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Inflation is the steady increase in prices and decrease in purchasing power over time. The inflation rate can be calculated using formulas that rely either on the Consumer Price Index (CPI) or Gross Domestic Product (GDP). However, the causes of inflation, and finding the right fiscal policies to manage it, cannot be solved with a formula.

Here, take a closer look at what the inflation rate is, possible reasons why prices change, and the different ways to calculate the inflation rate.

What Is the Inflation Rate?

Ever notice how things don’t get cheaper over time? Inflation can cause an uptick in the price of everything from a gallon of gas to mortgage rates.

Take the cost of bread as an example. The average price of a loaf has steadily risen from around $1.40 in 2013 to $1.88 in 2025, according to the Federal Reserve Bank of St. Louis. That’s because of inflation, or the increase in the price of goods and services and the decrease in purchasing power over a period of time. This means your dollar may not go as far as it did in the past, though there are ways to protect your money from inflation.

When people talk about inflation rate, they’re referring to a measurement of how much prices have increased over a period of time. Cost increases can vary across product categories, and certain states may be impacted more by inflation.

What Causes Inflation?

There are a few common causes of inflation. The first is when demand for a product is greater than the supply, which is often referred to as “demand-pull” inflation. This can happen when the government or Federal Reserve adds funds to the money supply or lowers interest rates, often in an attempt to combat higher unemployment and stimulate economic growth. It can also occur when consumers have more disposable income and are more economically stable.

The second main cause of inflation is when the cost of producing a product increases, and as a result, businesses must raise their prices. This is called “cost-push” inflation.

A third common cause of rising prices is “built-in” inflation. That’s when companies give workers a bump in pay to keep up with rising living costs, and then in turn raise the prices of their products to help offset those costs.

When inflation hits, tools like a spending app can help you keep your finances in order.

Recommended: How to Invest During Inflation

What Is the Consumer Price Index?

The Consumer Price Index (CPI) tracks and measures the average change in prices for 80,000 or so commonly purchased goods and services. Those items fall into eight major categories: food and beverage, recreation, apparel, transportation, housing, medical care, education and communication, and various services. Social Security taxes, income taxes, or the purchase of investments are not included.

Each month, the U.S. Bureau of Labor Statistics calculates and publishes the CPI. Economists, policymakers, businesses, and consumers follow the findings closely, as the index is a popular measure of inflation. The data is also used to determine cost-of-living adjustments for federal benefit payments.

How to Use CPI to Calculate the Inflation Rate

If you want to calculate the inflation rate for a certain period, you’ll first need to decide what goods you are going to examine. You can use CPI charts to gather the historical price information for those goods. Keep in mind that the index measures the average of the price of the goods or services over a stretch of time.

You’ll also want to decide what time frame you’d like to examine. Do you want to know the rate of inflation for the past five or 10 years? Or are you estimating the inflation rate for a future period?

Once you’ve collected all your historical price data, organize the information on a spreadsheet. Find the price of your goods at your starting point, and name that price A. Identify the price of your goods at your end point, and name that price B.

Now you can apply the inflation rate formula:

Inflation rate = Price B – Price A / Price A x 100

Your answer is the inflation rate as a percentage.

You can also use the BLS’s CPI Inflation Calculator to see how buying power has changed over the years.

Recommended: 2024 Hourly Wage Inflation Calculator Table

How to Find the Inflation Rate with GDP

Using the CPI is one way to measure changing price levels and inflation. Another way is the Gross Domestic Product (GDP) deflator.

GDP is the sum of the value of all goods and services produced and sold by a country in a specific period of time, usually a quarter or year. It’s considered an indicator of a nation’s economic strength because it shows what is being produced and sold.

Unlike the CPI, the GDP deflator measures the change in prices in the economy as a whole, including goods and services, government spending, and exported goods. It provides a more comprehensive measure of inflation.

To find out how much prices have changed over a period of time, you’ll need two pieces of information: the nominal GDP (the value of goods and services produced at current market prices) and the real GDP (the value of goods and services produced at inflation-adjusted prices). The Bureau of Economic Analysis updates and publishes this information on a quarterly basis.

