Why blogging should be on YOUR to-do list, especially during tough economic times

People create blogs for many reasons: to keep in touch with family and friends; to promote a product or service; to make money working from home.

A few full-time bloggers reportedly earn a very healthy income from blogging. Bloggers sell links and space to advertisers and generate referral income from affiliate sales programs. For those that blog as a means of making money, generating traffic is paramount. The higher the number of page views, the higher the opportunity to generate income. A-list bloggers make a lot of money because they receive tens of thousands of hits every day.

Most bloggers, however, earn very little. Don’t be discouraged though, because even with low traffic counts, blogging provides other valuable income opportunities.

Let me explain by way of example: I don’t make much money from the advertisement placed in my right sidebar — and what I do earn is donated to Kiva.org. But nonetheless, because of my blog, interesting and profitable income opportunities present themselves. I’ve appeared on national television, I’ve been profiled in several books, newspapers and magazines, I’ve been encouraged by literary agents and publishers to write a book, I’ve been offered writing and speaking gigs, and I’ve established a coaching business.

Considering today’s tough economic times, blogging should be on your to-do list too because it can open new doors.

Blogging provides a way for me to:

  • network, make connections, and influence others in a positive way
  • build my platform as an author before writing a book (essential in today’s publishing market)
  • offer my coaching services to a targeted and receptive audience
  • improve my writing skills
  • express myself and share an exchange of thoughts and ideas with a diverse, worldwide community of readers
  • promote topics near and dear to my heart (personal empowerment, science of happiness, financial literacy)
  • help small businesses operated by working, impoverished women in developing countries by pledging my blogging profits to Kiva.org

If you’re a consultant, small business owner, paid professional – or currently unemployed and looking for work — you owe it to your financial future to establish a blog of your own. But how? Here are the lessons I’ve learned:

Blogging 101

1)  First, answer the question “Why do I want to blog?”

Blogging takes a lot of time. Most bloggers quit within their first three months. Without a clear purpose, mission or vision statement, you’re likely to become a disillusioned short-term blogger. Realize that it takes plenty of time and work to create and maintain a well-trafficked and respected blog.

2)  Research the business of blogging and find mentors

Before launching my blog, I invested three months time researching the business of blogging. I followed successful blogs and those that teach the art of blogging (like Problogger). I joined a writers’ group to share my ideas with other writers, ask for feedback and reciprocate proofreading. Knowing that first impressions are everything, I made sure that I was ready to impress new readers during their first visit.

3)  Carefully select your niche and blog title

Pick a topic that you are passionate about. Your passion will be evident in your writing. You will spend a lot of time blogging about it, thinking about it and talking about it. Make sure you love-love-love your blog topic! Now, craft a title that will convey your blog’s topic AND grab your readers attention. Ask for feedback before committing.

4)  Have a plan

Before launching my blog, I drafted an outline for my 52 Baby Steps to Financial Freedom series (which I may eventually turn into a book), wrote an About Me page to introduce myself to new readers, and made a list of hundreds of topics I’d like to blog about.

5)  Use a self-hosted domain

I started my first blog in July 2007 using Blogger’s free service. Just four months later, my blogspot domain had earned thousands of inbound links and a nice Google page rank. It was discovered by the media and I was invited to appear on national television. My blog’s readership and traffic continued to climb.

In October of 2008, my entire Google account was hacked into and disabled. This means my blog, my gmail account, my calendar… the whole shebang… were gone. Since Blogger is not self-hosted, I had no recourse.  I had to start all over again.

Now I pay about $10 a year to register my own domain URL and $99 a year for my hosting service. Take it from me, the expense and hassle is worth it!

6)  Schedule blogging time

One of my favorite productivity tools is a digital kitchen timer. As a work-from-home mom of a three-year-old, I find it necessary to structure my writing and blogging time according to her schedule and push to get it done. I write when she’s sleeping, engrossed in Sesame Street or enjoying one-on-one time with her daddy.

