Money isn’t the most important thing in the world, but it is important. It’s the one thing that we all have to deal with on a daily basis. It cost money to have a place to live, to eat, to use utilities, to buy things, for entertainment ETC, so it’s important to get this part of our lives sorted out.
Here are some of the financial life hacks that will help you save and/or make money.
1. Monthly Expenses.
I’m going to start with the most basic thing, cost. Figure out what you spend on a monthly basis on things (rent/mortgage, food, utilities, wireless bills, internet bills, entertainment ETC).
Go through and review what is essential for you and what the unnecessary costs are. For example, you’re paying $70 for your wireless bills; you’ll want to ask yourself if you need that particular plan. If so, check with the company to see if you get a better rate or switch to another company with a comparable service that could save you money.
If you have 15 line items, and 5-10 of the line items can save you around $10, you have saved between $50-100 per month. This will add up significantly over time. If you can eliminate some of the unnecessary items altogether, you can save even more.
2. Savings
Life is unpredictable sometimes. Things can happen around the world that causes the economy to sink and cause you to lose your job. Or you could have an unexpected expense that pops up, whatever the case may be, it’s important to have some savings as a backup.
Most financial experts recommend having between three to six months’ worth of living expenses saved up in case of unexpected events.
Fewer than 4 out of 10 Americans have $1,000 for emergency funds. So over 60% of Americans do not even have $1,000 set aside for these situations. That’s not a majority that you want to be a part of.
3. Get rid of your debt
Depending the amount of your debt and the interest you are paying on them, but typically getting rid of your debt quickly is one of the best ways you can grow your net worth and put yourself in a much better financial situation.
According to Credit Karma, the average debt of an American household is almost $7,000 with an APY of a whopping 16%. Your situation may be better or worse than those numbers, but the same principle applies.
If you can get rid of that debt quickly, you stop losing 16% (or whatever interest you are paying) on that loan. So it’s essentially a guaranteed 16% return on investment, which is a much safer investment than anything you will find with a high return.
4. Use Balance Transfer to Lower Your Interest
If you have credit card debt, you are most likely paying insane interest in the double digits. One way to cut the cost on that is to do a balance transfer from one card to another.
There are many credit cards that offer 0% interest for 12-18months, check out the list here. The typical cost for balance transfer is 3%, which is added to the balance.
Your balance will end up being a little higher with the transfer, but you will stop paying compound daily interest for the balance, so this gives you time to work on paying down the balance significantly or completely.
5. Put Your Money In A Higher Yield Savings Account
This is essentially free money that you will leave on the table if you don’t have your money in a higher-yield savings account. The national average APY is 0.06%.
At the time this article is published, the higher yield banks offer between 0.50 – 0.61% APY. So that is 8X-10X returns on your money.
It may not seem like a lot, but it’s free money and it will add up over time by doing just this one thing. If you are multiplying your money in multiple ways which I will show you, then it can add up significantly over time.
6. Use Credit Cards For Cash Back Bonuses
This recommendation is only useful if you pay off your credit card every month or have 0% interest cards. Use your credit card responsibly or you’ll actually end up with more debt and paying more for interest.
There are many different cards that give a different type of bonuses. For example, my personal favorite for traveling and restaurants is the Chase Sapphire Reserve card because it gives 3% cash back on food and travel-related purchases. I can then redeem those points for an additional 50% bonus through the Chase Ultimate Rewards program with this card. So my 3% cash back bonus is effectively worth 4.5%.
Another example of using a credit card to build cash back bonus is the American Express Blue Cash Preferred Card. You can use this card to get 6% bonus cash back at grocery stores for up to $6,000. You can sign up here (*disclaimer, this is my referral link).
If you don’t want to pay the annual fee, you can sign up for the American Express Blue Cash Everyday Card which will still give you 3% cash back for your grocery purchases. You can sign up for this card here.
One last example of using credit to get the bonus is using the Chase Freedom Unlimited Card for things that does not give you a bonus like utility or most wholesale stores. Chase Freedom Unlimited gives you 1.5% bonus cash back on everything, and if you have the Chase Sapphire Reserve Card and use it through the Chase Ultimate Rewards system, your 1.5% gets 50% so it’s worth 2.25% cash back essentially.
These little bonuses can add up to thousands of dollars over time. My family and I rarely pay for flights now a day thanks to these bonuses.
7. Invest Your Money
There are limitations on how much work one person can do or much money one person can earn. The most effective way to multiply your production is to have someone else work for you. In another word, put your money to work. I will write a separate blog just on this topic since there are literally thousands of different ways to invest.
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