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

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

What Is a Credit Score?

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

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

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

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

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

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

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 3.60% APY, with no minimum balance required.

What Your Credit Score Means

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

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

The FICO ranges look like this:

•  Poor: 300-579

•  Fair: 580-669

•  Good: 670-739

•  Very good: 740-799

•  Exceptional: 800-850.

Credit Score vs. Credit Report

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

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

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

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

How Do I Check My Credit Score for Free?

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

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

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

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

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

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

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

Recommended: Track your credit score for free with SoFi.

How Are Credit Scores Determined?

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

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

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

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

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

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

Learn more about credit here:

Can I Check My Own Credit Score Without Affecting It?

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

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

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

What Credit Checks Can Hurt My Score?

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

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

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

•  Submitting a new utility application

•  Applying for a new credit card

•  Requesting a credit limit increase

•  Renting an apartment.

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

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

Recommended: How Student Loans Affect Your Credit Score

Why You Should Check Your Credit Scores

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

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

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

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

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

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

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

How Often Should You Check Your Credit Scores?

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

The Takeaway

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

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FAQ

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

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

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

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

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

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

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

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

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

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

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

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It may be tempting to just make only the minimum payment on your credit card bill and put off paying the total amount until another time. However, only making your credit card minimum payment can cost you both in interest and your credit score. Plus, it can keep you in debt longer.

To avoid this predicament, here’s what you need to know about minimum credit card payments, as well as what you can do if making the minimum payment on your credit card is a challenge.

What Is a Credit Card Minimum Payment?

A credit card minimum payment is the lowest sum that you’re required to pay each credit card billing cycle. To avoid late fees or penalties, you must pay at least this amount.

If you don’t make the minimum payment amount, you could be charged a fee or, worse, your interest rate could increase, which is why it’s critical to understand this part of how credit cards work.

Creditors determine your minimum payment by using one of three different methods, which include:

•   A flat percentage of your total outstanding balance: Your minimum payment might be 1% to 3% of your balance. Thus, your minimum credit card payment will fluctuate monthly depending on your credit card balance at the time.

•   A percentage of your balance plus fees or interest that’s applied during that billing cycle: With this method, the credit card company may make your minimum payment equal to 1% of your revolving balance and then add any fees or the annual percentage rate (APR) charged within that billing cycle.

•   A flat rate: A creditor may apply a flat rate, perhaps $25 or $35, for your minimum payment.

Keep in mind that if your revolving balance is less than the minimum payment, your creditor will typically require you to pay the total amount. Because minimum credit card payment guidelines differ from creditor to creditor, you’ll want to get familiar with your credit card payment rules — ideally before you even apply for a credit card.

How Does a Minimum Payment Affect Your Credit Score?

Not only does paying the minimum payment on your credit card increase the amount you pay in interest, but it can also impact your credit score.

One of the factors that credit bureaus use to determine your credit score is your credit utilization ratio, which is the percentage of credit you’re using versus the amount you have available. A good rule of thumb is to keep your credit utilization ratio below 30% (better still, closer to 10%) so your credit won’t be affected.

For example, let’s suppose you have $15,000 of available credit. If your revolving credit card balance is $7,500 racked up from places that accept credit card payments. That means your credit utilization ratio is 50%, which exceeds the 30% threshold. If you’re only making the minimum credit card payments, your credit utilization ratio will stay beyond an acceptable rate for a more extended amount of time. Therefore, your credit score may dip.

To avoid this scenario, it’s wise to make more than the monthly minimum payment so you keep your credit utilization low. This is especially important if you have a limit that’s below the average credit card limit, as it will be easier for your credit utilization ratio to jump.

What to Do If You Cannot Afford Your Minimum Payment

Although you want to make more than your minimum credit card payment each month, you may find yourself in a situation where you can’t afford to do so. Fortunately, there are steps you can take to ease this financial burden.

Stop Using Your Credit Card

If you’re trying to repay your credit card debt, it’s best not to add to it. This means that while you’re working to pay down your credit card balance, you should consider putting your credit card use on pause. If you continue to use your credit cards, you may feel like you’re never getting ahead. This can become a vicious debt cycle that can be challenging to break.

You can pause your use by putting your credit cards in a safe place where you don’t have access to them but also don’t risk them getting stolen. For example, you could put them in your family’s safe. This way, you can avoid the temptation of impulse buys.

Also, you may find it helpful to track your spending. This will allow you to see where your money is going and get a better handle on what costs might be busting your budget.

Reduce the Cost of Your Bills

Looking for ways to cut your expenses can free up extra cash to help you make your credit card minimum payments. You might start by saving on streaming services you’re not using, or consider putting a gym membership on hold until your credit card balance is repaid.

For example, if you have cable, Netflix, Amazon Prime, and Hulu, you may want to choose just one or two of these services to keep. Then, you can cancel the other subscriptions that you don’t need, saving you money and making it easier to meet your minimum payment on your credit card.