Here’s the formula you’ll use:

GDP deflator = (Nominal GDP / Real GDP) × 100

The answer is the rate of inflation in terms of GDP.

Recommended: Average Salaries in the U.S.

The Takeaway

From the rising cost of eggs to education, inflation can impact consumers on a number of fronts. Inflation commonly occurs when demand for a product outstrips supply, businesses increase their prices to cover rising costs of production, or companies raise their prices to cover cost of living wage increases. The inflation rate measures how much prices have risen over a period of time and is calculated by examining the change in prices of certain consumer goods and services over a period of time. The CPI is generally the metric used to calculate the inflation rate, but some economists prefer to use the GDP deflator because it takes more data into account.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is inflation?

Inflation is the increase in the prices of goods and services and the decrease in purchasing power over time. This means your dollar will not go as far as it did yesterday.

How do you calculate the inflation rate?

To calculate the inflation rate using the Consumer Price Index, first collect the price data for the period you are studying. Find the price of your goods at the beginning of your period (Price A) and at the end (Price B). Next apply the inflation rate formula, which is Price B – Price A / Price A x 100. Your answer is the inflation rate as a percentage.

What is the current inflation rate?

The U.S. inflation rate was 2.4% for the 12 months ending in March 2025, according to the U.S. Department of Labor. To get a sense of how this figure can vary, in 2022, it was 7.5%, and in 2021 it was 1.4%.

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Photo credit: iStock/marchmeena29

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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

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

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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In our digital world we like things to happen immediately. Unfortunately, it can take days, if not weeks, for a credit card refund to appear on a cardholder’s account.

How long does it take for a refund to appear on a credit card? Keep reading for insight into how credit card refunds work, types of refunds, and tips for getting your refund faster.

What Is a Credit Card Refund?

Before we can properly explain what a credit card refund is, it’s helpful to understand how credit card purchases work and who the main players are.

For every credit card transaction, there are two companies that help facilitate the purchase: credit card issuers and credit card networks. The credit card issuer is the company that creates and manages the credit card. The company essentially lends money to the cardholder to make a purchase. The credit card network is the business that processes the transaction electronically. It does this by transferring the money from the credit card issuer to the merchant.

Whenever someone makes a purchase with a credit card, the credit card issuer is the one to pay the merchant. Later, the cardholder pays the credit card issuer back.

With credit card refunds, this entire process works the same way but in reverse. When a merchant refunds a purchase, the money goes to the credit card issuer. Then the credit card issuer returns that amount to the cardholder’s account.

Recommended: What Credit Score is Needed to Buy a Car

How Does a Credit Card Refund Work?

As briefly noted above, when a consumer requests a credit card refund through a merchant, the merchant issues the refund directly to the credit card issuer, and then the issuer pays the account holder back. This is why merchants don’t typically refund credit card purchases in cash.

If the cardholder pays off their balance in full before a refund hits their account, they may end up with a negative balance. In this case, a negative is a good thing: It just means you have a credit on your account instead of the usual charges. You don’t need to do anything about a negative balance.

Types of Credit Card Refunds

There is only one type of credit card refund that consumers are involved in. The merchant and the credit card issuer (with the use of a credit card network) will work together to complete the refund and to get the money to the consumer.

Potential Delays for Credit Card Refunds to Appear

Exactly how long does it take for a refund to appear on a credit card? The timeline can vary based on a few variables. It can take time to process a refund, and all the consumer can do is wait.

In general, the retailer’s return policy dictates how long a consumer will wait to get their refund. Most retailers have a policy of refunding a purchase within three to five business days. The return policy can usually be found on the retailer’s website.

Online returns can be particularly lengthy and usually take longer to process than in-store returns because shipping is involved. It can take over a week just for the returned package to arrive and be processed before the refund process is initiated. Then the cardholder has to wait for the refund to appear on their monthly statement.

Here’s a few examples of common issues that cause refund delays.

Billing Disputes

Getting a billing dispute taken care of can take longer than a standard refund. In that case, the customer must file a dispute with the credit card company to receive a credit. Some examples of issues that may require a dispute are:

•   Being billed for a product you didn’t receive

•   Getting charged twice for the same purchase

•   Failing to receive credit for a payment

Mistakes happen and billing disputes can take a while to resolve. In some cases, a credit card chargeback may be necessary.

