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Getting Back on Track
Have you ever set a goal…and failed?
At some point, it happens to all of us. After all, our reach should exceed our grasp, right? That doesn’t make it easy to admit failure, or to correct it. Did you let a New Year’s resolution lapse, or slip off of a diet? Have you started shopping indiscriminately again, or stopped going to the gym?
It’s okay if you did, but it’s time to fix it.
How can you get back on track after failing a goal?
1. Pick a day to start over.
Just like when you first started towards your goal, you have to decide when you’re going to get back on board. If you can’t decide, just pick the beginning of the next month. A new beginning is a great time to tackle your new beginning.
2. Recommit.
You failed once. Accept it and move on. Past behaviors don’t have to be an indicator of future performance. Just do better this time.
3. Announce it.
Somebody has noticed that you aren’t on the wagon. Your coworkers are seeing you eating candy, or your spouse has noticed you buying things you don’t need. Talk to these people. Tell them you’re going to redo the things you’ve undone. You’ll change the world, but you have to start with yourself.
4. Don’t be ashamed of your lapse.
Unless I have seriously misjudged my audience, you are human. Humans sometimes make poor decisions. Being ashamed won’t help you, but take the opportunity to learn from the past. Do you know what caused you to fail? Are there triggers to your behavior that you can avoid this time around? When I quit smoking, I tried to avoid rush hour, because I smoked heavily while I drove and I wanted to avoid being in car for as long as possible, minimizing one of my triggers. What cause your lapse, and can you avoid it?
5. Don’t do it again.
This one should be the most obvious, but the fact that it’s a problem means it’s not. Do whatever it takes to not make the same mistakes and uphold your goals. Don’t smoke. Don’t eat garbage. Exercise more. Whatever you’ve decided to do or not do, do it….or not.
Have you missed a goal? How have you picked it back up?
Your Budget is Worthless
When you realize that you’ve buried yourself in debt and decide to get out from under that terrible burden, the first thing you’ve got to do is build a budget because, without that, you’ve got no way to know how much money you have or need. After you’ve got a budget, you’ll start spending according to whatever it says. Hopefully, you’ll stay on budget, but what happens when an emergency does come up? What do you do when your car dies? When you suddenly find out your kids needs vision therapy? How do you manage when your job suddenly gets shipped off to East De Moines?
Your budget isn’t going to help you meet those expenses. Most people don’t have enough money in their bank account to make it all the way to the next payday, let alone enough to keep the lights on and food on the table. How can you possibly hope to deal with even the little things that come up?
You whip out your emergency fund.
The problem with a budget is that it does a poor job of accounting for the unexpected. That’s where an emergency fund comes in. An emergency fund is money that you have set aside in an available-but-not-too-accessible account. Its sole purpose is to give you a line of defense when life rears up and kicks you in the butt. Without an emergency fund, everything that comes unexpectedly is automatically an emergency. With an emergency fund, the things that come up are merely minor setbacks. Without an emergency fund, your budget is nothing but a good intention waiting to get shattered by the next thing that comes along. With an emergency fund, you are managing money. Without it, it’s managing you.
How much money do you need in an emergency fund?
Every “expert” has their own opinion on this. Dave Ramsey recommends $1000 to start. Suze Orman says 8 months. The average time spent looking for work after losing your job is 24.5 weeks(roughly 6 months), so I recommend 7 months of expenses. That’s enough to carry you through an average bout of unemployment and a little more, but that’s not a goal for your first steps toward financial perfection. To start with, get $1000 in a savings account. That’s enough to manage most run-of-the-mill emergencies, without unduly delaying the rest of your debt repayment and savings goals.
How do you build an emergency fund?
Let’s not kid ourselves, $1000 is a lot of money when can barely make it from one check to the next. Unfortunately, this vital first step can’t get ignored. If you really work at it, you should be able to come up with $1000 in a month or so. Here are some ideas on how to manage that:
- Cut. Drop every possible expense. If you drop cable, your cell phone, Netflix, and a weekly dinner out, you will already be saving $400 that month. You’d be almost halfway there.
