Apache is functioning normally
You may have heard that 20% is the ideal down payment on a house, but that doesn’t mean you must pony up that amount to become a homeowner. In truth, the average house down payment is considerably smaller. Currently, the median down payment for a house is 15%, according to data from the National Association of Realtors® (NAR).
Here, you’ll learn more about down payments so you can house-hunt like an insider. Getting a sense of what others are paying and how that differs based on geographic area is helpful. We’ll also share how you might access help if you can’t come up with 20%. Armed with this intel, you’ll be better prepared to navigate that major rite of passage: purchasing a home.
Table of Contents
Key Points
• The median down payment for a house in the US ranges widely from 10% to 35% of the purchase price.
• The amount of the down payment can vary based on factors like loan type, credit score, and lender requirements.
• A larger down payment can result in lower monthly mortgage payments and potentially better loan terms.
• Down payment assistance programs and gifts from family members can help with affordability.
• It’s important to save and plan for a down payment to achieve homeownership goals.
Average Down Payment Statistics
As of 2023, the median down payment for a house was 15%, or $63,908 if you consider that the median national home price in 2023 was $426,056, according to Redfin. This was up slightly from 13% in 2022, according to the NAR. (The median means half of buyers put down less and half put down more; it’s generally considered a better barometer than an average, because the latter can be thrown off by outliers — people who spend wildly more or less than usual.)
This 15% figure shows that the conventional wisdom that you need 20% down to purchase a home is, to a large extent, untrue. In fact, in an April 2024 SoFi survey of prospective homebuyers, many planned to put down far less than 20%. Almost a third of respondents (29%) said they planned to put down 10% or less, and 7% of those surveyed were exploring zero-down-payment options.
A 20% down payment will lower your mortgage amount and monthly payments vs. a smaller down payment, and will allow you to avoid private mortgage insurance (PMI), but it’s not the only game in town.
Average Down Payment on a House for First-Time Buyers
First-time buyers make about a third of all home purchases, and the typical down payment for first-time buyers in the NAR survey was 8%, while repeat buyers’ typical down payment was 19%. (Repeat buyers often have money from the sale of their first residence to put toward the purchase of their next one.)
Down Payment Requirements by Mortgage Loan Type
The amount of money you put down on a home may be governed in part by the type of mortgage loan you choose (and conversely, how much money you have saved for a down payment could dictate the type of mortgage you qualify for). Let’s take a look at the different loan types and their down payment requirements.
Remember that if you are buying your first home or you haven’t purchased a residence in three or more years, you may qualify as a first-time homebuyer and be eligible for special first-time homebuyer programs.
Conventional Loan
This is the kind of loan favored by most buyers, and for first-time homebuyers some conventional home loans can allow for as little as 3% down on a home purchase. A repeat homebuyer might need to put down a bit more — say 5%.
FHA Loan
An FHA loan, acquired through private lenders but guaranteed by the Federal Housing Administration, allows for a 3.5% minimum down payment if the borrower’s credit score is at least 580.
VA Loan and USDA Loan
These loans usually require no down payment, although there are still other hoops to jump through to qualify for one of these loans.
A VA loan backed by the Department of Veterans Affairs, is for eligible veterans, service members, Reservists, National Guard members, and some surviving spouses. The VA also issues direct loans to Native American veterans or non-Native American veterans married to Native Americans. For a typical VA loan borrower, no down payment is required.
A USDA loan backed by the U.S. Department of Agriculture is for households with low to moderate incomes buying homes in eligible rural areas. The USDA also offers direct subsidized loans for households with low and very low incomes. Typically, a credit score of 640 or higher is needed. While borrowers can make a down payment, one is not required.
Jumbo Loan
A jumbo loan is a loan for an amount over the conforming loan limit, which is set by the Federal Housing Finance Agency (FHFA). In most U.S. counties, the conforming loan limit for a single-family home in 2024 is $766,550. Minimum down payment rules for jumbo loans vary by lender but are generally higher than those for conforming loans. Some lenders require a 10% down payment, and others require as much as 20%.
For all of the above loan types, the home being purchased must be a primary residence in order to qualify for the minimum down payment, but a homebuyer can use a conventional or VA loan to purchase a multifamily property with up to four units if one unit will be owner-occupied.
Average Down Payment by Age Group
The latest NAR Home Buyers and Sellers Generational Trends Report breaks down by age the percentage of a home that was financed by homebuyers in 2023.
Older buyers tend to use proceeds from the sale of a previous residence to help fund the new home. Buyers 59 to 68 years old, for instance, put a median of 22% down, the NAR report shows.
Most younger buyers depend on savings for their down payment. Buyers ages 25 to 33 put down a median of 10%, and those ages 34 to 43, 13%. A fortunate 20% of the younger homebuyers (those age 25-33) received down payment help from a friend or relative.
Percentage of Home Financed
All buyers | Ages 25-33 | Ages 34-43 | Ages 44-58 | Ages 59-68 | Ages 69-77 | Ages 78-99 | |
---|---|---|---|---|---|---|---|
50% | 15% | 6% | 8% | 15% | 22% | 31% | 29% |
50-59% | 6% | 2% | 5% | 5% | 9% | 14% | 11% |
60-69% | 6% | 2% | 5% | 6% | 9% | 11% | 9% | 71-79% | 13% | 13% | 14% | 14% | 12% | 9% | 15% |
80-89% | 23% | 26% | 27% | 22% | 19% | 18% | 14% |
90-94% | 13% | 19% | 14% | 12% | 10% | 4% | 8% |
95-99% | 14% | 22% | 17% | 12% | 8% | 4% | 7% |
100% (financed the whole purchase) | 12% | 9% | 11% | 13% | 9% | 9% | 6% |
Average Down Payment by State
The average house down payment in any given state is tied to home prices in that location. You can look into the cost of living by state for an overview and then find the median home value in a particular state at a given point in time and estimate what your down payment might be.
The least expensive states in which to buy a home? Iowa, Oklahoma, Ohio, Mississippi, and Louisiana are among them, according to Redfin.
Average Down Payment On a House in California
California, the most populous state and one of the largest by area, is joined by Hawaii and Colorado on many lists of the most expensive states in which to buy a house. Redfin shows a median sales price of $859,300 in California in spring of 2024. A 3% down payment would be $25,779; 10% down, $85,930; and 20% down, $152,260. The Los Angeles housing market is among the toughest in California, with the median sale price up more than 10% in the last year to $1,050,000. You might want to check out housing market trends by city as well if you are interested in finding out where owning a home could be more or less expensive.
Hawaii comes out near the top with a median home price of $754,800. Three percent down would be $22,644; 10% down, $75,480; and 20%, $150,960. In Hawaii, the conforming loan limit is $1,149,825, a reflection of the state’s high home prices. If you need a mortgage for more than that amount in Hawaii, you’ll be in the market for a jumbo loan.
Recommended: How to Afford a Down Payment on Your First Home
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Source of Down Payment
You’re probably wondering where homebuyers get the money to afford a down payment, especially first-time homebuyers. NAR has polled buyers to probe that question. Not surprisingly, more than half of buyers (53%) simply say they have saved up the money — which of course isn’t simple at all.
Savings is especially likely to fund a home purchase for those ages 25-33. Almost three-quarters of younger buyers rely on it for their down payment. Older buyers also use savings but are more likely to draw on the sale of a primary residence. This is especially true after age 59.
Other down payment sources include gifts from relatives or friends, sale of stock, a loan or draw from a 401K or pension, or an inheritance. For those who don’t have generational wealth or savings to rely on, first-time homebuyer programs can make home ownership possible.
City, county, and state down payment assistance programs are also out there. They may take the form of grants or second mortgages, some with deferred payments or a forgivable balance.
How Does Your Down Payment Affect Your Monthly Payments?
Curious to see what your potential mortgage would look like based on different down payments? Start with a home affordability calculator (like the one below) to get a feel for how much you’ll need to put down and other expenses.
Or use this mortgage calculator to estimate how much your mortgage payments would be, depending on property value, down payment, interest rate, and repayment term.
If Your Down Payment Is Less Than 20%
If your down payment will be less than 20%, you now know that you’ll have plenty of company. (In SoFi’s survey, 14% of would-be buyers said not having an adequate down payment was their primary challenge.) Consider these ways to optimize the situation:
• A government loan could be the answer: FHA loans are popular with some first-time buyers because of the lenient credit requirements. The down payment for an FHA loan is just 3.5% if you have a credit score of 580 or more. Just know that upfront and monthly mortgage insurance premiums (MIP) always accompany FHA loans, and remain for the life of the loan if the down payment is under 10%. If you put 10% or more down, you’ll pay MIP for 11 years.
• You may be able to improve your loan terms: If you can’t pull together 20% for a down payment, you can still help yourself by showing lenders that you’re a good risk. You’ll likely need a FICO® score of at least 620 for a conventional loan. If you have that and other positive factors, you may qualify for a more attractive interest rate or better terms.
• You can eventually cancel PMI: Lenders are required to automatically cancel PMI when the loan balance gets to 78% LTV of the original value of the home. You also can ask your lender to cancel PMI on the date when the principal balance of your mortgage falls to 80% of the original home value.
You may be able to find down payment assistance: City, county, and state down payment assistance programs are out there, and SoFi’s survey suggests they don’t get enough attention: About half (49%) of the homebuyers who said they were challenged to come up with a down payment hadn’t looked into city or state down payment assistance programs. The assistance may take the form of grants or second mortgages, some with deferred payments or a forgivable balance.
