5 Unique Personal Finance Tips for Advanced Savers
Personal finance tips are a dime a dozen these days, especially for students. It’s almost too easy to learn about money, as it can be found no farther than a simple google search. If you are an advanced saver or someone who is diligent with their finances, the first page results may seem a bit redundant.
We all know we should budget and yes, we all know we should pay our bills on time. What’s the next level? What more is there to learn? Is there something that a student can use? See below for 5 unique tips for those who are tired of the same old advice.
Using Credit Cards to Your Advantage
There I was eating lunch with my boss, 8 years into an accounting career and I thought I had it all figured out. I was dealing with billion dollar companies, of course I had my own finances figured out. There was little debt to pay off (just a car loan) and I had my emergency and retirement funds all set up. As I normally do, I like to pick the brain of those more successful than me (and many times those who are not. I am a big believer that you can learn anything from anyone at anytime.) Somehow we got to talking about how he just got an extravagant hotel booked for almost no money. Like anyone else, I was intrigued. He told me that it was all done through credit card points. He had accumulated so many points because he was achieving them systematically. Here was his very simple system.
- Pick out a credit card that offers a reward system relevant to your desires (i.e traveling)
- Pay for as many bills as possible with this card. I’m talking everything (cable, utilities, gum, etc)
The points WILL accumulate. If you are not using credit cards to your advantage, whether it be for cash back or some free movie tickets, you are leaving money on the table. The rewards are waiting for you!
My recommendation is to look for a deal. For instance, I recently signed up for the Bank of America Travel Rewards Card. If you spend $1,000 in the next three months, you’ll get 20,000 bonus points. That right there is worth a couple hundred dollars. It was a breeze since I signed up right around the holidays, which was not an accident.
Why Fintech is for Advanced Savers
Fintech is a fun new industry sparking a lot of startup investment. All this money equals more product for us consumers. Fintech is short for, you guessed it, financial technology.
There is money to be saved in its creation. One example of saving money through fintech can be exemplified in your stock trading account. While many are content paying, let’s say $7 a trade, there are alternatives such as Robinhood. It’s an app that doesn’t charge you for making a trade.
Imagine the compound interest on the savings of these fees?
Health Savings Accounts
Health Savings Accounts are rarely mentioned but they are a valuable vehicle for savings. The It’s most valuable asset is it’s triple tax benefit and students benefit
- First, it’s deductible on your individual tax return. If deposited through a payroll deduction (your paycheck), the money will be put in pre-tax.
- The second tax benefit is that the interest and dividends earned on the principle will be tax free.
- Third, any withdrawals that are deemed “qualified medical expenses” will be free of tax.
Pre-tax or Post-tax Retirement Savings?
A common question for any financial professional is the following: “Should I make my retirement contributions pre-tax or post-tax?”
For students this question is extremely importing. Starting saving money for retirement at young age will benefit your future. Since future circumstances are hard to predict, it’s hard to give a concrete answer to that question. My advice is to do both! For instance, my employer gives me the option. I contribute 6%, 3% to a ROTH 401K and 3% to a 401K. It’s my best solution to get the best of both worlds.
Save on Money Transfers
Transferwise is one alternative that you may want to consider. As Nerdwallet reports:
“Banks and other providers generally profit off transfers by marking up the exchange rates they give consumers, but TransferWise makes a point to avoid this. It charges a small percentage of the transfer amount as its fee. Delivery can take several business days”
Technology is evolving and making it easier AND cheaper to do things financially. I’ll leave you with something a wise man once told me – never pay full price!
Bitcoin is a cryptocurrency that has also made waves in the international payment space but that is a story for another post.