You can achieve financial independence via 1 of three methods:
- Increase your income
- Decrease your expenses
- Increase your income AND decrease your expenses
As FI’ers the freedom exists to achieve the end goal however we’d like to. Many try to do this by decreasing their expenses, which involves typically adopting an overly frugal lifestyle (nothing wrong with that). However as with all things, our household strives to maintain balance between financial independence and our natural inclination for exploring and experiencing.
Rewards points have been a great way for us to increase our return on dollars spent vs managing our income and expenses. Our main form of rewards points is Southwest Airlines, which offer 2 types of credit cards through Chase Bank.
What we’ve used rewards points on
Southwest Airlines
Our honeymoon flights were 100% paid for via my Southwest credits, and we currently have over 50,000 points just by spending our credit card in place of our debit. Once caveat to this is that it is extremely important to pay off your balance each month.
We set out budget based on bi-weekly interval and will keep to budget with our credit card, then we simply pay off the balance with the cash incurred for that income period.
Let’s do some math:
$450 round trip per person * 2 people = $900 per year (1 trip per year)
Hair Cuts
I go to a relatively expensive mens salon ($35 per haircut), however my wife appreciates the consistency my hairdresser is able to provide. A key thing that they do is after 5 haircuts with them, I get 1 free. It’s not much, but the consistency keeps my loyal, and I feel like I am getting a freebie for something I would have spent anyways.
Let’s do some math:
52 in a year / 1 haircut every 3 weeks = 17 haircuts per year
17 haircuts / 5 = 3 free haircuts per year
3 * $35 (+ $7 tip @ 20%) = $105 USD per year
Groceries & Shopping
Although we don’t shop at Kroger as much as we once did (hello HEB!) due to a reduced ROI even with their gas credits, this is still a rewards win I want to point out. We are fortunate in that we have options like HEB which are competitively priced, but if you don’t you may still find gold here.
Kroger does a great thing where they give away 10 cents per gallon per 100 kroger rewards points (1 point = $1 with Kroger plus card at the time of writing this).
Let’s do some math:
$400 grocery bill per month * 12 = $4,800 USD per year
$4,800 = 4,800 kroger points
4,800 / 100 = 48 gallons per year
48 gallons per year * 10 cents off per gallon = $4.8 USD per year
Investments & Cryto Currency
Robinhood Investing App
I am a huge fan of Robinhood investing application for basic trading. It is not beefed out and currently doesn’t even have a desktop app, but they don’t charge a buy or sell fee so you can grow your nest egg portfolio much quicker. They have a referral program where you get a free share of stock if you sign up through a referral link and so does the person who referred you. To day I’ve gotten 2 shares free (1 share Zynga and 1 share Sprint).
Let’s do some math:
2 friends who want to learn investing per year = 2 free shares of stock
2 free share of stock = 1 Zynga & 1 Sprint (~$10.00 total) = $10 USD per year (excluding appreciation)
In total, just from these examples we’ve received roughly $1019.80 free per year, doing nothing beyond our normal living. Could we increase this even further by spending less on haircuts or doing a smaller vacation every two year, sure. However, without sacrificing exploration I’d say this paints a great picture of why you should be seizing the opportunity where possible.