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Clearing Up Social Debt in 3 Steps
Debt can be thought of as a disease–probably social. Most of the time, it was acquired through poor decision making, possibly while competing with your friends, occasionally after having a few too many, often as an ego boost. Unfortunately, you can’t make it go away with a simple shot of penicillin. It takes work, commitment and dedication. Here are three steps to treating this particular affliction.
1. Burn it, bash it, torch it, toss it, disinfect. Get rid of the things that enable you to accumulate debt. If you keep using debt as debt, you will never have it all paid off. That’s like only taking 3 days of a 10 day antibiotic. Do you really want that itchy rash bloodsucking debt rearing its ugly head when you’ve got an important destination for your money? Take steps to protect yourself. Wrap that debt up and keep it away.
2. Quit buying stuff. Chances are, you have enough stuff. Do you really need that Tusken Raider bobble-head or the brushed titanium spork? They may make you feel better in the short term, but after breakfast, what have you gained? A fleeting memory, a bit of cleanup, and an odd ache that you can’t quite explain to your friends. Only buy the stuff you need, and make it things you will keep forever. If you do need to indulge, hold off for 30 days to see if it’s really worthwhile. If it’s really worth having, you can scratch that itch in a month with far fewer regrets.
3. Spend less. This is the obvious one. The simple one. The one that makes breaking a heroin addiction look like a cake-walk(My apologies to recovering heroin addicts. If you’re to the point that personal finance is important to you, you’ve come a long way. Congratulations!). Cut your bills, increase your income. Do whatever it takes to lower your bottom line and raise your top line. Call your utilities. If they are going to take your money, make them work for it. If they can’t buy you drinks or lower your payments, get them out of your life. There’s almost always an alternative. Don’t be afraid to banish your toxic payments. Eliminate your debt payments. This page has a useful guide to debt and how to clear it off.
Update: This post has been included in the Festival of Frugality.
Cutting Healthcare Costs
It’s not a secret that health care can be expensive. Many people pay two and three digit bills for their prescriptions. A visit to the doctor’s office can hurt the budget. Glasses cost hundreds of dollars? How can you cut this cost?
Drugs
If possible, go generic*. There is no difference between Trazorel and trazadone, aside from the cost. Wal-mart, Target, and many other stores offer common generic prescriptions for $4-5. When you are talking to your doctor, ask if there is an drug option that has an available generic. When you are talking to your pharmacist, ask if there is a generic alternative available.
Get the price match. The Cub Foods pharmacy near me matches the Target generic drug price, giving us $4 generics for the asking. This is often an unpublicized deal, so make sure you ask. If your pharmacy will not match nearby prices, consider going elsewhere.
See if there is a 90 day plan. Many insurance companies sponsor a 90 day prescription plan that gives you a 90 supply of drugs for the 60 costs as long as you are willing to accept the drugs by mail. For expensive prescriptions, this 33% discount can be a substantial savings.
Physician
Does your clinic offer online consultations with your doctor or nurses? Some clinics offer a chat or email option to talk to your doctor without requiring a visit that will add fees and copays to your expense sheet. Most clinics and hospitals have a free nurse line for basic questions, like “When is my baby‘s fever dangerous?” It’s a great chance to save some money. I know, from personal experience, that they won’t be shy if they feel you need to come in, but they generally won’t try to convince you to come in if aspirin will fix the problem.
Stay in-network. Check with your insurance company to make sure the doctor you want to see if in your network and therefore, available at the cheapest out-of-pocket price. If not, and you really want that doctor, ask your insurance company if they accept nominations for the network and ask your doctor if he’d be interested in being nominated.
Stay home for your cold. Don’t go to the doctor for every minor problem. The best remedy a doctor can give your for your cold will reduce it to a seven day malady. On the other hand, if you do nothing, it will go away in about a week. Why waste the money? This counts double for the emergency room and urgent care. Strep throat is not an emergency. Wait until morning and go to the clinic, paying the lower fees instead of the large ER costs. Make an appointment for a doctor visit, if possible. Urgent care is billed the same as a regular visit, but most insurance plans double or triple the copay for urgent care visits.