[embedded content]
Dream Home Quiz
The Takeaway
What is the average down payment on a house? Currently, it’s about 15% of the home’s purchase price, which usually means mortgage insurance and higher payments for the buyer. But buyers who put less than 20% down on a house unlock the door to homeownership every day. If you want to join them, you can be helped along by low down payments for first-time homebuyers, as well as government loans, down payment assistance, and other programs.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Is 10% down payment enough for a house?
Yes. More than a third of all buyers put down 10% or even less to buy a home. Lower down payments are especially common among younger and/or first-time homebuyers.
What is the minimum you should put down on a house?
Conventional wisdom says the minimum down payment is 20%, but most buyers put down less — 15% is far more common. Younger buyers and first-time homebuyers, especially, often put down far less and some home loans allow you to finance 97% or even 100% of the home’s cost.
What factors can affect my down payment requirements?
The amount of down payment you’ll need to come up with depends on your loan type, credit history and credit score, the cost of the property you’re buying, and whether you are a first-time homebuyer.
What are the pros and cons of putting down less than 20% on a house?
Putting down less than 20% on a house might allow you to buy a home sooner. It might also permit you to set aside money for renovations or to pay off other debts. The disadvantage is that those who put down less than 20% usually have to pay for private mortgage insurance which adds to their monthly costs. (Those with FHA loans who put down less than 20% will pay a mortgage insurance premium.)
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
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.
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.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
SOHL-Q324-107
Source: sofi.com
Apache is functioning normally
Security cameras are legal to purchase and use to protect your home or business, with some exceptions. U.S. states have specific laws about security cameras with slightly different standards for consent to recording and hidden cameras in private or public settings.
In general, don’t place a camera anywhere someone would have a “reasonable expectation of privacy,” including bedrooms, bathrooms and guest rooms — even cameras pointing into a neighbor’s private spaces
.
If your cameras have audio capabilities and can pick up a conversation, remember that some states have “all-party consent” laws that require everyone talking to consent to the conversation being recorded.
Camera laws to know about
Expectation of privacy
The concept of reasonable expectation of privacy is a part of the Fourth Amendment of the U.S. Constitution
. It originally referred to government intrusion into private spaces but is also used to assess home security scenarios. For example, an overnight guest has a reasonable expectation of privacy in a home.
As security technology evolves, there may be new interpretations of this right on a case-by-case basis, but in general, it’s best to keep cameras out of places where people can reasonably expect not to be recorded. For example, a landlord might be able to place a security camera in a common area, such as a lobby, but might not be able to place a security camera inside a rented apartment.
One-party consent
Some federal consent laws for recording primarily concern audio, not video. For example, 18 U.S. Code §2511 pertains to the recording of conversations — over the phone or in person through a security camera — if at least one person involved has consented
. Some states require everyone involved in a conversation to consent to being recorded.
Camera laws by state
State laws concerning video and audio recording can have slightly different wording, but in general they maintain the same principle as federal laws: keep cameras out of places where people have a reasonable expectation of privacy. Here are some examples.
Recording
-
With consent. Arkansas and Hawaii, for example, require consent to record anyone in a private space
. In Georgia, you’ll need consent unless you’re recording on your own property for security purposes, as long as you don’t invade anyone’s reasonable expectation of privacy.
-
No confidential information. In California, it’s illegal to record “confidential” communications
.
-
No trespassing. In Minnesota, it’s illegal to enter someone’s private property to install a camera or to record through the window of someone else’s home
.
Hidden cameras
-
In many states, such as Alabama, Arkansas, Delaware, Kansas, Maine, Michigan, New Hampshire, South Dakota, Tennessee and Utah, you need someone’s consent to record them with a hidden camera (in some states, it’s worded as using hidden cameras in places with a reasonable expectation of privacy).
What happens if I record someone without their consent?
Invasion of privacy can be a misdemeanor or a felony, depending on the state laws and what was recorded. If someone is recorded without their consent, they may be able to sue the party responsible
.
How do I prevent my security cameras from violating privacy laws?
Keep security cameras out of private spaces, such as bedrooms and bathrooms. If a camera can see into a neighbor’s property, change the angle or take advantage of privacy features from home security providers, many of which allow you to tailor a “privacy zone” that blocks out part of a camera’s view field.
Most security cameras we’ve tested have a “privacy shutter” that keeps the view field blocked most of the time, only opening when motion is detected and the system is armed.
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.
Source: nerdwallet.com
Apache is functioning normally
Though the Halepuna Waikiki by Halekulani hotel sits in the heart of tourist-packed Waikiki on the island of Oahu, it’s quiet and relaxed. The 284-room boutique hotel offers a refreshing alternative to the sprawling resorts that dominate the area.
But the real standout about this boutique oasis? No resort fees.
I visited Halepuna Waikiki for two nights, as part of a longer trip to Oahu. The resort initially caught my attention for its lack of resort fees. I grew even more interested when I learned about how much it included. Notably, it offered complimentary access to multiple museums that I had long been yearning to visit given my family’s Hawaiian heritage.
Though nightly rates typically run over $300 a night (slightly higher than Oahu’s average nightly hotel room rate of $272, based on May 2024 data from the Hawai‘i Tourism Authority), the free museum access alone went a long way in justifying it. Without that complimentary access, my travel companion and I otherwise would have spent more than $150 combined on museum tickets.
That made the decision easy — and it didn’t hurt that the hotel was quite fancy, too.
About the Halepuna Waikiki
Halepuna Waikiki by Halekulani is the sister property of Halekulani, On the Beach at Waikiki —one of the oldest (and most famous) Waikiki beach hotels. As for the Halepuna Waikiki, this property is relatively new. It opened in October 2019, but closed for more than a year during the COVID-19 pandemic.
The hotel reopened in April 2021 with several awards and titles to its name. That includes a AAA Four Diamond Award, which is a prestigious award recognizing hotels for their upscale style, amenities and service.
Features include a rooftop infinity pool with ocean views, plus a sleek lobby designed with custom light fixtures, vaulted ceilings and floor-to-ceiling windows that offer up a light and airy aesthetic.
The Halepuna Waikiki location
The Halepuna Waikiki offers the best of both worlds in that it has ocean views without sitting directly on the beach. That means you can still get a great view without the exorbitant beachfront price tag.
The hotel sits just one block from the beach on one side, and one block from Kalakaua Avenue — Honolulu’s main shopping street — on the other side. Since the hotel sits tucked away on a side street, it tends to be a little quieter than most other Waikiki hotels, and it usually won’t have as many non-hotel guests wandering through the lobby.
Halepuna parking is available, but it’s not cheap. Whether you opt for valet or self-parking, you’ll pay $50 per day. Given the hefty parking fee coupled with the hotel’s prime, walkable location, you might not actually want a rental car in Honolulu anyway.
To get there from the airport, it’s usually best to take a taxi or rideshare. Ubers generally cost about $30 to $40 between Honolulu’s Daniel K. Inouye International Airport and the hotel.
Halepuna Waikiki rooms
Halepuna Waikiki by Halekulani has 284 guest rooms and four suites. The best views are from the oceanview rooms on higher floors (floors 19 through 23), as they’re not obstructed by the buildings in front.
These Deluxe Ocean View rooms tend to cost about 15% more than the Ocean View rooms with obstructed views and about 30% more than the standard Waikiki view rooms.
The rooms have modern amenities, like a bedside and dress charging station with ports for USB and HDMI, plus a Bluetooth connection. Shades are remote controlled, and bathrooms have nice features like a lighted vanity and magnifying mirror.
The rooms also have some nods to the local culture. For example, each room has a unique photo taken by a local photographer, and the bath amenities use locally-sourced Hawaiian oils and extracts.
All rooms also have a refrigerator and coffee maker. The complimentary refillable water bottles make for a great souvenir.
Key amenities at the Halepuna Waikiki
The rooftop infinity pool on the hotel’s eighth floor is remarkable.
The area also has a hot tub, plenty of lounge chairs and cabanas available for rent. Conveniently, complimentary sunscreen is available for hotel guests.
A rooftop garden and grass turf space adjacent to the pool is a nice place to sunbathe outside of the pool deck.
The eighth floor also offers a gym, which offers fairly standard equipment like cardio machines and dumbbells.
One unique feature caters to the workcation crowd — the business center and hospitality suite. This room offers work desks where hotel guests can post up with no reservations required. If you do need to reserve a private space, there’s also a separate, bookable meeting room that accommodates up to 24 people.
One underrated amenity is a coin-operated laundromat, which is also located on the eighth floor.
In addition to the on-property amenities, the Halepuna offers some free events and tickets. For example, guests can participate in complimentary, daily surf demonstrations held on the beach in front of Halekulani.
Halepuna guests also receive complimentary admission at the biggest museums in the state, including the Bishop Museum and Honolulu Museum of Art. Given that general adult admission costs $34 to the Bishop Museum and $25 to the Honolulu Museum of Art, that alone could go a long way in justifying the hotel room rate.
Halepuna Waikiki restaurants
The Halepuna has two restaurants:
Halekulani Bakery: This morning spot serves coffee and pastries, and it’s most famous for its Halekulani Coconut Cake.
Umi By Vikram Garg: This seafood-centric restaurant open for breakfast and dinner is located in the hotel lobby. Each dish uses high-end and unique ingredients, such as fried rice made with seafood, bacon and koshihikari rice. Even the pancakes are elevated; the “Mai Tai Pancake” is served with caramelized pineapple and a rum-coconut essence.
