Saturday, October 28, 2017

Effective Frequency: Why Ads Might Impact You More Than You Think

Yesterday, I published an article entitled The Commandment of Treating Yourself, in which I lauded the virtue of caring for yourself but pointed out that it was a virtue that’s easily manipulated by advertisers to convince you to buy things you don’t really need. In the end, I concluded that the most powerful form of self-care is time, and the way to find that isn’t through buying products, but through smartly de-committing.

One thread that really runs through that article – and others that I’ve written before on how marketers and advertising can manipulate you – is the simple idea that marketing actually works. Many people simply don’t believe that it does. They are of the belief that they’ve seen every advertising trick in the book and that they don’t even see the ads any more.

However, what most people don’t realize is that marketers account for that exact mentality. They really, truly don’t mind if you don’t notice the advertisements. At all.

Recently, I came across a quote from a well-known book on advertising called Successful Advertising by Thomas Smith. This passage indicates clearly why marketers really don’t mind that you don’t notice ads most of the time.

“The first time people look at any given ad, they don’t even see it.
The second time, they don’t notice it.
The third time, they are aware that it is there.
The fourth time, they have a fleeting sense that they’ve seen it somewhere before.
The fifth time, they actually read the ad.
The sixth time they thumb their nose at it.
The seventh time, they start to get a little irritated with it.
The eighth time, they start to think, ‘Here’s that confounded ad again.’
The ninth time, they start to wonder if they’re missing out on something.
The tenth time, they ask their friends and neighbors if they’ve tried it.
The eleventh time, they wonder how the company is paying for all these ads.
The twelfth time, they start to think that it must be a good product.
The thirteenth time, they start to feel the product has value.
The fourteenth time, they start to remember wanting a product exactly like this for a long time.
The fifteenth time, they start to yearn for it because they can’t afford to buy it.
The sixteenth time, they accept the fact that they will buy it sometime in the future.
The seventeenth time, they make a note to buy the product.
The eighteenth time, they curse their poverty for not allowing them to buy this terrific product.
The nineteenth time, they count their money very carefully.
The twentieth time prospects see the ad, they buy what is offering.”

Now, let’s step back for a moment and think about what actually constitutes an ad.

An ad might take the form of a normal advertisement – a page in a magazine, or a banner ad.

An ad might take the form of a glowing “news report” about the product.

An ad might take the form of a Facebook posting or a Twitter posting inserted into your news feed.

An ad might take the form of a product placement within a program that you’re watching, one that the camera just happens to focus on for a second or two.

An ad might take the form of a testimonial from an actual friend of yours, one who is trying to perhaps start a multi level marketing “business” like Amway or take advantage of some affiliate marketing.

An ad might actually run across a bunch of those things, all at once.

The thing is, most marketers understand that you tune out a lot of ads. You don’t notice most of them. That’s why they rely on repeating ads over and over and over again – if you notice only a small percentage of advertisements and product placements and Facebook insertions and news reports, if they create a ton of those things, you’ll eventually notice some of them and the idea will be placed in your head.

Humans are very good at spotlight focusing, meaning that they pay a lot of attention to a narrow thing at any given moment, and most of the time ads will fall outside of that spotlight of focus. However, sometimes ads slip into that spotlight, no matter what we do, and if we notice a particular ad enough, it’s been shown over and over again that we’ll think more highly of that product and are more likely to buy it.

Advertising works. Marketing works. If it didn’t, companies wouldn’t invest billions into advertising and marketing.

Effective frequency explains why you often see the same ads over and over again, spread in various forms across your television, your smartphone, your computer screen, the middle of the programs you watch, and even sometimes in the words of your friends. It’s because, as the quote above makes clear, repeating a particular message and showing a particular product over and over eventually pushes people over a threshold of knowing about the product and desiring the product enough to buy the product.

There is no exact recipe for effective frequency. Sometimes, only a single exposure to an is enough. At other times, it can take many exposures to an ad. The Business Dictionary defines it as “Advertising theory that a consumer has to be exposed to an ad at least three times within a purchasing cycle (time between two consecutive purchases) to buy that product.”

John Philip Jones, an emeritus professor of advertising at Syracuse University, said in a 1997 paper: “Effective frequency can mean that a single advertising exposure is able to influence the purchase of a brand. However, as all experienced advertising people know, the phrase was really coined to communicate the idea that there must be enough concentration of media weight to cross a threshold. Repetition was considered necessary, and there had to be enough of it within the period before a consumer buys a product to influence his or her choice of brand.”

The important thing to remember here is the core concept. Effective frequency simply refers to the idea that a person has to be exposed to an ad many times for it to be effective, partially because many ads are unnoticed and partially because repetition of the noticed ads embed them in your head. So, advertising firms repeat ads, place products, and stick other forms of marketing for a product everywhere until you notice them – and you eventually will.

I’ll give you a recent example of this. In my spare time, I read a number of websites related to personal development. I listen to podcasts on the topic, read forums on the topic – in short, I really enjoy learning about it and reading what others have to say about it.

The thing is, whenever someone wants to pitch a product at people interested in personal development, you can tell because that product pops up everywhere. That doesn’t mean that the product is bad per se; it just means that someone involved in the product believes in it enough to spend a lot of money on a marketing campaign. They either think it’ll make a ton of money in the short term or that it’s the start of something that will last for a very long time.

A recent example of this is Leaderbox. It’s one of those subscription box services that have popped up in the last few years, but this one is being run by one of the foremost podcasters in the field of personal development, Michael Hyatt. The box comes out monthly and contains two books on leadership and personal growth, along with supplementary materials and a private online discussion forum.

Don’t get me wrong, there’s nothing particularly wrong with this product. I think that the sticker price on it is excessively high, but the content seems compelling – it’s effectively a well designed book club for leadership and personal growth books.

