I’ve spent the morning planning for the next 6 months and now I’m waiting for my kids’ dental appointments to be over, hoping my computer charge will let me get a little more written.
And I have to admit, I’m kind of terrified. For the past 6 weeks or so, I’ve been working to create my first online course: Fun French 101. It’s a free 4 week course that will allow me to get used to the tech I need to use, start a mailing list, and figure out what people do and don’t like about the current design of the course.
So here is the lowdown on my struggles and my successes.
Struggles
Struggle #1:
Just doing the work. When you have three kids, it’s hard to carve out the time to get much done, especially when you have to record videos that require a relatively quiet house.
Struggle #2:
Video quality. The quality of my videos kind of stinks – a lot. Because this is a free beta course and I know it won’t bring in any money for a while, I have spent my money only on the necessary software, and NONE on lighting or stuff like that. I do have a $20 microphone that I purchased earlier, but that’s it. So I’m really disappointed with how plain (and unflattering) they look. But do you know what? It’s not going to stop me. And 5 years from now, when I am able to produce some really nice videos, the old ones (from now) will make a great “You can do it!” story.
Struggle #3:
Tech. OH. MY. GOD. I am SO not a tech person. I’ve had to learn video recording and editing, as well as a WordPress plugin that is not always as intuitive as I think it should be. But I’ve kind of come to peace with tech. I’ve always told myself that I’m not good with tech. However, I don’t think that’s true. I think tech is like math. No one is inherently “good” or “bad” with math OR tech. It’s just that some people have spent more time doing it than others. And when you spend more time doing it, you get better at it. I’m already so very, very proud that I found a work-around that fixed a glitch on my course page. I was inserting a picture, and for some reason, no matter what I tried it showed up twice. I could NOT get the second one to disappear. So I inserted the image as a “cover” instead and low and behold, only one image. Win for me! So let me rephrase that first sentence. I am SO not a tech person – YET! But I will be.
Successes
Success #1:
Doing it scared. I feel so very out of my league. But I’m not going to stop. Because everyone has to start somewhere. And I firmly believe that anything worth doing is worth doing badly – until you can do it well. I’m not going to be good at this for a while. But it is definitely worth doing. So I’m going to do it the best I can, even if that’s not super great.
Success #2:
I am totally rocking the WordPress plugin. (Well, relatively speaking. Compared to when I started.) See Challenge #3 above for my awesome “I found a work-around that worked!” story.
Success #3:
Right now, I am on track to launch my beta right on schedule. And if I stick to my plan, I will have evey single lesson completely uploaded one day before the course opens. Wish me luck and NO sick kids!
Other: Expenses
Here is the current breakdown of what I have spent this month:
Well, I wasn’t actually expecting to write this blog about launching an online startup business. When I sold/transferred my preschool teaching business about a year ago, I thought I was done for a while. But that’s not the way it seems to be turning out.
Saying goodbye to Startup #1
So why did I sell it? A couple of reasons. First, I was once again teaching full time, and in a totally new subject area. I had never taught English Language Learners and although I had a strong base in understanding language acquisition, I was pretty much starting from scratch as far as materials and such and didn’t have any spare time.
Second, I had realized that my Spanish preschool startup business wasn’t going to serve the needs of my family long term. My husband and I had been talking about spending some time living overseas, and a preschool language business just wasn’t going to fit into that plan.
A New Startup
So I started exploring online options. I tried giving French classes online, and I loved it. But it was a pretty big stress on my family for me to be online and totally uninterrupted at a specific time each week. We’re a hot mess around here, and that just wasn’t working for us. Plus, a lot of my students had the same trouble. Their schedules changed from week to week, so they missed a lot of classes.
I kept thinking if I could only pre-record classes and set it up so they could do it on their own schedule, that would be ideal. I just didn’t know how to do it without making it deadly dull. I mean, it’s my sparkling personality that brings my classes to life, right? OK, well, maybe that’s an overstatement. But things just aren’t as interesting when the instructor can’t react to the student in real time. What to do?
Finally, I figured out a way to use video clips with my voice narrating them. Because a lot of the videos I use in my classroom have a twist or a surprise at the end, I felt like that would compensate for not having the personal interaction. But there was the issue of copyright infringement. I couldn’t use a lot of the videos without permission from the creator. I pondered that for a week or two, and finally found a solution (or a couple of work-arounds, actually) that will allow me to start on the class until I can get it 100% figured out.
So now, I’m working my way through a course I bought about 2 years ago. Here’s a shout out to Amy Porterfield, who is absolutely my hero in creating the course. So far, it’s been a breeze thanks to her amazing step-by-step system. Check out her page here. She’s also got a kick butt podcast, which I’ve mentioned before. It’s taking me step-by-step through the process of building my own course from the ground up.
The Startup Plan
At this point, my plan is to offer a free four-week class. This will allow people to see whether the format works for them, and also help me to see what folks like and what they don’t. The free class will remain available as a lead magnet. In other words, in order to get the free class, you have to submit your e-mail address. This serves two purposes, as I’m sure you know. First, it allows me to get subscribers the course information. Second, it allow me to start building my e-mail list.
Once we’ve gone through the free class, I’ll have another class ready for people who want to continue. Pricing and a lot of things are still in the air, but I’m unbelievably excited about this. I miss teaching French SO MUCH! And as I was sitting around planning the free course this morning, and working on content, I was just so incredibly psyched about how much my students are going to get out of this course. Even if they never pay me a cent, I want this course to be a huge value in their lives and allow them to learn things they wouldn’t otherwise.
Why I’m sharing it
So here’s why I’m sharing. When I read blogs, it really inspires me to see people who have shared their journey from the beginning – the good, the bad, and the ugly. One of my favorite blogs was The Simple Dollar,a blog in which the author shared his story of going from drowning in debt to being 100% debt-free. It really inspired me by showing how small, consistent steps can totally change a person’s situation. Plus, I just like seeing people succeed, so reading it always made me feel uplifted.
My plan is to let you all take this journey with me if you want. Every two months I’ll publish an income statement with real numbers to let you see what kind of progress (if any!?!) I’m making. If you know me at all, you know I’m pretty transparent. I’m not overly afraid to share my failures as well as my triumphs. So this is my chance to start at the beginning and allow any of you who want, to come along for the ride.
We all want big wins. Run a marathon. Write a book. Break $100K in income in your business. And we often hear talk about BHAGs (Big, Hairy, Audacious Goals) and how setting an audacious goal will push us to achieve more. If you shoot at nothing, you’ll hit it everytime, right? So you’d better shoot for something amazing.
Except, NO.
Those big, frightening audacious goals might actually make you LESS likely to finish your goal! What?
Amy Porterfield for the win
OK, I’m going to take a quick sidetrip here and recommend one of my favorite podcasts to you. Amy Porterfield’s “Online Marketing Made Easy” Podcast is not just about online marketing. It is full of not just marketing stuff and not just online hacks. It’s about running a business and being a person.
So anyway, I was listening to one of her episodes a week or so ago, and I thought, “I’ve just got to share this one.” She was interviewing Jon Acuff whose latest book is Finish: Give yourself the Gift of Done. It follows Start: Punch Fear in the Face, Escape Average, and Do Work that Matters and a couple of others that look good, but I haven’t had time to read yet.
What REALLY helps you finish
So for this book, Acuff actually did research on what helps people finish projects – tough projects like writing a book or losing weight. What he found was that people are actually MORE likely to stick with their project if they set a goal, then cut it in half. The example he gives is losing weight. People who set a goal of losing 10 pounds, then lost 8 were discouraged. However, the people who cut their goal in half, were thrilled. They had totally slammed that goal. And as Acuff said, “I’m more interested in your long-term success than your short term success.”
Starting a business is great. But what I really want for you is to have a viable business that still works with your personal life 5, 10, or 20 years from now. Getting to stay home with your kids for a year is nice, but I don’t want you to have to go back to teaching before you feel ready simply because your finances dictate it.
What it looks like in your life
That’s why I encourage you to take it one step at a time. Don’t implement 5 frugal habits all at once. Choose one and do that until you make it a habit. Then choose another one. Don’t try to give up your morning coffee, prepare all your meals at home, pack lunches, quit going to the movies, and start shopping at consignment shops all in the same week. It will all come crumbling down, and you’ll create an image of yourself as a loser in your own mind. Instead, cultivate an image of yourself as a winner by giving yourself SMALL wins.
In the income building area, this means that maybe that big, hairy audacious goal isn’t what you need. Maybe what you need is to set a realistic goal, then cut it in half. Maybe instead of saying, “This year I want to go from $0 to $20,000 in revenue,” you honor all the work that goes into a business before you ever make a penny, and say, “You know, I’m going to celebrate EVERY time I make $1000. And my goal is to make $8000 this year.” You know, $8,000 isn’t chump change.
It’s not easy for me, either.
Of all the things I have shared with you, I think this is the hardest concept for me. I want to do it ALL. PERFECTLY. TODAY. And then get even better tomorrow. So right now, I have limited myself to one goal for my blog. My goal is to post every week for three months. That’s it. By the time you read this it will probably be a year or so from when I am writing it. Why? Because I don’t have any readers yet. Nope, not even one. But my goal isn’t to get readers right now. It’s to post content that will help my readers. So that when they come, they will find not one or two blog posts that help them, but 20 or 30. And because they find quality content, they will come back again. And again. And again. And – God willing – their lives will change for the better.
When I began offering Spanish preschool classes, I thought I’d never find one with enough parent interest to make my efforts worthwhile. After flying out of the gates with high hopes, I was quickly shot down. It seemed impossible to get more than 4 kids enrolled in my classes. I told myself that the numbers would grow, but they just stumbled along, not really increasing at all. I started to wonder if this business of mine was just a pipe dream or really the viable moneymaker that I had dreamed of.
Well, after several centers and some advice from a friend who has a huge and profitable enrichment class business in preschools, I was able to tweak the formula. Now, I have a set process and timeline that produces higher enrollment numbers and amazing retention. I’ll bet you’d like to skip that learning phase I had to go through, and head right for successful start-ups. If so, here are three tips that turned my start-up process around. You can also get the Countdown to Class timeline I’ve found most effective for opening classes at a new center.
Offer a free class
So you’re getting ready to start a class at a brand new location, and you don’t quite know how to get the word out. You’ve done fliers and parent notes in each cubby, but it just seems as if there should be something more. Have you thought about offering a free class?
A free class can reassure parents that their child will enjoy learning Spanish. It also gets kids super-enthusiastic. (We all know that kids are truly the best salespeople, right?) It is a concrete reminder that a new opportunity is opening up. And it demonstrates right up front that you are interested in providing value. Finally, it is a chance for you to see which kiddos are interested in Spanish and help guide parents so they get the best value for their money.
So what can you do to make this introductory class the most effective?
Require parents to fill out a registration form for these three reasons
At the first few centers I partnered with, I simply offered do a free class for the entire group. I felt like I was truly offering them something of value, and I didn’t want any of the kids to miss out. It was a nightmare. There are three main reasons you should require a registration form.