Consider Getting a Side Job to Earn Extra Income

Increasing the amount of money you have coming in also can help you accelerate your credit card debt repayment. Even bringing home an extra couple hundred dollars per month via a low-cost side hustle could help you make a significant dent in your credit card debt.

For example, if you’re handy, you could sign up for a service like TaskRabbit to help people tackle projects around their homes. Or, if you like to interact with a variety of people, you could consider driving for a ride-share service like Uber or Lyft.

Also, if you receive a financial windfall (say, extra money from a work bonus, tax refund, or a gift), you could put these funds to good use by making a larger credit card payment.

Call The Credit Card Company

In some cases, you may want to contact your credit card company if you cannot make the credit card minimum payment. You’ll want to explain why you can’t make the minimum payment and how much you can afford to pay.

Also, share with your credit card company when you can begin making regular payments again. Your credit card company would rather receive payment than no payment. So, by communicating with them, they might be willing to work with you while you repay your debt.

Explore Get-Out-Of-Debt Options

There are other options to help you get out of your credit card debt. For starters, debt consolidation is a get-out-of-debt strategy that can help you minimize your interest payments, helping you to repay your debt faster. With debt consolidation, you take out a loan with a fixed interest rate that you use to repay all of your other high-interest debts. Ideally, you want to find a financing option that can yield a lower interest rate.

How Paying Only the Credit Card Minimum Payment Costs You More

As you now know, it’s essential to make at least the credit card minimum payment. But making only the minimum payments each month can end up costing you more — even if you have a good APR for a credit card. When you carry a monthly credit card balance, the interest continues to accrue, which can keep you in a debt cycle.

To illustrate the cost of paying the minimum payment on the credit card only, let’s suppose your credit card has a 17% interest rate and you have a $3,000 revolving balance. If your credit card company has a $50 minimum payment requirement, it will take you 135 months to repay your debt. Additionally, you’ll end up paying roughly $3,743 in interest alone. This means you’ll spend a total of close to $7,000 to pay off a $3,000 bill.

Luckily, you don’t have to do all of this math yourself if you’re wondering how your credit card payments will impact the total amount you owe. Per the Credit CARD Act of 2009, credit card companies are required to put a minimum balance warning on each bill you receive to protect your interests.

Usually, credit card companies will communicate this warning with a table that provides a snapshot of the amount of time it will take to repay your balance if you only make the minimum payment. In some cases, the company may also provide a table that suggests the amount of time it will take to repay your debt if you make more than the minimum payment.

The Takeaway

If you want to avoid costly interest or a dip in your credit score, it’s wise to make more than your credit card minimum payment each month. An even better solution (if you can afford to do so) is to pay off your total credit card balance every month. This way, you can dodge high interest payments and keep your credit utilization ratio at a favorable rate.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What are your minimum payment rights?

As part of the Credit Card Accountability Responsibility and Disclosure (CARD) Act, creditors are legally required to illustrate how long it will take you to repay your debt if you make only the minimum payment. Also, they must provide a toll-free number that cardholders can call to get assistance with credit counseling or debt management. These requirements are designed to keep credit practices fair.

Does paying minimum due affect your credit score?

Yes, making a minimum payment can affect your credit score since it impacts your credit utilization ratio, a factor used to calculate your credit score. Credit utilization ratio is the percentage of credit you’ve used versus the amount you have available. So, if you continue to carry a high balance on your credit card, your credit utilization rate may be higher than recommended, which can impact your credit score.

What happens if I don’t pay my credit card for 5 years?

After just six months if you don’t pay your credit card, the credit card company is required to charge-off the account. This means they will close your account and write it off as a loss. However, you will still be responsible for repaying the outstanding balance either to your creditor or a third-party collections company.

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Photo credit: iStock/MStudioImages

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.

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

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Wholesale clubs or warehouse clubs offer shoppers the opportunity to buy items in wholesale quantities at discounted prices, typically in exchange for an annual membership fee.

Shopping wholesale is a tactic favored by the frugal and thrifty, since in theory, bulk buying usually results in a lower unit price. But are wholesale clubs worth it? Can you truly save enough to make it worth the annual fee, not to mention the massive packages of soap and cereal in your closets?
Understanding how warehouse club shopping works can help you decide if it makes sense for you. Read on to learn the pros and cons of wholesale clubs.

How Does a Wholesale Club Work?

A wholesale club works by offering consumer goods in large quantities at wholesale prices. So, rather than buying a six-pack of toilet paper for $8.99, you might have the opportunity to purchase 30 rolls in a single package for $29.99.

You don’t have to do too much math to see that you typically save money by buying in bulk. But you might be wondering how wholesale and warehouse clubs make money if they’re charging low prices for their items.

