If you’re not familiar with BigCrumbs, it’s a cash back website where you get cash back on purchases at participating online retailers such Buy.com, Walmart.com, etc. The difference is that you get a small percentage of cash back for your referral’s purchases also. Build up a network of active referrals and you might build up a small stream of passive income to pay for a meal here and there. Also the cash back rates are pretty competitive when compared with sites like Fatwallet.

I buy and sell things on Half.com from time to time. I noticed that Half.com gives 4% cash back on purchases through the site. So I decided that each person that purchases an item is a potential referral to BigCrumbs. So in all my correspondence with each buyer I’ll usually list the tracking number, shipping update, etc. and also end with a short spiel about earning cash back on future Half.com purchases.

I’ll link my referral link using the url shortening service bit.ly.

Before the end of the year is up I plan on going to Europe with my girlfriend for a vacation. Normally this would be a pricey vacation but in this post I’ll detail all the steps I’m taking to cut the majority of the costs. I’m a low income student who loves to travel so hopefully this can inspire others to find ways to travel frugally. In general when traveling the biggest expenses are airfare and accommodations. If you can lower or eliminate these costs than seeing the world can be had for a lot less.

Getting There and Back

A couple months ago I took advantage of the Chase British Airways 100,000 miles deal (which was posted in the post on this blog but is no longer active). On British Airways 100,000 miles is enough to get two roundtrip tickets in economy from my New York City to Europe Zone 1 which includes Belgium, France, Germany, Ireland, Luxembourg, Netherlands, Switzerland and the United Kingdom. The best part is British Airways’ online booking system allows for free stopovers as long it’s part of the direct routing. For example if you were going to Paris, France, you’d generally have to connect through London anyway. So the plan is to stopover in London for a couple of days and then visit a another city or vice versa since the stopover can be on your return trip.

What would sweeten this deal is the British Airways card has a benefit where every year you spend $30,000 you’ll get voucher which allows you to take a companion on the same flight in the same class of service when you redeem your BA miles. Spending an additional $30k  on the card would net 137,500 miles total which would allow access to Europe Zone 2. I could then redeem the miles for one business class ticket (100k-120k) and use the voucher to bring my girlfriend along. Two business class tickets would be nice but the problem here is getting $30k worth of spending on the card. Chase only gave me a limit of $5k and I would have to find a number of different ways to get put spending on the card without using any money (Coins from the US Mint, funding bank accounts, etc).

Accommodations

I’ve gathered enough points at Starwood Hotels (Sheraton, Westin, W Hotels, etc.) using the American Express Starwood Preferred Guest credit card to get 4-5 free nights at hotels in prime locations (London, Paris, etc.). Hopefully by the time of the trip I’ll have acquired more points through spending and referring friends (You get 5k for referring friends). The card also has a 10,000 point sign up bonus which is enough for a night at a hotel with a prime location. I’ll probably try to get my girlfriend to sign up for the card and that’ll be another free night we don’t have to pay for.

Another big perk is that if I was paying for accommodations I normally wouldn’t stay at nice and expensive Starwood hotels. On average 5 days would cost $1,000! Getting it for free cuts a lot of costs.

I also plan on signing for other credit card bonuses at other hotel chains to bank the points and just in case I need more free nights.

Meals and other misc. travel expenses

This is one area where I won’t find much stuff for free but cost is basically whatever I choose in that I can eat and attend whichever attractions I please. However because I leave I’ll need to do research and find a credit card that doesn’t have foreign transaction fees for purchases and figure out how to change currency at the lowest cost. Discounts to various touristy attractions should also be thoroughly researched.

According to this CBS article which summarizes the 2010 retirement confidence survey(pdf):

• 27% reported having less than $1,000 set aside for retirement.
• 43% reported having less than $10,000 set aside for retirement.
• 54% reported having less than $25,000 set aside for retirement.
• Only 16% of workers feel confidence they’ll have financial security in retirement.
• Only 46% of workers have calculated what their financial goals for retirement should be.

Honestly these numbers do not surprise me. The United States is not a nation of savers. The problem is a lot of people are financially illiterate and/or spendthrifts. Is it really that hard to save for retirement?

A lot of people assume they don’t need to save up for retirement because they assume Social Security will take care of them or they can always start saving up later on in life closer to retirement. They keep put off saving for retirement that one day it’s too late and they have to continue working to be able to retire comfortably.