It will be more like your actual classes
First, the centers often wanted to combine classes to save time. At one center, I ended up with 24 kids in one class. That’s a teacher-student ratio I would NEVER allow in my paid classes, because they would be totally ineffective. Consequently, my free class was totally ineffective. The kids were wild. I had to cut some of my most fun (and most active) portions because I knew that they would dissolve into chaos. My classes came off as boring and I had VERY low enrollment. And by the way, they never grew because the kids had decided my classes were boring based on that one disastrous free class.
Make sure the center director is on board with your Spanish preschool classes
Secondly, requiring registration can save you time. Let the director know that there is a minimum enrollment for the free class. This will encourage the director to encourage parents to sign up. Who wants 6 parents to be disappointed because the group was short 2 enrollments? So, you are more likely to have a set number of enrollments, the director creates a habit of nudging parents to get their registration in, and you don’t have to offer the free class if only 2 students sign up. And here’s a news flash: if only 2 kids sign up for your free class, this isn’t the center that you’re looking for anyway. (It’s good to mention up-front that your free class has a minimum enrollment so parents don’t feel cheated if there is low interest.)
Be able to communicate directly with parents
Finally – and this is the big one – by having parents register, you can get their e-mail address. Having the parents’ e-mail address lets you communicate directly with them. You send an update on how the free class went (more on that later). You can send a quick e-mail reminder on the final day of registration for your paid class. You can send reminders for future classes and quick tips for helping a child learn language at home. Of course, you always want to give them a chance to opt out, but these parents have expressed an interest in having their child learn Spanish. They value education. They are your target market. By sending value-packed information, you can show your commitment to providing high-quality instruction. That allows you to build trust, and THAT is the key to a long-term relationship.
Follow-up with parents (individually, if possible) right after the free class
So you’ve presented a great free class. The kids were into it, you had rockin’ activities, and you can hardly wait for the full session to start. Let the parents know. Send a quick e-mail as soon after your class as possible detailing the songs you sang, the books you read, and how the games went. You might even want to include a link or two to YouTube videos of those songs, if they are available. Convince the parents (in 100 words or less!) that you are an amazing professional and they do NOT want their child to miss out. Keep it positive and low-key, but definitely let them know that you are providing tremendous value.
If possible, make the notes individualized. You probably won’t remember the names of each child, but to the extent that you can, let the parents know not just how “the kids” did, but how Emma or Aiden did specifically. Again, this shows that you are more interested in the kids than in the money. If a child asked a question, or seemed particularly engaged, try to make a note of that child’s name, so you can mention it specifically in your note.
Of course, sometimes a child is truly disruptive or doesn’t seem emotionally ready for the class. I always let parents know that (nicely and tactfully!), as well because I want them to get their money’s work AND I want the other kids who enroll to have a great class.
Parents are interested not as much in the group in general as they are in their very own little angel. The more you can give them specifics, the more they will see you as a resource and not just a salesperson.
In a recent post, I mentioned cutting expenses by adding one frugal habit every month or so. The example I gave was reducing Starbucks trips from daily to once or twice a week. The more I thought about it, the more I realized there was something else there important enough to write about. It’s the idea of making your “splurges” special.
This sounds kind of weird because splurges, by definition, are special. They are a special treat we give ourselves. Originally, the meaning was something a little over the top, something luxurious or costly. The trouble is that for whatever reason, whether it is advertising that encourages us to indulge more often, or the stress of daily life, many of us have “splurge-spread.” What should be a special treat has become something that we do almost every day. We still tell ourselves it’s our little splurge. But it has become a part of our routine.
That’s what happened to me with my Diet Dr. Pepper habit. When I was little I rarely drank soft drinks, even though I loved them. Then when I was out on my own, I started to have my beloved Diet Dr. Pepper more and more often. I wasn’t a coffee drinker, so I’d drink a DDP for my morning caffeine fix. At first, it was just when I hadn’t slept well and needed a pick-me-up. But pretty soon, it was a daily thing. If I forgot my DDP, my day wasn’t going to be a good one. Then, I started having one in the afternoon. I realized I was headed for a two-a-day habit. And it wasn’t something special. It was normal.
So I’ve started to cut back on my soft drinks. (My tastes have changed with maturity and now I’m more of a Coke person.) It’s taken me a long time, but now I drink 2-3 a week instead of 1-2 a day. Here’s the thing, though. My Cokes have become special again. Instead of it ruining my day if I don’t get a soft drink, when I DO get one, it’s a splurge. It FEELS special again. I really savor the bubbles and the sweetness. I notice how good it tastes.
Now soft drinks aren’t super expensive, so it’s not really about the money in that case. It’s about my quality of life. And even though it might seem crazy, having fewer splurges has actually improved my happiness. When I have a Coke, it is a choice, not a habit. And oh my gosh, how I enjoy it. Before, I just took it for granted.
But what if part of it IS the money? What if the habit you decide to change can add $20 a week or more to your bottom line, and make you happier in the process? That would be sweet, right?
So give it some thought. Is there a “splurge” in your life that you don’t even notice anymore? Is it something that could either save you money or could become something special again instead of just part of your daily routine? Try reducing – not eliminating – it. And see what happens. You might find that you like it even better when it is truly a splurge.
And whatever you do – or don’t do – on this front, remember I believe in you. You got this!
No one likes to think about recessions. They can range from unsettling to completely terrifying depending on your financial and job situation. But even if we don’t like them, they are predictable. On average, we have had a recession about every 6 years, which means that we are getting overdue for the next one. And while none of us is looking forward to one, there are several things we can do to make sure that we are on the mildly-concerned side of the spectrum instead of the full-on panic side of the spectrum.
Create an emergency fund
The most important thing that will help the average person weather a recession is to create an emergency fund. However, an astonishing number of people don’t have any money in savings at all. Not a great thing if we’re staring a recession in the face. So the first thing to do is get something in savings.
Many experts recommend an emergency fund of 3-6 months of expenses, although some recommend one as large as 12 months’ worth of expenses. The problem is that it can take significant time to save that much money, and if you aren’t paying off debt, you are sitting on a mountain of cash that you might not even need. At the same time, you may be paying huge amounts of interest each month that will make saving anything at all that much harder.
Finding the right balance
One way around this Catch-22 is to set a certain amount for a starter emergency fund, and then switch to paying off debt. When all debt is covered, then you switch back and finish up the emergency fund. For me, I would have a lot of trouble sleeping at night if I didn’t have at least one month’s worth of expenses saved up. So maybe the logical thing to do is to focus on saving a one-month emergency fund, then paying off a portion of debt, then saving another month, and so on.
If you have read my series on Dave Ramsey’s Baby Steps, you’ll realize that this is contradicting his advice to save only $1000 and then pay off ALL debt before finishing the emergency fund. But there is a reason I don’t like that advice at this exact point in time. We are overdue for a recession. Nobody can predict the future of the financial markets. But it makes me really nervous not to have a little bit of extra money laid aside when a recession – and possibly a big one – is looming.
Pay off debt
OK, so you have decided to get an emergency fund saved up. And you’ve chosen an amount to start with, one that’s enough to let you sleep at night, but not take 6 months to save up. Now it’s time to kick the debt pay off into high gear. For this, definitely start with your smallest debt. Why? Because every debt that you pay off is one less payment you’ll have if you get laid off. Even a reduction of $50/month in minimum payments can reduce the stress and make the emergency fund go a little further.
So this is what you do. Make minimum payments on everything but your smallest debt, and pound that sucker. Pay it off as quickly as you possibly can. Don’t eat out. Don’t splurge. Don’t buy ANY new clothes. Put every extra penny toward paying off that first debt. When the littlest debt is paid off, take that minimum payment, add it to the payment on the 2nd littlest, and pound that one.
You might not get all your debts paid off before a recession hits. However, you’ll be in a much better position if you have an emergency fund (even a small one) and have started paying off debts.
Once you’ve paid off a few debts, you might want to re-assess. Does your job seem stable, or is there trouble on the horizon? If it seems stable, you might want to stay the course. But if there is talk of a RIF at work, or if your partner’s job seems shaky, you might want to increase the emergency fund a little more before you pay off any more debt.
Create a side hustle – or two
This one goes hand in hand with the others and will help them to go a lot faster if you do it right. Start a side hustle or a small business to amp up your income. That gives you more money to put toward your emergency fund or your debt. The important thing here is not to spend too much money setting it up.
And the good news is that there are a lot of side hustles you can get going fast with very little investment. Here is a list of “high-dollar” side hustles – side hustles that allow you to make $20 or more an hour. If you’d like to get the real scoop on VIPKID, you can check out my interview with a friend of mine here. She’s been doing VIPKID for almost a year and it really works for her. Shoot, for a month or two, you could just deliver pizzas or babysit. But if you are serious, get out there and do something to earn cash and speed up the rest of the plan.
If you can earn an extra $300-$400/month, everything else is going to go a TON faster. You’ll build your emergency fund faster and pay off debt faster, too.
There is one SUPER important thing to remember here, though. Any money you make from a side hustle might not have taxes withheld, especially if it is a small business you start on your own. Make sure to put about 25% of that money back so Uncle Sam doesn’t surprise you with a big tax bill next April.
Update your skills
If you feel like your job isn’t as secure as you’d like it to be, updating your skills might be a higher priority than a side hustle. Now, I love extra money coming in. But what if you are worried that your company isn’t doing so well or that you might be one of the first to go in case of a downturn? Getting a few new skills under your belt might be more important than immediate income. Focus on skills that would make you more valuable in your current job or more marketable if you needed to go job hunting. Computer skills are always a good bet, but if you are almost proficient in a foreign language, that might be a good choice, too.
Again, spending an arm and a leg isn’t ideal. But you can get an absolute TON of learning for free online. Check out this list of the 10 best sites for FREE learning. Or this one for specific IT courses.
Check your monthly bills
Besides earning more money with a side hustle, you can also cut your monthly bills to find more money. In case of a recession, it will help to have lower monthly expenses. And in the mean time, you will have extra money extra month to put toward your emergency fund or toward debt.
It seems totally overwhelming and a lot of people don’t know where to start. But I’ve got a plan. Start by assembling all of your monthly bills and statements. Check your statements to find subscriptions or monthly charges you might have forgotten about. Then start calling. If you can cancel the charge (like with a gym membership you rarely use), do it. But if you can’t cancel it, see if you can get the charges reduced. If you get even three bills cut by $15/month, that adds up to $45/month total.
Choose and implement 1 new frugal habit
One of the things that trips a lot of us up when we want to reduce spending is feeling like we have to reign it all in at once. We rush in, slash like crazy, and then give it up after a week and a half because it’s just too overwhelming.
Let’s not do that, K? Instead, pick one item, JUST ONE in which you could make some cuts. Then create a plan. Do you buy coffee at the Starbucks near your office every morning? Could you cut it to just one morning a week? Depending on your order, that alone could save you $60-80/month. How many times a week do you eat out? Reduce it by one, just ONE per week and stash that money.
