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Looking to get a better handle on your finances? You may want to consider a monthly bullet journal. Part calendar, part to-do list, part note keeper, this type of journal can help you organize your finances, track short- and long-term financial goals, and more. And because it’s highly customizable, you can modify your journal to suit your specific needs. Whether you’re trying to curb your spending, get out of debt, or improve your financial habits, read on for ways a bullet journal can help.

What Is a Monthly Log?

Having a daily to-do list is useful. But sometimes, it helps to see the larger goals and tasks you’ve set for yourself, especially if you’re working to develop good financial habits. Enter the monthly log, which is a key component of many bullet journals. The log gives you a snapshot of the things you’d like to accomplish that month and the progress you’ve made so far. You may choose to include it alongside your daily or weekly to-do list or keep it on a separate page.

How to Fill Out Your Monthly Log

Figuring out what should go in the log each month may take some time. You might find it helpful to make a big list of all upcoming events and tasks. Then, place each item in the correct month’s log, and be sure to add details such as important dates and milestones. You may also decide to categorize and color-code each entry for easy skimming.

Here are some different ways you can tackle financial stress through journaling:

•   Get control of bills by listing when each bill is due, how much is due, and the payment method you plan on using.

•   Keep tabs on your savings plan by noting when you intend on putting money into your savings account, how much you’re depositing, and where the money is coming from, such as your checking account or paycheck.

•   Track your progress on paying down student loans, car loans, personal loans, credit cards, and other debt.

You can also use a monthly log along with your budget or a spending app to help you better understand your spending habits.

Benefits of Using a Bullet Journal

There are plenty of reasons why many people turn to bullet journaling to help them keep their finances on track. For starters, recording things like your expenses and spending, household budget, or savings goals can help you stay organized and increase productivity. There’s also the thrill of watching your savings balance go up or debt balance go down — and celebrating those accomplishments.

Visual learners may find monthly logs especially useful, particularly if they decide to color-code entries. But even just jotting down important details about your financial life can help keep your goals top of mind.

Recommended: Tips for Maximizing Time and Money

4 Monthly Bullet Journal Ideas

Here’s the beauty of a bullet journal: You can try out strategies others use or create a bespoke system for yourself. It can be as simple or complex as you’d like, and you may even find that it evolves over time. Here are four ideas on how to use bullet journaling in your financial life.

Use a Bullet Journal to Control Spending

You don’t have to have the classic signs of a shopaholic to want to curb your spending. A bullet journal can be a great tool to help you rein in the number of purchases you make.

One idea is to create a weekly bullet journal where you set how much you’ve allotted for discretionary spending that week and track any purchases made. Understanding how and where your money is going could help you avoid the bottom-dollar effect. This is when you may feel less satisfied with the last item you were able to buy with your budget.

Another option is the kakeibo budgeting method. This simple but effective strategy requires you to create a line item budget at the start of each month based on how much you plan on earning and spending, plus your savings goals. Throughout the month, you track every single penny you spend. At the end of month, review the log to see if you stayed on track spending-wise and are making progress on your savings goals.

Recommended: 10 Tips for Spending Your Money Wisely

Use a Bullet Journal for Financial Education

Despite what you may think, you can learn about finance without having a finance background. In fact, boosting your financial literacy could improve how well you spend, save, and invest your money. And a bullet journal might help get you there. You can use it to track your progress in an online financial literacy course, for example, or as a place to write down the books or podcasts that will help build your personal finance knowledge.

Use Bullet Journal to Land a Job

Whether you’re searching for your dream job or the next gig, consider devoting a few pages of your bullet journal to your job search. You may want to start by listing your goals in an easy-to-see spot so you can refer to them throughout the process. Use other areas to note the roles you apply for, key details about the positions, notes on the companies you researched, and any upcoming interviews. You can also try creating daily, weekly, or monthly to-do lists in your journal to help you stay on track.

Recommended: How to Make Money Even With No Job

Use a Bullet Journal to Track Progress on Long-Term Goals

Let’s say that you’re saving for a big-ticket item, like a house or car, or setting a long-term goal, such as paying off a large credit card bill. Bullet journaling lets you set, monitor, and track your progress on those goals. You can also break them down into smaller, easier-to-manage tasks that you set on a daily, weekly, monthly, or quarterly basis.

The Takeaway

Bullet journals allow you to record tasks, deadlines, responsibilities, and more in a format that combines a to-do list with a calendar. Though it can serve a wide variety of purposes, a bullet journal can also help you organize your finances and maximize your productivity. Common ideas include journaling to control spending, boost your financial literacy, help with a job search, and work on short- and long-term financial goals.

A money tracker app can be another valuable tool. With SoFi, you can connect all of your accounts on a convenient mobile dashboard. This gives you a bird’s-eye view of all of your balances even while you’re on the go. You can also get spending breakdowns, financial insights, and credit score monitoring — all in one place.

