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Instead Of Focusing On Growth, We Want To Focus On Enough: Our Journey To 330

September 1, 2018

Heads up: This post was first created on September 1, 2018 and will be updated monthly. Be sure to check back for updates!

We’ve decided to publicly share our journey to making “enough” money with Wandering Aimfully. The idea behind this is not to show off how much money we’re making, the idea is to show exactly HOW we’re doing it.

One of our core values here at Wandering Aimfully (or WAIM, as we like to abbreviate it and will do throughout this post) is transparency.

We believe the world is a better place when we’re sharing the FULL picture, authentically and truthfully.

Transparency becomes especially important to us when it comes to money because there are so many emotions and thoughts that often get tied to money (greed, shame, self-worth, happiness, embarrassment, etc), some of which can present challenges to the way we pursue our goals.

Before we get too deep into things, you might not know who the heck “we” are, in which case you may want to mosey on over to our About Page to learn more about us—Jason and Caroline Zook. If you just want the TL;DR version: We’re a husband and wife creative duo, with no employees, running our own businesses for over a decade, currently living and working together in Southern California. For good measure, here’s a super cute photo of us…

Jason and Caroline Zook, Journey to 330

Now that we’ve met, let’s talk about this goal of getting 330 people to join our Wandering Aimfully Membership.

 


INTRODUCTION

Our Goal: Reach 330 Paying Members Within 12 Months (aka Journey to 330)

From years of experience, we know how it easy it is to get fixated on making more money. Yes, we know how good it can feel to see a couple extra thousand dollars in your bank account after a big launch, but we also know the mental toll it takes to constantly be in promotion, marketing, and sales mode. That’s partly why we’ve decided to give ourselves an “enough number.” When we finally reach this number, we can stop feeling the constant pull of promotion. We can focus fully on the amazing community we’ve built, rather than constantly be searching outside of the community for more members.

We also believe that defining your enough is the only way to ever feel satisfied. So often we focus on the vague word “happiness” without defining what it really is. We believe a big part of happiness is this notion of satisfaction. So, let’s explore for a second this idea of satisfaction.

One definition we found for the word satisfaction was:

The pleasure derived from the fulfillment of one’s needs.

Think of your wants and needs as an empty bucket. The pursuit of fulfillment is the quest to fill that bucket, and satisfaction is the pleasure you get from recognizing it’s indeed full.

But here is the root of why satisfaction seems to be so elusive:

So many times in our lives, we don’t actually define our individual/actual needs. We never stop to decide how big the bucket needs to be. We never stop to decide how much is ENOUGH.

How can we be fulfilled when we have no idea how big the bucket is we’re trying to fill?

Without defining what your needs are—without setting that benchmark—you will just keep trying to fill a bucket that’s endlessly expanding. That’s a recipe for a lifetime of discontent.

Instead, if you want to experience satisfaction (ie. happiness), you need to define how big your bucket needs to be…and then you need to recognize it when it’s full.

Or, in other words, you need to figure out how much is ENOUGH.

For us, our enough is 330 Wandering Aimfully members

Getting to 330 paying Wandering Aimfully members within 12 months time will net us $33,000 in monthly recurring revenue (MRR). After we hit that number, we’ll close the proverbial sales-doors and stop accepting new members. We aren’t interested in continuing to grow our membership community (and make more money) just because we can.

In a highly digital world, we want to plan for and offer a personalized touch.

Why 12 months? Each month we’ll limit new memberships to 30 per month, so technically we should be able to get to our goal before 12 months (yay, math!), but we want to leave a bit of buffer in our membership signup planning especially because we know we’ll have some customer cancellations (aka churn). Limiting our memberships to 30 new people per month allows us to deliver as much of a personalized experience as we can, including some non-digital stuff.

Additionally, limiting the amount of new monthly members ensures that the community doesn’t feel crowed or overwhelming to our existing awesome members. It’s important to us to preserve the culture of the community, which we know to be one of our major selling points and differentiators.

For context, it might also help you to know how our membership pricing works. It’s very simple:

  • $100 per month or,
  • $1,000 per year

Both membership options include the exact same thing, the annual option simply saves someone a couple hundred dollars by paying in advance. If you want to learn more about what we include in our WAIM Membership, click here.

We’d be remiss if we didn’t mention some important advantages we have in this Journey to 330:

  1. We’ve been working for ourselves since 2007 (Jason) and 2013 (Caroline), with both of us focusing on helping creative entrepreneurs since 2014.
  2. We have a (now combined) email list of 16,000 subscribers.
  3. We have a (now combined) website that averages 50,000 visitors per month.
  4. Our membership community had 400 active members grandfathered (or grandmothered) in from a previous project called BuyMy/BuyOurFuture.

There’s no denying those are helpful pieces of this puzzle that we already have at our disposal. That being said, this is a new business offering for us and for our audience.

 

How did we get to $33,000 MRR as our GOAL “enough” number?

We told you we value transparency, didn’t we? Well, it’s about to get really real up in here.

A fundamental part of our approach to work and life is a philosophy we call Working To Live. Part of this ethos is the belief that living a fulfilling life begins with establishing our ideal lifestyle and then reverse engineering our business decisions to support and align with this lifestyle.

Using this approach, we first identify what we WANT, and then we back out how much money we need to get there.

That equation is how we arrived at our specific number of $33,000.

“We first identify what we WANT, and then we back out how much money we need to get there.”

Our average monthly living expenses: $12,000

That number may or may not seem outrageous to you. It’s taken a lot of restraint not to write paragraphs of text defending how much we spend in living expenses every month. But therein lies the problem when it comes to money: we constantly feel like we’re being judged or we feel we have to be on the defensive about our spending.

So, how about this as justification…We spend this much money every month to live lives we absolutely love. It’s awesome to be able to do that, right? We agree! But, it wasn’t always this way. In fact, it was just back in 2013 we spent $4,000 per month and could barely make ends meet (you can read our getting out of debt guide here).

Here are how our monthly living expenses break down in broad strokes:

  • Rent: $4,000
  • Groceries: $1,500
  • Entertainment/Coffee/Eating Out: $1,000
  • Travel*: $2,000
  • Health & Insurance: $1,000
  • Tesla Payment: $1,000
  • Plaxico (our dog): $400
  • Misc (utilities, cleaners, etc): $500
  • Other (donation to causes**, Acorns, etc): $600
  • Total: $12,000 spent per month

*We don’t actually spend $2,000 on travel per month, but the past two years we’ve averaged spending about $20,000 on travel per year. We put this as a monthly “expense” to keep a watchful eye on it.

**Donating to causes we care about is a big part of our Journey to 330 goal as you’ll read in a moment.

Our average monthly business expenses: $5,000

Our business expenses have fluctuated quite a bit over the years due to how many different businesses and projects we have. That being said, one of our huge goals with starting WAIM was to streamline all of our projects into ONE membership and create a much more predictable set of business expenses. We believe this number is actually going to decrease over time, but for now we’re using a comfortable monthly average (which we’ll share more about in detail as the monthly updates continue to get added to this post).

The average monthly amount we’ll set aside for taxes: $3,000

Oh taxes, you necessary evil, you. First, we aren’t going to be those people that gripe about paying taxes. We understand and believe in taxes. This monthly average number will absolutely change over time, but we’ve decided to base it on our previous two years of business (taking what we paid in total taxes annually and dividing that by 12 to get a monthly average number). We do a /decent/ job of setting aside money for our taxes each year, but with a more predictable MRR going forward, this will get much easier!

The average monthly amount we *want* to save: $10,000

Have you heard of this mystical thing in business called “profit??” It’s a pretty crazy phenomenon we’re just hearing about! It means that you don’t just spend every dollar your business brings in, but that you can keep some of it! It escaped us for a few years, but we’ve decided to utilize its wonderful powers going forward and put a much heavier focus on it 😂. Alright, jokes aside, our goal is to have $10,000 every month we can put into our savings, investments, and not touch at all. We’ve NEVER been able to predictably save a sizable amount of money each month and we want that to change.

It’s probably worth mentioning that we *have* been saving and investing the past few years, just not in a super regimented fashion. You can read how we currently invest and save our money here.

The average monthly amount we want to give to causes: $3,000

It can be really hard to give money to charities and great causes when you can barely eek a profit out of your business. We’ve managed to donate every month this year because we’re finally prioritizing it, but we want to do much more. Part of this Journey to 330 is to bake charitable giving into our financial plan. We want to allocate 10% of our total monthly revenue to non-profit organizations, causes, and other acts of good that come onto our radar each month. The idea of having $3,000 every month that we can give away and help make a difference is something we’re really excited about!

**

Those five categories of money add up to $33,000. As a reminder, our goal is to hit $33,000 in monthly recurring revenue in 12 months (that would be by September 1, 2019). Will it happen? What are we doing to make it happen? Find out each month going forward by referring back to this post. We’ll add an updated section each month with how our launches are going, what we’re doing to reach this goal of 330 members, and how our feelings continue to evolve about this enough goal.

Shameless plug to ask you to join our Wandering Weekly email list if you want to have little reminders about our Journey to 330 as well as get our awesome content related to fitting business into your life, making more money with your creativity, and being more intentional with your choices.

 


UPDATE #1: SEPTEMBER 1, 2018

The Starting Line and Getting 14.4% Past It (Everything Before September 1, 2018)

As of September 1, 2018:

Monthly Recurring Revenue (MRR): $4,783
Total Paying WAIM Members: 48

14.4% to goal

 
Monthly Profit and loss:

Total WAIM MRR: $4,783
Total WAIM Fees (Stripe/PayPal): $145
Total Expenses to Build WAIM: $16,500
Monthly Expenses in August: $7,460
TOTAL PROFIT: -$19,177 (eeeeek)

Quick hits of what we did to get this first group of paying members:

  • Shared everything it took to build Wandering Aimfully
  • Had an entirely new membership dashboard built
  • Did a pre-order launch of our memberships in May
  • Did the initial launch in August (20-27)

 
Ideally, we would’ve started this public journey at $0 MRR. Unfortunately, it takes a lot of time to put something like this Journey to 330 post together and we simply didn’t have the time while we were building our actual website and business. Every hour we had from March 1 – August 19 (2018) was spent bringing Wandering Aimfully to life. During that time we did a pre-order of our WAIM Membership and a first public launch.

In trying to keep this first update as succinct as possible (the irony is thick there), just know we spent five months planning, designing, building, working with developers, going through 400 of our past articles, riding a bunch of emotional roller coasters, creating our purchasing flow, and completing well over 2,000 tasks to bring this website and our membership offering to life. We also had a website dedicated to the behind the scenes of building WAIM, which was live from March 1 to August 19.

Under Construction Wandering Aimfully Website

Our first 15 paying customers: May 2018 Pre-Order

Before WAIM was finished being built, we knew we wanted to offer a pre-order for our memberships. We made this decision based on two things:

  • We teased to our email lists that we’d be offering a membership community and people said they were interested (so we wanted people to put money where their mouths were).
  • We wanted to fully test our somewhat complex purchasing flow using a new system we’d never had experience with (Restrict Content Pro [aff link]).

We opened up our pre-order for just one week, limited it to 30 buyers only, and sent three emails to a list of 400ish subscribers (this was a segment of our bigger list that had opted into daily-ish blog posts about how the build was going). Our three emails were fairly simple and explained the gist of the membership, the existing courses/workshops they’d get access to, and then a tease of what was coming in future months with WAIM.

Wandering Aimfully Pre-Order Page

There was only one hitch: We told our pre-order members they wouldn’t get full access to everything for at least a month (sell before you’re ready!)

While they’d receive access to our courses, this custom member dashboard we kept telling them about wouldn’t be fully coded for at least another month. Would people still pre-order if they couldn’t get the full experience right away? Well…

The WAIM Pre-Order brought in 15 buyers, netting us $1,483 in MRR

  • 488 people visited the pre-order sales page
  • 15 people pre-ordered (3% sales conversion – pretty epic!)
  • 14 people purchased the $100 per month option
  • 1 person purchased the $1,000 per year option (Hi Martha! 👋)
  • 11 people paid using Stripe
  • 4 people paid using PayPal

Wandering Aimfully Pre-Order Metrics

(You’ll notice the Airtable view of customers only shows 13 people and this is because two of our pre-order members canceled a few months in – sad panda. We’ll talk more about this in a moment.)

Our next 35 paying customers: August 20-27, 2018 Launch

With our website finally up and running it was time to do our first official launch! August 20 was the start date and we would leave the “cart” open for one week, again limiting the number of buyers to just 30 people. This launch was quite a bit different from our pre-order because it also coincided with the website going live and we sent sales emails to our entire email list.

Leading up to August 5, we created lots-o-content!

We decided early on that we’d write a behind the scenes journal sharing all of our processes, decisions, roadblocks, problems, and even share full unedited video meetings. From March 21 to August 5 we created and shared:

  • 49 blog posts (21,200 total website visitors)
  • 29 videos (just over 11,000 total views)
  • 61 Instagram posts (30ish stories)

Wandering Aimfully Lead Up Marketing

From August 5 to August 20 we warmed our audiences up to our first launch

Here’s what that looked like…

Caroline’s previous email list (Self-Made Society): On August 5 Caroline mentioned that WAIM was coming on August 20. This was sent to 5,502 subscribers and 1,514 of those subscribers opened the email (27.5% open rate).

My previous email list (JasonDoesStuff): On August 7 I mentioned to my email list that WAIM was launching on August 20. This was sent to 11,538 subscribers and 2,477 of those subscribers opened the email (21.5% open rate).

Our first combined newsletter (Wandering Weekly): On August 13 we sent our first combined email newsletter prepping the subscribers of our new website and membership on August 20. This was sent to 16,684 subscribers and 2,411 of those subscribers opened the email (14.5%* open rate).

*Something definitely went wrong with this email broadcast. We actually reached out to our email provider and they admitted something looked weird. Unfortunately, we had too many to-dos on our list to diagnose things and didn’t want to try to resend the email with fear of something else going wrong or happening with our email reputation.

