Points for the Unexpected

Its funny when you plan to write a post and another blogger beats you to the punch. Most of the time, it has something to do with an announcement  a new offer, but every once and a while its about a random subject. I had been planning for a while about writing a post about "Points for Emergencies." Yesterday, Mommy Points wrote an article about how points can be valuable in emergency situations. She used her emergency points to send a family member to help a child out after a devastating fire.

In the middle of last year, I had a light bulb go off in my head. My maternal grandmother was in the hospital (for the xyz time) and my family though that it might be close to the end. I live 6 hours away from Connecticut and have multiple ways of getting home quick, Amtrak, Southwest, driving, buses, rental cars etc. While they might not quick, I can get home cheaply, if I had to. Then I started thinking of my family around the country, Florida, Washington State etc. How would they get home? Would they not come home for a funeral because of $$$? At that point, I decided to change my points earning strategy

My first move was to get the British Airways Visa, which earns you 50,00 Avios points after spending $1,000 in three months, an additional 25,000 miles after spending $10,000 and even additional 25,000 miles after spending $10,000 more, for a total of $20,000. Currently, I am at $15,000. This has been a very painful process. I only have 4 more months to get the last $5,000. I am currently sitting on about 95,000 AVIOS points, which have been allocated for emergency travel, to get people home in case of an emergency.

Airline points can be valuable, but you should also put aside some hotel points as well. Back in 2010, there was a news story floating around about a gentlemen using his frequenet flyer points to live day to day.  Here are some excerpts from the article:


          "Kennedy, who earned $120,000 a year for a software company before being laid off 19
          months ago, earned loyalty program points by traveling for his former jobs in IT and finance."
         " Kennedy typically mixes points with cash so he can stretch his pile of points out a little
           longer. Starwood's Sheraton Four Points, for example, offers some rooms for 1,600 points and
           $30.

          He told ABC News that his loyalty points are about: 85,000 with Starwood Preferred Guest,
          400,000 with Hilton Honors, 100,000 Delta Sky Miles, 120,000 American AAdvantage, 
          200,0000 United Mileage Plus, and 125,000 American Express Membership Reward points."

         "The single Kennedy was evicted from his foreclosed home in January after being unable to pay
          the mortgage. He now collects unemployment checks in California, getting the maximum of
          $450 a week. He budgets $5 a day for food, and looks for hotels that offer free breakfasts. His
          search for a meal may be closer than he thinks: United Airlines' frequent flier points can be
          exchanged for certificates to eat at restaurants across the country."

Kennedy used his points for survival. Personal finance experts highly recommend that you have an emergency savings account equal to 4-6 months of your take home salary. This has been an ongoing goal of mine: currently I stand at about 3 months. But what happens when your emergency savings runs out. Kennedy, in the article above, had been unemployed for 19 months. My guess is his emergency savings had long been depleted. His logical choice was to use his next valuable asset: frequent flyer/hotel points. What I think is cool is that he used the tricks we use: cash and points and transfer points to other merchants: to stretch out his limited asset and survive.

I know most of us wince at the use of United Mileage Plus miles for Restaurant certificates. 500 miles gets you a $25 gift certificate. The redemption value is shockingly good.  I know these certificates can be purchased for a few dollars with a code. Kennedy's 200,000 Mileage Plus miles would get him 400 $25 certificates or $10,000 worth of food. When your choice is to spend your limited unemployment check or United Miles, the decision becomes much clearer.

I remember reading one of Frugal Travel Guy's reader success stories, where a women turned points into cash to fix her car. The exchange rate is terrible to do this, but she could not afford the car repairs. Her points came to the rescue. For some people, having a working car is the difference between having a job and not having a job.

I know these are extremes, but in this crazy economy of ours...you need to have a back-up plan or two or three back-up plans. Your points can be part of your back-up plan. Its difficult to think about putting points aside, when their are trips to far off places to be had for nothing. Trips to the Maldives or Australia are great, but do they compare to the ability to make it to a last minute wedding of a best friend, send an aunt to help her child after a fire or make it home to say good-bye to a family member?

Points can take you all over the world for vacation or help you in a pinch. Its how you use them!

Oh, a quick update on Grammy...she is doing great! Every time someone counts her out, she comes back fighting like a champ! I got the opportunity to see her a few months ago on her way back to Connecticut from Florida. . .