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October 2014 - SimplisticSaving.com

SimplisticSaving.com

Saving You Money through Simple Methods

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Current Strategy: Exactly What I am Doing! Stop Everything You are Doing and Act Now! Hint Southwest Companion Pass!

Here’s a link to the 50,000 point offer!

Let’s face it, with the internet there is always a deal to be had.  Many times it’s extremely difficult to determine where a “deal” falls on the spectrum of “meh” to “stop everything you are doing and act now (SEYADAAN)!!!”.  The problem with this scale that I just created is that a deal that is “meh” to you may be “stop everything you are doing and act now!!!” to another geyser.  If a hack existed to save $25,000 on a new BMW M3, this would mean nothing to the majority of us because we are not in the market for a $40,000 car, even if it is normally $65,000.  However, to the guy who is pulling up to the BMW dealership with $65,000 in $20 bills in his lap, this is a “stop everything you are doing and act now” moment.  If pulling over and doing this imaginary deal would save this bloke 25 grand he would be a fool not to use it.   This is a problem with many blogs, deal sites and other resources that are out there.  In an effort to reach more readers you must create broader content and post things that do not appeal to everyone equally.  This is not a good thing or a bad thing really, it’s just something you must be aware exists.  Sometimes I will post an opportunity that you will want to jump on and sometimes you will sit out.  One way that I am going to attempt to clarify great all around deals is to let you know which opportunities I am using myself or those that have me grabbing the ear of family members trying to get them to join my cult.

The first opportunity is one that I have already started acting on, but is a process over the next 3 months.  As you may already know my Southwest Companion Pass is set to expire on 12/31/2014.  You can click to read more about it, but in summation anyone holding a “Southwest Companion Pass” gets a free flight for their named companion anytime they book one.  It doesn’t matter if you book with cash or points any ticket you book instantly offers the opportunity of adding a companion. Since you are only allowed to change your companion twice it is not as useful for the tinder and grinder set that would like to have a different companion at the drop of a hat. This is the perfect deal for families or couples (couple does not need to be romantically involved) that travel together.  Once you earn your companion pass it is good for the rest of the year you earn it and the entire following year.  Therefore, if I earned the pass on October 31, 2014 I would be able to use its benefits for November, December and the entirety of next year, 14 months of the perk not expiring until December 31, 2015.  That’s a hella sweet deal, but if I can hold off just 2 months and instead earn the pass in January of 2015 it will be good for all of 2015 and 2016 which gives 24 months of use.  So, what am I doing to achieve this benefit?

Currently, Southwest is offering 50,000 rapid reward points to sign up for their credit card, all you need to do is spend $2,000 in 3 months to earn the bonus.  On the application you simply fill in your rapid rewards account number from Southwest.  If you don’t have one go sign up for one, it’s free and you do not need to fly or be flying anywhere soon.  Fill in that account number on the application.  After you spend your $2,000 you will get 52,000 points (50,000 bonus and 1 point per dollar spent).  These 52,000 points will be good for over $700 worth of airfare!  Keep in mind that you do pay a $99 annual fee for the card (which does not count toward the $2,000 spending requirement so make sure the balance in 3 months is at least $2,099), so in essence you’re getting over $600 worth of airfare for free and this is without even scoring the companion pass.  The trick is to hold off hitting your $2,000 until January 1st.  If your points hit in December the points needed for a companion pass will reset on January 1st.  In order to get the companion pass you need to earn 110,000 points in one calendar year.  So we get 52,000 points from a credit card where will the other 58,000 points come from to earn this?

The way I will do it is to sign up for the business version of the Southwest Credit Card which is offering the same terms.  It will cost another annual fee up front, but will earn you an additional 52,000 points.  Just be certain that when signing up for the second card you put the same Rapid Rewards account number on the application.  If you don’t do that you will be sorry.  If you leave the account number off of the application one will be created for you.  Now that you have earned 104,000 points you will still be short by 6,000 points.  In order to earn these you could do a number of things including using your Southwest credit card to charge another $6,000.  You can go to southwest.com and use their portal to earn points.  Booking a hotel or rental car through their website can also earn additional points.  If you get to the 104,000 point mark it would be nearly criminal to not figure out a way to get the other 6,000 points you need.

