, you may be able to save big if you buy in bulk from wholesale clubs or warehouse stores like Costco or Sam’s Club. Some of the best things to buy in bulk for back-to-school include pens and pencils, folders, and notebooks. Bulk purchases of things like paper towels, toilet paper, and shampoo might also make good financial sense. Joining other parents to split costs on bulk purchases might just result in a new, like-minded friend group.

💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

19. Buy Refurbished Electronics

If you need to pick up electronics like laptops, tablets, or phones, consider buying a refurbished version instead of a new device. Certified used models are often available directly from the manufacturer or from reputable online sellers.

20. Head to the Dollar Store

While the dollar store isn’t the ideal place for all your back-to-school shopping needs, you can find a number of inexpensive items there to save money on. These items include pencils, pens, crayons, folders, and clipboards.

21. Shop on Tax-Free Days

Some states hold annual tax-free days, usually in July or August, which can be perfect for back-to-school shopping. Check online to see if and when your state offers this money-saving option.

22. Use Your Student Discount

College students may be able to use their college ID or student email address to score discounts on electronics and other items. Check out stores around your college that offer deals to students.

23. Buy Used Textbooks

Another way to score some back-to-school savings is to purchase used textbooks. BookFinder.com searches all the bookseller websites to find the best deals on your textbooks.

24. Keep Your Receipts

If you keep your receipts and find out that items you purchased have been discounted further, then you may be able to get a price adjustment or a partial refund to make up for the price difference. Policies vary by retailer, but it doesn’t hurt to check sales after you’ve made a purchase and ask the store if they offer price adjustments.

25. Buying From Thrift Stores

Thrift stores like Goodwill or Salvation Army often have back-to-school essentials like clothing and backpacks. Plus, buying used items can be environmentally friendly. Families who are facing financial difficulty affording school supplies may qualify for assistance through various charitable organizations, such as The Salvation Army or even their local school districts.

26. Find Brand Giveaways

By following brands on social media or contacting them directly, you may get free samples or promo codes to get discounts on goods.

27. Turn in Those Rebates

Sometimes, you won’t be able to access back-to-school savings at the time of purchase. Instead, you’ll need to send in rebates. Look for products that offer rebates and remember to keep your receipts and anything else required for the savings.

28. Invest in Quality Purchases

While you may want to buy everything at discount stores, poor-quality items may not even last an entire school year. For items that get a lot of use, such as a backpack, consider paying a bit more so they last. For example, you may be able to use the same high-quality, well-made backpack for several years before it wears out.

29. Use Alternatives for Your Kids’ Favorite Characters

Your child might really want a backpack with a specific character on it, but next year’s favorite character will probably be different. Buying your child a plain backpack and then adding some keychains or stickers that feature their favorite character is an inexpensive compromise that will keep your kids happy and save you big bucks.

30. Buy Reusable Items

While plastic and paper bags may be convenient, you’ll save much more money (and the environment) if you buy a reusable lunch bag and containers instead. Find a lunch bag that’s easy to clean to save time as well.

31. Hold a Clothing Swap

Kids quickly grow out of clothes, so it’s not budget-friendly to buy a lot of expensive new garments. You can invite over some friends and neighbors who have kids and swap used clothing instead. Or you might try Nextdoor and see if people in your community want to see about a trade or offloading some outgrown clothes.

💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

The Takeaway

Taking some pre-shopping time to estimate costs is a good practice when trying to figure out how to save on school supplies. Setting a financial goal and saving a little bit at a time is a good thing to do whether the goal is purchasing school supplies or something a little more expensive.

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

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Photo credit: iStock/TARIK KIZILKAYA

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

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

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

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

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

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

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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