For me personally, it’s something that I would describe myself as semi-interested in. I love to do deep readings of those types of books, taking notes and looking at what I can apply to my own life, but I vastly prefer to just get such books from the library (which is free, far better than the high cost of Leaderbox) and read them at my own pace. This lets me choose my own books, read at my own pace, and best of all, it’s free. So, the idea of Leaderbox is something I’d call semi-interesting to me, but not enough that I’d actually buy it.

The advertising campaign for Leaderbox, however, is extremely effective. Mentions and ads for Leaderbox kept showing up again and again in the things that I look at. I probably missed the first half-dozen references to it. Then, at some point, I saw it on a website that I was reading and I thought, “Hmm… that seems interesting.” Then it popped up somewhere else. And somewhere else. Then a few people mentioned it in a discussion forum that I participate in. Then a particular podcast I listen to talked about it a little.

Thus, my awareness of it snowballed.

The funny thing was, this repetition gradually inched me from something I wouldn’t consider at all to asking myself whether I actually was interested in it and whether or not it would qualify as a business expense and whether or not I could sensibly afford it.

Why did that transition happen? Honestly, it was effective frequency. The fact that it kept popping up over and over again forced it onto my radar when it otherwise wouldn’t have had a single thought from me.

Again, remember, I’m not bashing Leaderbox in any way. I’m simply pointing out that it has a very effective marketing campaign behind it, one that lifted a product out of what would have been vague awareness and apathy from me to actual consideration of the product. That would never have happened without an effective marketing campaign.

So, what can you do about effective frequency? If it’s a given that you will eventually be exposed to multiple impressions of a particular ad campaign, what can you do to keep that campaign’s influence on your spending at a minimum?

Here are five things that I personally find very effective for reducing the power that pervasive marketing campaigns have in steering my spending.

First, constantly question whether or not a product would actually benefit you beyond what you already have. Ask yourself whether this is something that’s really going to provide anything beyond what you already have access to? If it does provide something “extra,” is that “extra” worth the additional cost?

For example, with the subscription box mentioned above, the only real additional value that I would get for the cost is the reading guide and access to an online discussion forum, one that I could probably start myself. I’d also have the physical books, but I could honestly check them out from the library. Is that worth the high monthly price? Not for me, it isn’t.

Once I broke down what I was actually getting for my dollars, the product seemed less compelling.

The key for me is to compare it to what I already have access to and then look only at the extras beyond that that the product was giving me.

So, for example, if you’re drooling over the latest smartphone, stop and compare the difference between that phone and the one you already have. Is it really sensible to pay $700 for another 0.25″ of screen space and a little bit more storage space for games that you’ll play once and forget about?

When you start looking at things through the lens of what it actually brings you that you don’t already have, a lot of products don’t really look all that great.

Second, buy store brands as a default. My default isn’t to buy a name brand I’ve heard about, ever, when there’s a store brand alternative. I only switch away from that if it’s not actually doing what I want.

That simple move eliminates a lot of the decision making that I’ll do in a grocery store or department store. I don’t have to decide between fifteen different kinds of ketchup. I just buy the store brand and keep moving.

The thing to remember is that it’s when you stop and try to make a more nuanced decision that marketing rears its head. The simple truth is that you remember the name brands and those products and think a little more highly of them thanks to effective frequency, not because they’re particularly good (they might actually be good products, but that’s not why you remember them or think highly of them most of the time).

Third, stop and think outside of your normal situation whenever you’re about to spend money. If you’re about to buy a product in a store, put it down for a few seconds and think about whether you really need it. If you’re buying a product online, close the web browser before clicking on the “buy” button. Give yourself a breather and a change of scenery before buying. This is particularly true if the item is a big ticket item.

Why do this? Simply changing one’s scenery often changes one’s train of thought regarding a particular item. Effective frequency works best when a repeated message carries you on a wave right to that purchase. Stepping out of the situation takes you off of that wave, at least for now.

One technique I like to use is to maintain a “wishlist” of items that I’m really interested in. Rather than buying the item, I add the item I’m excited about to my “wishlist.” I actually keep that wishlist in Evernote so I can add to it no matter where I’m at. This helps because it leaves me with a sense of taking action on that item in the moment, which takes the edge off the desire to buy.

Later on, maybe once every month or two, I’ll review the wishlist. Guess what? I usually discover that almost everything on there has faded in terms of my interest and I feel completely fine deleting almost all of them. The ones that remain are things that I might actually consider buying, but I feel okay doing bargain hunting for those items at that point.

Fourth, spend more time on “slow” media rather than “fast” media. The idea of “slow” media and “fast” media is one that I’ve been developing on my own recently and it’s one that I think is really helpful in terms of controlling effective frequency.

“Fast” media is media that’s delivered quickly in bite-size pieces. Think about short online articles, social media updates, quick segments on 24 hour news channels, any program interrupted by commercials, and so on. Those things are designed to hook your attention for only brief spurts, usually just long enough to deliver the briefest of information and also slide an ad view in there in that burst.

“Slow” media is media that comes in a longer form. Think about books, feature-length movies, television shows that are designed to be binge-watched, and so on. These things are designed to hold your attention for longer spans and are less prone to constant interruption and distraction. Ads don’t interrupt your books when you turn the page and, aside from a bit of product placement, they don’t show up in films or long-form television shows, either.

Spend more time enjoying “slow” media than “fast” media. Keep a book on your phone or in your pocket or purse and read it while you’re waiting or have a few minutes of down time instead of browsing pointless websites. Cancel your cable subscription and get your news from long-form written articles that are well researched. Yes, it takes a bit more effort to focus on such things, but in doing so, you’re taking a major step to knock back the effectiveness of frequency.

Finally, be aware that effective frequency exists and notice it. Simply being aware of a marketing trick takes away at least some of the power. When you notice that you’re seeing the same messaging over and over, recognize it for what it is. It’s just effective frequency at work. It’s just an ad agency using one of the oldest tricks in the book.