Nothing can sideswipe my attention and redirect my efforts quite like the world wide web. The timer keeps me focused, motivated and targeted on the individual task at hand.

Identify your daily, weekly and monthly activities, set a time limit for each one, and start the digital timer in countdown mode. Save your favorite activities for last to serve as your reward for staying on task.

For example, here’s the timed list I strive to keep for writing and blogging activities. (Note: You can also use your digital timer for other tasks: managing personal finances; housecleaning; de-cluttering; exercising; tackling a big project or assignment.) Use your timer to “eat your elephant one bite at a time”.

15 minutes: backup previous posts and template changes
15 minutes: submit posts to blog carnivals, write and publish my blog carnival roundup
30 minutes: thank bloggers for new incoming links
(Total = 1 hour per week)

30 minutes: reply to emails
15 minutes: respond to blog comments
15 minutes: check stats
30 minutes: read other blogs, leave comments, copy my comments for future post ideas
(Total = 1.5 hours/day x 5 days = 7.5 hours per week)

1-2 Times Per Week (my writing process):
30 minutes: brainstorm topics, research, outline, collect relevant links
60 minutes: write rough draft
30 minutes: proofread, edit, polish
15 minutes: publish post to blog, check for broken links
(Total = 2.25 hours oer post = 2.25 to 4.5 hours per week)

TOTAL = 10.75 to 13 hours per week

The digital timer can also serve as a reminder to get up from your desk, stretch your muscles and rest your eyes. I usually multi-task these mini-breaks: I throw a load of laundry in the dryer, do some yoga stretches with my daughter, or take the dog for a walk. About 10 minutes later, I’m sufficiently refreshed to sit at my desk for the next itemized task at hand.

7)  Create post titles that grab attention

Copyblogger writes,

Your headline is the first, and perhaps only, impression you make on a prospective reader. Without a headline or post title that turns a browser into a reader, the rest of your words may as well not even exist.

But a headline can do more than simply grab attention. A great headline can also communicate a full message to its intended audience, and it absolutely must lure the reader into your body text.

At its essence, a compelling headline must promise some kind of benefit or reward for the reader, in trade for the valuable time it takes to read more.

8)  Provide value

Aim to make each post a resource for your readers. Content is king queen. Quality content creates value for the reader, and in turn, value drives long-term traffic. Proofread before you hit the publish button.

9) Seek exposure with a targeted audience

Submit articles to blog carnivals related to your niche. Offer guest posts to other bloggers and include your web page link in your byline. Participate in conversations on related blogs and online forums. Include your link in your email signature.

10)  Be a polite blogger

Respond to readers’ questions, comments and emails. Link back to blog carnival hosts. Monitor inbound links, comments and mentions of your blog via Google Alerts, TechnoratiSiteMeter and Google Analytics. When you detect a mention of your blog, visit the referring blog and thank the blogger in the comments of the post.

11)  Share the link-love

Creating a blog roll and link out to other web sites within your niche. Encourage an online conversation.

12)  Make it easy for readers to return to your site

Ask readers to subscribe to your feed and make the process as easy as possible. Then keep in mind that your subscriber list is full of people who have trusted you with their valuable attention.

13)  Measure and evaluate your progress

Regular evaluations using analytical measures are important for keeping on track and staying in alignment with your vision. Identify what works, what doesn’t and what you want to accomplish next.

14)  Ask for reader feedback

Readers, I welcome questions, comments and suggestions. Please let me know if (and how) I can improve this blog to better assist you in your journey to success, wealth and happiness.

Blogging Tools and Resources:

Google Analytics
Blog Carnival List
Windows Live Writer
Help A Reporter Out

How I Became A Millionaire (Part 4: My Thirties)

Note: This post is part of a series that starts here.

Sticks And Bricks

Having two major home renovations under our belt, we opted to create our third home from scratch this time around. In 1994 at age 30, we invested the $40,000 cash we had earned from our two previous sweat equity projects into a seven acre piece of weedy land upon which to build a barn and our next home.

