Welcome to the un-official “Personal Finance Week” here at Common Sense Marketing!
Okay, so I have to admit that I wasn’t all that excited about Tuesday’s “How to Save Money on Your Affiliate Marketing Business” post. For some reason, it didn’t seem to *pop* for me and I didn’t think it was going to do that well in terms of traffic or comments.
And yet, it seems to have struck a chord with a lot of people. It’s had some really great feedback, and some very thoughtful comments from people who have had the same experiences I have.
I think that’s because saving money and being financially responsible isn’t something that we really talk a lot about when it comes to affiliate marketing. We should, but sometimes it seems like we’d all prefer to remain blissfully ignorant of the fact that most “gurus” aren’t as well off as they’d like us believe, or that most of the tools and products sold today just won’t come through on their promises of making you rich.
So today I want to talk to you about the other side of the personal finance coin – not just managing your spending, but how to manage the income you do earn from your online businesses responsibly.
The truth is, if you work your butt off and focus on continually improving yourself and your skills, you’re probably going to make some money online at some point. I can’t say how much you’ll make (and honestly, it’s probably not going to be the hundreds of thousands of dollars each month that IM sales letters promise you), but I can say that there are tons of different ways to make money online and that if you’re diligent about moving forward with your business, you’ll probably run into at least one of them.
And what I can tell you is my own personal story (yes, this is another one of those – “do as I say, not as I do” – kinds of posts).
As most of you know, I started online in 2007 and quickly ran through just about every online business model that’s out there. Eventually, I started gaining traction with freelance writing and affiliate marketing, and by the middle of 2009, I was earning between $5,000-$6,000/month online. Certainly not enough to call me “rich”, but combined with the take-home pay from my day job, it was a pretty good living for someone who was just a few years out of college.
But here’s the thing – I have absolutely nothing to show from that time.
After about six months, the writing contract that represented the bulk of my online income ended unexpectedly when the company I was writing for closed up shop, and I wound up selling off many of my affiliate marketing sites to help pay for my wedding and my first home. But for someone who was earning pretty good money online, I still had:
*Student loans, that should have been paid off with some of that money…
*Credit card debt that I incurred when I was younger and stupider (that *definitely* should have been paid off with that income)…
*Almost no emergency savings to protect myself from abrupt changes in income (like the end of my major writing contract)…
So where did the money go? I’m honestly not sure. I know my husband and I went out to eat more, and that we bought more clothing, more groceries and more gifts for others. But we didn’t travel extensively, we didn’t buy new cars or expensive electronics, and we sure as heck didn’t save any of it. Our spending rose to match our income levels, but I’m still utterly at a loss as to what we spent it on.
Yes, it’s hugely embarrassing to admit that – to myself, and to all of you who are reading this. But like the lessons I learned about spending too much on marketing products, I truly believe that having my income reduced drastically and being forced to learn to live within my means was one of the most valuable lessons I’ll ever learn.
Today, my husband and I are on a much more stable financial ground. We’re still paying off debt (and probably will be for awhile), but now we’ve got some savings tucked away and we’re much more aware of where our money goes each month. We’ve also got a plan in place for how we’ll handle increases in my online income (here’s a hint – it isn’t buying a bunch of new clothes or electronics… )
Now, this is the part of the article where the “Don’t be that guy” lesson happens.
Earning money online is an amazing feeling. There’s nothing like the thrill you get from seeing that “You’ve Received a Payment!” notice from Paypal in your inbox, or from watching a project you’ve worked your ass off on take off and start to make sales.
But losing that income wasn’t the hardest part of the process for me – knowing that I’d been so irresponsible with such large amounts of money was a thousand times worse.
So excuse me for a second while I go all Suze Orman on you, but you need to have a budget in place and you need to be very clear about how you’ll spend any income you bring in through your affiliate marketing business.
It isn’t enough to say, “Oh, once I start making some money online, I’ll think about tackling my credit cards…” because once that money is finally in your hands, there’s going to be a ton of temptation to spend it on other things. Decide right now what your financial priorities are, and come up with a concrete plan for how you’ll allocate your internet income towards these goals.
If you’re totally lost when it comes to personal finance, I highly recommend these resources:
*Get Rich Slowly – JD is a personal finance genius, and his site is a wealth of information on how to apply financial principles to real life. Check it out now!
*The Simple Dollar – Another great resource that’s full of personal finance tips.
*Mint.com – There are a few sites like this, but I prefer Mint to handle my day-to-day finances. Basically, it allows you to import transactions from all of your accounts and look at them in one place. I’m sure that if I had something like this running back in 2009, I would have noticed that I was spending ridiculous amounts of money on things I didn’t need.
If you have any other resources to share, please feel free to leave them in the comments below. I’d also love to hear whether or not you’ve got a plan in place to manage your internet income responsibly.
Thanks, as always, for reading – I promise we’ll be back to actual marketing advice this weekend