Financial stuff

If you have been reading the blog for a while you have probably noticed that I have a cash back category in my income statements each month. The amount varies but it isn’t unusual for me to make $50 or more in cash back. This amount comes from both cash back credit cards and online cash back shopping portals. Some may think that cash back isn’t worth the hassle. With interest rates for savings being in the 1% range getting 1% to 15% cash back on purchases you’re going to make anyway is a great deal. Plus, it isn’t really that much of a hassle to get cash back.

Although, I am doing pretty good at earning cash back I think I can do even better. Obviously, I don’t want to just increase my spending to earn more cash back as that would eliminate any benefit from the extra cash back. There are some strategies I can implement to increase my cash back earnings that don’t require me to increase my overall spending. First, I’m going to detail how I currently earn cash back.

Discover Card – This card earns 5% cashback on a rotating set of categories each quarter. They also have occasional promotions where they will offer 2% cash back on certain days. Black Friday was a 2% bonus day and allowed me to earn over $60 in cash back. If you make a purchase outside of the bonus categories you receive 0.25% cash back on your first $3000 in purchases and 1% on purchases after that. Purchases that get 5% cashback do not count towards your $3000 in purchases.

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Running out of money before the end of the month is a situation many people find themselves in. There are several things you can when there isn’t enough money at the end of the month.

Prioritize Your Bills

If you don’t have enough money to pay all of your bills then you should pay the most important ones first. The two most important things are food and shelter. It should be obvious that you pay your rent or buy groceries before you pay your credit card bill.

Sell Your Stuff

If you have anything of value worth selling then you should do so. This can provide you with the money needed to get through a short term financial squeeze.

Borrow Money

If you have family or friends that are willing to lend you a hand then you should consider this option. Do not take out a payday loan as that will most likely ultimately lead to you being in even worse financial straits. You could also consider checking out Activehours.com to get a loan. They are the sponsor of this giveaway. Their aim is to compete against payday loan companies by providing loans with no fees or interest. Instead they ask for voluntary donations. It is an interesting idea, but I haven’t been able to check out the site myself since it is blocked on the library’s internet.

Assess Your Finances

You need to determine what caused you to run out of money before the end of the month. Was it a one-time thing due to numerous unexpected expenses or is it likely to be a repeating thing. The above steps won’t be much help if you repeatedly run out of money. If you are repeatedly running out of money you need to either increase your income or reduce your expenses or do some combination of both.

Of course, it is easier to say that you should increase your income or reduce your expenses than it is to actually do it. Reading a book like, The Total Money Makeover, can get you started on improving your expenses. You can also get lots of ideas on how to reduce your expenses and find alternative sources of income here at Tight Fisted Miser. Plus, there are lots of other personal finance blogs with helpful advice.

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You should always double check your paycheck to make sure there are no errors. I’ve found mistakes several times over the years and they were never in my favor. If your paycheck is the same every week then checking your check is pretty easy. You just have to check it once and as long as nothing changes you are good. My paychecks are always different since I always work a different number of hours but it takes less than a minute to scan the check and make sure it is correct.

The most recent mistake I found was at my part-time job. They were taking out Kansas City, MO city income tax. Since I don’t live or work in Kansas City I shouldn’t be paying that tax. I guess since most of their employees live in Kansas City they just automatically take the city tax out. Or it may have been based on zip code since the address I used for that job has a zip code that includes both Kansas City and a suburb of Kansas City.

Fixing the problem wasn’t too difficult. I just called the payroll department and explained the problem. They then told me they would fix my checks so that the tax was no longer taken out and refund the tax that had already been taken out. I received that check today and they did fix it correctly.

The city income tax was only 1% but that adds up after a while and I need the money more than the city. This advice can also apply to your monthly bills, credit card statements, bank statements, and similar items that can cost you money if they are not figured correctly.

Have you ever found a mistake on your paycheck? Was it in your favor or theirs?

My sister is looking to supplement her income when she retires from the Navy and did some research to get an idea of how much she could make from blogging. She is letting me post her results here.

Realistic Income Expectations:

Months 0-12: Anywhere from 65 cents to up to maybe 20ish bucks/month.

Months 12-24: Now that you’re a little more experienced and know how to work the various ads, affiliates, attract customers, etc, you can reasonably anticipate making in the $200-$600/month range.

2-5 years: Even more experienced, with a solid following. You may well still only bring in the $200-600 you did during years 1-2. However, at least now that you have years of experience behind you, you’re probably not working as many hours on your blog as you initially did.