We planned to live in this home indefinitely, but we picked a floor plan and house design with resale in mind anyway. We cut out the middleman and acted as general contractor, hiring, organizing and overseeing various tradesmen to do the work we weren’t qualified to perform. My husband and I spent months painting walls, laying tiles, and transforming the weedy field into a garden oasis.

An after-construction appraisal indicated that nine months of hard work had earned us $130,000 in sweat equity.

+ $290,000 post-construction appraisal (in 1994)
– $40,000 cash down payment
– $120,000 construction loan
= $130,000 net equity

My Takeaway: Learning how to be a do-it-yourself-er can pay off handsomely.

Planning Parenthood

Money ranks as the first most argued topic for many couples. It has been estimated that an astounding 80% of divorces are the result of money disagreements. Having a child is now the single best indicator of financial collapse.

I wanted children, but I didn’t want to be one of those statistics.

My choice to form my family through adoption rather than pregnancy was a decision I made when I was an idealistic teenager. The way I figured it, why “make my own” child when there are countless orphans dying for a family already.

Since I planned to adopt, my biological time clock wasn’t a ticking time bomb. My husband and I wanted to achieve financial freedom before adopting our daughter because we didn’t want to repeat our own parent’s experiences. We both grew up with young, struggling, work-all-the-time parents and quite frankly, that often stunk. We didn’t want money issues to negatively impact our family.

But how would we accomplish financial freedom while we were still young enough to enjoy parenting?

My answer came in the creation of a plan using Microsoft Money’s Lifetime Planner. I used this inexpensive software tool to problem-solve, create “what-if” financial scenarios, and monitor my progress along the way.

My Takeaway: Keep an eye on the big picture as you tweak the details.


Part One of my financial freedom plan was to make more money. Not more work, though, just more money. Neither I nor my husband were willing to work overtime hours; we weren’t interested in giving up our evenings, weekends or holidays.

For 12 years, my husband had worked as a company-employed construction worker for hourly wages, earning $20,000 to $35,000 annually. Meanwhile, his boss made many times as much revenue off of my husband’s efforts.

At age 30, my husband quit his job, affixed a rooftop pipe rack onto an old Econoline van and became his own boss. He hired a bookkeeper to handle the office-related tasks, and after a year or two, his annual net income climbed to $60,000 before leveling off. He was on the right track, but for the hours he worked, he wasn’t earning what he could.

I reviewed his business operations and found inefficiencies. My husband is an excellent tradesman with fantastic people skills; however, the math and minutiae of business management wasn’t his strong suit. Thankfully, that’s where I shine so we joined forces and doubled the annual net income to $120,000 the following year.

Statistically, the majority of millionaires are self-employed business owners. But it’s difficult for one entrepreneur to wear all the hats. My husband and I both have different strengths that we bring to the table and together, we make a great team.

My Takeaway: Stick to what you’re best at doing and get help with the rest.

Outwardly Simple And Inwardly Rich

Part Two of my financial freedom plan was to cut expenses. Rather than keeping-up-with-the-Joneses behavior, we embraced a lifestyle of voluntary simplicity. We shared one used car, shopped at secondhand clothing stores, and didn’t buy stuff.

But that didn’t mean we lived a miserly lifestyle. Far from it, actually. We learned to live our lives and spend our money in ways that are in alignment with our values. For instance, since we don’t care much for stuff (fancy cars, designer clothes, glitzy jewelry, electronic gizmos), we could afford to spend generously on things that are important to us (recreation, weekly massages, organic foods, travel). We learned how to be green. By reducing our consumption, we saved money in the process.

My Takeaway: A life well lived does not require stuff.


Managing two businesses had me working more than I wanted, so I sold my pet care and training businesses ($60,000) and put a down payment on a single-family rental investment property. My initial plan was to add a new property to my real estate portfolio every few years. I had hoped this was my ticket to a lifetime of passive income. But after three years of landlording hassles, I realized this source of income would never be passive enough for me. I abandoned this plan and sold my rental at a net profit of $15,000.

