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- Reflection No. 20
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TODAY ON REASONED REFLECTIONS:
Personal finance articles 💰;
Everything I use to travel hack;
Time to reflect;
Quote of the Reflection.
Personal Finance Articles 💰
Time for a bit of R&R
Tax deferred = taxes due eventually
My Take - Tax-deferred retirement accounts are a fantastic tool during your working years because they lower your taxable income. However, Uncle Sam won’t wait forever to collect his share. These accounts come with RMDs in retirement, and for some retirees, those taxes can be an unpleasant surprise. Luckily, there are strategies to help avoid—or at least soften—the blow of those pesky taxes.
My Take - The start of the year is the perfect time to reassess your finances and set a plan for the months ahead. In fact, it’s probably a good idea to check in more than once a year. Getting in tune with your finances—hummmm—might be just what you need to crush your debt, save for that big purchase, or invest like you’re channeling Warren Buffett.
My Take - If you did freelance work or ran a side hustle and collected payments through platforms like PayPal, Venmo, or similar services, heads up—the IRS is watching. A new reporting requirement has made it easier for Uncle Sam to track those earnings and ensure they don’t go unreported.
My Take - Roth conversions are all the rage these days and can be especially appealing once those RMDs start kicking in. Strategically timing a Roth conversion could save you a significant amount in taxes and set you up for a more tax-efficient retirement.
My Take - Props to you if you get the math joke. If not, well, maybe I’m not as funny as I thought! Anyway, if you’re in the market for a new budget—or just starting out—the 50/30/20 budget is a great place to begin. It’s simple, effective, and easy to stick to.
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Looking ahead!
February is all about taxes on Reasoned Reflections! We’ll dive into key topics to help us get ready for April 15. Expect to better understand concepts like above-the-line and below-the-line deductions, tax credits, and the difference between itemizing or taking a standard deduction.
By the end of the month, you’ll be armed with the knowledge to outsmart your accountant—or at least impress them!
Reflection No. 20: My Travel Hacking Resources, Strategies, and Credit Cards
I - Issue: How do you win The Game?
R - Rule: Winning The Game (or at least try to play it well) involves using the right resources, developing some strategies, and keeping a few cards around for the long haul.
A - Analysis: When I first dipped my toes into credit card churning, I had no idea what I was doing. Over time, though, I’ve discovered helpful resources, developed strategies that work for me, and found a few cards I’ll always keep close to my wallet. Here’s how I approach The Game:
Resources
Like everything these days, you can learn the ropes of credit card churning and travel hacking online. These are my go-to resources:
The Points Guy
The Points Guy (aka TPG) is a daily newsletter that keeps me updated on covers everything from sign-up bonuses to travel deals and how-tos for redeeming points. It’s helped me learn how to book business-class flights or snag luxury hotel stays.
Doctor of Credit
This site is my first stop when I’m eyeing a new travel credit card. DOC tracks the latest deals, including targeted offers (shoutout to the commenters who share those gems). It’s also great for learning about bank account bonuses and deep dives into The Game.
Travel Freely
Travel Freely helps me track my 5/24 status and credit card applications. The “CardGenie” feature suggests which card to apply for next based on my current lineup and past bonuses.
If you don’t like the idea of giving Travel Freely all your information, I’m launching a referral program in February where 1 referral gets you the tracker I use for credit card churning. Stay tuned!
Yes, Reddit. While the mods can be annoying, subreddits on travel hacking and churning have taught me a lot. I’ve found detailed guides on manufactured spending and tips for maximizing Hilton points.
Strategy
After churning for a while, you’ll develop strategies that suit your goals. Here are a few that work for me:
Companion Pass
I’m a Southwest loyalist, and for good reason: the Companion Pass. It lets me bring someone with me on my flights for free (minus taxes). Earning the pass also comes with a ton of Rapid Rewards points, which means I can often book two tickets using just points.
Refunds
Even after booking, I track prices for flights and hotel stays. If prices drop, I update my reservation and get refunded the difference in points. This has worked particularly well with Southwest flights.
Transfer Bonuses
Stretching points is the name of the game. For example, if Chase offers a 25% bonus for using points on its travel portal, it might make sense to book a Hilton stay there. But if Chase has a transfer bonus to Hilton where I can transfer 1,000 Chase points and get 2,000 Hilton points, transferring directly could be the smarter play.
Cards
I’ve churned a decent amount of cards. Some I’m only in it for the sign up bonus but some are worth keeping around.
This card is my daily driver. Its $95 annual fee is offset by a $50 annual travel credit through the Chase portal. Plus, it earns 3x points on dining and 2x on travel. Chase’s Ultimate Rewards program is flexible, with great transfer partners, and the portal is user-friendly.
This no annual fee card is great for earning cash back or building my Ultimate Rewards balance. It offers 1.5% cash back on everything, 3% on dining and drugstores, and 5% on travel booked through Chase. It’s also a keeper for building credit history since there’s no annual fee.
I like this card because of all the benefits that come along with it. Yes, the annual fee is steep. However, I get a $300 annual travel credit, 10,000 bonus points each anniversary, Capital One lounge access, and Visa Infinite benefits like primary rental car coverage. This card is perfect for luxury travel perks.
C - Conclusion: The Game can feel overwhelming, but with the right resources, strategies, and cards, you can play like a pro. Start small, learn as you go, and soon you’ll be racking up points and booking dream trips like a seasoned churner.
Time to Reflect…
We’ve covered a lot about travel hacking and churning in the month of January. And let me say this again: you shouldn’t participate if you aren’t able to play by the rules—like paying your balance in full each month and not overspending. However, if you can manage those rules, travel hacking is an incredible way to see the country or even the world at a fraction of the cost.
If you’re just joining Reasoned Reflections, welcome! Here’s a quick recap of what we covered in January:
January 3: First, we introduced credit card churning in Reflection No. 16.
January 10: Reflection No. 17 focused on Chase’s infamous 5/24 rule.
January 17: Reflection No. 18 broke down how credit scores play a role in churning.
January 24: Finally, Reflection No. 19 explored how to redeem miles for maximum value.
Quote of the Reflection
“The first step towards getting somewhere is to decide that you are not going to stay where you are.”
-J.P. Morgan
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