Cash Flow
A Health Savings Account(HSA) is a pre-tax account to save for qualifying medical expenses similar to a Flexible Savings Account(FSA). The main differences are that HSAs are only available for people with high-deductible insurance plans and do not have to be spent on medical expenses. Non-qualifying expenses move from pre-tax to post-tax, meaning you will be charged federal income tax for non-qualifying withdrawals. FSAs are “use it or lose it” plans. If you don’t use it, it will go away, usually at the end of the year. That makes December a great time to stock up on over-the-counter medicines and possibly replace your eyeglasses, as both of those are qualifying expenses. Find out if you have either option available. If you use either one, set aside a place to store every imaginable medical receipt, so you can be reimbursed. Make sure you understand the FSA-eligible expenses.
An Ounce of Prevention
Get routine checkups. The earlier you find a problem, the more options you have. This goes for everything from cancer screenings to blood tests. Get a physical every year and know what is happening with your body. We may be living in the future, but replacement parts are still hard to come by.
Maintain Your Health
It’s cheaper to be healthy. Eat right, exercise, quit smoking.
I enjoy a good meal. It’s one of my favorite things. I won’t cut rich foods out of my diet, so we reduced portions. Beyond the first few bites, the flavor isn’t nearly as enjoyable or even noticeable. There’s no more enjoyment for huge servings than small ones.
Get more exercise, even if it’s just a 2o minute walks twice a week parking on the far side of the parking lot, or taking the stairs instead of the elevator.
Vision
Go online. This one is worth a write-up all by itself. I have 6 pairs of prescription glasses–all varieties of frames and coatings–that have cost a grand total of about $150. There is no noticeable difference between my cheapies and the designer alternatives. While I work on the write-up, the best site to introduce you to the concept of online glasses is GlassyEyes. Reviews, coupons, and discount likes. They have step-by-step instructions on turning an intimidating idea into a simple and cheap solution to an expensive problem.
How do you save money on health care?
* There are no generics available on new drugs until the initial patent expires. This gives the pharmaceutical companies a change to recoup their research and development costs. Without this patent period, new private drug research would evaporate. Don’t hate the brand names, but don’t show undue loyalty.
Making Extra Money Part 3: Product Selection
When you’re setting up a niche site, you need to monetize it. You need to have a way to make money, or it’s a waste of time.
There are two main ways to do that: AdSense or product promotion. To set up an AdSense site, you write a bunch of articles, post them on a website with some Google ads, and wait for the money to roll in.
I don’t do that.
I don’t own a single AdSense site and have never set one up. This article is not about setting up an Adsense site.
My niches site are all product-promotion sites. I pick a product–generally an e-book or video course–and set up a site dedicated to it.
Naturally, picking a good product is an important part of the equation.
The most important part of product selection is that the product has an affiliate program. Without that, there’s no money to be made. There are a lot of places to find affiliate programs. Here are a few:
- Amazon. If you don’t live in one of the states that Amazon has dropped in retaliation for passing laws that attempt to circumvent the Supreme Court’s ruling on collecting sales tax, you can sign up as an associate and collect a commission on every referral you send that turns into a purchase. That means you have a lot of product to choose from. Unfortunately, your commission is small, so you need to promote fairly expensive products to get a decent return. On the other hand, people trust Amazon, so that’s one less hurdle to making a sale.
- Commission Junction. These are the people managing affiliate programs for a large number of credit cards and banks. If you’ve opened an account with INGDirect through one of my links, I got a commission for the referral. (Thank you!) They have a lot of other products, too.
- e-Junkie. This one is a popular distribution system for bloggers. It’s likely that, if you’ve bought an ebook from a blogger, e-Junkie handled the fulfillment process. A lot of the products available there have an affiliate program, but that is up to the owner of the product.
- ClickBank. My favorite. This is one of the largest affiliate networks specializing in electronic products, whether that’s membership sites, ebooks, or video courses. Commissions are good, often 50-75%. They also offer a 60 day guarantee of every product sold through their site, which helps soothe the wary customer. This is the site I’ll be using for this series.
The first thing you need to do is sign up for whichever program you intend to use.
If you’re not going with Clickbank, feel free to skip ahead to the section on keyword research.
