free

What’s that, Frugal Mermaid?  Did you say FREE?  You’d better believe it.  In this post, I’m going to show you ways to get free and {almost} free money or rewards.  You want some?

*Free*

1. Rewards credit cards

You can get major cash, miles, or points, just by putting all of your normal spending on a rewards credit card.  I never pay with cash or debit if I can help it, because I want to reap the rewards!

Which card should you get?  There are hundreds of cards out there…and they all have those super long, super boring card agreements that hide sneaky fees and interest rate hikes.  Never fear, smart shopper!  There are many tools on the internet that can narrow down your choices for you.  While I still recommend you scour those card agreements for any card you are seriously considering, these tools can give you a starting point:

*HUGE (if I could have made that with a sweet WordArt effect, I would have) disclaimer*  Do not use a credit card to incur debt.  If you decide to get one of these cards, you MUST pay them in full every single month.  If there is any chance of you missing a payment or using it to get yourself in debt, just say no.

  1. Magnify Money is great for comparing everything from loans to bank accounts to credit cards.  Use their filters to narrow your choices down, and pick a few that look great to you.
  2. NerdWallet also has a similarly great comparison tool.
  3. TravelMiles101’s frequently updated recommendations are mainly focused around airline miles and hotel points.
  4. And ditto for the Mad Fientist’s recommendations.

If you don’t find the answers you want here, I have no doubt that other recommendations exist elsewhere on the internet.  But, before you take ANYONE’S advice on a credit card, make sure you do your due diligence.  Read the card agreement and research if other people like the card.  Sometimes websites/bloggers recommend cards because they are sponsored by the company, or get a little kickback for recommending it.  Hey, we’ve all gotta make money, right?  Just be careful and make sure the card is right for you.

1a. Target’s RedCard debit card

And on that note…just kidding, Target isn’t paying me to be a fangirl.  I am just obsessed with this card and want to shout about it from the mountaintops.

I’m going to start by saying no, this is not the best rewards card around.  But is it a good one?  And does it specifically get me benefits at my favorite store on earth, Target?  Yes, yes it does.

People think there’s a catch to this card.  And that’s the beauty of it…there’s not one!  This card is a DEBIT card.  It’s not a credit card.  You are not delaying payment when you use this card, anymore than you are by using a regular debit card from your bank.  As you use this card, Target does an automatic electronic funds transfer from your bank. EFTs happen so fast nowadays that you probably won’t even notice the delay from the middle man.  You buy something from Target, go home, check your bank account balance, and see that it has been reduced by the $100 you just spent on items from the dollar section (you know you do it too).

And what do you get from this marvelous card?  As they put it, “5% off today & every day”.  The 5% off works for pretty much everything in the store, minus gift cards (boo 🙁 ), pharmacy items, eye exams, gift wrapping services, and a few other things I’m guessing you don’t buy from Target very often.  So now I’m only paying $95 for my $100 pile of dollar crap?  Target, you’ve done it again.

My favorite feature of the RedCard debit card is the FREE SHIPPING at Target.com.  If you ever get a birthday present from me, you’d better believe I got it from Target.  Ain’t nobody got money for shipping!

One more benefit that I’ll mention before you get too bored…you also get your return period extended by 30 days.  Maybe that will come in handy someday!

So if you ever shop at Target or on Target.com, just get the card.  You know you want it.

2. “High” interest bank account

Up until I found the whole financial independence movement, we were banking with a little credit union in Orange County.  We had about $20,000 sitting in savings, earning us a 0.05% dividend.  What?!  That means that if I had $100 in that account, I would make $0.05 a month.  I make more from picking up coins on the sidewalk!  So the ~$20,000 we had just sitting in savings was earning us $10.  Sure, it’s better than nothing, but there’s gotta be something better!

And there is!  There are so many online savings accounts that earn so much more.  Unfortunately, we’re still generally under 2% (a little over 10 years ago rates were around 4%), but that’s a heck of a lot more than I was making!