Again, pointing back at that example with the subscription box, it wasn’t until I realized that they were using effective frequency that I really began to question why the concept was slowly becoming more intriguing to me. Simply being aware of the trick being used takes away some of the magic, just like understanding the sleight of hand of an illusionist eliminates the mystery.

That’s the real secret to piercing the veil of many advertising tactics, not just effective frequency. Watch for them. Be aware of them. Take steps to distance yourself from them. The more you do that, the less effective those tactics become.

Good luck.

The post Effective Frequency: Why Ads Might Impact You More Than You Think appeared first on The Simple Dollar.

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How to Get Out of Debt Faster: Balance Transfer or Payday Loan?

Anyone who’s ever found themselves overextended on debt knows what a precarious financial situation that can be. When unexpected costs pile on top of existing debt, it can push a borrower’s finances over the limit. That’s when it may be tempting to take out a payday loan.

The Consumer Financial Protection Bureau defines a payday loan as “usually a short-term, high-cost loan, generally for $500 or less, that is typically due on your next payday.” Essentially, payday loans — also known as cash advance or check advance loans — are designed to cover sudden expenses while borrowers are in between paychecks.

Here’s how payday loans work:

  1. You visit a payday lender and agree on an amount.
  2. You write the lender a post-dated personal check for the said amount, plus fees, to be cashed on a specified date. On average, the typical term is about two weeks.
  3. When that date arrives, the lender cashes the check.

Simple enough. But if you don’t have enough money to repay the lender on time, then interest kicks in. Payday loans usually involve very high annual interest, or APR (annual percentage rate). According to the CFPB, the typical two-week payday loan comes with a $15 per $100 finance fee. Sounds like a 15% interest rate, which doesn’t seem too bad, right? Think again. The personal finance experts will tell you that the annual percentage rate on that “two-week” loan is nearly 400%.

And what happens if you can’t pay the loan back in two weeks? Many payday loans “roll over,” so in two weeks you’ll owe even more. And so it goes.

Whether you’re covering a sudden expense or paying down existing debt, most personal finance experts will tell you payday loans should be an absolute last resort. There are plenty of alternatives, including payment plans, credit card hardship programs, and balance transfer credit cards.

First, use The Simple Dollar’s debt payoff calculator below to determine your payment plan:

I can't pay off my debt! I'm not paying enough each month.

Use slider to see how paying a little extra each month can get your debt paid off faster and save your money

TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
Interest saved by extra payments:0
I can't pay off my debt! I'm not paying enough each month.

Use slider to see how paying a little extra each month can get your debt paid off faster and save your money

TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
Interest saved by extra payments:0
I can't pay off my debt! I'm not paying enough each month.

Use slider to see how paying a little extra each month can get your debt paid off faster and save your money

TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
Interest saved by extra payments:0
I can't pay off my debt! I'm not paying enough each month.

Use slider to see how paying a little extra each month can get your debt paid off faster and save your money

TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
Interest saved by extra payments:0
I can't pay off my debt! I'm not paying enough each month.

Use slider to see how paying a little extra each month can get your debt paid off faster and save your money

TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
Interest saved by extra payments:0
  • Total Monthly Payment
  • Total Principal
  • Total Interest
  • Payoff Date
  • Total Monthly Payment
  • Total Principal
  • Total Interest
  • Payoff Date

How payday loans and balance transfers stack up

Let’s say Alex owes $1,000 in credit card debt. On the week he plans to start paying it off, his car breaks down, and repairs cost another $1,000. Now Alex has to deal with two costs. How to pay?

The choice between a payday loan and a balance transfer gives him these options:

  • Take out a payday loan and commit to paying off the $2,000 he owes, plus fees, in a short period of time
  • Put the additional $1,000 for the car repairs on his credit card debt, then transfer the combined $2,000 to a balance transfer credit card with 0% introductory APR, and pay it off bit by bit over time

At first glance, the payday loan may seem like the better short-term option. But here’s what happens in either scenario:

If Alex Chooses…
Payday Loan Balance Transfer with 0% Intro APR
  • Typical Cost:
    • Equates to APR near 400%
  • Typical Repayment Term:
    • 2-4 weeks (plans vary per lender)
  • Typical Fees
    • $15 per $100
  • Credit Check?
    • No
  • Typical APR:
    • 0% for 15-18 months, then between 10-25% (varies per card)
  • Typical Repayment Term:
    • Not Applicable
  • Typical Fees
    • 3-5% of amount transferred
  • Credit Check?
    • Yes


If Alex Misses a Payment…
Payday Loan Balance Transfer with 0% Intro APR
  • Typical late fees:
    • Additional $15 per 100
  • Additional fees?
    • Rollover Fees
  • Does it hurt credit?
    • Possibly – Lender may report to credit bureaus
  • Typical late fees
    • Capped at $25 per late payment
  • Additional fees?
    • No
  • Does it hurt credit?
    • Yes

APR and fees

It’s important to note that interest is not separate from a loan’s APR. Interest is an additional cost paid for the right to borrow money in the first place. (And it’s usually how the lender makes money.) APR is short for Annual Percentage Rate, and it refers to the total cost of a particular loan, including fees and any other extra costs. While interest and APR aren’t one and the same, interest contributes to a loan or debt’s overall cost and thus is considered part of its APR.

Many balance transfer cards offer an introductory APR of 0% between 15 and18 months, and typically a variable 10-25% afterward. So if Alex manages to pay off his $2,000 balance transfer within the intro APR period, he’ll be able to do so without incurring any interest. If he doesn’t finish paying down his debt before the introductory APR period ends, whatever remains of the $2,000 balance transfer would be subject to higher APR.

Balance transfers often require a fee of 3-5% of the amount transferred, meaning that if Alex transfers his entire $2,000 to a balance transfer credit card, he would pay a $60 to $100 fee.