Keep tabs on your finances by seeing exactly how your money comes and goes.

FAQ

What should be in a monthly bullet journal?

Monthly bullet journals are flexible, so use them to suit your needs. For instance, if you want to monitor and manage your personal finances, you can use the bullet journal to track when bills are due, when you plan to deposit money into a savings account, how much debt you have, and more.

How do you make a monthly bullet journal?

You can purchase ready-made bullet journals or make your own. If you go the DIY route, simple buy a notebook you like and personalize it. It’s a good idea to create an index that you can update when needed as well as a log to list your future goals. You can also create sections for monthly and daily logs, where you can add more details.

What are monthly spreads for?

A monthly spread is another name for a monthly log. This is where you lay out the tasks you have for a particular month. Typically, a spread runs two or more pages, but do whatever works best for you.

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Photo credit: iStock/Twomeows_IS

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.

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When summer rolls around, many college students decide to take a break from their academic courses and take on a summer job. Working isn’t just a way to earn some extra money. In some cases, it could also be a chance to gain valuable professional experience.

Of course, not all jobs are created equal. Let’s take a look at what to consider when seeking a summer gig and three job ideas that may be well suited for college students.

Summer Job Considerations

Ideally, a college student’s summer job will mesh with their skills, passions, and career goals. So when brainstorming jobs you might want to go after, think about the unique talents, goals, and experiences you bring to the table. For example, a student athlete can make money by offering personal training sessions, mentoring younger athletes, or working as a camp counselor.

Another strategy is to zero in on gigs that are available for professionals in your field of study. For example, if you’re in the education tract, you may want to look into common side jobs for teachers. Which ones could you qualify for now? Possibilities may include being an online tutor or test scorer or doing freelance writing, editing, or proofreading.

You could also focus on side hustles with low startup costs, like building websites for people, making and selling handmade items, creating a fee-based online course, or delivering food and groceries.

Recommended: Free Credit Score Monitoring

When to Start Applying for Summer Jobs in College

In general, the sooner you apply for summer work, the better. This is especially true if you’re planning to live and work in fields or areas where the job market is more competitive. Some employers start posting summer job openings in the winter to give them time to find the best candidates. Even if an employer doesn’t start the process that early, they’ll still need time to collect and review applications, conduct interviews, hire employees, and get their staff ready to begin work by summer.

Pros and Cons of a Summer Job

While the idea of relaxing all summer may be appealing, having a job comes with its share of benefits. Working is an excellent opportunity to build a strong resume, because you can pick up hands-on, relevant experience and sharpen essential soft skills like communication and problem-solving. It’s also a chance to discover more about your working style, preferences, and strengths and find out if you like working in a particular industry or field before commiting more fully to it.

A summer job is a good way to expand your professional network, which can come in handy when you graduate and start looking for full-time employment. Managers and co-workers from your seasonal gig can provide references or even keep you in mind if a permanent position opens up at their company.

Plus, the money you earn from a summer gig can help be put in savings or used to pay for school and living expenses. A spending app can help you to more effectively manage your finances.

Depending on your situation, there are some potential drawbacks to working in between school years. You’ll likely have less time for other activities, such as hanging out with your friends or relaxing. You may not also be able to take summer classes, which could help you graduate more quickly.

​​Recommended: Jobs That Pay for Your College Degree

Tips to Finding a Summer Job

If you want to work in the summer, there are plenty of jobs available — especially if you know where to look. Colleges often post listings of available jobs on or near campus, so be sure to check in with your school’s career services center.

It’s also a smart idea to tap into your network, including professors, parents, mentors, and former employers. They may know of an open role or suggest people you can contact.

Online job sites are another good source of job leads. Many allow you to search for openings by industry, location, employment type, and experience level.

Top 3 Summer Jobs Ideas for College Students

Some summer jobs are especially well suited for college students. They can be done in the short term, provide an opportunity for students to apply what they’ve learned in school, or offer some control over schedule and pay rate. Three jobs to consider: online tutoring, freelance web designer, and retail sales associate. Here’s what to know about each.

Online Tutoring

An online tutor typically helps individual students understand their lessons, assists them with homework assignments, and provides extra work as needed. Some tutors prefer to rely on word of mouth for clients, while others offer their services through an online tutoring website.

In general, online tutors set their own hours and rate. The average starting rate is around $18-$21 per hour, according to Care.com, but that amount can increase significantly based on experience, grade level, subject matter, and other factors.

If you apply with an online tutoring site, you will likely need to provide information about your educational and work history. Educational requirements can vary widely by platform, so be sure to research what’s needed. Background checks are typically part of the process, and the company may also want to know the type of computer you plan on using and whether you have high-speed internet access.

