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الاثنين، 30 أكتوبر 2017

How to Save on Holiday Travel

Don’t let the cost of transportation keep you from your loved ones during the holidays.

If you’re like most families, you love to travel for the holidays, but hate the high cost of air travel. This is especially true if you have to make an international flight with a family of four or more. Luckily, there are things you can do in both the long-term and short-term to help offset those costs.

For the long-term

When it comes to air travel, one of the best things you can do to curb the cost is to use a travel credit card. Many of these feature rewards that grant you miles on your everyday purchases. One example of this is the , which helps you gain miles without needing to adjust your spending habits.

Here are some examples of purchases you could make and the miles you’ll accumulate:

1. Gym membership

via GIPHY

On average, we spend $40 to $50 a month on a gym membership. For the sake of this exercise (pun intended), we’ll assume the higher end of the spectrum. If you were to use your to pay for that membership, then you would have 1,100 miles in 11 months. This might not sound like much, but keep reading…

2. Daily coffees

via GIPHY

Based on a study featured on CBS News, it was determined that the average amount a person spent on coffee reached $65 per month. This was based on the average price of a cup of coffee from Dunkin Donuts, Caribou Coffee, and Starbucks. If you charged 11 months’ worth of coffee to the right travel credit card, you could have 1,430 miles. Hardly enough for a flight, but it’s all starting to add up.

3. Cable TV

via GIPHY

A fair amount of people still pay for cable television and if you’re one of them, then you could be paying on average $80 or more per month. If you were to use a travel credit card on those monthly bills, you could come away after 11 months with as many as 1,760 miles.

4. Electricity

via GIPHY

According to the United States Energy Information Agency (EIA), the average American electric bill came to $114.03 a month in 2015. While your own monthly bill will vary on your location, weather, and household, let’s use this figure as an example. If we round this estimate up to $115 and pay it all off with a travel credit card, you’re looking at a possible 2,530 miles.

5. Dining out

via GIPHY

In our own analysis of Americans eating out, we found that the average person can spend upwards of $232 on meals outside of the home. While this can add up to quite a chunk of change, sometimes it can’t be helped. However, if you were to pay for those meals with a , you’d be banking some major mileage. After 11 months, you’d have 5,104 miles.

6. Pet expenses

via GIPHY

It’s tough to put a price on a pet, but there’s no denying the simple truth that owning one – especially a dog or a cat – can be expensive. One particular breakdown for a dog examined food, toys, emergency funds, and even pet insurance before arriving at a monthly cost of $338.61. At about $339 a month for 11 months, you could end up with 7,458 miles.

7. Retail gas

via GIPHY

In an exclusive analysis put together by the Oil Price Information Service for CNNMoney, Americans were spending $368.09 a month on average (2011) on gas. While there are so many factors to consider that can either raise or decrease this figure for you, let’s roll with it. After 11 months, paying with a travel credit card, you would have something to the tune of 8,118 miles.

8. Groceries

via GIPHY

Which brings us to food, arguably the largest monthly expenditure of any American family. According to the United States Department of Agriculture, the average family of four on a low-cost plan could pay upwards of $836.20 a month. Were you to cover those costs with a , that would come to 18,414 miles in 11 months.

The result…

So what does this look like after 11 months of using the on everyday expenses? Well, after 11 months, you would have something close to 45,914 miles, but that’s not all. Many of these travel credit cards come with signup bonuses and, in the case of the Capital One® Venture® Rewards Credit Card, you would add an additional 50,000 miles.

In all, you would have 95,914 miles. And after you’ve paid for your flight, you can redeem those miles for an account credit of $959.14. That’s enough money to cover the cost of two or more domestic flights. You could also afford one international flight or, at the very least, shear off a huge portion of the cost.

For the short-term

If you’ve waited until the last minute, don’t worry. There are a few things you can try in order to make your holiday travel a little more affordable.