One of the advantages to saving young is you get to take advantage of the power of compounding interest. Let’s say you put away $1,000 saved up at age 22. If you earned 5% return and added $1,200 a year to your savings you’d end up with $210,207.20. Although this probably won’t buy as much in the future due to inflation it only took roughly $100/month in savings.

I used 5% as a conservative number. If you were able to average a higher rate of return throughout the 45 years you’d see the compounding effect is quite noticable.

$1,000 starting amount (principal), $1,200 added every year, 45 years

• 5% average yearly return = $210,207.20
• 6% average yearly return = $284,374.36
• 7% average yearly return = $387,904.57
• 8% average yearly return = $532,831.73

The point here I’m trying to make is to start saving early and over the years contributing as little as $100 a month has the potential to grow into something sizable.

I’ve been looking at Big Crumb’s referral structure more closely and it turns out it’s worth discussing. Currently BigCrumbs will give you cashback on all your purchases and a percentage of your referrals cashback purchases. The amount entirely depends on the retailer cashback amount.

Let’s say for instance you’re shopping at Drugstore.com in which Big Crumbs offers 9% cashback on non-prescription purchases. The referral amount is 1%. So this means when I make a purchase at drugstore.com I’ll get 9% cashback and whoever referred me gets 1% of the purchase amount.

This gives everyone an incentive to refer friends, family, etc. People also have an incentive to shop through BigCrumbs in that they’ll receive cashback for their purchases.

You have the option of two types of memberships at BigCrumbs. The first being “Crumbsaver” where you’ll earn the highest personal cashback on your own purchases and earn commissions on people you directly refer. The other choice being “Crumbearner” where you’ll earn a reduced cashback amount (5% in the drugstore.com example) but earn commissions on up to 5 generations of referals. Once you switch to Crumbearner you cannot switch back. I suggest you sign up as a a Crumbsaver and and switch to Crumbearner after your referrals have started to refer more people.

BigCrumbs is focused so much on referrals that if you sign up without someone referring you they’ll assign one randomly to you. When signing up for BigCrumbs I ask that you help me out and just make sure hejustlaughs is in the referrer box. I appreciate it.

link to BigCrumbs.com

Many websites offer cashback on purchases if you click through their merchant link. Generally the website will get a percentage of the sale as a commission and then kick back some of that money to you. Different websites will decide to kickback different amounts and therefore it’s sometimes worthwhile for you to check around to see who’s offering you the most cashback (especially on large purchases).

In the past whenever I purchased anything from an online retailer I’d generally just go through the Fatwallet cashback portal out of habit and laziness. However I’m getting into the habit of looking around for the highest cashback I can get since Fatwallet doesn’t always have the highest cashback percentage these days.

Recently I was looking to make a purchase from Buy.com in the “home” category. I only noted what category my purchase was in because some cashback websites tier the cashback percentage depending on the category of your item. I check several different cashback websites to see what they were offering.

• Fatwallet – 3% in home & outdoors item purchases
• BigCrumbs – 4.5% in home & outdoors item purchases
• Mr. Rebates – Flat 3% cashback on any item purchases (currently $5 sign-up bonus)
• ebates – Flat 3% cashback on any item purchases (currently $5 sign-up bonus)

BigCrumbs was the site offering the highest cashback at 4.5% while all the other sites seemed to offer 3%. Spending 5 minutes to check different cashback sites netted me an extra 1.5% cashback on my purchase. Generally this is wasted time when the purchases are low amounts but if it’s more and more worthwhile the larger your purchases are.

From time to time there will be the occasional friend who asks me to co-sign a loan for them. Sadly I always refuse because I don’t think most people realize that cosigning a loan is a bigger deal that it appears to be.

You aren’t just lending someone your credit score but rather you’re on the hook if they ever default. It’s a serious financial step that you should reserve only for people who you intimately know. I wouldn’t mind co-signing a future spouse’s loan because chances are I’d know their finances well enough to know they aren’t likely to default and relationships are about trust so I hope I’d trust a spouse enough to co-sign a loan or that would be the last of my problems.

Co-signing a loan adds the debt amount on both your credit reports so if you’re someone that needs their credit report to appear debt free think twice about co-signing that loan.