My Takeaway: If it’s not a good fit, ditch it and move on.

Dear Broker, You’re fired!

I’m sure there are investment brokers worth the fees and commissions they charge, but I haven’t met one. I burned through five brokers before realizing that no one cares as much about my money as I do. Brokers are salespeople. Naturally, they cared more about their bottom line then mine.

Each year, I’d compare our broker-managed IRA accounts’ long-term performance with the stock market indexes (Wilshire 5000, S&P 500, Dow Jones Industrial Average, NASDAQ, MSCI EAFE, etc.). I found that despite paying a decent sum to brokers for their expertise, our portfolio was under-performing the standard index benchmarks.

I decided to make it my job to learn how to invest. For two years, I studied equity investing via books, web sites, and conversations with other investors. Once confident that I had acquired the knowledge, confidence and skills necessary to invest successfully on my own, I fired our broker.

Not only did our return on investment (ROI) improve, but over the course of our lifetime, we will save thousands of dollars in commissions and fees.

As I watched the astounding power of compounding grow our portfolio, I knew I’d discovered a source of passive income I could embrace. I paid ourselves first, investing 15-20% of our income plus all unexpected windfalls (such as tax refunds). I made maximum allowable annual contributions to our IRA retirement accounts and automatically reinvested the interest, capital gains and dividends.

My Takeaway: Become the expert of your own money.

Bubble Trouble

In 2004, I read a book that at the time sounded like science fiction. But author and economic consultant John Talbott presented the facts so well in his book, The Coming Crash in the Housing Market : 10 Things You Can Do Now to Protect Your Most Valuable Investment, that I was convinced financial aliens would soon be landing upon our house to snatch away our sizable home equity.

Talbotts’s analysis made so much sense to me that I decided to foil the aliens by selling our home and cashing in. We became renters.

In doing so (and when explaining why) most of our friends and family thought we’d lost our marbles. “Renters throw their money away”, they’d say. Everyone seemed to believe that real estate prices would always go up. So did many readers of my blog, when in the fall of 2007, I first shared that I was a renter. But there is no doubt about it now — the equity-sucking aliens have landed upon our rooftops. It should come as no surprise really; a 120-year historical graph shows that home prices in the U.S., adjusted for inflation, stayed relatively flat for 100 years, then began rising in 1981 and surged from 1997 to 2006. No irrational bubble can continue to inflate indefinitely.

In 2004, after sticking a “For Sale By Owner” sign in the front yard and selling the home we had built and lived in for nine years (at a net profit of $335,000), we rented and invested the cash – and our monthly savings — into a diversified portfolio of mutual funds.

Renting was much less expensive for us than owning and by putting our equity to work, our net worth surged exponentially.

My Takeaway: Follow common sense, not the crowd.

… continued in Part Five: My Early Forties

The beginning of this series started here: How I Became A Millionaire: Childhood

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How I Became A Millionaire (Part 3: My Twenties)

Note: This post is part of a series that starts here.

Wake Up Call

I was in my early twenties when friends and I took a fateful camping trip that changed our lives forever…

My friend, Linda, divorced for three days, was a nutty sass all weekend. She chased wild bulls through the remote Indian Reservation, cartwheeled across fallen trees bridging the river, and stopped us en route to our campsite to pour beer on a small lightning-strike fire to fan the flames. Then, perched upon the back seat of the Jeep I was following, with one hand tenuously grasping the roll bar to steady herself, she pulled down her jeans to flash me the moon.

That was her last act of sass. She fell head first out of the jeep and lay in the middle of the road, in the middle of nowhere, uncharacteristically still.

Linda’s premature death shattered my naïve sense of immortality. For several years afterward, I suffered from anxiety as a result of PTSD (post-traumatic stress disorder). But along with my internal pain came an impetus for personal growth. The meaning of life became a subject of intense introspection for me.

My takeaway: It is only possible to live happily-ever-after on a day-to-day basis.