- Sell. How much stuff do you have that you don’t need, want, or use? I’d be willing to be there’s more than you realize. Last spring, I had a garage sale that brought in about $1300. Everything we sold was just crap we don’t use any more. We sold candles and candle-holders, DVDs, books, clothes, toys, electronics, games, and anything else we could find. I spent a month going through every room in my house to find my inventory. Craigslist is a good way to sell just one or two things at a time.
- Work. Have you thought about delivering pizza or working weekends in a gas station? If you have some technical or writing ability, you could pick up some part time work on oDesk or eLance. Your opportunities are only limited by what you are willing to do.
Stop at a grand?
Dave Ramsey’s advice is to get your fund up to $1000 and then leave it alone until your debt is paid off. Screw that. I’ve got money going into my fund every month. It’s only $25 per month, but over the last two years, it has almost doubled my fund. Don’t dedicate so much money that you can’t meet your other goals, but don’t be afraid to keep some money flowing in .
Using the fund?
When can you pull the money out? That is entirely up to you. I have ju st two points to make about withdrawing from your emergency fund:
- Don’t keep the money in an easy-to-access account. If your fund is in the savings account that serves as your overdraft protection account, it’s too easy to spend it, and it will go away. I keep it in my INGDirect account. I don’t use the checking account for anything in person, so I don’t carry the card. If I want to spend that money, it will take 2-3 days to transfer into my main bank account.
- Never decide to spend the money on the spur of the moment. There are very few major financial decisions that can’t wait until morning to be answered. Sleep on it. If it’s still necessary tomorrow, you can spend it without guilt.
An emergency fund makes your life easier and your budget possible when the unexpectable happens. Don’t forget to fund yours.
How much money do you keep in your emergency fund? What would it take to get you to spend it?
Carnival of Personal Finance #307: The Silver Edition
This is the 307th Carnival of Personal Finance, the Silver Edition. As of 10:00 PM CDT last night, silver is at $43.76 per ounce. Three years ago, when I last bought silver, it was at $11.30. In honor of that, and inspired by my first editor’s pick below, I’m going to share some facts and history about silver.
The last time prices rose like this was in 1979, when the Hunt brothers bought or controlled close to 50% of the world’s silver. They managed it by leveraging their silver hoard. As they bought more, prices went up, increasing the value of their hoard, which they then used as collateral for more loans to buy more silver, which caused the prices to go up so they’d use it as collateral…. You get the idea. Prices went from $11 per ounce to $50 per ounce in less than a year, before the regulators figured out the game and changed the rules, bringing the whole thing crashing down. The resulting losses and lawsuits bankrupted the former billionaires within 10 years.
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Editor’s Picks:
First, we have a post from Squirrelers, Is There a Silver Bubble? How High Can Prices Go?. This post reminded me of not only the Hunt brothers story, but the small box of silver I own. Now, I’m debating taking it to a precious metals dealer and cashing out for 400% of my purchase price.
Suba from Wealth Informatics brought Never Pay full price : How to save 10-50% on every purchase. This was entirely new to me, which surprised me. I see a lot of ideas presented in new ways, but rarely see something I know absolutely nothing about.
If you’ve got legal papers you need to fill out, or questions you need answered, you could do far worse than to start with the site Jeff Rose from Good Financial Cents gives us with 7 Free and Cheap Online Legal Resources. If you think you don’t need the resources, that means you a complete estate plan, right? You have a will?
Saving
Dimes, quarters, and half-dollars were 90% silver until 1964. Half-dollars continued to be 40% silver until 1971. At that time, the government tightly controlled the price of silver and kept it at $1.29 per ounce so the face value of the coins matched the value of silver they contained. Today, a supply of 90% silver coins with a face value of $5 can be had for the bargain price of $173.74.
Fanny from Living Richly on a Budget – Personal Budget Blog presents How to Build the Crucial $1,000 Emergency Fund, and says, “How do you finance unexpected personal expenses, such as car repairs, medical visits, home maintenance repairs, etc? The most effective way to finance these expenses is through a personal emergency fund.”
Flexo from ConsumerismCommentary presents Silent Inflation is Destroying Your Net Worth, and says, “Inflation continues to deflate individuals net worth and there are no signs of it getting any better.”
