Spend less than you earn. The single most elemental tenet of succeeding financially. All personal finance advice revolves around it, including my three basics of taking financial control and Elizabeth Warren’s All Your Worth.
If you’re struggling to stretch your income to cover all your expenses (needs and wants alike), you can attack the problem from either end. You can try to reduce your expenses, either in large ways (like getting rid of cable) or small (like taking advantage of coupons and sales).
Or, you can try to increase your income. You can do this in large ways (like taking on a part-time extra job), or there are countless smaller ways to get extra money. And the small ways can really add up, if you stick with it.
I was reminded of this yesterday, when fellow bloggers in an online community I frequent started posting about a deal from Capital One 360. For three days (the offer ends tonight, July 3, 2013), they’re offering a bonus if you open a new checking or savings account with them. The bonus was $76 for a savings account or $100 for a checking account. Sometimes I’m tempted to think an amount is too small to pursue, or that there may be too much effort involved. But when several bloggers whose financial acumen I trust posted that they’d done it, it spurred me to read up on the offer.
Turns out, the savings account one was really simple. I opened an online savings account with a $500 transfer from my bank account, and the $76 appeared instantly in my new account, even before the $500 had showed up. Now, the only remaining step is to wait 30 days, when the money will be available for withdrawal. I can close the savings account if I want, or I can keep it open if it seems useful. (I will probably close it, because I have two savings accounts already.)
Just as one of my blogger friends noted when she did it, it took less than 5 minutes to earn $76 that I didn’t have before. And I spent literally nothing; I’ll move the money back into my checking account and have my $500 back plus an extra $76.
If you have a large income or large expenses, or huge goals to try and achieve, $76 may seem like a piddly amount. But these amounts can add up. In 2011, I became aware of a practice known in some circles as “credit card churn.” A lot of credit cards were offering $100, $250 or even $500 to open a card and spend a certain amount within a certain window of time. My initial hesitation was that it would hurt my credit score. My other thought was that it would be hard to keep track of the credit cards and I might end up incurring fees by missing payments, or not getting the bonus by not spending the right amount in the right time span.
But again, several trusted bloggers were saying that their credit scores were still high despite frequent opening and closing of credit cards. And as for keeping track, I turned to my trusty spreadsheets, which I use for any seemingly daunting task.
From 2011 to 2012, I opened and closed about 10 credit cards, never paid a cent in interest or fees, experienced very little fluctuation in my credit score, and made over $3000 tax-free (mostly in cash but some in gift cards and airfare discounts). And that was just in my name; I also opened cards for my family members and made even more.
Now, the really generous credit card offers come and go, and right now the $500 offers are nearly nonexistent. But now that I know about them, I’m keeping eye out for another wave. But there still are several “spend $500, get $100” offers that are easy to qualify for and receive, so I’d recommend them to anyone wanting to pick up an extra hundred bucks in the course of their regular spending. (Of course, I only recommend this if you and your finances are well-organized, because if you don’t pay off the card you’ll end up paying interest and diminishing the benefit of the bonus.)
There are many other ways we’ve brought in extra money over these past few years (not counting the part-time and freelance work we’ve taken on), and I’ll probably touch on them in later posts. But credit card and savings account bonus offers have been one of the easiest and most lucrative avenues of extra income for my family.