Alternative Income- Cash Back

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This isn’t really an alternative income source since you have to spend money to get it. If you only purchase things you would spend money on anyway though this provides a little extra money. There are two main ways that I get cash back.

The first way is through online cash back shopping portals. The ones I most commonly use include Ebates ($10 signup bonus), Big Crumbs, and My Points. There are many more out there but these are the ones I’ve used and know.

I’ve mainly used Ebates for online shopping.  Their cash back is good but they only let you cash out four times a year and you have to earn a minimum of $5.01 not counting referral bonuses to cash out. This is a problem for me since don’t shop online(or offline) that much.

I’ve just started using Big Crumbs but I think it is going to be my main cash back site now. They pay on a monthly schedule. One of their big draws is that they allow you earn cash back on Ebay purchases. The other thing I most like about them is they allow you to earn money on your referral’s shopping activity. If you have a lot of referral this could be a decent amount of passive income.

MyPoints I don’t actually do any shopping through. I just get paid to read their emails and occasionally do a survey. I joined them earlier this year and it looks like I’ll make about $20 a year in gift cards from them. If I were more active I could increase that amount.

The other big way to get cash back is through the use of cash back credit cards. My personal favorite is the Chase Freedom(SM) Credit Card. I earn 3% back on my top three categories and 1% on the rest. If you wait until you have $200 cash back accumulated you will get a bonus $50 which effectively turns your cash back rate to 3.75%. I should have $200 accumulated by early next year and I’m waiting to cash out until then.

The other cash back card I use is the Discover® More(SM) Card. The trick to getting the most out of this card is to focus your purchases on their bonus 5% cash back categories. They switch these four times a year giving you a variety of categories to save money on. They currently have 5% cash back on gas which I’ve already earned my maximum amount of $20 on. I’ll now set the card aside until I can use it for the next 5% cash back promotion.

You can view some more cash back cards here.

Remember if you buy something you don’t need just to get the cash back you’re not saving any money.

Keep Savings Aside from Retirement Accounts

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You shouldn’t have all your savings in retirement accounts. You need to keep some of your money outside retirement accounts for emergencies.  There are several reasons for this.  The main one is if you have to pull money out of your retirement accounts for an emergency you will get hit with a large tax bill.  On a 401k you’d have to pay a 10% penalty plus ordinary income tax on the amount you withdraw. This could eat up almost half of your withdrawal.  On a Roth IRA you’d also have a 10% penalty but you’d only owe ordinary income taxes on your withdrawn earnings not your contributions.  There are exceptions that will let you avoid the penalty but they won’t apply to most withdrawals.

The other big reason to avoid pulling money out of your retirement accounts is that you lose the ability to contribute that amount to your retirement accounts.  If you put $5,000 in your Roth IRA and then have to withdraw it you can’t put it back in.  You’ve lost the ability to contribute $5,000 to your Roth IRA for that year and you’ll have to wait until the next year to start contributing again.  Since you are only allowed to put a certain amount in retirement accounts it is important to make full contributions if possible.

Those are just the biggest drawbacks to using your retirement accounts as an emergency fund. Some people think it is worth the risk to keep all of their savings in retirement accounts but I wouldn’t recommend it and it isn’t what I do.  I may not be able to fully fund my Roth IRA this year because I don’t want to bring down the balance of my non-retirement savings too low.  There is a drawback to this too because I’m losing the ability to contribute that amount.  What would you do, keep a fully funded emergency fund or withdraw most of it to contribute to a Roth IRA?

Reflections on First 3L Week

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I just completed my first week back in law school and I am finally a 3L. This school year will be my last one way or the other. Hopefully it won’t be the other. This semester will be the big test. I have 6 classes for a total of 14 credits this semester. Next semester I only need to take 9 credits to have enough to graduate so that semester should be easy.

My classes this semester are only on Tuesdays,Thursdays, and Fridays. My Friday classes don’t last all semester. I’ll have it even easier after those classes end. The classes I’m worried about are App Ad II and my Family Law clinic. Both require public speaking, legal research, and legal writing which aren’t my favorite things. They’re pretty important things though if you want to be a lawyer though so I need to do it. I also have to retake Biz Org which I think should be easy for me. I didn’t think the class was difficult last time but I bombed the final so I probably shouldn’t overestimate my knowledge. Overall, I don’t think this semester will be too difficult academically. I’m not used to getting up early for classes and I haven’t gotten into a routine yet. In another week or so that should be established and everything should be relatively smooth sailing.

August Credit Score

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My credit score for August is 725 up from 716 the month before. It finally seems to be heading the right direction after declining this spring and early summer. It is still a long way from the high of 787 earlier this year but it is good enough for my present needs. I get my credit scores for free from my Wamu credit card which is all I use the card for any more.

I Won’t Be Living In A Van

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At least not in the near future.  When I stated that I was going to be moving into a van this fall I had every intention of doing so and was looking forward to the prospect.  However, things have changed since then. My relationship with my GF has grown more serious and I’m spend almost every night at her house.  If I moved into a van I’d still be spending almost every night at her house.  That would end up being an unfair situation since I’d basically be living at her house but not sharing any of the living expenses.  Therefore when my lease is up I will be moving in with my GF. I’ll be contributing towards our living expenses an amount roughly equal to my current living expense. I’ll probably do a separate post about that.

I hope this isn’t too much of a disappointment to those who were looking forward to my posts about living in a van but moving in with my GF is the fair and practical thing to do.  Of course it also represents a step forward in our relationship and a further commitment to each other.

My new plan is to live in a car or van for a short time this fall as a sort of experiment.  I’ll post details and pics when this plan is finalized.