Hi there, it's Ernest from Trip Astute. Today, we'll be talking about getting
started in the points hobby.
(light chiming music)
There are a ton of blogs out there with lots of
information on how to get started in this hobby. Here are my quick tips. Tip
number one is to get organized. Now what I mean by that is that you need to have
your entire financial house in order. You need to make sure that you can pay your
bill every month. You don't want to carry a balance with any credit cards because
that will negate the value of any points or rewards that you earn. Now the best
way that I know of to do this is to use a financial system or software in order
to track your expenses and your budget. There are two tools I recommend for this.
One is Mint.com. A lot of my friends are looking for ways to automate their
budgeting and finances, and Mint has a pretty good solution. It basically
connects to all your bank accounts and credit cards, and it pulls data from them
every time you log in. This will give you a picture how much you're spending and
whether you're staying within your budget. The second tool that I'll
recommend is You Need a Budget, or YNAB, for short. I've been using YNAB since
2009 and I love it. It's a program that requires a little bit more work than
Mint in that you have to enter your transactions and you have to reconcile
them against your actual budget categories. What I love about the program
is that I always know that whatever i'm spending on my credit cards, that I
actually have that money to pay it off. It becomes more about how much
I'm spending per category versus on which, you know, credit card i'm using or
whether I'm using cash. It really becomes about whether I'm actually spending the
amount of money that i budgeted. When you get into this hobby, it's really
important to know how much you're actually spending on your daily expenses.
Do you spend a lot for groceries? On gasoline? On dining out? Knowing these
things can be really helpful. So, structuring your budget and understanding your
finances is crucial. Some credit cards offer bonuses on certain
catgeroies, so understanding your daily spend definitely helps you match up the right
card and the right program. The idea is that you want to maximize your points
through all your spend, and by understanding where you're spending the
most money, you can find the right card and the right program. Tip number two is
determining your travel goals. It's important to understand your goals and
preferences before you start getting into this hobby. Here are a list of questions
to consider before you actually start applying for cards. Do you want to focus
on airline miles, hotel points, or both? What part of the world are you planning
to travel to? Are you hoping to stay domestic or travel internationally? What
airlines serve your home airport? When flying, are you looking to fly first
class, in business class, or is economy class sufficient? Now that may seem like
a silly question. For me, it's all about getting as much travel as I can with as
little points as I can. But for other people, it can be about trying to get the
most luxurious travel they can get. Lastly, tip number three is to know your
credit score. Understanding where you are on the spectrum of credit scores can be
really helpful to know whether you have a high chance of getting qualified or
disqualified for certain cards. Certain premium cards such as the Chase Sapphire
Reserve or the American Express Platinum do require a pretty high credit score.
Understanding whether you have a low score or high score can definitely help
with determining your strategy for applying for cards. So, those are my top three
tips. I'll be diving deeper into each one of the topics in future videos. Now I
can't stress enough tip number one. I see a lot of folks who make the mistake of
jumping into the hobby, applying for credit cards when they already have a
lot of credit card debt, and they're not able to manage their finances. I'm not
trying to be a downer, but I just want to make sure that you don't put yourself
into a deeper hole. This is such a fun way to travel for free, but it has risks,
and if you don't have a good sense of your finances, it can put you in a deeper
hole. This is a disclaimer I give to all my friends and
family members, so I want to make sure that I tell you the same thing. Also, I've
included a link to both You Need a Budget and Mint.com in the description
below. If you liked this video please hit the "like" button below, and I'd love it if
you subscribe as well. Until next time, travel safe and travel smart.