Halekulani restaurants
Dining options are slim at Halepuna, but that’s where Halekulani, its sister property across the street, shines. The hotel has about a half-dozen different places to eat, and Halepuna guests can charge purchases made at Halekulani back to their room.
La Mer: The award-winning La Mer serves French cuisine with ‘flavors of Hawaii.’
Orchids: Though it’s open all day, Orchids is a great spot for Waikiki brunch in particular, as well as Waikiki afternoon tea given its ocean views and diverse menu that embraces both Asian and American cuisine.
House Without A Key: Then there’s one of the most famous restaurants in Waikiki: House Without A Key. Though it’s not fancy, it’s still an elevated spot for lunch, dinner or drinks. Don’t plan on rushing through a meal here, as the draw is enjoying the Hawaiian music and hula performances held in front of the restaurant’s century-old kiawe tree.
It’s all outdoor seating, though there’s an expansive, covered area offering an open-air, indoor-like place to eat.
The food is just as good as the vibes. There’s all sorts of burgers, fish and flatbreads. The highlight, though, is found on the sunset cocktail menu: kabayaki fries. With this dish, fries are doused in the famous Japanese sauce, and then topped with furikake, garlic, onions and kewpie mayonnaise. Don’t miss it.
Who is the Halekulani Waikiki best for?
The Halepuna Waikiki by Halekulani offers the perfect combination of modern yet luxurious touches, a tucked-away atmosphere plus a prime Waikiki location – all at a competitive price, especially considering the absence of resort fees.
The complimentary cultural access and exclusive privileges at the Halekulani elevate the experience even further. For travelers seeking a luxurious and intimate escape in Waikiki, the Halepuna Waikiki is one of the best hotels in Waikiki.
Booking the Halekulani Waikiki
There are a few ways to pay for your stay, so compare prices before booking. Booking options include:
Direct through Halepuna: When you book directly on Halepuna’s website, you can take advantage of exclusive offers. These vary by time of year, but often include deals like free breakfast for two.
I Prefer Hotel Rewards: The free-to-join hotel loyalty program doesn’t have a huge presence in the U.S., but it serves hundreds of hotels and resorts worldwide. Like most hotel loyalty programs, members can rack up points to exchange for free nights. Plus, members have access to exclusive rates, early check-in and space-available room upgrades.
The hotel also usually appears on American Express Travel, where it’s part of the issuer’s Fine Hotels + Resorts® program. Cardholders who pay with their The Platinum Card® from American Express can get up to $200 in statement credits per calendar year on prepaid bookings through Fine Hotels + Resorts® or The Hotel Collection bookings through American Express Travel. (The Hotel Collection requires a minimum two-night stay.) Though that card has an annual fee of $695 (see rates and fees), the statement credits can go a decently long way in justifying it. Terms apply.
Plus, AmEx cardholders who book through FHR are eligible for space-available room upgrades, complimentary breakfast, a $100 property credit and late checkout. Terms apply.
How to maximize your rewards
Source: nerdwallet.com
Apache is functioning normally
How much drivers pay at the gas pump — averaging $3.22 per gallon in September — depends largely on the price of oil and the cost of refining it. But federal, state and local taxes and fees can add significantly to the total.
On top of a federal tax of 18.4 cents per gallon, most states levy multiple taxes and fees on a gallon of gas. Those include some combination of excise taxes (imposed on goods, services and activities), sales taxes, environmental taxes and inspection fees.
Those costs add up to an average of 32.6 cents per gallon in state taxes, according to a NerdWallet analysis of U.S. Energy Information Administration data. Combined with the federal tax, that’s about 51 cents per gallon, on average, factored into the gas prices you see at your local station.
States with the highest gas tax
State tax rates vary widely. California’s rate (69.8 cents per gallon) and Illinois’s rate (67.1 cents) are highest, followed by Pennsylvania (58.7 cents). Alaska has, by far, the lowest state tax (9 cents per gallon), followed by Mississippi (18.4 cents) and Hawaii (18.5 cents).
2024 state gas tax hikes
In many cases, gas taxes are adjusted annually based on the consumer price index, a proxy for inflation calculated by the U.S. Bureau of Labor Statistics. That means taxes may rise (or fall) with the annual rate of inflation. Sometimes states also phase in new or higher fees by increasing them incrementally.
As for what happens with that tax revenue, states often use it to fund infrastructure improvements and environmental initiatives.
Oct. 1 gas tax hike
Washington D.C.’s motor fuel surcharge will tick up slightly from 11.4 cents per gallon to 11.8 cents per gallon on Oct. 1, according to the D.C. Office of Tax and Revenue. That fee is added to the district’s 23.5-cent sales tax on gasoline. Altogether, drivers pay 35.3 cents per gallon in state taxes when they fill up.
July 1 gas tax hikes
Gas taxes in seven states went up on July 1, generally by less than 2 cents.
California
California’s excise tax on gas rose from 57.9 cents per gallon to 59.6 cents per gallon, according to the California Department of Tax and Fee Administration. When other state taxes and fees are taken into account, the state tax on a gallon of fuel in California rose from about 68 cents to about 70 cents.
Colorado’s road usage fee increased from 3 cents per gallon to 4 cents per gallon, according to the Colorado Department of Revenue. Additionally, an environmental fee increased from 0.6 cents per gallon to about 1.3 cents per gallon. Those fees are on top of a 22-cent gas tax. Altogether, the state tax on gas increased from about 26 cents per gallon to about 28 cents per gallon.
The Illinois gas tax increased from 45.4 cents per gallon to 47 cents per gallon, according to the Illinois Department of Revenue. All told, the state tax on gas increased from 66.5 cents per gallon to 67.1 cents per gallon in state taxes — the second highest in the country.
In Indiana, the gas tax increased from 34 cents to 35 cents per gallon, according to the Indiana Department of Revenue. In addition to the excise tax and a 1-cent oil inspection fee, the state charges a gasoline use tax. That tax rate is adjusted on a monthly basis. In July, the use tax rate is 20.1 cents per gallon. In all, Indiana drivers pay state taxes totaling 56.1 cents per gallon.
Missouri’s motor fuel tax rate increased from 24.5 cents per gallon to 27 cents per gallon, according to the Missouri Department of Revenue. Combined with two other fees levied on a gallon of gas, totaling about half a cent, the state taxes add up to 27.5 cents per gallon.
Nebraska’s fuel tax rate went up half a cent to 29.6 cents per gallon, according to the Nebraska Department of Revenue. Combined with an environmental fee, drivers in the state pay 30.5 cents per gallon in state taxes.
The Virginia motor fuels tax rate increased from 29.8 cents per gallon of gas to 30.8 cents per gallon, according to the Virginia Department of Motor Vehicles. The state’s motor vehicle fuels sales tax rate for gas increased from 8.7 cents per gallon to 9 cents. In all, motorists pay 40.4 cents per gallon in state taxes.
Source: nerdwallet.com
Apache is functioning normally
While there’s no official guideline on what makes a salary “good,” a $20,000 salary is not typically enough for a household to live comfortably in most parts of the United States. Certainly, each person’s situation is unique in terms of their assets and expenses, but an individual making $20K a year may have a hard time making ends meet. They might need to rely on assistance from family, friends, and/or the government to afford basic necessities.
A $20,000 salary puts a single person above the poverty threshold for 2024. An individual supporting themselves plus one or more people on $20K a year, however, will live below the poverty threshold. With the record-high inflation we’ve seen in recent years, affording basic needs on a $20,000 salary has become even more challenging.
So is $20K a year good? While a $20,000 salary averages out to more than the federal minimum wage of $7.25/hour for full-time work, it is likely not an adequate income for anyone living independently and especially those with a family. In this piece, we’ll cover:
• The current American median income.
• Is $20K a year good?
• A breakdown of a $20,000 salary.
• The best and worst places to live on $20,000.
• Tips for living on $20K a year.
Factors to Determine if a $20,000 Salary Is Good
A $20,000 salary will be challenging for anyone to live on, but a few factors may determine if it can be done — or if it’s impossible:
• Taxes: If you are filing singly, a $20,000 salary will put you at the 12% federal income tax bracket. You may owe additional taxes for your state, city, and/or school district. For the sake of example, assume a flat 15%. That means, although you make $20,000, you only bring home $17,000 after taxes.
• Family size: Single individuals without children can make $20,000 stretch more easily. Two or more people living off a $20,000 salary will face more challenges.
• Location: Money goes further in some places more than others. If you live in an area with a low cost of living, a $20,000 salary may be more manageable. But if you live in a popular city, $20,000 a year may not even cover rent.
• Debt: If you have debt, it can be more challenging to allocate your limited money to basic necessities and important financial goals, like building an emergency savings fund. If you are dealing with high-interest debt, you probably know how quickly this debt can grow when you are only paying the minimum amount due.
How Does a $20,000 Salary Compare to the American Median Income?
According to the most recent U.S. Census Bureau report, median household income was $80,610 in 2023. Keep in mind, though, that this number represents all households, which may include more than one earner. According to the Bureau of Labor Statistics, median weekly earnings for American workers was $1,117 in 2023, which comes out to $58,084.
Either way, $20,000 is far below either estimate for a median income. If you earn $20,000 and have a domestic partner or spouse who earns additional income, your salaries together might get you closer to the median income level.