Again, I’m sure you have a LOT more ways you could cut expenses, but pace yourself. This ain’t no sprint. It’s a marathon, Honey! Give yourself time to really solidify one frugal habit before you rush into another one. My suggestion would be to aim for no more than one new money-saving habit every 2-4 weeks. You want it to become so routine that it doesn’t takes almost no willpower at all to continue it. That way, when you add another habit, the first one doesn’t shrivel up and die.
So if a recession does come our way (and it WILL, the question is only “when?”) you’ll sleep so much better at night if you’ve put yourself on solid ground with even one of these tips. Don’t overwhelm yourself by trying to do all of them at once. Think about what is realistic for you, do that, and then pat yourself on the back.
One of the side hustles you hear about most is teaching English to students overseas, principally in China. This can be a great side hustle for teachers, or if you need to replace only a portion of your own income in order to stay home with kids, this would be an option to actually help you bridge that gap. Here is a link to their teacher website, so you can check out the basics.
I wanted to get the scoop from someone I know and trust, so I called my good friend Julianne. She has a strong entrepreneurial streak and previously started and ran her own paint-your-own pottery store. She has since moved away from that area. VIPKID allows her to work from home and keep a flexible schedule. If you decide to give it a go, her referral number is http://t.vipkid.com.cn?refersourceid=e01&refereeId=4058854. and I’m sure she’d love for you to use it.
How long have you being teaching for VIPKid?
It’s been just about a year now. I started in Oct. but my shedule wasn’t full until after Chistmas. That’s fairly typical. About 2 months to get your time slots filled.
In an average week, how many hours do you work for VIPKid?
15-20
What was the hardest part about getting started?
Probably just getting familiar with their format. Their teacher portal and also all the lessons. Just getting in the rhythm . There are at least 7 different levels and within each level there might be 100 different lessons. Just getting in the flow of what’s in the lesson – what you’re going to need. And then the tech stuff. Is the webcam working? That stuff is super important. They’ve been updating a lot because they’re getting so many new teachers, so just getting that figured out.
About how much do you make an hour?
$20/hour. Everybody has a base pay. My base pay is $8 per 25 min lesson. As long as you show up on time you get an extra dollar, and if you teach at least 45 classes per month, you get an extra dollar. So that makes it $20.
How much do you make from bonuses, like referrals and special promotions?
Not much really. I think if I worked more hours I would. There are certain prime time hours that I can’t work because I am getting the kids ready. But sometimes they will give a bonus if you open up all those slots.
I haven’t really done much on the referrals. There are other opportunities within the company. They have stuff like teacher mentors and curriculum development. You can move beyond just teaching , but I don’t know much about it.
What do you like best about VIPKID?
The flexibility. Most of the kids are really fun and they take their lessons seriously. I like to be able to work at home. I can sit in my little office in my comfortable clothes. Once you get into the rhythm of the lessons, it’s pretty easy.
If you could change one thing about VIPKID, what would it be?
Maybe that the Parents can rate the teachers. So every class you teach, you can get 1-5 apples. If you don’t get a 5 apple, you aren’t eligible for some things and if you don’t have a perfect 5 rating other parents might not book you. If there’s a kid misbehaving and you reprimand them, they can give you a low score and theres nothing you can do about that. VIPKID isn’t very flexible about the evaluations. Sometimes it’s a little difficult to correspond with VIPKID about stuff like that.
Who would you recommend VIPKID to? In other words, what would you consider to be their ideal recruit?
Someone that really enjoys working with kids. Somebody that can have a little bit of an understanding of the culture, especially regarding education. Why the parents are putting their kids through this education. They are spending a lot of time and money on these lessons. Someone who is energetic and patient and understands that it can be challenging to learn another language. You don’t have to be a teacher but need to have experience teaching children in some way.
Other options
So there you have it. Since Julianne and I are such good friends, I have heard about her VIPKID journey from the beginning, and I know it has really made a difference for her. If you want to try a side hustle, but don’t think VIPKID is the one for you, check out our post on other high dollar side hustles that can net you well over $20 an hour.
A couple of years ago, I was fortunate to attend a business workshop in Nashville, Tennessee. It was two days so packed with business education that I thought my head would explode. Several of the sessions have since faded from memory, but a few have stuck around and changed something notable about how I do business. One of those was the presentation by StoryBrand. You can check out a couple of free videos here at the StoryBrand website.
Now, StoryBrand charges over $2,000 for their in-person workshops, so the chances that I’m going to be able to do as good of a job as them are slim to none. But I can tell you one simple idea that make me not only think, but also take action to make my branding more customer centered.
Here’s that idea: You are NOT the hero of your customer’s story. Your customer is the hero of their OWN story. And you are the guide.
It’s about connection
Here’s why that matters for selling stuff. Many of us know that we need to make a connection with our customers (or potential customers), and we try to do that by sharing our story with them. On the surface, it seems like a great idea, but we are missing a very important part of the puzzle. It’s so obvious, and at the same time so easy to miss.
Our customer doesn’t care about OUR story. They care about THEIR story. We’re all that way. We want to know what’s in it for us. Not because we’re horrible people, but because in order to survive and thrive, that’s what we have to do. We have to solve our own problems, not everyone else’s.
So if your ads, flyers and, and customer communication isn’t based around THEIR story, it might make them say, “Oh, that’s kind of cool.” But it’s a lot less likely to get them to buy from you.
The customer is the hero of their own story, so make it about them
Let me give you an example. Imagine a company that sells hand-made leather wallets. Their site’s landing page is all about how the founder’s grandpa, great-grandpa, or great-great grandpa founded the company on quality materials, integrity, and superior workmanship. It’s a cool story, but it doesn’t make you buy. They are the hero of the story, and you don’t really see your place in it.
On the other hand, imagine that same landing page paints an image of a friend of yours pulling a wallet out of his pocket for years, and each time treasuring the fine workmanship and noticing the softness of the leather. Then a smile spreads across his face as he remembers how you were the one who gave it to him for their retirement, or graduation, or other special life event, And then he starts thinking about all the special memories the two of you share. That wallet is a symbol of friendship, shared memories, and of course, your impeccable taste. Suddenly, YOU are the hero. You have a place in the story. Shoot, it’s not the company’s story anymore, it’s your story. They are just helping you get there.
Do you see the transformation there? Even if you don’t buy today, the chances are much better that the story –which is now YOUR story – will stick in your brain and that the next time you need a super special gift, you might return to that site and actually make a purchase.
My own StoryBrand re-write
So let me give you a real-world example. Prior to hearing the StoryBrand talk, the headline on my flyers was something like “Spanish Classes starting soon. Register today.” I know. The creativity! The poetry! How did I ever come up with it? Amazing huh?
After I stori-fied it? “You can give your child a ticket to the world. We can show you how.” I might be biased, but I think the second one is a ton better, because the parent is the hero. We are placing the emphasis on them, and my company is just a helper. It also subtly places us in the role of a trusted adviser, an expert of sorts, which is exactly how we want them to see us.
Now, I’ll be honest. I was a small business and I didn’t do A/B testing to see which tagline was more effective. So it might have made absolutely no difference in sales. I don’t know.
But placing the customer at the center of our tagline made a difference in me! Every time I saw those flyers, I remembered what our role was – a valued and trusted guide to parents who want their kids to learn a language. It made me fiercely protective of my customers because I was their guide. They were trusting me to show them how to help their kiddos in a way that they couldn’t. It was a powerful psychological shift. And that truly impacted how I dealt with them.
Your journey
Since then, I always try to make my customer the hero. I hope you feel that as you read my blog. Obviously, the examples are from my own life. But the blog is meant to be about you. About helping you to create the life you want through improving your personal finance and/or through teacherpreneurship. About helping you to create options for you and your loved ones. About you living your best life on your own terms.
After teaching high school for 17 years, I was pretty apprehensive about going cold turkey to preschoolers. I mean, high schoolers actually get jokes. And they have an attention span of more than 32 seconds (some days, although not always). I did have preschoolers of my own, and a sister and a best friend who were firmly in the early-ed end of things. But seriously, I could think of about 1,842 ways that I could totally screw this up.
So while this is certainly not the last work on the topic, I wanted to take a little time to share with you some of the most important lessons I learned when I left my adolescents behind an ventured in the much cuter, much more terrifiying (for me) world of preschool.
Be flexible.
This one is common to both ages, but possibly even more important in working with the littles. While older kids have more or less learned to function in a school setting, the littles aren’t necessarily there yet. A rainy day, a special activity, a sunny day, a friend being absent, a friend being present – all of these can send a student (or possibly your entire class) into a tail spin.
Honestly, I dreaded rainy days. It just seemed like the kids couldn’t concentrate as well. So if it turned out to be rainy, I almost always cut a storybook and added a song or two. Luckily, I didn’t have to cover a set curriculum, so I had the freedom to do that. And it really helped save my sanity.
And sometimes it worked the other way. After 15 minutes of trying to get them to chill and listen, we finished a book and were supposed to do a moving game. But they were sitting and listening SO well, I wasn’t about to lose that opportunity. So I’d get out another short book while they were in the mood, even if it mean breaking my “5 minute activity” rule. Occasionally I would regret it, but there’s no law that says you have to finish the book. If they lost interest half-way through, I’d say, “Hey. I think you are tired of reading. Let’s do something else.” And then it was time for the game.
So while you know rule #1 with older kids, it’s even more important with littles. Have a back-up plan. And a back up plan for your back-up plan. And a … well, you get the picture.
Give yourself time to get it right with preschoolers.
My first class was a nightmare. Really. I dreaded seeing those preschoolers. I tried everything, but it just didn’t seem to work. But I just kept reminding myself that it was, after all, my firstpreschool class. My second group went better. And my third was even better. Obviously, I never became the preschool whisperer, but it got to the place that I actually looked forward to seeing my cute little goofballs. And I think they looked forward to me, too.
So if you don’t get it right away, don’t be surprised. That’s part of the deal. Keep at it. Just keep learning every time you see the little darlings.
Movement, songs, and games are your friends.
This may go without saying, but it’s about the most important advice I can give, so I’m going to say it anyway. The less kids are concentrating on the language and the more they are concentrating on FUN, the better it is for everyone. So when you’re learning to count, count stuffed animals. Or count your jumps as you jump across the room. The less your classes feel like learning and the more they feel like play, the more engagement you’ll have. And – ironically – the more they will learn!
Short, short, short.
My rule when planning was to never count on any activity to last more than 5 minutes. So if we were going to read, I counted on a four-minute activity. (And that doesn’t mean sing one song for three minutes, then sing another song for three more minutes. It means completely change activities.) Then we’d sing. Then we’d do a movement game. Then we’d sing again. More reading. Then moving. Then another book. By that time, it was time for the good-bye song and stickers. As I mentioned above, sometimes I broke this rule if the kids were really engaged in a certain activity. However, I never plannedfor any one activity to keep their attention for longer.
Few words on the page, lots of discussion.
In an upcoming post, we’ll cover some of my all-time favorite books for preschool. But in the mean time, just let me tell you that they will all have something in common: very few words. “But Jill,” you might be thinking, “How are they going to learn if they don’t hear the words?” By responding to questions. For example, with on of my favorite booksEl Canguro tiene mama?there is only one short sentence on a page, but here is an example of the discussion we can have about it, all with very elementary vocabulary.
