30 Steps to Great Finances: Steps 10 through 12

Today we are going to continue listing the 30 steps anyone can take to have great finances.

If you are new to this series, please read through the steps we've already covered, starting with 30 Steps to Great Finances: Steps 1 through 3, before reading this post.

Last time we offered some suggestions for making extra income and we continue with that line of thinking today.

Let's get started.

Step 10: Use Credit Cards Strategically

I look at rewards credit cards as offering what I call opportunity money. This is extra money I can earn if I simply chnage my behavior a bit. And no, the change is not "spend more", it's simply "pay with credit rather than cash and get a reward for buying what you would have purchased anyway." I love earning money for doing something I was going to do anyway, that's why using rewards credit cards are one of my multiple streams of income.

I generally earn a couple thousand dollars a year doing this. Yes, I have some large expenses that help me out, but even if you "only" earn a few hundred dollars a year doing this, isn't it worth it?

Of course you need to manage your cards properly. You must pay them off in full every month, avoid all fees, and not make purchases you wouldn't have made anyway. If you do any of these, you'll cost yourself far more than what you'll make. I've never had a problem in 20 years, so if I can do it, you can too.

Develop a strategy that works for you. Look at where and how you spend your money and get cards that make the most of this spending. Also consider the right mix between using cards for rewards and getting cards simply for the bonuses.

IMO if you are not using credit cards strategically, you are leaving easy money on the table.

Step 11: Sell Your Clutter

Take a look around your house. If you are like most people, there is a lot of “stuff” you aren’t using on a regular basis that you can sell and make some extra money.  Consider clothes, kids’ toys and clothes, and other items you just don’t use. Not only will you earn some extra money, but you'll also declutter your life.

And if you are renting out a storage unit for your “stuff”, you can also save yourself some money by having a sale.  It's a double win!

Step 12: Rent Your House

I don’t mean move out of your house, but instead, rent some of your extra space.  You could rent a spare room to someone like a college student or recent grad. Or you could renovate your home and open a bed and breakfast.  (Ok, this example is a bit extreme and not everyone will have the desire or funds to do this, but it is an option for some. Then again, maybe I've been watching too many episodes of Income Property.)

If you don’t like the idea of sharing your home, try renting your space for storage. The self-storage industry is a $17 billion a year behemoth. Maybe it's time for you to get yourself some of that pie by renting basement or garage space to others who need a place to keep their stuff.

Or, if you have a two-car garage but only one car, you could rent the space to a neighbor for parking, boat storage, or something similar.

The original Frugal Zealot, Amy Dacyczyn, even once suggested renting part of your freezer chest to a single person so they could buy food in bulk and save.
 
As you can see, you are only limited here by your creativity. :)

So there you have them -- three new ways to make money and improve your finances.  Take a stab at some of these strategies to see if they can work for you. And stay tuned -- we're not even halfway through our list of 30 steps to great finances. There's still a lot more good stuff to come!!

Update: Click here to read steps 13 to 15.

Comments

[MITM @ Nakedbudgeting]

I understand the credit card thing but I don't trust myself to not be motivated to spend more because of the rewards. I might delve into it some time this year because I've become more disciplined over the past few years, but I'm still nervous.

Our house is small and doesn't have space to rent and we don't have a garage so those options you gave aren't for us. BUT I've thought along the same lines of renting things and I've seen some web sites like snapgood.com out there that will let you rent your car, lawn mower, power saw, garden space etc. I haven't tried them yet, but I'm intrigued.

All that being said, when I remodeled our basement, rigged it so that it can be turned into a rental unit with minimal work. Now I'm just waiting for our kids to move out. Right now one is 1yr old, so it's gonna be a while. :)

[Sarah]

Yes, I think using rewards cards is only suitable for people who are not in debt and without any recent history of impulse spending on cards. Basically, if you've paid any CC interest in the past three years ago, I'd stay away.