Wednesday, August 27, 2014

Oren's Money Saver Beginner's Guide Part 1 - Introduction - Extra Cash and Savings In Your Pocket

Check Out the Other Posts in this Series:

Part 2 - Maximize savings through Credit Cards
Part 3 - Maximize savings without Credit Cards
Part 4 - Manufactured Spend

Some of my reader's have pointed out that the site can be confusing for the novice and recommended something to get started.  You are expected to know too much to just jump in.  Therefore, I've decided to write a Beginner's Guide to help everyone learn the basics of what they need to know to understand most deals.  The idea is for this to be a permanent series of posts that can always be accessed.  So, here goes:

Oren's Money Saver is here to help you do accomplish 2 things, just about everything else I talk about is related to those 2 goals:

What You Can Gain From Oren's Money Saver

1)  Extra savings on purchases

2) "Free" and, hopefully, easy money

Let's talk about each of these in more detail:

Extra savings on purchases

You are spending the money.  You might as well get as much back as possible.  Here is the basic structure.

1) Using the correct credit card

Different credit cards give back extra cashback at specific types of stores.  If you use the correct credit card, you can get extra savings.

2) Discounted Gift Cards

If I have a $100 Walmart gift card I received as a gift, but I don't want it, what can I do?  I might be able to sell it online for $90.  The website can then resell it for $95.  That means that a third person can buy it for 5% off and everyone is happy.  Every retailer is different in how much of a discount you will get.

3) Shopping Portals

Many websites, referred to as Shopping Portals, will give cashback for starting at their site first and then going to the website you want to end up in.  Many times, you can stack these savings with previously mentioned strategies for a "double or triple dip".  Again, some examples in later posts.

4) Promo Codes

Just by putting in a promo code you find online, you can get extra savings.  The savings can range from $1 to 40% or more off

5) Credit Card Specific Offers

Many credit cards, including American Express, Discover and Bank of America have limited time deals at specific merchants.  You usually have to spend a minimum amount on your card at that merchant.  If you combine all of these different ways of savings, it can really add up.

"Free" and, hopefully, Easy Money

Why and how would I be getting free money?  Well, there is rarely someone giving out money for nothing.  Usually the money is an incentive to get you to do something that they think will make money long term.  Sometimes, the extra work is worth it and sometimes it's not.  Here is the structure of how it usually works:

1) Sign up for new accounts 

This includes credit cards, checking accounts etc.  These usually don't require much explanation and are constantly in flux.  I sometimes talk about these as they come up, especially if the sign up bonus is much better than usual or it is extremely easy, but it usually less of my focus.  If you want to check out the best current sign up bonuses for credit cards, I recommend Frequent Miler's page on the topic.

2) Manufactured spend

Basically, this means buying money for a price that is equal to or less than the value of that money.  For example, let's say your local bank was selling shiny new $100 bills for $100 and allowed you to buy them with a credit card for no fees (RIP U. S. Mint coins).  You could buy those $100 bills and deposit them in the bank to pay your credit card bill.  You would be left with your credit card points/miles and no out of pocket expenses. 

That would be nice, but let's say they were selling the $100 bills for $97 with no fees.  I think we can all agree that situation is even better.  Sometimes, it costs $97 and sometimes it costs $100, but you can get extra cashback from your credit card to be the equivalent of paying $97.

Manufactured spend is just like that except using more complicated financial instruments.  Concrete examples (nothing new to regular readers) to be explained in later posts.

We will start next time with using your credit cards effectively to maximize savings and go in order from there.