One of the main ways these clubs make a profit is through annual fees. The wholesale club gets your membership fee and in exchange, you get to buy items at a discount. Some wholesale clubs even offer additional incentives, such as discounts on home and auto insurance.

Wholesale Clubs vs Grocery Stores

Wholesale clubs and grocery stores differ in a few ways.

•   Selection. While both can offer food, household items, and petcare items, the range of products available at a wholesale club may be different than what you’re used to at a grocery store. For example, you may be able to find frozen vegetables in bulk at a wholesale club, but you’ll need to hit the grocery store for fresh veggies.

•   Sizing. Instead of buying one can of crushed tomatoes for pasta sauce at a grocery store, you might be buying a case of eight at the wholesale club. Or the 48-ounce orange juice you buy at the grocery store may only be available in a 96-ounce size at the warehouse club.

•   Membership.Grocery stores don’t charge a membership fee. Anyone can walk into a grocery store and shop. Without a membership pass, however, you generally won’t be able to shop at a wholesale club. Not having to pay a fee might appeal to you if you’re used to grocery shopping on a budget.

Factors That Determine if a Wholesale Club Is Worth It

While many people enjoy shopping at warehouse clubs, these retailers aren’t necessarily right for everyone. If you’re debating whether joining a wholesale club makes sense, here are some factors that can determine if it’s worth it to you:

•   Membership fee. The first thing to consider is the fee you’ll pay to shop. If you can’t easily make the fee back in savings, then a wholesale club might be a waste of money.

•   Discounts. To gauge how much savings you might net, you’ll need to look closely at the size of the discounts. This can involve a little homework as you’ll need to compare unit prices for the items you typically buy at the grocery store to unit prices for the same items sold at wholesale clubs.

•   Time savings. In addition to the financial aspect, consider whether shopping at a wholesale club would save you time. Will you be able to get in and out quickly and make fewer trips by buying in bulk? Or will you eat up an entire day wandering the aisles of a giant warehouse full of stuff?

•   Returns. If you change your mind about a bulk purchase, it’s important to know whether you’ll be able to return it and get your money back. What if you buy a 12-pack of laundry detergent and discover it’s not the unscented kind you like? Would you be stuck with it? Different wholesale clubs have different policies regarding what they will and won’t take back.

•   Usefulness. Buying 20 apples or four pounds of quinoa at rock-bottom prices might seem like a deal, but it’s important to consider how much use you’ll get out of those items. If you don’t frequently eat or use the things you’re buying in bulk at a wholesale club, then you’re essentially throwing money away.

•   Extra savings. Aside from potentially saving money on food and other items, consider whether you can get a break on anything else you typically buy. For example, some warehouse clubs sell gas at prices that are typically several cents lower than regular gas stations. You might also be able to pick up free samples of items or, as mentioned above, get discounts on home and auto insurance.

If you only plan to hit the warehouse club every few months, then you might not get the full range of benefits from your membership. On the other hand, if you’re a more regular shopper with a large family, a wholesale club membership could pay itself back (and beyond) in savings.

Advantages of a Wholesale Club

If you’re wondering what are wholesale clubs good for, consider some of the benefits that come with membership.

Lower Prices and Bargains on Certain Products

One of the chief selling points of wholesale clubs is their prices. Wholesale clubs can limit markups on products by selling them in bulk (and charging membership fees). So while a grocery or regular big-box store might mark up items 25% to 50%, a wholesale club might cap its markup at 15%.

Wholesale clubs may also offer special deals on certain items that can’t be matched anywhere else. For example, you might be able to take advantage of online-only exclusive coupons or savings.

Brands Can Be Higher Quality

You might assume that just because you’re buying items in bulk or at discounted prices at a wholesale club, they’re cheap and perhaps not top-notch. That’s not necessarily the case. Warehouse clubs can and do sell quality, name-brand items. This is not limited to grocery or household items. You can also find brand-name tires, electronics, and appliances for sale at wholesale clubs.

Having Access to Services

If you’ve never joined a wholesale club, you might not be aware that they can offer services beyond just shopping. For instance, you might be able to order checks through your wholesale club, get pet insurance, sign up for identity-theft protection, get a garage-door opener installed, or get business cards printed at discounted rates through your membership.

Depending on the club, you might also be able to get access to car-buying programs, vision and hearing-aid services, banking services, home renovation and repair services, or special discounts on travel. All of these things can help to increase the value that you’re getting in exchange for your membership fee.

Disadvantages of a Wholesale Club

Shopping a wholesale club can take some getting used to if you’re primarily used to shopping at grocery stores or big-box retailers. And there are a few potential drawbacks to know before signing up.

Membership Fees

As mentioned, one thing that sets wholesale clubs apart from other retailers is the membership fee. The amount you pay and the perks the fee unlocks will depend on which club you join.