Pros

•   Flexibility — you will likely be able to control when and where you work.

•   The money can be good for a side gig.

•   You can make a real difference in students’ lives.

Cons

•   Internet issues and technical glitches can disrupt your tutoring.

•   Working with students in different time zones may be challenging.

•   Many online platforms have strict policies against canceling tutoring times.

Freelance Web Designer

Developing and managing websites for clients can be a good fit for college students, especially those who prefer to work independently or are looking for jobs for introverts. You can find customers by listing your profile on websites for freelance designers or through recommendations from family, friends, and colleagues.

On average, a web designer can charge anywhere from $30 to $80 per hour, depending on the complexity of the project. Some technical skills are typically required — HTML, JavaScript, and CSS, for example — and it’s a good idea to stay up to date on the latest tools and technologies.

Pros

•   You’re your own boss, which means you can determine when and where you work.

•   The hourly rate is higher than other summer jobs.

•   You can work on a variety of interesting projects.

Cons

•   The work typically requires you to sit for long periods of time.

•   You’ll need to keep up on new developments, which may be easier if you’re already studying web design in school.

•   You may need to juggle multiple projects at once.

Retail Sales Associate

In many ways, a retail sales job can be an excellent summer gig. Often, the work is fairly straightforward, work hours are scheduled, on-the-job training is usually provided, and you usually don’t need a college degree. Students with a friendly, upbeat attitude and strong customer service skills may find a sales job particularly rewarding.

The average hourly rate of a salesperson is around $14, but this can vary based on your company, the store’s location, and how much experience you have. Some companies also offer extra perks, such as employee discounts.

Pros

•   Work is often indoors and may not be as physically demanding as other jobs.

•   Having a work schedule means you know when you’ll have free time.

•   You have opportunities to develop your people skills.

Cons

•   Your take-home pay can fluctuate if you earn a commission.

•   Dealing with difficult customers can be stressful.

•   Depending on where you work, you may need to be on your feet for several hours.

Recommended: 10 Money Management Tips for College Students

The Takeaway

Though there are ways to make money during winter break, the summer is commonly when many students get a short-term job. A summer gig allows you to earn extra cash and potentially gain valuable professional experience, especially if you’ll be working in the field you’re studying. Your college career services center, professors, family, friends, and former employers may be able to provide you with potential leads. Three types of jobs you may want to explore are online tutoring, web design, and retail sales. Online tutoring and retail sales typically allows you more chances to interact more with people, but web design tends to command a higher hourly rate.

No matter what summer job you choose, a money tracker app like SoFi can help you monitor and manage the money you earn. The app makes it easy to see where you are financially at any given time. Plus, you can keep tabs on your credit score, see what you’re spending, and view the progress you’re making toward your goals at no cost — just for being a SoFi member.

Stay on top of your finances by seeing exactly how your money comes and goes.

FAQ

What should college students do with their summer?

As a college student, you can get a job or internship, go on a vacation with friends or family, volunteer at a non-profit agency of your choice, or go to summer school to potentially graduate more quickly. Starting to think about life post-graduation? Here are some intriguing things to do after college.

Where do most college students work in the summer?

Whether you’re planning to work outdoors, in a store or restaurant, or for a company, there is no shortage of summer job opportunities for college students. To help you narrow down your options, look for roles that match your interests and skills.

How can college students make money over the summer?

Many summer jobs pay by the hour, and that rate might depend on factors such as location, the type of work being required, and your experience and skills. Looking ahead? Here are the most rewarding jobs in 2023.

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Photo credit: iStock/AndreyPopov

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.

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As anyone who has ever watched their bank account balance decline after paying bills knows, owing money is no fun. But debt often serves an important function in people’s lives, putting things that can cost tens of thousands of dollars or more — like a college degree or a starter home — within reach.

Such cases aren’t quite the same as racking up a high credit card balance on restaurant meals and shopping trips, underscoring that when it comes to owing money, there can be good debt and bad debt.

What Is Debt Exactly?

It’s a simple four-letter word, yet debt is often not as straightforward as it may appear. Carrying a credit card balance? That’s debt. Have a student loan or car lease? Also debt.

When individuals owe money, they generally have to pay back more than the amount they borrowed. Most debt is subject to interest, the borrowing cost that is applied based on a percentage of money owed.

Interest accrues over time, so the longer consumers take to pay off debt, the more it may cost them.

Across people and households, debts add up. According to the Federal Reserve Bank of New York, by the end of 2022, total household debt climbed to $16.90 trillion.

Housing debt — specifically mortgages and mortgage refinancing — accounted for the majority of money owed, more than $12 trillion. Non-housing debt, such as credit card balances and school and car loans, accounted for the rest.