1. Book flights on ‘off’ days

Booking a flight on Tuesday, Wednesday, or Saturday could make a big difference when it comes to the cost of your ticket. Generally, these are considered to be the cheapest days to travel as they are statistically the least popular among consumers.

2. Break up the band

If you’re a family of four, you might consider splitting up into two groups each with a parent and a child. Sometimes it’s a lot easier to book two cheap seats during the holidays (at the last minute), not four all together.

3. Go by city, not airport

Sometimes you’ll find more options and better variety in prices if you search for flights based on city instead of specific airports. Adjusting your search will often yield a larger listing of airports in the area you can use to compare prices and find the right one for you.

4. Shop on a Tuesday afternoon

We already talked about the “off” days to go shopping for flights and if you need to get more granular, try Tuesday at 3 p.m. EST. This is recommended because many airfare sales are usually filed late Monday evening.

Airline credit cards

In addition to travel credit cards, we’ve also covered the best airline credit cards. These can help you save on holiday travel even when you don’t have a full year to accrue mileage.

Southwest Rapid Rewards® Plus Credit Card

The has a signup bonus where you can earn 40,000 bonus miles when you spend $1,000 on purchases in the first three months of opening an account. Based on those earlier estimates of monthly costs, it shouldn’t be any trouble to reach that threshold within a month.

Blue Delta SkyMiles® Credit Card from American Express

The features a signup bonus of 10,000 bonus miles after you spend $500 with your new card during the first three months. That’s an easy enough goal to reach within a month and can help lessen the financial blow when putting it toward airfare.

Methodology

These numbers were determined taking the average monthly cost of common purchases, adding them together, and then multiplying by 11 months. We rounded the cents to the nearest dollar for figures that were not solid dollar amounts.

The aforementioned additional 50,000 miles was determined by adding up those monthly costs and multiplying by three. The amount exceeds $3,000 and, based on the signup bonus, you can earn 50,000 miles when you spend $3,000 using the card within the first three months of opening an account.

The bottom line

Whether you’re stuck at the last minute trying to save on a holiday trip or you have an entire year to save up miles, holiday travel doesn’t have to break the bank. There are lots of things you can do to curb the cost, as well as rewards programs you can take advantage of to make holiday travel easier and more affordable. Don’t let the steep costs of travel keep you from enjoying the holidays.

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Here’s How We’ll Spend a Bone-Chilling $9.1 Billion on Halloween This Year

Job-Hopping Helped Me More Than Double My Salary — and My Skills

In the six years since I graduated from college, I’ve held four jobs — a fact that technically makes me a job-hopper. (For the record, it’s also expanded my network and padded my wallet… but more on that later.)

Job-hopper is a term often synonymous with millennials, as are other flattering descriptors, like entitled. It’s a jab at our generation meant to indicate we won’t settle in with a company that doesn’t recognize us as the superstars we surely are — unwilling to grind it out till 65, when we get a nice cake in the breakroom celebrating retirement.

It’s true that we’re a generation that moves around more often — a 2016 Jobvite survey found that 18% of Americans change jobs every one to three years, compared to 42% of 18 to 29-year-olds — but it’s not because we don’t want to pay our dues.

The business world has changed, too. Companies certainly don’t have loyalty to employees, as evidenced by massive layoffs, shrinking compensation packages and the rarity of pensions. This has contributed to an environment where, to get what we really want, we can no longer afford to be “company men” (or women).

For some of us, myself included, job-hopping is a side effect of trying to find work we’re passionate about. (Hey, if we’re going to be working longer, we might as well enjoy it.) After my first job — a one-year program working as a page for “The Late Show with David Letterman” — ended, I stumbled into a PR job because I knew a guy who worked at a company with an opening. It only took eight months to know this wasn’t a great long-term fit. Not only did I not feel intellectually stimulated, but the pay was (extremely) low compared to the hours.

So I hopped. I networked my way into a job as the communications manager for a startup, where I stayed for two years before deciding to try self-employment, which I really enjoy. (A full 62% of millennials have similar entrepreneurial ambitions.)

