Personal Finance Advice

I recently spoke with a friend who is heading to Walt Disney World soon. She was so excited because she has managed to amass $1,200 in cash and Disney gift cards by participating in several “Get Paid To” (GPT) programs and survey websites. This money will pay for the majority of her family’s spending while they’re in Disney World.

I was happy for her, but I had to ask her how long it had taken her to accumulate that much money. When she said, “About three months. Maybe a little less,” I took a step backwards in shock. You have to understand: I’ve been doing surveys and GPT and survey sites for years and, because I only do them in my idle hours, it would take me at least a year to accumulate that much money. And even then, it would have to be a very good year in which every offer paid out, every survey credited, every company paid as they said they would, and none of my reliable sites went out of business.

“Wow,” I said in wonder. “How’d you manage to get that much so fast?”

“I turned it into a job,” she said proudly. “I spent about six hours a day, every single day for three months doing surveys and offers. I have probably twenty programs going at one time. I hate it, but it’s money. There’s so much record keeping and tracking of things. I have to remember to cancel all the offers before they bill me and fight with the ones that insist on billing me anyway. My credit card number was stolen by some offer I did and that was a nightmare. If the Internet flakes out in the middle of a survey, I freak. It’s stressful, but we’re going to Disney basically for free so it was worth it. I’m going to keep at it when we get back and use the money to pay for all of our gas.”

I congratulated her and moved on with my day, but I couldn’t shake the wonder that this woman had spent so much time on these programs. Twelve hundred dollars sounds like a lot of money, but relative to the amount of time that she spent to earn it, it’s really not that much money. I sat down with the calculator and ran some numbers. She said she worked at this every day (including weekends) for three months. For argument’s sake I called it ninety days. To make $1,200 in ninety days she earned $13.33 per day. Divide that by the six hours per day that she spent on her “job” and her hourly wage works out to about $2.22. That’s awfully low. She could have gotten a job at the local big-box store making minimum wage ($6.55), only worked two hours per day, and made almost the same amount of money. (And don’t say she’d lose money to taxes at a “real” job. She should be reporting her earnings from the survey and GPT programs, as well. Whether she did or not, I don’t know, but she should be so her $1,200 should be reduced accordingly and I do just that later in the piece when I start breaking down some numbers for you. I’m assuming we’re all honest people here.)

I can understand why this woman chose to do these programs rather than getting a “real” job. She has small kids and she wants to be home with them. I get it. It’s sort of my fault, as well, because I mentioned these programs to her as a way to earn some extra cash during her free time. I didn’t know it was going to consume her, however, and become a very low paying full-time job.

The next time I saw her, I asked her why she hadn’t chosen to spend all that time freelancing from home. If she’d worked the same number of hours, she could have made a fortune (she’s a very talented graphic designer).

“It’s too hard to freelance,” she said. “Getting clients, billing them, it’s all so much of a hassle. It was easier to do the programs.”

Okay, fair answer. (Even though I thought that freelancing wouldn’t have required any more work and record keeping than she’d done for the GPT sites.) But for some reason it still bothered me. I knew I shouldn’t judge this woman; we all do what we feel like we have to in order to get by in this world. For whatever reason, this was her answer to a tight money situation. She wanted to go on vacation and this was her way of paying for it. Heck, I give her credit for not plopping the whole thing on a credit card and racking up the debt. But I couldn’t stop thinking about it.

After a few days, I figured out why it was bothering me. She didn’t want to get a “real” job and she didn’t want to freelance. Fine. I understood that part. But she could have saved that same amount of money over ninety days and built herself a lifestyle that would “pay” for many more trips with far less effort on her part in the future. Sure, she would have to apply a little labor and thought on the front end to figure out how to reduce her family’s spending, but once she had a program in place all that would be required was a little tweaking to keep it working.

