3 Simple Tricks to Save More Money
It's hard to give broad financial advice because everybody is at a different point in their life. However, whether you're approaching retirement or just out of college, these are three simple ways to potentially save some more money.
1) Upgrade your savings account
If you're not getting 2% or more in interest on your cash savings, you're doing it wrong. In the long term, you're actually losing buying power to inflation which slowly chips away at the value of your money each year.
These higher-yield savings accounts are sometimes called money market accounts and are not offered by all banks. The two options below are great: they have no minimum deposits or balances, no withdrawal limits, and you can get your money easily, usually within 2-5 days like a normal bank transfer.
These interest rates are as of June 1, 2019:
- Betterment Smart Saver – 2.14%. Betterment provides a great option for saving or investing. Their unique service is the most popular "robo-advisor" on the market, which means they have an algorithm that builds a unique portfolio for you that is automatically adjusted over time. There is an annual 0.25% fee to use their service. The 2.14% interest rate on savings is after the fee is paid, so it's still a great rate.
- Marcus High-Yield Savings – 2.15%. Marcus is a set of consumer products offered by Goldman Sachs. These include high-yield savings, and some great options on CDs (certificates of deposit). All accounts are FDIC insured up to $250k, which means you're protected in the extreme case of bank failure.
2) Subscribing to Amazon purchases
Think about the purchases you make consistently. What if you could get a steep discount by simply subscribing to those purchases ahead of time?
Normally subscription services are a bad idea. They force you to opt out of purchases rather than opt in, which inevitably means you'll pay for things you don't use. How many times have you paid for a gym membership you didn't use, or a streaming service, or an app on your phone?
However, because Amazon purchases are so integrated into most peoples lives, and because Amazon allows you to skip or delay purchases each month, I'm going to recommend this service as an easy way to save money.
The way this works is that you click "Subscribe & Save" next to eligible items and get up to a 15% discount for doing so. For example, let's imagine you take a daily multi-vitamin with 60 pills. That means every 2 months you'll need a new delivery. Instead of ordering it one-off each time, you can subscribe to the purchase with a 2-month recurring delivery and get a discount.
The great thing about this service is that you can have many different subscription items and then decide whether you want to deliver or skip a specific item for that month. Amazon will send you a reminder email so you don't forget to check your subscriptions.
By ordering 5 or more items you unlock the 15% discount while less than 5 items gets you 5% off. Some items aren't eligible for 15% such as the air filters in the screenshot above.
- Anything used on a consistent basis (daily/weekly/monthly). For me, that's nasal strips that I wear every night, so I can predict accurately when I'll need a new delivery.
- Laundry or dishwasher detergent
- Multi-vitamins or supplements
- Trash bags
- Ziploc/Storage bags
- Air filters (such as HVAC or HEPA)
3) Cash-back rewards credit card
WARNING: this requires discipline. This is not for everyone. Do not attempt to do this unless you feel you are responsible enough to handle a credit card.
However, I feel the need to add this to the list because I make hundreds if not over a thousand dollars of "free" money each year using my cash-back rewards credit card. The way these cards work is that you get a certain percentage of your purchase value back in cash each month, automatically deposited to your checking account like an extra little paycheck.
I put "free" in quotation marks because nothing is free. The bank is making money off of at least two things: first, they're making a bet that you will spend more than you earn and incur interest charges. Second, they're likely selling your purchasing data or using it to better target services or marketing at you.
Nevertheless, I think it's an easy way to put more money in your pocket. As an example, the Bank of America card I use gives 1% cash back on all purchases, 2% back on grocery stores/wholesale clubs, and 3% on a category of my choice, such as online shopping (e.g. Amazon) or travel.
In this article, I'm not going to recommend a specific card because there are so many options and their specific rewards are changing all the time. I recommend doing a Google search for "cash back rewards credit cards" and finding something that works best for you. With growing competition in this space, the rewards seem to be getting better for consumers all the time.
Obviously, to avoid incurring interest charges you must pay off your balance each month, and you can do this with an automatic payment from a checking account with most banks.