Part II - Use This: Airline Dining Programs
Part III - Use This: Cash Back Portals for Online Spending
Part IV - Do This: Maximize Rewards Credit Card Use
Part V - Read This: Final Thoughts on "Stretching" Spending
Part I - Introduction
Smart spending has two distinct parts. First, there's "saving" money. That's simply using coupons or shopping around to get a lower or lowest price on an item. The result is more cash left in your bank account. It's as simple as using a coupon to take 20% off a store's $12 widget. Instead of spending $12, you spend $10 and your checking account is $2 richer.
The second aspect of smart spending is "stretching" each dollar spent. While the benefits of stretching aren't immediate, they typically lead to points, miles, etc. that can be redeemed in the future for cash or travel. Ways to stretch spending typically include store rewards programs, credit cards, etc.
For example, let's say you buy your $10 widget at CVS with cash. By signing up for the CVS' ExtraCare Rewards Program, you earn 2% back on your purchase in the form of an end-of-month ExtraBucks coupon. That's stretching your spending by 2% because you'll soon receive a coupon for 20 cents (plus 2% of your other CVS spending) that you can use on a future purchase. The $10 bill is spent, but you got more out of it.
|Fancy graphic depicting example|
But wait, there's more! Nothing should stop you from double or triple dipping to stretch further. Using the same $10 CVS widget example above, this time you instead use a credit card that gives you 2% cash back on all purchases at retail pharmacies.* So, in addition to stretching your widget purchase by 2% via CVS ExtraCare Rewards, you're getting another 2% cash back from your credit card. Combined, this stretches your purchase by 4% or 40 cents for your $10 purchase.
|Another fancy graphic depicting double-dip example|
Now that I covered the basics of stretching, this week I'll tell you about some of the no-brainer methods to stretch your spending.
*This assumes you don't keep a credit card balance, as the interest on a balance will vastly outweigh the cash back rewards.