An Introduction to Income Creativity

The notion of “making your money work for you” is not just an accepted practice in the world of finance and business, it is the professional standard. And it is not one you are likely to hear about in a Dave Ramsey course. The principle involved is simple: Your money is your employee. The idea is rather complimentary to those in scripture indicating that money should never occupy “master” status in the lives of Christ-followers. It is also a brilliant understanding and fiscal application of the Parable of the Talents. Though it is most often used to refer to investment strategies connected with anything from the stock market to real estate to the funding of small businesses, the principles can also be applied on a smaller scale and to everyday life. This can be of particular benefit to the small church or bi-vocational pastor who finds him or herself looking for creative ways to support a ministry habit. For example:


Find Interest-Bearing Checking and Savings Accounts

Interest rates on checking and savings accounts are, frankly, terrible right now. But opening an account at a credit union that offers 1.5% even if it is only on the first $1500 in the account means your money just bought you a cup of coffee – at Starbucks, no less. This doesn’t touch inflation, but it is $5 more than you had 30 days ago. There is really no reason to entertain a checking or savings account that produces no interest if it can be avoided.

BE AWARE that such accounts may have minimum requirements in order to receive the incentive rates: You may have to have a minimum balance, sign up for direct deposit, or use your debit card for purchases. Ask the banking representative what you have to do in order to receive the incentive rates. Often you are doing these things anyway, so why not earn interest? Also, if you are particularly interested in maximizing these rates, your spouse can open a separate account and earn the incentive on additional funds.

Look for Debit Card Incentives

Many checking accounts (that’s right, checking accounts) also offer cash-back or other incentives (in addition to higher interest yields) when you use your debit card to make purchases. Recognizing that using a debit card for purchases is counter to Dave Ramsey’s advice, if you need the cash in an envelope in order to track your spending, checking account incentives may not be for you. However, there are a myriad of ways, if you have the time and energy for paying attention, to use Dave’s cash accounting system and still use your debit card to make the purchase. For example, go ahead and put the cash in an envelope. When you make the debit, deposit the cash. Many banks have ATM services inside of grocery stores and other venues, so you may even get it all addressed in one place at the same time. Of course, it is important to understand that these offers only “make money” on spending you are already doing. But you are going to buy groceries and dog food anyway; why not get paid to do it? Some offers can put 10 – 20% of the purchase price back into your account. That is like getting one free bag of dog food for every ten: Your money just fed your dog for a month.

Consider Credit Card Incentives

Speaking of Dave, he has helped many to understand and free themselves from credit card and consumer debt. If tracking your budget is a challenge for you, or if credit cards pose a particular kind of temptation, this may not be the option for you. But because Dave is advising on the basics, he is not telling you that a properly managed credit card can earn you $10 - $100+ a month. Simply using a card that offers “cash back” and paying it off every month costs you nothing, but it builds your credit and turns your normal monthly expenditures into a “pay check” that could buy you a date night or help you create that emergency savings you never seem to be able to scrape together. Some cards offer 1 – 3% on every purchase (better than the interest rates these days) plus additional incentives, like an extra 5% back on gasoline purchases, or an extra 10% back on purchases in December. You buy gas anyway. You pay the price you pay for it. Why not have them write you a check at the end of the month, too? Other credit card incentives include air miles or points. If you are a traveler, this could mean a free or partially paid ticket to see the family over the holidays, or it could be the difference between taking a vacation versus sitting at home. Either way, as my Business Accounting professor used to say, it is “free money.”

Utilize a Health Savings Account

Healthcare Reform has impacted everyone, and almost everyone has probably ended up with a high-deductible insurance, if any insurance at all. If you have a high-deductible plan, you probably qualify for a Health Savings Account (HSA, which is different from an HRA or FSA). An HSA is just a specialized checking account offered by certain banking institutions - you own and manage it just like your regular checking account - wherein you may set aside monies you know you are going to spend on qualified health care expenses (this can be anything from contact lens solution to doctor’s bills, see ).

When you choose to use an HSA for this purpose, you get a tax break on the money. In other words, the money you allocate to an HSA is not counted as a part of your taxable income. So, again, these are expenses that you have anyway; why not have 10 – 35% more money to cover them? If the use of such an account knocks you down into a lower tax bracket, your cash in-pocket goes up again. The accounts are super flexible, too. You never “lose” the money, nor do you have to use it in a particular time-frame. Usually there are fees for this kind of account, however, so it is more lucrative if your employer makes the account available to you (because they often cover the fees to do so). But the tax savings may still outweigh the costs. I have literally seen people allocate $100 to an HSA and it has only “cost” them $75 to do it: That is an extra $25 per month to spend on costs you already have simply because you put it in a different checking account.

These are just a few simple, small ways to make your money work for you. A myriad of others include signing up for loyalty programs at your favorite shops and gas discounts at your local grocery store. It often pays to have one or two department store cards that also offer discounts, such as Best Buy or Target – but again, only if that is where you do your shopping anyway, and only when you budget for them appropriately and pay them off every month. Even auto-repair conglomerates offer same-as-cash payment options for large repairs. There are smartphone apps like GasBuddy or Front Flip that can help you get competitive prices and discounts as well. These small savings really do add up – and on a very basic level they involve the same principles as good stock market and real estate investing, so the money-managing experience you are gaining is like practicing for the major leagues should you decide to play someday.

What creative ways have you found to make your money work for you?

Jamie A. Sequoyah graduated summa cum laude from MidAmerica Nazarene University with a Bachelor’s Degree in Management and Human Relations. With additional degrees in Behavioral Science, Liberal Arts, and Language Arts, and most recently, coursework as a part of the Master’s of Divinity and a Master’s in Counseling, she currently serves as the Director of Human Resources and Financial Services at Nazarene Theological Seminary.