Archives for November 2013

A Terrific, Terrifying Article About Poverty

Today, I happened upon a wonderful article about what poverty is like. After reading it, I knew I needed to share it with you all. Poverty, debt, and working till you drop are all terribly interlinked. The following are a few highlights:

Rest is a luxury for the rich. I get up at 6AM, go to school (I have a full courseload, but I only have to go to two in-person classes) then work, then I get the kids, then I pick up my husband, then I have half an hour to change and go to Job 2. I get home from that at around 1230AM, then I have the rest of my classes and work to tend to. I’m in bed by 3.

Nobody gives enough thought to depression. You have to understand that we know that we will never not feel tired. We will never feel hopeful. We will never get a vacation. Ever. We know that the very act of being poor guarantees that we will never not be poor.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing?

Poverty is bleak and cuts off your long-term brain.

Read the article in its entirety here (it’s worth a read): Why I make terrible decisions, or, poverty choices.

Master Your Budget With Google Wallet Card

By Frugaling 7 Comments

Credit, Debit, Or Cash?

I’m constantly looking for ways to budget better, as it can be challenging in a new, digital epoch of swipes and signatures. Last month, I decided to follow Dave Ramsey’s advice and only use cash. For 2 weeks, I banished all credit and debit cards from my wallet.

Over the course of the experiment, I struggled to use cash. Despite all the whimsical benefits of budgeting via cash and envelopes, the good ol’ paper currency seemed antiquated and made for difficult money management. As a near-religious Mint.com user, all of my transaction history and spending trends were lost in the data-less use of cash.

Now, there’s a new solution called the Google Wallet Debit Card!

Cash Didn’t Work… For Me

Recently, I was interviewed by a writer for LearnVest.com that asked whether I was still using cash – had I made the switch more permanently after the experiment? I laughed and said, “No. In fact, I don’t have any cash in my wallet at all.” I haven’t really used cash as a primary payment method since middle school. When I got to high school, I opened a savings and checking account, and the debit card quickly replaced the greenback.

After the experiment, I was left floundering around the questions about how to budget better. As an avid swiper, I realized the consequences in spending that could occur. Researchers from MIT’s Sloan School of Management found that:

In studies involving genuine transactions of potentially high value we show that willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash. The effect may be large (up to 100%) and it appears unlikely that it arises due solely to liquidity constraints. In addition to demonstrating the effect, we provide a methodology for detecting it, and our findings suggest a source of variance to test alternative explanations.

The Fourth Option: Google Wallet Debit Card

Yesterday, Google announced a perfect solution for the digitally-inclined: Google Wallet Debit Card. The card is just like any other; in fact, it’s a Mastercard with the power of Google. It can link credit cards, bank accounts, and loyalty cards in a neat little application for iPhone and Android. But now, there’s a new, physical card to help making shopping easy.

Ever since Dave Ramsey introduced the envelope system with cash to manage a spending plan, I’ve been looking for ways to incorporate that philosophy into my life. Google Wallet is finally that solution. The debit card uses the balance in your Google Wallet, which functions much like a PayPal account. Once your balance is empty or too low, the purchase won’t go through.

What Makes Me Excited About This New Product?

The Google Wallet Card operates much like a prepaid debit card, except it’s entirely digital, reloadable, and has hardly any fees. I have the power of a bank by utilizing Google Wallet’s features. I can send money to friends, receive payments, and now I can spend the money wherever I go.

The most important part is that it allows you to set strict budgeting goals for each week. For instance, let’s say I want to limit my food spending (groceries, lunches, and dinners) to $400 per month. If I load my card with $100 per week, and stop swiping after that – because there’s nothing left – I can effectively stick to my budget. Just like the envelope system, I’d know exactly how much is left (digitally) – no more, no less.

The Dark Side Of That Terrific Paycheck

By Frugaling 14 Comments

Money Scrabble Picture Flickr — *Photo: PT Money*

This is a contribution from Syed of The Broke Professional! He runs an up and coming personal finance site for working professionals. On top of that, he’s a practicing doctor. Thanks for the article, Syed!

Personal Finance Is Simple, Right?

The ability to manage and master your finances is based on two factors: what you bring in and what goes out – income versus expenses. Though this may seem like an oversimplification, everything financial boils down to this equation. If you spend more than you earn, this puts you in debt and leads to a precarious financial situation.

