Sometimes these fads can help you earn save a couple bucks and other times they can suck up your time and money.
At times it can be hard to tell if you’re implementing a technique that is actually going to help you financially or if you’re just responding to hype.
Since I spend a lot of time reading and writing about personal finance I can spot the trends pretty easily. Here are three personal finance fads.
Are you following any of them?
# 1 – Churning Credit Cards
Rewards credit cards are nothing new, but the way they’re being used is.
Instead of just using one credit card to rack up and redeem points every so often people have begun to use rewards cards to simply “game” the credit card companies.
It works like this: You sign up for a credit card that is offering a special sign up bonus (flights, hotels, or some other incentive) You meet the spending requirements in the allotted amount of time paying your credit card in full each month, cash in your bonus, and then cancel the credit card. Rinse and repeat.
By doing this you have the potential to fund several vacations per year.
So, is it worth it? I’m not going to get into the ethics of this because that all comes down to a matter of opinion. The problem I see is the potential of spending more money than you normally would by trying to meet the spending requirements. Plus if you try this and are unable to pay your bill in full each month you’re going to rack up a lot of interest. Therefore you cancel out any rewards you would’ve received.
# 2 – Extreme Couponing
The extreme couponing trend has finally started to die down (thank God) but this was one money fad that took America by storm.
Just in case you haven’t heard extreme couponing entails combing manufacturer coupons with store sales to get free or near free items. Sounds harmless enough, but this fad was taken advantage of by so many that several retailers stopped doubling coupons, limited the amount of coupons per transaction, or stopped taking coupons altogether.
While extreme couponing provided a way to cut back on your normal spending it also presented many problems.
First off, many couponers were building huge stockpiles of items that they would never use. Second, greed spread and store’s shelves were constantly cleared leaving sale items only for those who hit the stores first thing in the morning. And lastly while many claimed that using coupons was saving them money it kind of wasn’t. I mean if you’re paying twenty five cents for something you’ll never use just because it’s a good deal you’re not saving money: you’re spending it.
# 3 – Starting a Side Hustle
Starting a side hustle is definitely a growing trend in today’s economy and I have recommended this several times.
A side hustle is anything you do on the side of your regular day job to earn extra money. This could be babysitting, taking surveys, freelancing, or blogging. A side hustle is meant to be a fun way for you to earn extra money.
Here’s why I think starting a side hustle is good: First off it’s a way to bring in extra income. This extra income can help you meet your financial goals faster. Secondly, with time you can grow your side hustle into a full time job or have another source of income to rely on in case you lose your job.
The downside is that it does take time to make a side hustle profitable. If you’re already strapped for time this can be hard to implement.
Final Thoughts
These aren’t the only money fads. You could also consider buying tech stocks, bit coins, or investing in gold trends at point or another.
Being trendy isn’t always bad, though. You can find nuggets of wisdom in all of these methods, the trick is practicing moderation.
What other money trends have you noticed lately? Do you follow them?