Because payday loans have to be repaid quickly, they’re designed with notoriously high APRs, again, averaging around 400%. Payday loan APRs can be fixed or variable depending on the lender, but typically debtors incur fees of $15 to $30 per $100 borrowed.

If Alex agrees to a payday loan of $2,000 the finance charges put the actual cost of the loan at around $2,300. Since Alex has to take out a loan to cover his debt in the first place, it’s unlikely he’ll have enough funds to cover the original amount, plus extra. If Alex doesn’t have the funds in his account by his next paycheck, his payments are considered delinquent, and the payday lender will begin charging interest with a high APR.

Once Alex is late, his payday loan lender may offer a “rollover” fee, also known as a renewal fee. Rollover fees typically cost around $45 and simply delay paying back the loan. Payments do not contribute to principal or interest owed. So, if Alex were to pay a rollover fee on his payday loan, he’d be paying an extra $45 to extend the due date until his next payment period.

Credit check

As with any other credit card, balance transfer credit cards require a credit check before approval. The better Alex’s credit is, the more a chance he’ll have of being approved.

Payday loans often don’t require a credit check before approval. Instead of using FICO or other established credit score institutions, lenders utilize a custom creditworthiness score based on the information borrowers provide.

Even if Alex has bad credit, he might be able to get a payday loan, no questions asked. But if Alex manages to pay off his payday loan, his credit score might not go up. If he’s delinquent, his score might go down. Some payday lenders report late payments to major credit reporting agencies.

Other debt consolidation and management options

In addition to balance transfers, alternative methods of paying off debt include:

Assistance programs

Many credit card issuers offer financial hardship and payment assistance programs, including Discover and American Express. Before you consider a payday loan, call the Customer Service number for your credit card issuer and see if you can negotiate a lower interest rate or extended payment plan.

Debt consolidation loan organizations

If you have debt with multiple lenders or creditors, consider a debt consolidation loan company.

These organizations allow borrowers to lump different streams of debt together, often with a lower interest rate. You’ll have fewer debts to worry about and a chance to improve your overall financial health.

Payday loans or balance transfers: Which is better for me?

At first glance, payday loans might seem like a quick and easy solution for borrowers to receive emergency funding in a pinch. However, high APRs and fees, combined with a short repayment term, can make it all too easy for borrowers to get caught in a debt trap.

Balance transfers, on the other hand, offer a less risky way to manage credit card debt. If there’s an emergency, using a credit card and then transferring the debt to a balance transfer credit card to pay it down monthly is a viable option.

A balance transfer card allows you to pay down debt gradually without a lump sum coming due in a matter of weeks, and making timely monthly payments is a great way to rebuild your credit.

Payday loans should only be used once you have exhausted every other option. If you do take out a payday loan, prioritize that debt above all others, and pay it off immediately.

The post How to Get Out of Debt Faster: Balance Transfer or Payday Loan? appeared first on The Simple Dollar.

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Friday, October 27, 2017

The “Commandment” of Treating Yourself

One of the most interesting phenomena to arise in the last twenty or thirty years is the concept of self-care as a widely accepted thing that people should integrate into their life. Spending time and resources to do the things you need to do to feel like a healthy, centered, and rested person is something that hasn’t really become a fully mainstream concept until recently.

The thing is, self-care isn’t really a new concept at all. You can find encouragement of self-care in the writings of ancient Greek philosophers, who encourage people to put aside time for thoughtful leisure and rest as a method of making yourself into a better and stronger person. Self-care is actually a sensible and smart idea with a long history before it became popular in mainstream culture.

However, the idea of self-care really easily lends itself to overspending and overindulgence.

A recent article by Ester Bloom at The Atlantic, entitled How ‘Treat Yourself’ Became a Capitalist Command, covers exactly how the idea of self-care is something that marketers love to manipulate in an effort to convince you to spend money on unnecessary things.

She starts by pointing to the strong philosophical basis for self-care:

In a 1982 lecture that went on to be published as an essay called “Technologies of the Self,” the French philosopher Michel Foucault argues that looking after oneself, rather than being a form of navel-gazing or narcissism, is a kind of “vigilance” that dates back to antiquity. For Socrates, Plato, and their ilk, Foucault writes, “taking care of yourself eventually became absorbed into knowing yourself.” As the thinking went, only with the proper amount of time set aside for the “active leisure” of reading, studying, and ruminating could a person come to grips with the profound nature of the universe and his own mortality.

In other words, self-care, particularly in terms of active leisure, is something that’s a healthy and productive part of human life. The core idea of self-care is a good thing.

Of course, the idea of caring for yourself and treating yourself well is easily bent into buying things.

American culture, with its typical anything-worth-doing-is-worth-overdoing attitude, has reduced self-care to buying stuff and, even more counter-intuitively, to trying to become a more productive employee. In other words, active self-care was originally considered necessary to be a philosopher, typically for elite white men who had the luxury to sit and think. Now, America has democratized it by making it seemingly available to all—at least, for a price.

The advertising industry has nudged self-care away from introspection and towards reflexive consumerism. According to copywriters, you “deserve” everything from “a break today” (at McDonald’s) to “brighter eyes” (with new make-up) from “a decent sandwich” (from Milio’s) to, simply, “the best” (in the form of Beats By Dre). The implication is clear: Consumers who fail to purchase such treats are depriving themselves, failing to meet their own needs.

The interesting part of all of this is that much of the rise of self-care as a modern concept is due to the fact that, as a society, we feel extremely overworked and overbooked, and that can lead to a lesser sense of personal value, that we don’t exist as much beyond being a cog in a machine.

As always, the solution that companies would give to us is to spend money.