Merchant Delays

All merchants have their own timeline for processing credit card returns. It can take a week or two depending on how slowly the merchant tends to process their refunds.

Cases of Identity Theft

If someone needs a refund for a purchase on their account that is a result of identity theft, it can take quite a while to fully resolve that issue.

How Does a Credit Card Refund Affect Your Credit?

If someone doesn’t pay off their credit card balance while waiting for a return to process, they will carry the balance on their credit card. In addition to expensive interest charges, carrying a balance affects the consumer’s credit utilization ratio, which can harm their credit score.

A credit utilization ratio compares how much available credit someone has to how much of it they’re using. Ideally, it’s best to keep the utilization ratio below 30%. Financial software like SoFi offer free credit monitoring, a debt payoff planner, and other handy tools to make sure you aren’t taken by surprise.

Recommended: What is The Difference Between Transunion and Equifax

Tips To Get a Faster Credit Card Refund

The best chance someone has at getting a quick refund is simply to make the return as soon as possible. If a consumer is in a rush to get their money back, they can request a store credit refund from the merchant, which will be issued immediately.

That means the customer will have to spend that money in-store, leaving the purchase amount on the credit card bill to be paid off. On the bright side, this method results in the cardholder getting to keep any cash back or rewards points that the purchase earned.

The Takeaway

It can take anywhere from a few days to a few weeks for a refund to appear on a credit card. The exact timeline varies based on the merchant and credit card issuer involved, as well as other factors that can cause delays (such as slow shipping times). Patience is key, but it helps to be aware of what the merchant’s and credit card issuer’s return policies and expected timelines are.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How long do refunds take to show up on credit cards?

It can take as little as three days for a refund to show up on a credit card. That said, it can take longer depending on the merchant and credit card issuer involved. Returns that require shipping back merchandise can take the longest, because the consumer has to wait for the merchandise to arrive and be processed before a refund can be initiated.

Why is my refund not showing up on my credit card?

A refund can take days, if not weeks, to show up on a credit card. Don’t be afraid to check in with the credit card issuer on the status of a refund. Instead of waiting for a new statement to come in the mail at the end of the month, it can be more expedient to review an online account statement.

Why do card refunds take so long?

Credit card refunds can take a while for a few reasons. To start, all merchants and credit card issuers have different refund timelines. Other things like slow shipping times (for online purchases) or issues with identity theft can cause additional delays.

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Photo credit: iStock/Passakorn Prothien

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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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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When life gets expensive (which is often), it can make sense to take on a side job to earn extra money. If you have skills you can put to work on a part-time basis (like writing, landscaping, or driving), you may be able to generate enough income to help pay down debt, build up emergency savings, or to get some breathing room in your budget.

What are the best self-employed jobs? Keep reading to find out.

What Are Self-Employed Jobs?

Being self-employed means working for yourself. For tax purposes, you may be considered a sole proprietor or an independent contractor. You can be self-employed on a full-time basis or part-time on the side.

Reasons for Getting a Self-Employed Job

These are some great reasons to get a self-employed job:

•   Earn extra money

•   Gain experience and improve skills

•   Expand your professional network

•   Make your own schedule around other responsibilities

Pros and Cons Of Getting a Self-Employed Job

Of course, there are advantages and disadvantages associated with self-employed jobs and side hustles, including:

Pros:

•   Flexible hours

•   Choose your work environment (home, cafe, office)

•   Great learning opportunities

•   Chance to pursue a passion

Cons:

•   Less collaboration

•   Starting a business can require long hours

•   Fluctuating earnings (having a budgeting app can help here)

•   A lot of responsibility

Recommended: What Trade Makes the Most Money?

What to Expect From Self-Employed Jobs

It can be hard to know what to expect from self-employed jobs since they don’t come with a job description or HR department. Some jobs can be done on a work-from-home basis, whereas others require showing up in-person.

Self-employed workers know to “expect the unexpected”: Don’t assume that your workday or client roster will be consistent or predictable, as it is with a full-time job. It’s normal for there to be speed bumps along the way to a more steady routine.

Self-Employed Job Tips

Now let’s look at some tips for making self-employment easier.