But job-hopping didn’t just help me find interesting work. It also sharpened different skills and significantly increased my income. Considering young workers are earning $10,000 less than they did in 1989, this is perhaps the biggest motivator for us hoppers.

From page to PR, I jumped from a $23,000 salary to $37,500. The next hop bumped me up to $50,000. (The PR company couldn’t come close to matching my $50,000 ask.) Negotiating with a new employer often yields better results than hoping for significant bumps at your current position.

Another advantage of job-hopping? Career-advancement opportunities we can’t always get by staying with one company. That’s how Daniel Keller, a 34-year-old CPA, ended up at his current gig. After five years in one position in Pennsylvania, he received a 50% raise for another gig in Buffalo, New York.

But it soon became apparent that upward mobility was incredibly regimented, and time with the new company meant more than skills. He stuck it out for a few years, but ultimately left for another firm that gave him the additional responsibilities he wanted (plus a 30% raise).

For job-hoppers who worry about discussing work history with potential employers, Steven Dibelius, a 31-year-old consultant who’s held eight jobs in 10 years, offers this advice: “Some [employers] have asked about [my job history] and how it zigs and zags through many different things,” he says. “But explaining my reasons for each change seems to help us discuss whether this prospective new job is the right fit. It spurs conversations about company culture, management style, expectations for the job and my own interests and strengths.”

Related stories on Grow:

How 3 Simple Choices Can Give You a Head Start Financially

Young Millionaires: 4 Ways to Hit $1 Million By 40

20 Common Money Mistakes to Avoid

Erin Lowry is a millennial personal finance expert and the founder of BrokeMillennial.com. Lowry and her work have been featured on CBS Sunday Morning, CNBC, Fox & Friends, USA Today, Wall Street Journal, Cosmopolitan and NBC News

This article originally appeared on the personal finance site, Grow.

This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.



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Five Scary Liability Claims That Could Haunt You Long After Halloween

If you want a good scare on Halloween, all you need to do is contemplate the financial risk you’re taking if you don’t have adequate homeowner or renter liability coverage when visitors come calling.

Liability claims stemming from injuries are common. When ghosts and goblins arrive on your front porch, you’ll have greater peace of mind if you have a liability policy that can protect your assets.

It’s financially risky for homeowners and even renters not to carry adequate personal liability coverage, said Bob Courtemanche, senior managing director at the Risk Strategies Company insurance brokerage and risk management company. “We live in a litigious society and people are prone to file lawsuits more than ever before if they feel that they have been harmed by your alleged negligence,” he said.

It’s a good goal to have enough coverage to protect your net worth. A standard homeowners or renters policy will cover your legal fees if there’s a judgment against you — but only up to your policy’s limits. That means you could be held personally liable in a legal judgment for any costs your policy doesn’t cover. Liability limits generally start at about $100,000, but that’s not always enough to protect your assets.

If you don’t have money to pay a liability claim, which in some cases can exceed $1 million, a court could garnish your wages or go after your personal assets, leaving your credit ruined, explained San Diego attorney Evan W. Walker. “In short, it can be devastating.”

Here are five scary liability claims that could haunt you long after Halloween has come and gone:

1. Swimming pool and spa injuries

If you own a swimming pool or spa, you can be held liable if you fail to take precautions to prevent drowning or other injuries. According to a report from the Consumer Product Safety Commission, there were, on average, about 5,900 pool or spa-related hospital emergency department-treated nonfatal submersion injuries in the U.S. each year from 2014 through 2016. There were 356 pool or spa-related drownings each year from 2012 through 2014 involving children under age 15.

2. Accidents in the home

Even if a person comes onto your property without your invitation, you can be held liable for their injuries if you’re judged to be negligent. In 2014, 20.2 million Americans, or one in 16 people, experienced an unintentional injury in the home that required aid from a medical professional, the Insurance Information Institute (III) reports.