$20,000 Salary Breakdown
Again, no judgment here: It’s not a matter of if a $20,000 salary is good or bad. To someone just out of high school, $20K a year might look like a good entry-level salary. But anyone who has handled monthly bills like rent and utilities will likely recognize that a $20,000 salary may be insufficient.
Here’s how a $20,000 annual salary breaks down:
• Monthly income: $1,666.66
• Biweekly paycheck: $769.23
• Weekly income: $384.62
• Daily income: $76.92 based on working 260 days a year
• Hourly income: $9.62 based on working 2,080 hours a year
These estimates do not account for taxes. In the example above, a $20,000 salary may shrink to $17,000 after Uncle Sam has taken his cut.
Recommended: Is Making $100K a Year Good?
Can You Live Individually on a $20,000 Income?
It is possible to live individually on a $20,000 income, but you will likely only be able to afford the items on your basic living expenses list if you aren’t able to supplement your income. Living comfortably — with easy access to good health care (including mental health), balanced nutrition, safe housing, and efficient transportation — may be far more challenging on $20,000 a year.
If you make $20,000 a year, you might be able to minimize monthly expenses by looking for government assistance, getting a roommate or moving in with family, cooking at home, and using an online bank account with a high interest rate and automatic savings features.
How Much Rent Can You Afford Living on a $20,000 Income?
Wondering how much you can afford to spend on rent? Researchers have long argued that you should spend no more than 30% of your income on housing. With rising inflation and increasing rent prices, however, that’s not always possible.
If you were to stick to the 30% rule (and forget about income taxes for the sake of the example), that means you can spend $6,000 a year on rent, or $500 a month. But the median cost of rent in the U.S. was $2,100 as of September 2024, according to Zillow. That’s about four times what you could afford on $20K a year.
To afford rent on a $20,000 salary, it’s a good idea to live in a place with a very low cost of living and to have one or more roommates who can help share living expenses of rent and utilities with you. Moving in with family is also a solution if you cannot afford rent on your salary.
Best Places to Live on a $20,000 Salary
If you are making $20,000 a year (or $9.62 an hour), it might be a good idea to explore cities and states with a low cost of living.
These are the five least expensive cities to live in for 2024-2025, per U.S. News:
• Fort Wayne, Indiana
• Huntsville, Alabama
• Wichita, Kansas
• Springfield, Missouri
• Davenport, Iowa
Living outside a city altogether is usually more affordable. Consider a rural location in one of these five cheapest states to live in:
• Arkansas
• Mississippi
• Alabama
• West Virginia
• South Dakota
Recommended: Typical Monthly Expenses for a Single Person
Worst Places to Live on a $20,000 Salary
On the flip side, there are some major cities that are exorbitantly expensive to live in. If possible, it’s a good idea to avoid living in the following locations when you are living on $20,000 a year:
• Hartford, Connecticut
• Los Angeles, California
• Miami, Florida
• New Haven, Connecticut
• New York City, New York
California cities clearly carry a high cost of living, but other states are also expensive. If you have a $20,000 annual salary, it’s a good idea to steer clear of any of the five most expensive states to live in:
• Hawaii
• New York
• California
• Massachusetts
• Oregon
Is a $20,000 Salary Considered Poverty?
A $20,000 salary is above the poverty line for an individual, but if you are a couple or a family of three or more people living on a $20,000 salary, the government considers you to be below the poverty line.
These numbers do not consider factors like variable cost of living. A localized poverty line could be more telling, especially if you live in a place with a high cost of living. If you are, say, living in a pricey city and earning $20,000 a year, you might be feeling the financial pinch more.
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.50% APY on your cash!
Tips for Living on a $20,000 Budget
While advocating for a higher salary can infuse your line item budget with more funds, you can’t necessarily count on a raise. Taking other steps now may make it easier to live on your $20,000 salary.
Finding Out What Assistance You Qualify For
If you are making $20,000 or less, you may qualify for government assistance. Here are a few actions to consider taking:
• Work with the U.S. Department of Housing and Urban Development for assistance with rent, including the Section 8 program.
• Determine if you are eligible for assistance with grocery bills through the Supplemental Nutrition Assistance Program (SNAP).
• Research the Low Income Home Energy Assistance Program (LIHEAP) to help with utilities.
• See if you can lower your phone bill through the Lifeline Modernization Order .
• Find out if you are eligible for free or low-cost health coverage through Medicaid and the Children’s Health Insurance Program (CHIP).
Coming Up With a Housing Plan
If you do not qualify for rental assistance from the government, you may need to come up with another plan to avoid high rent costs. Roommates can be a good way to keep rent low.
Alternatively, family and friends may be willing to offer free lodging while you save money. While it can be hard to lean on others in this way, it can be a form of financial self-care to do so until you are able to be out on your own. If you do move in with a loved one, just remember to be helpful around the house and chip in with utilities and groceries if you’re able.
Cutting Costs
After reducing your largest cost (rent), it may be possible to reduce other costs in your budget. For example, a car payment, gas, and car insurance can be costly monthly expenses. If you live in an area with great public transportation or are comfortable walking and riding a bike, you may be able to get around without owning your own vehicle.
Other costs you might be able to cut include streaming services, gym memberships, and bills from dining out.
Getting on a Budget
After finding low-cost housing and trimming unnecessary expenses, it’s a good idea to make a monthly budget that accounts for your post-tax income and your monthly expenses.
Not sure how to budget on a $20K salary? Taking care of all necessary bills (housing, utilities, groceries) is the perfect first step. Once you’ve accounted for those monthly expenses, see how much you can allocate to paying down debt or building your savings.
Recommended: How to Save Money From Your Salary
Avoiding the Wrong Kinds of Debt
Taking on debt is often necessary — when buying a house, purchasing a car, or even going to college. But when you make a low salary and struggle to pay the bills, it can be tempting to take out a payday loan or overuse a high-interest credit card.
When possible, it’s a good idea to avoid high-interest loans. In fact, instead of taking on more credit card debt, you may be able to take control of your bad debt by applying for a debt consolidation loan. These are typically personal loans that charge an interest rate that may be significantly lower than your credit cards’ rates. You use the loan to pay off the cards and then you work to eliminate the personal loan.
You might also meet with a counselor from a nonprofit debt counseling organization like the National Foundation for Credit Counseling, or NFCC .
Recommended: Debt Repayment Strategies
Supplementing Your Basic Income
You might also consider ways to bring in more income to pump up your spending power. This could include seeing if additional hours are available at your primary workplace, as well as taking on a seasonal part-time job or starting a side hustle. These are all ways to use some of your leisure time to bump up your income.
The Takeaway
A $20,000 is usually not enough for a family to live on, and it may be difficult for individuals to get by on this salary too. It may be wise to research government assistance, look for roommates to lower housing costs, and build (and stick to) a monthly budget that prioritizes paying down debt and building emergency savings. These steps can help you live on a $20,000 annual income.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.50% APY on SoFi Checking and Savings.
FAQ
Can you live comfortably on $20,000 a year?
It can be difficult for an individual to live comfortably on $20,000 a year. With the right assistance from friends, family, and the government, however, it may be possible to meet basic needs. Families will face more challenges living off $20,000 a year.
What can I afford making $20K a year?
A $20,000 salary may leave room in your budget for the most basic expenses: rent, utilities, transportation, and groceries. Even then, getting government assistance and a roommate might be necessary for managing monthly expenses on $20K a year.
Is $20,000 a year middle class?
According to the most recent data from the Pew Research Center, middle class, middle-income households have incomes ranging from about $56,600 to $169,800. Thus, a family living on $20,000 is not middle class; it’s actually below the poverty level. While an individual earning $20,000 a year is not below the poverty line, they are still not considered middle class.
Photo credit: iStock/svetikd
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.50% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
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 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOBNK-Q324-098
Source: sofi.com
Apache is functioning normally
If you’ve always dreamed of opening your own business, now may be the time. The entrepreneurial spirit is thriving in the U.S. as historic numbers of Americans start their own companies. In 2023, a record 5.5 million new business applications were filed, according to the U.S. Census Bureau. The trend started in 2020 during the pandemic and has accelerated ever since.
There are many reasons why new business is big business today. For some individuals, the allure of running their own enterprise is a motivation too strong to resist. Others see opportunity created by changing consumer tastes and needs. For yet other people, starting a business may be a way to start over after a job layoff.
Small businesses are the backbone of the U.S. economy, employing 46% of the workforce, according to the Small Business Administration (SBA). But of course, a new business needs to stay in business. And one of the key factors that can help determine its success: Location, location, location.
So then, where is the best place to start a business? In what cities can a new business not only find its footing but go on to flourish?
To discover the answer, SoFi looked at the 50 largest cities across the U.S. with populations of 500,000 or less, and ranked them on eight different criteria, including annual business applications, average cost of office space, unemployment rates, and cost of living. We assessed the criteria for each city on a 10-point scale for a possible total score of 80 points. (See below for the complete details about our methodology.)
What we found was that while businesses are starting nationwide, certain cities across the country seem to be particularly beneficial for new businesses. Read on to learn the 10 best cities to start a business in the U.S.
Key Points
As SoFi analyzed the data about each city, these important findings stood out:
• The South is a hotspot for new businesses. Three of the top 10 cities on our list are in Florida, and all score high in self employment. Plus, Florida has increasing numbers of businesses owned by underrepresented groups. Atlanta, the Number 3 city overall, has a large population of working age people and ranks high for new business applications.