•   Focus on a passion. Having a second job or working as an entrepreneur is hard. But if you choose a field or mission you’re passionate about, it can be easier to stay motivated and on track.

•   Develop industry expertise. To really stand out and impress clients, it’s important to have a deep knowledge of the industry and skills required to do the job well.

•   Learn from mistakes. Mistakes happen, but they aren’t a reason to give up. Try to learn from mistakes and improve.

•   Make the most of your income. Once you start making extra money, you may need help managing it. A money tracker lets you connect all of your accounts in one place, so you can track your debts, keep tabs on your cash flow, and find ways to save.

16 Best Self-Employed Jobs 2022

What are the best self-employed jobs? Let’s take a look at 16 options, considering how much they pay and the skills they require. All of these jobs can be done on a part-time basis to generate supplemental income. They also have the potential to turn into full-time opportunities.

1. Writer

National average pay: $35.43 per hour

Job growth outlook: 5%

Job description: Write articles, books, scripts, advertising copy, and other materials.

Requirements: Strong understanding of grammar, communication skills, professional or academic writing experience.

Duties:

•   Write short-form or long-form copy

•   Edit written copy

•   Craft headlines and campaign slogans

2. Business Consultant

National average pay: $47.80 per hour

Job growth outlook: 11%

Job description: Consult businesses on how they can improve their performance.

Requirements: Business experience and good communication skills.

Duties:

•   Help a business perform better in chosen area(s) of focus

•   Measure and report business performance

•   Create strategy and present that strategy to key stakeholders

3. Videographer

National average pay: $31.28 per hour

Job growth outlook: 3%

Job description: Capture video content and edit it for clients.

Requirements: Video and editing skills.

Duties:

•   Shoot and direct video content

•   Edit video content using professional software

•   Plan video shoots

4. Social Media Specialist

National average pay: $13.71 per hour

Job growth outlook: 4%

Job description: Plan social media marketing strategy, create and post social content, and engage with audience.

Requirements: Marketing analytics and social media marketing knowledge, including paid social media.

Duties:

•   Plan social media campaigns: organic and paid

•   Create written and visual content

•   Interpret metrics to understand strengths and weaknesses

5. Makeup Artist

National average pay: $32.97 per hour

Job growth outlook: 9%

Job description: Apply makeup on models, individuals for special events, or actors for movies and red carpet events.

Requirements: License in cosmetology and strong cosmetic skills.

Duties:

•   Apply makeup to professional or individuals

•   Consult on beauty looks before big events

•   Design and apply special effects makeup for the film industry

6. Graphic designer

National average pay: $28.32 per hour

Job growth outlook: 2%

Job description: Design graphics such as logos and advertisements using digital tools.

Requirements: Understand design and color theory and be adept at digital design programs

Duties:

•   Use software to create visuals for digital or printed materials

•   Edit photographs

•   Create company branding

7. Career Coach

National average pay: $29.67 per hour

Job growth outlook: 4%

Job description: Help clients set professional goals and guide them as they work toward them. Coaching can be a rewarding way to make money from home.

Requirements: Strong understanding of job market and active listening skills.

Duties:

•   Help clients complete job applications effectively

•   Assist with cover letter and resume writing

•   Practice interview scenarios

8. Software Developer

National average pay: $62.58 per hour

Job growth outlook: 17%

Job description: Developers write computer code in order to create applications, websites, and other digital products or to update existing ones. Coding is considered the quintessential job for introverts.

Requirements: Knowledge of coding languages.

Duties:

•   Write computer code

•   Design and install programs and applications

•   Create or update websites

9. Event Planner

National average pay: $27.36 per hour

Job growth outlook: 7%

Job description: Plan corporate events, weddings, and parties.

Requirements: Plan and execute events, from compiling guest lists and booking the venue to selecting a caterer and choosing decor.

Duties:

•   Plan events from start to finish, from concept to tiny details

•   Run and manage the event day-of

•   Connect clients with vendors

10. Hairstylist

National average pay: $16.87 per hour

Job growth outlook: 7%

Job description: Cut, color, and style hair for clients, as well as providing other beauty services.

