Asked on 29 Nov 2019
I find my spending has gone up ever since I've gotten involved in the Miles game, does anyone have any tips on how to prevent this? Hacking miles should be about getting more rewards for what I'm already paying for, not spending more to get cheaper Miles right?
Please don't overspend when you enter the miles game. Credit is a dangerous thing if not managed wisely, and compound interest on the bills will just totally negate the value of any miles you have earned.
One good way to judge if an item is really needed, is to ask yourself if you would have bought the item if the merchant only accepted cash. If it's still something you would have gone ahead to buy, then just use your miles card to pay for it instead. Buying a fancy gadget like a Google home? If it was cash only, I would have skipped. Then I know it's not something that I really need. Buying a microwave oven because the one at home broke? Even if the merchant accepted only cash, I would have to buy it anyway, so this is where I take out my card to pay instead.
Hacking miles is about maximizing essential spend. (and the occasional wants).
Absolutely right. We play the miles game to avoid leaving money on the table, not to put more money down.
Your miles cards should be used in place of debit cards/cash on things you would otherwise have bought. That last part is key. I don't buy a sofa to earn miles. I earn miles because I buy a sofa.
So a good sense check is to ask yourself whether you'd have bought an item if you didn't have a miles card. You may also consider the value of voluntarily lowering your credit limit, if you feel you have difficulty keeping within your means.
06 Dec 2019
Please do not overspend. Despite being in the miles game, the main focus should still be based on "spend and miles is bonus" rather than "spend cos I want the miles". Sounds the same but huge difference.
Keep close track of your expenditure. Ensure you know when is your credit card due date and pay it by then. The last thing you want to do is get interest charged on it.
Do not spend over your limit just for the miles. Look at your normal spending habit and plan accordingly. There is no need to force more purchases.
Only spend on what you need. Then think of what credit card to use to best maximise the credit card miles rewards. It about how your current expenditure pattern can be maximised fully to earn miles. It is not allowing the credit card dictate your expenditure!
I always remind myself to never overspend out of my means to, and only spend on your needs not your wants. So having the financial discipline to restrict your spending is crucial.
As you mentioned that your spending has increased, it would be worthwhile to study the breakdown of your expenses - for example, could the increase be due to taking more Grab rides? As if so, what is the best possible reward for this? Such as AMEX Krisflyer for 3.2 mpd.
Or could you have been more compelled to hasten the accumulation process of your miles? Perhaps due to the expiry/ ticking timebomb on these miles. To ease your anxiety, it could be worthwhile considering cards with miles that do not expire such as Citi PremierMiles or DBS Altitude card.
Nonethelss, my mantra is that miles collection is a by-product of spending, instead of the reverse (where you wanna collect miles hence you spend more). Cheers!
Firstly, understand your own cashflow. Know how much your earning potential is, and track your expenses. Here is a detailed breakdown: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Personally, I use an excel to track my income and expense. Accordingly, I will be alerted whenever my expenses increases abnormally.
Next, I will create a budget based on my cashflow. This is the exact method that I am using: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/
Through this method, I am only spending money that I am allowed to spend. This prevents the problem that you have mentioned - spend more than I need to.
Hope it helps! =D
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