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How to Maximize Your Income and Reduce Your Expenditures

Finance

If the past few years have taught us anything, it’s that we need to be taking out less debt and building up more savings. And certainly, it’s where the public seem to be heading – levels of mortgage overpayment and personal savings have rocketed in the past year amongst those who have the luxury of being able to put income aside.

For many of us though, finding money to save is a real struggle. After the bills and living costs are taken out of a monthly salary payment, there’s not always a lot left to play with. So what do you do?

The answer lies in getting tough with yourself, carrying out a review of your current spending patterns and working out a sensible budget. Essentially you need to both maximise income and reduce expenditure – both sides of the coin. There are plenty of ways to do this when you start thinking, so be creative and start thinking outside the box.

Here are a few top tips to get you started:

Ask for a pay rise – it seems like an obvious option, but so many of us never do it. Take a look at the market and see what similar companies are offering for your job role or profession. This will give you an idea of whether you’re currently being paid enough for your skills level and experience.

Ask your manager in a calm and prepared manager and come with facts and examples to back up your request. If the request is turned down, try again in a few months time, with more evidence. Also, ask HR for advice about your job salary banding and progression, so you show that you’re serious.

Get a new job – the obvious option when your pay rise request is denied. You may find that you can earn more elsewhere in the same profession, or flex your skills into a new career entirely. See a professional careers advisor for guidance.

Get a second income – more people than ever are opting for this route, by becoming self-employed on a part time basis. There are numerous industries that rely on an army of part-time staff, often self-employed. Examples are party-planners, sales people, freelance designers, coders, copywriters and researchers, market researchers, bar and restaurant staff and plenty more.

Take in a lodger – if you have a spare room, then the government allows you to take in a lodger without paying tax on rental income (up to £4250 pa.) This can be an effective way to make the use of your home to bring in income. Do your research first though on how to select the right lodger and make the relationship work.

Look for opportunities to earn – examples include signing up for overtime during busy periods at work or selling unwanted items on eBay. You could also sign up with the local council to count votes during election period, or help steward at large events. There are various agencies offering links to such opportunities if you search online.

On the other side of the coin lies spending reduction. This is a bitter pill for some to swallow, but there really is no point in earning more if you’re not going to make good use of it!

Food shopping – when it comes to food shopping, start using grocery coupons/vouchers and sign up for reward schemes. Downgrade your brands when you’re out shopping, so that you save money on you shop each time. Look at bulk buying offers, local grocers, markets and other opportunities to slash monthly grocery bills.

Travel – identify ways to save on travel, firstly by walking when a journey is a mile and under. If you’re doing this regularly you’ll save on petrol and you can cancel your gym subscription! With train tickets, book well in advance to take advantage of special deals and with holidays, look for cheap holiday offers and promotions via online search sites – these check the whole of the market to find the best prices and options for your requirements. Holiday extras such as car hire and airport parking can also usually be arranged via these online travel sites so be sure to compare prices to save yourself some money.

Clothes shopping – instead of shopping expensively on the high street, channel your passion for fashion into eBay. Many of your regular brands will be on there already and you can sell last season’s purchases to make way for the current season of items. Get savvy with bids and set yourself limits – you’ll find some great bargains if you’re clever about it!

Entertainment – when it comes to entertainment, sign up to group buying schemes for special offers and look more broadly in your area for things to do that don’t cost a lot of money. Things like local leisure centres, museums, parks, libraries, city parades and exhibitions are often free or subsidised by the council and you can enjoy time with the family without spending a lot of money on more commercial entertainments.

Hobbies – rather than taking up yet another expensive sport that you’ll buy all the equipment for and then never see through, find low cost hobbies to enjoy and cultivate. Walking or running, painting, music appreciation, gardening, racket sports, debating groups, local social clubs – all of these can be enjoyed without necessarily parting with too much cash. And it will broaden your horizons too – thinking more broadly about what counts, such as spending time with loved ones, rather than throwing money at free time like there’s no tomorrow!

 This post brought to you by MoneySupermarket.

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How devalued dollars can hit you in the pocket

Finance

The Bretton Woods Conference started the system now known as fixed rate exchange. After the 1944 conference, theUnited Statesattached dollars to gold with one ounce of

Billions of Dollars
Image by Mr Ush via Flickr

gold equal to $35.