Buried Treasure

My husband and I married at the tender age of 23. Like many newlyweds, we wanted a wedding, a honeymoon and a home to call our own. But neither of us had any savings. Fortunately, we didn’t have a credit card, either, so we sold one of our vehicles to generate the cash to pay for a creatively frugal and fun wedding and honeymoon.

Additionally, by sharing one car we had reduced our monthly expenses enough that we could afford mortgage payments. We bought a foreclosure fixer-upper house priced below market value and spent much of our first two newlywed years stripping off dated wallpaper, tearing away landscape overgrowth, pulling weeds and patching holes in the roof. To raise cash for home renovations and furniture, we rented one of our spare bedrooms to a friend.

My takeaway: Where there’s a will, there is a way. Live within your means and pay with cash.

Moonlighting and Bootstrapping

I continued my work at a veterinary hospital and simultaneously started my own pet care and training business. I offered my employers a win-win situation: I’d teach dog training classes in the hospital’s backyard so they’d have a new service to offer their clients; I’d be self-employed with no start-up costs, minimal operating expenses, and a steady stream of customer referrals.

In addition to training, I recognized another need that I could fill. Many pets dislike boarding kennels, so I added home and pet-sitting to the services I provided.

Approximately one year later, I was earning more from my part-time business than I was working at the veterinary hospital, so I quit my job.

My takeaway: Starting a business can be done with little to no capital investment.

Leaving the Nest and Sprouting Wings

By the time we celebrated our second wedding anniversary, it was obvious that if our marriage was to survive, we needed to move away from his family. Quite frankly, my in-laws thought that I should “wear the skirt” and demonstrate subordination to their son, and since I was a “strong-minded” woman, they were not supportive of our relationship.

We packed our belongings and sold the assets that couldn’t move with us. Selling my pet-care client list fetched $10,000 and our renovated home netted $14,000 in capital-gains-free profit.

My takeaway: Reduce your exposure to toxic people.

Lather, Rinse, Repeat

Once in our new town, we opened our first retirement IRA accounts ($2,000 each at age 25, if I recall), banked the rest of our cash, and rented a small condominium. Hubby took a construction job, and I duplicated the same pet care and training business I had owned before moving.

Rather than spend money on advertising my services in a new town, I sought relationships with referral sources by introducing myself to complimentary businesses (veterinarians, groomers, kennels) and offered their staff free workshops and classes. My investment of time paid off profitably as my new business grew quickly via personal referrals. I hired a few part-time employees and created an apprenticeship program. It was at this point that I discovered the joys of working from home in my pajamas.

After a year of renting, we purchased our second foreclosed fixer-upper home, remodeled it, then sold it two years later (by owner) for a capital gains tax-free net profit of $25,000. We invested our earned equity into a seven acre piece of ground and built a home on it.

My takeaway: Replicate and expand upon previous successes.

…continued next in Part Four: My Thirties

Did you miss the beginning of this series? How I Became A Millionaire: Childhood

How I Became A Millionaire (Part 2: Early Adulthood)

Note: This post is part of a series that starts here.

After high school, I wanted to be a professional dog trainer so I enrolled in college to study the psychology of learning, animal science and animal behavior. I was working 30+ hours a week to pay my own tuition and after three semesters, I found myself tired, bored, frustrated and impatient with the required undergraduate curricula. I discovered that I wasn’t happy with the traditional education system, nor with burning the candle at both ends.

I dropped out of college and spent the next couple of years drifting from one minimum wage job to another, paying more attention to the boys I was dating than to my financial future. I ended up broke and alone after my fiancée and I broke up. I learned that I couldn’t count on Prince Charming to sweep me off of my feet and take care of me.

My parents were struggling to make ends meet, so I couldn’t go home and become a burden on them. I became more frugal: I abandoned my broken-down car, reduced my rent by sharing my one-bedroom apartment with three other women, and found free food during Happy Hour at the local bar (free appetizers with the purchase of a $2 draft). I learned to be resourceful and to do whatever it took to survive.