We shared teasers and whatnot on social media: While our social media follower numbers are nothing to scoff at, it’s important to note we also don’t see social media as a huge driver of new traffic or sales. Even though I have 31,000+ followers on Twitter, the engagement of even the most exciting of tweets is VERY low. Caroline has 2,900+ followers on Twitter, but I think she’d echo my statements about engagement (and she mostly just pushes her Instagram posts through to Twitter). Speaking of, Caroline wins our household Instagram award with 16,000+ followers; I have just a touch over 3,000 followers; and Caroline runs our @wanderingaimfully account which has 900+ followers. Those numbers are just to give you an idea of the impressions we’re working with. Numbers aside, we posted a handful of tweets with teaser images, shared a few stories on Instagram, and just generally kept people tuned-in to the launch date of August 20. Caroline did work some pretty awesome grid-magic on IG (as you may have noticed in the “Lead Up Stuff” image above).

While keeping our audiences ready, we wrote our sales email sequence

This isn’t our first rodeo selling something over the course of a week. We knew we didn’t want to be writing and sending sales emails the night before (we’ve done that too many times and it’s stressssssful), so instead we whipped up a Google Doc and wrote all our sales emails in one spot.

Pro-tip: This is also a great way to get the subject line, preview line, links, etc organized ahead of time.

Wandering Aimfully Sales Email Google Doc and Drip Campaign

Then Caroline worked her wizardry in our email provider ( Drip [aff link]) to set up a “campaign,” which is just a string of emails with a simple sending schedule (shown above). Here is the timing of the sales emails along with the general topic discussed:

  1. Monday, August 20: New site is live! Memberships are OPEN! 😱
  2. Tuesday, August 21: Case studies and testimonials 👫👫
  3. Thursday, August 23: New resources to be added in September for members 🤩
  4. Saturday, August 25: How can WAIM help you? Reply! 🤔
  5. Monday, August 27: Memberships are closing tonight 😬
  6. (We didn’t end up needing to send this email, as you’ll read!) Monday, August 27 (evening): Last call!!! 😳

These emails were sent to our newly combined (as of August 13) Wandering Weekly email list minus the last email in the campaign because we hit our goal and didn’t need to send a “Last call” email. Who turns off one extra sales email during a launch knowing it would probably bring in more sales? We do. That’s who.

In the image below you can see the open rates improved greatly using this email campaign in Drip, as opposed to a normal broadcast email (very odd). And a couple email stats for you:

  • Starting # of subscribers: 16,329
  • Total unsubscribes during launch: 520*
  • Average open rate: 20.8% (3,396)
  • Sales conversation rate (email opens to WAIM buyers): 1.4%

*Truthfully, we’re happy to see people unsubscribe as we know our content and membership isn’t the right fit for them.

Wandering Aimfully August 2018 Sales Campaign Emails


Wait, 35 new customers, I thought you said 30 was the limit?? Let’s dive into the data of our first launch…

35 new customers, what happened to 30? Ahhh, you are astute! So, a couple things happened which led us to end up at 5 buyers over the 30 number we set:

  1. We had two pre-order buyers cancel during the launch, so we figured we’d just fill their spots and let two new people come in
  2. We had one new customer cancel the day after they purchased
  3. The counter that tracks our amount of member spots left is completely manual and we may have forgotten to update it when a buyer came in overnight (whoops!)

With that out of the way, let’s look at when people bought during the launch:

  • Monday (Aug 20): 8 new members
  • Tuesday (Aug 21): 2 new members (but 1 canceled)
  • Wednesday (Aug 22): 3 new members
  • Thursday (Aug 23): 5 new members
  • Friday (Aug 24): 3 new members
  • Saturday (Aug 25): 5 new members
  • Sunday (Aug 26): 0 new members (crazy, huh?)
  • Monday (Aug 27): 10 new members

We offer credit card or PayPal as a buying option, so here’s the split on that:

  • 60% bought using credit card (21 people)
  • 40% bought using PayPal* (14 people)

*PayPal actually wasn’t working for the first four days due to two technical issues we missed. We finally got them fixed but have no idea if we missed out on folks who wanted to purchase via PayPal. Oh well.

And finally, the traffic to WanderingAimfully.com during the launch:

  • Total new website visitors: 9,782
  • Traffic from search: 64%
  • Traffic from direct (email): 21%
  • Traffic from social: 10%
  • Membership page visitors: 992
  • Membership page sales conversion: 3%

Wandering Aimfully Launch Week Website Analytics

To recap: As of September 1, 2018, we’re at $4,783 MRR (or 14.4% of our goal)

There’s no doubt in our minds that the initial launch is the most exciting time for people. It’ll be very interesting to see if we can keep up our pace of 30 new members each month going forward.

And now, the best and worst parts of our first official launch:

The BEST part of our first launch?

We can’t stress enough how excited we were to get Wandering Aimfully launched, but more importantly, to have a new group of amazingly talented and creative people in our community.

Wandering Aimfully Slack Member

The WORST part of our first launch?

It’s hard to categorize anything as the “worst” part when things go pretty much to plan. If we had to mention something here, it would probably be how much stuff we have to do manually behind the scenes for a new customer that buys via PayPal. We won’t bore you with all the details, just know that each PayPal customer requires a bunch of manual processes that we’d love to automate in the future, but had to launch without (even though we tried to automate them months prior).

One last thing: We’ll be using Baremetrics to publicly track and share our progress

We’ll be using Baremetrics to track our member growth progress and revenue and you can actually view our public MRR dashboard here. Baremetrics is super neat because it helps you keep track of customers, revenue, churn, and lots of other powerful recurring revenue stuff.

Wandering Aimfully Baremetrics Dashboard

A big shout out to Josh and his team for getting us hooked up on Baremetrics and making it really easy to update our Airtable with actual monthly revenue.

**

That’ll do it for this first update! Now, it’s time to get to work on creating new stuff for our WAIM Members and executing our plans for the lead-up to our October launch.

👍👍

 


UPDATE #2: OCTOBER 10, 2018

After Our Second Launch We’re 19.2% Toward Our “Enough” Goal (Sept 2 – Oct 10, 2018)

As of October 10, 2018:

Monthly Recurring Revenue (MRR): $6,350
Total Paying WAIM Members: 62

19.2% to goal

 
Monthly Profit and loss:

Total WAIM MRR: $6,350
Total WAIM Fees (Stripe/PayPal): $160
Monthly Expenses in September: -$3,496
TOTAL PROFIT: $2,854

Quick hits of what we did to get this first group of paying members:

 
This is our second update on our Journey to 330 and man-oh-man do I have ALLLL the thoughts to share. If you are unclear of our “growth strategy” with selling our Wandering Aimfully Memberships, the goal is to open the doors every month and only allow up to 30 new paying members. One thing that you’ll notice between the first and second update is that our assumption about our expenses was correct. We can’t live off the $2,854 in profit we made this month*, but it’s great to know that our business is not making more money than it spends (after just two months!)

*If you’re wondering how we’re keeping the lights on since we aren’t making the profit needed to cover our total living expenses, we have ongoing payments from our previous BuyOurFuture project as well as revenue from a few other online courses and software products. Truth be told, these Fall months will be tight financially and we hope we don’t have to dip into our savings!

Looking at the month of September, we had a hunch that the luster would wear off during our second launch and I’ll talk more about that in a moment. But, one really big thing happened between the first launch and our second launch and that is that life took a big steaming 💩 on our faces…

Caroline got shingles and it royally sucked!

You know that phrase everyone (including us) like to throw around: “Plan ahead because life will shit on your face.” Well, it happened to us in a big way in September. My lovely and very healthy wife mentioned she had some tightness in her neck at the beginning of September and a few days later we found ourselves in an Urgent Care doctor’s office hearing that Caroline was diagnosed with shingles. Oof.

Caroline got shingled.

I’ll save you all the intimate details of how bad shingles can suck, but here’s the painful timeline of how it went down:

  • Week One: Caroline had shooting pains in her neck and could barely get out of bed
  • Week Two: Caroline still had a lot of pain in her neck and generally felt awful
  • Week Three: The pain in her neck lessened, but the itching (deep nerve itching) started
  • Week Four: The itching continued and some pain came back in her shoulder/neck
  • Week Five: Almost out of the woods, but we saw another doctor and got additional meds

Those five weeks happened between the first launch and second launch of Wandering Aimfully and unfortunately, it left us a woman down in the work department. While I tried to carry my weight and tow the line of everything we had going on (and keeping my other business ventures afloat) I spent the majority of my time trying to give Caroline any ounce of comfort possible. It was difficult not being able to work like we normally do, but truthfully, it was an emotional few weeks for me and an insanely few painful/emotional weeks for Caroline.

I don’t want this entire update to be about our run-in with shingles, but it’s worth noting that you DO have to prepare for these life hiccups to happen. You can be mad about it, you can be frustrated about it, but you can’t just fast forward life so you hunker down and deal with it the best you can.

I’m happy to report that Caroline is feeling 1000% better than she was during week one of shingles, but she still has some lingering issues (which we’ve come to discover are normal).

We launched our podcast/YouTube show, aptly titled Wandering Aimfully: The Show!

Earlier on in the summer, we made the decision to create a podcast and YouTube show where we’d talk about areas of life where we’ve wandered aimfully and share our experiences, stories, and lessons learned. Originally we were going to launch the show at the time of launching the website, but Caroline had a good idea to push the launch date of the show back a month so we’d have something fun to announce after the luster of our new website announcement wore off (good idea Carol!)

I’ve had a few podcasts over the years and one of the most important things I’ve done for my sanity in running them is to get AHEAD of the publishing schedule. We still had a ton of work on our plate during the summer months, but we carved out time to record five initial episodes of Wandering Aimfully: The Show. This was a clutch move because we couldn’t record a single thing in September and it was nice to know we had five weeks of episodes already recorded and ready to be edited.

Wandering Aimfully: The Show Recording Setup

I don’t want to spend too much time on the production of our show, but just know that:

  • Setup and teardown of our recording “set” takes about 1 hour (3 DSLR cameras, 2 mics, lots of cords)
  • Recording an episode takes about 1.5 hours (not including any prep or research)
  • Organizing and importing 80 GBs of footage (per episode!) takes about 1 hour
  • Editing and color correcting each episode takes about 15-20 hours
  • Exporting, uploading, creating an episode post, writing copy, etc takes about 2 hours
  • Each episode takes on average 25 total hours to produce 😱

I could, and may, write an entire article devoted to our plan and strategy with our podcast/YouTube show, but the short of it is we want to create a show that we’d enjoy watching. Our assumption is that we’ll deepen the relationship with our existing audience through the show, having them (you!) feel a connection to us that you can’t get through the written word. Could we see some external growth with our show? Maybe. But that’s kind of out of our control, so we’re not focused on that.

Wandering Aimfully: The Show on iTunes

As of writing this second launch update, we’ve released five episodes and the total views/downloads are just around the 3,000 mark. To some people, that may be great! To others, that may not seem worth the 125+ hours we’ve put in. To us, we’re committing to the show because we enjoy it and we want to see how it goes for a few months.

EDITOR’S NOTE: After reading back through this section of the update I posted a note in the Wandering Aimfully Slack channel about how much work was going into our show and not being sure if it was actually going to pay off (just some straight-up #realtalk). I heard back from many of our members that they loved the show and it was doing exactly what we intended it to do. Plus, a few newer members said the podcast pushed them over the edge to join WAIM. So… hurray testing assumptions!

During our second launch we had 18 new paying members

As you’ve read and understood, our goal is to get 30 new paying members each time we open the WAIM Membership doors. We are not naive and we understood that there would be a natural drop-off in membership with our existing audience.

New Wandering Aimfully members in October 2018

As our October launch approached we were trying to figure out the best way to sell our memberships, but not oversell it to the folks who went through our full 7-day sales sequence just a few weeks prior. Here’s what we ended up doing for our second launch.

Launch Group #1 – New subscribers who didn’t get the 7-day sales sequence in August (408 subscribers)

This group was made up of new email subscribers who went through our 5-day welcome email sequence and did not get our first launch sales sequence.

We dropped these folks directly in the same 7-day sales sequence we used before:

  • It was the same 5 emails we sent to our full email list in August
  • We updated the copy in 2 of the emails (to remove “we’ve just launched”)
  • The 5 emails saw an average open rate of 32.4%
  • The emails had a total of 25 clicks to the WAIM sales page (yep, only 25)
  • 29 people unsubscribed ¯\_(ツ)_/¯

And the most important stat of all? 8* people purchased!

*Unfortunately, we don’t have concrete data to say that our email sales sequence was the sole reason these folks purchased, but they were all in that group of 408 subscribers, so we’ll take it! Also, we’re going to try to track conversions from the 7-day sales sequence better during our next launch (always room to improve).

Launch Group #2 – Existing subscribers (15,931 subscribers)

I’m gonna be brutally honest and just come out and say it: I’m nervous that our email provider is having email sending issues. I’ve heard from another customer of Drip that they’ve seen a huge drop in email open rates, but it’s crazy to me that we went from an average of 20-25% open rates down to 10-15% since switching to a combined newsletter with a new from email address. That’s probably a topic for an entire other discussion, but we can’t do much about it now, so… let’s move on.

We sent our existing subscriber group three emails during our second launch:

Email #1: A normal newsletter about taking risks which aligned with our podcast episode that had a callout that memberships were open at the top (14% open rate).

Email #2: A dedicated sales email three days later focusing on wins our WAIM members shared with us with a bit more of a pitch to join (13.5% open rate).

Email #3: Another normal newsletter on the last day of the launch about confidence with a reminder callout that memberships were closing (11% open rate… but this data is written one day after sending that email).

It’s safe for us to assume that 8 of our new customers came from these emails.

