What the deuce?!?
That’s right folks, I am talking about two types of money saving maneuvers:
- Save Money #1: spending as little as possible when making purchases through price competitions, coupons and rebates.
- Save Money #2: putting money you don’t spend into savings and investment accounts for your future.
Save Money on Purchases
‘Tis the season for giving, but ’tis also the season for buying. Make sure you are doing everything you can to save on those purchases. This is definitely an easier process when shopping online as a few clicks and keystrokes will let you price compare in an instant, but still doable when shopping in stores with the aid of the ever prevalent smartphone technology.
- Take advantage of price competition: unless you’re buying an item that is sold exclusively at one store, chances are that item is being sold at different prices in other places. A quick Google search is probably the easiest and quickest way to see where the item is sold and more importantly, how much it’ll cost you.*
- Search for coupons: often times the online stores will advertise their own coupons/promo codes, sometimes you have to do a little work for them. Sites like RetailMeNot will have the most up to date list of discount codes for most of the stores out there. It’d behoove you to check there for a usable promo code. Another tip: you can always add the item to your cart and check to see if the promo code works before completing the purchase.
- Maximize rebates: by funneling your purchases through sites like Ebates, you’ll receive cash-back on your online purchases. This site will also have the up-to-date promo codes for you to type in as you make your purchase. It usually takes a few days for the cash-back to appear and is paid out quarterly via check in the mail. I’ve received over $1,400 by shopping through this site over the last 8+ years!
- Maximize rewards: in addition to getting cash-back from Ebates, your credit cards will also give you cash-back on your purchases. Hopefully you have a few cards with different perks that you rotate around. Make sure you use the card that gives you the most cash-back at that particular locations (example: Chase Freedom gives 5% cash-back on all purchases at Walmart this quarter).
*Expert level tip- if you have a price rewind credit card like the Citi Double Cash Card, finding the cheapest price is sometimes irrelevant. I usually find the store that gives me the best cash-back reward then set the price rewind so not only do I get cash-back percentage at the higher price, but I also am refunded the difference anyway.
Save the Money you Save
It’s way to complicated to try to tally up all of the money you save through sales, coupons and promo codes every time you make a purchase. I think it’s too time consuming, tedious and frankly uninteresting to transfer $1-2 at a time to your savings/investment accounts. Rather, I recommend doing so on a quarterly basis with larger sums of money. Four times each year, cash out all of your rewards, put your Ebates check in the bank and then transfer the entire sum into your investment accounts.
If you check out my quarterly updates, you’ll see that I dedicate all of my cash-back money into investment accounts. This is easily done just four times each year and has helped me a nice little investment account by doing this consistently over a short period of time.
Obviously the cash-back you receive is already post-tax dollars since it’s viewed as a delayed discount by the IRS. But, what if, and believe me this is a big hypothetical what if…but, what if you viewed the cash-back as pre-tax money? And what if you took this “pre-tax” extra cash and placed it into a Roth IRA which will grow tax free and can be withdrawn tax free in retirement? If you are able to think this way and if you have been hesitant to open a Roth IRA because you didn’t want to come up with extra cash, then maybe this is a reasonable way of thinking. Of course, max out your tax-deferred options first, but this is just something to consider.
I’ve been having the problem of spending everything that I save. I don’t “save” that much way. I admire your discipline of transferring your money quarterly into your investment accounts.
I started doing it toward the end of medical school and it has really worked well for me! For me it helps to do it quarterly with larger sums so I feel I’m making a difference in those accounts.