The kind of self-care being peddled to the 21st-century American white-collar worker is a cure for a quintessentially 21st-century American problem: that jobs demand ever-increasing amounts of time, energy, and creativity. Capitalism, faced with a problem it created, is itself trying to provide a solution. Little wonder, then, that the suggested fix isn’t to convince workers to actually take their vacation days or to go back to a more humane schedule of 40 hours a week, both of which would help employees to prioritize their own well-being. Instead, to avoid burnout, people are encouraged to spend more and exercise harder.

The real truth is peeking out, right there. The most effective form of self-care is taking time for yourself. Self-care gives your body time to heal and to grow stronger and your mind time to refresh and rest and to absorb new ideas. Self-care enables you to do things that bring you joy and to build relationships that can bring continued value into your life.

Guess what? Those things don’t involve buying products. Those things don’t involve spending money. The best forms of self-care – the best forms of “treating yourself” – don’t involve throwing money at the problem.

Instead, we find ourselves often so overbooked that we don’t take time for self-care, and due to a deep realization that we need self-care, we look for an easy solution. Guess what? There’s always an easy solution for any problem, provided you’re willing to throw money at it!

The idea of buying something to “treat yourself” doesn’t actually solve the problem of self-care at all. While those products that you buy might bring a burst of pleasure, they don’t help alleviate any of the things that are actually causing us to feel devalued or to need self-care in the first place.

The true solution to the problem of self-care is time, and time is hard to come by when you’re overcommitted.

That’s right in line with Bloom’s conclusion:

Self-care may never have been easy, but it was once simple and certainly not expensive. It required little more than the ability and wherewithal for introspection. Foucault’s “active leisure,” the time “to study, to read,” is not impossible to carve out time for. Workers and employers alike only have to recognize that determining and meeting one’s needs has value, regardless if it can produce any profit.

So, what’s the real solution? The real solution is to de-commit. If you’ve put yourself in a position where there is no time left for any form of actual self-care – because the actual effective forms of self care, such as genuine leisure and rest and reading, involve spending time – then you’re overcommitted and you’re ensuring that you’re not able to give your best to the things you’re committed to. You’re like a rechargeable flashlight that’s slowly growing dimmer because you’re never recharging, you’re just hoping to squeeze a little bit more from the batteries.

Another solution is to realize that the act of splurging on a product that really isn’t in line with what you most care about isn’t really any kind of self-care at all. Instead, it’s just this little burst of short-term pleasure that, when it fades, leaves you feeling just as exhausted and just as uncared-for as you did before. You can’t buy the things that you need to refill the tank of your soul. That can only be refilled with quality time.

So, the next time you hear an advertisement talking about how you need to “treat yourself” or how you “deserve” something good and it’s followed immediately by something you should spend money on, recognize that trick for what it is. It’s merely preying on your internal sense that you really do deserve self-care, but it’s trying to route it in a way that involves you spending your hard-earned money on their product.

If you find that such ads really work well on you and you’re constantly wanting things, then that’s a sure sign that you need to find time in your life for real self-care – genuine rest, thoughtful leisure time, time spent on hobbies that matter to you, simple and nutritious foods, and so on. Find that time. In the long run, it will cost you far less to find time for self-care than it will cost you to stay on the treadmill of “treating yourself” and continuing to run yourself ragged.

Good luck.

The post The “Commandment” of Treating Yourself appeared first on The Simple Dollar.

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Thursday, October 26, 2017

Take Control of Your Cards With The TSD Credit Card Tracker

Credit cards are powerful tools that can help you build, improve, and even restore your credit score (which is increasingly important in today’s economy). The key is to use them correctly. And unless you have a ton of experience, managing all the aspects of your credit can be overwhelming.

Say hello to The Simple Dollar’s Credit Card Tracker. If you have at least one credit card, this customizable spreadsheet will help you keep track of your credit utilization, fees, and your overall financial health. It will also help you stay on top of credit card signup bonuses and organize your spending to help you earn bonuses and maximize rewards!

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11 Strategies for Low-Cost Professional Development

Monique wrote in with a good question that quickly grew far beyond the boundaries of the reader mailbag (as good questions often do):

What do you do as an independent writer/content creator for professional growth? And how do you do it inexpensively?

First of all, it’s worth noting that, because of the niche that my writing tends to occupy, a lot of my professional development overlaps with personal development. This is somewhat true in every field, but it is stronger for someone who (tries to) work professionally on things that have personal impact.

Here are the big things I do myself for professional development.

I read, constantly. I’m pretty much always reading a book on personal finance or some aspect of personal growth. I read books about money, books about time management, books about investing, books about philosophy, books about psychology, books about writing, and so on. I try to read them deeply, too; I take notes on what I read and try to come up with ways to start using the things I learn about as soon as possible.

I listen to podcasts and audiobooks whenever I’m driving anywhere alone or when I’m walking or exercising. This is just an extension of the reading strategy, mentioned above.

I have a list of longer-term career goals that I’m working toward, and I put some effort most days toward achieving at least one of them. I have a few really big ideas for what I want to do in the future, so I take time each day to work toward those things. Those ideas stretch me beyond what my normal day-to-day efforts are like. Sometimes, those long-term ideas don’t pan out, but I’m always glad I worked toward them because I virtually always see some benefit for having put in the effort.

I talk to other people who do similar things. I know two people locally who are freelance writers and I communicate with them quite often, meeting them for coffee on occasion and pinging them online on what seems like several times a day. They’ve gone from being acquaintances to professional associates to friends over the course of the last several years. I also communicate online with other people who are freelance writers who work from home. In all of those cases, we are constantly swapping ideas and strategies.

Those are strategies I use pretty much every day in my current role as a self-employed writer. However, in my previous role as a research assistant, I used quite a few additional strategies that worked well in the environment of a large organization, which I’ll get into in a moment. Professional development and growth has always been important to me.

Here’s the catch, though: a lot of professional development and growth strategies are expensive. It’s not cheap to go to conferences and conventions. It’s not cheap to constantly buy books. It’s not cheap to attend seminars. It’s not cheap to work toward a college degree in your spare time.