So, where did the other 2 customers come from? Well… They found us completely out of the blue and joined in the last few moments! No joke. I emailed with both new customers who weren’t on our list and they said they hadn’t heard of us before joining but felt a real connection to us and WAIM and decided to take the leap. Pretty cool!

New WAIM Member

How does it feel to not hit our goal of 30 new paying members (and thus miss our revenue goal)?

Honestly? And most people would probably try to hide behind fake optimism… It sucks. It sucks to put something out into the world that you truly believe can make a difference for folks, but to not see the conversions happen.

BUT… We knew it wasn’t going to be easy to get 30 new paying members each month and we also knew that September was a really tough month for us.

If we take a step back we can see that we have 18 new (awesome) members who believe in us. We can see that we didn’t do much marketing or promotion at all, with exception to launching our show (which, as stated, is more of an audience deepening decision, not a widening one). And you know what’s better than a big fat 0? 18! There is a tinge of discomfort that we missed our 30 mark, but, we’re grateful to have new members AND our existing group who continue to stay active members.

To recap: As of October 10, 2018, we’re at $6,350 MRR (or 19.2% of our goal)

We have a second launch under our belt after having a pretty damn rough month personally. We still ended up with new members and even though we didn’t hit our goal, we were able to test some assumptions about the groups on our email list we could sell to.

Let’s finish up with the BEST and WORST…

The BEST part of our second launch?

We got some new members! 18 is way better than 0. The quality of the members of the second group seems to be on par with the first group (which is rad!) We were also really stoked that brand new subscribers converted to paying members, which bodes well for the future of our email marketing plans.

Wandering Aimfully Membership Growth

The WORST parts of our second launch?

There are two things I want to share and you probably guessed the first one: Poor Caroline had to deal with shingles the entire month. It. Was. Awful. But, we made it through and she’s feeling so much better. Could’ve been worse!

The second worst part I wanted to share is that 5 customers canceled their memberships. Personally, I have some soul-searching to do on how I deal with people canceling, especially after only being a member for one month. I get it, people will cancel, it’s the name of the membership game… but that doesn’t mean it doesn’t suck and it doesn’t make me feel emotions (even though most of the time I have the emotions of a robot).

WAIM Member Cancelations

The silver lining to having people cancel is that we get to learn why they canceled. We can find ways to improve or to make our membership better. We absolutely believe WAIM is worth the $100 per month, but we also know we don’t have the best onboarding process for our new members. Hoping to spend time on this in the next few weeks!

**

Hope you enjoyed our second update on our Journey to 330! It’s as much a reminder to us as it is to you that reaching your goals isn’t going to happen overnight. It’s also not going to happen just because you hope and dream it will. You have to put in the work and you have to prepare for things to go wrong now and again.

Thanks for reading and feel free to shoot me a tweet if you have any questions or things you’d like to see added to these updates?

 


UPDATE #3: NOVEMBER 15, 2018

After Our Third Launch We’re 18.5% Toward Our “Enough” Goal (Oct 11 – Nov 15, 2018)

As of November 15, 2018:

Monthly Recurring Revenue (MRR): $6,133
Total Paying WAIM Members: 62

18.5% to goal

 
Monthly Profit and loss:

Total WAIM MRR: $6,133
Total WAIM Fees (Stripe/PayPal): $128
Monthly Expenses in September: -$3,590
TOTAL PROFIT: $2,415

Quick hits of what we did this month:

 

Holy moly, where do we begin this month? Well… Let’s just go ahead and rip the band-aid off and jump right into the biggest emotional topic.

Our MRR went DOWN after our third launch, and, truthfully, that sucked.

This is a very weird sentence to type, but we’re kind of glad our MRR went down. Wait, do we hate making money? Are we gluttons for punishment? Why the heck would we be happy that our MRR went down??

Here’s the deal, and it’s my belief it’s going to make total sense after you read this:

We humans love drama. We don’t like to just watch other people succeed without challenges.

We like to see some tension. We need relatability. We need something to go wrong so we can see how the hero(es) overcome the adversity.

Now, if I’m being honest, I’d rather that drama didn’t involve how much revenue we generate, but it is what it is. The fact of the matter is that between October 10 (the end of our second launch) and November 12 (the end of our third launch) we had more people cancel than we had signup. OOF. Not great.

I’m the one who more closely watches our WAIM Memberships and it was a punch to the gut every time a cancelation email came through. All-in, we had 12 people cancel their WAIM Memberships which increased our User Churn to 16.9% (industry average is 11%).

WAIM November Churn

While it sucks that people canceled the memberships, it’s a great opportunity for us to learn what we need to improve upon.

The wise and experienced co-founder of Basecamp, Jason Fried, once said that you learn the MOST about your product right when a customer signs up or right when they cancel. When a new customer joins, ask them why and find out if there are recurring things that are attracting and converting people (and do more of that!). When a customer cancels, asks them why and try to fix that problem asap. So, that’s exactly what I’ve been doing with every WAIM Member who’s canceled.

I would have expected members who canceled to say things like: You guys aren’t as helpful as I thought or Your products aren’t what I expected or I just expected something completely different. But, we didn’t hear any of that. In fact, we’re seeing people cancel their WAIM Memberships because we have TOO MANY products. We’re hearing that folks believe in the value of WAIM, but they were overwhelmed by all the products available and not sure where to begin. And while that might seem like a good problem to have, it’s still a problem that needs fixing because it is causing people to leave.

Can I just pause for a moment and be brutally real with you… Emailing people and asking them why they canceled is humbling. It’s not fun. But, if you’re trying to build something that can last and that can make an actual impact for your customers, you have to push through the uncomfortable moments. Every time I hit send asking people why they canceled it feels crappy. But it’s necessary, and I’ll continue to do it.

Is it possible that we can fix this problem of overwhelm and hopefully reduce our member churn in the process?

I’m going to save the answer to this question until the final part of this month’s Journey to 330 update. For now, let me take a break from talking about everything that went wrong and share some stuff that went RIGHT!

We hosted three workshops in the past month and people loved them!

One of the things Caroline and I enjoy most is teaching live workshops. Caroline is amazing at coming up with frameworks and processes that we can use ourselves and pass on to others. The live video element takes me back to my IWearYourShirt days where I hosted a 1-hour live video show daily for nearly 5 years straight (yeah, you read that right!) There’s something about the energy of speaking to people live and getting immediate feedback that lights us both up.

WAIM Workshops

Workshop #1: Selling Without Feeling Sleazy

This workshop was initially supposed to happen during our second launch but with Caroline still not feeling great we had to postpone it a bit. Instead, we held the workshop on October 18 and had 232 people register. Of those 232 people, 139 showed up to the event which is a whopping 61.5% attendance rate (that’s RAD!)

Selling Without Feeling Sleazy Workshop Analytics

We didn’t have anything to sell on the workshop, so it was just 100% value-driven. That being said, we did have two people email us after the workshop who thanked us and said they would be joining WAIM because the workshop was so great (and they both stuck to their word and signed up during our November launch – wahoo!).

Workshop #2: SEO & Google Analytics (Members Only)

For a while, we’ve wanted to have WAIM Member co-hosted workshops as there are some really talented and smart people in our community. One member, in particular, has been an all-star since joining what WAIM was previously known as: BuyMyFuture.

That member is Brendan Hufford and he’s been an incredibly valuable community member. Brendan lives, eats, and breaths SEO, so whenever someone has a question in our community Slack channel, Brendan is all over it (or if I beat him to read it, I’ll tag him and then he’ll reply).

Through a few random DM convos, Brendan and I decided it was time to do a basic SEO workshop as well as share a really nice Custom Google Analytics Dashboard that’s perfect for content creators.

WAIM Members-Only SEO Workshop

This workshop was for a much smaller audience, just our paying WAIM Members, but I was still stoked we had 83 people register (20% of our total community) and a 55% show-up rate. Even better than that, the comments at the end of the live workshop and afterward were incredibly positive (it helps that Brendan was a teacher in his former life, so he’s great at hosting and keeping people engaged!)

WAIMs are happy!

Workshop #3: Our “Customer Journey Marketing Plan” Exercise

Truth be told, we didn’t plan to do this workshop when we started our third launch of WAIM Memberships. However, because we missed doing a workshop during October’s launch, we decided to squeeze this one in and do it during the final day of our 1-week launch window.

We had 193 people register for the workshop and another great show-up rate (56.5%). I believe we had people attend from 25 countries around the world for this one, which is really neat!

WAIM Marketing Workshop Attendees

The big experiment for this workshop was to have a sales pitch for WAIM Memberships at the end. The workshop itself was approximately 45 minutes of teaching and 15 minutes of selling. We unveiled a new plan in the works, which again I’ll get to in a moment. Here’s what the sales slides looked like:

WAIM Workshop Sales Pitch

We’re not new to selling on live workshops, especially me. That’s actually something I got really comfortable doing 2013-2015. You can imagine my surprise when we had… drumroll… zero sales. Not a single person bought during the workshop and only one person bought when we sent out a follow-up reminder email that the doors were closing for WAIM Memberships.

Which, leads us to two final updates this month…

We believe that WAIM Memberships are a bit too general and don’t solve a specific enough problem for prospective customers.

This is part of the discussion about members canceling due to feeling overwhelmed. While we can solve many problems with the 30+ products we provide in WAIM, it’s too much to choose from and feels like we’re not addressing a bigger problem we can solve for people.

As we’ve watched our membership join rates decline from August (first launch), October (second launch), to November (third launch), it’s apparent to us that something is missing the mark. That something is what we’re going to hunker down and focus on next.

With only 7 new members joining in November (and 12 people canceling in October), we have to make a change.

Sometimes you don’t have a crystal clear change to make in your business when things aren’t going exactly as you want them to go. It would be an entirely different story if people were canceling our membership and saying, The courses are crap, The other members aren’t around, and You guys aren’t who I thought you were. Thankfully, NO ONE is saying those things (at least not to our faces or email inboxes – haha). But if people were saying those things, we’d have an idea of exactly what to fix. Instead, we’re making a best guess based on what our gut is telling us.

We’re going to create a new 6-month program that’s laser-focused on solving a big problem for a specific type of person and focus the entire membership around that core program.

You may have caught a glimpse of this in the sales slides I included a GIF of a few paragraphs ago, but this is where we’re taking a big leap of faith. We’ve known from the beginning that what you get with WAIM is a bit too generic. We’ve always loved that our resources can help people at different parts of their business journey (not started, beginning, intermediate) and that what we teach can apply to different types of businesses (products and service-based business) BUT just because your product can do something doesn’t mean that’s how you should market it. Trying to solve everyone’s problems at once makes for some pretty diluted marketing. Our selling proposition doesn’t speak enough to a specific problem that people have or can clearly articulate. That’s a recipe for disaster when it comes to selling anything. I believe we got as far as we did with this generic approach only because we’ve worked so hard at building trust over the past few years.

WAIM 6-Month Program Preview

Going forward, we want to focus on this singular pain-point:

Wandering Aimfully is the membership community that teaches you how to turn your creative skills into a profitable digital product business, without sacrificing your lifestyle in the process.

To accomplish that, we’re creating a 6-month program that’s the MAIN focus when people join WAIM. They can get everything else (all 30+ previous products) but we’ll position that stuff as “in the vault.” While we’d love to rest on our laurels and believe all our previously created content is good enough to solve problems for people, we know we can do better. We know we’ve learned a ton and that we want to give a more concise and updated plan of action for our members to follow.

Soooooo, what the heck are the next steps to accomplish building this 6-month program?

  1. We’re going to plan out the curriculum for this 6-month program
  2. We’re going to create the content for this program (with assistance from our existing members) and build it into our membership dashboard
  3. We’re going to rewrite parts of our website copy and reposition WAIM on our sales page
  4. We’re going to try to do all of that by January… eek.


One of the core tenants of this 6-month program is giving you a framework to follow that helps you avoid burnout. Unfortunately, we don’t have the luxury (read: cash flow) to take the next 6 months to build this program. Instead, we’re going to have to reduce any other tasks or commitments and hunker down to build something great, free from other distractions.

Should be run, right? Well, we’re nothing if not up for putting in the work it takes to succeed. We will absolutely do our best to stay balanced and not overwork ourselves. (Definitely no intention of going shingles Round 2 in this house!)

To recap: As of November 15, 2018, we’re at $6,133 MRR (or 18.5% of our goal)

It would be easy to sum up the past month as a “bad” month due to a smaller launch and higher rate of member cancelations, but it wasn’t bad. Caroline’s health improved. Our existing members are happy, excited, and getting value from what we’re doing. We are making a difference for people, providing value to them, and enjoying most of the process.

The BEST part of our third launch?

We realized that we need even more clarity and focus around what WAIM can provide its members, what specific problem it can solve, and who it would be a great fit for.

And of course, the fact that we did get some new paying members was great!

New WAIM Customers in November 2018

The WORST part of our third launch?

Watching 12 people cancel their memberships between the second and third launch. As helpful as learning from the cancelations is (and it may end up being the catalyst that helped propel us toward our Journey to 330 goal faster), it was a punch to the nether-regions this month.

**

Phew, what an update! We really hope you enjoy these. It’s the exact type of content we love, especially when things aren’t going perfectly so you can see how people overcome adversity (it just kind of sucks to be the ones having the adversity!)

Have anything you wish we’d talk about? Want to give us feedback? Send me a tweet and let me know.

 


WHAT WE’RE WORKING ON NEXT

Here’s What We Plan To Accomplish Before December 10, 2018

We are going to stick to our monthly launch schedule, even though we know our 6-month program probably won’t be ready until January. If anything, folks can get on board and take advantage of resources within WAIM they have their eyes on, before we drop something new on them!