The process changed in the 1970s, due to problems with inflation and currencies from other countries. The financial system of any country relates to the law of supply and demand.

As the demand for currency increases, the system undergoes appreciation. When the demand for currency drops, the system goes through depreciation. A country can devalue its currency based on lower demand.

For example, a country might equate 20 of its own currency for one American dollar. After the market fluctuates, the country devalues its money, making 40 of its currency equal to a single American dollar.

Devalued currency occurs in theUnited Statesduring periods of debt or recession. The government prints more money, which is worth less.

The country must have a way of covering its debts, such as with gold. If the country lacks adequate funds, the paper currency is essentially worthless.

A good example of this occurred during the American Civil War. The Confederates printed its own Confederate money. Once the war ended, the devalued money was worth nothing. Even today, the money only has a slight historical value.

American debt rises when the country goes through a recession or depression.Franceunderwent such a change when the country increased minimum wages and benefits for the working class.

The national debt continued rising and the country had no funds to pay back that debt. Fortunately, comparison sites like MoneySupermarket can help you find the best ways to save and make the most of your money when the value of American dollars drops.

Devalued dollars affect you because it reduces the amount of goods and services you can afford. Even simple things, such as buying car insurance or saving money takes more than it did before.

Devalued dollars increase inflation. As the country pumps out more money, stores and businesses increase prices.

You spend more money on the things you need every day, only to find yourself in debt once inflation ends. TheUnited Statesdevalued the dollar in the 1970s and again in 2001. During the 1970s, inflation hit gas stations particularly hard, leading to markups on gas prices and an overall gas shortage.

The 2001 inflation came with increased housing prices, car prices and food prices. Once the bottom fell out, millions of Americans found themselves further in debt. The devalued dollar affects you because it increases costs.

The value of gold, copper, silver and platinum rises, which in turns increases the prices of any items using those metals. Electronics, vehicles, construction and even jewelry prices increase.

Maximize your dollar amount now by saving money on travel expenses, home utilities and anything else you use on a daily basis. Reduce your overall costs before supply and demand causes a drop in the dollar value.

Anytime you use money, including paying student loan bills or insurance bills, you risk spending more than you should. As the dollar value drops, you will find yourself paying even more.

Brought to you by MoneySupermarket.

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Save Your Family

Finance, Life, Parenting

I don’t attach much importance to dreams.  They are just there to make sleepy-time less boring. Last night, I had a dream where I spent most of my time trying to prepare my wife to run our finances before telling my son that I wouldn’t be around to watch him grow up.    That’s an unpleasant thought to wake up with.  Lying there, trying to digest this dream, I started thinking about the transition from “I deal with the bills” to “I’m not there to deal with it”.   We aren’t prepared for that transition.   Last year, we started putting together our “In case of death” file, but that project fell short.    The highest priorities are done.   We have wills and health directives, but how would my wife pay the bills?  Everything is electronic.  Does she know how to log in to the bank’s billpay system?    Which bills are only in my name, and will go away if I die?   Is there a list of our life insurance policies?

I checked the incomplete file that contains this information.   It hasn’t been updated since September.  It’s time to get that finished.  Procrastinating is inappropriate and denial is futile.   Here’s a news flash: You are going to die. Hopefully, it won’t happen soon, but it will happen.  Is your family prepared for that?

The questions are  “What do I need?” and “What do I have?”

First and foremost, you need a will.  If you have children and do not have a will, take a moment–right now– to slap yourself.   A judge is not the best person to determine where your children should go if you die. The rest of it is minor, if you’re married.   Let your next-of-kin, your spouse keep it.  I don’t care.   Just take care of your kids! Set up a trust to pay for the care of your children.   Their new guardians will appreciate it.  How hard is it to set up?   I use Quicken Willmaker and have been very pleased.  Of course, the true test is in probate court, and I won’t be there for it.   If you are more comfortable getting an attorney, then do so. I’ve done it each way.    You can cut some costs by using Willmaker, then taking it to an attorney for review.

It’s a sad fact that often, before you die, you spend some time dying.  Do you have a health care directive?   Does your family know, in writing, if and when you want the plug pulled? Who gets to make that decision?   Have you set up a medical power of attorney, so someone can make medical decisions on your behalf if you aren’t able?  Do you want, and if so, do you have a Do-Not-Resuscitate order?  Willmaker will handle all of this, too.