Once you are signed up and logged in, click on the “Marketplace” link at the top of the screen.
From here, it’s just a matter of finding a good product to sell. Here are the niches we’re going to be looking for:
- Back pain
- Bankruptcy
- Conflict resolution at work
- Detox diets
- Fat kids
- Foreclosure avoidance
- Job hunting
- Weddings
- Writing sales copy
I’m going to look for one or two good products in each niche. When that’s done we’ll narrow it down by consumer demand.
For now, go to advanced search.
Enter your keyword, pick the category and set the advanced search stats. Gravity is the number of affiliates who have made sales in the last month. I don’t like super-high numbers, but I also want to make sure that the item is sellable. Over 10 and under 50 or so seems to be a good balance.
The average sale just ensures that I’ll make a decent amount of money when someone buys the product. I usually aim for $25 or more in commissions per sale. Also, further down, check the affiliate tools box. That means the seller will have some resources for you to use.
This combination will give us 36 products to check out for back pain, unfortunately, none of the results are for back pain products. After unchecking the affiliate tools and setting the gravity to greater than 1, I’ve got 211 results. Sorting by keyword relevance, I see three products, two of which look like something I’d be interested in promoting. One has a 45% commission, the other is 55%. The X-Pain Method has an initial commission of $34 and claims a 5% refund rate. Back Pain, Sciatica, and Bulging Disc Relief pays $16, which will make it a potentially easier sale. I’ll add both to the list for further research.
I’m not going to detail the search for the rest of the niches. That would be repetitive. You can see my selections here:
- Back pain – X-Pain Method; Back Pain, Sciatica, and Bulging Disc Relief
- Bankruptcy – I’m dropping this one from the list. It’s too complicated and deserves an attorney. I don’t know enough about the topic to make sure it is up to date.
- Conflict resolution at work – Management Training: By the Book; Anger Management for the 21st Century
- Detox diets – Master Cleanse Secrets: 10 Day Diet; Master Cleanse Insider; Eating for Energy: Raw Food Diet for Weight Loss
- Fat kids – I’m dropping this one, too. A kid’s health is too important. I don’t want to sell a dangerous or unethical product.
- Foreclosure avoidance – How to Stop Foreclosure in 7 Days Flat; Foreclosure Defense Secrets
- Job hunting – Guerrilla Resumes; Amazing Cover Letters
- Weddings – All Types of Wedding Speeches; The Master Wedding Planning Guide; Amazing Wedding Planning
- Writing sales copy – Instant Swipe File; Ad Copy Creator Pro; How to Write Killer Copy
Now we’re going to go through a few steps for each of these products.
The Sales Page
We need to make sure the sales page doesn’t suck. If the site doesn’t work, is hard to read or navigate, has a hard-to-find order button, or just doesn’t look professional, it’s getting cut.
- Raw Foods is eliminated. The sales video is horrible and the order link is at the bottom of several screens worth of nothing. It’s a crap site.
- The 7 day foreclosure-avoidance product is out. Site’s down today. I want reliability.
- Management Training By The Book is out. I don’t like typos on the sales page, especially in the page title.
The Email List
If it has an email subscription form, we’ll need to subscribe, then double-check to make sure our affiliate information isn’t getting dropped in the emails. If it is, the seller is effectively stealing commissions. In the interest of time and laziness, I’m going to eliminate anyone pushing for an email subscription. It’s harder–and time-consuming–to monitor that. On of my niche site had a seller completely drop their product. Instead, they pushed for email subscriptions so they could promote other products as an affiliate. Absolutely unethical.
- Wedding speeches is eliminated for throwing a mandatory email entry into the order process. There’s no guarantee they are up to anything shady, but I’m taking the simple route.
Checkout and Credit
Finally, we’re going to visit the checkout page. You need to do this from every links in the newsletter and the links on the sales page, just to make sure you’ll get your money.
The way to tell who’s being credited is to look at the bottom of the order page, under the payment information. It should say [affiliate = xxx] where xxxis your ClickBank ID. Anything else, and the product gets cut from the list.