Here’s what we’ll be working on between now and December 10:

  • Running our annual Black Friday bundle using Bumpsale
  • Finishing our 6-month WAIM Member gifts and shipping them out
  • Packaging up our new WAIM Member gift and shipping that out
  • Recording WAIM Show episodes from a NEW studio (sayyy what!?)
  • Editing, uploading, and promoting weekly WAIM Show episodes
  • Trying to get a few shorter videos created and shared on our YouTube channel
  • Getting the first set of plans in place for building our new 6-month program
  • Staying active with @wanderingaimfully on IG
  • Checking in on our new onboarding emails/roadmap to see if those things made a difference for new members

As a reminder, we’ll be sending updates about our Journey to 330 to our Wandering Weekly email list. If you want to get notified first when we have an update, hop aboard and subscribe now.

 


THE TOOLS WE USE

The Tools And Services We Use To Make Wandering Aimfully Tick

Note: Some of the services below have our affiliate links in which we make a tiny commission if you sign up.

Flywheel – We’re huge fans of Flywheel’s WordPress hosting! I joined them really early on with my previous JasonDoesStuff site and have loved every minute of paying them money. For just $15/month you get an intuitive dashboard, free SSL, fantastic customer service, and included hands-on migration from your existing WP host.

Restrict Content Pro (RCP) – We were completely new to RCP when we started building WAIM but we heard great things about it. RCP has lived up to the hype and is incredibly powerful if you’re trying to run a membership community using a WordPress website. The features are great, the help documentation is solid, and customer service has also been top notch.

Drip – Our current email provider of choice is Drip. We love all the fancy stuff you can do with automations, workflows, customer tagging, and more. Drip may be more than you need for email marketing so be sure to read our comparison article on MailChimp vs ConvertKit vs Drip.

Wistia – While we use YouTube for most of our video content, we also pay for Wistia every month. Wistia is perfect for videos that don’t need to be searchable or videos we want to share with our WAIM Members only. If you’re looking for a really slick video host that has a bunch of nice customizations, you’ll be super happy with Wistia.

Crowdcast – Alongside Wistia, we also do a decent amount of live workshops. Crowdcast has the most user-friendly interface of any live video provider and they’re constantly making improvements to the platform.

Airtable – Boy oh boy do we looooooove Airtable! Caroline has mastered the art of spreadsheets and Airtable lets her take things to the proverbial next level. We manage all of our WAIM Members, our personal finances, our content calendar, and our ongoing tasks/to-dos within Airtable. I’m not sure we’d be able to run WAIM (or our lives) without Airtable at this point!

Slack – With over 400 WAIM Members, we wanted our own private place to hang out and chat, free from distractions (we’re looking at you FB Groups). We use the free Slack plan and cherish all the amazing features we get. If you run a community or just want a way to chat with friends/co-workers, Slack is a must-use.

Baremetrics – The most beautiful way to keep track of our monthly recurring revenue and overall financial growth of WAIM. Baremetrics takes minutes to set up and is completely automated if you use Stripe (we do have to input our PayPal members manually).

Have any amazing tool recommendations we should check out that you think we’d enjoy? Send us an email.

8-Step Guide to Becoming Debt Free (How We Paid Off $124,094)

June 21, 2018

Introduction

Our Debt Journey And How We Can Help You Become Debt Free

A few years ago my wife and I found ourselves overwhelmed with debt. How much debt? $124,000 spread across six credit cards, a car loan, and student loans. We could never have imagined being debt free at that time.

This article shares our debt story, but more importantly shares our debt payoff plan: the exact steps we used (and that you can use) to become 100% debt free in just 15 months!

Before we dive in, I want to be absolutely clear that we didn’t get into overwhelming debt overnight and we didn’t get out of our debt overnight.

Our debt didn’t come from buying extravagant things. The majority of our debt came from a business I ran from 2009-2013. I got behind on the monthly operational costs, things like employee salaries, design and development expenses, advertising and marketing, and countless products and services that kept my business running. Then we had my wife’s business debt, her student loans, and our car loan.

These were our specific debts and where they came from:

  • Jason business debt: $72,328
  • Caroline business debt: $6,764
  • Caroline student loans: $20,208
  • Volkswagen Tiguan lease payoff: $24,794
  • Total debt: $124,094

I want to point something out before I move a step further, and my guess is you can relate to what I’m about to say.

I was ashamed of our debt. I was embarrassed by the financial mistakes I’d made. Becoming debt free felt like an insurmountable mountain to climb. If you’re currently battling with debt and having similar feelings, those feelings are completely normal.

Get out of debt

Debt is something almost all of us deal with

Did you know the average credit card debt per U.S. adult, excluding zero-balance cards and store cards is $4,878*?

How about the fact that 26% of small business owners carry a balance of nearly $10,000 on their business credit cards*?

Or did you know that more than 35% of Americans are seriously concerned about being able to meet essential financial obligations such as their mortgage, loans, credit card, or bill payments*?

Some of us are riddled with debt, stuck in its invisible grasp with no sight of escape. Some of us just have school loans, which seem harmless because of low fees and payments, so we ignore the soul-sucking and bank-account-syphoning elephant in the room. Some of us are able to use debt to our advantage to escape a bad month of business or get through hard times. But debt is dangerous and it needs to be dealt with head-on.

Let us help you attack your debt, just as we attacked and vanquished ours!

 


Step #1: Your debt payoff starts here

Draw Your Line In The Sand Right Now

Around 2013 I realized our total debt was over $120,000. That was the moment when I knew something had to change.

Unfortunately, that change came with the tough decision of closing my business’s doors. That meant letting people go, cutting as many expenses as possible, and accepting the fact that my business was no longer profitable and was failing.

I hope, for your sake, that $120,000 is not your number. I hope it’s a drastically lower number. But if you do have more debt than we did, don’t be ashamed of it any longer. It’s just a number.

Make today the day you announce you aren’t getting any further into debt. Draw your line in the sand right now.

Changing how we viewed our debt was a crucial first step to becoming debt free

It would have been easy to let the feelings of shame and embarrassment continue to control how we felt about our debt. We could’ve given in to those feelings as we’d been doing and as a lot of people do, but instead we decided to do something different.

Bear with me, as I know this is going to sound weird, but we started to think of becoming debt free like playing the original Donkey Kong video game:

  • We were Mario, with a difficult path ahead of us
  • The barrels, oil, and fire were our current debt hurdles (credit cards, loans, etc)
  • Donkey Kong was consumerism trying to keep us in debt
  • Saving the princess was financial freedom!

This Donkey Kong metaphor may sound completely bizarre to you, but it really helped us shift how we thought about our debt. It went from a dark cloud that loomed over our heads, to a silly game we could try to beat. With each ladder we climbed and every barrel we jumped over, we’d be getting that much closer to rescuing the princess (AKA gaining financial freedom).

Whether you want to buy into our Donkey Kong metaphor or not, maybe there’s a way you can reframe how you think about your debt? The most important thing at this point is to draw your line in the sand and to tell yourself: I WILL GET OUT OF MY DEBT!

TIP: A great thing to help draw your line in the sand is to have someone hide your credit cards so you can’t have access to them. Or just cut them up. Start using a debit card or cash only.

 


Step #2: Consumerism is your enemy

Change Your Mindset About Credit, Credit Cards, and Buying Things

We’re a society driven by consumerism.

Turn on any TV. Open any magazine. Browse any website. Scroll through any feed on your phone. There’s a new gadget or clothing company begging you to spend money you don’t have. Today is the day you tell yourself you don’t need to buy any more stuff.

“I don’t need to buy XYZ thing. I want it, but I don’t need it.”

How many things have you purchased with your credit card(s) in the past year that you can actually name off the top of your head?

If you can’t remember what you spent your last couple thousand dollars on, it wasn’t that important and you didn’t actually need to buy it.

What’s more important in your life: Owning a couple new material goods, or NOT being stressed out over your current financial situation?

Credit cards points and consumerism are not your friends when you’re deep in debt

Commercial after commercial tells us that the credit card companies just want to help us! They want to give us nice low rates (which most of us can’t actually qualify for) and they want to reward our spending by giving us awesome perks (redeem those double points!).

Except, when you’re in debt, the last thing you should be thinking about is credit card points. One of the important mindset shifts in becoming debt free is greatly reducing your spending. I’ll talk more about reducing spending in a moment, but credit card companies are great at convincing us that “cash back” feels like we’re somehow saving money. Or that “airlines miles” will help you travel for free. If you’re in debt, getting minuscule amounts of cash back or accruing airline miles are thoughts you need to put on hold.

At one point my wife and I had 12 active credit cards and the majority of them were opened because of the so-called “rewards” they offered. Here are a couple of examples, along with the rewards we never actually enjoyed:

Best Buy Rewards Card – A simple VISA card that helped us purchase electronic goodies. Except, when we bought them with Best Buy’s friendly payment plans, we didn’t take into account we’d up spending 20-30% more on the items we purchased because we could only ever afford to make the minimum monthly payments.

Southwest Airlines Card – I remember the day I signed up for this card and thought I’d grab the reward offer of a free companion pass for Southwest flights. Within a month I’d met the qualifying spend of $3,500 on the card, except, I didn’t have the money to pay it off. You don’t get the free companion pass if you don’t pay off required spend. Not only did I not get a stupid free companion pass, I now had $3,500 of debt that probably didn’t need to exist. (Also, FWIW, I can count on one hand the number of Southwest flights I’ve taken in the past decade, we never fly with them.)

CitiBank Diamond Preferred Card – This was a card I signed up for because it would 2x or 3x your points depending on what you purchased. It took me six months to realize I could only ever use those points for stuff I didn’t need (like a blender, or headphones, or other consumer goods that I already owned or absolutely didn’t need).

I hope these examples help you take a look at the cards you currently have in your wallet/purse. You may think these credit card companies are trying to help you, but they’re not. These companies have very well crafted systems in place to keep us all in debt.

TIP: Stop using credit card points cards until you’re completely debt free. When you’re debt free, start to identify one or two credit cards that offer rewards you might actually use.

 


Step #3: Spend less and/or earn more

The Are Two Ways To Get Out Of Debt: Spend Less or Earn More

The un-sexy secret to getting out of debt is exactly the headline you just read: Spend less money or earn more money.

Sure, there’s a lot more to becoming debt free (hence the length of this article), but along with acknowledging your debt and avoiding consumerism, this is the next mindset shift that will help you get rid of debt.

Spending less money

Getting rid of a mortgage and renting a home

I could write an entire article on why buying a home is a terrible financial investment for the majority of us. Instead, I’ll let the economic crash of 2008 do the talking for me. I would, however, like to explain how renting a home (AKA “throwing money away”) was incredibly helpful in our journey to financial freedom.

When you have a home with a mortgage, as we did for 8 years, you do NOT have stable expenses. In fact, most homes are a ticking financial time bomb.

What do I mean by that? Oh, how about when your air conditioner breaks and you have to spend $8,000 to get it replaced? Or how about when you wake up one morning to an inch of water in your living room, only to find out you had a “slab leak” which still cost you $2,000 (after insurance!)? Or how about the $20,000 “invested” in redoing the kitchen and bathroom which was never actually recouped. Not to mention every stupid little thing that pops up and needs to be fixed (and paid for) when you own your own home.

Deep breath Jason, deep breath.

When my wife and I moved from Florida to California and chose to become renters, we knew one very important thing: Renting gave us the piece of mind that we’d incur $0 in surprise costs when it came to our home.

As renters, we’d never have to worry about an $8,000 air conditioning system. We’d never have to worry about little costly odds and ends. We would pay our rent every month and that was it. If something went wrong, it was on our landlord’s dime. Every dollar we used to have to spend to cover unexpecting home costs could now go toward aggressively paying off our debt.

Renting can be the best thing for people who are in debt. It’s a completely predictable expense every month, and you are guaranteed NOT to lose money in the long run.

A home you buy? Not an investment to be made when you’re trying to get out of debt. Heck, we’re years removed from being in debt and we still (proudly) rent our home.

Sacrificing a 15-year passion: Cars

I want to share a more personal example of spending less money: For me, that was a 15-year passion of owning nice cars.

I love cars. LOVE them. They’re easily the biggest money-pit I’ve had besides my business. Except, unlike my business, there is no potential ROI (return on investment) for a car. Sure, a 1950 Ferrari Dino is a great investment, but let’s be realistic here, you and I are not collecting Ferraris.

Aside from our mortgage and food, my monthly car payment was always our highest household expense. Over the years I had car payments ranging from $500 per month to as high as $1,200 per month—the latter being the time when I needed to own a Porsche Cayenne Turbo as a 25-year-old (dumb, dumb, dumb). Not to mention all the extra hidden costs of cars like gas, insurance, maintenance, etc.

When we decided to attack our debt, I knew my “fun car” hobby had to take a back seat (get it? It’s a car pun folks!). My wife and I talked about this decision together and I made the commitment to our get-out-of-debt plan that we’d purchase an affordable car and be more responsible when it came to spending money on depreciating assets (cars). We ended up leasing an extremely practical Volkswagen SUV, a car that would be very low in maintenance costs, yet not feel like we were driving a 1982 Ford Taurus.

I’d be lying to you if I said I loved driving that VW. Truthfully, I loathed it. It wasn’t a bad car by any means, but it was quite the departure from the BMW M5, BMW M3, Porsche Cayenne, Infiniti G35, etc, I was used to driving. But I just had to keep asking myself: “Do I want to feel cool driving around in a nice car, or do I want to save the financial princess and stop having a looming cloud of debt over my head?”

What you own right now is ENOUGH

Think of spending less as short term pain, for long term gain.

I really hope this point settles in with you. Your current TV, couch, bed, car, etc, are all enough right now. They are good enough and will do the job you need them to do until you become debt free. If you can commit to making short-term sacrifices and not focus on upgrading anything in your life, you can make huge dents in paying off your debt right away.

You are spending less now so you regain control of your finances. It will be uncomfortable to change your lifestyle and remove lavish things from your life, but I can tell you from firsthand experience: the feeling you get from paying off all your debt is a lasting positive feeling that greatly outweighs the short-term blips in happiness you get from buying stuff.

Earning more money

Now that I’ve gone over the spending less part, let’s talk about earning more money with two specific examples.

