The overall health of a person’s spending habits can run the entire gamut. From having very good spending habits to those that wreak havoc on a budget and a lifestyle. So, how can you tell where yours fall—and perhaps even more important, how can you ensure yours are more healthy tomorrow than they are today?
In this post, we’ll share key differences between healthy and unhealthy spending habits, provide a quiz so you can see where yours fall on the spending spectrum, and offer tips on how to change your spending habits, if necessary.
Healthy vs. Unhealthy Spending Habits
Here’s a quick gut check. If, on average, you’re spending more than you make, then this is a red flag, a sign that you should consider reviewing your budget to see how you can bring income and expenses into balance.
You could reduce spending, or you could brainstorm ways to earn more income, whether that means finding a new, higher-paying job or getting a side gig to supplement your paycheck. Or, you could use both strategies.
Here are a few questions to ask yourself:
• Are you able to pay off credit card debt in full when your statement arrives?
• Do you make all your payments on time?
• Have you been able to save enough money in an emergency savings account—say, three to six months’ worth of income?
• Are you able to also contribute money to your retirement account?
If you can answer yes to all these questions, then that’s a good sign.
Changing Your Spending Habits
If changing spending habits is in the cards for you, then step one is typically to create a new budget. Create a sheet that will allow you to track your income, expenses, and more. As you create your budget, consider how quickly you’d like to pay off credit debt, as one example, how much you need to put into an emergency savings account, and so forth.
It’s typically best if you create a budget that helps you to move steadily towards your financial goals while also containing some flexibility. It can also help to create an initial draft of a budget and then tweak it as you test it out. Using this budget, are you able, say, to pay off credit debt in full each month? Is your savings account increasing? Is this a budget you can live with?
If you find yourself going off-budget one month, don’t be too hard on yourself—but do analyze what happened. Perhaps, for example, you had an unexpected car repair and you haven’t yet built up your emergency savings account to a level that would allow for covering that. If so, keep moving steadily ahead with your plan.
Or, maybe you’ve discovered that you’re spending more at restaurants than what’s in your budget. In that case, are there ways you can tweak the budget, moving money from one area to the dining one? Or would it be more helpful to find intriguing recipes that you can cook at home? Answers are unique to each person.
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More Tips for Spenders
If you realize that your spending habits are causing you to fall short of your savings goals, then here are more strategies to consider. For some people, it can help to share their savings goals with family members and close friends. If you think this would help to make you more accountable to your budget, then this can be a quick and easy strategy to implement.
Make sure you pay as you go. Let’s say there’s a neighborhood watering hole that allows customers to put expenses on a tab. If you know that you like to spend, then skip the tab system and pay for whatever you buy, right then and there.
Each time you’re tempted to make a purchase, stop to think about whether this is a need or a want. There isn’t anything wrong, per se, with buying things you want, but it can be quite helpful to practice distinguishing between wants and needs and then doing a gut check before making a buying decision. To help avoid feeling overwhelmed from too much frugality, carefully plan rewards that fit within your budget.
Track Your Money With SoFi Checking and Savings®
As part of your plan to improve your spending and saving habits, you may be looking for the right account to help you track your money. SoFi Checking and Savings may be a good option for you. SoFi Checking and Savings is an online bank account where you can spend, save, and earn all in one place.
You can keep tabs on your spending within your dashboard in the SoFi app so you always know where you stand. You can open an account in just 60 seconds (seriously!). Plus, you’ll have access to mobile transfers, photo check deposits, and more—making it easier to save and otherwise manage your finances.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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