An average human can live 3 weeks without food, 3 days without water and 3 seconds without checking their iPhone. But how long can you live without money? I’m not talking crazy here (well I am) about going off to live in the caves of Utah like Daniel Suelo. I’m talking living the life you want, but doing so without spending a dime of real money. I think I’d like to give it a shot next year as a bit of fun, and am starting to lay the groundwork for it now.
First steps would be:
Set up a household budget
Since we have just moved home we have a completely new budget to build. Things like Utilities, Gas, Taxes, all have changed. So I need to know what the outflows are per month, and how then to lift them all off the budget without spending money.
Find leverage solutions
As I mentioned at the start, I’m not going off reservation here – I plan to eat good food, drink good booze, and maintain the lifestyle that I want. The solution is to lift off things via points and giftcards. It builds upon the concept I raised yesterday that we are overvaluing points. And by doing so, we are hoarding them unnecessarily.
Think about this. If your monthly outflows are $3,000 but you ‘Travel for Free’ then you are still laying out $36,000 per year, and still making conscious decisions to not spend points as you want to have them available for travel. If instead you can find a way to use your points for not just travel, but all monthly outflows – your inflows from salary can leapfrog you forward. Just imagine how much faster student loan debt would be eradicated, or how you could save up the downpayment for a house in a year or two with the extra $36,000 saved…
Is it possible?
Perhaps. We just spent a ton of money on our new kitchen. It is possible that we could have bought appliances with points. The key here reverts to the leverage solution. If we were to just use statement credits and gain a 0.5 cent value VS if we bought a Gift Card at 1 cent value and then churned it into a relevant card… that’s doubling your value right away. The challenge will be the ‘real money’ things. Such as rent or mortgage payments – but these already have App partners like Evolve and many others. So if we have a pipeline of Gift Card>Evolve>Mortgage we would just need to find a way to craft the originating gift card from points, and there create a solution without cost. The interesting thing for me will be how much time it would take to generate this. I feel that when the system is in place the challenge will be to maintain points inflows, and I’d rather not be standing in line in Walmart for more than an hour a month.
I can see this blowing up in my face for sure, but if in the process of failing miserably I learn how to remove an entire line item – EG Groceries – from my budget, its a win.
What do you think? Would you want to take the leap from traveling for free to living for free? What pitfalls do you see here?
Matt,
I was attempting something similar earlier this year with the Ink cards and Staples. Back when the portals paid, you could MS the max at OSS pretty quick. I was able to get our full year budget of Target giftcards (groceries) done.
So you definitely can get one line item off your budget pretty easy. I was working on getting gas done (Sears giftcards thru Ink, and then converting to BP and Shell at Sears) but that dried up after the portals stopped paying and Sears locked it down at least here in Minneapolis around October.
I couldn’t figure out how to get my utilities or anything else though. Maybe others have good ideas.
Yep – I was thinking of things like Sears too. I think there must be other chains like this. For Gas, I have reduced it to around 70 cents a gallon already, but do pay cash for that. However, filling a tank for $10 is pretty sweet.
I’m not sure I understand. It seems like you’ll still be spending the same amount of money but differing payments.
I’m not sure it makes sense 🙂
Here’s what I am doing right now (example data)
Earning a salary of $50K
Spending $40K on ‘stuff’
Travel with a value of $20K
Saving $10K
What I am proposing is:
Earning a Salary of $50K
Spending $0 on stuff
Travel with a value of $20K
Use points to cover stuff of $40K
Save $50K
Meaning you buy gift cards with points? Or do you buy gift cards and offset the cost with the points you earn?
Is there a difference in that?
If I buy a giftcard with points or buy a giftcard with credit and reduce credit card balance with points it is both coming from points.
As I mentioned in the post, doing this the ‘smart’ way could double the value (or more) of the transaction.
But in both case I am not taking salary and applying it to pay directly, or indirectly – that’s the goal..
I have zeroed out our cost for gas entirely with MS. However, it isn’t really making that big a difference, especially because the price of gas has plummeted. Still, free is free.
Yeah, that’s a good one, as I said upthread I am down to a $10 fill. I’d like to pull off groceries in full next. I don’t have a lot of other expenses so that would be a big one.
A similar challenge I have heard about from a 20something friend of my daughter was this: Buy nothing new for a year except food. Meagan allowed herself to shop at second hand stores, do trades (a popular event among my D’s friends is a clothing exchange where a bunch of women bring clothes they no longer want, it all gets tossed in a pile, and the women pick and choose whatever they want), use bartering, accept hand-me-downs, and the like. Meagan lived quite well for the year. BTW she’s a school counselor who just bought a house. The idea was to funnel more money into home renovations.