Let me start off by saying that I realize earning more money is not easy. If you don’t own your own business and you work at a conventional 9-5 job (for someone else), it can be difficult to think about earning more money. I do want to tackle both scenarios though, as I believe it’s possible to earn more money whether you work for yourself or you work for someone else.

Earning more money when you charge by the hour (hello freelancers!)

I’d like you to meet my wife Caroline, she’ll be taking over the keyboard here for a moment to share her story of earning more with her business:

Hi y’all! Caroline here, Jason’s better half (obviously!)

When I was running my own branding design company in 2014 I had a stunning realization: Quite simply, I wasn’t making enough money.

I think this problem can take different forms for different businesses – not enough clients/customers, prices too low, terrible margins, etc. In my case, I was taking on far too many small projects for far too little money. $100 here for a hand-lettering project, $200 here for a small graphic design job, giving deals to friends and not being more vocal about the real amount of time a job would take. Then, when I had bigger branding design projects, I was working way more hours than I was charging my clients. Something had to change.

Jason and I sat down and starting talking about how I was running my business and where we might be able to make improvements (you know, make more money!) As we started talking it became clear that with any service-based business (AKA freelance), time truly is money. If it took me two hours to finish a job that could have taken me one hour, I just lost an opportunity for additional revenue. And if I had a bigger job that I only charged the client for 40 hours of work, but it took me 80 hours, I just missed out on a ton of revenue.

To give you an idea of just how much money I was losing out on, after implementing a simple time-blocking exercise (which I’ll explain in a moment) I was able to TRIPLE my revenue! Not only was I able to earn more money, I gained more time back because I became extremely diligent with how I was spending it on a day-to-day basis.

What is time-blocking and how did it help me triple my revenue?

Jason and I looked at a normal work-week for my branding design business and figured out a few simple things:

1. I did my best work between 11 am – 4 pm each day (5 hours of work per day)
2. Working Monday – Friday, I had 25 billable hours
3. Over the course of 4 weeks, working at $75/hour, I should be making $7,500 per month (25 hours a week x 4 weeks = 100 hours x $75 = $7500)

Seeing that $7,500 was defeating and empowering at the same time. I certainly wasn’t making $7,500 a month (I was lucky to be making $2,000 per month), but seeing how just 5 hours of focused work per day could generate so much more revenue for my business was incredibly motivating.

From that meeting with Jason, I started to block off time on my Google Calendar with client work. Whether it was a tiny 1-hour project, or a bigger 80-hour project, all of the working hours I committed to would go on my calendar and I would do my darndest to ruthlessly stick to the time I’d estimated. This time-blocking system gave me clarity in my work days and was a great way to understand how much my time was worth.

As I mentioned earlier, getting a grip on my hours, estimating my time better, and working during specific time blocks helped me triple my revenue in just a few short months. If you’re a freelancer (or you work for yourself), time is money and you should definitely keep track of it.

 

Working part-time on a side project can also help you earn more

You thought that Caroline might be passing the writing-baton back to me, but she has another story to share with you about earning more money. This example specifically applies to you if you work a full-time job and don’t think you can earn more money.

It’s Caroline again, I’m back on the keyboard!

If you would have told me that I could make an additional $3,000 per month in revenue with a project I did on the side, I wouldn’t have believed you. If you read the last few paragraphs then you know I was doing branding design as my full-time job. Now, I wasn’t working for someone else in a 9-5 capacity, but the story I’m about to share happened in my “off work” hours.

Whenever I wanted a break from my client work, I would open up a sketchbook and start doodling. I didn’t consider myself an artist, but I enjoyed filling blank pages with drawings and hand-lettering. For months I filled sketchbook after sketchbook, not at all thinking I was honing a skill that would lead to earning more money, I simply enjoyed the creative outlet.

I started sharing some of my hand-lettering creations on my Instagram account and people started asking where I learned how to do hand-lettering. I responded in truth, I hadn’t really learned it anywhere, I just started doing it in my spare time. When enough people asked me about my hand-lettering, I had the spark of an idea: I should write a blog post that explains the basics (that I’d learned) of hand-lettering. Just a really simple guide if someone wanted to go on a hand-lettering adventure of their own.

That blog post started to get a little bit of traffic. Then it started to get shared on Instagram and Pinterest. Before I knew it, hundreds of people were reading my introduction to hand-lettering post and I saw an opportunity. I added an email capture to the blog post that asked people to enter their email if they’d be interested in an online course about hand-lettering (I’d never made an online course, but Jason had, and it seemed like something I could create if there was interest).

After a month I had over 500 email subscribers waiting for me to create a beginner’s hand-lettering online course! I hunkered down one weekend and created my first online course, without grand expectations about how it would sell. I worked on the sales page for the course and some other odds and ends in my non-working hours, and a few weeks later I launched the course. I was happy to make a few hundred bucks from the small email list and decided to change the callout on my blog post from “sign up to my email list” to “purchase my beginner’s course to hand-lettering.”

All of the sudden I was waking up to course sales. Then the traffic to the post would increase and I’d see more sales. Day after day, week after week, month after month, the sales steadily increased and I’d created my first passive income source. In the first two months that hand-lettering course generated over $7,000 in additional revenue I never saw coming and over $82,000 in total revenue!

The best part about the extra money I earned was that it happened on the side of everything else I was doing. It didn’t take an extraordinary amount of effort or time, I just saw an opportunity to create something and there was a demand for a quality hand- lettering resource for beginners.

I share this with you because I want you to realize what is possible. I want you to feel the way I felt when I made my first online course in my spare time and it started making passive income.

There are so many opportunities waiting to be had out there. You just have to find the drive and the commitment to make them happen.

 
Hopefully, after reading those two stories from Caroline your wheels are turning on how you might be able to earn a bit more money. And maybe after reading how we starting renting our home and I gave up a passion for cars, you’re already thinking about ways you can cut back on larger expenses you don’t need (for the time being, so you can become debt free!)

TIP: Grab a notebook and jot down a couple ideas of how you might be able to make more money right now: Is it using time blocking? Or creating a small product in your spare time that you’re interested in? Also, write down larger expenses that you may be able to cut back on.

 


Step #4: Get control of your expenses

It’s Time To Look At Every Dollar You Spend (And Find Hidden Money)

Have you ever logged into your online banking or your credit card company, only to realize it’s kind of a pain in the ass to figure out how much money you’re actually spending? Sure, you can see your expenses in a vertical list with a total balance (usually always decreasing, ugh!), but banks and credit card companies don’t try to help you see where you can save money or cut costs.

It’s time for you to take control of all your expenses, and get a firm grip on every dollar you spend and make.

There’s a simple exercise that my wife and I did that opened up our eyes to our spending: We exported the last three months of activity on our bank accounts and credit cards, put them in ONE spreadsheet, and did our best to organize them by spending category (separated by month).

We called this exercise ETAC (or Expense Tracking and Categorization)

The silly thing about the name ETAC, if you say it out loud it kind of sounds like you’re saying attack. Which is neat, because you want to be attacking your debt!

Anyhoo, here are the simple steps for the ETAC exercise (video walk-through below):

  1. Download the past three months of spending for ALL bank accounts and credit cards (CSVs)
  2. Import your downloaded CSVs as individual sheets
  3. Format your data so it’s all uniform
  4. Once your data is all formatted, add every transactions to “All Transactions” sheet
  5. Sort “All Transactions” by month
  6. Assign a category to every transaction (use our examples or create your own)
  7. Sort “All Transactions” by month
  8. Filter transactions by month, and then sort by category
  9. Use formulas to sum the expense total for the month in each category

Expense Tracking and Categorization (ETAC) Spreadsheet

📊 Click here to use the ETAC spreadsheet.

We encourage you to save yourself time and use our example Expense Tracking and Categorization spreadsheet with the categories we use to organize our expenses. If you’re creating your own spreadsheet, here are the categories we use and recommend:

  • Auto (car loan, maintenance, gas, etc)
  • Business (any costs associated with running your biz)
  • Eating Out (coffee, romantic dinners, fast food, etc)
  • Entertainment (movies, drinks with friends, bingo night, etc)
  • Groceries (food!)
  • Health & Personal Care (therapy, Dr’s visits, etc)
  • Insurance (health, auto, dental, etc)
  • Misc (whatever is left!)
  • Pets (pet emojis!)
  • Rent/Home
  • Shopping (Target runs, IKEA, Amazon, etc)
  • Travel (weekend trips, et al)
  • Utilities (electric, water, trash, etc)

The reason these categories are so important is two-fold:

1. You want to compare the category month over month and see if there are any big spikes and what your current monthly average spend per category is (this is how you can find where to spend less).

2. Later on, we’ll show you how to create an ongoing monthly budget for these categories, so you can be a wizard at tracking exactly where your money goes and have ZERO financial surprises (you know, like barrels thrown by a digital monkey).

 
I cannot stress the importance of the Expense Tracking and Categorization (ETAC) exercise enough! Even if you think you have a good idea of what you spend, I 10000% guarantee listing out and organizing all your expenses will surprise you.

NOTE: If you have spouse or family member, this is a great person to do this exercise with. You’ll probably be embarrassed to show them your expenses—but you know what—that’s a huge red flag that you NEED to show someone your finances!

Here’s where we found hidden money in our expense tracking exercise

When my wife and I organized our expenses for the first time, a few items within categories of spending jumped out as potential places to save money (and put towards our debt).

Cell phone bill (I found $1,440 in annual savings!)

We were paying $260/month for our “family” cell phone plan. We’d had the same (unlimited) plan for more than two years and I had a hunch there was a better plan available. I went into an AT&T store (gasp! I know!) and asked them if they had a better option based on our actual phone usage. Come to find out, we were only using around 8GB of total data and didn’t need the costly unlimited plan. We switched to a $140/month plan and netted $1,440 in annual savings.

Cable bill (I found $600 in annual savings!)

At the time of doing our first ETAC exercise, we were paying $185/month for all bizallion cable channels (that we only watched a small handful of). Back in 2014 cutting cable wasn’t as prevalent, so I didn’t think about that as an option, but I did think maybe I could call the cable company and simply ask for a better plan since I had been a loyal customer for years. I navigated my way through the painful customer support phone tree and was able to reduce our bill to $135/month, saving us $600 per year.

Entertainment (I found $1,800 in annual savings!)

Drinks with friends, seeing movies (and getting popcorn), two Netflix subscriptions in one house, and a bunch of other stuff quickly filled this spending category without us even noticing. We decided we’d set some boundaries for our entertainment and hopefully save money. We allowed ourselves to see two movies (in the theater) per month and have two nights per month to have drinks with friends. Setting these boundaries saved us $150 per month or $1,800 per year. Remember, Short term pain for long term gain!

Food (I found $6,000 in annual savings! Whaaat?!)

We were spending $2,000 per month on food ($1,400 was eating out). For two people that is a lot of money each month! However, neither of us love to cook and because we work from home, going out to eat is one of the nice breaks from our day-to-day routine. That being said, we challenged ourselves to cut back by $500 and only spend $1,500 per month going forward (this included eating out and groceries). That $500 added up quickly, saving us $6,000 (!!) that we could put towards our debt in one year!

Just by reassessing a few categories of our spending we were able to find nearly $10,000 we could apply to our debt!

Do a little bit of cutting back in the short term and you’ll find hidden money you can apply to pay down your debt. You’ll be amazed at how living frugally for a short time can help get you out of debt exponentially quicker.

TIP: Don’t waste any time, do the ETAC exercise today and categorize all your spending for the past three months. Where can you find hidden money?

 


Step #5: Get your income in order

Paying Off Debt Requires Looking At Your Income Flow

The one thing that stood out to us, and that would become critical to our success in our war on debt, was building a better income flow.

If you’re anything like we were a few years ago, you deposit money into your bank account, you pay your credit cards from your bank account, and there’s not much else to it. There’s nothing inherently wrong about this, but there is a better way!

Creating an income flow will help show you a more logical and systematized process for managing the flow of your money (in and out of your accounts).

Here’s what we did to create our income flow:

#1 Established our bare minimum monthly household expenses

After doing the Expense Tracking and Categorization exercise, we had a bunch of categories of spending that we could total up to see our average monthly budget. We took every category except our business expenses, added them up, and that became our minimum monthly household expense number.

#2 Established our bare minimum monthly business expenses

Similar to the household expenses, the category from our ETAC exercise that grouped our business expenses together showed us our average monthly budget for business. Keeping this separate from household expenses is helpful if you have a bank account specifically for your business (which, if you work for yourself, you should!).

#3 Created a monthly schedule for transferring all excess income to a new account

It should go without saying that you need to be making more money than you’re spending every month. If this isn’t happening for you right now, you have a bigger problem at hand. Hopefully, after going through the ETAC exercise, you have some excess income that you can apply to your debt (especially if you found hidden money!). For us, we identified the excess money we made over our expenses every month and would transfer this to an external savings account to be applied toward our debt (more on this savings account in a moment).

#4 Scheduled a weekly budget meeting

Weekly budget meetings helped us deal with the shame and embarrassment of our debt.

This may sound crazy to you, but my wife and I decided to put a standing meeting on our calendars every week to start talking about our finances. This meeting would involve doing a couple things:

  • We’d download the previous week’s expenses and track/categorize them
  • We’d discuss the previous week’s expenses and go over any outliers
  • We’d discuss our income for the week
  • We’d look at our debt payoff schedule (more on this in a minute)
  • We’d make transfers from our business accounts into our household account
  • We’d make excess cash transfers to an external savings account
  • We’d pay down or pay off any debts we could

I could talk for hours about how vitally important these weekly budget meetings were for us (and continue to be). Not only did they help us get a firm grasp on our financial situation, but they also helped us deal with the shame and embarrassment of our debt. The more we discussed and attacked our debt every week, the less shame and embarrassment we felt about it.

If you don’t have a spouse to do weekly budget meetings with, find one! Just kidding… But ask a friend? Get a financial advisor? (More on the latter option in a bit as well).