Here’s how the fees compare at three of the top wholesale clubs in the U.S. for basic and premium plans:

•   BJ’s – $55/year for Club Card Membership; $110/year for Club+ Card Membership

•   Costco – $65/year for Gold Star Membership; $130/year for Executive Membership

•   Sam’s Club – $50/year for Club Membership; $110/year for Plus Membership

Keep in mind that you’re not limited to joining just one club. But you’ll need to pay each one’s membership fee. And you generally need the higher-tier membership to take advantage of the full range of features and benefits a wholesale club offers.

Having to Buy Many Items in Bulk

While not every item is sold in bulk at a wholesale club (you wouldn’t buy five air conditioners, for example), many of them do come in multi-unit packages. So before you shop, you need to be reasonably sure that you’re going to use all of what you buy. If you’re not into stockpiling or you don’t know someone you can split your purchases with, they could just end up cluttering up your home and costing you money.

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

Higher Potential for Impulse Buying

Part of the lure of the wholesale club is the opportunity to get a great deal. But that could lead to impulse buys if you spot something on sale at a price that seems too good to be true. While you might save if you can find true bargains, you’re not really saving if the money you spend isn’t in your budget. If you’re struggling with how to stop impulsive spending, then a wholesale club membership might be a stumbling block to your efforts.

Tips for Shopping at a Wholesale Club

If you’re heading out to your local wholesale club to shop for the first time, it helps to know some insider tips to make the most of your shopping experience. Here are a few pointers for getting the most value when buying from a warehouse club:

•   Pre-shop at home. Checking out your wholesale club’s website can give you an idea of what’s in stock at your local store and what kind of deals you’ll find once you get there. You can also look for exclusive online-only offers that might be worth scooping up.

•   Compare unit prices. Unit price is everything when you’re buying in bulk to save money. So as you shop, note the unit price (if posted) or calculate it yourself on your phone. You can then compare that to the price you’d pay for the same item at your local grocery store.

•   Watch out for sizing. What’s known as shrinkflation is a real threat to your wallet when prices are on the rise. This practice occurs when companies downsize items but charge the same price for them. Again, you’ll want to look at the unit price to see how much value you’re getting for your money when shopping wholesale clubs.

•   Take advantage of freebies. Wholesale clubs commonly offer freebies and free samples to shoppers. So be on the lookout for those as you’re cruising the aisles.

•   Shop with a list. Shopping with a list can be an easy way to curb impulse spending. The key is committing to buying only what’s on your list and not being swayed over by any surprise deals you come across.

•   Consider splitting the trip. If you have a friend or family member who doesn’t have a wholesale club membership, you could still take them along with you to shop. You can pick out items together, purchase them using your membership, then split the cost. That way, you’re only getting what you need, and they get a deal at the same time.

Also, you might consider upgrading to a premium membership if doing so could help you to earn rewards on purchases. If you can get 2% of what you spend back, for example, it might be worth it to pay a higher annual fee for that added savings.

Recommended: How to Save Money: 33 Easy Ways

Are Wholesale Clubs Worth It?

Whether a wholesale club is worth it to you or not really depends on your lifestyle and shopping habits. For example, if you often rely on takeout because there’s no food in the house, buying staple items like frozen chicken breasts, frozen veggies, rice, and oil in bulk could allow you to make more meals from scratch. It’s generally cheaper to buy groceries than eat out.

The Takeaway

Buying groceries in bulk can lead to significant savings, since warehouse clubs typically offer generous discounts per unit when you purchase items in large quantities. However, these stores generally require memberships. Annual fees can run from $50 to $130 per year, depending on the club you join and whether you choose a basic or premium tier. If you’re able to save more than you spend on annual dues, joining a wholesale club may be financially worth it. If, on the other hand, you could potentially come out behind, or find that combing the aisles of these stores often leads to impulse purchases, it’s probably not a good deal.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.60% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How do wholesale clubs make money?

Wholesale clubs primarily make money by charging membership fees. Since they don’t charge the same high markups on items as other retailers, they use membership fees to make up the difference in their profits.

What services do wholesale clubs provide?

Wholesale clubs can provide a variety of services, including pet insurance, home and auto insurance, life insurance, home-improvement services, travel services, and vision services. The range of services offered will depend on which warehouse club you join, and whether wholesale clubs are worth it will depend on the annual fee and how well the perks line up with your spending habits and lifestyle.

What are some common wholesale clubs?

BJ’s, Costco, and Sam’s Club are among the most well-known wholesale clubs in the United States. Boxed.com is an online store that sells wholesale items, with no membership fees. Alibaba is another online wholesaler that ships a wide variety of items to buyers around the world.

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

SOBNK-Q424-042

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Dealing with people who ask for money can be uncomfortable, and it can put a strain on even the best of relationships. You may feel pressured to say yes when you can’t really afford to. Or you may get tired of handing over your hard-earned cash to someone you view as being financially irresponsible.