3. Dog-bite claims

If you own a dog and it bites someone, you should be prepared to face a liability claim. Dog bites and other dog-related injuries accounted for more than one-third of all homeowners insurance liability claim dollars paid out in 2016, costing more than $600 million. The average cost paid out for dog bite claims nationwide was $33,230 in 2016.

4. Intoxicated guests

As a Halloween party host, you could be held responsible if you served a guest enough alcohol to become intoxicated and that guest caused injuries to himself or others.

Anyone who serves alcohol at a party needs to be very conscious of the risks, said Lisa Lindsay, the executive director with the Private Risk Management Association. “Should someone leave their party under the influence and injure themselves or others, [the host] may be named in a lawsuit,” she said. “Proper insurance coverage ensures there is coverage for defense costs and coverage for a judgment.”

5. Attractive nuisances

Homeowners have a legal responsibility to make sure their property contains no “attractive nuisances” that could interest and cause harm to children, but it’s hard to foresee all accidents. Each year about 50,000 children are sent to hospital emergency rooms because of injuries on home playground equipment alone, says the U.S. Consumer Product Safety Commission.

Other examples of attractive nuisances include untended construction sites, wells, drainage ditches, appliances that could trap a child inside, and trampolines.

Protecting your future

As people move into middle age and accumulate property and wealth, they can’t afford to play trick-or-treat with their assets. They typically have much more to lose than they did in their 20s. People who don’t have enough homeowner or renter liability coverage are taking a big chance, said Lindsay.

Adequate personal liability coverage “is an absolute must for everyone,” she said.

Related Articles:

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How This Mom Made the Jump From Blogger to Branding Consultant

Martine De Luna was the Author and Editor of the popular blogs Dainty Mom and later on Make it Blissful, where she was known as a home and parenting blogger and influencer. In her time as the Editor of Make it Blissful, she learned many strategies and ideas that were helpful and important to people who were looking to build an […]

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الأحد، 29 أكتوبر 2017

How this Sports Psychologist Makes Money Helping Golfers Maximize Their Mental Game

Dr. Shannon Reece’s biggest obstacle to playing great in all areas of her life was fear of failure, which infiltrated all her experiences as a competitive athlete. But through a love of sport and psychology, mixed with a fascination and longing to understand peak experiences led her to pursue a Masters and PhD at the best-applied […]

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Why the Explosive Growth of E-Commerce Could Mean More Jobs

When the robots came to online retailer Boxed, dread came, too: The familiar fear that the machines would take over, leaving a trail of unemployed humans in their wake. Yet their fears didn’t come to pass.

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How to Handle People Who Hate Your Frugal Lifestyle

While frugal people often get a bad rap for being “cheap,” it’s usually due to misunderstanding more than anything else. Oftentimes, non-frugal folks assume those who are more careful with their money just “don’t know how to have fun” or haven’t learned to enjoy the finer things in life. Or they might assume someone who doesn’t spend freely must be poor, or have squandered money in the past, or are just plain miserly.

Yes, there are plenty of folks who are frugal out of necessity – and if you’re just getting by on a low income, frugality is definitely your friend.

But if you ask a frugal person what drives them to be judicious with their spending, often it has nothing to do with those preconceived notions.

For example, there are a ton of frugal people whose bank accounts are brimming with cash – the “millionaire next door types” who have socked away money for years.

Other folks choose a frugal lifestyle because they want to maximize the money they earn. Some deeply abhor waste, or choose frugality to reduce their consumption and lessen their impact on the environment. And some people live frugally because they want to simplify their lives – when they’re not spending money, they have less to stress about.

But if there’s one thing for certain, it’s this: Our frugality confuses the heck out of people who don’t “get it.”

When you’re not frugal, it’s hard to understand why others don’t spend the way you do – or why they choose to go without when they can clearly afford more. Unfortunately, some people hate frugality and look down on it – and really, that’s where the problem lies.

Three Ways to Deal With People Who Hate Your Frugal Lifestyle

Almost anyone who’s lived a frugal lifestyle has faced a naysayer or two somewhere down the line. Maybe it’s a co-worker who makes fun of your older, paid-off car or your refusal to go out for drinks. Or a sibling who criticizes your simple, affordable home. Perhaps you have an acquaintance who looks down on your choice of clothing, or a neighbor who thinks you really need to “spruce up the place” to make your property as attractive as theirs.