This is the unfortunate truth for many in America today, as the allure of easy credit and excessive consumption keeps many in debt. On the other hand, earning more than you spend puts you in a position to save, and saving enough will help you weather almost any financial storm or life-changing event that comes your way.

Your Paycheck’s Hidden Costs

Getting that first job after college and seeing all those numbers that represent your yearly salary can be exciting at first. It’s usually more money than you have ever seen before, so it can be an exciting time. But appearances can be deceiving. Though that nice big round number may look nice, you’re not going to get all of it. If you’re not careful, you might not even get half of it.

There are many associated, and often times hidden, costs for any job. Knowing what these costs are will help you determine your real hourly wage – what you make per hour after all of the associated work expenses are accounted.

The biggest factor people usually associate with jobs is the commute. Whether it is driving or taking public transportation, there is going to be some cost of commuting to your job, unless you work from home. Most of us would just calculate how much we spend for gas and be done with it. But there are other hidden costs to commuting such as wear and tear on the car which can lead to increased trips to the shop, money spent on tolls, and increased frequency of oil changes due to driving every day.

Another big factor for some is money spent on food. From eating out to that daily coffee we get from Starbucks on the way to work, “rewarding” ourselves with a treat after a stressful day, and money spent on take-out when we are too tired to prepare dinner at home. Work can hurt your budget by leaving you with little time to think, prepare, and make wholesome spending choices.

The list can be endless: hiring outside help such as yard workers, maids, tutors, and money spent on entertainment to de-stress from work. Let us go through a simplified example to see how much having a certain job can actually cost you, and what your real paycheck ends up being.

Analyzing Paychecks

Let’s say you have a friend who makes $20/hour. They’re struggling to make ends meet, but not sure why. You ask him how much he makes per week. He simply multiplies 20 dollars an hour by 40 hours per week to get 800 dollars per week. But knowing what we know about job associated costs, we go deeper and find out what he is actually making.

We calculate that with money paid for gas, tolls, and wear and tear on his car, he is spending an average of 100 dollars per week on commuting-related expenses. We then move to food and find out that with his daily latte, occasional lunches, and eating out with co-workers, he is spending an average of $50 a week on food. Then, we find out that he has a habit of seeing a movie with a co-worker after a long day of work and rents movies weekly to de-compress after work. This comes out to 30 dollars per week.

His job also has a dress code of a shirt and tie, and sometimes he has to wear a suit to meetings. This newer wardrobe can cost a couple hundred dollars, and require purchases further down the road.

He also takes a yearly vacation just to get away from it all, which averages out to $40 over the year.

Last but not least, he also hires a cleaning service because he has no time to thoroughly clean his apartment. This comes to about $25 a week. There are other associated costs but these are the ones that stick out so let us work with these.

Our friend said that he makes $800 per week. After applying just these associated costs we went over, we find out that he is making 480 dollars per week. This means after associated costs, he is actually making 12 dollars an hour in possible savings!

What Does It All Mean?

Though this example had simplified numbers and categories, it shows that job-related expenses can really take a bite out of your bottom line. By looking at the real hourly wage, you can better evaluate the consequences on your budget and well-being. We can also use this information to examine our destructive money habits and try our best to change them.

In this example, if our friend made coffee at home and stopped going to the theaters after work, he could easily save $30 a week. Making little, positive changes here and there can really add up and help to improve our situation.

Finally, this exercise can show us how important it is to spend our money on the things that matter most. If we know that our real hourly wage is 12 dollars an hour instead of 20, maybe we will think twice before we drop down 20 bucks for a movie ticket and popcorn for 2 hours of fun or 40 bucks for a video game we will only play once in a while. Instead of spending money on frivolous things, maybe we can save it, spend some time exercising, learn a new skill, and spend time with family.

Successfully graduating with a bachelor’s or any advanced degree takes a lot of work. It is vital to find the job that suits you and your life, rather than going for the first big salary you see and realizing you’re not making as much as you thought.

5 Steps To Successfully Monetize Your Blog

By Frugaling 24 Comments

5 Steps To Successfully Monetize Your Blog

For Love Or Money?