Requirements: Cosmetology license (most states)

Duties:

•   Cut and color hair

•   Style hair

•   Educate clients on hair care and products

11. Photographer

National average pay: $19.60 per hour

Job growth outlook: 4%

Job description: Take photographs of places, objects, and people for business clients or individuals who want a special moment or event recorded.

Requirements: Digital photography and photo editing.

Duties:

•   Plan photoshoots

•   Take digital photographs

•   Edit photos in post-production

12. Transcriptionist

National average pay: $17.82 per hour

Job growth outlook: -5%

Job description: Listen to recorded or live speech and transcribe it into text. (Transcribing is a good job for antisocial people.)

Requirements: Active listening, typing, and spelling and grammar skills.

Duties:

•   Accurately transcribe audio into text

•   Edit transcripts for proper spelling and grammar

•   Work for businesses or transcription services

13. Driver

National average pay: $19.21 per hour

Job growth outlook: 9%

Job description: Pick up and drive passengers to desired locations safely.

Requirements: Valid driver’s license and good driving record. If driving for a company, you may have to pass a driver’s test and own a car.

Duties:

•   Pick up passengers at desired location

•   Drive passengers to their location safely

•   Provide ride-share services or private driving services

Recommended: What Credit Score is Needed to Buy a Car?

14. Landscaper

National average pay: $18.12 per hour

Job growth outlook: 5%

Job description: Plan and plant landscaping and maintain existing plantings to ensure garden health and aesthetic appeal.

Requirements: Knowledge of landscaping best practices.

Duties:

•   Plant grass, flowers, trees, and shrubs

•   Maintain health of plants

•   Mow grass, trim and prune plants, and water landscaping

15. Nanny

National average pay: $14.60 per hour

Job growth outlook: -1%

Job description: Take care of children: Cook for, clean up after, play with, and transport them to and from school and social activities.

Requirements: Childcare experience; some parents prefer safety certifications such as CPR.

Duties:

•   Keep children safe, clean, and fed

•   Play with children and help them with their homework

•   Assist with household chores

16. Personal Trainer

National average pay: $22.35

Job growth outlook: 14%

Job description: Help clients master workout routines and make physical health progress. While this used to be an in-person job exclusively, many trainers now work from home, coaching and leading classes via web-cam.

Requirements: Education in kinesiology or exercise science.

Duties:

•   Create custom workout routines for clients

•   Help clients set fitness goals

•   Instruct clients on how to properly perform exercises and monitor their physical progress

The Takeaway

The best self-employed job for you depends on your skills and passions. There are many self-employed job opportunities across various industries that can help you earn extra money. Benefits include flexible hours and schedules, your choice of workplace, and the opportunity to expand your knowledge and skills. Disadvantages include fluctuating income, unpredictable workdays, and total responsibility.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How can I make $1,000 a month passively?

Passive income takes work to set up, but it can be rewarding once the initial labor is done. Investing is a good example of passive income. It takes time and money to build a strong investment portfolio, but once you do, you can earn money passively each month with little effort.

What self-employed jobs make a lot of money?

Personal trainer, event planner, software developer, business consultant, videographer, and makeup artist are some of the best paying self-employed jobs. But many different types of jobs can generate good income once you have some experience.

Which career is best for the self-employed?

As they say, one person’s heaven is another’s hell. And so it is with self-employed jobs. Think carefully about what you’re good at, your industry knowledge and experience, and the type of role you’re passionate about in order to find the right self-employed job for you.

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About the author

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Photo credit: iStock/dusanpetkovic

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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Housing and transportation may be the top line items in a typical family budget, but the cost of meals and groceries can also be significant. The cost of food jumped during the pandemic and has remained high due to inflation, supply chain issues, and other factors. While all consumers are impacted by price hikes, families in particular may be feeling the pinch at checkout.

If you have a larger family, creating a budget can help keep you from overspending at the grocery store. But how much should you allocate for food each month? Keep reading to learn more about creating a grocery budget for a family of five.

Average Grocery Budget for American Family of Five

When coming up with your grocery budget, it helps to first understand how much you can expect to spend on food. The average household spends roughly $832 per month or $9,985 per year, on at-home food, according to the most recent statistics available from the BLS.