What’s going to happen to your bank accounts?  I’m personally a fan of keeping both of our names on all of our accounts.   I share my life and my heart, I’d better be able to trust her with our money. If that’s not an option, for whatever reason, fill out the “Payable on Death” information for your accounts, establishing a beneficiary who can get access to your money if you die.   Do you want your spouse to lose the house or the car if you die? Should your kids have to miss meals?  Make sure necessary access to your money exists.

Does anybody know what you have for life insurance? Get a copy of the policy and make sure your spouse and someone else knows what company holds it and how much it is worth.

Now, it’s time to make some lists.   You need to gather account numbers and contact information for everything.

  • Bank accounts. List every bank and account you own.  Checking, savings, CDs.
  • Investment accounts. Again, every company, every account.
  • Mortgage and car payment information.
  • Life insurance. Get your policy numbers, contact information, beneficiaries, and amount of coverage all in one place.
  • Credit card accounts. Every card, every company.    If it’s just your name on the account, your spouse will need to send certified death certificates to stop collections.  Otherwise, she’ll need to pay the bills.
  • Utilities.  Get the account number for the electric bill, the gas bill, water/sewer/garbage, cable and phones.
  • Other bills. These include car/home insurance, Netflix, memberships and anything else you pay.
  • I’ve included the account information for my web host, registrars and websites. Some of it is salable, some of it is income-generating.
  • Car titles. Put the actual titles in the pile of lists.
  • Property deeds. Keep these here, too.

Non-financial information to list:

  • Online accounts. Any financial sites that would be useful, or any community sites you would like to have informed about your death.  Your online presence is a part of who you are.
  • Email accounts. Will your survivors need to interact with anybody potentially contacting you?   They will need your username and password, or most big providers won’t let them in.
  • Social media. How many networks do you participate in?  Do you want to disappear, or should all of your Facebook friends know your dead?
  • Blogs. Do you have a blog that needs an announcement?   Does it generate income?  Could it be sold?
  • Contact list. Who else needs to be informed of your demise?  Don’t make your loved ones hunt for the information.

Now, take all of this information and put it in a nice, fat envelope and lock it in the fireproof safe you have bolted to the floor.  Make a copy and give it to someone you trust absolutely.   Make sure someone knows the combination to the safe or where to find the key.

Your loved ones will appreciate it.

Festival of Frugality #278: The Pure Peer Pressure Edition

Misc

Peer Pressure
Peer Pressure

Welcome to the Festival of Frugality #278: The Pure Peer Pressure Edition.    If everyone else was jumping off of a cliff, would you do it, too?  Maybe not, but what happens if you surround yourself with people who hold the same values as you and are striving for personal growth in the same way?  Peer pressure doesn’t have to be negative.

“Peer pressure is not a monolithic force that presses adolescents into the same mold. . . . Adolescents generally choose friend whose values, attitudes, tastes, and families are similar to their own. In short, good kids rarely go bad because of their friends.” – Laurence Steinberg

Shameless plug:  If you like what you see, please take a moment to subscribe to Live Real, Now by email or RSS or follow us on Twitter.   All your friends are doing it.

Editor’s Picks:

Dinks Finance shows us a few ways to negotiate your mortgage fees.   Take a few minutes to read this post before you get a mortgage.

Money Ning reminds us that everyone needs a crappy job early in their working life.

Personal Finance by the Book is leading the fight against the 100,000 mile mindset.

Free Money Finance shows several ways to have fun dates on the cheap.   My secret is to make it look “creative” and “unique”  instead of “cheap”.  You don’t have to cave to the pressure of “expensive” to have a good time.

“Most literature on the culture of adolescence focuses on peer pressure as a negative force. Warnings about the “wrong crowd” read like tornado alerts in parent manuals. . . . It is a relative term that means different things in different places. In Fort Wayne, for example, the wrong crowd meant hanging out with liberal Democrats. In Connecticut, it meant kids who weren’t planning to get a Ph.D. from Yale.” – Mary Kay Blakely

The Best of the Rest:

Budgeting in the Fun Stuff talks about my favorite tax-funded institution: the Library.   I’ve easily save thousands of dollars since I started using the library consistently.