For individuals, average debt amounted to $101,915 in the fall of 2022, according to the credit reporting company Experian. While student loan debt was down slightly, shrinking by 1.2% from the year before — many other debts, including amounts owed on credit cards, personal loans, car loans, home equity lines of credit (HELOCs), and mortgages, all increased from the year before, according to Experian.

Recommended: Free Credit Score Monitoring

Good Debt vs Bad Debt

When you have debt, not only do you have to repay the money borrowed, but you also usually incur ongoing costs — specifically interest — which increase the amount you have to pay back.

While incurring more debt probably isn’t the most attractive proposition, there are occasions when taking on debt can be necessary or even beneficial in the long term. This is where good debt vs. bad debt comes in.

Though the idea of good vs. bad debt might seem complicated (and is often subject to some misconceptions), as a rule of thumb, the difference between good debt and bad debt usually has to do with the long-term results of borrowing.

Good debt is seen as money owed on expenditures that can build an individual’s finances over time, such as taking out student loans in order to increase one’s earning potential, or a mortgage on a house that is expected to appreciate in value.

Bad debt is money owed for expenses that pose no long-term value to a person’s financial standing, or that may even decrease in value by the time the loan is paid off. This can include credit card debt and car loans.

While owing money may not feel great, debt can serve some helpful functions. For starters, your credit score is used by lenders to determine eligibility and risk level when it comes to borrowing money.

Your credit score is based on your history of taking on and paying off debt, and helps to inform a lender about how risky a loan may be to issue. Your credit score can play an important role in determining not only whether a credit card or loan application will be approved but also how much interest you will be charged.

With no credit history at all, it may be harder for a lender to assess a loan application. Meanwhile, a solid track record of paying off good debt on time can help inspire confidence.

While there are no guarantees, good debt can also mean short-term pain for long-term gain. That’s because if paid back responsibly, good debt can be an investment in one’s future financial well-being, with the results ultimately outweighing the cost of borrowing.

Conversely, with bad debt, the costs of borrowing add up and may surpass the value of a loan.

Recommended: What is The Difference Between Transunion and Equifax?

What Is Considered Good Debt?

Mortgages

Like other lending products, mortgages are subject to annual interest on the principal amount owed.

In the United States, the average rate of a 30-year fixed-rate mortgage was averaging 6.28% nationally in April 2023, according to the Federal Reserve Bank of St. Louis. That’s up from 2022, when the average rate for a 30-year fixed-rate mortgage was 4.72%.

Meanwhile, data from the Federal Housing Finance Agency showed that home prices grew 8.4% from the end of 2021 to the fourth quarter of 2022.

This illustrates how the potential appreciation of a home might outweigh the cost of financing. But it’s best to not assume that taking on a mortgage to buy a house will increase wealth. Things like neighborhood decline, periods of financial uncertainty, and the individual condition of a home could reduce the value of a given property.

Personal loans or home equity loans used to improve the condition of a home may also increase its value, and in such instances may also be considered “good” debt.

Recommended: Should I Sell My House Now or Wait?

Student Loans

Forty-three percent of Americans who attended college incurred some kind of education debt, with most outstanding loans in a recent year coming in between $20,000 and $25,000, according to the Federal Reserve.

Cumulative income gains may eclipse the cost of a student loan over time.

But higher education may be linked with greater earnings, and cumulative income gains might eclipse the cost of a student loan over time.

According to the U.S. Bureau of Labor Statistics, the median weekly earnings for a bachelor’s degree holder are $1,547, which is more than $650 greater than the median weekly pay of someone with a high school diploma.

But just as taking out a mortgage is not a sure-fire way to boost net worth, student debt is not always guaranteed to result in greater earnings. The type of degree earned and area of focus, unemployment rates, and other factors will also influence an individual’s earnings.

Recommended: Staying Motivated When Paying Off Debt

What Is Considered Bad Debt?

Credit Card Debt

Credit cards can be useful financial tools if used responsibly. They may even provide cash back or other rewards. And because interest is generally not charged on purchases until the statement becomes due, using a credit card to pay for everyday purchases need not be costly if the balance on the card is paid before the billing cycle ends.

However, credit cards are often subject to high interest rates. According to the Federal Reserve Bank of St. Louis, the average annual interest rate for credit cards is 20.09% — but some charge rates even higher.

Credit card interest adds up, making that takeout dinner or pair of jeans far more costly than the amount shown on its price tag if a balance is carried over. For example, if you were to charge $500 in takeout food to a credit card with a 20% APR but only pay the $10 minimum each month, it would take nine years to pay off the full balance. The total amount paid — including interest — would be $1,084. That’s more than double the cost of those takeout meals!

Recommended: Does Net Worth Include Home Equity?