To see this idea in action, watch the numbers: My friend spent about nine hours to earn $20 doing GPT sites. She’ll have to pay taxes on it, so take away about thirty percent. Now she’s spent nine hours to “earn” about $14 at an hourly rate of $1.56. If she keeps doing the GPT sites at the same rate, in a month she will have earned $280.80, after taxes and not counting any interest she might earn. Over a year she could earn $3,360. Sounds great, right?

Check the flip side: If my friend were to save $280 from her husband’s income every month through better money management, that’s still $3,360 a year, before interest is added. This is “free” money because it does not require any extra time or labor on her part to earn it. She didn’t have to spend six hours in front of the computer every day. She was free to spend the time with her kids or working on other money saving activities like cooking or gardening. Her husband already earned that money and was taxed on it. She won’t have to report taxes on the $280 she saves, only on the interest she earns from it once it hits the bank.

But think about this: The difference between the two methods is that “earning” the $280 per month cost my friend about 180 hours of her time each month, which is more than most full time jobs require. Saving that $280 per month cost her no time at all (or very little) giving her a much higher hourly wage and rate of return. Now, which would you choose?

It seems obvious, but I can hear you now. “How is she supposed to save that kind of money every month? If money is so tight that she has to resort to surveys to pay for a vacation, how’s she going to come up with that kind of money?” We talk about simple money saving ideas all the time here at Saving Advice. Applying just a few of them (and these are things that I know her family could do, so it’s a valid example) would allow her to save that $280 per month.

• Eliminate two fast food meals out per month for her family of four = $40
• Eliminate one sit down meal per month at a restaurant like Applebees = $40
• Cut the premium pay channels from the TV package = $20
• Direct deposit $10 per pay period into a savings account = $20
• Eliminate that extra stop at Target just to look around that always ends up with something being purchased = $20
• Husband brown bags his lunch to work twice a week instead of eating out = $50
• Use a few coupons and the loyalty card at the local grocery store = $30
• Shop around for better deals on cable, Internet, and phone and possibly bundle some services = $20
• Use a refillable mug instead of bottled water = $20
• Use the library for books and magazines and stop purchasing/subscribing = $20

Boom. That’s $280 per month saved right there with no major time commitment, lifestyle changes, or sacrifices. I actually think some of those numbers are low, so the savings is probably greater than $280, but for an example you get the point. If my friend were to get even more aggressive with her saving strategies, the numbers could only go up.

Earning a little cash on the side through GPT sites and surveys can be a fun hobby in your spare time. You can pay for a few tanks of gas each year, or a few meals out without investing a lot of time. And that’s great. The point of this piece isn’t to bash GPT sites. I find them entertaining and useful, in moderation. The point of this piece is to point out that earning small amounts of money is not as valuable as figuring out ways to save large (and even) small amounts of money. When you save money, you’re building real wealth.

My friend’s numbers are just an example. Your own situation is likely different from hers, so you might be able to save more or less per month than she does. The point remains the same however: If you need to make money (and getting a “real” job or freelancing is out of the question), your time will be better spent trying to figure out how to save more money than by trying to earn a few cents here and there.

And yes, I did point all of this out to my friend once I figured out what was bothering me about her GPT/survey “job.” She just about cried when she realized how much time she’d wasted for so little return. “I sold myself out,” she grumbled. “I never thought of my time as that valuable, but all that time I could have been doing other things and still getting the money we need for the trip. I thought I was doing the right thing by earning extra money, but I should have been saving money instead and using that time for other things.”

I told her not to be hard on herself. What she was doing wasn’t any different from what a lot of people do when they need money. After all, in this culture we are taught that “making money” is the key to happiness and success. We’re taught that, no matter how small the wage or ridiculous the hours, we should be earning money. What no one ever tells us is that saving money is a better way to wealth in some cases. Your time is valuable and you have to learn to weigh the time you spend earning and the amount you make against the time and money you could save in other ways. The numbers might surprise you, as they did my friend.