The reality is that cost is an extremely important factor in making professional growth and development decisions, especially early in a career where income may be lower and expenses such as student loans and expensive rent are draining away what little money you do have.

So, what avenues does one have for professional development and professional growth when money is tight? Here are 11 strategies I used, both in my early career when I worked in a more traditional environment and money was very tight and today when I work independently at home and I choose to be very mindful of my dollars.

Set some longer-term career goals so that you can see what you’re working toward. Spend some time to evaluate where exactly you want to go in your career. Are you on a career path you’re happy with? If you are, where do you want to be in five years or 10 years, and what can you do to start going there? If you’re not on a career path you’re happy with, what’s your path to get to where you want to be and how can you leverage your current opportunities to help you get there?

Those are questions you should be asking yourself frequently. Not every single day, mind you, but frequently enough that your plan changes based on what kind of progress you’re making and how your actual life and goals are changing over time.

I tend to do it about once every three months – I sit down for a thorough professional and personal assessment of my life and think about what I want to achieve in the next three months, the next year, the next several years, and the rest of my life. Doing that kind of deep, reflective thinking virtually always points me toward setting really meaningful goals that I’m excited to work toward, and that provides the motivation for me to actually do the extra steps I need to do in personal and professional development.

In other words, professional and personal development is much easier to do when you’re motivated, and thinking about your future and setting goals you’re excited about is a powerful motivator that costs you nothing more than a few hours every few months.

Request professional feedback at work and use that feedback as a checklist to improve. If you have any sort of employer, whether it’s an actual boss in your office environment or someone you’re contracted to work for, it never hurts to ask that person for honest feedback on your performance. What do you do well? What do you do not so well?

(Remember, when you’re asking those questions, you’re asking for a mix of positive and negative feedback, so you should expect that kind of feedback with the understanding that the person giving that feedback is not trying to be cruel. They’re trying to be helpful.)

Take that feedback and use it. Don’t dwell too much on the positive stuff – just use it as a reminder that you’re probably in a solid place. Instead, focus on the criticisms. What things can you take from those criticisms to improve your performance without undermining the things you’re already good at?

Those items, along with the deep thinking about your future career, should give you lots of pointers toward areas where you should be working on your professional development. Now, how do you actually do that work?

Make a daily commitment to reading (and taking notes) on material related to your field and to better professional performance. This should be a standard part of professional development in almost any career path. There are always areas in which you can be improving, and there’s a very good chance that there are books and/or papers out there that can help you improve in those areas.

Make a daily commitment to reading something related to the areas where you want to improve. Read an article in a respected publication. Read a chapter or a section of a book. Whatever it is, read it slowly, reflect on what you’re learning, and stop and look up terms and phrases and ideas you don’t know as you go so you’re not lost.

Keep a notebook near you so that if you read something interesting that you can take action on or something that merits further thought or something you’d like to come back to, you can quickly write it down. When you’re done reading, write down a sentence or two (or more, if you feel it’s necessary) summarizing what you read and what the important parts were. If you have some specific things you can take away and use, write them down as well.

The cost here is minimal, since you can get almost unlimited books from your local library and the cost of a pen and a simple notebook is trivial.

If you prefer listening, find high-quality podcasts and course lectures related to your field, listen to them, and make note of the key ideas. Reading is incredibly useful because of the convenience of taking notes, but sometimes you’re in a position where sitting down with a book isn’t convenient. Maybe you’re exercising, or you’re driving somewhere.

In those cases, make an effort to listen to things that are meaningful to your professional development: podcasts related to your field, audiobooks related to your field, and so on.

It can be difficult to take notes when doing this. Whenever I hear something noteworthy, I usually stop the audiobook or podcast and use the voice recording app on my phone to take a verbal note, and then I copy them down later in my notebook. It works well for me.

Again, this has very little cost. You likely already have a smartphone, which likely has a free podcast discovery and listening app on there. You just need to find podcasts related to the areas you want to develop. Your local library likely offers audiobooks, both digitally and in physical format, which you can transfer to your phone and listen at your leisure.

Form or join a professional learning community, locally or online. Some people find it particularly effective to learn material together, through discussion and face-to-face interaction. One way to facilitate that is to join a professional learning community, one dedicated to professional growth in the area or areas you’re interested in.

Once you’ve identified some areas in which you want to develop professionally, look for some groups that you might be able to join that are focused on those areas. You can look online for Facebook groups to participate in, for example; if you’re looking for offline groups, I suggest taking a look at the offerings at meetup.com.

What if you can’t find such a group? Consider starting one yourself. Look for a small number of people that you know professionally that might be interested and just start a small group where you meet up either face-to-face or online to talk about professional development ideas. Perhaps you could facilitate a “book club” where you all read the same book and talk about the different takeaways you had, or maybe you could take turns leading a discussion on a particular topic. Just find something that you’re comfortable with that others would find useful and engaging.

Put those new ideas you’re learning into practice as often as you can, as soon as you can. When you’re reading and listening to material related to professional or personal development, you’re going to be bombarded with ideas. While it’s great to have those ideas in your head, the magic happens when you actually use those ideas in some productive fashion.

If you’ve followed the above two strategies, you’ve probably dotted down some specific actions you can take in order to improve your professional performance. Make a point of actually carrying out those actions – transform something you’ve noted into something you’re doing.

For example, if you’re learning about a new programming methodology, try to use that methodology on a small project at work. If you’re learning about techniques for effective communicating, put them to work during a meeting or during water cooler talk at work.

If you’re not taking those ideas and transforming them into action, you’re just reading and not growing.

Use new skills and ideas to build things in your spare time that you’ll actually use. You don’t have to limit the use of your new skills and ideas to the workplace, either. Don’t be afraid to look outside of your primary employment to find ways to utilize the professional skills and ideas that you’re learning.