Whoever the person is – and no matter what they say – it’s important to stand your ground.

Here are some ways to deal with the haters who may not appreciate your frugal tastes:

#1: Focus on your goals.

While choosing to be frugal isn’t the easiest decision to make, it’s a lifestyle that comes with too many upsides to count. When you spend wisely and waste as little as possible, you tend to have more money to save and spend on important goals.

Obviously, more savings can help you sleep better at night – and even provide a safety buffer if you lose your job or face a loss in income. And when your expenses are lower, you have fewer bills to worry over.

Or maybe you’re frugal so you can afford to travel the world. By spending less on housing, food, and entertainment, you can afford to traverse the globe while also saving steadily for the future that will inevitably come.

Either way, focusing on these goals is the best thing you can do to stay on track. A non-frugal friend may not understand your desire to have a fully-funded emergency stash or to pay for your child’s college education, but that doesn’t make these goals any less worthy.

Focus on the future and on your goals, and that will help ward off any negative feelings from people who might criticize you.

#2: Know that some people will never understand.

Many Americans are so caught up in consumer culture that they can never truly understand why someone would choose not to spend. They’re so busy buying and upgrading their lives that they can’t imagine any other way.

On the flip side, frugal people are inherently different, mostly because they usually have a goal in mind. Either they’re saving for the future or paying off their house, or socking away money to try and retire early (or at least on-time).

People who don’t focus on personal finance may not appreciate these goals at all, mostly because they don’t tend to think that far ahead. Keep in mind that up to 78% of U.S. workers live paycheck to paycheck, and that nearly three out of four full-time workers say they’re in debt. Further, more than half of Americans have less than $1,000 in savings.

When you consider these statistics, it’s easy to see why regular people don’t understand your early retirement goals or your devotion to living debt-free. It’s not their reality – not even close – so of course they won’t “get” why you’re so focused on the future.

As a frugal warrior, you don’t have to understand the way people think or spend – and you probably couldn’t care less. But it’s equally important to realize that it’s not your job to make people understand why you’re frugal. Some people never will, and that’s perfectly okay.

#3: Meet them halfway.

Out of experience, I can say that some of the backlash frugal people get is because others feel you’re isolating yourself or refusing to participate. A good example from my own life is when, many years ago, I refused to participate in Christmas gift exchanges because I believed (and still believe) they’re a waste of money.

Here’s how I see gift exchanges: Everybody buys a random, impersonal $20 gift and exchanges that gift, so we all end up with something we didn’t want. In my mind, this is akin to setting $20 on fire, so I’ve never wanted to participate.

Of course, family members haven’t always loved that – and I think some of them misinterpreted my feelings to mean that we didn’t want to be a part of the group. That’s why, over the years, I’ve softened on situations like these where everyone wants to participate except for us.

That’s not to say that you should spend money you don’t want to just to make other people happy. Instead, try to see your frugality from the perspective of an outsider. Sometimes, spending the $10 or $20 to participate in a group event can go a long way to ensuring family harmony or mending a long-term friendship – and that’s a sound investment.

The Bottom Line

If you’re sick of dealing with people who seem irked by your frugal lifestyle, remember that it’s more about them than it is about you. Sometimes people might see your success as their own failure, and the fact you’re making financial progress may serve as a painful reminder to them that they’re not.

It’s your life and your goals that matter, and there’s power in not caring what other people think. As you forge forward with your frugal lifestyle, keep your eye on the prize and don’t let negative opinions get you down.

Haters may always hate, but you don’t have to listen.

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

Related Articles:

How do you deal with people who don’t like your frugal lifestyle? Please share in the comments below. 

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Are Cover Letters Dying? Maybe, But Here’s Why You Should Write Them Anyway

You’re applying for your dream job — or just a job that pays more than what you’ve got going on right now.