This is a deal that I am already acting on currently and have advised my parents to look into as well.  If you’re thinking, “our family doesn’t fly” well it’s likely because it costs too much.  At minimal, even without the companion pass these cards offer value.  Keep in mind that with the companion pass we were able to fly our family of 4 to California for just over 60,000 points.  That’s only slightly more than you receive from signing up for one card.  As always, with Southwest, even when shopping using points always wait until sales are best and fares are lowest.  On their sale last week their shortest distance flights were $49 each way, which meant a roundtrip ticket would only cost < 5,000 points.  Assuming you had 110,000 points you could take 22 roundtrips, if you earned the companion pass that would translate into 22 roundtrip tickets for you and 22 roundtrip flights for your companion.

 

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Does Saving Money Save You Money?

Clearance Deal of the DayCould not live without!  (never used)

 

When you read a blog about saving money, you already possess the most important aspect needed, proper mindset.  Financial awareness is a key component in saving money over the long term.  It’s very easy to think that saving a dollar here or there is no big deal.  For instance, I always use those credit cards which give me the highest return on every purchase.  I have an American Express Blue Cash Preferred card that gives 6% cashback at the grocery and I will use it every single time.  My wife on the other hand will go to the grocery store and just grab any card available.  Her rationale is that if she is only spending $20, that card would only save $1.20 so it’s no big deal.  However, every trip to the gas station, grocery store, or other retail establishment offers a chance to save.  The way I see it is that if I’m going to be making the purchase either way, why not put it on a credit card that will reward me for that purchase?  Why use cash when I can pay with a credit card and get an instant discount a discount that comes after I shop for the best prices and use cashback portals!

The biggest problem for many of us comes from trying to save significant amounts of money by purchasing things we otherwise do not need.  The “Extreme Couponing” craze is one such example of this as those people who follow these methods clip every coupon every week.  If I can buy a can of beets for 10 cents each why not do it?  Because nobody likes beets, they’re garbage, they taste gross and you just wasted your money! This is the opposite of not using your discount when the amounts are small.  You use the discount on items that are deeply discounted, but do they offer a value to you?  If you were some kind of masochist with a beet addiction 100 cans of beets is a fantastic deal and likely saved you about $100, but if you are a normal human being then you probably would have been better off burning the $10 you spent.

This phenomenon is not only present in the extreme couponing circuit.  In fact, every trip to Target provides an opportunity for those demons lurking on the endcaps to claw at your soul.  As you walk the perimeter of the store you see the red homing beacon that are the red clearance stickers.  They sing to you from the cream colored shelves like Sirens in the Tyrrhenian Sea.  Powerless over the possibility of saving tremendous amounts of money you are pulled into their orbit.  Assuming you are not currently reading this while at Target, let’s speak rationally about these fine deals.  Clearance items are only a deal if these are things you would normally buy anyway.  If you have been looking for a bedding set, and had decided on one that was $300 and you find one on clearance for $50 this is a superb deal.  By contrast if you are walking down the aisle and see 80% off a camo beer coozy that says , “My neck may be red, but I’m well read” don’t buy it.  Actually, you’re probably getting this ironically, you can go ahead and get that.  The point is that these items that are “only a dollar” really tend to add up over the course of the year.  In fact these can add up far faster than the “only a dollar” rewards my wife loses when she fails to use the right credit card.

It’s far too easy to base your savings off the MSRP rather than what you truly value an item to be worth.  A better exercise would be to look at these clearance items and ask, “Do I need it? Do I really want it? Would I buy it anyway?  What is it worth to me?”.  So if you walk past the endcap and sunscreen is on sale at 75% off go ahead and pick some up because you probably need it and if you don’t buy it now you will buy some day.  If you walk past the aisle and there is something you have always wanted, but price has kept you from buying it then I think this is a fair purchase.  The Suze Ormans of the world would disagree and advise you to only buy absolute necessities,  fund your emergency savings, fully fund all retirement accounts and then with anything leftover spend money on your wants.  My opinion on this is that sometimes you need to spend some money on the things you want.  So if there is a lamp or shirt you think looks great buy it.

