I have been thinking lately – I need to find a way to make money on my daily spendings. I think I might have come up with a simple formula how to make up to 7-8% on all of your daily spendings.
In reality – money is offered everywhere. You simply need to find a way that works the best for you.
Below I will describe a couple of options that are available to you currently that can easily add up to 7-8% return on your daily spending. The below will simply be my vision and you can combine different tools to achieve similar returns for yourself.
make money through a credit card
The first thing that I would encourage you to use – a cashback credit card. This is a type of credit card that pays you money (rather than any type of points). You get a set percentage for every pound that you spend on your credit card.
There are many different credit cards available on the market that offer cashback. Finding the one that works the best for you won’t be too difficult.
There is a myth I need to clear straight away. Credit cards don’t have to cost you anything! There are 2 reasons you might need to pay for these.
Firstly, if you chose a credit card that has a product fee linked to it. My American Express for example charges me £25 per year to use it. The enhanced cashback I get however is worth it for me personally.
Secondly, you will have to pay interest only in those instances when you do not clear your balance monthly. If you make sure you pay everything you borrowed regularly – there will be no interest to pay.
You can also choose a different credit card. Other types of cards offer rewards such as points or air miles. You can learn more about different types of credit cards in this article.
If you want to find a cashback card that works for you – you can check this comparison web site.
This can give you anywhere between 0.5% and 1% back.
loyalty cards bring another way to make money
One other benefit you can get at the same time – loyalty cards. Most retailers and many other types of shops currently offer loyalty cards of some sort.
One thing many believe – there is a shame associated with using these. I would strongly disagree with this mindset. I would argue – it is foolish for someone to leave money on the table when you are offered it.
The loyalty schemes offered are very different across different types of retailers. Grocery shops in the UK offer something like 1p for every £1 spent. This is an equivalent of 1% return.
This yield can go significantly higher with other types of retailers. If you think about coffee shops – these offer loyalty cards where every 10th coffee is free of charge. This is an equivalent of 11.1% return.
I would argue that the coffee that you are sold there is massively overpriced to start with…. but there isn’t much you can do about that.
short term savings accounts
The last step to this scheme – open a short term savings account. In the current environment many banks offer savings accounts with interests north of 4%.
Many of these offer the benefit of your cash being available for you to withdraw at any point you might need this. Many of these types of account also recalculate your interest daily.
In order to benefit from this – simply deposit all the money you spend on your credit card into this account. Withdraw the money just before you need to clear your credit card. This way – you get the benefit from both the savings account and your credit card.
The account that I recently opened myself is with Barclays. They offer up to 5% interest on savings up to £5,000 for the member of their Blue Rewards scheme. This is fairly easy for anyone to apply for
summary
The above is a real simple scheme anyone can follow to get up to 8% return every month on the money they spend daily on their expenses.
Being clever about how you spend your money and how you make it work for you is an opportunity for anyone out there. When you look at some of these individually – they seem like small returns and you can afford to give these a miss.
The real opportunity comes when you start combining many of these different reward schemes into a bigger picture. You can actually save yourself a large chunk of cash this way.
One further thing I would advise you do – forget about this cash actually existing. Transfer these savings into an ISA and make the money grow. This will bring a long term benefit for you.