Seed Money

Gavin Schmidt  |  Feb 4, 2023

MONEY IS OFTEN TIGHT for those in their 20s. Yes, that first “adult” job typically pays more than any previous job. Still, finding money to save and invest can be tough. After handling all the other big expenses of early adulthood—house, wedding, student loans—there just isn’t much money left over.

That’s my dilemma and one facing many others in their 20s. How can we make extra money without getting a second job? My fiancée and I focus on earning money just by living. Here are five tactics we use:

• High-yield savings accounts. In the current environment, these accounts are a no-brainer, with many currently paying well over 3.5%. Most have no minimum balance, worry-free transfers and charge no fees. Currently, we earn roughly $60 a month on our balance of more than $20,000.
• Credit cards. Yes, these are easily abused. But if you’re diligent about paying off the balance in full, there’s no reason not to use one. Nearly all big retailers offer a card that rebates 3% to 5% back for store purchases and perhaps 1% elsewhere. Fidelity Investments even has a card that gives 2% cash back on all purchases, with the money going straight into your brokerage account. I’ve had an Amazon card for nearly five years. As a couple, we also use the Costco card, which refunds 4% back on all Costco purchases with the gold membership, plus 4% back on fuel up to $7,500 a year. Between our Costco and Amazon credit cards, we get roughly $40 back per month.
• Treasury bills. These are a risk-free way to earn interest. Treasury rates vary with each auction, but are typically slightly higher than high-yield savings accounts. Treasury bills are sold in increments of $100. Maturities range from four to 52 weeks, with auctions occurring each week. We buy four-week bills every week, which means every week some of our four-week bills also mature. The most recent auction for a four-week bill was well over 4%. We buy anywhere from 10 to 50 bills per month, equal to $1,000 to $5,000, and might collect $4 to $15 per month in interest.
• Money back apps. There are numerous apps out there that’ll pay you to share your receipts. For instance, we use Upside, an app that gives us cash back when we buy fuel at certain gas stations or eat at select restaurants. All you need to do is share the last four digits of your credit card or upload the receipt. The cash back can be directed to your bank account or a gift card. Pairing this with the credit card rewards can mean a handsome return on each purchase. We’ve gotten anywhere from $20 to $40 back each month with the app.
• Donating plasma. There are many donation companies that collect plasma. Although this takes time out of your day, it’s an easy way to earn extra income that can then be dedicated to investing. We live near a relatively busy clinic. Each visit can take up to two hours. Donating twice in a week means an extra $150.

All this might seem like relatively small potatoes. But even small investments in the financial markets each month can have a big impact over time—especially if you’re in your 20s and have many decades to invest.

Gavin Schmidt is a supply chain analyst for a Fortune 200 company. Fascinated by the economy, and by business and consumer decision-making, he became interested in personal finance and investing early in life. Based in Minneapolis, Gavin’s interests outside of finance include reading, being outdoors, fitness and music.