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How to Get the Biggest Bang For Your Airline-Miles Buck

How to Get the Biggest Bang For Your Airline-Miles Buck

Everyone dreams of racking up great airline mileage points to see the world, but some find the process more difficult than expected. Need help navigating the fine-print confusion to get the most use out of your airline miles? Here are some tips to turn you into a travel master.

Use Miles on Flights with the Best ROI

Get the most return on investment (ROI) out of your miles by critically looking at the best purchase options. The general rule is this: if the ticket costs more than $500, you will usually get a better deal using your miles. If the ticket is less than this, it’s often better to simply pay for it. Blowing 50,000 airline points on a $200 ticket just doesn’t make sense, unless that’s the only flight you can use your miles for before they expire. Using the 50,000 points on a $2,000 flight is a much better spend. If you have more expensive tickets in the future, save your miles for these trips instead.

Points on Upgrades are Smart Buys

Another way to use miles to obtain a higher cost per point value is with upgrades. These give you a much greater dollar value for your points vs than the 1.2 – 1.4 cents per mile average. It is certainly worth utilizing this option on longer flights where the extra leg room and pampering will be more thoroughly enjoyed. Of course, it doesn’t hurt that you also bank additional miles from the trip. Just be sure to ask about any surcharges or restrictions on the revenue ticket you plan to upgrade.

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Book Very Early, or At the Last Minute

Remember, the best possible prices either go to those who book extremely early (330 days in advance on some airlines) or those who snap up empty seats at the last moment. So, if you are neither a long-term planner or a spontaneous person, you will need to adjust accordingly in either direction if you want to snatch up the best ticket deals. As you accumulate your airline miles on purchased flights, it just makes sense to find the best value per ticket.

Book Through an Agent

Airlines have trained us well to book online. This lowers the amount of employee time spent on customer calls and automates the system so it’s easier for the airline. That said, calling an agent and booking over the phone can be advantageous when trying to redeem miles. Airline representatives have access to information and authority over options that you do not, so it just makes sense to use this to your advantage. Agents can often create options that aren’t available through an online site, and can also exercise their authority to bypass restrictions that limit award availability. Yes, you may pay a surcharge—typically $20—but it’s worth it if you save several hundred dollars on a better ticket or option that you didn’t know was available.

Keep Accounts Active

Hoarding your miles for the most amazing trip to paradise won’t happen if you sit on them so long they expire. Many programs allow you to keep your account active other ways. You can gain miles and add activity to your account with purchases not even related to flying. You can often go to restaurants participating in an airline dining for miles program. You can also earn miles shopping. Over 400 online merchants—Wal-Mart, PETCO, Nike, etc.—participate in airline shopping mall programs. You can get anywhere from 1 to 12 bonus miles for each dollar spent. Also, always give car rental agencies and hotels your frequent flyer number to boost points. You can even grow you mileage account through FTD for sending flowers, or stack up additional mileage bonuses booking cruises or vacations through carrier sites. Are you already an investor with Fidelity Investment or TDAmeritrade? You can earn miles investing through these companies with some airlines. Or, if you are more comfortable investing in real estate, you can earn airline miles through certain banks when you take out a mortgage. If buying a house seems like an extreme way to gain miles, you can tone things down and simply sign up for Netflix to accrue additional points over some nightly movie entertainment. New opportunities to build up miles are out there if you’re willing to invest the research necessary to find them.

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Use Sites to Manage Your Miles

If the thought of shifting through all the fine print to discover which deals work gives you a headache, you can utilize certain sites to explore the options for you. These sites take a deep dive into your frequent flier account to help you understand the best options of your miles. GoMiles.com and AwardWallet.com will warn you if your miles are about to expire and alert you to new deals and promotions. However, don’t expect all airlines to embrace the third-party intrusion, as they feel it threatens the security of your information.

Use the Right Airlines

When it comes to redeeming points, not every airline is equal. It pays to choose airlines that are more friendly to point-redemption opportunities. The Wall Street Journal did a survey of all major carriers and found that the toughest airline to utilize your mileage points was US Airways, followed by Delta. With these companies, you have a 36% chance of actually using your miles the way you intend. Southwest was the clear winner of the survey, with a 95% chance of redeeming points, followed by JetBlue at 89%.

If You Can’t Use Miles:

1) Donate Miles

If your miles are expiring before you use them, consider donating them to others instead of losing them. For example, families have pooled airline points together to send newlyweds on their honeymoon, or parents on an anniversary vacation. The gift of travel is a great present! Who knows—they may return the favor when you need some additional miles in the future.

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If you don’t have a friend or family member to share your miles, you can also donate them to charity. For example, the Fisher House Foundation’s “Hero Miles” program has given more than 40,000 tickets to injured service members and their families, and Mercy Medical Airlift has provided almost 10,000 free flights to patients. The Make-A-Wish Foundation also needs miles to send kids on their desired adventures. These charities, as well as many others, will greatly benefit from your unused mileage points, and you can feel good giving to a worthy cause.

2) Trade Miles

While the exchange rate is fairly high, you can exchange miles for gift cards to companies such as Amazon or Starbucks. You can also trade your miles from one airline for points with a different carrier.

3) Use Miles for Hotels and Car Rentals

While the frequent, elite traveler will see much better deals than the average flier, you can spend your expiring miles for hotels and car rentals, as well as other travel needs. Again, it pays to research your best options for redeeming these miles.

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The possibilities of utilizing airlines miles are numerous and differ greatly depending on the program and carrier. However, taking a bit of time to do a deep dive into the opportunities and savings offered will help you become quite the travel-savvy flyer. After all, saving money while flying first class to your dream vacation is a great reward for a bit of extra airline mileage research and points management.

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Sarah Hansen

A corporate-sales professional turned entrepreneur

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Last Updated on August 20, 2019

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!

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Featured photo credit: rawpixel via unsplash.com

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