After making over $10,000 in 6 months of writing at Frugaling, a number of people inquired about how they might mimic the results. No single recipe will get you from start to money, but there are some things you can do to put yourself in a position to succeed.

Too many people are focused on pumping out a certain number of articles per day, week, or month. The goal makes sense: The more I publish, the more I’ll get my name out. But when you’re just starting out, there isn’t a network to share and enjoy your content. Eventually, most sites/blogs/independent writers lose momentum, and the strategy fails.

We’re all motivated by the idea that our work may someday be read, and it can be challenging to publish and parish – losing sight about what intrinsically interests you about a subject. Simultaneously, in the most productive push, people make the least amount of money. It’s a lose-lose – a recipe for disaster.

This article will walk you through a process of creating and cultivating a site worth visiting. From there, I’ll talk about how you can start making money. Between advertisers, private connections, and affiliate sales, you can begin raking in some serious dough.

Here are 5 steps you must take to monetize your blog successfully:

1. Create Content Worth Sharing, Network Like A Boss

A number of people have approached me and asked how they can make five figures in 6 months. The road is circuitous and doesn’t always end up with the success I had. There were a number of pleasant accidents that led me here, but it all started with a fundamental building block: Creating strong stories and content.

I didn’t set out to create a money making machine. Frankly, my writing style is more opinionated and personal than financial. I wanted to put the personal in personal finance. This was going to be my story. If I made a little money along the way, great! At the heart of my decision to write about student loan debt and other financial concerns was my own desire to write about what I was learning. I intrinsically wanted to be doing this – money wasn’t the sole motivator.

From very humble beginnings, I wrote what I considered to be deep, thoughtful pieces about struggle and areas of my life that I needed to improve. There were many cracks in my budget, ideas about finance, and how to make my small salary work. Through writing and getting feedback from others, I gained some confidence in my monthly budget, created some rock solid plans, and became more frugal. By writing, I was embodying what I wanted to become, and it became a self-fulfilling prophecy.

Beyond my content and spending time to better my writing style, I networked as much as I could. I found people of all personal financial stripes to trade links, comment on work, and email for help. There were times when I frustrated, pestered people or asked for too much. I realized that some people didn’t really like human-to-human interaction in this world of personal finance. But others loved it, and that’s where I devoted 80 percent of my time.

Every website I visited was an opportunity to network and connect. Those connections led to Twitter followers, Facebook likes, and much more. Between creating content worth sharing, reading others’ sites, commenting on great articles, and establishing relationships with those in the field, I was primed for advertisers.

2. Invest In Your Theme, Design

When I first turned the server space on and started Frugaling on May 4th, 2013, this site looked like a patchwork quilt. It was cute and homey, but unprofessional and unattractive in certain parts. I felt limited in time and money to change the website’s look and feel. Unfortunately, by not evolving the website over time, I was limiting my potential for growth and new readers.

Dezzain Mesocolumn Free WordPress Theme — *Dezzain’s Mesocolumn Theme – This is what I use!*

A theme and solid, consistent design cannot guarantee you success. Similarly, great content that isn’t accessible and easy to read will just be swept under the rug. To be in the right place for success, you need the content and theme to match. I’ve been to many personal blogs over the years, and when I see something that’s poorly contrasted, uses strange fonts, and/or doesn’t offer me an easy way to navigate, I lose interest.

If your theme doesn’t seem professional, you may be losing traffic; at least, from people like me. Colors should be themed throughout your site. Text should be black on a lighter color – preferably white. Use smoother fonts for easier, more friendly reading. These things should be common sense, but mishaps occur all the time. Don’t make it challenging for me to read your site!

Over the last few months, I’ve received a few different emails about my own themes. Generally, I point them in two directions: buy a theme or modify a free theme. Buying one is simple and opens the world to terrific customer service. There are traditionally money back guarantees that help reassure you as well. Personally, I’m frugal and cheap. The theme you see today is absolutely free. You can check it out here.

3. Apply For And Install Google AdSense

Now you can actually think about making money. That day has come. You’ve created a wonderful entrance to your site and you’re publishing terrific articles. The flow of traffic to your website has steadily increased. Maybe you even have a little following.