Teacher: Is the mom big or little?
Kids: Big.
T: Yes, the mom is big. Are the babies big?
K: No. Small.
T: Yes, the babies are small. Is YOUR mom big or small?
This exchange about big and small can be followed on the next page by questions about what the animals are doing, how many babies there are in the picture, how many mommies there are, is it the mommy or the daddy in the picture, where is the mommy (or the daddy), and do you like this animal?
You’ve still got to read your audience and make sure you are not boring them, but in my experience, kids respond a lot better when they are taking part in a conversation about the book than when they are just passively listening.
Praise, when possible.
It’s hard to remember, but kids often do better when you praise the ones who are behaving well instead of reminding the ones who aren’t. Our first instinct is often “Simon, sit down please,” or “Amari, please listen.” Instead, try calling attention to the kids who are sitting and listening already. “Maria, I love how you are using your listening ears,” or “Andy, you are sitting so well and keeping your hands to yourself. Nice job,” reminds the kids how to behave without calling anyone out for having trouble. It won’t work every time, but I found it to be particularly helpful with preschoolers.
Small groups – NO MATTER WHAT.
If you are starting your own business, please do yourself this favor. Keep your groups small no matter what. If that means splitting into two different classes or even starting a waiting list, do it. As you are getting your feet wet with preschoolers, you are going to make mistakes. That’s just a fact. But mistakes are multiplied in large classes. And they can make you really, really miserable! I didn’t let my classes get above eight, and that one thing helped me retain what little sanity I had left.
This applies even to one-offs. If you are doing a free class, don’t let the center persuade you to have a class that’s twice what your comfortable with. You won’t be able to do as much fun stuff, and it may actually hurt your enrollment since kids will think Spanish is boring. (Um, and they might get the idea that the Spanish teacher is grumpy for some strange reason, too.)
Cut your losses.
This doesn’t happen very often, but sometimes you’ve just got to cut your losses and close a class down. The very first class I started seemed promising at first, but the bottom line was that it just wasn’t working out. I had low enrollment, the management was a bit disorganized and completely unhelpful, and the kids didn’t behave well. I tried everything I could think of, but I finally decided that I was done. After thinking up a suitably diplomatic way to phrase it, I quit offering the class, and I was SO much happier. I found another center where the enrollment was higher, kids were amazing and fun, and the management actually had it together. Plus, my life got better just because I didn’t have to deal with that one group of kiddos.
Remember, part of the beauty of owning your own business is that you can make calls like that. So do it. If it just isn’t flying at a certain place, let it go. That location that isn’t working out might be keeping you from one that is amazing.
We all love our families – that’s a given. Usually, everything we do is for them in one way or another. Cook food – yup. Earn money – yup. Go to Disney – yup. Pretty much everything is meant for their benefit, either directly or indirectly. And yet, many of us don’t do the one thing that could prevent their lives from being a living hell in the time when they most need us.
Why? Because it is boring, mundane thing that seems like a useless hassle. I mean, we’re not planning to die. Yes. You read that correctly. This is something that we complete in case we die, in which case, they will be the very last act of love that we can ever do for our kids, or spouse, or whoever we leave behind. And it is indeed boring and a huge hassle. But not nearly as much of a hassle as our family will deal with if we die without it. So let’s take a quick look at the most boring thing you can do to show your family you love them: life insurance
Repeat after me: portable, 10-12 times annual income, guaranteed level term life. OK that’s all you need to know. Next topic.
Portable
Just kidding – kind of. Those three things are literally all you need to know, but you might like a little more detail than that, so here it goes. Your life insurance needs to be portable – in other words, it shouldn’t be tied to your employer. A lot of employers provide some life insurance, and if it’s free, great. But do NOT count on that. There’s a simple reason why.
Let’s say you are seriously ill. Like, sick enough you can’t work anymore and you leave your job. If your only life insurance is through your employer, it is gone, too. “Well, no worries, I’ll just get life insurance someplace else.” But will you? Will you qualify? Will you be able to pay for higher premiums? Or will you be out of luck just when you need life insurance the most?
That is why life insurance needs to be portable. It means more hassle when you get it because you will probably have to get a mini-physical and you’ll have to research it yourself to get the best rate. (Hint: apply with several companies because different insurance companies rate things way differently. Slightly elevated cholesterol numbers might not be a big rate changer with one company, but could jack prices way up with another.)
10-12 times annual income
When buying insurance, you should shoot for 10-12 times your annual income. For example, if you make $50,000/year, you should have between $500,000 and $600,000 in coverage. If you make $150,000/year, you should have between $5 million and $6 million in coverage. It sounds like a lot, doesn’t it? But here is the reason.
You should have enough insurance that you could invest it and the income would replace your income. Usually, 10-12 times your income, if invested well, will do that. That will allow your family to survive without your income, even if your kids are very young. They would never have to worry about the money running out.
Guaranteed level term life insurance
Next up, term life. For people not in the insurance industry or who are not financial geeks like me, (I really get into this stuff!) insurance can seem totally incomprehensible. But there are only two things you really need to know about the type of insurance to buy. First, buy term life insurance. Secondly, your insurance agent is going to give you 500,000 reasons that I’m wrong and you should buy some other kind of insurance. But don’t listen. I’m right. They are making commission. If you are ready to trust me on that, you can quit reading now. If you want a little more information on why I say those things, read on.
Term Life vs. Whole Life
There are basically two types of life insurance – term life and whole life – with some sub-categories. Term life insurance is just that. It is insurance that you buy for a certain period of time, usually a term of 10, 15, 20, or 30 years. If you die during the term, it pays out. If not, it doesn’t.
Whole life is life insurance that never expires (as long as you are paying the premiums) with a savings component built into it. It will cover you your entire life, you can borrow against it, and it actually has a savings component, so that its cash value accumulates. “Hold on just a second, Jill,” you may be saying. “That sounds like a WAY better deal. Why on earth would anyone go with a chintzy term life that expires when whole life offers all these benefits?”
What is insurance for?
And the answer to that question lies in what insurance actually does for us. What is life insurance for? Well, it is to ensure that anyone who is depending on us financially isn’t left in a big mess if we die. Kids, spouse, anyone who needs your income – that’s who life insurance is for. And it’s purpose – its SINGLE, SOLITARY PURPOSE is to provide for dependents.
It is not intended to be a savings account, an investment, or a bank to borrow from. It’s just to make sure that your family isn’t totally screwed if you die. And all those other bells and whistles? What do they hurt? Well, they cost money – a LOT of money. And they don’t do any of those extra things well.
Why your insurance agent desperately wants you to choose whole life
Whole life insurance can cost 10 times what term life does. I don’t know about you, but I’m not eager to pay ten times as much for anything that doesn’t provide a super-benefit. And one of the reasons that it costs so much is related to the second thing you need to know: your insurance agent is going to be convinced you are making a huge mistake if you don’t get whole life or some type of insurance other than guaranteed level term life. One of the reasons it costs so much more is that your insurance agent is going to receive a much, much bigger commission if he sells you that.
Now, I’m not dissing on insurance agents. Most of them have been trained to believe that whole life is really the way to go. Their company has a huge incentive to convince them to sell more expensive policies, but that doesn’t mean they are right. However, because they have been trained to believe it, they are going to give you 500,000 reasons that they are right and I am wrong. So no matter what arguments they throw at you, you just pat them on their little head and buy guaranteed term life. Then take the extra money that you WOULD have spent on whole life, and use it to get your financial life in order. Pay down debt, get that emergency fund in place, and invest the extra. If you do those things, it’s almost guaranteed that you will be better off by buying guaranteed level term life. If you take the extra and go to Disney? Well, then I can’t promise you anything.
But my agent says I will lose all my money if I buy term life and don’t die
Not really. Let’s go back to why we are buying insurance and fill in a little more detail. You buy insurance (of any kind) to transfer the financial risk of losing something from us to another entity. What’s the financial risk if your house burns down? You will have to pay for another house. What is the financial risk that is covered by health insurance? The need to pay medical bills if you are sick. What is the financial risk of dying? Your family will lose the benefits of your labor and the money it might have earned.
So when your agent tells you that you will have wasted your money if you buy term life and don’t die, he is referring to the small amount of cash value you would build up if you had whole life. But remember, you are not paying to build up cash value. You are paying to make sure that whether you die or not, your family is financially protected. If you don’t die, your family is protected – by YOU. Your income, your work, your effort. If you do die, however, your family is protected from financial devastation by the insurance. You got what you paid for either way – a family that is financially safe.
Just do it
So those are the only three things you absolutely have to know before buying life insurance. There are a ton of other boring details that geeks like me just love. If you want to know everything about insurance, you can check out any of these links. This one is great to find out if you actually need insurance. But if not, now you know the basics.
PS Do me a favor. If this post moves you toward getting life insurance, please post below letting me know. It would make me really happy to know you have taken the time to make sure that your family will be OK if anything should ever happen to you. If you don’t know where to start, check out this page of independent insurance agents. I don’t make money from you clicking on this link – now or ever. But being an insurance affiliate is big money, so be careful out there. Some web sites prioritize their profit over your best interests.
Whew! This is the point where you are really getting a handle on this whole personal finance thing. You have paid off all debt except your house, so you should have some significant wiggle room between your income and your expenses. You are starting to see yourself as a winner in the money game, and it’s true! Now it’s time for the final step of your financial foundation: 3-6 months worth of expenses in a safe savings account.
Why do you need that much in savings?
Now that you have extra money every month, isn’t it enough to just avoid debt and pay cash for your splurges? Well, having 0 debt does put you miles ahead of the average American, you’re right. But you’re still a few hundred yards away from the short-term financial stability finish-line. So don’t stop running quite yet.
The next and final step for short-term stability is having 3-6 months of expenses in an easily accessible savings account. This is your emergency savings in case life suddenly gets a little too real. I hope that this step is a complete waste of your time. And for a lot of you, it will be. But the truth is that some of us will face an unexpected job loss, a short-term disability, a seriously ill child, or any of a hundred other things that can turn your life upside down. And for those, this will be one of the most important things you can do to make the hardest time of your life a tiny bit easier.
Three to six months’ savings won’t protect you from every tragedy that exists, but it will cover the vast majority of them. And even more important, if the tragedy is even worse, it will give you some time to get your sanity back after the initial shock. It gives you breathing space while you grieve. It allows you to concentrate on the people who need you, instead of “How on earth am I going to pay the bills next week?” Having that buffer savings is a favor that you will NEVER regret doing for yourself if the unthinkable happens.
How do I get my savings to that level?
This should be pretty easy. You have been paying off debt at a rapid rate by really throwing every extra penny at the debt you have. Well, now you can splurge a little to celebrate that accomplishment. (And by splurge, I mean a weekend get-away or a special but smallish new shiny thing – NOT a cruise around the world or a Ferrari!) And after the splurge, that extra money in your budget that you used to send to the credit card company or whatever creditor you were paying off should immediately head toward the nearest savings account. Just take the money that you were already putting toward debt repayment and send it to savings.
Where do I keep my savings?
