I like to get paid for banking. No longer will I settle for a bank that will only give me a few cents in interest per month. Perhaps you are fed up with your bank and need a few alternatives. Let’s explore how you can earn over $700 back from banks each year!
Preliminary Budgeting Practices
Ever since I started budgeting, I adhered to the following principles and they’ve never failed me. I believe everyone should follow these simple rules of budgeting as first priority – before they look for getting cash back.
1. Spend this month’s income next month.
I can’t even begin to explain how important this budgeting method has been in my life. Learn how to spend this month’s income next month, and you’ll have thousands in your checking account. This helps prevent overdraft and ensure that you know exactly how much money you have to spend each month.
2. Begin to build a fully funded emergency fund.
Emergencies happen. Sometimes, they happen a lot. You have to be prepared for the worst, and having an emergency fund that you can depend on is crucial for success. Shoot for 3 to 6 months worth of expenses in an emergency fund.
Start Earning Cash Back
Once you have set out to accomplish each of the goals above, you are ready to earn cash back. Currently there are two financial institutions from which I earn cash back: PerkStreet Financial and ING Direct. Let’s explore each and how together with my budgeting practices, I earn over $700 cash back each year.
PerkStreet Financial: Primary Checking Account
PerkStreet is a financial institution that has banded together with the Bancorp Bank to create one of the highest rewards online checking accounts available today. They offer 1% cash back on your debit card (yes, debit card!) purchases or 2% cash back on your debit card purchases if your checking balance is over $5,000.
Because I spend this month’s income next month, I easily have over $5,000 in my checking account at any one time. That means I always get at least 2% cash back (you can get up to 5% cash back on certain purchases) on our everyday purchases.
For us, that averages out to be about $49 cash back per month, or $588 per year.
PerkStreet has been awesome to us, and I highly recommend them to you. For more on this highly profitable checking account, including all the pros and cons, read my full review of PerkStreet Financial!
Also be sure to check out Bob’s thoughts on PerkStreet!
ING Direct: Orange Savings Account
Another way I earn cash back is by using ING Direct for my emergency savings fund. At the time of this writing, ING Direct offers 1% interest on their savings account. This is far more than is offered at any brick and mortar bank I’ve ever found.
Because we have an emergency fund of 6 months worth of expenses, we end up making at least $150 per year in interest.
Are You Going To Switch Banks?
As you can see, by using just these two financial institutions we make $738 per year. That’s a lot of money! For us, it’s almost a full mortgage payment! Wow!
And the best part is, we aren’t risking going into debt with a high interest credit card to get there. We’re done with credit card rewards programs, as we feel the risk isn’t worth the profit we incur.
Maybe you have a different opinion on how people should store their money. Or perhaps, just perhaps, I’ve convinced you to rethink your banking methods and still earn over $700 per year in cash back.
I want to hear from you! How do you do your banking, and how much do you profit from it? Meet me in the comments!
Photo by stevendepolo
{ 3 comments… read them below or add one }
With your debit cards, the only way to get the Rewards is to shop and stores that accept credit cards. The two discount stores in my neighborhood only allow pin based debit card transactions. In those transactions, you are not getting any cash back. In my neighborhood, the only way to get cash back rewards on debit cards is to shop at the high price stores. This is a false savings. In order to get a small reward you are paying a very high price for the products you buy. Shop for price first. That is where your real reward is.
Glen, I couldn’t agree more with this statement: “Shop for price first.” That’s so essential. I like to think of my rewards debit card as simply paying 98% of purchase price, not 2% cash back. That keeps my spending down! But you’re right, shop for the lowest price first people!
I wonder if they have something like Perk Street in Canada. This article is great, and brings up somethings we aspire to in our household. I am talking about 3 – 6 months savings, and spending this months income next month.
My husband and I took a financial class at our church which was enlightening, Good Sense, its put out by Willow Creek. I mentioned this website at the class. I’m finding having a spreadsheet in the laptop, as in an electronic spending plan, very helpful. I am doing much better with our spending plan than when I tried to think of a budget on my own. There is something about accountability, that my husband went to the class with me, and taking a coarse with others, and learning why to budget a certain way (managing what God has entrusted to us), that really turned over a switch in my brain for me. Of coarse it all comes down to God enlightening my brain anyway!