However, it’s not completely uncommon to near or surpass the $1k/month milestone during years 2-5. It’s even possible to surpass the $1k/month milestone, but bloggers in this range seem to be pretty darn happy if they’re regularly pulling in 1-2k/month.

Realistic Expectation of Hours Worked:

Months 0-12: Expect to put in at least 4-6 hours/day. Some report putting in less, but many report putting in more than full time work during this stage. So, 20-60 hours a week to earn that whopping 65 cent paycheck! woohoo!

Months 12-24: Expected working hours in this range can really vary. Basically, it appears one of two things usually happen at this point. One, you’ve developed a good following and have worked out how to get money through Adsense, affiliates, etc. and now your work load has evened out a bit, still averaging working 2-6 hours/day.

Or, the other thing that could happen, is, now that you’re more experienced, you’re starting to really get a feel with how to maximize your profits, and you now spend a few MORE hours per day/week, working all the angles to really get your blog/website going where you want it to go. If this is where you’re at at this stage, you can reasonably expect to put in anywhere from 6 to 10 hours/day.

Years 2-5: If you haven’t given up yet, once you reach this stage, you’ve probably figured out how to maximize your profits while minimizing your workload. You’re probably still working 2-4 hours per day to maintain your regularly monthly income flow or perhaps modestly increase it. Be warned though, just because you know what to do to maximize profits while minimizing workload, doesn’t mean you’ll be able to actually do those things. Many perfectionists will burn themselves out.

It seems that most bloggers who manage to pull in a significant income (1-3k/month is my personal definition of ‘significant income’) seem to do one of two things, listed below.

One, is that they have a good niche. Their target audience is well defined enough that they don’t have to compete with as many people, and thereby make more profit. However, their target audience is still broad enough to attract enough readership to pull in those profits.

The second thing I noticed that those ‘significant income’ earners did, was they sold an actual product or service that they made/invented themselves via their blog (or at least linked their product/service website to their blog and used their blog as one means of attracting customers to their product).

So, that’s it. Bottom line, if you have a good idea for an online business, and are willing to put in 20-60 hours per week, and willing to wait/work for pennies for a few months to a few years, you can probably realistically expect to make $200-$600/month from it. If you have a good idea, plus a good niche, plus an actual product/service, then you can somewhat realistically expect to earn $1-2k/month, after a few years of growing your business.

These number seem fairly accurate to me. What do you think?

A couple weeks ago I decided to check my credit report and credit score. It had been over a year since I had checked it and since a lot had happened since then I wanted to make sure that there were still no blemishes on my credit report and that I still had a good credit score.

I went to annualcreditreport.com to check my credit report. That is the official free site for checking your credit report from all three credit bureaus. It is supposed to be easy to check your credit report online, but I’ve had trouble doing so in the past. One reason is because I had my identity stolen several years ago and had a 90 day freeze put on my credit. At least one of the credit bureaus took several years to lift the freeze. The other reason is because I have a hard time passing the identity test. I’ve lived in so many places that I have trouble remembering them all.

This time I was able to pass the identity test. I was a little worried since two of the answers were none of the above, but it seems like that is the most common answer. Since you can access your credit report free once a year, it is advised to just check one report every three months so you can see your credit report more often. This is a good plan, but since I was so surprised that I was able to access one of my credit reports I wanted to see if could access the other two as well.

I was able to access all three credit reports. I was happy to find that I had no negative information on any of my credit reports. The only potential worry was that one of the credit bureaus showed my student loan as a line of credit which makes it look like I’m using nearly all of my available credit. I pay my credit cards off every month so I actually have plenty of available credit. Since I don’t plan on applying for any loans or credit cards I’m not going to worry about the available credit issue right now.

Next I wanted to get my credit score. When you are accessing your credit report the credit bureaus will offer to sell you your credit score also. I’m guessing the credit bureaus probably make a lot of money off of people accessing their free credit report. I didn’t want to pay for my credit score so I went to CreditSesame.com. They offer a free credit score from Experian. In exchange for the free score they will try to sell you credit cards or other financial products. I was pleasantly surprised to find that my credit score is 776. The last time I had checked it was in the 730s. Although, I don’t plan on applying for credit in the near future it is still helpful to have a good credit score.

I’ll have to wait a year to check my credit report again, but I can check my credit score every month. If there are any major changes in my credit score then I’ll know something is up with my credit report.

Have you checked your credit report and/or credit score lately?