Having a strategy for answering when someone asks for money can make those situations feel less awkward — and keep you from making a poor financial decision.

Determining if You Have the Funds to Help First

Any time someone asks for money, there’s an important question to ask before you consider saying yes: What can I afford?

Giving friends money when they’re in a jam could make you deplete your bank account if your budget is already strained. So before agreeing to hand over any cash, review your financial situation first to see how much money you can realistically part with.

This is especially important when someone asks for money, and it’s more than just a few bucks. Say your aging parents ask you for $10,000 to help with medical bills, for example. That’s not exactly pocket change. Talking to parents about money may not be easy but if you can’t afford to part with that kind of money, it’s important to say so upfront.

Recommended: Guide to Practicing Financial Self-Care

Determining if It Is for a Genuine Need or Financial Situation

When someone asks for money, it’s natural to want to know what it’s for. And that might play a part in your decision to say yes or no.

For example, there’s a big difference between your younger sibling asking you for $1,000 to put a security deposit on an apartment and asking for $1,000 to buy a gaming console. One is a need, while the other is a want.

If you’re constantly dealing with family members or friends who ask for money to fund their desired lifestyle, you may begin to feel that you’re being taken advantage of. So it’s okay to set boundaries and specify that you’re only willing to give friends and family money in situations where there’s a genuine need.

However, be wary. Some people might use their hard-earned money on things like, say, the latest mobile device or a weekend away, and then come knocking for cash when a student loan or medical bill is due. Again, you don’t want to fund someone’s extravagant lifestyle.

Understanding the Risk Involved With Lending Money

Borrowing from friends and family isn’t the same as getting a personal loan from a bank. If someone asks you for money, they probably aren’t expecting you to whip out a loan agreement or charge them fees and interest, for instance. And they might assume that if they don’t pay you back, you won’t bombard them with collection calls the way a traditional lender would.

When you lend money to friends and family, you’re taking on risk. If they don’t pay you back, then you likely won’t be able to get that money back unless you’re willing to sue them in small claims court. When debts between friends or family members go unpaid, that can lead to the eventual breakdown of the relationship.

If people who ask for money regularly seek you out, there are two ways you can try to manage the risk factor:

•   Require them to sign a loan agreement

•   Consider the money a gift

The former can give you some legal protection if they don’t pay, but some people might balk at having to sign it. The latter, meanwhile, eliminates all risk since you’re assuming you’re never going to get the money back anyway. But you have to be sure beforehand that you can afford the loss.

Also, be aware that it may change the nature of your relationship with the person to whom you are gifting the money. Consider whether you want to set a precedent of bailing out, say, your younger sister’s or your fiancé’s finances.

Recommended: 5 Ways to Achieve Financial Security

Paying for Things Directly Instead of Gifting Money

If you’re not comfortable giving cash to friends or relatives who ask for money, you could offer to pay for things for them instead. If your best friend asks for $300 to pay their electric bill, you might not feel 100% sure they’ll use the money for that. You could offer to pay the bill for them instead.

You might also consider offering non-financial help. For example, if you have a cousin who is a struggling single parent and often requests cash, you might offer to watch their kids for free so they can spend time looking for a higher-paying job or take night classes to advance their education. You’re still helping them out, but you’re not giving them permission to turn to you for money every time they need it.

Watching Out for Your Financial Goals

Saying yes when someone asks for money can be problematic if it means your financial goals suffer. Going back to the example of aging parents, helping them pay for medical bills or other expenses in retirement could mean that you’re shortchanging your own financial future.

Again, it all goes back to looking at how much you can afford to give and whether you’re comfortable giving money to friends and family, knowing that you might never see that moolah again.

If doing so would put your money goals at risk, it’s important to consider whether helping them out is truly worth it, especially if the money they’re asking for is to fund wants rather than needs.

Learning From Your Mistakes

If you’ve gotten into the habit of automatically saying yes when people ask for money or you’ve given someone money in the past and regretted it, it’s not too late to correct those mistakes.

For example, say you have that one friend who, when you dine out, always asks if you can pick up the tab when the check arrives. Maybe they say they haven’t gotten paid yet and that you are lucky to earn a higher, dependable salary.

Remember, it’s perfectly okay to say, “I can’t afford to keep picking up the tab for dinner. What’s another way we can enjoy time together without spending as much?”You could suggest that instead of going out, you do potlucks at home instead. This could help you to avoid feeling like you’re being taken advantage of.

If you feel like you’ve made a mistake with money by lending it or giving it to friends and family, don’t shy away from it. Analyze the situation to figure out what went wrong, then commit to not repeating those same mistakes again. Just because you gave a person money in the past doesn’t mean you must continue to do so.

