I Racked Up $750 in Credit Card Rewards Last Year. Here's What I'm Doing With That Money

I'm sitting on a pile of reward cash. And I have no plans to save any of it.

Although I have several open credit card accounts, there's one card in particular that I consider my go-to card. It's the card I whip out when I'm stocking up on food at the grocery store, paying for my kids' extracurricular activities, or charging travel plans.

This card offers a fairly generous cash back program. And putting most of my purchases on the same card makes it easier for me to track my spending and make sure I'm not going overboard.

Last year, I racked up roughly $750 in cash back on the card. Now some credit cards let you cash out your rewards month after month or when a certain minimum is met, but my card works a little differently. Rather than cash out rewards during the year, you accumulate rewards and then get a certificate once a year you can redeem for cash.

That's precisely what I did last year. And given that $750 isn't a small amount of money, part of me initially thought I should maybe put some of it into my savings account.

Instead, I'm using every dollar of that money for leisure purposes. Here's why.

It's free money, and my savings are on track

Although there are certainly aspects of my finances that could use some work, for the most part, I'm in okay shape when it comes to things like savings and debt. I have a full emergency fund with enough money to cover roughly a year's worth of living expenses (which is actually more than what most people need, but I have my reasons to err on the side of having more cash in the bank). I also don't have any debt other than my mortgage, and that's considered a healthy type of debt.

I've also been maxing out contributions to my retirement plan, and I've been keeping up with my bills without having to dip into my savings to cover my expenses. All told, while I could put some of my reward cash into the bank or add it to my brokerage account and invest it, I don't feel compelled to do that.

The way I see it, I'm meeting my personal financial targets already. And since that $750 in cash back really is free money, I feel I'm entitled to enjoy it.

To be clear, I don't intend to just spend it on myself. My plan, rather, is to spend that money on either a modest weekend getaway with my family, or on some fun day trips and activities with my husband and children. The point, however, is that I'm using my cash back for leisure purposes because I feel I have that leeway.

What should you do with your credit card cash back?

If you're behind on emergency savings, have credit card debt, or are behind on specific financial goals, then the next time you receive any windfall, whether it's a pile of cash back from your credit card or something else, you should consider using it to shore up your financial situation. But if you're doing just fine financially, then why not take your credit card cash back and use it to enjoy life a bit more?

Having that extra money on hand makes it possible for me to indulge a little more without guilt. And there's no reason you shouldn't adopt a similar approach if you happen to be in a comparable boat.