That’s cool – its more of a “Yes, And” situation though. My goal here is to not change any lifestyle habits – IE I will buy the same food, and enjoy the same things, I will just do so without paying from salary. You could then scale that by adding in things like this.
From my earlier reply with Gas, I currently pay 70 cents, but that is real money – let’s make that points, so it all clears off.
The struggle will be things like dining out and what not, I’ll have to find a cash equivalent solution for those sorts of things.
So how do you zero out or drastically reduce your gas cost? Outside of the occasional 2x to 4x gad points on Visa purchases at grocery stores, are you just offsetting the cost with cashback card MS?
Yes, I have found that I am able to use gas points most months. I’ve been lucky in that I really needed store giftcards, but beyond that the route is churning. Buy Card X that swaps to Y that I can actually use. I’ll likely swap over to the Forum for some of the tactics…
Frankly though, this is just a hairbrained idea right now- so it may fail miserably 🙂
It helps to be a person of a certain age on certain days of the week in some locations
I’ve tried this approach but through a combination of MS and Reselling. Even though I net positive (aka earn money) per point earned, to truly scale is the part, that as you alluded to, becomes a time suck. The challenge is mapping up the value/time curve and figuring out where you get the greatest benefit per time spent, and seeing whether similarly, you’re getting the greatest time saved per dollar spent.. Assuming that’s possible, I’d be awfully interested to see whether they are far off or not… Logically they’d be one in the same, at least, I’d think.
Yeah, I agree that the time is where it is at. As mentioned, I’d like to be able to keep the time to bare minimum. I wasn’t joking when I said an hour a month 🙂 I think the best approach is:
First hit goal in any way I can (or come as close to it as possible)
Refine, reducing time and costs
If after the refine stage it isn’t ‘viable’ then I drop it and move on. Just thinking out loud here though, I’m pretty sure I could cover the cost of groceries (as an expense) without much difficulty for the next few years. The key now is finding how I can get discounted GCs to them.
To live off MS is the holy grail of MS isn’t it? Yet only a very select few have managed to live off MS (MM for example, and it’s a full time job for him).
I do a lot of MS, but it’s part time and I’m flexible with my hours/time. Only when I could do a ton of 5x was I really able to save a bunch of $ – my best month was ~$8K cb after fees – but average was probably around $3K. And even with my best month, I wasn’t able to offset all my monthly costs. As such, I don’t see this idea as remotely viable in practice. Absent an unusual combo of very low cost of living, lots of 5% opportunity and wide open cashout options, plus a willingness to hit it full time, I think it is all but impossible to live off MS for any sustained period.
As for being able to convert points into cash, it’s almost always at terrible conversion rates where you’d be better off just doing 2% and skipping all the hassle of converting. That’s why most stick with using miles for travel and not toasters or gift cards.
But I’m not necessarily seeking to live from MS. I’m actually wondering what it would take to lift everyone off the budget for a month. I’m also kinda lucky in that my expenses are pretty small, which makes it easier. Long term, I wonder what will scale and what will not.
Ultimately though, I want to spend as little time as possible MSing – I don’t want a full time job! I think i’ll end up with a couple more things that I no longer pay for. At the moment, I still default to cash for more things than I think necessary.
And weirdly enough, I have enough points to buy a toaster, but I don’t have enough money to send Jnr to Harvard… yet I find myself paying money for the toaster.
I actually do try to do this. If I am able to not put out cash for an expense, I think about the money I didn’t have to earn and the taxes I didn’t have to pay. I love that. There are travel points you can only use for travel and I consider them my travel bank, while more flexible points are considered when talking care of expenses.
I have always looked at points with an eye towards tax-free spending money/way to cover some expenses. I love this approach and will be following closely!
I’ve been pondering this sort of thing. For years I’ve been good at generating points and miles far greater than my points redemptions. As a result, I have enough now to last me several years but the points and miles I have stockpiled from previous years have been losing value and I feel dumb for having spent cash at times for travel when I could have used points but didn’t because I wasn’t getting the “minimum value” out of the points that others recommend getting. I was thinking maybe I should sell some of the points and miles but then I worry about getting my accounts closed and all that. So for starters I have decided that I will not spend any cash for travel this year in situations where I can use points or miles instead no matter what the redemption value. I’ve also switched all my MS efforts to cashback and I’m looking at what else I can use points and miles for besides travel such as gift cards for gas, restaurants, etc.
5x points on groceries this quarter with Freedom card should help with your goal.
I don’t see how this will work, and I’m not a total newbie. But I look forward with anticipation to see your results.