The problem with these deep discounts is that we often go overboard on these clearance items.  In the haze of getting a great deal we often make purchases of things that we do not need or even really want.  As I am composing this my wife came in the door with 3 big bags from Target.  She purchased an $18 lifejacket for $5.38, not a bad deal since our kids will need a lifejacket next year and if she did not make the purchase on clearance we would have paid closer to 20.  However, she also purchased a rug which was on sale for $7.50, she wanted a rug, but I have a feeling that all things equal she never would have bought this style.

My wife happened to be the person who peaked my interest on this topic.  She said, “I used to never look for sales and just buy things I wanted.  I think that I spent less back then than I do now.”  Her hypothesis was that when you go into a store and do not look at prices (but have limited funds) you only purchase things you really want.  Both of us have been guilty of going to Target and buying multiple items, especially clothing, which were on sale.  When my beautiful wife last cleaned out her closet there were multiple items new with tags.  Just as bad there were countless items that she wore only once.  She is not the only one guilty of this either.  I have gone into the store at certain times of the year and bought 5 pair of shorts, but only ended up wearing 3 of the pairs and only a couple times.  Once it’s time to wear them again I’ve undoubtedly gained or lost weight making them useless.

Rather than buying multiples of things you like a little, buying one thing that you really love can be a better deal.  At the beginning of the summer I bought one pair of golf shorts for regular price, but only bought one pair.  I wore these shorts a couple times per week all summer long.  At the end of the year they were 50% off so naturally I bought 5 pairs!  Yet I have worn each pair only once.  One pair is still in my closet untagged.  Basically I spent $20 and wore the shorts 30 times (60 cents per wear), but spent $50 on the discounted shorts and worn those only 5 times ($10 per wear).  So even though my closet looks better with more choices, I’ve likely wasted money overall.  Of course the best option would have been to buy only 1 or 2 pair on clearance and then wear them and I’m saving money.  The problem with clearance deals is they usually don’t work like that.  You end up overspending on things that you don’t need because you feel like you’re saving money.  Unless we think about this consciously we are all subject to doing it.  Which brings me to the question, does anyone want to buy a case of corn on the cob holders?  Accidentally bought too many.  Asking for a friend.

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How We Bought 4 Plane Tickets, 7 Nights Hotel and 7 Nights SUV Rental for $40

Anyone who has read previous entries to this blog knows that two of my favorite things to do are spending time with my family and getting good value. This year for our fall trip we decided to, once again, fly to California. This is usually a trip that would be beyond our grasps financially due to the immense expenses involved with flying across the country. To make this trip a reality I relied on various points and miles programs offered by hotels.

IMG_3710

 

Itinerary

 

The trip included flying into San Francisco then looping around to Yosemite National Park, Sequoia National Park, Monterey and back to San Francisco. This itinerary required 4 round-trip tickets from Louisville to San Francisco, 7 day SUV Rental and 7 nights of lodging. The total cost for only these expenditures would have been $3,256. If you were pricing this out you probably could have searched for better deals and alternate lodging, but the prices I included were for the exact same flights, rental car and hotels that we used. This MSRP value assumes that you just booked the going rates without using other discounts. If you are not interested in the details of each portion of the itinerary scroll to the conclusion section where I will outline all the details including points used and the price without points.

 

Flight

 

We flew Southwest using Rapid Rewards Points, which are tied to the actual cost of the flights. Therefore when flying Southwest whether purchasing tickets with cash or using points it is extremely important to purchase tickets at the lowest fare (which also means the lowest points). Since our youngest child is 25 months old he is over 2 years old his ticket costs the same as an adult fare. This required us to purchase 4 tickets. As soon as the month of October opened up for booking I started checking Southwest on a weekly basis (at least). They offer new sales every Tuesday, some sales are great and some sales are pretty weak. The great thing about Southwest is that there is no fee to cancel your flights, so if you book at one price and the next sale is better you can cancel those tickets and book again.

