There are never too many ways to add to your savings account. This post will explain how I use Venmo to automatically add to my savings and maximize my credit card benefits. This isn’t for everyone, and you shouldn’t do this unless you’re comfortable. But, because it has worked so well for me, I wanted to share it with you.
If you haven’t heard of Venmo, I highly recommend it. It is among the most useful apps out there, especially for those in their 20s and/or those living in cities. (There’s a list of all my essential city apps in my new City Survival Guide, grab yours free below). It allows you to quickly and easily transfer money to and from your bank account to others. It’s simpler and quicker than Chase Quick Pay or PayPal, and it’s totally free. Kiss goodbye the nights of cab rides where one person always ends up forking over more money than they spent.
To make the most of Venmo I link it to my savings (not my checking account). I also try not to Venmo others. Instead, I use my credits card to pay for a night out (to and get benefits), and then have others Venmo me if I paid for. It’s like I trick myself into thinking I’ve spent more than I have, all while that extra money goes into my savings (mwah haha).
1. Choose the credit cards with the best benefits for you.
Decide what sort of benefits would make the most sense for you. Cash back cards are easy because they do just that, directly give you cash back. However, the percentage is usually pretty low in value when compared to airlines or travel cards. They can give you much higher rewards in terms of airline miles. It just depends on what you’re trying to save more of: travel points of simple money. Here is a great flowchart from nerdwallet.com to help you find which sort of reward credit card is best for you:
2. Set up automated alerts for credit card spending.
If you’re worried that a credit card will lead you to overspending, you can still reap the benefits they offer. Set up automated alerts (text or e-mail) to notify you when you’ve spent a certain amount and/or when your available balance is below a certain amount. I’ll show how to do this with Chase, but you can do this with any credit card as far as I know.
First, log into your online banking.
Second, select “Manage Account Alerts” in the Customer Center (shown with the arrow below).
When you’re brought to the alerts page, make sure that the correct credit card account is selected as shown with the arrow below.
Then, enter the lowest amount you want to have available. Select how you’d like to be notified (text or e-mail) once you’ve hit that amount. Now, you don’t have to keep track of everything you spend on your credit cards because once you’ve hit a certain limit, it will notify you! Easy.
Scroll to the bottom of your page and click ‘update alerts’ and you’re good to go.
3. Download Venmo.
If you don’t have it linked to your savings account (versus your checking account), do so.
Great. Now that you’ve got your credit card and Venmo set up, you’re ready to apply my handy technique. You:
- Offer to pay. Yes, I know it sounds scary, but at restaurants with friends, when buying concert tickets, when pooling money for a gift, you should offer to pay for them. That will get the most spending on your credit cards and get you the most rewards.
- Have your friends Venmo you directly for their portion of the purchase. Then, the money they send you is sent to your savings account without you even thinking about it.
- You receive a text or e-mail alert saying you’ve spent X amount on your credit card, so you finish your appletini and go home. Fast forward 10 hours and you wake up refreshed and knowing you have extra cash in your savings after a night out. You, your liver and your bank account are welcome.
To illustrate, let’s pretend you and two other friends go out to dinner and your bill is $120, $40 each. You could:
A- spend $40, get 40 frequent flyer miles or .40 cash back, end of night.
Or! You could:
B- spend $120, get 120 frequent flyer miles or 1.20 cash back, put $80 into your savings account, receive a text message from credit card company reminding you that you’ve spent your limit and evaluate your money for the rest of the night. Then, you have: enjoyed a night out with friends, earned credit card rewards, and contributed to your savings. You multitasker, you!
I hope that this effortless method works well for you. As with all money “tricks”, you still need to be mindful of your spending. I do hope that this easy and fun little trick offers a mindless boost to achieving your rewards and saving, as it has for me.
Venmo is one of the best apps I have for my life in New York City. Check out my free City Survival Guide for more tips, apps, and sites essential for the best city life. Yours below!