Teaching Them Smart Financial Habits

If you find yourself dealing with someone who asks for money on a regular basis because they’re terrible at managing their finances, you could offer to help. For example, you might introduce them to some online resources for learning about money or share your favorite budgeting app or savings calculator with them.

Keep in mind that this doesn’t always work. If someone has learned poor financial habits from an early age and doesn’t seem inclined to change them, you may not be able to put them on a different path. In that case, you may need to kindly but firmly say no to their frequent requests for money and know that you tried to improve their situation via education.

Providing Financial Resources to Help Them

If someone asks for money and you either can’t afford to give it or would prefer not to, you can still point them in the right direction. You can help them explore other ways to borrow money, such as personal loans, lines of credit, or credit cards.

Just be mindful of steering them toward loans that might worsen their financial situation. Payday loans, for example, can feature astronomical interest rates that can quickly lead borrowers into a downward spiral of expensive debt. Cash advances on credit cards are another very expensive way to borrow money that one may want to avoid.

Valuing Yourself and Your Hard Work

You work hard for your money, so it doesn’t make sense to give it away without some thought beforehand. A request in and of itself isn’t a good reason to part with your cash. For all you know, the person asked half a dozen people who said no before they came to you, and they may have several people they are planning on asking for funds if you decline.

When people ask for cash, check in with your money mindset. Don’t undervalue the effort it took for you to make it, even if that’s not something that’s on their radar. Also, be clear about how it will be used.

For example, finding out after the fact that the $500 you thought was going to buy groceries for your sister and her kids actually went to funding a trip to an amusement park might make you feel resentful. You may feel like your hard work to make that $500 was all for nothing since it went to a frivolous expense.

Not Giving Out of Guilt

Guilt can play a big part in influencing financial decisions. For example, perhaps your spouse’s parents gave you the money to put down on a home after you were married. That can lead to sticky situations with how to handle money with in-laws for years to come if they later need financial help and automatically expect you to provide it.

You may feel too guilty about the down payment gift to say no, which could put a strain on your finances or even your marriage. Or it may be your parents who are putting a guilt trip on you to justify asking you to pay for their expenses in retirement. Talking about money with your partner can help you to avoid conflicts in these kinds of situations.

Guilt can also come into play in other ways. For instance, you might feel guilty about making more money than your friends and use that as an excuse to always pay for nights out or give them money. But allowing guilt to guide you can lead to everyone you know treating you like a personal bank. So it can be important to not let guilt cloud your decisions, and feel comfortable saying, “No, sorry I can’t” to money requests without feeling obligated to explain your reasoning.

The Takeaway

Knowing how to navigate the conversation when people ask for money can make those situations less stressful. You don’t always need to say no, but it’s important to know when doing so makes sense for your financial situation — and your personal relationships. Whether you do or don’t choose to loan money to friends and family, it’s important to keep working toward your own financial goals by saving regularly.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.60% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

When should you say no to someone who asks for money?

It may be a good idea to say no to someone who asks for money if you truly can’t afford to give it or if you believe the money will be wasted on wants vs. needs. You should also consider saying no if you suspect the money will be used for illegal purposes.

How can we trust if someone is telling the truth?

There’s no way to tell if someone is being truthful, short of giving them a lie detector test. When someone asks for money, you essentially have to trust your instincts. If you suspect they might not be truthful about why they need the money, then you can say no.

How can I avoid disputes if I choose to say no?

Telling someone who asks for money that your answer is no could lead to conflicts. If you’re worried about a dispute, you can explain your reasons for saying no or simply say, “I’m sorry; it’s just not a good time.” Don’t allow them to argue with you or try to wear you down to change your decision.

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Photo credit: iStock/Sergey Nazarov

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q424-039

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Making a budget is often the first step in building a solid financial foundation. It helps you get better acquainted with how much money you earn, spend, and save. What’s more, it provides guidance and guardrails to help you hit the financial goals you’re focused on, whether that means saving for a vacation in Tuscany or the down payment for your dream house.

But budgets are not “set it and forget it” tools. The process can involve plenty of trial and error, and you may benefit from refining your plans along the way. In fact, it’s a good idea to check in on your budget every month, quarter, and/or year to make sure it’s still serving you well.

That’s where budgeting questions come in. Whether you’re just starting to budget or have been doing it for years, the following list of budget-specific questions can help you fine-tune your financial plan and stay on track. When asked regularly, these questions can yield surprising insights and adjustments to enhance how you manage your money.

How Questions Can Help You Budget Better

Asking questions about budgeting can be a wise move because everyone’s financial situation is different. The way that your parents or best friends budget may be entirely different from the way you approach managing your money. By checking in and assessing where you stand, you can help improve your financial outlook.

The right budget questions can give you insight into things like:

•   Why you should budget in the first place

•   What you hope to achieve from keeping a budget

•   Where your biggest budget pitfalls are

•   How you can improve your budget

To put it another way, asking budgeting questions can help you better understand where you are financially, where you’d like to be, and how a budget can help you to get there.