But how much should you budget for groceries if you have a family of five? A good starting point is the USDA’s food plans, which include four spending levels: thrifty, low-cost, moderate-cost, and liberal. According to the latest food plan available, here’s what a family of five should plan to spend on groceries:

Spending level	Cost per month	Cost per year
Thrifty	$939	$11,268
Low-cost	$1,017	$12,204
Moderate-cost	$1,258	$15,097
Liberal	$1,520	$18,240

Source: USDA food plans

How Much to Budget for Groceries Per Person

How much a family of five end up budgeting for groceries depends on a number of factors, like how much the store charges, the type and amount of food purchased, and whether they use a grocery delivery service.

Want to figure out how much to allocate in your food budget for each family member? You can refer to the USDA food plans above for a general idea of monthly and yearly costs, and divide the amounts by the number of members of your family. You can also look at the last three to six months of your family’s grocery bills and calculate a monthly average. Divide that amount by the number of members of your family.

Once you see how much you’re actually spending per person each month, you can adjust your budget accordingly.

How to Prioritize Your Grocery Spending

When you’re feeding a large family, you want to make the most of your grocery list. The best way to prioritize your food spending is to create a home budget and stick to it. Having a plan in place makes it easier to curb grocery store splurges.

If you’re new to budgeting, you may want to use the 50/30/20 rule. This framework calls for earmarking 50% of your monthly after-tax income on things you need (such as food, housing, and transportation), 30% on things you want (such as a new outfit or tickets to a concert), and 20% on savings and debt repayment.

Another helpful tool to consider is a budget planner app, which allows you to easily set spending and savings goals and monitor your progress.

How to Stay Within Your Grocery Budget

Staying on top of a grocery budget can be challenging, especially when you have a larger family. The following tips can help:

Don’t Shop When You’re Hungry

When your stomach is grumbling in the middle of the grocery store, chances are you’re more likely to give in to cravings. This may leave you with a cart full of impulse buys, which could add to your overall cost.

Make a Shopping List

Writing down everything you need before you start shopping is a good way to ensure you only pick up the items you need and are in your budget.

Embrace Meal Planning

Create a weekly menu ahead of time so that when you hit the store, you know exactly what ingredients to buy. If your finances allow, consider reserving a small chunk of the budget so that each family member can pick out a treat for that week.

Recommended: How to Create a Budget in 6 Steps

How to Budget for Restaurants and Dining Out

While eating at home can be more cost effective than dining out, many memories are made at restaurants. If your family is planning to have meals out, how much should you expect to spend?

The average American household spends $3,933 on dining out, according to the most recent data available from the Bureau of Labor Statistics. However, larger families should expect to spend more.

Tips for Reducing Your Grocery Budget

Looking to lower your grocery bill? Consider these simple strategies:

•   Buy in bulk

•   Shop at discount retailers

•   Choose generic brands

•   Meal prep for the week

•   Shop sales

•   Join rewards programs

•   Use coupons

•   Use a credit card that earns cash back rewards

Tips for Getting Help If You Can’t Afford to Buy Groceries

Families that are struggling to pay for food have several government resources they can turn to for help. Food stamps (also referred to as SNAP benefits), the WIC program, school meal programs, and food assistance programs are all worth looking into. Depending on the program, you may need to meet certain criteria, such as an income limit, in order to be eligible.

Examples of the Cost of Common Groceries

As anyone who has stepped foot in a grocery store lately can attest, food costs are going up. But just how much depends largely on where you live. To make budgeting for groceries and other expenses easier, consider using a money tracker app.

It can be helpful to understand national prices so you can prepare your food budget accordingly. Below is the national average of six common items, according to a February 2025 NBC News analysis of NielsenIQ data.

Average Cost of Groceries
Orange juice (60 oz.)	$4.83
Chicken eggs (dozen)	$5.88
Chicken breast/lb	$5.75
Fresh ground beef/lb	$5.88
Bacon (16 oz.)	$4.86
Loaf of bread	$3.04

How to Stretch Your Grocery Budget

Stretching a grocery budget requires careful planning. A few places to start: planning meals for the week, taking advantage of weekly ads and local deals, and shopping at more affordable grocery stores. Savvy shoppers can even design meals around the discounts and coupons being offered at the more affordable grocery stores.