Now I have an online savings account with GS Bank and it’s earning me 1.05% (now 1.20%!!!).  This is one of the highest rates that I’ve seen (although I’ve got a few others I’m researching…stay tuned to find out if I switch when I get back to the States!).  Online savings accounts tend to have better interest rates.  Rumor has it that the reason behind this is that they don’t have to pay overhead fees like a brick-and-mortar bank with employees does.  Whatever the reason, I’m glad there are better options out there.  Ten dollars is good free money…but $210 is much better.

I don’t recommend that you keep $20,000 in a savings account (I have since corrected my mistakes), unless you are afraid of the risks of the stock market or other investments.  BUT, if you don’t mind losing out on better returns for your peace of mind, make sure you are getting a good interest rate at your bank.

3. 401(k) Employer Match

Many companies have what’s called an employer match.  This means that your employer will also contribute a percentage of what you are contributing to your 401(k).  So if you are making $30,000 a year and decide to contribute 3% of that to your 401(k), your employer may also contribute 3%.  Doubling your money for free!  Be aware that all employers have different limits to their matches…so sometimes if you contribute 7%, the employer may only match up to 3%.  But it’s still free money, people!

*{Almost} Free*

1. Low-cost index funds

An index fund is a type of mutual fund.  An index fund is created to try to match a market index, like the S&P 500.

Huh?

It’s just a specific mutual fund, one that generally contains stocks from hundreds of the best North American companies.  This gives you a little diversity, in a very passive way, which results in lower fees for you.  They also tend to outperform any other kind of stock investing.

So what part of this is free money?  Your returns!  Vanguard’s VTSAX Total Stock Market Index Fund (my fav) has an average return of about 7% over the last 10 years (with 5-year, 3-year, and 1-year returns even higher!).  Most other index funds have similar returns.

What does this mean for you?  One guess.  Yep, FREE MONEY!  Just for investing $10,000 of your hard earned money into an index fund, you can potentially get $700, with absolutely no effort on your part!  Remember, the stock market is never a certain thing.  I’m just giving you averages here.  You could get returns of 3%, but you could also get 12%!  Either way, FREE MONEY!

*Note, you could also lose money in the stock market…be aware of the risks before you invest*

But why is it {almost} free?  People wanna be paid!  You’re going to have to pay your investment company.  The number you care about is the expense ratio.

With VTSAX, you will pay an expense ratio of .05% of your portfolio balance (one of the lowest in the industry).  So, $5.35 of that $10,700.00 has to go to Vanguard.  Not a terrible deal, right?

This is why you want an index fund.  Other funds can charge 1.0 – 3.0+%.  Just like the good interest you earn from a high interest bank account, the difference between .05% and 1+% can make a HUGE difference.

2. Free college education

Concurrent enrollment is the best invention ever.  You take classes that 1) count for your high school credits, 2) count for college credits, 3) cost much less than they would at a college or university, and 4) are easier than college courses with no-nonsense professors.  You are literally taking one class and reaping the benefits twice.  Some programs even let you graduate high school with your Associate degree!!!  It seriously keeps me up at night when I think about it.  I could have graduated high school and started university as a junior.  If your high school offers this, or offers any type of college credits for any amount of classes DO IT!!!

My big hang up was “wah, I won’t have time for school, homework, friends, a job, AND college homework!”  Let me tell you, I had a few friends who did it, and their social lives did not suffer.  In fact, I didn’t even realize they were doing it until graduation day when they also received their Associate degree.  D’oh!

If you are looking for ways to save on your graduate degree, the Mad Fientist just earned his Masters Degree from an Ivy League school for free. What?! You heard. Check out his article here.

I hope these gave you some good ideas on how to make your money/time work for you.  There’s no reason to let rewards like these go unclaimed!

*Have you read the other articles in this series?  Read my advice on work, housing, and savings.*

How do you reap free rewards?

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