 

In June the price of tickets round-trip dropped to $350 each (plus $10 for taxes and fees). If I had not prepared for this then the cost for tickets alone would have been $1,400 (plus $40 for taxes and fees). Since I qualified for the Companion Pass, any ticket that I book on Southwest allows me to add a companion to travel with me free of charge. Anyone reading this who has the companion pass, but not enough points to book tickets that way would have paid $1,050 for the tickets (plus $40 for taxes and fees). Since we had the Companion Pass and enough Rapid Reward Points I was able to book this flight for 61,734 points. Alternatively Chase Ultimate Reward Points transfer to Southwest at a 1:1 ratio meaning I could have transferred as many points as I needed from Chase Ultimate Rewards with no cost.

 

Car Rental

 

Since our itinerary required a great deal of driving renting a car was a necessity. Since we have a stroller and a few bags I decided to go with an SUV for this trip. I used carrentalsavers.com to look up rates and found that Alamo offered the most value. I then went to my Chase Ultimate Rewards account to book through them as they offer a “pay with points” option which gives these points a value of 1.25 cents per point.

 

We rented a 2014 Jeep Grand Cherokee which would have cost $433.68 for 7 days booking directly through Alamo after taxes and fees were applied to the total. In lieu of this I was able to book the week using Chase Ultimate Reward points. The total was 20,696 Chase Ultimate Reward Points which actually ended up getting me 2.1 cents per point. To put this into perspective my wife and I both got 25,000 Chase Ultimate Reward points when we signed up for the Chase Freedom card which has no annual fee. So that amounts to about $500 worth of signing bonus for each card.

 

If you are considering this particular itinerary keep in mind that we drove the rental car over 1,000 miles. We spent $152 on fuel that we paid for using point earning cards, but did not pay with actual points.

 

Hotels

 

When creating an itinerary involving multiple destinations the hotel accommodations are the most difficult and arguably the most important of the trip. Using Google Maps I plotted out the trip to the best of my ability. We arrived in San Francisco, saw some sights in the city and headed toward Yosemite. I found that the Modesto and Turlock area was about half way between these two locations. Finding lodging near a national park is very difficult and you pay dearly for the location and often give up a lot in quality of hotel (unless you pay much more). I decided that Comfort Suites worked well for our night in Turlock. We booked a double Queen suite which had two queen beds and a pullout couch. This room was one of the bigger hotel rooms that we have stayed in and it was very nice. The normal cash cost for this room was $139 plus tax per night. It cost us 16,000 choice hotel points. If you sign up for the Choice Hotels Visa you get a 32,000 point signing bonus which would cover 2 nights.

SimplisticSaving.com Comfort Suites Turlock

 

After visiting Yosemite we made our way toward Fresno which is almost directly between Yosemite and Sequoias. Our plan was to have 2 nights in Fresno, one night between Yosemite and Sequoias and another night spent after our day in the Sequoia National Park. Using Club Carlson Reward Points we were able to stay in a Country Inn & Suites which worked out quite nicely because when you have the Club Carlson credit card you get your last night free on a stay of 2 or more nights. Obviously there is more value if you only stay two nights. Normally a room costs $92.50 per night or 15,000 Club Carlson points. Since we have the Club Carlson Visa we used 15,000 points for 2 nights which is 7,500 points per night.

 

After our second night in Fresno we headed to Monterey. This is the only portion of the trip that I did not book in advance. We could have stayed using points for the night, but instead we opted to use Hotel Tonight. Hotel Tonight found us the Best Western Plus in Monterey which is directly on the beach. The normal cost for this is $160 per night plus $18 per night parking. On hotel tonight it was $132 plus $18 parking. A total of $150 for the night. Using American Express Membership Reward Points to wipe out this charge cost 22,000 points.