• Cold-weather cities are offering new businesses a warm welcome. Minneapolis clinched the Number 2 spot on our list, and St. Paul, Minnesota and Madison, Wisconsin scored in the top 10. All three have large populations of working age people.
• Texas is poised to become a new-business powerhouse. The Lone Star State has 2 of the top 10 cities on the list — Plano and Irving. Younger people are gravitating to Texas, giving new businesses in these cities plenty of working age adults to employ.
Our Findings
Reviewing the entire list of cities in the SoFi analysis reveals some important, even surprising, information for aspiring business owners. For instance, Miami is the city with the most new business applications and highest level of self employment, while Witchita, Kansas, offers the best prices for office space, and Cleveland has the lowest cost of living.
Check out how other top cities rank when it comes to opening a new business.
Ranking | City | Walkability Score | Cost of Living Score | Office Space Cost Score | Household Income Score | Unemployment Score | New Business Score | Self-Employment Score | Working Age Score | Total Score |
---|---|---|---|---|---|---|---|---|---|---|
1 | Miami, Florida | 8.85 | 3.74 | 0.44 | 4.46 | 5.14 | 10.00 | 10.00 | 9.50 | 52.13 |
2 | Minneapolis, Minnesota | 8.16 | 4.55 | 4.60 | 6.21 | 4.73 | 3.17 | 9.71 | 10.00 | 51.13 |
3 | Atlanta, Georgia | 5.52 | 4.14 | 2.65 | 6.32 | 4.05 | 9.75 | 7.88 | 9.99 | 50.30 |
4 | Plano, Texas | 4.71 | 3.43 | 3.79 | 8.60 | 6.22 | 4.26 | 8.68 | 9.21 | 48.89 |
5 | St. Louis, Missouri | 7.59 | 5.45 | 5.27 | 4.31 | 4.73 | 3.55 | 8.22 | 9.36 | 48.48 |
6 | St. Paul, Minnesota | 8.16 | 4.85 | 5.36 | 5.69 | 5.27 | 2.50 | 6.98 | 9.25 | 48.06 |
7 | Orlando, Florida | 4.71 | 4.44 | 2.88 | 5.39 | 5.14 | 7.05 | 8.66 | 9.74 | 48.01 |
8 | St. Petersburg, Florida | 4.94 | 4.75 | 3.23 | 5.72 | 5.95 | 5.62 | 8.77 | 8.99 | 47.97 |
9 | Madison, Wisconsin | 5.75 | 4.19 | 5.10 | 6.09 | 7.30 | 2.31 | 6.61 | 9.99 | 47.34 |
10 | Irving, Texas | 5.17 | 4.60 | 5.36 | 6.24 | 5.81 | 4.57 | 5.90 | 9.31 | 46.97 |
11 | Lincoln, Nebraska | 5.06 | 5.05 | 5.79 | 5.52 | 6.62 | 1.94 | 7.60 | 9.14 | 46.71 |
12 | New Orleans, Louisiana | 6.67 | 4.65 | 4.71 | 5.10 | 2.97 | 5.32 | 7.85 | 9.04 | 46.30 |
13 | Jersey City, New Jersey | 10.00 | 2.78 | 0.00 | 7.41 | 5.00 | 3.89 | 7.35 | 9.86 | 46.29 |
14 | Lubbock, Texas | 4.48 | 5.35 | 5.49 | 4.78 | 6.35 | 2.36 | 8.09 | 9.34 | 46.25 |
15 | Omaha, Nebraska | 5.52 | 5.15 | 5.59 | 5.71 | 5.81 | 2.85 | 6.58 | 8.89 | 46.10 |
16 | Pittsburgh, Pennsylvania | 7.13 | 5.20 | 4.28 | 4.90 | 5.41 | 2.43 | 6.61 | 9.63 | 45.58 |
17 | Lexington-Fayette, Kentucky | 3.91 | 4.90 | 5.69 | 5.38 | 5.14 | 2.86 | 8.31 | 9.20 | 45.39 |
18 | Colorado Springs, Colorado | 4.14 | 3.99 | 4.94 | 6.43 | 5.00 | 4.11 | 7.61 | 9.10 | 45.32 |
19 | Virginia Beach, Virginia | 3.79 | 4.14 | 4.86 | 7.12 | 6.22 | 3.84 | 6.12 | 8.94 | 45.04 |
20 | Arlington, Texas | 4.37 | 4.70 | 5.26 | 5.83 | 5.14 | 3.58 | 6.44 | 9.21 | 44.52 |
21 | Tulsa, Oklahoma | 4.48 | 5.45 | 5.53 | 4.61 | 4.46 | 3.21 | 7.75 | 8.80 | 44.30 |
22 | Gilbert, Arizona | 3.33 | 3.33 | 2.71 | 9.37 | 6.08 | 3.83 | 6.65 | 8.85 | 44.16 |
23 | Santa Ana, California | 7.70 | 2.27 | 3.94 | 6.85 | 5.27 | 2.99 | 5.56 | 9.42 | 44.01 |
24 | Reno, Nevada | 4.60 | 3.79 | 4.41 | 6.64 | 5.14 | 3.55 | 6.72 | 9.10 | 43.95 |
25 | Aurora, Colorado | 4.94 | 3.84 | 4.40 | 6.40 | 5.14 | 3.77 | 6.19 | 9.24 | 43.91 |
26 | Durham, North Carolina | 3.45 | 4.70 | 3.63 | 6.08 | 5.54 | 3.61 | 7.41 | 9.44 | 43.85 |
27 | Long Beach, California | 8.39 | 2.07 | 2.18 | 6.43 | 4.05 | 3.46 | 7.59 | 9.60 | 43.77 |
28 | Chandler, Arizona | 4.02 | 3.59 | 4.40 | 8.08 | 5.81 | 3.83 | 4.79 | 9.20 | 43.72 |
29 | Anaheim, California | 6.44 | 1.82 | 4.70 | 7.20 | 5.27 | 2.99 | 5.88 | 9.24 | 43.55 |
30 | Corpus Christi, Texas | 4.60 | 5.25 | 6.11 | 5.21 | 5.14 | 1.94 | 6.37 | 8.85 | 43.47 |
31 | Tampa, Florida | 5.75 | 4.60 | 0.23 | 5.43 | 4.86 | 5.61 | 7.43 | 9.54 | 43.45 |
32 | Buffalo, New York | 7.70 | 5.66 | 6.01 | 3.76 | 3.92 | 2.02 | 4.90 | 9.04 | 43.00 |
33 | Irvine, California | 4.94 | 0.00 | 2.04 | 10.00 | 5.41 | 2.99 | 7.89 | 9.72 | 42.98 |
34 | Oakland, California | 8.62 | 0.81 | 0.03 | 7.68 | 4.46 | 2.43 | 9.40 | 9.44 | 42.86 |
35 | Wichita, Kansas | 4.02 | 5.35 | 6.45 | 4.94 | 5.00 | 2.50 | 5.75 | 8.78 | 42.79 |
36 | Honolulu, Hawaii | 7.59 | 0.66 | 2.98 | 6.73 | 6.35 | 2.46 | 7.24 | 8.74 | 42.74 |
37 | Raleigh, North Carolina | 3.56 | 4.39 | 2.40 | 6.40 | 5.95 | 3.95 | 6.32 | 9.69 | 42.65 |
38 | Henderson, Nevada | 3.45 | 4.04 | 3.55 | 6.94 | 4.32 | 4.45 | 7.21 | 8.33 | 42.29 |
39 | Cincinnati, Ohio | 5.63 | 5.20 | 6.06 | 4.00 | 3.38 | 3.28 | 5.20 | 9.50 | 42.25 |
40 | Fort Wayne, Indiana | 3.68 | 5.45 | 6.19 | 4.74 | 4.73 | 2.67 | 5.83 | 8.52 | 41.81 |
41 | Greensboro, North Carolina | 3.33 | 5.30 | 5.16 | 4.48 | 4.19 | 3.55 | 6.57 | 9.20 | 41.78 |
42 | Anchorage, Alaska | 3.56 | 3.38 | 2.40 | 7.79 | 5.27 | 2.83 | 7.05 | 9.14 | 41.42 |
43 | Toledo, Ohio | 5.29 | 5.61 | 6.28 | 3.69 | 2.70 | 2.75 | 6.25 | 8.72 | 41.29 |
44 | Riverside, California | 4.94 | 3.13 | 4.68 | 6.79 | 4.46 | 2.34 | 5.33 | 9.44 | 41.11 |
45 | North Las Vegas, Nevada | 3.91 | 4.55 | 4.50 | 5.84 | 3.24 | 4.45 | 4.11 | 9.04 | 39.63 |
46 | Chula Vista, California | 5.29 | 2.12 | 2.66 | 8.29 | 1.62 | 2.57 | 6.95 | 9.14 | 38.65 |
47 | Cleveland, Ohio | 6.55 | 5.81 | 5.63 | 3.03 | 0.00 | 3.77 | 4.87 | 8.98 | 38.64 |
48 | Newark, New Jersey | 8.74 | 4.24 | 3.11 | 3.78 | 1.22 | 4.45 | 3.89 | 9.11 | 38.53 |
49 | Stockton, California | 5.06 | 3.69 | 5.22 | 5.82 | 3.38 | 2.11 | 4.44 | 8.81 | 38.53 |
50 | Bakersfield, California | 4.25 | 3.89 | 5.39 | 6.00 | 3.51 | 1.73 | 4.57 | 8.61 | 37.97 |
The Top 10 Cities to Start Your Own Business
The best cities for new businesses tend to be in the South and Midwest, our research found. But no matter where they are located, each of the cities in our top 10 has attributes that make them great locations for aspiring business owners.