Car Loans

The dollar value of your car may not be what you think it is. Cars famously start to lose value the second you drive them off the lot. A new vehicle loses 20% or more of its value in the first year of ownership, according to Kelley Blue Book. After five years, a car purchased for $40,000 will be worth $16,000, a decrease in value of 60%.

But a car may also be necessary for getting around. For some individuals, owning a car can also help them earn or boost income, reducing or negating depreciation.

The Takeaway

Both good debt and bad debt can be stressful — and both types of debt can be more costly than they need to be if you don’t keep tabs on what you owe and pay back loans efficiently. A digital tracker could be the remedy.

SoFi gives you the information you need to manage debt, providing real-time financial insights and tracking so you can stay on top of what you owe.

Get spending breakdowns, credit score monitoring, and more — at no cost.

Track all your money in one place with SoFi.

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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.

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.

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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Children bring a lot of light into a family’s life, but they also bring a lot of expenses. It’s no secret that the cost of raising a child is steep. But just how high is the average cost of raising a child to 18?

Being prepared is always a good idea. Let’s take a closer look at the average cost of raising a child per year so parents-to-be can plan their budgets and save accordingly.

What Is the US Average Cost of Raising a Child?

On average, the cost of raising a child is $12,980 per year for children born in 2015 into a middle-income, two-child family with married parents.

For more context on child-raising costs, take a look at the following table.

Average Cost of Raising a Child to 18 Per Year Total Cost: $12,980
Cost category	Average percent of spending
Housing	29%
Food	18%
Childcare/Education	16%
Transportation	15%
Healthcare	9%
Clothing	6%
Miscellaneous:	7%

Which State Has the Lowest Childcare Costs?

Where someone lives can impact how much it costs to raise a child. South Dakota residents are lucky to have the lowest average childcare costs at $6,677 per year, representing 23.7% of income. Massachusetts residents aren’t so lucky: They spend $10,000 more each year than South Dakota parents do. The average cost of childcare in Massachusetts is $16,781 per year, accounting for 51.4% of income.

How Much Does It Cost to Raise a Child?

The average cost of raising a child each year comes to $12,980 for children born in 2015, which leads to an overall cost of $233,610 to raise a child through the age of 17. When adjusted for inflation, the figure rises to $284,570. None of these numbers account for the cost of a college education, which many parents like to budget for far in advance.

For more insight into how much it costs to raise a child, there are free calculators online that can help parents to better estimate their spending based on their particular family needs. You may also be curious to learn how to financially plan for child No. 2.

Are You Able to Afford a Child?

Whether or not you can afford a child depends on your particular financial circumstances, as well as factors like childcare needs and the cost of living in your area.

There is no one salary figure that means someone is able to afford a child. It’s important to research how having a child will impact housing, food, and healthcare costs, how much of your disposable income will go toward clothing, equipment, childcare and education, even toys. This way, you’ll have a clear idea of how having a child will impact your budget.

Recommended: How to Create a Household Budget

How to Budget for a Baby

Speaking of budgets, these are some expenses parents need to budget for when they plan to have a baby join their family. They can use a budgeting app, spreadsheet, or even good old fashioned pen and paper to create a new budget.

Some examples of baby expenses that should go in a budget include:

•   Food

•   Medical care

•   Housing

•   Childcare

•   Education

•   College savings

•   Clothing

•   Equipment (high chair, car seat)

•   Toys

•   Recreational activities

•   Care items (diapers, baby wipes, etc.)

Once parents know what their total expenses are, they can subtract that amount from their take-home income to determine how much money is left for fun (like dinners out and vacations) and savings goals. Some parents even like to create an investment plan for their newborn.

Recommended: Top Budgeting Tips for Single Parents

How to Reduce the Costs of Raising a Child

Because raising a child can cost a pretty penny, it can be helpful to think strategically about how to save money while raising kids. Here are some tips that can make it possible to spend less as a parent.

•   Buy second-hand clothes. No hand-me-downs at the ready? Shopping second-hand can be a great way to save money on baby and kids’ clothes. Most children grow out of their clothes very quickly, so new or lightly worn clothes are always available at thrift stores.

•   Spend less on housing. Even if you can afford to buy a larger house, you may want to consider living below your means. Housing is a major ongoing expense for any family, so saving here can really make an impact.

•   Buy generic. When it comes to things like formula and diapers, lower cost generics can get the job done just as well as fancy name brands.

•   Head to the library. Looking to keep kids entertained? Don’t forget about the local library. Alongside books, many libraries offer DVD rentals, story time, and tons of free events that can keep little ones active. So cancel those expensive streaming subscriptions and skip the overpriced petting zoos for now.