Another strategy is to buy in bulk where it makes sense. Purchasing larger amounts of staples like rice, flour, and paper products can provide a better bang for your grocery buck.

Recommended: 23 Ways to Cut Back on Spending and Expenses

The Takeaway

Food is a major expense for most Americans, but perhaps more so for larger families. Creating a budget can help keep costs in check. On average, a family of five spends anywhere from $939 to $1,520 a month on groceries, according to USDA monthly food plans. If you’re looking to curb your spending, consider meal planning, buying in bulk, and shopping at more affordable grocery stores. If you need help paying for groceries, government programs like SNAP benefits and WIC can provide support.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is a realistic grocery budget for a family of five?

Depending on how much you have to spend on food, a realistic grocery budget for a family of five may range anywhere from $939 to $1,520 a month on groceries, according to USDA monthly food plans. To determine how much your family should spend each month, consider adding up the last three to six months of grocery bills and finding the monthly average.

How can a family of five save money on groceries?

There are steps a family of five can take to save on groceries, including meal planning, taking advantage of coupons and weekly deals, and making a shopping list ahead of time. Those strategies allow families to spend more mindfully and, ideally, lower their grocery bill.

What is a reasonable grocery budget?

The average American household spends $9,985 per year on groceries, according to the most recent statistics available from the Bureau of Labor Statistics.

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About the author

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Photo credit: iStock/seb_ra

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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Keeping your credit score healthy is a lifelong endeavor. It’s never too soon to start working on improving your credit score, but it’s also never too late to make progress. If you are in your forties or fifties, you may be wondering, what is the average credit score by age 50? Read on to find out.

Average Credit Score by Age 50

On average, consumers between the ages of 50 and 59 have a credit score of 706, which is considered a “good” credit score. This credit score is partially due to the borrowers having had the chance to build credit over a long period of time. The length of a borrower’s credit history is an important factor taken into consideration by the major credit scoring models.

What Is a Credit Score?

A credit score is a three-digit number issued by a credit scoring agency that provides both you and interested parties with a glimpse of how reliable of a borrower you are. Lenders use these credit scores to get an idea of how likely an applicant is to repay a loan on time. Employers, landlords, and utility companies can also use a credit score to get an idea of your credit history, which helps them better understand how you manage your money.

Your credit report gives a detailed look at your credit history, but a credit score acts as a quick snapshot of how you navigate credit.

Recommended: How to Check Your Credit Score for Free

What Is the Average Credit Score?

Every borrower has a unique credit score, but understandably consumers don’t want to fall behind the average if they want to compete for the best lending products and rates. As of March 2024, the average credit score for all consumers in the United States was 705.

Average Credit Score by Age

To get a better idea of how you compare to borrowers in your age group, let’s take a look at what the average credit score is by age.

Age	Average Credit Score
20s	662
30s	672
40s	684
50s	706
60s +	749

What’s a Good Credit Score for Your Age?

Because factors like length of credit history, credit mix, and consistent payments play a role in how high a credit score is (all of which come with years of credit usage), it’s understandable that younger borrowers are at a bit of a disadvantage. It takes time and discipline to build a high credit score. That being said, no matter their age, borrowers should aim for at least a “good” credit score — typically in the 670 to 739 range. Ideally, you will work toward a “very good” (740 to 799) or “excellent” (800 or higher) credit score.

How Are Credit Scores Used?

Credit scores are used in a few different ways, but primarily lenders rely on them to make decisions about which borrowers to work with, how much to lend them, and how much interest to charge them. Your credit score paints a picture for a lender about how responsible of a borrower you are.

If your score reflects that you have a manageable debt load and a history of making consistent on-time payments, a lender is going to be more likely to work with you and offer you favorable loan terms. If your score is on the lower side, that doesn’t mean you can’t qualify for a loan. However, lenders tend to charge borrowers with lower credit scores more interest to help offset their risk.

Factors Influencing the Average Credit Score

One of the best ways to keep your credit score in good standing is to understand how your credit behavior impacts your score. There are five factors that influence your FICO® Score — which is the most popular credit scoring model on the market (VantageScore is another popular model that works similarly). How much of your score is impacted by each factor varies.