#5 Set goal numbers of how much debt we could pay off each month (debt payoff schedule)

I’ll get into much more detail about this in Step #7 of this article. But the idea is to look at how much excess money you have above your expenses that you can immediately apply to your debt. Some weeks it may be $50, some weeks it may be $0, and some weeks it may be $500. The key is to continually know more information about your financial situation based on your income flow.

Our example income flow

Creating an income flow isn’t rocket science, and I felt like we already had some semblance of a household budget, but using this new process was incredibly helpful. Our income flow consisted of these things:

  1. Caroline’s business checking account (Caroline Biz)
  2. My business checking account (Jason Biz)
  3. Household checking account (Household Account)
  4. External savings account (Debt Crusher!)

Income Flow

The most important part of our new income flow: Debt Crusher (savings account)

When all your bank accounts can be seen on the same online banking dashboard page, it’s easy to see the money in one account as money available to any account. It wasn’t until our financial advisors introduced us to creating a completely separate external savings account (with a completely different bank) that we understood how important this was.

Our new savings account was nicknamed our “Debt Crusher” because that was its sole purpose for existing. We would transfer our excess cash from our Household Account (or sometimes Biz Accounts) and make debt payments from the Debt Crusher account.

Having a completely separate bank account that we couldn’t see next to our business and household bank accounts really helped us build momentum in paying off our debt.

No longer did excess money sit in our main bank accounts where it could easily be spent. That excess money got transferred to an account with one important job: Crushing debt!

Assign goals to each part of your income flow

Have you ever had a month where you realized you didn’t have enough money in your bank account to pay your electric bill? Maybe you’ve overdrafted a time or two and cursed yourself each time it happened? We’ve been there!

When you create your own income flow it’s extremely beneficial to add goals to each section. Our financial advisors gave us the sound advice to keep a goal amount of money in all our accounts as a buffer to never drop below (this helps avoid those crappy overdrafts!) I’m sharing our example numbers to give you an idea of how to set this for yourself…

  • Caroline Biz: Goal to have $1,500 in account at all times
  • Household: Goal to have $8,000 in account at all times
  • Jason Biz: Goal to have $3,000 in account at all times
  • Monthly transfer goal from Caroline Biz to Household: $2,500
  • Monthly transfer goal from Jason Biz to Household: $10,000
  • Monthly transfer goal from Household to Debt Crusher: $4,500

For Caroline Biz and Jason Biz, our goal number was at least one month of average expenses. The idea was to never drop below that number again if we could avoid it. For Household, our goal number was also one month of average expenses.

And if you’re wondering, YES, we had to work our way up to these goal numbers. When we first set these goal numbers we did NOT have those amounts saved in each account.

Income Flow Chart

This income flow exercise showed us that we should be able to pay down $4,500 of our debt every month (that was $54,000 in a year!). At the end of each month, we’d look at our debt payoff sheet (again, coming in Step #7 of this article) and pay down the different areas of our debt.

We didn’t always hit our exact $4,500 number, but it was extremely helpful and motivating to have a goal to hit each month.

TIP: Create an income flow of your own! Add goals for all your accounts, transfers, and get a clear picture of how much money you can apply to your debt every month.

 


Step #6: Your simple debt payoff plan

The 4-part Simple Debt Payoff Plan You Can Stick To


There’s a reason why this article didn’t start here. It may seem like the “plan” should’ve been first, but what my wife and I realized through our journey to debt freedom was that we needed to get all our financial ducks in a row BEFORE we started climbing ladders and dodging barrels (yep, still running with the Donkey Kong metaphor, folks!).

Truthfully, you already have a big part of your debt payoff plan if you’ve done the Spend Less/Earn More, ETAC, and Income Flow exercises. But, let us show you four additional pieces to your debt payoff puzzle based on our experience paying off our $124,000 in debt.

Debt payoff plan part #1: Short-term pain for long-term gain

Yeah, yeah, I’ve said this phrase multiple times, but it’s such an important mindset shift that you need to make when it comes to getting out of debt.

To remind you, we didn’t accrue our $124,000 in debt through lavish spending. However, do admit that our financial habits weren’t the best and there was plenty of room for improvement. A huge part of that improvement was setting budgets and sticking to them.

You cannot and will not get out of your debt if you continue to stick to the same financial habits you’ve had up until this point. You have to make changes.

The phrase that we came up with and that was a guiding principle over and over again while making sacrifices to get out of our debt was: Short term pain for long-term gain.

When we finally accepted the fact that cutting back for a few years didn’t mean cutting back FOREVER, it created a spark of momentum. Yes, we’d have to spend less money each month, travel less each year, and watch our dollars much closer every week, but those things would lead to removing the dark cloud of debt that hovered above our heads.

We want the same thing for you! So… say it with us: Short term pain for long-term gain.

Debt payoff plan part #2: It’s time to make difficult phone calls

Did you know that American Express has a hardship case that will lower your credit card interest rate (APR) to 0% for three months, 1% for the next 3 months, and then 9.99% for the 6 months that follow? All you have to do is call the number on the back of your American Express card and ask to talk to someone about a “hardship case.”

Hardship cases are made for people like you and us. We got into debt, it sucked, and we were worried about how we’d be able to afford the minimum monthly payments on our credit cards with how high the interest was on our cards. Credit card companies would rather lower your monthly interest rate (APR) then see you default on your payments (AKA: not give them your money).

I didn’t know a hardship case existed when I called American Express and was simply looking for any way to reduce my 24% APR. I hopped on the phone with a customer support person and explained my business was going through hard times and instead of defaulting on my payments, I was hoping there was some other option for me. That’s when the customer service person explained they had a program that would freeze all spending on my card, but would lower the monthly interest rate from 24% down to 0% for three months (then raise it to 1% the next three months, then raise it to 9.99% for the next six months).

These phone calls suck, but staying in debt sucks much worse.

If you apply for American Express’s hardship case, they do have to lock your cards during that time period. This sounds scary, but you shouldn’t be using your cards anymore anyway.

We also called the companies where we had other credit card balances with high APRs: CitiBank, Wells Fargo, and another American Express card. CitiBank and Wells Fargo didn’t have a hardship case like American Express they were both willing to lower our APR by over 10% on each card.

We spent just over an hour making these humbling phone calls to our credit card companies and were able to get our interest rates lowered to a point that would save us $400 in credit card fees each month.

That’s $4,800 annually, which when you add in the savings from our Expense Tracking hidden money we found, it meant we had nearly $15,000 to pay toward debt!

Ready to call your credit card company(ies) yet?

Note: We didn’t call our mortgage or student loan company to find out if they offered a hardship case of any kind. You could call and ask, it definitely wouldn’t hurt.

Debt payoff plan part #3: Move credit card debt to 0% APR cards

One of the craziest things I’ll never understand is that even when we were riddled with credit card debt, we could still get approved for additional credit cards! Insane.

Our financial advisors were happy with the hardship cases we were able to get with a few of our credit cards, but on some of them, the APR was still too high. They recommended we apply for cards with 0% APR and very low balance transfer fees. The idea is that we’d transfer the balance of an existing credit card with a high interest rate to a new card with a 0% interest rate and just pay the one-time balance transfer fee.

Here’s an example of exactly how we did this:

Step 1: I applied for the Discover It credit card (0% APR and 3% balance transfer fee)

Step 2: I got approved for the card with a line of credit of $12,000

Step 3: I transferred the balance of our Wells Fargo Platinum card to the new Discover It card ($12,000 balance x 3% transfer fee = $360 one-time balance transfer fee)

I repeated this process and signed up for the Chase Slate credit card, as they also offered a 0% APR. We moved over three separate cards that had over $9,000 on them and nearly 30% APR.

This part of the debt payoff plan is going to be dependent on your credit score and credit history. We were fortunate that we both had pretty great credit scores and credit history and could still get approved for new credit cards with reasonably high credit limits. If you can’t get approved for new cards, don’t worry, just skip this part of the debt payoff plan.

Note: We found the best 0% APR credit cards by checking out NerdWallet. They keep an up-to-date list and give you an easy way to apply. IMPORTANT: Be very careful when signing up for more credit cards, remember these are only for transferring your debt, not to use for spending!

Debt payoff plan part #4: Pay off high interest cards/loans first

You should aim to pay off the credit card or loan with the smallest balance AND highest interest rate first. As Dave Ramsey (“America’s trusted voice on money”) says, paying off one card creates a snowball effect. Once you see that first card (or loan) paid off, it motivates you to want to pay off the rest (instead of evenly reducing all debts). Think of paying off each credit card or loan like getting one level closer to that financial freedom princess!

Momentum moves money mountains (a quick story)

Around the beginning of 2015, we had stashed enough money in our Debt Crusher account to pay off a credit card that had the highest interest rate. This was a CitiBank card with a 21% APR and a balance of over $14,000.

It was during one of our weekly budget meetings when Caroline and I hunched over my laptop. We logged into my CitiBank account. We clicked “Make A Payment.” We selected the magical option of “Pay Total Balance” (an option we hadn’t be able to select for many years). And we hit the glorious Submit button.

What a wonderful feeling that was! Up until that point, we’d only felt the mundane feelings that came along with paying minimum monthly payments. Yeah, some of our monthly payments had a little extra thrown in here and there, but none of them were as satisfying or motivating as paying off an entire balance. (I’d liken this to beating that first level of Donkey Kong where he not only throws barrels, but he starts throwing them rapid fire. Beating rapid fire Donkey Kong barrels proved to us that we could finally rescue our debt-free Princess!)

The little celebration we did lead to getting even more focused on wanting to pay off our debt as quickly as possible. We wanted to select all the “Pay Total Balance” buttons on all our debts. We couldn’t make it happen at that moment, but we could feel that snowball effect was in motion.

Hopefully this 4-part debt payoff plan gives you some really solid momentum toward debt freedom. Now would be a great time to make those hardship phone calls, look for 0% APR cards you can apply for, and get ready to organize all your debt in one place.

 


Step #7: The debt sucks spreadsheet

It’s Time To Organize All Your Debt In One Place

Congratulations friend, you are on your way to debt freedom! But before we release you into the financial wilderness with all the debt payoff strategies you’ve learned thus far, we have a pretty important spreadsheet to share with you.

Say it with me: Spreadsheets are our friends!

Just like you created a spreadsheet for Expense Tracking and Categorization (ETAC), it’s time to make another one that shows you exactly how much debt you owe. This additional spreadsheet will help you create a monthly payoff schedule that shows you exactly which debts need to be paid off in which order. This is the Debt Sucks Spreadsheet.

Seeing our debt laid out on one sheet was incredibly powerful. Yes, the total amount of debt staring us in the face sucked, but the fact that we could see a clear monthly path to paying off all our debt was incredibly helpful.

I’m going to walk you through how to use our Debt Sucks Spreadsheet step-by-step below. There’s also a video after the written steps if you want to see me using and updating the spreadsheet.

💸 Grab your own copy of the Debt Sucks Spreadsheet here.

Debt Sucks Spreadsheet

Step #0 to using the Debt Sucks Spreadsheet: Make your own copy!

When you open up the Google Sheet, you’ll need to make your own copy that you can edit. Simply go to the top menu bar: File > Make a copy… and boom, you’ll have your own version you can edit.

Steps #1 & #2 to using the Debt Sucks Spreadsheet: Enter in your debts

Now that you have your own copy of the Debt Sucks Spreadsheet, you’ll want to fill it out. Leave Column B as the last column you fill out.

Column A: This is where you’ll list your debts (credit cards, loans, etc).

Column C: Add the total current starting balance.

Column D: Add your interest rate (APR). Don’t be surprised if this information is hard to find!

Column B: The card or loan with the highest interest and lowest balance is your #1 priority (remember, this is the snowball effect).

If you have more than three debt items, we recommend copying and pasting one of the existing debt sections and adding it to the far right of the spreadsheet. Make sure to also add a new debt item in the top left section too.

Step #3: Add your balance and enter your monthly payments

You wrote down your credit card/loan balances in the top portion of the spreadsheet, now let’s add them to the corresponding color section below (to help you pay down those debts). Here’s a quick guide to where you need to match up your balances:

  • Cell C2 should match cell C15
  • Cell C3 should match cell H15
  •  Cell C4 should match cell M15

You only need to update cells C15, H15, and M15 in this step! The spreadsheet should update the rest of the cells automatically.

Once you’d add the Balance numbers to match, you can edit the Date and Amount Paid columns to match your debt payoff schedule. You may need to add more months, and you’ll certainly want to update the Date column to match your calendar. You enter monthly payment data in the Amount Paid that is your goal payment each month. (Once a payment is made you’ll change its background color to denote you made the payment.)

You will most likely not stick to the payment schedule you first write in. That’s okay! We didn’t either. Just make sure to go in and make the biggest payment you can and the Balance totals will update for you.



Step #4: Set your interest rates

This is the only complex part of the Debt Sucks Spreadsheet, but it’s not as bad as you think! You want to update the formula that calculates the interest rate so you can see the actual amount of interest you’re paying each month.

To update the interest rate for the first debt item, click on cell D16 (or 16D). When you click that cell, you’ll see the formula in the bar at the top of the sheet. We’ve set the default interest rate at 10% (or 0.1 as written in the formula). All you have to do is take the interest rate you wrote in cell D2, convert it to a decimal, and update the formula.

Example: Let’s say you have a 5% interest rate (APR) on your credit card. You’d enter 5.00% in cell D2 and in the formula in D16 you’d change 0.1 to 0.05.

Example #2: If you have a 24% interest rate (APR) you’d enter 24.00% in D2 and in the formula in D16 change 0.1 to 0.24.

Repeat this process for all cells in the “Balance Plus Interest” column where a formula exists (when you click the cell).

Step #5 to using the Debt Sucks Spreadsheet: Make your monthly payments and update the sheet!