Adam Piplica from Magical Penny presents Avoid Hitting the Rocks of Financial Ruin, and says, “This post draws on a famous story in Homer’s Oddessey how a captain made it safely passed the Sirens because he had protected himself from making a poor short-term decision. It’s exactly the same thing you have to do if you want to grow your pennies.”
Clint from Accumulating Money presents Baby-Boomer Generation Must Get Serious About Planning for Retirement, and says, “The “Baby-Boomer” generation has undergone two severe business-cycle reversals in the past ten years alone. Many of these fifty and sixty year-olds are now facing a daunting task – how do you rebuild your net worth in so short a remaining time period?”
Jason from One Money Design presents Planting a Garden to Save Money, and says, “As Spring is here, planting a garden is a great way to help feed your family and save some money at the same time.”
Career
Silver is almost always found with lead. Through most of history, mining silver meant mining lead and breathing lead dust. In the ancient world, silver miners had a life span of about 3 years, so free men refused the job. This was a slave occupation.
Crystal from Budgeting in the Fun Stuff presents Job Experience – Don’t Rock The Boat, and says, “Being young and ambitious may seem like the best thing in the world but knowing your audience and environment is very important. You don’t want to come off as the young new hothead…here’s a story all about exactly that.”
Well Heeled Blog from Well Heeled Blog presents 5 Ways to Spend Your Raise, and says, “Congratulations, you got a raise! Now what? Now, what to do about this extra money? No matter what, don’t want to fritter this raise away. Here are 5 ways for the extra money to work hard for you. ”
Kathryn @ Financial Highway from Financial Highway presents 30 Common Interview Questions and How to Answer Them, and says, “This guide not only tells you what the interview questions are but also provides insight into what the interviewer is really asking and what types of answers will help you get the job.”
Credit
Around 500 BC, Athenians discovered a huge silver mine on land belonging the city-state. This find was used to finance building their first effective navy, which catapulted them to the heights of power they achieved.
Craig Ford from Money Help for Christians presents Best Ways to Maximize Cash, Credit Card, and Debit Card Rewards, and says, “How to maximize your credit cards or debit card rewards.”
Tim Chen from NerdWallet Credit Card Watch presents Premium Credit Cards: The Value Beyond the Cost, and says, “A premium credit card is a step above your average card: better rewards and extra perks offered at, well, a premium. These exclusive credit cards come with additional goodies like lounge access and free plane tickets, as well as hefty annual fees.”
Kevin (for Moolanomy) from Moolanomy presents How to Avoid Credit Cards and Credit Repair Scams, and says, “Credit cards don’t have to be a bad thing, but they definitely have their fair share of scams out there. Here’s how to avoid them.”
Real Estate
In World of Warcraft, silver is a rare spawn of tin. If you want to find silver, you should try mining tin. Over and over. (Source)
Mike from Green Panda Treehouse presents How Much Should We Spend on Housing?, and says, “How much is the right amount for housing costs?”
Ben from Money Smart Life presents How to Use a Mortgage Calculator to Compare Home Loans, and says, “A post about how to use a mortgage calculator to screen and compare the rates and costs of home loans.”
Frugality
The early discovery that water, wine, milk and vinegar stayed pure longer in silver vessels, led to its desirability as a container for long voyages. Herodotus wrote that Cyrus the Great, King of Persia, a man of vision who established a board of health and a medical dispensary for his citizens, had water drawn from a special stream, “boiled, and very many four wheeled wagons drawn by mules carry it in silver vessels, following the king wheresoever he goes at any time.” (Source)
Donna Freedman from Surviving and Thriving presents This isn’t your grandparents’ recession, and says, “When the going gets tough, it’s tempting to invoke our grandparents and their tribulations during the Great Depression. But some of their advice wouldn’t help us. ”
Glen Craig from Parenting Family Money presents Inexpensive (Cheap) Date Night Ideas for Parents, and says, “It’s tough getting out with the spouse when you have kids. With babysitting and the date it can get expensive. See some inexpensive date night ideas and how you can save on babysitting as well.”
Finance
From 1998 to 2009, Bernard von NotHaus marketed the Liberty Dollar as an alternative to U.S. government fiat currency. Liberty Dollars were made from silver and later, gold and copper. von NotHaus was later convicted of–among other things–counterfeiting coins, even though he only produced his own coinage and didn’t pretend it was the same thing.