1. Miami, FL
Score: 52.13
This vibrant metropolis combines the perks of big-city life, such as an exciting food and nightlife scene and renowned museums and art galleries, with beautiful beaches and warm, sunny weather. Miami’s population has increased steadily in recent years, making it one of the fastest growing cities in the country. And tourists from around the world flock to this oceanside oasis. In short, there are endless opportunities — and customers — for new business owners in Miami.
In SoFi’s analysis, Miami received top scores for new business applications and the number of self-employed individuals. It also rated highly for walkability and its large working-age population. Not only that, prospective business owners in Miami may be able to take advantage of small business grants in Florida that can help with start-up costs.
2. Minneapolis, MN
Score: 51.13
With its friendly midwestern vibe and cosmopolitan charm, Minneapolis has been experiencing population growth since the pandemic. Despite the cold winters, residents say it offers a good quality of life, access to nature, sporting events, arts and culture, and more. The city is also seeing a surge in new housing and economic development.
In the SoFi study, Minneapolis received a top score for its large working-age population. It also got high marks for the number of self-employed residents and the city’s walkability. Another potential selling point for entrepreneurs: The state of Minnesota works to cultivate small businesses, offering assistance and partnerships through its Office of Small Business and Innovation.
3. Atlanta, GA
Score: 50.30
Atlanta is another one of the fastest-growing metro areas in the country, according to Census Bureau data. The city has seen a boom in businesses opening and relocating there, from major corporations to smaller companies. Atlanta’s lifestyle amenities have flourished as well, making the city a draw for its vibrant entertainment offerings, diverse restaurants, and sporting events.
It’s no wonder then that Atlanta has a robust population of working-age individuals, according to SoFi’s research. It also got a high score in our analysis for new business applications. For entrepreneurs, the city has support networks, incentives, and small business loans that make it an appealing place to set up shop.
4. Plano, TX
Score: 48.89
New businesses are popping up across Plano, making it a welcoming community for those ready to launch their own companies. Located less than 20 miles from Dallas, the city is a family-friendly place to live with easy access to a major metro area. People are drawn to Plano’s parks, cultural events, and restaurant offerings — something new business owners can both enjoy personally and benefit from professionally.
SoFi’s research found that Plano has a large working-age population and a high household income. It also ranks near the top of the list for self-employment. Plus, small business grants in Texas can make Plano a good choice for new business owners.
5. St. Louis, MO
Score: 48.48
Located on the Mississippi River and known for its iconic Arch, St. Louis is actively courting new businesses through incentive programs, tax credits, and enterprise zones. The city has a vibrant start-up scene, with business incubators and accelerators. St. Louis, which boasts a diverse culture, historic neighborhoods, and a fairly affordable cost of living, is a top area for job growth, according to recent data from the Federal Reserve Bank of St. Louis.
Indeed, SoFi’s report found that St. Louis gets high marks for its large working-age population, self-employment score, and household income.
6. St. Paul, MN
Score: 48.06
The state capital of Minnesota, and the other half of the famed “Twin Cities” (along with Minneapolis, the Number 2 city on our list), St. Paul is a mid-sized metropolis with a youthful vibe. There are a number of colleges and universities here, giving the city’s employers access to skilled graduates. In our research, the city ranked high for its large working-age population. In addition, St. Paul offers a number of resources for new businesses, including financial and technical assistance.
7. Orlando, FL
Score: 48.01
Home to Disney World and Universal Studios, among many other theme parks, Orlando is not only a coveted tourist destination but also a cosmopolitan city with a strong arts and cultural scene, good restaurants, and a bustling nightlife.
It also has a variety of employment opportunities to attract workers: Orlando is filled with big companies, such as AAA and Darden Restaurants, and it’s a growing technology hub. As a result, the city has a large working-age population, according to SoFi’s analysis. Orlando is welcoming to new businesses and offers many incentives to entrepreneurs.
8. St. Petersburg, FL
Score: 47.97
This Gulf Coast city is so beloved for its weather that it’s known as Sunshine City. St. Pete is appealing to employees and business owners alike for its working and lifestyle opportunities. Here, you’ll find pristine sand beaches and a walkable city with a dynamic business community. Companies like Raymond James and HSN are located in the city, as are a growing number of new businesses.
St. Petersburg has a booming working-age population and it scores high marks in self employment, the SoFi report found. It also offers tax benefits and incentives to new businesses.
9. Madison, WI
Score: 47.34
This state capital was recently rated the sixth best city in the U.S. to live in by U.S. News & World Report, thanks to its quality of life. Madison has a hot job market and it’s a hub for companies in technology, healthcare, and manufacturing. As a college town — the University of Wisconsin-Madison — it also has a diverse population and a dynamic downtown filled with boutiques, restaurants, bars, and coffee shops.
In SoFi’s report, the city rated highly for its working-age population. The unemployment rate in Madison is fairly low, which also makes it desirable. The city offers programs to help small businesses start and succeed, and there are small business grants in Wisconsin entrepreneurs can explore.
Recommended: Unemployment Rates by City
10. Irving, TX
Score: 46.97
Located near Dallas, Irving combines urban amenities with a suburban feel. It has many perks of city living, such as live music venues, ballet and symphony, art, movie theaters, and restaurants. For nature lovers, Irving has a number of rivers and lakes weaving through it, along with parks and nature trails.
Irving’s economy is strong — major corporations in industries such as technology, finance, and consumer goods are located there. SoFi’s research found that the city has a large working-age population, which can be beneficial to new business owners. Irving also offers incentives and resources for small businesses.
Tips for Small Business Owners
If you’re ready to start a small business, these are some important steps to take to help your venture become a success.
• Choose the right location for your business.
Do your research to pick an area that best suits your business needs. Consider whether the area has the type of customer you’re targeting, a robust workforce, and real estate and operating costs you can afford.
• Check out local resources, networks, and programs.
Does the location you’re considering offer incentives and tax credits for new and/or small businesses? The cities on our list do, as do many others. Be sure to check with the chamber of commerce, the city’s SBA office, if there is one, and local economic development centers and business incubators.
• Find the right financing.
The city or state may offer grants or funding for new businesses — do your homework to find out if they do. Also investigate grants and funding programs from the SBA.
As you’re seeking financing for your small business, you may also want to consider a loan to help get your venture off the ground.
When you’re looking for a loan for your new business, SoFi can help. On SoFi’s marketplace, you can shop top providers to access the capital you need. Find a personalized small business loan option today within minutes.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
With SoFi’s marketplace, it’s fast and easy to search for your small business financing options.
Methodology
To determine the best cities to start a business, SoFi looked at the largest 50 cities across the U.S. with populations of 500,000 or less. (“Population” refers to the city proper and is separate from surrounding urban areas.) SoFi analyzed eight key contributing factors, each assessed on a 10-point scale, in each city for an overall potential score of 80. These factors included:
Walkability
Walkability was determined by reviewing statistics from Walk Score, which were given on a scale of zero to 100. The higher the Walk Score, the higher a city’s walkability score.
Cost of Living
Using Area Vibes, SoFi reviewed the cost of living score — an index score compared to the national average. The lower the cost of living score in a city, the better the score we assigned.
Average Cost of Office Space
Using LoopNet, SoFi assessed all 50 cities using the following filters:
• Type of space needed: office, retail, or restaurant
• Number of employees: 10 (which equaled 1250 to 4000 sq. ft. of space)
SoFi averaged the price per square foot per year for the newest 10 results in each city. The higher the average cost, the lower the score.
Median Household Income
Using Data USA, SoFi assessed the median household income for each city. The higher the median income, the higher the score.
Unemployment Rates
Using Area Vibes, SoFi assessed the unemployment rate for each city. The lower the unemployment rate, the better the score.
Annual Business Applications
Using Census Burea data SoFi calculated the percentage of people who applied for a small business loan in the county where each city is located. The higher the percentage of new business applications, the higher the score.
Percentage of Self-Employed People
Using Census Burea data, SoFi calculated the percentage of people in each city who had self-employment income. The higher the percentage, the higher the score.
Working-Age Population
Using Census Burea data, SoFi calculated the percentage of people in each city who were between the ages of 15 and 64. The higher the percentage, the higher the score.
SoFi’s marketplace is owned and operated by SoFi Lending Corp. See SoFi Lending Corp. licensing information below. Advertising Disclosures: SoFi receives compensation in the event you obtain a loan through SoFi’s marketplace. This affects whether a product or service is featured on this site and could affect the order of presentation. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider.
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.
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.
SOSMB-Q324-018
Source: sofi.com
Apache is functioning normally
Hawaii State Federal Credit Union offers the Always Cash Visa Signature Rewards Credit Card. This card offers the following:
- 2.5% cash back on the first $5,000 each month, 1.25% cash back on any amount above that
- Must have Hawai’ian residency to open a new account
- No annual fee
- No foreign transaction fees
Hat tip to reader Amanda
Source: doctorofcredit.com
Apache is functioning normally
Spending money is typically fun, while saving money is hard — all that temptation to buy cool new things or try the latest restaurant. Which is why we can all use a little extra motivation to stash away some cash, and a savings club can play a role in that process.
Basically, savings clubs are a type of bank account in which the account holder contributes to the account over time to meet a specific goal. It can be a valuable option vs. breaking out your plastic and running up credit card debt.