After tailoring your resume to the job description, you obsess over every single word. Then you make your significant other read it approximately 23 times.

Once you determine it’s perfect, you move on… to the cover letter. Dun, dun, dun.

That’s the one-page document that’s supposed to add personality to your bulleted resume.

Online advice says, Be cool. Be interesting. Show; don’t tell. Make yourself shine through the screen.

I respond, Sigh.

Aside from those “We’re sorry. You’re just not the right fit. We won’t elaborate why; we’ll just let you lose sleep over it” responses, the cover letter is arguably the worst part of the job-search process.

But times could be changing, at least according to Jobvite’s 2017 Jobseeker Nation Report released earlier this year.

The survey revealed nearly half (47%) of American workers didn’t even bother sending a cover letter when they applied to their current job. Additionally, 74% of recruiters reported not considering the document when evaluating a candidate.

Jobvite bluntly concluded that, yes, the cover letter is dead — or at least dying.

What’s the Point of a Cover Letter Anyway?

Can you really fit your entire being into one page of Times New Roman text?

Not really, but the original purpose of a cover letter was to add some flair to that straightforward, bullet-pointed resume.

“It’s a vehicle to accompany your resume, portfolio or whatever it is you’re sending in,” says Loren Margolis, CEO of Training and Leadership Success. She spent nine years as a leadership and career coach at Columbia Business School.

Margolis says the cover letter is also a great spot to express your desire to be called in for an interview, something you can’t necessarily do in your resume.

There’s also what she calls a hidden purpose. “[Recruiters and hiring managers] want to see if you’ve got writing skills and that you can put together two paragraphs — or sentences even,” Margolis explains. “This is your time to shine and demonstrate your communication skills. It can really be a selling point.”

Bryan Chaney, the talent branding and attraction strategist at Indeed, says the cover letter is a great opportunity to explain why you’re the perfect fit for a job, even if your background doesn’t exactly align with the job requirements. “Your cover letter is there to explain why the recruiter should talk to you,” he says.

Jumping off that point, Rachel Bitte, the chief people officer at Jobvite, explains the cover letter was a way to “tailor your application to the company and position” and to “make a personal connection with the recruiter and to highlight useful information that doesn’t shine through on bullet points on a resume.”

She emphasizes one key word, though: Was. The cover letter was

Why Are Cover Letters Dying?

For those of us who have poured our entire hearts and souls — and perhaps a sleepless night — into a cover letter, I apologize for what I’m about to say…

Many recruiters these days simply don’t have time to read your cover letter.

“The number of candidates who apply, as well as the pace at which companies need to bring in fresh talent, has increased exponentially, leaving recruiters with more applications to get through and less time to do so,” Bitte explains. “Recruiters only have a couple of minutes to review an application, so they want to get to the core of someone’s experiences and background quickly via their resume.”

It’s also worth considering how we’re finding and applying to jobs now — through online portals such as LinkedIn.

Sometimes you don’t have the medium to take a Word doc and create a cover letter in it,” Margolis notes. She uses LinkedIn as an example. The “Easy Apply” feature only asks for a flavorless resume.

What’s Replacing the Cover Letter?

At this point you’ve probably guessed it: Social media is now playing a huge role in the job application process.

“Before, the cover letter was a way to show off some personality, but modern recruiters can now look to social media to suss out culture fit,” Bitte explains.

But the key lies in properly managing and carefully curating those platforms.

“When it’s done right, it can showcase your creative skills, personality and ability to build a network,” Bitte says.

Remember that Jobvite Job Seeker Survey? It found recruiters love seeing examples of work, volunteer experience and mutual connections.

“That, more than any cover letter, could be the difference maker on whether you land the job,” Bitte concludes.

Further down the road, some professionals, including Chaney and Margolis, believe video will become more prevalent. Chaney deems it an “accessible storytelling medium.”

Imagine sending a 10-minute selfie video to a hiring manager.

So I Can Stop Writing Cover Letters Now, Right?