One night, while working the graveyard shift at a donut shop and pouring coffee for a homeless patron, I realized that I was one paycheck away from being homeless myself. That was my wakeup call. Motivated by fear of an uncertain future, I opened the Yellow Pages, called professional dog trainers and negotiated an unpaid apprenticeship. Less than a year later, I was hired by my mentor, and I loved the work. I learned the power of asking for what I want.

My mentor-employer was a great dog trainer but she made poor financial choices and lost her business. So I took two part-time jobs: one with a competing dog training school; the other as a veterinary hospital receptionist. One day, the office manager took me aside and said, “Jen, you have a smart mind and strong opinions. I realize that you have some good ideas about how this business could be improved, but you need to understand that you are not in charge here; the veterinarians are. You’re just an employee. You need to do things our way”. My response? I decided I wasn’t cut out to be “just” an employee.

…to be continued next in Part Three: My Twenties

Did you miss Part One of this series? How I Became A Millionaire: Childhood

How I Became a Millionaire (Part 1: Childhood)

One of the most complicated questions I’m asked is, “How, exactly, did you do it? How did you become a millionaire?”. I find myself scratching my head and “uhmm”-ing in response, not because I don’t remember, but because it was a process rather than one identifiable event. My short answer is this: we lived below our means and invested in our future. But it’s way more than that — you’ve likely learned bits and pieces about many of the actions I took as I sprinkle them throughout my blog posts. Today, I’m putting the pieces together to illustrate how it’s a culmination of the little choices we make that add up to something big.

I’ll start at the beginning with some lessons I learned as a child. (Parents take note: perhaps you can glean some useful information for your children.)

Part One: Childhood

I didn’t grow up with money: When my legs outgrew my pants, Mom sewed extra fabric around the cuffs. Our family of five shared a cozy two bedroom apartment. We kept our cars until the wheels fell off (literally, once). My parents were frugal role models.

After their divorce, Mom, who was admittedly terrible with keeping her checkbook balanced, assigned this task to me. I was 13. She gave me and my siblings $25-40 each a month – which was a generous allowance back in the day – with the stipulation that we pay for our own clothes, school lunches, books, recreation, yearbooks, bus fares, etc. I quickly learned that if I spent too much money at the movie theater with my friends, I could kiss hot lunches and new socks goodbye. This taught me the value of money and forced me to budget and delay gratification at an early age.

If I wanted more, I had to work for it. At age 13, when I was old enough that my peers started poking fun at me about my well-worn clothes (kids can be cruel!), I took my first job: delivering the morning newspaper before school. Oh, but I am not a morning person, and I struggled to wake before dawn. Misery was my motivation for invention; I created ways to make money that were in alignment with my interests. I loved animals, so I started a dog walking service. An entrepreneur was born.

During my 14th summer, after hearing one too many whiny complaints of “I’m sooooo bored!”, Mom helped me arrange an unpaid apprenticeship with a dog trainer at a boarding kennel. I fed the kenneled dogs and shoveled sh!t in the mornings, and in exchange, the trainer taught me how to train dogs. Through apprenticeship, I learned a valuable new skill that years later, I would turn into a thriving business of my own.

I thought I wanted to be a veterinarian when I grew up. Thankfully I explored this option – before enrolling in veterinary school – by “shadowing” a vet for a few days. I observed the vet as he performed his daily work to see if the profession was a good fit for me. After fainting repeatedly at the sight of blood, I learned it wasn’t my dream job after all. I discovered I liked working with healthy animals, not sick ones. Exploring my options via shadowing spared me costly tuition and many years of study that would have been for naught.

…to be continued, next, in Part Two: Early Adulthood

Suze Orman’s 2009 Action Plan

Suze Orman outlined her 2009 Action Plan today on the Oprah Show. For the next week, you can download her new book for free or order a print copy of Suze Orman’s 2009 Action Planat Amazon for $9.99.

Here are the notes I took from the show today:

Tell the truth. Take an honest look at your financial situation and discuss it openly with your spouse or life partner. How much do you owe? How much do you have in your savings account?