SimplisticSaving.com 17 Mile Drive Monterey17 Mile Drive in Monterey, CA

 

After our day in Monterey we traveled back to San Francisco. I decided that stopping halfway between Monterey and San Francisco would not only be more economical, but it would allow for us to get to the hotel a bit earlier and relax. We stopped in Silicon Valley at the Four Points by Sheraton – San Jose. This hotel usually runs $180 per night, but I was able to book a room for 4,000 SPG points. My wife and I both have an SPG Credit Card which awarded us a bonus of 25,000 points for signing up. This offered a great value. Although this was a lower category hotel for the chain it was still beautiful. Starwoods Hotels include W, Westin, Sheraton and many high end brands.

SimplisticSaving.com Four Points Sheraton Lobby

Picture of the Four Points by Sheraton Lobby

 

Our final stay was for 2 nights in San Francisco. We stayed at the Radisson in the middle of Fisherman’s Wharf. The location was superb and the hotel was updated in 2012. We were very impressed with the accommodations. The normal rate at this location is $299 per night and parking is an additional $50 per night. Like Country Inn & Suites, Radisson is also part of Club Carlson and we were able to use 50,000 Club Carlson Reward Points for this stay. The normal charge for points is 50,000 points per night, but having the Club Carlson Visa allows your last night of a 2 night (or longer) stay to be free. Along with this huge benefit you are given Gold Elite status which we found very beneficial at this hotel. When we arrived at check-in they told me that as a VIP member my room had been upgraded free of charge to a balcony room on the top floor. As a Gold Elite member they also waived the $50 per night parking charge. When we arrived in our room there was a “welcome gift” of a bag of kettle corn waiting for us in the room. Attached to the gift was a card thanking us for choosing to stay at their hotel for our trip. My children and I went to the pool while my wife got comfortable in the room. Someone stopped by the room during that time to bring us extra towels and a couple bottles of water to welcome their “VIPs”. The sign up bonus for the Club Carlson Card is 85,000 points, plus you get the last night booked with points free and are automatically upgraded to Gold Elite status. On this stay alone we used 50,000 points, but managed to save $299 per night on the hotel, plus $50 each night on parking. So for this stay 50,000 points equaled over $700 in value! That’s not even considering the free upgrade to the balcony room closest to the bay with a tremendous view of Alcatraz.

 

IMG_5123                                                                                                                    Actual Unobstructed View From Radisson Balcony – Blue Angels Flying Over Alcatraz

 

Conclusion

 

All told we received $3,256 in value but paid only $40 for flight, lodging and SUV rental. I put a valuation of dollar per point received. Many of these calculations depend on how they are used. For instance, American Express Membership Reward points used for this stay were worth less than a penny each, but can be used much more beneficially when transferred to another program. SPG points were worth 4.5 cents each used at this particular location. The value of hotel points can be a bit skewed because if I had not had hotel points I would not pay $180 or $350 per night for a hotel room. I would probably sacrifice a bit of quality for a lower price. However, using points allows the user to splurge and afford things that normally would have been out of reach.

 

Retail Price                   Actual Paid               Points                $/Point

 

Southwest – Louisville to San Francisco                                          $1,440                                $40                61,734                   .023

Southwest Rapid Rewards

 

Alamo Mid-Size SUV Rental (7 Days)                                                 $434                                  0                  20,696                   .021

Chase Ultimate Rewards

 

Choice Hotels- Comfort Suites Turlock                                             $139                                   0                  16,000                   .009

Choice Priveleges

 

Country Inn Fresno (2 Nights)                                                           $185                                   0                 15,000                    .012

Club Carlson Rewards

 

Best Western Plus Monterey Beach Resort                                    $178                                   0                  22,000                   .008

American Express Membership Rewards

 

Four Points by Sheraton – San Jose                                                $180                                 0                    4,000                    .045

Starwoods Preferred Guest

 

Radisson Fisherman’s Wharf                                                         $700                                  0                   50,000                   .014

Club Carlson Rewards

 

Total

$3,256                             $40                   189,430                   .017

 

 

 

 

 

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