What Is a Savings Club?
So, what is a savings club? A basic savings club definition is that it’s a bank account that the account holder uses to hold funds to meet a specific savings goal. For example, some people set up what are known as “Christmas clubs” in which they make regular contributions throughout the year to save for holiday gifts, travel, decor, and parties. By saving gradually in advance, they may be able to avoid the wallop of that major end-of-year credit-card bill.
Usually, savings clubs accounts that can be opened at a bank or credit union. They can be a good idea in terms of where to put short-term savings, as they typically earn interest. Often these savings clubs have other incentives attached to them to encourage account holders to follow through on their savings goals. There can also be penalties associated with savings clubs — such as forfeiting earned interest for withdrawing funds from the account early — to help motivate people to keep saving.
Recommended: How Much Money Should I Save a Month?
How Do Savings Clubs Work?
Usually, savings clubs create a schedule the depositor can follow to make regular deposits of a certain amount. So, say you open a savings club account to gather cash for a vacation next summer. If you want to save $1,200 over one year, the club would guide you through depositing $100 a month to meet that goal. Typically, the end date associated with a savings club aligns with your goal, whether that’s heading to Hawaii, getting married, or celebrating the holidays.
Deposits for savings clubs can be drawn from the account holder’s paycheck, which can make it easier to steadily progress towards meeting a savings goal. Automatic savings transfers can be a real helping hand because you don’t see the money in your checking, as if it’s available to be spent.
Some savings clubs allow multiple people to contribute to it — similar to another type of savings account, the joint account — so they can work together towards a savings goal. While usually only couples share a bank account, friends, or family members can choose to contribute to a savings club together to save up for a group vacation, present, or family reunion. Or some financial institutions will allow parents to help a child open a holiday savings account. In all cases, this can be a good strategy, since savings club accounts may offer higher interest than a typical savings account, though there can be penalties for early withdrawal.
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.50% APY on your cash!
Benefits of a Savings Club
There are quite a few benefits attached to savings clubs, including:
• Saving on a schedule towards a specific goal
• Offering saving incentives
• Creating discipline in a savings routine
• Teaching children about financial literacy and the value of saving
• Paying higher interest rates than typical savings accounts
Recommended: How Do You Calculate Interest on a Savings Account?
Drawbacks of a Savings Club
There are also some downsides associated with savings clubs worth being aware of:
• Withdrawing funds early can lead to penalties
• Not contributing on schedule can lead to penalties
• Some savings clubs can be banking scams if not hosted by a financial institution such as a bank or credit union (beware “money board” and “circle game” schemes)
• Investing money elsewhere may lead to more growth
Savings Club vs Savings Account: What’s the Difference?
There are many reasons why you would put money in a savings account, and savings clubs offer a specific financial product to serve a specific goal. Let’s look at some differences between these two account types.
Savings Clubs Can Offer Higher Interest Than a Traditional Savings Account
One of the reasons savings clubs can be so motivating is because they often offer a higher interest rate than traditional savings accounts do. Knowing your money can grow faster can be an exciting prospect.
Savings Clubs Have Penalties for Premature Withdrawal
There are no penalties when someone withdraws money from a standard savings account. Nor is there a set period of time they have to keep their money in the account.
With a savings club, however, there can be penalties (such as losing the interest accrued) for actions such as withdrawing funds before the predetermined end date or for not making a contribution according to the savings club schedule. These penalties can be an incentive to save, but they can also create a challenging savings environment.
Savings Clubs Often Require a Minimum Deposit and Term Lengths
While basic savings accounts don’t usually have strict requirements attached to them, savings clubs often have minimum deposit requirements. These requirements may be as low as $1 or can be much higher. Savings clubs can also come with predetermined term lengths — usually six months to a year — and may require automatic weekly or bi-weekly deposits. Some people don’t like feeling “locked in” in this way.
Recommended: How Do Savings Accounts Work?
Starting a Savings Club
In most cases, you’ll start a savings club that’s hosted at a bank or credit union, review the terms, make an initial deposit, and continue funding the account.
Some people may choose to set up social savings clubs with friends and/or relatives by taking the following steps.
• Define a savings goal for the club
• Find people to join the savings club
• Create savings club rules and structure
• Commit to the planned schedule and follow through
Where the funds are actually kept can be decided by the group; an interest-bearing savings account will offer the nice perk of having your money earn money.
Banking With SoFi
Savings clubs can offer a motivating way to stockpile cash, thanks to their usually higher interest rates (compared to traditional savings accounts) and their structured schedule.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.50% APY on SoFi Checking and Savings.
FAQ
Why would someone join a savings club?
Savings clubs can help you efficiently save towards a specific short-term goal, like accumulating money for the holidays or for a vacation. Benefits of saving this way include a motivating format and often a higher interest rate vs. traditional savings accounts do. Also, the potential penalties associated with not sticking to the schedule can also motivate people to save.
Should I have a savings club or savings account?
Whether or not you should have a savings club vs. a standard savings account depends on your personal goals and preferences. If you benefit from having a savings schedule and are offered a good interest rate, it may be a great fit. If, on the other hand, you want the ability to withdraw funds from your account penalty-free, it may not be the right move.
Can I use a savings club for long-term savings?
Savings clubs are usually designed to meet short-term goals, not long-term savings goals. They typically last for six months to a year. Those looking for long-term growth may find that investing money elsewhere can lead to more growth than a savings club can offer.
Photo credit: iStock/MicroStockHub
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.50% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
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 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://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.
*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.
SOBNK-Q324-039
Source: sofi.com
Apache is functioning normally
Living in Hawaii offers unique experiences, from stunning landscapes to fascinating culture. Whether you’re looking to rent in Honolulu or searching for an apartment in Hilo, these fun facts about the Aloha State will give you more reasons to appreciate this island paradise.
1. Hawaii is the only U.S. state composed entirely of islands.
Hawaii consists of 137 islands, but only eight are considered the main islands. The largest island, Hawai’i (also known simply as the Big Island) is more than twice the size of all the other islands combined. Oahu, home to the capital city Honolulu, is the third-largest island.
2. The Hawaiian language has only 13 letters.
The Hawaiian alphabet includes five vowels (A, E, I, O, U) and eight consonants (H, K, L, M, N, P, W, and the ʻokina). The ʻokina, a glottal stop, acts as a letter in the language. Many place names in Hawaii include repetitive sounds, reflecting the language’s simplicity.
3. Hawaii has its own time zone with no daylight saving time.
Hawaii follows Hawaii-Aleutian Standard Time (HST), which is 10 hours behind Coordinated Universal Time (UTC-10). The state does not observe daylight saving time, so the time difference with the mainland changes throughout the year. In the winter, Hawaii is two hours behind the West Coast, but during the summer, it’s three hours.
4. Hawaii is the only state that grows coffee commercially.
While most states have to import their coffee, Hawaiians can enjoy it fresh from the source. The rich volcanic soil and ideal climate make Hawaii perfect for coffee farming. Kona coffee, grown on the Big Island, is famous worldwide for its smooth, rich flavor. Coffee farms can also be found on Maui, Oahu, and Kauai. The industry plays a significant role in the local economy, attracting many tourists. Living in Hawaii means you can enjoy fresh, locally grown coffee daily.
5. The islands of Hawaii are still growing.
The Hawaiian Islands were formed by volcanic activity, and this process continues today. Kīlauea, one of the world’s most active volcanoes, constantly adds new land to the Big Island. The island’s southeastern coast has seen significant changes in recent years due to lava flows. Volcanic activity also creates black sand beaches, which are unique to the area..
6. Hawaii was once an independent kingdom.
Before becoming a U.S. state, Hawaii was an independent kingdom with its own monarchy. King Kamehameha I united the islands in 1810, establishing the Kingdom of Hawaii. The monarchy lasted until 1893, when it was overthrown by American and European settlers. In 1898, Hawaii was annexed by the United States, and it became the 50th state in 1959.
7. Surfing was invented in Hawaii.
Surfing, a sport now enjoyed worldwide, originated in Hawaii. Ancient Hawaiians viewed surfing as more than a sport; it was a spiritual experience. The chiefs, or ali‘i, often competed in surfing, showcasing their strength and skill. Today, Hawaii remains a global surfing destination, with famous spots like Waimea Bay (near Pupukea) and the Banzai Pipeline. Living in Hawaii, you can embrace this sport’s deep cultural roots.
8. Hawaii is home to the world’s largest dormant volcano.
Mauna Kea, located on the Big Island, is the world’s largest dormant volcano. Standing over 13,800 feet above sea level, it is taller than Mount Everest when measured from its oceanic base. The summit often receives snowfall in winter, making it a unique spot in tropical Hawaii. The clear skies above Mauna Kea make it a prime location for astronomical observatories.
9. Hawaii has no snakes.
Due to strict laws and natural barriers, Hawaii remains snake-free. The state takes this seriously, as introducing snakes could harm the delicate ecosystem. The only snakes you might see are in zoos or brought illegally, with severe penalties for smuggling them.
10. Hawaii celebrates its own holidays.
Beyond the usual U.S. holidays, Hawaii celebrates several unique ones. King Kamehameha Day on June 11 honors the first king of the Hawaiian Islands. Prince Kuhio Day on March 26 commemorates the birth of Prince Jonah Kūhiō Kalanianaʻole, a Hawaiian royal. The Aloha Festivals, held annually in September, celebrate Hawaiian culture with parades, music, and hula.