When you are checking these, don’t click on every possible link at once. That confuses the cookies. Do one at a time. I tried to do it in one batch for this post and lost half of the cookies. If it weren’t for the fact that I already own one of the products and bought it through my own link and got credited, I would have been talking undeserved trash about thieving companies.
Other Factors
Sometimes, when you’re examining a product, it just doesn’t feel right. When that happens, drop it. There are millions of other products you can promote. In this case, I’m dropping the anger management program because, in my experience, angry people don’t think they are the problem. Here’s a life tip: If everyone else is a jerk, the problem probably isn’t everyone else.
- Another important factor is the sales page itself. If it doesn’t make you want to buy the product, why would anyone else?
- Amazing Cover Letters is eliminated because it’s too easy to overlook the buy link. If I have to hunt for it, it’s losing customers.
- Amazing Wedding Planning is getting eliminated because I don’t like the sales page. The buy link is easy to overlook, and it doesn’t compel me to buy.
Now we’re down to 10 products in 6 niches. At this point, we’re comfortable with the sales pages and we know that they are crediting commissions. As it stands right now, all of the products are worth promoting.
- Back pain – X-Pain Method; Back Pain, Sciatica, and Bulging Disc Relief
- Detox diets – Master Cleanse Secrets: 10 Day Diet; Master Cleanse Insider
- Foreclosure avoidance – Foreclosure Defense Secrets
- Job hunting – Guerrilla Resumes
- Weddings – The Master Wedding Planning Guide;
- Writing sales copy – Instant Swipe File; Ad Copy Creator Pro; How to Write Killer Copy
We’ll make the final determination after doing some heavy keyword research in the next installment. That’s where we’ll find out how hard it is to compete.
Any questions?
2011 Goals
It’s that time of the year when people make public promises to themselves that last almost as long as the hangover most of them are going to earn tonight, otherwise known as New Year’s Resolutions.
Not a fan.
I am, however a fan of planning out some concrete goals and doing my best to meet them. I do this through a series of 30 day projects. I set a goal that can be reached in 30 days, and push for it. I tend to make my goals fairly aggressive, and I tend to meet them.
Here were my goals and results for 2010:
- January: Wake up at 5am AND read to my kids every night before bed. These were easy goals to meet. A year later, I am still getting up much earlier than I ever have, even if it’s not 5AM. I write better late at night than I do early in the morning, anyway. I’m not still reading to my kids every night, but we are making progress on teaching my four-year-old to read.
- February: Do 100 push-ups at one time by the end of the month. I accomplished this in 22 days. I also had a secret project that involved doing something sweet for my wife every day. By the end of the month, she was convinced I had done something horrible that I was trying to make up for.
- March: Do 100 sit-ups at one time by the end of the month. It took me a week, but I found out how bad sit-ups are for your back. Pure failure.
- April: Spring Cleaning. I will declutter every room in my house this month. We missed one room and one closet, but made a lot of charities happy.
- May: Have a sit-down dinner with my family, at the dining room table at least 3 times per week. We managed this one and enjoyed it, but we haven’t managed to keep it up. I’ll have to try this again.
- June: No computer use, while anyone else in the family is awake, except for household necessities, such as bills. This one worked well and improved the quality of our interaction. I’m not quite this strict about it, but my computer use has gone down dramatically while my family is awake.
- July: Write fiction every day. I don’t think I wrote more than a few pages of fiction, but I did write every day.
- August: Buy nothing new this month. We came very close to doing this one perfectly. It wasn’t easy.
- September: Attempt to learn a new language. Total bomb. I never even got started.
- October: No yelling at the kids. Have you ever thought about trying this with a a two-year-old and a four-year-old? We never got started.
- November: No complaining. Not at home, not at work. I didn’t make this an actual month, but I’ve been trying to complain much less. I think it’s been working.
- December: I will have done 14 projects this year. December is a month off. As planned, I took December off.
So I missed 4 months of projects. This year, I’m going to modify my overall plan and only do 6 projects, every other month. That will give me a month off to either relax or incorporate the goal into my ongoing habits without any stress.
