How to Make Your Money Work for You, Even After You’ve Spent It

There’s no way around it — most of us have to work for our money.

It’s a good rule to save or invest some money from every paycheck (the more, the better). But what about your regular expenses?

Once that money is out of your wallet, there’s no way to make it work for you, right? Wrong.

Here’s how I started making my money work for me even after I spent it.

Start With How You Spend

I’ve written about the power of cash-back credit cards in the past. Using cash rewards cards is an easy way to reclaim a percentage of your spending each month.

I use different cash-back cards for different purposes to maximize my rewards, such as groceries, gas, utilities and Netflix. Using multiple credit cards means I have to be more vigilant about how I spend.

I treat my cash reward cards as though they’re charge cards — an obligation I have to pay off in full every month.

Putting Your Money to Work

Once I made the most of my credit card rewards, I started thinking about ways to wring even more value out of the money I spend regularly.

That left me with two problems to solve: How to partition my money in a way that made spending easy to track, and how to make the most of that money.

At the time, I’d started using Capital One 360 as my primary bank account. For a checking account, Capital One 360 does offer a decent return — a 0.20% APY with no minimum balance to earn. Considering Bank of America only offers 0.01% APR on a regular savings account, it’s a great value.

Inspiration struck when I discovered you can add up to 25 free savings accounts on Capital One 360. Those accounts offer an even higher interest rate with no minimum balance required.

This solved both my problems in one fell swoop: I simply added a savings account for each of my rewards credit cards. After that, whenever I spent money on a credit card, I simply transferred it to the corresponding savings account.

Since I can pay my credit cards directly from my savings account, I just let the money sit there, accruing interest, until the day my credit card payment is due.

If I buy something at the beginning of a billing cycle and make my credit card payment on the due date, I’ll have money earning interest for nearly two months after I’ve spent it!

Increase Your Earning Power

After doing some digging, I discovered GE Capital Bank, which offers a 1.05% APR on savings accounts. You can have an unlimited number of accounts and there’s no minimum to earn interest.

If you’re already a Capital One 360 customer, you may prefer to use their savings accounts. Although the interest rate isn’t as high, the money you transfer from checking to savings is instantly available no matter when you make the transfer.

GE Capital Bank does not offer a checking account, so it’s difficult to use as your primary bank. Also, transfers made after business hours or on the weekend aren’t processed until the next business day and it can take up to a week for the funds to be available.

I’ve used both banks at different times, and I’m always on the lookout for another one that will offer me higher interest with a comparable user experience. For me, the flexibility of being able to have so many accounts is paramount.

In June 2015, American consumer spending averaged $90 a day. Using either of the accounts listed above, a year’s worth of spending adds up to an extra $18-$28 dollars a year. Not big bucks, but free money all the same.

This strategy does require some work to get started, but once you have your accounts set up, it’s easy to use. Give it a try, and your money will be working for you — even after you’ve spent it!

Your Turn: What are your favorite cash-back rewards cards? How much have you saved using them?

Disclosure: We have a serious Taco Bell addiction around here. The affiliate links in this post help us order off the dollar menu. Thanks for your support!

Douglas Clinton is a New Englander, an AmeriCorps Alum, a Kentucky Colonel and a playwright whose work has been performed across the U.S and abroad. He lives in Charleston, South Carolina, with his fiancee and three cats.