What's it worth?

Well, if you frequently visit Guess Who's Cheap? you will see my torn love hate relationship with Air Miles. 
I love it when I am getting something for free! Air Miles are always free, and whether you have Dream or Cash Miles, it is a great deal.  But let's talk about what Air Miles are worth in each situation to help make decisions about what to do with all those Air Miles that are racking up.

Cash Miles is the easiest math, let's start there.  If you have your Air Miles set to the cash setting then your Air Miles are worth money.  Shop at the participating stores as you normally do, and at the checkout tell the cashier that you are redeeming Air Miles.  95 Air Miles is worth $10 cash.  This means that one Air Mile has a cash value of 10.5 cents.  
Keep that in mind when you are shopping.  If you see that an item in the flyer has 5 Bonus Miles with purchase, that is about 50 cents in future savings when you redeem.  Before you make the purchase to gather bonus Air Miles take the cost of the item and subtract the Air Miles value (example $3 with 5 Bonus Air Miles is like paying $2.50 for the item) and determine if the item is indeed a sale.  It may be cheaper to purchase the item at a different store for less money.  If the item is on sale at a different store for $2.25 then the item is cheaper at the different location.

Dream Miles are a bit harder to calculate.  To figure it out with merchandise, I used a night at the Best Western as the example.  I figured out that it would be 1490 Dream Air Miles before taxes for a night and the same hotel on the same night would cost $166.50 before taxes.  That makes one Air Mile worth 11.5 cents an Air Mile. 

After seeing these two scenerios it appears that it makes close to zero difference which way your miles are being saved.  When I redeem Cash Air Miles I used to put the money on our debt from our budget. Example: Redeem 95 Air Miles towards $10 cash at Sobeys, take $10 out of the grocery budget and slam it on the mortgage.  Now we do this and put the money towards our vacation fund.

WHERE DREAM VS CASH matters is booking flights.  Recently my family went to Orlando. I redeemed 3000 Dream Miles for each flight ticket( there is always a tax on flight redemptions).  3000 Cash Miles is worth $310, there is no way that my flight was anywhere near this cheap had I paid cash for the flight.  It is difficult to find flights but when they are found they are worth it! 

Keep all this information in mind when deciding how to redeem your Air Miles, and before you make a purchase just for the Bonus Air Miles.

It pays to be frugal.