Example List of Expenses for Raising a Child

To help parents plan better, below are some common expenses that come with raising a child and the percentage of a parent’s income that goes toward each expense:

•   Housing: 29%

•   Food: 18%

•   Childcare and education: 16%

•   Transportation: 15%

•   Healthcare: 9%

•   Clothing: 6%

•   Miscellaneous: 7%

The Takeaway

The average cost of raising a child in the U.S. is about $13K per year. Knowing this can help families create a budget that makes it easier to reach their savings goals while raising young kids. The biggest child-related expense is for housing, followed by food and childcare or education. Things like clothes and toys will barely make a blip on your budget, if you take advantage of hand-me-downs.

To help you get a grip on your finances, soon-to-be parents can sign up for SoFi’s money tracker app. Track multiple account balances in one place ,and keep an eye on your credit scores too. You can also set savings goals and review your spending — so you can get ready for all the extra line items that come with raising kids.

Get the information and tools you need to make the most of your money.

FAQ

How much does it cost to raise a child monthly?

On average, it costs $12,980 per year to raise a child that was born in 2015. This breaks down to average monthly spending of about $1,081.

How much does it cost to raise a child to 18 in California?

California is a notoriously expensive state to live in, and that extends to child rearing costs. It costs an average of $23,586 each year to raise a child in California, which comes out to $400,962 over the course of 17 years.

What is the minimum salary to raise a child?

There is no one minimum salary that parents need to earn in order to afford a child. How much it costs to raise a child depends on many different factors, like location, childcare needs, education preferences, health conditions, and more.

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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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There are a grand total of seven states that don’t tax retirement income, and that’s because those states don’t tax income at all. This can be important for seniors to know, as holding onto as much retirement income as possible can be important — whether it’s coming from pensions, Social Security, a 401(k), or elsewhere.

Equally important to know: As of 2023, there are 14 states that don’t tax pensions, and 37 states that don’t tax Social Security benefits. Paying less in taxes can lower the strain on a retiree’s budget and help their money last longer. That becomes especially important when and if inflation shrinks purchasing power — as it has in recent years.

How Much Can State Taxes Take Out of Retirement Income?

Each state taxes income, including retirement income, differently. So, there are different states that don’t tax pensions, and then there are states that don’t tax Social Security, etc.

Accordingly, how much of a bite state taxes take out of retirement income can depend on several factors, including the applicable tax rate where you live, and your specific tax brackets.

Taxes can be an important consideration when choosing where to retire, and when to retire.

Understanding State Income Tax

As of 2023, 43 states tax individual income. Of those, 41 states levy taxes on wage and salary income, while seven states do not assess individual income tax. The state of New Hampshire exclusively taxes dividend and interest income, while Washington taxes capital gains for certain high-income individuals.

In some states, the same tax rate applies to all taxable income. Other states use a graduated tax system with individual tax brackets, similar to the way the federal tax system works.

California has the highest marginal tax rate, at 13.30%. Other states with double-digit tax rates include Hawaii (11%), New York (10.90%), New Jersey (10.75%), and Washington, D.C. (10.75%). Aside from the states that have no income tax, the lowest marginal tax rate belongs to North Dakota, which has an income tax rate of 2.90%.

Further, if you were to look at the average retirement savings by state, it may help provide some more insight into where many retirees live — and why.

💡 Learn more about income tax and how it works.

14 States That Don’t Tax Pensions

Altogether, there are 14 states that don’t tax federal or private pension plans. Some of these are states that have no income tax at all; others have provisions in state law that make them states with no pension tax. Here are which states don’t tax pensions:

State	Pension Tax Policy
Alabama	Pension income excluded from state income tax
Alaska	No state income tax
Florida	No state income tax
Hawaii	Pension income excluded from state tax
Illinois	Pension income excluded from state tax
Mississippi	Pension income excluded from state tax
Nevada	No state income tax
New Hampshire	Only taxes interest and dividend income
Pennsylvania	Pension income excluded from state tax
South Dakota	No state income tax
Tennessee	No state income tax
Texas	No state income tax
Washington	Only taxes capital gains for high income earners
Wyoming	No state income tax

Keep in mind that state or local government employee pension benefits may be treated differently. New York, for example, specifically excludes pension benefits paid by state or local government agencies from state income tax. If you move to another state, however, that state could tax your New York pension benefits.

37 States That Don’t Tax Social Security

Understandably, many people have questions about Social Security, including whether the program will remain solvent in the future. Another big one: How will taxes affect your benefit amount? That’s why it’s important to know which states don’t tax Social Security.

The good news is that 37 states and the District of Columbia do not tax Social Security benefits. So if you’ve chosen to retire, or at least are thinking about choosing a retirement date (which can affect your total Social Security payouts), you don’t need to worry about it. Similar to the states that don’t tax pensions, these states either have no income tax at all, offer exemptions, or have elected to exclude Social Security benefits from taxable income calculations.