Now that you have the Debt Sucks Spreadsheet setup with all your debts, your total starting balances, your interest rates, your estimated amount paid, you can start making monthly payments and denoting them in this sheet.

Don’t get discouraged if you can’t meet the goal you set for your monthly payments. Stick with paying down your debt and use this sheet to your advantage!

 
 


Step #8: Get a debt accountability partner

Accountability Will Help You Pay Debt Off Faster

You know what sucks about debt? Talking about it often. But you know what helps get rid of debt? Talking about it often.

Finding a financial accountability partner is key

If you have a spouse or significant other, I highly recommend this being your financial accountability partner. Conversations about money SHOULD be had in a relationship. Money is evil. It causes so many problems when not discussed often.

Debt isn’t fun and neither is getting out of it. Don’t do it alone!

But if you don’t have a spouse or significant other, you’ll want to get some financial accountability from another source. Here are a couple of recommendations:

Online or local groups: Are you in any Facebook Groups or do you attend any local meetups? Could you ask around and see if anyone wants to team up on attacking debt together?

Financial advisors: I always thought of financial advisors as crusty old men who wore those bright green visors you see in paintings that usually involve games of poker. Maybe there would be cigars involved, but most certainly, being $124,000 in debt didn’t qualify to talk to financial advisors. Then we were proven wrong. We were introduced to our financial advisors through a friend and have been using them since 2013. I’ll also mention that you don’t have to be wealthy, rich, or even making much money to have financial advisors. We had none of those things when we started our relationship with the financial guys we use.

Ask your friends: It may sound crazy, but given the stats I shared earlier about the average debt in the US, you are very likely to have a friend who is in a similar debt position as you. Don’t be ashamed to ask. Heck, forward them this article and have that be the way you broach the subject.

No matter who you team up with, finding a financial accountability partner is hugely beneficial. It removes all the pressure from your shoulders and allows you to have someone to commiserate with. Debt isn’t fun and neither is getting out of it. Don’t do it alone!

Weekly budget meetings will make all the difference

I may sound like a broken record, but our weekly budget meetings were the turning point in our debt story.

I give my wife a lot of credit (money pun!), she was the catalyst for starting our weekly budget meetings. At first, I hated these meetings. It sucked to confront the debt we had, most of which was caused by me and my poor business decisions. But as we started to talk each week about our debt and how we were working through paying it off, it became a much easier topic to discuss. The shame and embarrassment started to melt away.

It’s not an exaggeration to say that since 2013 my wife and I have had over 250 conversations about our finances.

When you have 250+ conversations about anything, progress is bound to happen! Sure, some weeks our budget meetings are short and sweet. We download our data. We review our spending. We update our budgets. We’re on our merry way. But every few weeks it’s a much longer, and sometimes difficult conversation. Those tougher meetings are that much easier with all the boring meetings sprinkled in between.

We can clearly remember being blindsided by random bills, business expenses, or even income before these weekly budget meetings. Now, we feel completely in control of the flow of money coming in and out of our accounts. It feels really effing great.

 


Debt Conclusion

Be Ready To Adapt, Change, And Iterate On Your Debt Payoff Plan

When we created our first debt payoff plan I was hell-bent on paying off all $124,000 of our debt in 12 months. Well, things didn’t go according to plan. We didn’t make as much money as we’d hoped and we had a few unexpected expenses pop up. But just because we didn’t stick to our first debt payoff plan, doesn’t mean we gave up.

We were able to pay down $60,000 of our debt in the first 12 months of our debt payoff plan. And, a whopping $25,000 of that money came directly from doing our Expenses Tracking and Categorization exercise (and then setting budgets, making sacrifices, and making those tough phone calls). So, $25,000 of our first year’s debt payoff came directly out of money we already had and otherwise would have wasted!

Week after week my wife Caroline and I would sit down, go over our finances, make our monthly debt payments, and update our Debt Sucks Spreadsheet. It took just under two years, but we finally reached debt freedom.

Paying off our final credit card

On June 14, 2016, we jumped over that final debt-filled barrel and kicked Donkey Kong right in his credit-card-loving face.

I simply can’t type enough words to explain how great it feels to be debt free. That $124,094 used to make us feel ashamed and embarrassed, but now all we feel is pride.

Our very last credit card to pay off was carrying a balance of $9,639. When we paid it, we immediately grabbed a phone and took a selfie (which, obviously, needed emojis added to it).

Being 100% debt-free is a feeling like I’ve never felt before. It feels like so much more is possible in life. It feels like we’re in control of the decisions we make. It feels like we’re breathing some really sweet, sweet oxygen these days.

If you’re currently in what feels like insurmountable debt, you can get out.

There is no perfect debt payoff plan. There is only the perfect plan you can create for your situation and your life.

Money is a deep, emotional subject for a lot of people and just talking about it can bring up a lot of negative emotions: guilt, shame, scarcity. But we promise the moment you acknowledge the barrel-throwing monkey in the room and make a plan to rescue your financial princess, things will start to change. They did for us.

Remember: It’s not going to happen overnight, and it’s not going to be easy. Short-term pain for long-term gain.

How We Spend Our Money and Different Ways To Invest Yours

May 28, 2017

While the title of this article might suggest I want to show you how to spend all your money, it’s really an article about the different ways to invest your hard-earned cash.

Let’s talk about voting with your dollars, living a rich and full life, and understanding the fragility of being a human being*.

*Sorry to all of my mammalian and marsupial readers out there. I’ll have your back next time!


The different ways to invest your money

To give you a bit of background, my wife, Caroline, and I spent the past few years aggressively paying off $124,000 in debt.

You can read part 1 of our debt story and part 2 of that story at your leisure. During that time, we made some important changes in our spending habits, one of the most important of which was listing out ALL of our expenses and having a hard look at where we were overspending and needed to make changes. (Pro tip: we do this exercise once every few months to make sure we aren’t falling off the financial wagon.)

One of the questions I’ve received the most after we became debt-free was:

Now what do you do with your money??

That is a great question, and I answered it on a podcast episode that you can listen to here:

But I’m not just going to drop a podcast episode on you and leave you high and dry. I want to expand upon the title of this article and help you spend your money, or at least explain the thought process behind how we spend ours.

The first step to spending (and growing) money is covering all your bases

Enough well-off (read: rich) people and non-crusty financial planners repeated the same thing over and over again, so I finally started listening and applying their advice.

What were they repeating? Was it a hot stock tip? A slick investment strategy?

Nope. It was super boring. They were all talking about insurance.

You don’t understand the value of having insurance until you truly need it, and by then, it’s too late.

Car insurance

Sure, almost everyone reading this probably already has car insurance. BUT… Do you have the right amount of coverage? Do you know your deductible if you were to get into an accident (and do you have a buffer of cash saved to cover that deductible)? Most importantly: you may be paying for the cheapest coverage possible, but could you pay just a few extra dollars to have WAY more coverage?

Our GEICO car insurance policy had decent coverage every month for the $78 we were paying. But, upon further inspection, we found that we could quadruple our coverage, cut our deductible in HALF ($5,000 to $2,500), and only spend $9 more per month. Yes, $9. Just based on the $2,500 smaller deductible, that extra $9 is worth it for the next 23 years (2500/9, then divided by 12).

Life insurance

We always assumed life insurance was a complete scam. Guys with slicked-back hair wearing ill-fitting suits, trying to get you to buy something you’d never use. That was, until we were told about Whole Life Insurance* and how it not only builds a policy that your spouse (or family) can benefit from if you pass into the next life, but can also be used as an investment account (netting 3-5% returns annually).

Now, you may be like I was a few years ago and not have a spouse to think about when you die. But I bet you have family members who could benefit from the policy if you took a trip on the No Longer Alive Express. And remember, it’s also an investment.

Find a recommended financial advisor (from a friend) and talk to them about life insurance. Avoid investing in life insurance from anyone who calls you unsolicited.

*I want to point out that Whole Life Insurance can get a bad rap on the Internet. You may also find Term Life Insurance in your searches. Truthfully, for every positive article on Whole Life, I could find a competing negative one. At the end of the day, I trusted the people who recommended this to me (close friends and biz acquaintances), and none of them were benefiting financially. That’s good enough for me.

The Oh-Shit-Everything-Went-Cray-Cray-Fund (aka safety net of savings)

Bring on the “snooze” alert. I want you to know, dear reader, I hate the idea of savings. I really do. You’ll read more about that in a moment. However, I hate the idea of being in a financial stranglehold if something goes wrong in life more than I hate the idea of savings.

When we finished getting out of debt, one of the first things we did was build up a reserve of cash (savings). There’s no tried-and-true rule here, but we wanted three months of expenses saved up as an “oh shit, everything went cray cray” fund. This became the first thing we put money toward after paying off all our debt. We squirreled away every dollar and put it—and this is key—in a bank account that wasn’t at the same bank as our other accounts. This external safety net account is one we rarely see and never touch (and that’s how it should be). The peace of mind we feel having this 3-month cushion is absolutely fantastic and something you must do for yourself.

Insurance is boring, so let’s talk about living a rich life and different ways to invest money in your own happiness!

For as long as I can remember, I never believed in saving for retirement. I enjoy the work that I do and want to enjoy my life at the same time. Now, does that mean I don’t make long-term investments? No, but I’m not buying into the same long-term investment plans as other people because I don’t have to. (We’ll get to that in a moment.)

If you knew you were going to die next week, wouldn’t you change everything about your life?

Of course, I’m not going to tell you to spend all your hard-earned money on Faberge eggs, lavish trips, etc. But I will tell you that we live our lives under the idea that human beings are fragile creatures. We get sick easily. We can contract some random illness, and our dreams of a long life can be squashed in a moment.

To me, it’s actually a bit short-sighted to think about living a rich life only when you’re much older. So here are some things we prioritize in our budget:

Travel budgeting

When we finished paying off all our debt, we knew we wanted to do one big trip to celebrate. We called it our “Moneymoon” (clever, I know), and we splurged on a bucket list journey to Tahiti. Yes my friends, over-the-water bungalows and all. This was our only big trip of that year. One trip. The other trips we took were all road trip-based (read: driving in our car to cheap AirBnBs or pet-friendly hotels).

Moorea, Tahiti, Jason and Caroline Zook

(Obligatory Tahiti photo, sorry I’m not sorry.)

As we’ve continued to make a little bit more money each year, our travel budget has increased But we reflect on it each year, and we’re honest with ourselves about our priorities. There was a time our yearly travel budget was $0.00 because we had no money to spend, and it’s likely that could happen again if something more interesting pops up on our radar.

Semi-pro-tip: If you feel like you’re at the $0.00 travel budget place, I’d recommend using a savings app like Acorns. It’s free to use and can round-up your daily/weekly purchases to save little bits of money here and there. You can also set monthly withdrawals (I have $50 on ours). Last year my Acorns account accrued over $1,100 without me even thinking about it! Boom. Travel budget.

Repetitive joy spending (aka monthly entertainment budget)

I believe the reason people (maybe people like you) feel guilty about going out to dinner or movies (or spending money on other discretionary things) is that they don’t budget for it.

When you have an idea of what you can spend on non-necessities, you create a cap for it, and then you don’t feel the guilt of spending it.

We have a $1,000 budget per month for entertainment. That includes:

  • Eating meals out
  • Going to the movies
  • Local coffee shops visits
  • Miscellaneous

Our budget didn’t start out at $1,000. A few years ago, it was something like $150 and included one nice meal and one movie night a month.

Here’s the really important thing about this category of spending: It’s one of the things that brings us the most repetitive joy in our lives. Exploring new restaurants. Seeing works of art on the big screen (or just huge explosions and 360-pans, thanks Michael Bay). We budget this happiness into our lives and are incredibly intentional about it.

I think often of Ricardo Semler’s TED Talk about “terminal days” and how similar it is to the idea of being intentional about how we spend our time. This is a paraphrase of how Ricardo puts it:

“On Mondays and Thursdays, I learn how to die. I call them my terminal days. A lot of people in my family died of melanoma, and I kept thinking that one day, I could be sitting in front of a doctor who looks at my exams and says, ‘Things don’t look very good. You have 6 months to live.’ And I started thinking about what I would you do with this last bit of time I had left. Spend more time with the kids? Visit these places? Go up and down mountains? We all think think we’re going to do all the things we didn’t do when we didn’t have the time. But I decided I’m going to do something different. I’m not going to wait to be diagnosed with a terminal illness. Instead, every Monday and Thursday, all year round, I do what I was going to do AS IF I had received a terminal diagnosis.”


What if you invested in yourself first?

I’ve done this by nature for as long as I can remember, but my friend Greg Hartle explained it to me in ways that made more sense as a business owner. I’m paraphrasing, but he said some version of this…

“Invest your money in your own projects because unlike stocks, bonds, and other standard investments, you can usually enjoy 100% of the returns (or more!)”

This mindset of investing in myself has drastically shifted my thinking, especially when I start to evaluate taking on a new project. Yes, new projects are shiny and fun and give you all kinds of dopamine responses, but they also come with pressure, stress, and a whole heap of work. Work that you aren’t sure will pay off.

Invest in projects that are already working: A Teachery Case Study and Growth Plan

For me, Teachery is one of these projects that I keep investing in and look to as my own long-term investment. If you don’t know, Teachery is an online course software that I co-founded in 2014, and it’s always been a side project.

Recently, however, I’ve started to think about creating more predictable monthly income, and Teachery was the logical place to start (especially when using the “invest in yourself first” mantra).

Here’s how the numbers break down when it comes to investing time and energy (which is another form of currency) into Teachery:

  • Current time spent per week working on Teachery (support/dev): 3-5 hours
  • Current monthly revenue (aka MRR): $6,000 (ish)
  • Current monthly paying customers: 120 (ish)
  • Investment in a second developer to beef up our features: $18,000*
  • Investment in a designer to spice up our look: $3,000
  • Investment of my time: 2-3 additional hours per week

Goal: Increase Teachery monthly recurring revenue (MRR) by 3-4x in the next year

Our investment of time and money into Teachery will be recouped in four months if absolutely nothing changes. But I know things will change, because the money we’re spending is on things our potential customers are asking for (but that we don’t currently offer, so we’re losing their business).