N.W. Journey from Net Worth Journey presents What is Compound Interest?, and says, “A basic introduction to compound interest.”
Bret from Hope to Prosper presents Age 21: A Year of Change and Humility, and says, “The year I turned 21 was the most tumultuous of my life. In many ways, that one year shaped my life more than any other and determined the direction of my future.”
Economy
Colloidal silver is claimed to be a near-magical cure-all. Its proponents claim it has the ability to “benefit the immune system; kill disease-causing agents such as bacteria, viruses, and fungi; serve as an alternative to prescription antibiotics; or treat diseases such as cancer, HIV/AIDS, diabetes, tuberculosis, syphilis, scarlet fever, shingles, herpes, pneumonia, and prostatitis (inflammation of the prostate).” Scientific evidence for any of this: none. (Source)
Money Beagle from Money Beagle presents The Economy Must Be Improving, and says, “I don’t need a government report to show me that the economy is improving; I look no further than the latest coupon offerings from local restaurants!”
Darwin’s Money from Darwin’s Money presents Stop Complaining About Gas Prices, and says, “Americans are complaining about prices at the pump. I say “Stop Complaining and Look in the Mirror”. Here are some very rational reasons and real solutions.”
Investing
The best method of storing silver is in bullet form. When the werewolves attack, none of us will have long to fight back.
Mike from The Dividend Guy Blog presents 7 Deadly Sins of Investments, and says, “Are you making these mistakes with investing?”
Mike Piper from Oblivious Investor presents Replacing Index Funds in Your Portfolio, and says, “For the most cost conscious of investors, it might make sense to build a portfolio of individual securities rather than index funds.”
RJ Weiss from Gen Y Wealth presents How to Convert a 401(k) to Traditional or Roth IRA, and says, “Reviewing your options with your 401(k) when leaving or changing jobs. More specifically, to look at the steps to convert your 401K(k) to an IRA, since this is most likely the optimal choice.”
Michael from DoughRoller presents How Half a Percent Can Ruin Your Retirement, and says, “Investing for retirement is crucial to securing your financial future. Make sure to find the best interest rates available, as even half a percent can ruin your retirement aspirations. ”
Money Management
I had a silver ring in my septum for almost 10 years and, in fact, still maintain the piercing, but it’s usually empty.
Cathy Moran from Money Health Central presents An Alternate Truth About Financial Literacy, and says, “Financial literacy is grounded in understanding bigger truths about money, not in acting on those truths.”
Kara from Frugal In My Forties presents Worst Money Lessons My Family Taught Me, and says, “My parents had great financial skills: Unfortunately they weren’t really great about passing them on to their children. These are the 4 big things that I think they should have done differently!”
Mike from The Financial Blogger presents Teaching Finance In High School, and says, “A look at getting finance across at the high school level.”
Eric from Narrow Bridge Finance presents How Your Insurance Rates are Calculated, and says, “Ever wonder how insurance companies determine your monthly rates? Find out what you need to know here.”
FMF from Free Money Finance presents How Millionaires Become Millionaires, and says, “Many people mistakenly think that most millionaires have their wealth handed to them from either their relatives or some stroke of luck (like winning the lottery, being gifted with amazing abilities/talent, etc.) This is completely false. Most people with over seven-figure wealth got it the old-fashioned way, they earned it.”
Matt Bell from Matt About Money presents Money Lessons From the Royal Wedding, and says, “Amid all the royal wedding hoopla, did you notice what Prince William and his fiancée, Kate Middleton, asked for in terms of wedding gifts? Since this is one couple that truly does have everything, they asked anyone wanting to get them a gift to consider making a donation instead. For all of us commoners, there are two lessons we can learn from the royal couple’s philanthropic mindset.”
Debt
Sterling silver is 92.5% silver and 7.5% other, usually copper. Pure silver is too soft for most applications. It is, however, the most optically reflective element.
Jacob Irwin from My Personal Finance Journey presents Helping A Friend Get Out of Debt – Part 3 – Cut Your Interest Rates In Half, and says, “A look at the steps my friend and I took to get his credit card interest rates lowered, and how you can too!”