Pay off credit card debt BEFORE creating a savings account. List your credit card accounts in order of interest rate. Pay extra on the account with the highest rate first, while paying minimum payments on the rest. After the highest rate card is paid off, get to work on the next highest. And so on until you no longer have credit card debt.

Improve your FICO score. The higher the number the better (850 is the highest). In today’s economic climate, under 700 is considered low. Did you know that potential landlords and employers also use your FICO score to determine how responsible you are? Yep, so do insurance agencies. Those with a high FICO number score big when it comes to loan rates, jobs and insurance premiums.

Ways to improve your FICO score:

1) Pay more than the minimum payment on each credit card.
2) Pay on time. (This constitutes 35% of your score.)
3) Never go over your credit limit. If you do, they raise your interest rates.
4) Don’t close your credit card accounts. This hurts your score. Why? Because 30% of your FICO score consists of your debt to credit ratio.

Separate WANTS from NEEDS.
If you have debt or no savings, ELIMINATE THE WANTS!

Save 8 months of expenses in an emergency savings account. Decide how much you can save each month and add 20% as a stretch goal. Search for the highest savings account interest rates from FIDC-insured banks.


1) Don’t panic when the market goes down.
2) Keep investing in your 401k or IRA.
3) Money you need in the next 5 years DOESN’T BELONG IN THE STOCK MARKET. If you need your money in 5 years or less, take it out of the stock market.

Suze’s pledge idea:

1) Don’t spend money for 1 day.
2) Don’t use your credit card for 1 week.
3) Don’t eat out at at restaurant for 1 month.
(The first two pledges are easy ones for me, but not the third!)

How To Revolutionize Your Spending Habits

For some, buying with credit is akin to paying with funny-money. You want something, you pull out a plastic card and shazam, you own it. At least that’s what you think… But money, whether earned yesterday or tomorrow, is something we trade our life energy for.

Do you want financial freedom? Then it’s necessary to keep your credit cards (and cash) out of merchant’s hands. Today, I’m sharing a trick that can completely revolutionize your spending habits by changing the way you see the cost of the goodies that merchants want to sell to you.

Here’s the trick: Translate the number of dollars you see printed on a price tag into the number of hours the purchase will require you to work for it. By doing so, you’ll make well-informed decisions regarding what you’re willing to pay for with your irreplaceable life energy.

Do you know how much your net pay is per hour — after all work-related expenses are subtracted? Here’s a cool tool you can use to determine your bottom line: Time Value Calculator.

One of my coaching clients (Sue) earns $60,000 annually. She’s thinking about buying a new car. She’s considering taking on a $400 monthly car payment. Should she do it?

It’s not my place to answer that question for her. But I CAN help her come to her own conclusion by turning dollars into the time she’ll need to work to pay for it. Using the Time Value Calculator, we find that after taxes, commuting, daycare and other work-related expenses are subtracted, Sue’s net pay per hour is $16.07.

Now we take the $400 monthly car payment she’s considering and divide it by $16.07 to find that buying a new car would cost her almost 25 hours of time working EACH MONTH for the next five years.

Translating dollars into time made it easy for Sue to come to her own conclusion. She decided to have her current car professionally cleaned and detailed instead.

I suggested that she write her true hourly wage on a piece of paper and affix it to her credit card and checkbook. Before making any purchase, she would be reminded to divide the sales price by her true hourly wage. Is the item or service worth the hours of work required to pay for it? If so, buy it. If not, walk away.

Let’s look at some other time-price tag examples:

Apple iPod: $250 divided by $16.07 = 16 working hours.
Monthly supply of cigarettes and chewing gum: $200 divided by $16.07 = 12 working hours every month… until you quit!
House payment (PITI and maintenance) = $1600 divided by $16.07 = 100 working hours every month for 30 years.

What’s YOUR number?

Do it – convert your dollars into time. Then spend your money AND your time in accordance with your own personal values and priorities.