Perhaps you can use your newfound communication skills within the service of a community group. Maybe you can use your web development skills in the service of a civic festival. Perhaps you can use IT skills to help out a local nonprofit.

The advantage of this approach is that it allows you to cultivate skills that you might not be able to directly use at work. You’re solving new problems in new ways, and there’s often less of a drawback if you don’t produce perfect results (due to using and refining new skills).

Join a professional organization related to your career path and try to get maximum value from the benefits. Many professional organizations provide great opportunities for professional growth. They offer publications and other resources that make it easy for you to continue to grow within your field.

The only catch, of course, is that many professional organizations can be pretty expensive. Many professional organizations have a rather significant annual cost in order to be a member, though that membership does afford access to publications, resources, meetings, and other tools.

One way to reduce that cost is to look into membership through your workplace. Perhaps your workplace offers a group discount, or even subsidizes the membership of employees.

Another avenue to examine is whether or not the discounts that you might get from professional organization membership might provide enough savings for you to justify the cost of membership.

In either case, if you can find a low-cost avenue for participation in a professional organization, do so.

Of course, if you are a member, it’s well worth it to make sure you’re taking advantage of the benefits. Make sure you’re receiving and reviewing the publications, taking advantage of online resources, participating in forums, going to conferences and other meetings when you can, and simply squeezing every ounce of value from your membership.

Evaluate what workplace resources are available to you in terms of furthering your education or earning new certifications. Many workplaces offer at least some tools for the professional development of their employees. This might take the form of a stipend for additional education, groups within the workplace geared toward professional development, cheap or free memberships in professional groups, cheap or free admissions and travel to professional meetings, and so on.

Take the time to talk to your supervisor as well as to the human resources department about the availability of any such resources and then take advantage of them. If your workplace subsidizes your participation in professional meetings, then participate in those meetings. If they subsidize further education, then grab that additional education. If they’ll pay for a certification, get that certification.

The thing to remember is that it’s up to you to take advantage of these things. They’re generally not laid out there like a buffet – you usually have to seek out benefits like this, because they’re usually benefits intended for the type of top performers who would seek them out.

It never hurts to ask!

Intentionally choose challenging projects at work as they will push you to learn more and build more skills. As you’re building all of these skills and professional relationships and new ideas, it’s useful to make sure that you’re applying them in the workplace. While you may find ways to apply some of them in your day to day activities, one of the prime ways to ensure that you’re really using your new skills is to put yourself out there for projects that really tap into the new skills and ideas that you’ve been building.

Not only will these new projects provide a great way to show off your increased capabilities at work, they also become a way for you to really hone new skills and make them natural.

For example, if you’ve been working on your public speaking and presentation skills, you should look for opportunities at work to speak to groups and present what your employer is doing. If you’ve been working on your social skills, you should seek out opportunities to represent your organization at larger meetings. If you’ve learned a particular new skill that’s related to your career, look for projects that will put that skill directly to work.

Choices like this will force you to really use those new skills, which can be intimidating. However, the rewards are tremendous – it’s taking risks and digging into new projects like these that help set you up for the type of career advancement you might be dreaming of.

Keep track of the skills you’ve built and applied as well as the things you’ve achieved as a result of those new skills. As you’re building these skills and finding new ways to apply them, make sure you’re keeping track of them.

The easiest way to do this is to make sure that you’re keeping your resume updated. I recommend making this a part of your three month professional review, discussed earlier in this article. As part of that review, go through your resume and ask yourself whether there are significant new projects and new skills that can be added to each section of the resume.

Do you have a new certification? Add it. Have you taken significant coursework? Add it. Have you added a significant new skill? Add it.

Doing this ensures that your resume continues to look good to people who may be interested in hiring you.

If you think you’ve done enough, you haven’t – never stop growing. Professional development isn’t just something you do every once in a while when someone suggests that you do it. It is a key component of growing in value in your professional career. It is a key to achieving the big things you want from your career – raises, promotions, and even career changes as they’re warranted.

Never, ever stop growing and developing, personally or professionally. The more you grow, the more valuable you become as a person and as an employee, and that value will be rewarded.

Good luck!

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We Booked a Mediterranean Cruise — and It’s a Better Value Than You Might Think

Earlier this year, my husband and I took our two kids – ages 6 and 8 – for an extended trip through Germany, Italy, and Switzerland. Our journey was meticulously planned and lasted nearly three weeks from beginning to end.

We saw jaw-dropping sights including the buried the city of Pompeii, the Amalfi Coast, and the towering Swiss Alps while enjoying some of the world’s most decadent food. We climbed actual mountains, laughed and played, and ate so much gelato it just isn’t right. I would also say the trip was somewhat educational since my kids saw many major attractions they’ll eventually study in world history classes, from the Roman Colosseum to the masterful works of art in the Uffizi and Accademia galleries of Florence.

Our kids had a blast, and so did we. And, thanks to our long-term planning strategy, this trip wasn’t too expensive, either. While the retail price would have been over $20,000, we paid around $3,500 out-of-pocket for the entire trip thanks to credit card rewards and some creative planning.

Next summer, we plan to do something similar… but with a twist. While last year’s Europe trip was largely land-based, we decided that, next time, we want to throw in a Mediterranean cruise. While that probably sounds luxurious and overpriced, I was actually surprised to find that this could be one of the most affordable components of our trip.

Let me explain.

Planning Our Europe Trip for Summer 2018

Before I get into why this is such a good option for us and other families, let’s start at the beginning. As you probably know, the biggest component of any trip to Europe from the U.S. is airfare – the cost of just getting there and back.

I started planning early for this part, racking up several signup bonuses through American Express and earning even more Membership Rewards points through regular spending.

So, just like last year, we’re transferring 200,000 American Express Membership Rewards points to Air France/Flying Blue good for four round-trip flights from Indianapolis to European cities of our choosing. In addition to the airline miles, we’ll need to pay around $150 per person in airline taxes and fees.