State	Social Security Tax Policy	State	Social Security Tax Policy
Alabama	Not included in income tax calculations	Nevada	No state income tax
Alaska	No state income tax	New Hampshire	Only taxes interest and dividend income
Arizona	Not included in income tax calculations	New Jersey	Not included in income tax calculations
Arkansas	Not included in income tax calculations	New York	Not included in income tax calculations
California	Not included in income tax calculations	North Carolina	Not included in income tax calculations
Delaware	Not included in income tax calculations	North Dakota	Exempt from taxation
Florida	No state income tax	Ohio	Not included in income tax calculations
Georgia	Not included in income tax calculations	Oklahoma	Not included in income tax calculations
Hawaii	Not included in income tax calculations	Oregon	Not included in income tax calculations
Idaho	Not included in income tax calculations	Pennsylvania	Not included in income tax calculations
Illinois	Not included in income tax calculations	South Carolina	Not included in income tax calculations
Indiana	Not included in income tax calculations	South Dakota	No state income tax
Iowa	Not included in income tax calculations	Tennessee	No state income tax
Kentucky	Not included in income tax calculations	Texas	No state income tax
Louisiana	Not included in income tax calculations	Virginia	Not included in income tax calculations
Maine	Not included in income tax calculations	Washington	Only taxes capital gains for high-income earners
Maryland	Not included in income tax calculations	Washington, D.C.	Not included in income tax calculations
Massachusetts	Not included in income tax calculations	Wisconsin	Not included in income tax calculations
Mississippi	Not included in income tax calculations	Wyoming	No state income tax

Montana and New Mexico do tax Social Security benefits, but with modifications and exceptions. Montana will also see a change to its tax rate structure in 2024, and Social Security benefits will be taxed the same as they are at the federal tax level.

8 States That Don’t Tax Capital Gains

Federal capital gains tax applies when an investment or asset is sold for more than its original purchase price. The short-term capital gains tax rate applies to investments held for less than one year. Investments held for longer than one year are subject to the long-term capital gains tax.

States can also tax capital gains, though not all of them do. The states that do not tax capital gains are the same states that do not have income tax or have special tax rules on which income is taxable. They include:

•   Alaska

•   Florida

•   Nevada

•   New Hampshire

•   South Dakota

•   Tennessee

•   Texas

•   Wyoming

As far as how much capital gains are taxed at the state level, the tax rate you’ll pay will depend on where you live. Some states offer more favorable tax treatment than others for capital gains.

12 States That Don’t Tax 401(k), TSP, or IRA Income

Yet another potential area where states can generate tax revenue is by taxing retirement accounts such as 401(k) plans, individual retirement accounts (IRAs), and Thrift Savings Plans (TSPs). In all, there are 12 states that don’t levy taxes on retirement income derived from these sources:

•   Alaska

•   Florida

•   Illinois

•   Mississippi

•   New Hampshire

•   Nevada

•   New Hampshire

•   Pennsylvania

•   South Dakota

•   Tennessee

•   Texas

•   Wyoming

31 States That Don’t Tax Retirement Income From the Military

There are certain states that tax military retirement income, but most do not. In all, 31 states don’t tax military retirement income, including those that don’t have income taxes, and others that have specifically carved out exceptions for military retirement income.

•   Alabama

•   Alaska

•   Arizona

•   Arkansas

•   Connecticut

•   Florida

•   Hawaii

•   Illinois

•   Iowa

•   Kansas

•   Louisiana

•   Maine

•   Massachusetts

•   Michigan

•   Minnesota

•   Mississippi

•   Missouri

•   Nevada

•   New Hampshire

•   New Jersey

•   New York

•   North Dakota

•   Ohio

•   Pennsylvania

•   South Dakota

•   Tennessee

•   Texas

•   Washington

•   West Virginia

•   Wisconsin

•   Wyoming

7 States That Don’t Tax Retirement Income

As covered, there are a lot of different tax levels and tax types — some include different types of retirement income, some just involve plain old income tax itself. As such, it’s not really easy to determine which states don’t tax retirement income whatsoever. But if you were to boil it down to a list that accurately answers the question “which states don’t tax retirement income,” it would mirror the short list of states that don’t tax income at all.

•   Alaska

•   Florida

•   Nevada

•   South Dakota

•   Tennessee

•   Texas

•   Wyoming

In addition, as mentioned above, while New Hampshire and Washington state do tax certain types of income, they don’t really tax most forms of retirement income. So if you live in these states, your Social Security benefits and pension benefits can go further when it comes to covering your retirement expenses.

8 States With Low Retirement Income Taxes

Taking everything into account — taxes on income, pensions, Social Security, military retirement income, and more — there are several states that offer retirees relatively low retirement income taxes. Aside from the seven that don’t tax income at all, these states may be a good option for seniors, as they offer low retirement income taxes in one form or another:

•   Alabama

•   Hawaii

•   Illinois

•   Iowa

•   Mississippi

•   New Hampshire

•   Pennsylvania

•   Washington

Which States Have the Lowest Overall Tax Burden on Retirees?