Babies are undeniably expensive.   Squirrelers provides some tips on limiting the early expenses.

“Don’t think you’re on the right road just because it’s a well-beaten path.”  – Author Unknown

Wealth Pilgrim shows how his daughter discover the secret to saving 80% on college costs.  The trick isn’t just going to a state school, but what you do when you get there.

ptMoney shares some copy-cat recipe sites.   I love making copy-cat meals with better quality ingredients for half the price.

“Every society honors its live conformists, and its dead troublemakers.”  – Mignon McLaughlin

Magical Penny recommends tracking your net worth.   Mint makes that easy to do.

Smart Wallet talks about going cash-only and the benefits of credit cards.  I am currently cash-only, but plan to transition to a good rewards card when all of the debt is gone.

Simple Life in France discusses radical simplicity and frugality in relationships.

“There’s one advantage to being 102. There’s no peer pressure.” – Dennis Wolfberg

I’m a bit of a foodie and more than a bit cheap, so when Not Made of Money talks about creative uses for some we stock up on, I’m listening.

Wanderlust Journey explains the Carnival Cruise loyalty program.  I’ve been on exactly one cruise and enjoyed it quite a bit.  It’s not the best method of travel for all possible destinations, but I can’t think of a better way to spend a couple of weeks in the Caribbean.

Beating Broke just saved a ton of money by switching to…wait, wrong venue.    Read how they saved money on a remodel.  Don’t be afraid to use your social capital–the skills of the people who care about you.

“If fifty million people say a foolish thing, it is still a foolish thing.”  – Anatole France

If you’ve got kids who are planning to play an instrument, you’ll want to pay attention to Budgets are Sexy‘s ideas on saving money on musical instruments.

Free From Broke talks about the hidden costs of home ownership.   A home is a never-ending money sink.

“Peer pressure has many redeeming qualities. It is the pressure of our peers, after all, that gives us the support to try things we otherwise wouldn’t have.” – Bill Treasurer

Suburban Dollar explains Swagbucks.

Money Help for Christians shares some tips to save money.  I particularly enjoyed the coupon walk-through link.

Provident Planning talks about someone living happily on $7000 per year.  I can’t imagine making it on that.

A “Normal” person is the sort of person that might be designed by a committee.  You know, “Each person puts in a pretty color and it comes out gray.”   – Alan Sherman

Final plug:  If you enjoyed yourself, don’t forget to subscribe to Live Real, Now by email or RSS or follow us on Twitter.   All your friends are doing it.   The coolest ones are even fans of LRN on Facebook.

Money Problems – Day 2: What’s Going Out?

Finance

Today, I continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

On this, day 2 of the series, you need to gather all of your bills: your electric bill, your mortgage, the rent for your storage unit, everything.  Don’t miss any.

Go ahead, grab them now.  I’ll wait.

Did you remember that thing that comes in the plain brown wrapper every month?  You know, that thing you always hope your neighbors won’t notice?

Now, you’re going to sort all of the bills into 5 piles.

Pile #1: These are your monthly bills.  This will probably be your biggest pile, since most bills are organized to get paid monthly.  this will include your credit cards, mortgage(do you rent or buy?), most utilities and your cellphone.

Pile #2: Weekly expenses.  When I look at my actual weekly bills, it’s a small stack.  Just daycare.  However, there are a lot of other expenses to consider.  This stack should include your grocery bill, gas for your car, and anything else you spend money on each week.

Pile #3:  Quarterly and semiannual bills.  I’ve combined these because there generally aren’t enough bills to warrant two piles.  My only semi-annual bill is my property tax payment.  Quarterly bills could include water & sewer, maybe a life insurance policy and some memberships.

Pile #4:  Annual bills.  This probably won’t be a large pile.  It will usually include just some memberships and subscriptions.

Pile #5:  Irregular bills.   The are some things that just don’t come due regularly.  In our house, school lunches and car repairs fall into this category.   We don’t have car problems often, but we set money aside each month so our budget doesn’t get flushed down the drain if something does come up.

Now that you have all of your expenses together, you know what your are on the hook for.  Next time, we’ll address income.

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Making Extra Money Part 3: Product Selection

Finance

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.

Clickbank

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.

CBSearch

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:

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.

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?

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