The big thing here is that this is an EMERGENCY fund. In case of emergency, you don’t want to have to do something super complicated to get your money. So just put it in a money market account or a savings account. “But Jill,” you say, “This is gonna be a chunk of cash. Wouldn’t it be better to earn a little something on it?”
NO. No it wouldn’t.
And this is why. That’s not its purpose This is not money that is intended to earn interest. It’s money that is going to save your butt if something bad happens. You will invest in the next step. You will invest for the rest of your life. The money you invest will make you rich. But this emergency savings is not investment money. It’s “in case of emergency” money.
Don’t be penny wise and pound foolish with this money. Just put it somewhere safe!
What if I’m a spender and don’t trust myself to keep it?
Ahhh, great question. If you are afraid that you will lack discpline to keep that money sacrosanct for a true emergency, then put it at a separate bank from where you keep your checking account. Maybe a bank where you don’t have your electronic login info memorized, so it’s a hassle to use it for an impulse buy. You just want to be able to get to it without TOO much trouble if you you should really need it.
How much savings?
Three months’ expenses? Six months’? Or somewhere in between?
And the answer: it depends. This is based on several parts of your personal situation.
The first issue to get an actual number for your monthly expenses. How much do you realistically spend on non-negotiable in a month? Include housing, utilities, gas, car maintenance, food, and other essentials. However, you can probably skip any frills like lunches out. Just add up what it would cost you to stay afloat for one month, bare bones. Once you have that number, we’ll figure where in the 3-6 month range you should aim.
How much stability do you need?
When I was single and childless, I was a risk-taker. I figured the worst that would happen is that I would move back in with family for a few months. Now that I have a family and live in a different city, I need more stability. It would be a tremendous disruption to pull my kids out of school. That not only means we couldn’t relocate on a whim. It also means I wouldn’t want them to know that we were having financial trouble. My kids are worriers, and it would be important for them to see our lifestyle going on more or less as they were used to before. So stability is a huge need for us at this point in our lives. We wouldn’t even want to cut too far into the extras unless it got pretty bad. This points us to the upper end of the range.
Next question: How stable is your income?
If your income is strongly commission based, or your company has a history of layoffs, you will want to shoot for six months of savings, maybe even more if you have a family. On the other hand, my husband and I are both in incredibly stable jobs. I’m a teacher with great evaluations and many years experience in this district. My husband is a lawyer for the state in which we live. Plus, we could live on either one of our incomes if we absolutely had to. This points us to a lower savings amount.
Last (and most important) question: What is your comfort level?
Don’t discount your own emotions. If having six months’ worth of expenses in savings just makes you feel better, then by all means do it. If the other two questions indicate that you could go with less, and you don’t lie awake at night worrying about it, cut it down to three.
For us, even though our jobs are so stable and we have extra in the budget, I grew up on a farm in the 1980’s. And even though we made it through, losing the only home I had ever known was a very realistic fear for me. So we stick with the 6 months plan.
Ok, so now you’ve got the final step in your foundation. Next week: building on that foundation to create financial independence.
I am a money mentor, not a financial planner. While I can provide good, general information, your situation is specific to you. Always do your own research or speak with a fee-only financial planner about your personal circumstances.
This post may contain affiliate links. When readers click on them to make a purchase, I earn a small commission. However, your trust is more important to me than any commission, so I only recommend tools and services that I believe can help my readers.
A Four-fifty What?
I’m a personal finance geek. I actually LOVE blogs and books and podcasts about budgeting and savings and planning for retirement. So I kind of freaked out when my sister asked if I’d ever heard of a 457 and I hadn’t. (She’s my little sister, and LOVES it when she knows more than I do – which of course, is quite rare! 😉 )
After looking into it, I realized that 1) it was a real thing, not a hoax, and 2) it could seriously change a teacher’s financial life.
So what is a 457(b)?
It’s a deferred-compensation plan. Yep. I know. That helps exactly not at all, doesn’t it? Ok, here’s the Cliff Notes version. You choose to have a portion of your money put aside before you ever see it. It comes out of your paycheck like taxes or insurance payments, and you just see a line item on your pay stub telling you that it got deducted. (Yeah, I know. So far, it sounds WAY less than enticing. But it gets SO much better.) Then it is put into an account for you, much like a retirement account. You can choose to take this account and draw from it whenever you leave that employer – here’s where it gets good – EVEN if you are not at retirement age.
Um, what’s the point?
So I imagine that you might be thinking, “Um, you want me to get excited about not getting my pay until years later? I could put it in a savings account of my own and at least have control of it. You’re not the brightest knife in the drawer, are you, Jill?”
But WAIT!!!!! This is important. They take this money out pre-tax and when you withdraw it, it will be taxed at your tax rate at that point. This means two very important things are happening. First, that money is going to grow tax-free until you need it. So you will be making money on what you would have otherwise already paid out in taxes. Sounding a little bit better? Second, when you withdraw it, it will be taxes at your current (at that point in time) tax rate, which could be significantly lower if you are no longer working.
So you say it can help me leave teaching?
So let’s say you want options.
Maybe you are ssssooooo close to retirement, but need a few hundred extra dollars a month to make it work.
Maybe you have already decided you don’t want to go back to teaching this fall, but you want a little extra cash cushion in case you don’t find a job right away.
Maybe you are thinking about having kids and you’d like to be able to take a couple of years off. Or you want to have another kid, but you don’t think you could afford the childcare for two (or more).
Maybe you’ve always wanted to start your own business and you’re thinking you might want a couple of years away from teaching to try that.
Or maybe you have always dreamed of just taking some time off and living overseas or traveling around the country in an RV while homeschooling your kids, (That idea absolutely makes my hair curl, but different strokes for different folks, you know?) or after the kids are gone to college (much less-terror inducing for me).
If the rest of your financial house is in order, a 457 could be a tool to get you to any of those dreams.
What a 457 allows you to do, is not collect your pay now, but collect it at any time in the future after you have left your current employer.
Show me the money
The 2022 limit is $20,500 per year, but people over 50 who have not maxed out their contributions can put in an extra $6500/year, for a total of $27,000/year. I realize that most of us can’t spare $27,000 a year (or even $20,500), but remember, this money is pre-tax. That means it’s still going to make a dent in your paycheck. However, the dent will be about 20-25% less that what’s going into your account. Depending on your particular tax situation, you could deposit $1000 into your account, and only see your take-home pay drop by $800.
And you don’t have to put the entire amount it. You could put $4000/year in. Over several years, that could add up to enough to allow you to take some time away from teaching or even to retire earlier than you thought.
What’s the catch?
This is the big one. You have to be a government employee (like a public school teacher, firefighter, or police officer) AND your employer has to offer the plan. Not all of them do. However, if your spouse is government employee, the 457 could apply to them, too.
Also, the employee has to actually leave the job at which they have the 457 account. It can’t be a leave of absence.
But here is the big issue, and why I recommend you do your own research or talk to a professional. Whatever money you put into a 457b and take out is money that isn’t available for retirement later. Given the state of teaching at the moment and how many teachers’ mental health is declining, that might not be your primary concern. But whatever choice you make, I want you to have thought through both short and long-term issues.
How the 457 (b) worked for us
When we realized we were really going to go all in on this crazy adventure and move to Norway, we started re-evaluating our finances. One part of that was for me to go back to work full time and stash my salary in savings. We opened a savings account with Huntington Bank (which honestly was a great bank to work with) and my salary was direct deposited in it to remove all temptation. We didn’t even have a check book because we didn’t want to be tempted to use that money without a really valid reason. It worked fine, but of course all of that money was taxed before it went into the account.
When we found out about the 457, I started investigating it hard core. I was all about it. However, my employer didn’t offer it as an option, even though it was one of the largest school districts in the state. However, my husband worked for the state government and upon some further checking, we found out he was eligible. It was quite a pain to get set up, and it took us several months. However, because we were living off of only one salary anyway, once he got the paperwork done, we chucked about 80% of his pay in the 457 and just lived off of my salary instead. That allowed us to put the maximum amount away before we moved. By my figures, that gave us an extra $6K or more than we would have had if we continued with the original set up.
How it could work for you
Let’s say you are wanting to leave teaching for a few years – or forever. You have dreams of moving overseas or starting a small business or staying home with the kids. Saving money in a 457 account could help you in a couple of ways.
First, it allows you to save more since you are saving pre-tax dollars. Unlike a 401K or the retirement account, you can receive the money at any time after leaving your employer. (Remember, you have to actually resign, not just take a leave of absence.)
Second, if you do leave teaching, your income will most likely go down. So when you pay taxes on it, you will pay a lower rate. Third, you get to decide when to withdraw the money. For example, if you start a small business, and you start making enough income that you don’t need to withdraw it, you don’t have to. It can continue to grow tax-free until you DO need it.
This is ABSOLUTE BASIC information on a subject I had never really been familiar with. I have checked all this information with my accountant for accuracy, but I am NOT an accountant, and I could have missed something or messed something up. So – disclaimer alert – definitely consult your own accountant or tax professional before you jump into a 457.
If you were trying to swim across a lake with an anchor, and you weren’t sure you’d make it, what’s the first thing you would do? Drop the anchor, right?
Yet in personal finance, we often carry around a huge anchor for not just years, but decades. Sometimes we don’t even realize we’re carrying it because everyone else in our lives has always carried anchors, too. What’s that anchor?
Debt.
Yes. For many people, debt is an anchor that will absolutely prevent them from getting to where they want to go financially. Why? Because we spend a ton of money making payments. Think of every payment you have now or have had in your life. How much money would you have to work with every month if you didn’t have those payments to make?
“OK, Jill,” you say. “Sounds great. But if I knew how to do it, I probably would have already done it.” Yes, it’s easy to say, but not easy to do. But then again, teaching isn’t easy either, is it? And you’re KILLIN’ that! So I know you can do things that are tough. I know you’re not a quitter. And I know this is worth the effort.
Again, these are not my ideas, they were formulated by Dave Ramsey. But this is my personal take on the system he used.
Kill debt with emotion, not logic
In getting rid of debt, like most things in life, your emotion matters more than logic. So we’re going to put your debts in an order that will give you some quick wins and really allow you to see some fast progress. Make a list of your debts – credit cards, car loans, student loans, medical bills, loans from family and friends, payday loans, EVERYTHING except the house. Include the name of the debt, the total amount, and the minimum payment you have to make each month. Then put them in order from the smallest amount owed to the largest amount owed.
Dumping the Debt – smallest to largest
Once you have your $1000 emergency fund (for more on saving $1000, click here) and your list of debts, you continue paying minimum payments on all of your debts. But stop EVERYTHING else. Stop the money that goes into your retirement. Stop buying new clothes. And stop eating out. Get rid of everything that is not absolutely essential.
At the end of the pay period or month, you scrape up all that extra money you have and put it toward the first (smallest) debt on the list. With any luck, you’ll knock this one out right away. When you’ve paid off your first debt, you take that monthly payment and you put it toward the second debt on your list, along with ANY extra money you can find. (Check the couch cushions one more time. Raid the cup holder in your car!) Now you are making a bigger payment on that second debt each month, and it should disappear pretty quickly. You repeat this process until you have worked your way through every debt.