Junior Boomer from Consumer Boomer presents Top 5 Bankruptcy Myths Dispelled For You, and says, “For those who have been considering bankruptcy, but are concerned about the overall impact it could have on their financial future, we are going to break a few myths.”
Other
Silver fulminate is an explosive, ionic, fulminic acid salt of silver. Yes, silver goes boom.
Echo from Boomer & Echo presents Assessing Your Estate Plan, and says, “Before making an appointment with your lawyer take some time to assess your situation and review your estate plan.”
Sustainable PF from Sustainable Personal Finance presents Eight Favourite Blogs, and says, “There are some awesome PF blogs out there and these are 8 you shouldn’t miss!”
Nicole from Nicole and Maggie: Grumpy Rumblings presents Dissecting an emergency room bill, and says, “Nicole and Maggie discuss how a recent bead up a preschool nose cost one of them $1400. (Actually $1700– a additional bill just came.)”
Tom Drake from Canadian Finance Blog presents The new breed of financial bloggers: Young, frugal and vocal, and says, “I’ve discovered a lot of young bloggers who do care about personal finance. Young bloggers can fill a void in financial education for young people.”
Tom from Stupid Cents presents What Is Term Life Insurance?, and says, “Life insurance is important for everyone but it can be expensive. That is where term life insurance can be the most helpful.”
Philip from PT Money: Personal Finance presents How to Pick a College that Suits You, and says, “Financial and other considerations when deciding on a college.”
That’s it. If you enjoyed this little journey through silver, please take a moment to subscribe to Live Real, Now.
First 3 Things to Do in the New Year
- Image by iowa_spirit_walker via Flickr
With the new year looming, it’s the perfect time to review the things that may not have gone as well as planned in the current year, and plan ahead for the coming year, to make sure things go well from now on.
To get a good start in the new year, you should focus on three things.
1. Budget.
A good budget is the basis of every successful financial plan. If you don’t have a budget, you have now way of knowing how much money you have to spend on your necessities or you luxuries. Do you really want to guess about whether or not you can afford to get your car fixed, or braces for your kid? I’ve gone over all of the essentials to make a budget before. Now is the perfect time to review that series and make sure your own budget is functional and ready for the new year.
At the same time, spend some time thinking about how your what has gone wrong with your budget over the previous year. In my case, when we got back from vacation in August, our mindset had changed a bit about spending money, and we got out of the habit of staying strictly on budget. By the time we got back on track, it was Christmas and our plans got shot, again. If it weren’t for my side hustles–money that I don’t track in the budget because the money isn’t consistent, yet–we would have had some serious problems this fall. Where have you gone wrong, and what could you do to improve next year?
2. Credit Cards and New Debt.
In the new year, if you haven’t already done so, make sure you throw your credit cards away. The most basic law of debt reduction is, “If you don’t stop using debt, you’ll never be out of debt.” That’s why you need to set up your budget first. Make sure that your expenses are less than your income, so you can make ends meet without having to charge the difference.
How has your debt use worked out over the last year? Have you used it at all, or have you eliminated the desire to pay interest? What have you used your credit cards for? How much of that could you have done without?
3. Estate Planning.
Now is the time to make sure that all affairs are in order, if the worst should happen. If you die, what happens to your money? Your kids? I’ve gone over everything you need in an estate plan before, so I won’t beat that horse again. You owe it to your family to make sure they are taken care of if something should happen to you. At a bare minimum, write a will and get it notarized.
Have you putting off writing your will? You know you need one, but it’s a morbid thought, so it’s easy to put off, right? Get over it. If you love your family, you’ll do better and get your affairs together next year.
That’s a good financial start for 2011. What are you missing in your financial life?
Make Extra Money Part 2: Niche Selection
If you want to make money, help someone get healthy, wealthy or laid.
This section was quick.
Seriously, those three topics have been making people rich since the invention of rich. Knowing that isn’t enough. If you want to make some money in the health niche, are you going to help people lose weight, add muscle, relieve stress, or reduce the symptoms of some unpleasant medical condition? Those are called “sub-niches”. (Side question: Viagra is a sub-niche of which topic?)
Still not enough.