Again, there is a lot to consider when trying to determine an overall tax burden, especially on retirees. But if you were to whittle down a list of a handful of states in which the tax burden is the absolute least on retirees? It would come down to the states with the overall smallest income tax burden, and a few other factors.

Delaware

Delaware hasn’t been discussed much, and though it does have state income taxes, a few other factors make it particularly appealing for retirees. Specifically, its state income tax rate tends to be relatively low (2.2% – 6.6%), and it has low property taxes, no sales taxes, and no applicable estate taxes.

Nevada

Nevada is a state with no state income taxes — a big win for retirees — and that also has relatively low property taxes, and no estate taxes. It also doesn’t tax income from most retirement accounts, or military retirement income.

Wyoming

Wyoming is similar to Nevada in that it has no state income taxes, low property taxes, and no estate taxes. There are applicable sales taxes, however, but it’s a drop in the bucket compared to the overall tax burdens seen in other states.

Can You Have Dual State Residency?

Generally, most people are residents of just one state. It is possible, however, to have dual residency in two different states. This can happen if you live in each state for part of the year to attend school, or to work.

For example, the state of Virginia distinguishes between residents who maintain a home in the state for 183 days or more during the year and domiciliary residents who claim Virginia as their legal state of residence. Under state law, it’s possible to be a resident of Virginia and a domiciliary resident of another state.

For instance, a college student from California who lives in Virginia during the school year would be a dual resident. However, you can have only one domicile — in this example, it would be California.

If you live and earn taxable income in two different states during the year, you may have to file tax returns in both those states unless a reciprocity agreement exists. Reciprocity agreements protect taxpayers who work in states other than the one in which they’re legal residents from being hit with double taxation.

What to Consider Before Moving to a Tax-Friendly State

Moving to a state that doesn’t tax pensions and Social Security could yield income tax savings, but it’s important to consider the bigger financial picture. Paying no or fewer income taxes on retirement benefits may not be much of a bargain if you’re stuck paying higher property taxes, or your heirs are left with steep inheritance taxes, for instance.

Also, consider the overall cost of living. If everyday essentials such as housing, food, and gas are higher in a state that has no income tax, then your retirement benefits may have less purchasing power overall. If costs end up being higher than you anticipated, you might end up working after retirement to fill any retirement income shortfalls.

The Takeaway

There are a number of states that tend to be more tax-friendly for retirees, and those generally include the states that don’t levy any income taxes. That list comprises states such as Alaska, Nevada, Texas, Florida, and Tennessee. But there are other potential taxes to take into consideration, and states all have different tax rules in regards to pensions, retirement accounts, capital gains, and more.

As such, if you’re hoping to save on taxes during retirement, you’ll need to do a little digging into the specifics to see what might affect you, given your unique financial picture. It’s wise to take into account other tax types as well (property taxes, etc.), and overall cost of living. Doing a thorough cost-benefit analysis before making a decision to move could be beneficial.

If you’re wondering about other ways to help make your retirement savings tax efficient, SoFi can help. With SoFi Invest, you can open a traditional or Roth IRA, and you can build, or add to your investment portfolio right from your smartphone or other device. SoFi doesn’t charge commissions (you can read the full fee schedule here), and SoFi members have access to complimentary advice from professionals.

Help grow your nest egg with a SoFi IRA.

FAQ

What is the most tax-friendly state to retire in?

The most tax-friendly states for retirees are states that don’t tax pensions and Social Security, and have a low tax-profile overall for sales and property tax. Some of the best states for retirees who want to avoid high taxes include Alabama, the District of Columbia, Nevada, and Tennessee.

Which states have no 401(k) tax?

States that do not tax 401(k) distributions are generally the same states that don’t tax income. Those states include Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. New Hampshire and Washington don’t tax 401(k) distributions either.

Which states do not tax pensions?

States that do not tax pensions include the seven states that have no income tax — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming — as well as New Hampshire and Washington. Additionally, five states — Alabama, Hawaii, Illinois, Mississippi, and Pennsylvania — exclude pension income from state taxation.

How can I avoid paying taxes on retirement income?

The simplest way to avoid paying taxes on retirement income is to move to a state that has the smallest applicable tax burden on retirement income sources. That would include the short list of seven states that don’t have any sorts of state income tax. You can also consult a professional.

Which states are tax-free for Social Security?

There are a grand total of 37 states that don’t tax Social Security benefits, and that list includes the seven states that don’t tax income at all. Aside from those states, 29 others (and Washington, D.C.) do not, specifically, tax Social Security benefits.

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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.

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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