Here are my goals:
- January: I’m going to do Tim Ferriss’s Slow-Carb diet. Yes, it’s a fad diet, but it beats the constant stream of garbage I eat now. The basic plan is to avoid anything white; no bread, pasta, rice, potatoes, or sugar. That’s accompanied by a targeted supplement regimen and a timed exercise plan to manipulate my metabolism. I’m not adding any aerobic exercise to my day, because I want this to be as controlled an experiment as possible. If it’s working at the end of the month, I will keep it going. It’s time to not be fat anymore.
- March: In February, I managed to get myself able to do 100 pushups in a single set. In March, I hurt my back trying to do the same with sit-ups and that killed my workout habit. This March, I’m going to do the 100 pushups challenge again, but this time, I’m going for perfect pushups. Last year, they got sloppy after about 80. This year, that won’t be good enough.
- May: I’m going to do at least 30 days of the Couch to 5k running program. It’s a 9 week program. As a 30 day project, it’s designed to establish the habit. When I tried picking up running last year, my knees were causing problems. Hopefully, my January project will mitigate that this year.
- July: I’m going to pick up a new language. This is the failed plan from September 2010. I’ve narrowed it down to either Spanish, Swedish, or Italian. One is useful, one is a part of my heritage, and one is for fun. At the moment, I’m undecided.
- September: Undecided. I am leaning towards a “nice” month. 30 days of doing something nice, for someone, somewhere. If I go this route, I’ve got 9 months to plan, because that’s a lot of things to do.
- November: Absolutely undecided. Any suggestions?
That’s my plan for the new year. Six specific goals, each lasting 30 days. I could definitely use some help for September and November. Please give me some suggestions in the comments.
A Moment of Clarity
- Image by Matt Stratton via Flickr
Ten years ago, I buried myself in debt. There was no catastrophic emergency or long-term unemployment, just a series of bad decisions over the course of years.
We bought a (short) series of new cars, a house full of furniture, electronics, hundreds of books and movies, and so much more. We threw a wedding on credit and financed an addition on our house. We didn’t gamble or drink it away, we just spent indiscriminately. We have a ton of stuff to show for it and a peeling credit card to prove it.
What changed?
In October 2007, we found out brat #3 was on the way. Don’t misunderstand, this was entirely intentional, but our…efficiency caught us by surprise. It took several years to get #2. We weren’t expecting #3 to happen in just a couple of weeks. #2 wasn’t even a year old when we found out she was going to be a big sister. That’s two kids in diapers and three in daycare at the same time.
The technical term for this is “Oh crap”.
I spent weeks poring over our expenses, trying to find a way to make our ends meet, or at least show up in the same zip code occasionally.
I finally made my first responsible financial decision…ever. I quit smoking. At that point, I had been smoking a pack a day or more for almost 15 years. With the latest round of we’re-going-to-raise-the-vice-tax-to-convince-people-to-drop-their-vices-then-panic-when-people-actually-drop-their-because-we-made-them-too-expensive taxes, I was spending at least $60 per week, at least.
Interesting side story: A few years ago, Wisconsin noticed how many Minnesotans were crossing the border for cheap smokes and decided to cash in by raising their cigarette taxes. The out-of-state market immediately dried up. Econ 101.
So I quit, saving $250 per month.
Our expenses grew to consume that money, which we were expecting. (Remember, we were expecting a baby!) Unfortunately, our habits didn’t change. We still bought too much, charged too much on our credit cards, and used our overdraft protection account every month. At 21% interest!
Nothing else changed for another year and a half. My wife would buy stuff I didn’t like and we’d fight about it. I’d buy stuff she didn’t like and we’d fight about it. When we weren’t arguing about it, we’d just silently spend it all as fast as we could.
Bankruptcy was looming. We had $30,000 on our credit cards and our overdraft protection account was almost maxed out. Have you ever thought you’d have to sell your house quickly?
One day, while I was researching bankruptcy attorneys, I ran across Dave Ramsey. When I got to daycare that evening to pick up the kids, I noticed they had The Total Money Makeover on the bookshelf, so I asked to borrow it.
I read the book twice, had a very frank discussion with my wife about the possibility of bankruptcy, and we set out on the path to financial freedom together.
What made you decide to handle your finances responsibly? Or, perhaps more importantly, what’s holding you back?