That “until” could be a big one. Like 2-3 years big. Two to three years that might feel like 2-3 decades. But what would it mean to you to have NO payments? NO car payment. NO credit card bills. NO student loan. What would your life look like if you paid your mortgage, utilities bills and were DONE? I’ll bet for most of us, it would be a lot different. A lot more joyful. A lot less stressful.
Would it be worth it to sacrifice – REALLY sacrifice for a while to give yourself options? To give yourself freedom?
Again, for those in the back – It’s emotion, not logic!
If you are a math geek, you are saying to yourself, “Lowest payoff to highest? NO WAY! If you put it in the order of lowest interest to highest,you’re going to save all that money you’re paying on high interest loans and you’ll pay it off so much faster.” Well, that’s a great theory, but it’s kind of like all those theories your education professors taught you that just flat don’t work in actual life.
Remember, paying off debt is not about the numbers. It is not about the logic. If it were, no one would ever get into debt. It’s totally against all logic to spend money you don’t have to buy things you almost never actually need! This is about emotion. And whatever extra interest you pay will be more than offset by your intensity as you start paying off debt and really feeling like this thing could actually happen.
In this case, the interest isn’t your problem. The principle is. Bad spending habits and spending more than you earn are. The interest is just a symptom.
So I’m going to ask you one more time, would it be worth it to sacrifice – REALLY sacrifice for a while to give yourself the option to continue teaching or do something else, like stay home with the kids or start a business. To give yourself the peace of mind that comes with knowing you have money in the bank to pay all of your bills? To sleep soundly without worrying that one small emergency will bring your entire financial house of cards tumbling down around you? If so, get that $1000 saved, and get your list made, and get on your way.
In the last post, I gave you an overview of Dave Ramsey’s 7 baby steps to financial success. Over the next several weeks, I’m going to break each one of those steps in more detail. Remember, this is not my stuff, it’s Dave’s. This is just my take on it. Step 1 is save $1000, but it should really be divided into step 1A and step 1B.
Step 1 A: STOP using credit cards
Stop borrowing money at all. If you have debt, it is because at some point in your life, you were spending more than you were earning, and that led to trouble. It might not be your fault, but the result is the same. And we’ve got to deal with it. Maybe you are still doing it. If so, nothing else can help you. Before you do anything else, you’ve got to stop spending money you don’t have.
There are a lot of ways to do this. Most people can get their spending in line by doing a budget. Yeah, it’s about as fun as a pap smear (well, not quite THAT bad), but it works. You’d be amazed by the number of people who swear that doing a budget is as good as getting a raise. They suddenly have to pay attention to where their money is going.
Online apps
And there are tools that make it a lot more appealing. Ramsey solutions developed “Every Dollar” and online budgeting app. I’m old, so I’ve always just done mine in excel, but I’ve tried Every Dollar and it’s super user-friendly. There are a lot of other ones out there, but Every Dollar is the only one I have personally tried. If you’d like to know other options, check out this list.
The ugly truth
With all that said, I have never been successful doing a budget. I hate it, and I generally end up ignoring it. However actually sitting down and figuring out guidelines is essential. So even if you make it and then ignore it (like I do) I still recommed giving it a go. The big thing is that you need to know how much you’re spending and keep it under control. If you cut up your credit cards and don’t have a realistid idea of how much money you need at the end of the pay period for food and gas, you’re going to be in a world of hurt.
Step 1B: Put $1000 in savings as fast as you possibly can
DO NOT TOUCH that money unless there is a serious emergency. And no, a great sale isn’t an emergency! If you already have $1000 or more saved up for emergencies, you can go ahead a skip on down a bit. If not, this is important stuff. Now, if you don’t have even $1000 you could use for an emergency, DO NOT beat yourself up. According to a CNBC article from January, 2018, you are not alone. Only 39% of families could cover a $1000 emergency. So this is normal in America. But normal isn’t always fun. If worrying about money keeps you up at night, this is an indispensible step in your journey.
Why does Dave recommend saving before putting a single dollar (beyond minimum payments) toward debt? Because if you want to get your finances in real order, this ain’t no sprint. It’s a marathon. And if you don’t warm up and stretch out before a marathon, you gonna hurt something. Well, this is that warm up to help you keep from getting messed up on the way.
But I want to pay off debt, why delay?
Nothing is going to make it harder to actually get out of debt than, well, life. You know how it works, right? You’re chugging along toward a goal and then something comes along and stops your progress. You have to take 3 steps back and it’s so discouraging that you never get that momentum back.
Here’s how it works with money: You swear to yourself you are going to stop using the credit cards and pay the off. “NO. MORE. DEBT.” You say to yourself. And everything is just fine until (dramatic music – dun, dun, dun!) – a child gets sick and there’s an unexpected trip to urgent care. OR the water heater goes out. OR gas prices spike and you’re paying twice as much for gas as you thought you were. OR grandma dies and you have travel expenses for her funeral. OR _________________ (fill in any of a godzillion possible emergencies here).
You’re paying off debt and every penny is going to extra payments. There is nothing in the bank, so you whip out the credit card. STOP RIGHT THERE. I thought you weren’t going to use the credit card any more. I thought you said “NO. MORE. DEBT.”
Well, $1000 in the bank will take care of about 85% of those emergencies. (That’s a statistic I totally made up, but it’s based on personal experience.)
How fast do you think you could save $1000? Could you sell something? Have a yard sale? Do a little tutoring or teach summer school? Totally give up eating out until you have $1K in the bank?
This might seem impossible, but it creates the base for absolutely everything that happens to you financially. This is the reason. Our goal is to get you out of debt, right? If you have absolutely no savings you’re going to keep going further into debt every time an emergency happens. And THAT is going to do a huge number on your belief that you can actually do this.
So just save the $1K and be done with it. Then move on to step 2: Eliminating ALL debt.
For years, I’ve been a personal finance geek. Seriously, one of my first memories is sitting on the floor of my bedroom when I was probably about 6 years old, counting the money I had saved, then writing the amount on the outside of the small, cardboard jewelry box where I stored my vast sums of wealth ($46.78, if I remember correctly!) So I’ve read and listened to a ton of personal finance gurus who espouse everything from giving up the daily latte to getting rich in a year by using OPM (Other People’s Money.) But by far, the best comprehensive plan for people who want to win with their money is Dave Ramsey’s Baby Steps.
How Dave Got it Figured Out
He knows both sides of the money world. Although he is now reportedly worth over $50 million, he actually declared bankruptcy in his 20’s. He swore off debt, and fought his way back, founding the Lampo Publishing group and The Dave Ramsey Show to teach others how to manage money. I won’t say I agree with him 100%, or follow his plan point for point. However, if you are looking for a place to start, especially if you really don’t like dealing with money, his plan is pretty much the best there is. It will take you from overwhelming debt to incredible prosperity, and there’s a plan for every step along the way. Disclaimer: It will work, but it won’t be EASY.
So here it is. To start with, we’re just going to name the baby steps with a short description. Then we’ll delve into each one a little deeper in a series of upcoming posts.
Baby Step 1 – Create a mini-emergency fund.
Dave Ramsey says this emergency fund should be $1000 dollars, and that’s a pretty darn good guideline. If you have a very low income – like, say under $20,000/year, I’d go with a smaller fund of $500. My own recommendation (not Dave’s) is that if you make $100K or more as a household, you might want to keep an emergency fund of $2000. Even when we were paying off my husband’s student loan, I would have passed out if we had only $1000 in savings. I’ve gotta have some security.
Baby Step 2 – Pay off all debt except your house.
Next, make a list of EVERY debt except your mortgage. Credit cards, loans from family members, payday loans, student loans, car loans, medical bills, EVERYTHING. Then put them in order from the smallest to the largest amount to pay off. Take every extra dollar you can scrape together and throw it at that smallest debt. When it’s paid off, move to the next one, and so on. Depending on how much debt you have, this step could take 3-4 years, but imagine how amazing it would be to have absolutely NO payments other than your house. That’s what you will have accomplished when you check this one off your list.
Baby Step 3 – Save an emergency fund of 3-6 months’ expenses.
OK, so at this step you have a little emergency fund, and NO debts except the house. It’s time to get yourself a little more security by ramping up that emergency fund. This is money that you have in an easily accessible account (like a money market) so that you can cover just about any surprise that comes up. Somebody loses a job? No sweat. You have time to regroup without panic. Figure what you would spend in a typical month, without extras like cable or vacations, and multiply that by the number of months you feel comfortable with. That’s the amount you are working toward having in savings.
Baby Steps 4 – 6 – Put 15% of pre-tax income into retirement savings
Save for kids’ college
Pay off house
Dave always puts these three together, because they are usually done at the same time. You are now debt-free, except for the house, so you should have a little extra money to play with. The first thing to do with that is chunk an amount equal to 15% of your pre-tax income into a retirement account. If you still have money left over, put it toward kids’ college savings if that applies to you, or toward paying off your house early. Dave says that once people reach this point, their house is usually paid off in about 7 years, even though they are putting money toward the others goals at the same time.
Baby Step 7 – Build wealth and be outrageously generous
This is where the fun comes in. You’ve always wanted to invest in real estate? Cool! Do it now. Want to buy a house and GIVE it away. Cool! This is the time.
OK – There is a TON more detail I could go into here, but this is just to give you an overview. If you are dying to binge-read the babysteps in minute detail, check out Dave Ramsey’s book The Total Money Makeover, which you can buy here, or check out his podcast, which is available here.
If you are willing to take a few weeks to work through the whole thing with me, I’ll cover each one with a lot more detail in a weekly post.
A lot of you might know my personal finance story by now, but if not, here’s the Cliff Notes version. I’ve taught in public schools for 18 years. During my first few years of teaching, my best friend and then-co-worker had her first child. That first year of motherhood was tough on her. She went back to the classroom when he was about 6 months old. However, because of some minor health problems, she was getting calls every week (sometimes a couple of times) that she had to be at the daycare within an hour to pick him up. (Because of her husband’s job, he was often out of town.) She was a super-conscientious teacher and she was about to loose it.
I decided watching her that year, that I was going to do everything I could to give myself options. I wanted to make sure that I could take some time off of teaching if every my family needed me. My first step was to pay off debt and make a habit of saving something every single month. Step 2 was to take charge of my income, which a lot of people think you can’t do as a teacher. However, through the years I did an MLM, sold real estate, and managed my own rentals. I knew that WANTING to make my family my first priority was a pipe dream unless I had the money to choose whether or not to work full time.
The Payoff
Well, it was worth it all. And not just one in my life, but twice so far. When my daughter was born and we had just relocated, I was able to stay home with her for an entire year. Then, just three years ago, it all got to be so much I thought I was going to blow a gasket. Three kids, two jobs, a side business, and lots of out-of-town travel for my husband. So my husband and I talked it over, and I resigned from full time teaching. I got to spend two whole years building a side business and enjoying the time before my two youngest started school. What a gift!
None of that would have been possible if our money was a mess. THAT is why I started this blog. I wanted other teachers to have the same options that I did to take care of themselves, their mental health, and their family.