Credit Score Factor
Payment history	35%
Amounts owed	30%
Length of credit history	15%
New credit	10%
Credit mix	10%

Recommended: Differences Between VantageScore and FICO Credit Scores

To strengthen your credit score, you will work on improving each of the five credit scoring factors consistently throughout your lifetime.

•  Payment history: Missing a single payment by just 30 days can harm your credit score. Always aim to make consistent on-time payments.

•  Amounts owed: Lenders like to see that you are keeping your credit utilization ratio low so you can afford to make debt payments.

•  Length of credit history: The longer your credit history is, the better. Many young consumers start their journey with a credit card before moving onto loans.

•  New credit: Applying for too much new credit can make lenders nervous. Keep your hard inquiries to a minimum.

•  Credit mix: Having a healthy credit mix can assure lenders you can handle multiple loan payments at once.

How Does My Age Affect My Credit Score?

One area of your credit score that can be challenging to control is the length of your credit history. The more experience someone has managing credit, the more their score benefits. Applying for credit while young (such as with a credit card) and not closing credit card accounts can help keep that credit history strong.

At What Age Does Credit Score Improve the Most?

Credit scores generally improve the most in a person’s 30s, as they establish a longer credit history, stabilize income, and adopt better financial habits. Consistent on-time payments, reduced debt, and responsible credit usage during this period significantly boost scores, laying the groundwork for strong credit into middle age.

Older borrowers have many factors working in their favor that give them a leg up in the credit world, too. To start, they tend to have many more years of experience paying bills on time. They also tend to have longer credit lengths and a stronger credit mix due to having more time on their side. Borrowers in their 60s have the highest average credit score of 749.

Recommended: How Long Does It Take to Build Credit?

How to Build Credit

One of the best ways to start building credit is with a credit card. If you pay your balance in full each month, you don’t have to spend any money to have a credit card and can build your credit score while earning rewards points or cash back.

You can also keep your credit utilization ratio low by paying off the balance in full each month. If you can’t qualify for a credit card due to a lack of credit history, you can have a parent or spouse add you as an authorized user on their credit card.

Credit Score Tips

To keep your credit score healthy, it’s a good idea to practice these good credit habits:

•  Pay on time: Always make payments by the due date to build a strong payment history. Use a money tracker app to keep an eye on your spending throughout the month so you can afford to pay your bills.

•  Keep balances low: Aim to use less than 30% of your credit limit to keep credit utilization within the recommended range.

•  Avoid frequent hard inquiries: Limit new credit applications, as multiple inquiries can lower your score.

•  Maintain old accounts: Keeping older credit accounts open can help lengthen your credit history.

•  Monitor your credit report: Credit score monitoring can help you stay on top of things. Regularly check your credit score and review your credit report for errors and dispute inaccuracies to protect your score.

•  Diversify credit types: A mix of credit types (e.g., credit cards, loans) can positively impact your score if managed well.

The Takeaway

There’s no need to fear getting older when it comes to your credit score — time is on your side here. Practicing decades of good credit habits can result in your gaining access to the best loan rates and terms and make it easier to meet your financial goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How rare is a 700 credit score?

Earning a credit score of 700 is a very realistic goal. The average credit score in America is 705, so many consumers have a “good” credit score.

Does anyone have a 900 credit score?

The FICO credit scoring model tops out at 850. Finding a credit score of 900 isn’t possible.

How rare is 825 credit score?

Having a credit score of 825 is one of the best credit scores a borrower can achieve. This is a rare but not impossible score to obtain.

How rare is an 800 credit score?

Having an 800 credit score is not common and is very impressive. Borrowers can work toward an 800 credit score by always making credit payments on time, keeping a healthy credit mix, and maintaining a low credit utilization ratio.

How common is a 750 credit score?

The average credit score for borrowers of at least 60 years of age is 749 (this is the highest average of any age group). Achieving a credit score of 750 is not impossible but requires a lot of hard work and discipline.

What is a good credit score for a 50 year old?

The average credit score for a 50 year old is 706. Ideally, borrowers in their fifties will want to either have that score or an even higher one if they want to qualify for the best loan rates.

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About the author

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Photo credit: iStock/JLco – Julia Amaral

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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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

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

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 .

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