For many, their first advertisement dollars start rolling in from Google’s AdSense platform. Overall, AdSense has been the second largest money maker for me. It’s one of the largest ad networks in the world, and provides advertisers access to nearly every popular site, and publishers with a steady stream of financial support. Somewhere in between, Google takes a hearty chunk out of the profits and provides a seamless process.

The Google network is relatively easy to apply to and setup. Once you’ve been approved, you can begin plastering your site with advertisements. Meanwhile, your visitors may be shocked by a sudden onslaught of ads. This can be a seriously unwelcome and unfriendly wakeup call to many. If you can, be cautious and deliberate when choosing the placement and number of ads.

Initially, I placed ads in the content of single posts, but I quickly learned how annoying that is as a reader to withstand that advertising onslaught. To be popular with more critical social networks such as Reddit, you cannot place ads inside an individual article. If you do that, you’re setting yourself up for failure – and it’s clear you’re only in this for money, and not reader enjoyment. All I’d suggest is be contentious about ad locations and frequency. Respect your readers and they will honor the service you provide them.

4. Available, Accessible, And In Demand

As your Alexa rankings rise and traffic statistics show a growing, thriving audience, you should begin thinking about private advertising opportunities. Month-to-month Frugaling regularly has around 14-15,000 page views. At that rate, I’m about a fifth of some of the large personal finance sites’ traffic. While there’s room to grow, advertisers may be interested in a niche audience.

Private advertisers tend to pay per month, which necessitates that they understand your current traffic. All of this information needs to be packaged up and easily accessible to possible companies. Just like making your site easy to read, offer advertising opportunities that are easy for companies to understand. Create an advertising page with some basic information.

Offer some ability for companies to get ahold of you. I recommend a contact form because it shows the IP address of the person. If you’re approached by a scammer or spammer, showing an email address may aid them in stealing something from you. I’d highly recommend the default contact forms within WordPress’ Jetpack plugin.

Private advertisements are far and few between, but landing something like this puts you a cut above the rest. Following these aforementioned steps will put you in good territory to get one.

5. Share Top-Notch Affiliate Offers

Making over $10,000 was a shock, and the big money was with affiliate links and articles. One day, I logged into my bank account to find about $2,000 deposited from a leading affiliate company. Suddenly, I felt this infusion of energy and confusion over why I had made so much.

I looked at my Google Analytics account to find a huge amount of traffic frequenting one of my affiliate articles. Naturally and organically, people were finding and making their way to my site. I didn’t have to do anything and suddenly I was making up to $3,000 in some months.

Affiliate companies and links can be great fun to work with, but I highly recommend you establish a strong audience before applying in a network. First of all, it’ll make you less likely to be outright rejected from the entire network. Secondarily, you’ll be far more likely to be accepted by individual companies. The best affiliate offers require some serious website traffic. You’ll just be declined time and time again if you go into a network without a sufficient baseline.

Affiliate offers are like the top of the food pyramid: use sparingly. In my experience, they come in handy when recommending products I already use. For instance, I use BigScoots web hosting, which can be purchased here. If you signup for an affiliate company and just share all the links you can, you’ll likely lose readers and credibility. I find it to be one of the more annoying parts about visiting certain personal finance sites. They clearly aren’t writing about a product because they truly love it, but you’ll find tens of articles that gush about for-profit products. Both as a consumer and publisher, you should be wary of selling out in this manner – it may tarnish your reputation to visitors.

Now What?

Google has an unofficial company motto that says, “Don’t be evil.” It just means, do what’s in the best interest of most and be kind while doing it. Sometimes Google fails to live up to that standard, but the philosophy is still exceptionally important.

You may want to monetizing your blog and make a few bucks doing something you love, but don’t lose sight of why you started writing. If it was simply to make boatloads of cash, you’re likely not going to make it very far in this business or with your motivation to continue. Blogging and writing regularly must be a labor of love – don’t become evil in the need to monetize your blog.

Keep your affiliate articles, ads, and private deals at a minimum. The ideal is a safe, comfortable place for visitors to stay for a while and browse around. There’s no need to inundate them with popups, popunders, multiple ads in content, and affiliate links everywhere you look. Over time, hopefully, readers will see what you have to offer is worth it and give you a referral. But you have to start with the fundamentals: great content and design. Once you’ve built a solid foundation, get ready for some profits.

Good luck!

Archives for November 2013