In terms of how often you should be asking questions about budgeting, there’s no set rule of thumb. You might check in monthly if you’re just getting started, then ease back to every few months. At the very least, it’s a good idea to do an annual budget review to see how your spending has evolved over the year. It’s also a good time to see what adjustments you might need to make as you set new financial goals for the year ahead.

14 Budgeting Questions That Can Help You

Not sure which budget questions to ask? The following checklist covers some of the most important things to consider as you make your monthly spending plan and keep tabs on it.

1. Am I Prepared for Unexpected Expenses?

Saving for financial emergencies is an important part of budgeting. When you don’t have money to cover an unexpected expense, you run the risk of having to use a high-interest credit card or loan to cover, say, a car repair or a major dental bill.

One of the first budget questions to consider is how much you have saved toward emergencies. If the answer is “0” in liquid funds you could quickly tap, you may want to think about how much you need to save for emergencies and how to fit that savings goal into your budget each month.

2. What is a Good Amount for an Emergency Fund?

A general rule of thumb is to keep three to six months’ worth of expenses in a separate savings account earmarked for emergencies. However, a good amount for an emergency fund for you can depend on your income, expenses, and how much money you need to have in the bank to feel comfortable.

If you’re single and have side-hustle income on top of your regular paychecks from a job, for instance, you might be okay with one to two months’ worth of expenses saved. On the other hand, if you’re married with two kids and are the primary breadwinner, it’s a much different situation. You might be more at ease with nine to 12 months’ worth of expenses saved instead.

When you’re starting from zero, aiming for $500 or $1,000 can be a good way to ease into a savings habit. You can then review your budget monthly to see where you might be able to find additional money. Every little bit counts ($20 here, $35 there) until your emergency savings hits a level that allows you to breathe a sigh of relief.

Recommended: Savings Account Calculator

3. How Much Debt Should I Pay Down Each Month?

Debt can make it difficult to reach your financial goals, especially if a big chunk of your income is going to credit cards, student loans, or other debts. With high-interest debt (like credit cards), it’s generally a good idea to pay as much as you can in excess of the minimum payment each month. This will help speed up repayment and save you a significant amount of money on interest. With other types of debt, however, you may want to strike a balance between debt repayment and saving. With the 50/30/20 rule of budgeting, 50% of your income goes to needs; 30% goes to wants; and 20% goes to debt payments beyond the minimum and savings.

4. Did I Overspend? If So, Where?

This is another great budgeting question to ask when reviewing your budget monthly if you’re trying to stop overspending. Going through each budget category and analyzing how much you spent can help you pinpoint the money leaks in your financial plan.

Once you find the leaks, you can take steps to plug them. For example, if you noticed that you’re spending more money on dining out, then planning meals at home and committing to that plan is a relatively simple fix. Or you might decide to audit your subscription services and cut out anything you’re paying for but not using. Those are simple ways to cut back on spending.

5. Do I Need to Adjust Spending Limits?

Reviewing your spending each month can help you figure out where you might be overdoing it. But it’s also an opportunity to see how inflation and rising prices might be affecting your expenses. If you notice that you’re spending more on groceries or gas, for instance, then you may need to adjust your budget and trim other areas of spending to compensate for those higher costs.
You might also decide to adjust spending limits down if you want to dedicate more of your budget to saving or debt repayment. So again, instead of eating out you might stick to having meals at home which can be more cost-effective. If that saves you $100 a month, you could add that sum to your emergency fund or make an extra payment to your student loans.

Recommended: Budgeting for Beginners: A Guide

6. What Are My Money Priorities?

Knowing your money priorities is important as they can influence the financial decisions you make. You could ask this budgeting question monthly. But if that feels like too much, aim to consider it at least once a year to see how life changes might affect your answers.

For example, your money priorities might include spending on travel or recreation in your 20s. But once you hit your 30s, your focus may shift to saving, paying down debt, and taking other steps to work toward financial stability and security.

7. Am I Tracking Toward My Financial Goals?

Tracking your financial goals can give you motivation to stick with your money plan. It’s also an easy way to see how you’re progressing toward them.

Whether your goals include paying down debt, building an emergency fund, or saving for a vacation, you can ask this budget question monthly to gauge how you’re doing.

If you see that you’ve made little progress over the past few months, for instance, you can then ask yourself what you can do to change that and get closer to your goals.

8. Am I Happy About the Purchases I’ve Made?

Some things you have to spend money on, but others you buy because you want to. That’s the difference between needs vs. wants, and understanding that is an important part of budgeting.

If you find yourself spending money more often than you’d like on things that aren’t necessities, ask yourself what you’re getting from those purchases. Dropping $5,000 on a once-in-a-lifetime vacation might be justified if you get a chance to create lasting memories. Spending that same $5K on new clothes, on the other hand, might give you a temporary boost, but you may end up regretting that purchase later.