Your Personal Finance Journey
Now, let’s get to the nitty-gritty. If improving your financial situation is important to you (and I hope it is), and you desperately want to have options in your life, it is incredibly simple (not necessarily easy) to do so. All you have to do is increase the gap between what you spend and what you make. And there are really only two ways to do that – if you are moving in the right direction.The first way is to increase what comes in and the other is to decrease what goes out.
Offense – Your income vs. Defense – Your expenses
Most personal finance blogs will focus on one of the other of those. Trent Hamm from “The Simple Dollar“, Dave Ramsey, and the frugality-focused blogs tend to hit that side of the equation hard. Some others, like Ramit Sethi’s “I will Teach you to be Rich” or Michelle Schoeder-Gardner’s “Making Sense of Cents” lean toward the other side of the equation and help you increase your income.
The truth is, neither one will get you where you want to be if you totally ignore the other. If you only make $12K a year, you’re not going to make progress no matter how frugal you are. On the other hand, we’ve all heard of celebrities who make an obscene amount of money and still – somehow – manage to go bankrupt. Of course, these are the extremes. But let’s not forget that even less obvious issues can really keep you from making progress.
With that said, I hope to cover both sides of the equation. We’ll talk a lot about some side-hustles and small businesses that can increase your income. (For some side hustles that bring in over $20/hour, check out my post on High-Dollar Side Hustles.) We’ll also talk about ways to decrease your spending. Some of you will relate more to reducing what you spend. Others will want to increase your income. But please, PLEASE don’t allow yourself to ignore either one long term. You might want to START with a single focus to help you make some quick progress. (For most people that would probably be cutting spending.) Once you’ve made some progress on that, though take a look at the other side, too.
My wish for you
My goal for every one of you would be to have a financial life the affords you options. To go to sleep at night knowing you can easily pay your bills, even if an emergency arises. To be able to shed some of the emotional baggage that surrounds personal finance. To feel confident and knowledgeable about your money.
During the next few weeks, I’ll be posting a Personal Finance 101 series. Based on Dave Ramsey’s 7 Baby Steps and my own personal finance journey it will cover the first steps to getting finances in order. For some of you, this might be too basic, but if money totally isn’t your thing, this is ALL about you. Leave whatever shame or embarrassment you have about past decisions at the door. (Well, there’s not really a door to a blog, but you get the idea, right?) Lao Tsu said, “The journey of a thousand miles begins with a single step.” Take that first step, and let’s go.
So, if you’ve already read Pricing, part 1: Can a Higher Price mean Better Value? and Pricing, part 2: You Deserve to Make Money for your Work – Good Money, you might think this is a total contradiction. However, like many things in life, it is part of a truth that can’t be summarized in a 30-second sound byte. Yes, higher price can mean better value. Yes, you deserve to earn great money for your expertise and skills. But your business will only be successful if your clients believe that the value you provide to them exceeds the amount you are paying them. That’s why if you want to have a wildly successful class or business or product or WHATEVER, you need to be besties with perceived value.
Perceived value
The first thing we need to talk about here is perceived value. The actual value of your product or service DOES NOT MATTER. Yes. you heard me right. The actual value of whatever you provide has little to no bearing on your success. It is the value your client perceives that matters. If you have a winning lottery ticket that can be immediately cashed in for $2 million, and you offer to sell someone a 50% interest in it for $50, that is a GREAT value. However, if they believe that it is a forged ticket, they aren’t going to buy it. Their perceived value of the ticket is less than what you are charging.
Here is another example. Last week, I listed our family’s beloved, but beat-up, Volvo Station Wagon on Craigslist. I was asking $600 for it since it had several mechanical problems and over 220K miles on it. I was completely honest, sharing pictures of its distressed paint and admitting that it was going to need some work, but that it did run. However, I knew the price was fair, since it also had almost new tires, and would bring almost $500 if it were sold just for the tires and the scrap value.
Several people contacted me and said, “I’ll give you $200 cash” or “It’s worth $400, I’ll pay you today if you’ll take it.” However, I was also contacted by a guy who loved Volvo as a brand and had a Volvo with a busted engine sitting in his driveway. He looked at the car on Monday, said he’d pick it up the next morning for full price, and even reminded me that if I changed my mind overnight he’d understand. “I wouldn’t blame you if you did change your mind,” he said. “It’s worth more than that.” We assured him that a deal was a deal, and the next morning, he gladly paid the $600.
That buyer got more value than he paid for, but other people definitely thought I had overpriced the car. Perceived value is tricky like that. Like beauty, perceived value is in the eye of the beholder.
Perceived value is a huge topic, so there will be future posts coming on ways to increase it. However, there are basically two ways to ensure that the value you are offering your clients is greater than the price they are paying you. The first is to increase what they believe your product or service is worth. The second is to provide the same value for a lower price.
Increase what they believe the service is worth
Now, you are going to provide a high-quality product. You know it and I know it. So that is not the issue. The issue is to ensure that your potential customers know it is a high-quality product.
There are several ways to do this, but maybe the most effective long-term is education. When I started my Spanish classes for children, I had a big drop in enrollment after the first month. The students weren’t going home and spouting Spanish to their parents, so the parents thought the kids weren’t learning. They didn’t realize that you understand much, much more than you can produce. Nor did they understand that by learning to truly understand the language, instead of memorizing vocabulary lists, their kids were building a foundation to be able to actually communicate in Spanish.
What I had to do was educate them on the value they were actually receiving. So I started sending out short e-mails every week or two explaining why my methods were so effective long term, the benefits of learning a second language, and how to help their child at home, even if they didn’t speak Spanish. They also received almost-weekly updates on their specific child’s class, including what songs we sang, which books we read, and what games we played. After that, my retention shot up to near 100%. I didn’t change my actual product, I just educated them so they would realize its true value.
Provide greater perceived value
Sometimes, you can figure out ways to provide greater value without too much more work or cost on your side. For example, when I started my Spanish classes, I set up a website where I included information on language learning, links to Youtube videos of the songs we were singing and the stories we were reading in class, and tips on how parents could optimize their child’s learning. This can be done relatively inexpensively, but it creates tremendous value for the parent. They can simply look up the website and sing the songs with their child, even if they don’t know Spanish. It allows them to participate in their child’s learning, which greatly increases the perceived value.
Perceived value of e-book versus online course
Another example of this is an online course versus an e-book. E-books have a very low perceived value, no matter how useful or valuable the information really is. However, if you take that same content and package it as an online course, people will gladly pay a much higher price.
Now, I’m not talking about scamming people. Remember what we said in Pricing, part 1? Charging a higher price can actually cause your client to take action because the product has a greater perceived value to them.
Let’s imagine that you have information that will literally save a person $20,000 over the course of their life. You can either package it in an e-book for $3.95 or in an online course for $395.00.
I can absolutely imagine someone buying an e-book for $3.95 and NEVER reading it. They would miss out on the information they wanted simply because they didn’t prioritize reading it. Or maybe they don’t like reading and just keep putting it off. They have wasted that money. Much worse, they have missed out on a chance to be $20,000 richer because of the information they didn’t read.
However, imagine if that person purchased that same information in the form of an online course priced at $395 and studied and implemented every lesson. They would have received massive value from that online course, even though it was priced at 100 times more than the e-book. Granted, this is an extreme example, but it happens literally every day. The takeaway here is that you can increase the perceived value of your product in a lot of ways. Your primary job, though, is to have your customer leave feeling like you gave them a heck of a lot more value than you charged them for by providing an outstanding product at a price that is fair to both you and to them.
Provide the same value for lower cost
Question: Is the value you receive approximately the same whether your child has a one-on-one class or is in a group of 5-6? I would say yes. In some cases, the value might even increase in classes because it’s more fun to learn with your friends, right?
This is why I almost refuse to do private tutoring. My clients receive much greater value (and I also increase my own earnings) by offering group classes. To be sure, I make sure the classes are small, so that our time is spent learning and not dealing with discipline issues. However, the kids really learn well in a group setting, so they aren’t sacrificing value. However, I can charge $12 per child and still make $60 per class. They are paying less, but they aren’t receiving less.
This is the same concept that many people are putting into practice online. I just finished a short course on how to design your own website. (By the way, do you like it? I thought the course was OUTSTANDING! If you want to set up your own website, see the end of this post for the link and information.) Shannon offers pre-recorded classes that are value-packed. I loved her free class so much, I decided to sign up for her Serious Side-Hustlers subscription course because I know I’ll get unbelievable value from it.
However, she has already done the work by recording the lessons and posting them on her web site. She is providing me EXCELLENT value with no extra work because she figured out how to scale her business. What if she had to sit down with me individually (even online) and teach me step-by-step how to set up my website? It might be slightly more valuable to me since I could ask questions in real time. However, she’d have to charge me so much that the value of her service would no longer exceed what I was paying for it. She has figured out how to charge less for basically the same value. She has scaled her services, just like I scale mine by doing group classes instead of individual classes.
Link and info for Shannon Mattern’s 5 Day Website Challenge
OK, I mentioned that I would share the link to the website class, so here it is. I can’t recommend it highly enough. And for the first 30 days, IT’S FREE!!!!!! Here’s the link to Shannon Mattern’s 5 Day Website Challenge. This is an affiliate link, so if you follow one of her paid programs I will receive a small commission. However, I ONLY endorse things that I have used and LOVE. And for anyone who knows me, I don’t do tech! So if she can teach me step-by-step how to set up every aspect of a website and all sorts of gobbledy-gook that I don’t understand, you know she is a tech teaching goddess!
Mediocre white man vs. Superstar woman – who has more confidence?
I’ve teased my husband that I’m going to buy a tee shirt that says “Carry yourself with the confidence of a mediocre white man.” Now, I’m totally NOT into stereotypes, so let me start by saying that I’ve got nothing against all white men. However, I’ve dated several guys (and had conversations with a ton more) who absolutely drove me crazy because they were sure that they were smarter, hotter, and more athletic than they actually were. In other words, they had a supersized opinion of their own abilities.
This is purely anecdotal, but I find the opposite to be true of most of the women I meet. (Again, both of these are generalizations, and there are lots of exceptions to the rule.) We often downplay our successes, second-guess our ideas, and allow criticism of our thoughts without defending them as vehemently as we could. The same goes for our products. I’ve talked to a lot of women who say, “But I can’t charge that.” “Who would pay me that?” or the ever-popular, “I’m doing what I love, so I don’t need to charge that much.” Hold on right there, sister. If you are providing a quality product or service, you deserve to make money. It’s not selfish; it’s capitalism.
Take my money – PLEASE
So let me give you an example. Our family went through a really dark time a few years ago when one of our kids started having some serious behavioral problems. It was bad. I actually remember thinking, “Oh, my God. We have got to get help. I don’t want to be on the evening news in a few years because my child has gotten a gun and shot me, but that’s the direction we’re headed.” I was more scared and panicked than I had ever even imagined being.