11. Hawaii has the highest life expectancy in the United States.
Hawaii consistently ranks as the U.S. state with the highest life expectancy. The combination of a healthy diet, active lifestyle, and strong community ties contributes to this longevity. The state’s natural beauty and relaxed pace also reduce stress, promoting well-being. Residents often enjoy fresh seafood, tropical fruits, and outdoor activities year-round. Living in Hawaii seems to be a key to a long and healthy life.
12. Rainbows are a common sight in Hawaii.
Hawaii’s unique climate and topography create prime conditions for rainbows. The islands’ frequent rain showers and abundant sunshine result in vibrant rainbows, often visible across the sky. Double rainbows are also a regular occurrence, adding to the islands’ natural beauty. The state is also nicknamed the “Rainbow State” for this reason.
13. Hawaii has the most isolated population center on earth.
Hawaii lies over 2,000 miles from the nearest mainland, making it the most isolated population center on the planet. This remoteness creates a unique culture and lifestyle distinct from the rest of the U.S. Unfortunately, this isolation also affects the cost of living, as many goods must be imported. However, it also fosters a strong sense of community among residents.
14. Hawaii is home to the world’s most active volcano.
Kīlauea, located on the Big Island, is the world’s most active volcano. It has been erupting almost continuously since 1983, creating new land and reshaping the island’s landscape. The eruptions often draw visitors, eager to witness the molten lava flows. Despite the dangers, many people live nearby, drawn by the fertile land and stunning scenery.
15. Hawaii has a ban on billboards.
To preserve its natural beauty, Hawaii has banned billboards across the state. This law, enacted in 1927, ensures that the islands’ stunning landscapes remain unobstructed. Instead of advertisements, the scenery takes center stage as you travel through the islands. This absence of billboards contributes to the state’s peaceful, unspoiled atmosphere.
Apache is functioning normally
The average square footage of a house in the United States is 2,430 square feet, according to the National Association of Home Builders. That figure varies significantly from state to state, however, with averages ranging from 1,164 square feet all the way up to 2,800 square feet.
Average home sizes tend to be larger in areas where prices are lower and smaller in more expensive locales, though other factors also come into play. Understanding the average square footage of houses in your area can help you set realistic expectations for your house hunt and determine how much house you can afford.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Questions? Call (844)-763-4466.
Home Square Footage Trends in the U.S.
The size of homes in the U.S. has grown significantly over the past several decades. In 1949, the average square footage of a house for one family was 909 square feet. By 2021, it had almost tripled to 2,480 square feet, according to American Home Shield’s American Home Size Index.
One of the reasons behind expanding home sizes was American migration to the suburbs following World War II. During these years, new highways were built, demand for housing grew, and homeownership rose. People moved into bigger houses with more land outside the densely packed cities.
Overcrowding decreased at the same time. In 1950, 15.7% of U.S. homes were considered overcrowded. By 2000, the proportion had dropped to 5.7%. Today, older homes tend to have smaller floor plans, while more recent constructions are more spacious.
That said, home sizes have decreased slightly in the past few years due to rising interest rates and home prices. Home size was larger during the pandemic when interest rates reached historic lows and homebuyers were often looking for a house that could be home, workplace, and school all at once. Home sizes trended downward in 2022 and 2023 as housing became less affordable. (Learn more about how to save money for a house.)
Still, the mean square footage for new single-family homes was 2,430 square feet in the third quarter of 2023, a huge increase from the 909-square foot average of 1949.
States With the Largest Average Homes
The state with the largest homes on average is Utah, with an average home size of 2,800 square feet. Following Utah are other states in the Mountain West, including Colorado, Idaho, and Wyoming. This chart shows the 10 states with the largest average home sizes in the U.S., along with their median price per square foot.
State | Average home square footage | Median price per square foot |
---|---|---|
Utah | 2,800 | $259.05 |
Colorado | 2,464 | $279.55 |
Idaho | 2,311 | $286.85 |
Wyoming | 2,285 | $189.87 |
Delaware | 2,277 | $223.75 |
Georgia | 2,262 | $180.61 |
Maryland | 2,207 | $234.53 |
Montana | 2,200 | $324.53 |
North Dakota | 2,190 | $139.12 |
Washington | 2,185 | $335.73 |
States With the Most Expensive Cost per Square Foot
In states with a high cost per square foot, homes tend to be smaller on average. The smallest homes are in Hawaii, where the median price per square foot is nearly $744. New York has the next-smallest real estate, with a median price per square foot of more than $421. (New York City, however, has a median price of $1,519.57 per square foot.)
That said, home prices and size don’t always have an inverse relationship. California has some of the most expensive real estate in the country, but its home sizes average 1,860 square feet. Along with cost per square foot, some other factors that influence average home size include income levels and age of the homes.
This chart shows states with the highest median price per square foot, along with their average house sizes. If you’re looking to buy in a less pricey locale, consult a list of the best affordable places to live in the U.S.
State | Median price per square foot | Average home square footage |
---|---|---|
Hawaii | $743.86 | 1,164 |
California | $442.70 | 1,860 |
New York | $421.49 | 1,490 |
Massachusetts | $398.77 | 1,800 |
Washington | $335.73 | 2,185 |
Montana | $324.53 | 2,200 |
Oregon | $307.86 | 1,946 |
Idaho | $286.85 | 2,311 |
Nevada | $281.85 | 2,060 |
Recommended: 12 Tips for First-Time Homebuyers
What to Consider When Buying a Larger Home
Buying a larger home might be appealing if you have a growing family and want space to spread out, but it could have downsides. These are some of the factors to consider before splurging on extra space:
More expensive maintenance costs
Not only may a larger home have a higher initial price tag, but it could also cost you more in maintenance costs. Home repair projects can easily cost thousands of dollars apiece, and prices only go up when you have more house to maintain. Before opting for a big home, consider what shape it’s in and any potential renovation costs. You could also do some research on the cost of services in your area to estimate future expenses.
More time to clean and organize
Larger homes take longer to clean and organize than smaller ones. You’ll have to purchase more furniture and spend more time on general upkeep. If you hire cleaners for your house, the cost of each visit will be higher if you have additional rooms that need cleaning.
Located farther from city center
Homes in and around a city are often smaller, while houses with more square feet and land are typically located outside of the urban center. This may not be ideal if you prefer to live near restaurants, theaters, and other urban activities. It could also be a downside if you work in the city and would have a longer and more expensive daily commute.
A bigger carbon footprint
A larger home will require more heat in the winter and air conditioning in the summer. Not only will your energy bills cost more, but your bigger house will use more resources and have a greater impact on the planet. Some newer constructions may offset this footprint with energy efficient features.
Recommended: Tips to Qualify for a Mortgage
How Much Square Footage Can You Afford?
Before starting the house hunt and the quest for a mortgage loan, it’s worth considering how much square footage you can afford. Even if you get preapproved for a mortgage of a certain amount, you might prefer a smaller loan with lower monthly costs to avoid over-burdening your budget. Many first-time homebuyers opt for a smaller starter home before eventually upsizing. One way to figure out how much house you can afford is with the 28/36 rule.
The 28/36 Rule
The 28/36 rule is a guideline that can help you estimate what price house you can afford. This rule suggests spending no more than 28% of your gross monthly income on housing costs and no more than 36% on all your debt combined, such as housing costs, car payments, and student loans.
Let’s say, for example, that your monthly gross income is $6,000. Using this guideline, you’d want to keep housing costs at $1,680 per month or lower. If you have other debts, you wouldn’t want to spend more than $2,160 on those debts and housing costs combined.
Key Reasons to Purchase a Smaller Home
Purchasing a smaller home can have several benefits, including:
• Smaller mortgage: A smaller home may have a lower cost, so you might be able to put down a lower down payment and take out a smaller mortgage.
• More affordable bills: With less square footage, you’ll have lower monthly bills when it comes to electricity, heating, and cooling. Plus, you won’t have to pay as much in property taxes.
• Easier and cheaper maintenance: Smaller homes can be easier to clean and maintain, and you won’t have to spend as much on furniture and decorations.
• Extra room in your budget for other goals: If you’re saving money on housing, you’ll have more money for other things, such as home renovation projects, travel, investing for the future, and dining out.
The Takeaway
The average home square footage in the U.S. is more than 2,000 square feet, but sizes have slightly decreased recently with rising costs and interest rates. Home sizes also vary greatly by state, with the average square footage in some states more than double that in others.
Before splurging on a big house, consider your budget carefully. Use the 28/36 rule to estimate how much house you can afford, and take your other financial goals into account when considering how much you want to spend on housing each month. With careful planning, you can find a house size that meets your needs without overstretching your budget.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Are basements included in home square foot calculations?
Basements may or may not be included in home square foot calculations, depending on the state where you live and condition of the basement. If the basement is included, it generally must meet certain criteria for living space, such as having an entrance and exit point that leads outside the home.
How much square footage does a family of four need?
While everyone’s needs are different, one guideline for determining the ideal square footage for one’s family size is 600 to 700 square feet per person. For a family of four, that would be a home with 2,400 to 2,800 square feet.
Is the average house size in the U.S. increasing or decreasing?
The average house size in the U.S. increased significantly over the past 75 years from 909 square feet in 1949 to 2,430 square feet in 2023. However, the past couple of years have seen a slight decrease in house sizes due largely to rising interest rates and worsening affordability.
Photo credit: iStock/years
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
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.
SOHL-Q324-006
Source: sofi.com