Oh, yeah, you read that right. There IS a way to put more money into your savings account even as you’re spending money.
Most personal finance advice focuses on cutting back and reducing your spending, which is an effective way to keep more money in your bank account at the end of the month. However, there are some expenses we can’t get out of paying, and for those we should at least try to get as much money back as possible!
Use a cash-back credit card
Obvious, but under-utilized. One of the easiest ways to earn on your spending is to use a cash-back credit card. These typically pay back 0.5% to 2% on your spending. Most cash-back cards offer bonus cash back rates on special categories, like groceries or gas, so you can earn as high as 3% or 5%.
Of course, earning cash back on a credit card means nothing if you’re drowning in credit card debt. This is why I switched all my spending over to Koho, which offers all the convenience of a credit card (including 0.5% cash back!) with none of the drawbacks. You can read more in my Koho Review here!
Click through Rakuten before buying online
I’ve been a member of Rakuten for years, but sometimes I still forget to click through this website in order to get cash back on my online shopping (which is really unfortunate, because I recently bought a $500 camera lens!).
Rakuten usually gives 1% to 4% cash back on a variety of online stores, but sometimes there’s bonuses and specials that let you get as high as 18%. I love Rakuten because the stores are ones I actually shop at: Amazon, Sephora, Clearly Contacts, Expedia, etc.). I usually take my rewards cash as Amazon gift cards, but you can opt for hard dollars. Cash is paid out quarterly!
Get rewards points without a loyalty card
One of my new favorite apps is Drop, which lets you earn rewards points on your debit and credit card spending without signing up for a loyalty card (we’re all over Airmiles, amirite?). With Drop, you earn points per dollar for spending at certain stores. The list isn’t quite as robust as eBates, but it does include two of my main go-tos: Starbucks and Shoppers Drug Mart. You can then redeem your Drop points for gift cards to your fave stores, like Lululemon. My referral code is thr5n. Use it when you sign up!
Get rewards points with a loyalty card
Imagine if you use a cash-back credit card and click through eBates to the Shopper’s Drug Mart Beauty Boutique where you earn Drop points for buying make-up. Does this mean you’re getting your mascara for free? Almost. If that’s not spending savvy, I don’t know what is. While loyalty cards (or non-loyalty rewards programs like Drop) don’t pay out actual cash, they can add to your budget with discounts or free stuff, which ultimately saves you money.
I don’t like having a wallet full of loyalty cards, but now that most can fit in the virtual wallet of my iPhone, I’m a bigger fan. I don’t want you to fall prey to spending more than you intend to somewhere just to earn points, but if there’s a store that’s a regular part of your day-to-day spending, there’s no reason not get rewarded for it!
I know many people harp against credit cards, but using a rewards credit card has been AWESOME. The caveat is that you should only use a rewards credit card if you’ve eliminated all other credit card debt and pay it off each month. If you can do that, earning rewards points is kickass. We saved our points all year in 2016 and used them to pay for Christmas presents. The holidays were barely a blip on our budget and we were able to give nice gifts to everyone.
YES! I do that too! It makes holiday spending so much easier.
I’ve made $526.34 with my tangerine money back credit card since May 2016. That’s about $52 a month I’m making by spending what I normally spend (within my budget) and pay off monthly! Best free way to save!
Whoa! That’s amazing!! I have the Tangerine card too but it’s only giving me ~$20/mo
haha nice job!
We like the Presidents Choice and Shoppers Drug Mart points cards. We usually cash them in before Christmas, makes things a bit easier for the holidays.
Yaassss!! Holiday shopping on points is my strategy too!
I love cash-back cards! My personal card is the Tangerine Cash-Back Mastercard, all my earnings get deposited into my school savings account. A nice little bonus for doing nothing extra! My boyfriend and I also you the PC Financial Mastercard along with our PC Plus card and get points rewards back that add up very quickly. It’s nice after a vacation when we can redeem all our points for a free grocery trip.
I’ve been using drop for about 3 months and love it! It’s nice that the stores you earn points at are actual stores I shop at on a regular basis. And the supercharge game is a nice addition 😉
bahahaha the supercharge game is the best, though I’m terrible at it!
eBates is great! I finally put the extension so it reminds me to use it. I get so mad when I make a big purchase and forget about it. Great list!
I love eBates! I have the Chrome extension, so it reminds me to activate an ebates if it’s available – plus, it searches for coupons and applies them, too. I’ve saved a lot thanks to eBates all while not spending more than I would have.
I tried to set up Drop, but the app isn’t available in the U.S. 🙁
Yes, of course, its very harder to save because I have a habit of spending more money for restaurants. But I’m on the way to recover. I came to know lots of new things from your article. I think some of my friends want this stuff and it’s worth able to share.
I just started using Drop and its freaking amazing. Sometimes I feel like a genius badass because going to Shopper’s Drug Mart means a sweet combo of Optimum points, 2% Tangerine cash-back and Drop points. Seriously, it’s like they are throwing money at me when all I’m doing is picking up essentials like eggs, milk and toilet paper.
I usually get my ebates as cheque (if I meet the threshold that quarter), but I do use Amazon quite a bit, so I’m going to look into their rewards cash. Thanks for the tip!
The key is discipline, using a CC can be a big no-no for some people. As a certified Cash-Flow Specialist (CCS) from The Money Finder, I’ve seen how this strategy can work against people if they are a little too focused on points, however staying well within your spending limits and avoiding deals that you don’t need…. you should be fine.
Thanks for the article Bridget.
I’ve never heard of drop, I’ll have to check it out. Thanks for the tip! Also, you’ll be getting a referral, cause well why not?
So if you have good credit, which you should, you can sign up for credit cards over and over again. This is also known as travel hacking. I still suggest avoiding spending in the first place to build up your investments. However, some spending, like groceries, can’t be avoided. Ergo, don’t let the fact you are getting rewards let you get excited about buying stuff new, buying used is always the best way to go.
This is called credit churning and makes more sense for Americans — who enjoy significantly greater credit card rewards — than Canadians. Continuously opening new credit accounts can get you flagged as a “credit seeker” and work against you at some point. There’s a limit to how much outstanding credit you can have, and opening accounts just to close them soon after doesn’t do any good for your credit score because it just leaves a lot of short credit histories on your credit report.
Not worth it IMO, especially for Canadians.
I use the RBC points plus card, no annual fee for office purchases and personal purchases. As soon as I reach 12,000 points I redeem for the $100 registered plan reward and put it into my RRSP. This makes me so happy that I haven’t really considered changing to a cash-back card.
Wow that’s awesome! Credit card rewards that turn into retirement funds is an awesome perk. I wouldn’t change either!