Enter our therapist. She specialized in the issue our child was having. Suddenly, I was thinking, “This woman MUST spy on us. She knows what’s going on as if she watched our family every night.” She gave us hope and taught us how to deal with the issue. She didn’t solve every problem and we still have challenging days, but it’s nothing, NOTHING like it was before.
We have a normal family life again, and I owe it all to her. Do you think I care about her fee? Hell, no. She gave me my family back. I would have sold everything I owned and still considered it a bargain. As a matter of fact, we have even paid for an initial session for several of our friends who were facing serious family struggles, all of whom have continued to work with her. Why? Because she is worth it! She delivers on what we needed and so much more.
Now if you called her an expert, she would probably laugh in your face. She doesn’t see herself as an expert, but she is. She is providing a service that is well worth her fee, and if you provide an excellent service, you should, too.
People are paying you to solve a problem
“But I’m not saving someone’s family. I’m just ___________ (fill in the blank). That’s different,” you say. Yes and no. Are you filling a real need? Are you going to solve a problem, a real, burning problem? Then let people pay you to solve a problem.
I teach enrichment language classes in preschools. I’m not saving someone’s family, but I do solve a problem for parents who know that learning a language is easiest and most effective during the preschool years. I also use a method that is tremendously more effective than most preschool language classes. And I provide lessons at the child’s preschool, so parents don’t have to schlep their child somewhere in the few precious evening hours they have together. I provide a real service, and I charge for it. If I don’t make at least $50 per 30-minute class (I often have multiple students in each class), then I don’t do it.
When I focus on solving problems for my clients, it gets easier for me to charge what I’m worth. Now, please realize, that I always make sure I’m providing value for clients that exceeds my price (more on that in another post), but I don’t get the guilties when I see it from their point of view. They have a problem. They need a solution. They will be happy – thrilled, even – if I solve that problem for them, and if I’m really making their lives better, then I deserve to make money for my skills, for my investment, for my abilities. If they could do it for themselves, maybe they would. But they don’t have the expertise/product that I do. And I’m going to save them time, or money, or frustration. I’m helping them. And for that, they pay me.
Your Turn
It’s pretty rare that I assign exercises, but this time I’m going to. If you provide a service or product, spend 5-10 minutes thinking about what problem you solve for your customers. Why would someone want what you have? There’s got to be a pain there, a fear, a worry. What is that? Now, how do you solve that problem for them? Write it down, and then ask yourself this question: what would you pay for someone to solve that problem FOR you in the way that YOU solve it?
Do you sell make-up? What problem is the make-up solving? Well, it depends on the customer. You’re solving very different problems for a 22-year-old and 65-year-old. For a 22-year-old, you might be helping her look professional, so she feels more at ease in her job. You might be helping her feel beautiful at a party. For a 65-year-old, you might be helping her feel like she used to feel. You might be helping her see those rosy cheeks that she used to have. Now, what would you be willing to pay to feel beautiful? What would you pay to see yourself as you looked 10 years ago? That’s a very different price than what you’d pay for make-up.
Please, if you have trouble charging what you’re worth, complete this exercise. Write it down. Don’t just do it in your head. Thoughts become more powerful, more real when we write them down. Good luck!
Pricing is an issue that many of us struggle with as we start a business or create a side income. As women, we are conditioned by society to be more communal than men are. Now before you get mad at me, I am basing this not on my own opinions, but on studies of how women are perceived in the workplace. Generally, co-workers are more likely to ask help from women. They are also more likely to be offended if that assistance is not forthcoming.
This can create problems in our own brains. Because our culture often expects us to just “pitch in” without a thought for ourselves, or the inconvenience it may cause us, women often have trouble valuing ourselves at our true worth. While men tend to be confident that their services are worth a premium price, women often second-guess themselves. It can make us uncomfortable charging for our services, especially if we are pricing them at the upper end of the spectrum.
I tell you this for several reasons. First, because being aware of the problem is an important step in overcoming it. Second, because we need to address how we are actually serving people when we charge money for what we do. And third, because if you are going to provide a high-quality, premium service (which I assume you are), you deserve to charge a premium price. To do less is to short-change yourself and your family. Since this is a pretty important point, and since I tend to be wordy, I’m going to break this down into three separate posts. Today, we’ll cover how we serve people better when we charge a premium price.
Price Influences Value
Two years ago, I invested in a class on how to make an income by creating and selling online courses. And when I say invested, I mean it was a big decision – over 2 weeks’ take home pay for me. I went through the course. I followed the course. It didn’t work. I adjusted and started over again. Still, no luck. Meanwhile, in the Facebook group, people are talking about their successes. How they created a course, tested it, and are earning money teaching people about something they love. I cringe and start over – again!
So why am I still trying instead of throwing in the towel? First, because I know for sure it can be done and I know for sure I can do it, even if it takes multiple attempts. Second, (and this is probably the real reason) because I just flat refuse to lose that kind of money. If I stop trying, it becomes a “waste of money” not an “investment,” and I am too stubborn to let that happen. Paying a high price made this course matter to me, and in the long run, it is more likely to make me successful.
Another example is a treatment we chose for my son’s ADHD when we wanted to get him off his medication. Its effectiveness was backed by multiple studies. Unfortunately, it wasn’t covered by insurance, and each session cost $100 AND it worked best when appointments were at least once a week.
Well, you’d better believe I didn’t miss any sessions, nor was I late unless something major happened. Also, we changed our lives to make it a priority, even taking our son out of school early a couple of days a week, which doesn’t happen lightly in our family. (In case you’re wondering, yes, it did help and we’re thankful we did it.) Would I have taken it as seriously if sessions cost only $25? I hate to admit it, but I don’t think so. Consequently, it probably would have been a lot less effective and my son would have missed out on its benefits.
In both of these cases, pricing the service at a premium may have actually improved its benefits.
It won’t happen overnight
Learning to value yourself and your skills probably isn’t going to happen overnight, because this is truly a paradigm shift. If you, like me, have spent a large portion of your life looking for bargains, it’s hard to change that and start thinking that setting a low price isn’t necessarily doing your customers a favor. But I want you to start trying.
Examine your beliefs about what is “fair pricing,” and what truly constitutes value. When we are talking about services, the customer’s perception of its value, and thus its importance, sometimes has even more impact on their success than the service itself. Is it a better value for a person to spend $100 and get an outstanding service that they prioritize, or to spend $10 and get the same product, but not the benefit from it because they don’t value it?
What do you think? Do you have an example of a time when a pricing a product or service higher actually benefitted the customer more or when a low price prevented you from appreciating a product or service? You’ve read my take. What’s yours?
We’ve all read those articles about “50 Ways to make money in your spare time.” We get all excited, but when we read the article and then figure how much we’d make per hour, it works out to about $1.50 if we’re LUCKY! I don’t know about you, but I don’t have the time for that! If I’m going to get a job on the side, it had better be worth my time. That’s what I call a high-dollar side hustle. So here are four jobs on the side for teachers that can earn you $20/hour or more.
Side Hustle #1: Pet Sitting (or walking during the summer months)
This is a high-dollar side hustle that will make animal lovers smile. Rover.com matches animal lovers with people who want pet care while on vacation. The pets come to your house and you care for them. Some providers snap pictures to send to owners and do other cute things, but mainly it’s about providing safety and care without the pet having to experience the stress of a kennel. The going rate usually runs between $20-25 per day per pet, and some care givers also offer pet sitting, drop-ins, or house sitting.
Rover is ideal for someone who can really demonstrate they have experience and a knowledge of dogs, but they only accept about 20% of people who apply to work through them. However, you can also let your friends and neighbors know this is something you’d be willing to do. Just know your limits and make sure you can adequately care for any pets you are entrusted with.
Since rover.com provides the insurance, you don’t need to worry about it. Yes, they do take a cut, but the insurance plus the fact that they help with getting your name out there makes it not such a bad deal.
Side Hustle #2: Teaching English online
Teaching English remotely to students in China and other countries has become a huge business, and it can be a flexible and portable job on the side for teachers. One of the best things about this plan is that it allows several options, based on what you’re looking for.
If you’re interested in freelancing, you can sign up through verbalplanet.com. It costs nothing, but you have to build your own clientele base and create your own lessons. VIPKID, on the other hand, is a little more corporate. They provide lesson plans (which you are expected to use). One of my close friends has been doing VIPKID for over a year, and it really works for her. Read more about her experience here. If this interests you, this is one of the most up-to-date articles I’ve found on the different options available.
Side Hustle #3: Offering premium classes in person
Offering group classes can allow you to earn a great per-hour rate (think over $80 per contact hour!). Now that’s a high-dollar side hustle that beats the pants off of filling out surveys online! I am a language teacher. Instead of offering one-on-one tutoring, I teach group classes in preschools and just-for-fun classes at a local winery.
Maybe you are a dancer, a black-belt in karate, or have a knack for making science irresistible for kids. All of these are currently successful businesses in the preschool enrichment world. But you don’t have to build a huge business. If you can get 1-2 locations with lot of interest, it can add $800 or more to your monthly income.
Or if you’re not into the preschool scene, wineries and micro-breweries might partner with you to lure clients in at off-peak times.
If you’d like to offer a group class, think about what skills you have and who might be interested in them. Be creative. Do you knit? Are you an artist? The winery where I offered classes also partnered with a henna artist, a tarot card reader, a message therapist, and a yoga instructor to use their back room when it wasn’t booked. So this is limited only by your creativity and ability to market your skill as fun and useful. If you want to learn more about starting a successful preschool group class, check out my article on three make or break steps.
What you are looking for here is a skill that 1) you know well enough to teach 2) you enjoy doing and 3) people are willing to pay for. Often, after you’ve built a class up, you can earn $60-$100 per contact hour. Not too shabby!
Side Hustle #4: Offering autism-specific services
This one is for you, special ed teachers. You know you are amazing in the classroom every day, but how about using your gift to not only make money for yourself, but also allow a special-needs parent to get a service with peace of mind and zero stress? Do you have a knowledge of autism or other special needs? Have you ever thought about how stressful it must be for the parent of with special needs to get good-quality family photos done? Or find a babysitter they feel confident leaving their child with? From what I hear, it can be a nightmare.
Let’s look at photography as an example. Most photographers don’t understand how to work with these special kids, and so a lot of parents don’t even try to get professional quality pictures. So instead of marketing yourself as just another photographer (or whatever your service is), do some thinking about how your service could be made more attractive to parents of kids with special needs. Then use your expertise to market yourself as a provider of services for this special demographic. This high-dollar side hustle will also let you help others in a big way.
What other services do you think create stress for parents of special-needs children? I’ll bet you can think of a few, and some of them might even be something that you love doing.
Work it
There you go. Four possible high-dollar side hustles than can earn you $20 or more. Will they all work for everyone? Heck, no! But you don’t need five or ten different ways to make money. You need 1-2 ways that fit your personality and work for you.
The other thing I hope you gain from reading these ideas is the belief that where there’s a will, there’s a way. Once you start thinking about business ideas and how you can turn your own skills and interests into a viable income, you’ll eventually hit on an idea that is perfect for you. It might not be the first idea you try, or even the second or third. But action is the important thing here. Try something. Do something. See what works and what doesn’t. Then adjust if you need to.