Well, not exactly.

Not all recruiters have tossed cover letters out the Windows (get it?), especially in writing-focused and communication-focused industries.

Many jobs require communication skills, and that’s why the cover letter is handy: to make sure a candidate can piece together sentences to form a paragraph, like Margolis explained.

Other recruiters and hiring managers might use the cover letter to gauge a candidate’s attention to detail. In the job description, it might ask for specific paragraphs on specific topics. If those aren’t included, it shows you might not be cut out for the job.

Margolis also mentions those popular “cover letter optional” listings. When it comes to these, she encourages applicants to submit a cover letter. It can’t hurt — only help.

When asked if the cover letter will ever totally die off, Margolis says, “You know, I think they may. But here’s what will never fully die out: An organization’s need to know how you communicate as a part of their vetting process.”

So, for now, we recommend you keep writing ’em!

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She wishes cover letters would hurry up and die already.

This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.



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السبت، 28 أكتوبر 2017

Local costumer set for holiday

While it is no secret that Americans love holidays, what we’re spending on Halloween this year might spook you.Americans are expected to spend a record $9.1 billion on the holiday this year, a more than $700 million increase compared to spending in 2016, according to a recent report.“The crowds have been wonderful this year, they seem really into it,” said Bill Frazetta, owner of Frazetta’s Costumes in East Stroudsburg.According to the [...]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thus, my awareness of it snowballed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Good luck.

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



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

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

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

Here’s how payday loans work:

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

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

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

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

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

TYPE OF DEBT
NAME OF DEBT
AMOUNT OWED (PRINCIPAL)
$
INTEREST RATE
%
MONTHLY PAYMENT
$
I can't pay off my debt! I'm not paying enough each month.
EXTRA MONTHLY PAYMENT
$

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

$0
TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
DEBT FREE BY
Interest saved by extra payments:0
TYPE OF DEBT
NAME OF DEBT
AMOUNT OWED (PRINCIPAL)
$
INTEREST RATE
%
MONTHLY PAYMENT
$
I can't pay off my debt! I'm not paying enough each month.
EXTRA MONTHLY PAYMENT
$

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

$0
TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
DEBT FREE BY
Interest saved by extra payments:0
TYPE OF DEBT
NAME OF DEBT
AMOUNT OWED (PRINCIPAL)
$
INTEREST RATE
%
MONTHLY PAYMENT
$
I can't pay off my debt! I'm not paying enough each month.
EXTRA MONTHLY PAYMENT
$

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

$0
TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
DEBT FREE BY
Interest saved by extra payments:0
TYPE OF DEBT
NAME OF DEBT
AMOUNT OWED (PRINCIPAL)
$
INTEREST RATE
%
MONTHLY PAYMENT
$
I can't pay off my debt! I'm not paying enough each month.
EXTRA MONTHLY PAYMENT
$

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

$0
TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
DEBT FREE BY
Interest saved by extra payments:0
TYPE OF DEBT
NAME OF DEBT
AMOUNT OWED (PRINCIPAL)
$
INTEREST RATE
%
MONTHLY PAYMENT
$
I can't pay off my debt! I'm not paying enough each month.
EXTRA MONTHLY PAYMENT
$

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

$0
TOTAL MONTHLY PAYMENT0Monthly payment: 0Extra payment: 0
DEBT FREE BY
Interest saved by extra payments:0
CURRENT PAYOFF PLAN
  • Total Monthly Payment
    0
  • Total Principal
    0
  • Total Interest
    0
  • Payoff Date
    0
ACCELERATED PAYOFF PLAN
  • Total Monthly Payment
    0
  • Total Principal
    0
  • Total Interest
    0
  • Payoff Date
    0

How payday loans and balance transfers stack up

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

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

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

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

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

 

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

APR and fees

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

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

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

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

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

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

Credit check

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

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

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

Other debt consolidation and management options

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

Assistance programs

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

Debt consolidation loan organizations

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

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

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

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

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

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

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

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



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