Initially, we wanted to go to Croatia and possibly Greece, and then finish up our trip with a week on the Amalfi Coast. I loved mainland Greece when we went a few years ago, so I really wanted to see a few Greek islands this time. But, would it be possible to pull this off?

As anyone who’s traveled in this region knows, getting around Europe is pretty easy! But, that doesn’t mean it’s always fast.

Once I mapped out the train and bus routes for the various cities we wanted to visit, I realized we would spend several days on train travel alone. With young kids especially, this isn’t the ideal way to spend our time.

Greece is just plain huge, spread out, and out of the way. Croatia is long and skinny and not that ideal for train travel. Getting to Italy from either of these countries would be a pain – unless we wanted to fly. But, once again, I didn’t want to invest the time or money into too much transportation.

Eventually, I stumbled onto the idea of taking a Mediterranean cruise. We’re not really cruise people per se, but it seemed like a smart way to accomplish our travel goals without too much hassle or expense. And now that I’m ready to book, I’m finding it’s easily one of the smartest – and most affordable – options available for our family.

Our Experience Booking a Mediterranean Cruise

While Mediterranean cruises range from budget to luxury, we really needed a “no frills” option that would fit with our travel budget and make it fun for the kids. We considered a few different cruise lines, but we ultimately chose to go with MSC Cruises due to their overall affordability and selection of itineraries.

With the specific itinerary we were considering, we could check off all the “musts” on our wish list without spending a crazy amount. The specific cruise we chose departs from Alcona, Italy before visiting Venice, Split, Santorini, Mykonos for two days, and Dubrovnik. This itinerary worked rather well for us since I was also able to find Flying Blue/Air France availability into Bologna, Italy, and home from Naples. This way, we could spend a few days in nearby Bologna before the cruise, and then spend a week on the Amalfi Coast before flying home from Naples.

Cruise Itinerary

If you think the cruise component of this trip sounds crazy-expensive, you’re not alone. I absolutely thought it would be more than I wanted to spend — until I actually priced it out.

But really, it’s not so bad – especially for a family with young kids. For the particular cruise we chose, which takes place during peak travel season, it works out to $989 per adult for an ocean view room.

Cruise Details

This includes the “Fantastica” cruise experience with:

  • Upgraded stateroom location
  • Free breakfast in bed
  • Additional kid’s classes
  • Kid’s club
  • 12 free drink vouchers per person
  • Flexible, inclusive dining

The best part is the fact that kids 12 and under are free on our particular cruise, as they are on many MSC cruise itineraries. So, that brings our grand cruise total to $2,150.64 for two adults and two kids.

Stateroom with taxes

This price includes the cruise fare itself, but also government taxes and fees. In addition to this amount, we’ll owe 30 euros per night as our service charge in place of traditional tips. This adds another 210 euros – or $250 USD – to our grand total, bringing it to about $2,400. While you can have this removed from your account if you don’t receive good service, I am more than happy to tip the people who work so hard on the ship.

Either way, this brings us to a grand total of $2,400 — or $600 per person for an eight-day, seven-night Mediterranean cruise.

How and Why This Is a Smart Deal for Us

Handing over $2,400 for eight days and seven nights doesn’t sound particularly cheap, and it’s not. But it’s actually a really good value when you consider everything a cruise includes.

We’ll get breakfast and most dinners on the boat for free, for example. That leaves us covering lunch only in our ports, which should be easy to handle on the cheap with some planning and budgeting.

MSC Cruises also offers kid’s clubs on their ship, which means we’ll have an on-hand babysitter if we need a break. And of course, our ship will have the usual cruise amenities: nightly entertainment, on-board activities, swimming pools, a gym to work out in, and an on-board casino. Here’s the full list of what is included:

What’s included in the cruise fare:

  • Onboard activities
  • Kids and teens clubs
  • 24-hour room service
  • Fitness center
  • Library and card room
  • Casino
  • Nightclubs and disco
  • Broadway-style shows
  • Dining

What’s not included:

  • Shore excursions
  • Spa visits and treatments
  • Internet cafe
  • Beauty salon
  • Personal trainer
  • Exercise classes
  • Shopping
  • Drinks (soda and alcohol)

We’ll want to do some excursions, but I’ve already found quite a few I would consider through Chase Ultimate Rewards. Since we have around 70,000 Chase Ultimate Rewards points leftover to burn, we’ll be able to book a few excursions and get them entirely for free. For the most part though, we like to get out on our own and explore cities without the help of guides.

When you consider the fact that we could easily pay $300 per night for a hotel alone in high season (or more since you typically need two rooms for a large family in Europe), it’s a pretty great deal to get a floating hotel, transportation all around Croatia and the Greek islands, most of our food, and intermittent babysitting for $300 per day.

But, it was the convenience factor that really got me. Instead of visiting a spot for a day, staying in a hotel for one or two nights, riding in a train, unpacking and doing it all over again, we can pack and unpack in our cruise cabin once. Each day we’ll get off the ship with the kids in a new place, yet we won’t have to endure many of the pitfalls of traveling with luggage and children.

The Bottom Line

While we’re not the biggest cruise enthusiasts in the world, this particular itinerary makes a ton of sense for us, and a Mediterranean cruise can offer a surprising amount of value to the average family. It’s inexpensive when you consider all that’s included — lodging, food, and transportation between countries — and it will be downright convenient since we only have to pack and unpack once. Most importantly, it will let us see some cool sights with our children without worrying about the intricacies of getting from one place to another.

Is $2,400 for a week of cruising cheap? Absolutely not. But, it is a good value. And, no matter what, I know the memories I make with my kids will be absolutely priceless.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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Do you think cruising is an affordable family vacation option? Why or why not?

The post We Booked a Mediterranean Cruise — and It’s a Better Value Than You Might Think appeared first on The Simple Dollar.

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