Considering what you’re getting from spending money can give you clarity on your financial priorities. It can also help you to identify bad money habits that might be hurting your financial situation.

9. What Would My Budget Look Like Without Debt?

Living debt-free might seem like a dream but it’s possible to make it a reality with the right plan. If you have debt that you’re paying down monthly, ask yourself what your budget might look like if you didn’t have to make those payments. That could give you a push to dedicate more money toward debt repayment so you can eliminate those obligations faster.

There are lots of debt reduction strategies you can use, including the debt snowball and debt avalanche techniques. If you’re tracking your debt repayment progress and aren’t getting ahead as fast as you’d like, you might review your budget to see if another method might be more effective.

When it comes to credit card debt, you might investigate balance transfer credit card offers, which give you, say, 18 months during which you pay no interest. This can help some people pay down the amount they own. You might also seek advice from a nonprofit credit counselor.

10. Is There a Way to Increase My Income?

Making more money can give your budget a boost. When income goes up, paying bills becomes less stressful. It may also be easier to knock out debt or grow your savings.

How often you ask yourself this budget question can depend on your situation, but it’s worth pondering it at least once a year. Some of the ways you might be able to increase income include getting a part-time job, taking on more hours at your current job, negotiating a raise, or starting a low-cost side hustle.

11. How Much Should I Budget for Investments?

Investing money and saving it are two different things. When you invest money, you’re putting it into the market where it has more opportunity to grow. There’s greater risk involved vs. saving, but the rewards can be greater as well.

The amount you should budget monthly for investing can depend on how much you have left after covering basic expenses, how much you’re saving for emergencies or other short-term goals, and how much you’re paying towards debts. (You also want to spend a little on those “wants” mentioned above; otherwise, you’ll end up feeling deprived.)

Depending on the details of your situation, aiming to invest 10% might be a good place to start and you can build on that amount year over year as you pay down debt or increase your income.

12. How Much Should I Save Each Month for Retirement?

Paying yourself first is a fundamental rule of personal finance and it’s a good way to build the wealth you need to retire. When reevaluating your budget each year, it’s a good idea to look at how much you’re saving for retirement.

The exact amount you’ll need to save monthly will depend on your retirement goals and age. Financial experts often recommend saving at least 10% to 15% of your annual take-home income for retirement (including any company match).
However, you might need to double or even triple that if you’d like to retire early or you’re getting a late start.

Look at what you’re putting into your 401(k) at work if you have one. If you’re not contributing enough to get the full company match, then consider bumping up your contribution rate to max out this benefit (which is essentially free money).

13. What Are My Goals This Month?

Financial goal-setting often involves looking well into the future. For instance, you might want to save $50,000 for a down payment on a home or $1 million for retirement. But you can also set goals that you hope to achieve month to month.

For example, you might set a goal of getting three car insurance quotes from different companies if you’re hoping to get a better rate. Or you might have a goal of not spending money for 15 days out of the month. These kinds of short-term goals can help you move ahead financially without losing sight of your bigger money picture.

What’s more, succeeding at small financial goals can build your confidence to tackle larger ones.

14. How Can I Stay Consistent In Keeping My Budget?

Making a budget is important, but sticking to it matters even more. Examining your income and expenses monthly is helpful, but asking the key question, “How can I stay consistent with my budget?” can also be vital. Doing so can help you figure out what might be tripping you up and what you can do to be more consistent with your spending plan.

You might decide to do weekly or biweekly budget check-ins versus reviewing your budget once a month. Or you might start using a budgeting app that tracks your daily and weekly spending. These tools often link to your checking account and credit cards and will automatically download transactions. This can help you catch — and correct — small cash flow problems before they become bigger and completely derail your budget.

The Takeaway

The great thing about making a budget is that there’s always room to tweak and improve things. Asking the right budget questions is a good way to figure out what’s working (and what’s not) so you can make the most of your money each month.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.60% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How many budget categories should I have?

There’s no single right answer to how many budget categories someone should have. It’s possible to have 100 budget categories or more, depending on how much detail you go into when dividing up your income and expenses. At a minimum, you may want to have budget categories for fixed expenses, discretionary expenses, variable expenses, saving, and debt.

What does a realistic budget look like?

A realistic budget takes into account all of your income and divides it up to pay for your needs (including debt repayment) and some wants, as well as allowing room for saving. It should allow you to manage your money without feeling stressed or anxious.

How do you plan a budget?

Planning a budget starts with understanding your income and then diving into your expenses. As you make your budget, you can assign income to each expense you have, starting with the most important ones first. That usually means housing, utilities, food, transportation, and insurance. Paying down debt is also often a priority. From there, you can continue dividing up income to cover discretionary spending and savings.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

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