If you’re going to offer a product to help lose weight, does it revolve around diet, exercise, or both? For medical conditions, is it a way to soothe eczema, instructions for a diabetic diet, a cure for boils, or help with acne? Those are micro-niches.
That’s where you want to be. The “make money” niche is far too broad for anyone to effectively compete. The “make money online” sub-niche is still crazy. When you get to the “make money buying and selling websites” micro-niche, you’re in a territory that leaves room for competition, without costing thousands of dollars to get involved.
Remember that: The more narrowly you define your niche market, the easier it is to compete. You can take that too far. The “lose weight by eating nothing but onions, alfalfa, and imitation caramel sauce” micro-niche is probably too narrowly defined to have a market worth pursuing. You need a micro-niche with buyers, preferably a lot of them.
Now the hard part.
How do you find a niche with a lot of potential customers? Big companies pay millions of dollars every year to do that kind of market research.
Naturally, I recommend you spend millions of dollars on market research.
No?
Here’s the part where I make this entire series worth every penny you’ve paid. Times 10.
Steal the research.
My favorite source of niche market research to steal is http://www.dummies.com/. Click the link and notice all of the wonderful niches at the top of the page. Jon Wiley & Sons, Inc. spends millions of dollars to know what topics will be good sellers. They’ve been doing this a long time. Trust their work.
You don’t have to concentrate on the topics I’ve helpfully highlighted, but they will make it easier for you. Other niches can be profitable, too.
Golf is a great example. Golfers spend money to play the game. You don’t become a golfer without having some discretionary money to spend on it. I’d recommend against consumer electronics. There is a lot of competition for anything popular, and most of that is available for free. If you choose to promote some high-end gear using your Amazon affiliate link, you’re still only looking at a 3% commission.
I like to stick to topics that people “need” an answer for, and can find that answer in ebook form, since I will be promoting a specific product.
With that in mind, pick a topic, then click one of the links to the actual titles for sale. The “best selling titles” links are a gold mine. You can jump straight to the dummies store, if you’d like.
Of the topics above, here’s how I would narrow it down:
1. Business and Careers. The bestsellers here are Quickbooks and home buying. I’m not interested in either topic, so I’ll go into “More titles”. Here, the “urgent” niches look like job hunting and dealing with horrible coworkers. I’m also going to throw “writing copy” into the list because it’s something I have a hard time with.
2. Health and Fitness. My first thought was to do a site on diabetic cooking, but the cooking niche is too competitive. Childhood obesity, detox diets and back pain remedies strike me as worth pursuing. I’m leaning towards back pain, because I have a bad back. When you’ve thrown your back out, you’ve got nothing to do but lie on the couch and look for ways to make the pain stop. That’s urgency.
3. Personal Finance. The topics that look like good bets are foreclosures and bankruptcies. These are topics that can cost thousands of dollars if you get them wrong. I hate to promote a bankruptcy, but some people are out of choices. Foreclosure defense seems like a good choice. Losing your home comes with a sense of urgency, and helping people stay in their home makes me feel good.
4. Relationships and Family. Of these topics, divorce is probably a good seller. Dating advice definitely is. I’m not going to detail either one of those niches here. Divorce is depressing and sex, while fun, isn’t a topic I’m going to get into here. I try to be family friendly, most of the time. Weddings are great topic. Brides are planning to spend money and there’s no shortage of resources to promote.
So, the niches I’ve chosen are:
- Back pain
- Bankruptcy
- Conflict resolution at work
- Detox diets
- Fat kids
- Foreclosure avoidance
- Job hunting
- Weddings
- Writing copy
I won’t be building 9 niche sites in this series. From here, I’m going to explore effective keywords/search terms and good products to support. There’s no guarantee I’ll find a good product with an affiliate program for a niche I’ve chosen that has keywords that are both highly searched and low competition, so I’m giving myself alternatives.
For those of you following along at home, take some time to find 5-10 niches you’d be willing to promote.
The important things to consider are:
1. Does it make me feel dirty to promote it?
2. Will there be customers willing to spend money on it?
3. Will those customers have an urgent need to solve a problem?
I’ve built sites that ignore #3, and they don’t perform nearly as well as those that consider it. When I do niche sites, I promote a specific product. It’s pure affiliate marketing, so customers willing to spend money are necessarily my target audience.