At a 3-4x increase in customers and revenue, we’ll go from $6,000 MRR to $18,000 – $24,000 MRR (or $72,000 annually to $216,000). There isn’t a stock or fund you can put your money in that creates a potential increase of 300%! Plus…

One of the best things about investing a project of your own (like Teachery) is that no one can pull it out from under you.

You own it. You control it. It’s your playground, and no one can steal your bouncy ball.

Do you have a project that’s already generating revenue that needs some love? Maybe a small investment and some time could propel your business forward?

*The $18,000 was hiring a second developer for six months. We could have done all the work ourselves, but due to our limited time investment, this accelerated our roadmap immensely!

Investing in new and bigger ideas: BuyMyFuture/BuyOurFuture Case Study

You may not have a software product like Teachery to invest in, but you may have a big idea that’s nagging at your thoughts day in and day out. I’ve had a few of these over the years, but most recently, BuyOurFuture was that project.

The initial idea behind BuyMyFuture was to provide maximum customer value to me for my projects ($1,000 per customer) and maximum “Jason’s projects value” to my customers (pay me once, get all my current AND future stuff).

When I started running the numbers on what it would take to make BuyMyFuture a reality, the expenses racked up. How much, you ask? Just shy of $9,000. That included:

  • Website design and development
  • Promo video
  • Legal fees
  • Promotional items
  • Software (podcast hosting, website hosting, etc)

Even though that $9,000 was a scary number to spend, I knew it would be an investment of my own idea that I’d get 100% of the returns from.

So, what happened?

  • In the first launch of BuyMyFuture, I made $178,000 in revenue.
  • In the second launch, I made $123,000 in revenue.
  • In the third launch (BuyOurFuture), we made $107,000 in revenue.

That first investment of $9,000 ended up bringing me over $408,000* in just two years. Show me a stock, mutual fund, or any other typical investment that has this type of immediate return.

Now, of course, not all ideas pan out and end up bringing in hundreds of thousands of dollars. I’ve chased after ideas that barely broke even. I’ve had ideas that ended up in the red. But the important way to look at this is that you don’t put all your eggs in one basket (diversify, as they say), and that you are doing things that YOU actually control the outcome (to some degree).

I’ll take investing in my own ideas over investing in ones where I have no control any day of the week.

*I share revenue numbers, because they’re obviously bigger and more awesome. However, the profit numbers are worth sharing for transparency’s sake: total expenses for all three BuyMyFuture launches equal $105,000. Total profit is then $303,000.


Important mindset shift: Voting with your dollars

This topic has become more and more important to me as I’ve been in the entrepreneurial game longer.

If you’re being completely honest with yourself, do you really want to see more big box stores out in the world? More huge companies that squeeze as much profit out of their employees and products? Or would you rather spend your money supporting world-changing businesses, industry-disrupting entrepreneurs, or maybe just a hand-crafteded brand run by one guy and his family?

Why I have an “Ugmonk Budget”

Jeff Sheldon started a simple apparel company around the same time I started my IWearYourShirt idea in 2008. The idea behind his company, Ugmonk, was to create well-designed and high-quality apparel (instead of contributing to the fast-fashion world that makes things as cheap and mediocre as possible).

Every year since Ugmonk started, I’ve purchased something from Jeff. Whether it was a t-shirt, a mousepad, a Chemex coffee collar, or one of his anniversary sets, I have an annual Ugmonk budget.

(Not only do I spend money on Jeff’s products, sometimes I also create content about them because I want more people to know about it – a la his current Kickstarter for “Gather.”)

As a minimalist, I don’t often need the things Jeff is creating/selling, but I want the Ugmonk brand to continue to exist. I want to do what small part I can to try to ensure Jeff continues to create beautiful, functional, and meticulously crafted goodies. That is why I have an Ugmonk budget* and why I will continue to have one for as long as Jeff is running Ugmonk.

Ask yourself this question: What do you want to see more of in the world? Spend your money on that.

*The best thing about my Ugmonk budget is it’s $200 per year. That may not make a huge impact on Jeff’s bottom line, but it makes a big impact for me to know I’m supporting Jeff on an annual basis.

And of course, let’s not forget charitable giving…

Donating to various charities is something I’ve done since I was running my first business in 2006. Sure, I didn’t have a ton of extra money to donate, but as a small business owner, I knew how much of an impact a small amount of money could make.

I’m not one of those people who likes to brag and share every time I make a donation. Yet it’s an important part of my money-spending mantra to carve out a chunk of change that goes to folks who are doing good in the world.

Investing is great. Building a nest egg is great. But much like supporting businesses (like Ugmonk) with your dollars, it’s important to support the causes you believe in. Much like anything else that has to do with spending money, if you budget for and prioritize charitable giving, it doesn’t have to become an afterthought (or worse, the first expense you cut when money gets tight).

  • Start with a budget of $100 this year.
  • Next year, double it.
  • Then double it again the following year.

In a few years, you’ll be donating thousands, and it will have turned into a positive habit that you can’t live without.


Let’s recap the different ways to invest your money

There’s a lot to chew on here and I love focusing on taking action. Here’s your quick-hit list of what to invest in and where to spend your money:

  1. Get your insurances in order (car and life)
  2. Build up your “oh shit savings” in a separate bank account
  3. Start a travel budget
  4. Create a repetitive joy budget
  5. Figure out if you have a current project you can invest in right away
  6. Look for bigger opportunities to take risks (and see bigger payoffs)
  7. Define your “Ugmonk budget”
  8. Set aside money for charitable giving

We live in a time when you can always make more money. You can always work more. But if you aren’t actually enjoying your life, then what is it all for?

I wanted to touch on long-term investments before putting a pin in this article. I absolutely believe in “safe” long-term investments (like Index Funds, et al). At this moment in time, I don’t have the excess cash that makes sense to put towards long-term investments. It’s absolutely on the list—it’s just not the highest priority for our money-spending strategy (plus, that Whole Life Insurance does count as a long-term investment).

Then again… maybe I’ll never have a boring long-term investment because I’ll always be creating stuff of my own I want to invest in?

What To Do When Your Creative Business Isn’t Making You Money

January 23, 2017

If you’ve taken a peek around Made Vibrant before, then you know my #1 priority is never money or “success” as it is traditionally defined.

I’m of the mindset that inner alignment and building a life that brings you sustained satisfaction based on your unique values is always the primary goal. I’ll never try to sell you the “six-figure dream.”

That said, turning your creative gifts into a full-time income can be an incredible way to live out your values in a flexible, impassioned, and impactful way, so this complex relationship between creativity and money is one that I feel compelled to explore with you.

That’s why I want to continue our conversation from last week about the survey responses I received from so many of you at the end of last year.

When I asked about the relationship between your creativity and what brings you income, only 30% of you currently said you have a business that provides your full-time income, yet 70% of you said that’s what you are working towards.

That got me thinking about ways I can help you close the gap and help more of you that want to have a full-time creative business, get there (on your own terms and in your own way, of course).

One of the hardest parts of being a business person AND a creative person is that you are often paralyzed by possibilities. Which ideas to focus on, how to structure your day, how to balance practicality and idealism… these are all issues that I continue to confront, even now as I approach my fourth year in business.

It can often feel like you’re in a complicated maze of decisions, like you have 20 buckets before you and all you feel like you’re ever doing is filling them up one tiny drop at a time.

But, after two strong and profitable years in business, working less than I ever have with more joy than I ever have, I want to share with you the exact process I engage in every time I discover my business isn’t making the money that I want it to be making (or every time it becomes clear to me that I need to make a shift in how that money gets made.)

The most distinct personal example of this is probably back in 2014, when I was just six months into starting Made Vibrant as a freelance design business. I seriously considered shutting it all down and getting a job again because I was bringing in just barely $1,000/month, which wasn’t enough to maintain the lifestyle I was living. Before I threw in the towel though, I wanted to know in my heart that I gave it my very best try.

The process outlined in the steps below is exactly what I did to take my business from a struggling crapshoot to a strategic, fulfilling, profitable business. In a matter of just three months, I was able to lift my monthly income to $4,000/month. Those shifts I made quite literally saved my business, and this process is how I’ve approached things ever since.

My hope is that by outlining some specific steps you too can take, that it will empower some of you to formulate your own action plan instead of staying paralyzed in the dark when it comes to your creative business. If making a full-time income with your creative gifts is something you envision for yourself, I truly hope that today’s letter will provide you with some ways to confidently move toward that future.

Alright, buckle up… here we go!


Identify the core limiting beliefs that are holding you back.

You guys are one step ahead because we already tackled this!

Just as no bucket can remain full if there’s a leak in the bottom, no business can thrive with an owner who is self-sabotaging. Many of you are solopreneurs or have small teams, which means your mindset and behaviors greatly affect every inch of your business operations.

If you’re not flourishing financially in the way you want, the first crucial step is to take a hard, honest look at what could be preventing your progress on a personal level. Once you find a way to start rewiring or rewriting some of those stories, you’ll find that everything else in your business will begin to flow more easily.

(I’d like to add that I don’t consider limiting beliefs to include things like very real health or mental health challenges, which require a different approach to treating and thriving. Limiting beliefs represent the false, invisible barriers we place on ourselves mentally, things that we have the power to flip the script on if we are willing to work at it.)

Going back to that crucial moment in my first year of my business, I had MAJOR limiting beliefs around my lack of confidence and my fear of rejection. These barriers prevented me from sharing my design work or art (which was an important part of attracting clients) and it led me to set my prices WAY too low, leading me to be overworked and underpaid.

Once I was able to confront these self-imposed limits head on, I could work past them, eventually sharing more of my work and raising my prices, which I know contributed significantly to the lift (and survival) of my business.

After you’ve take the time to reinforce the foundation, that’s when you can move on to the business itself.


Evaluate revenue streams at a macro level.

Some of you out there may have one single thing that you create that brings you money. Maybe you sell jewelry or you are a freelance designer and that is 100% of the work that brings you income.

That business structure allows you to focus on one main thing, which may be an efficient use of your attention and focus, but it also leaves you incredibly vulnerable because the health of that one business line defines the health of your entire business.

My approach from the beginning has always been to diversify with multiple revenue streams so that the success or decline of any one income source won’t be the end of my business. (It also is a natural consequence of being a multi-passionate and curious person. I have new ideas and those create new revenue streams!)

While I believe this strategy is beneficial overall, it does also present me with a challenge, pulling my attention in multiple directions. This is why it’s incredibly important at regular intervals to check in and ask ourselves:

What do I want to continue to work on and what can I let go of?

Every time I’ve realized I’m at a road block with the profitability of my business, it’s usually because I’m wasting energy on something that isn’t quite working or I’m NOT giving my full attention to an opportunity that is ripe for the picking.

So, this step becomes about understanding what is working, what’s not working, and why.

Here’s how to make that deduction:

1. Start by breaking down every single source of income by product stream, and take a look at how much profit each one brings you monthly.

I still to this day do this on the first of every month. I export the data from my payment processors like Stripe and Gumroad, and I enter it into a spreadsheet where I separate the transactions by project, total them up, and add them to a master sheet that shows me totals for the year on all of my various courses and products.

Thanks to spreadsheet magic, it only takes me about a half hour every month, but it’s incredibly powerful because it forces me to check in on a monthly basis and identify where my energy went vs. where my money came from at a high level.

2. Once you have your revenue totals, go project by project and write down your input vs. your output.

In other words, answer these two questions:

  • Output: What did I get out of this project?

This goes for money, obviously, but it also refers to other things. A project could bring you joy, creative growth, cultivation of a skill, collaborations with great people, etc. In my business, these are all things I want to take into consideration, though understanding that if financial lift is my primary goal, then that metric is what needs to carry the most weight at that time.

  • Input: What did I put into this project?

The same guidelines hold true for this question. You want to consider cost as well as other things. How much money did it cost you to produce that revenue stream? How much time? Energy? Did it take joy from you? Did it take patience from you? These are all things I write down.

3. Now identify your Power Player and your Dark Horse.

Your Power Player = the revenue stream that brings you the biggest profit for the the least sacrifice. (ie. Output is disproportionately larger than input.)

Your Dark Horse = the revenue stream that feels like it has the most potential, if it was cultivated properly.

That could mean it’s the one that is the most enjoyable but still isn’t very profitable, or it could mean the one that brings you a decent income but it’s taking too much from you and needs a process overhaul to be enjoyable and efficient.

4. Lastly, put each of these various projects through your “value filter.”

In other words:

What are the things you care about most, and does each of these projects align with those values? What do you want to be working on?

Keep in mind, there’s a balance at play here between doing work that lights you up, but also being realistic about what is working from a business perspective (we’ll dive deeper into this next week.)

Again, if you’re in a place right now where financial stability is your goal, you may have to cultivate the projects that aren’t the most ideal in terms of aligning with your values, but that can serve as a stepping stone to doing that bigger, more meaningful “heart work” after you’ve reached a more stable footing.

By this point, at the very least you should start to see a much clearer picture of what is actually bringing you money and what is not, as well as what is an opportunity and what is a time suck.

This exercise is what led me to start shifting away from client work in early 2015 because I saw that my online lettering course was bringing in almost double the income of my client work with far less time spent and far more joy.

By shifting resources away from a revenue stream that was a losing game for me to one that had great potential, I was able to use my very limited time a lot more effectively.


Evaluate work processes at a micro level.

The top-level evaluation in Step 2 may be enough to illuminate changes you want to make right now in your business in terms of ways you want to allocate your resources. But, here’s the next logical question: What if you can’t just cut off an entire income source cold turkey? What do you do in the meantime as you transition out of it or as you redistribute your attention to new projects or opportunities?

What if you see a Dark Horse — an opportunity that could prove to grow into a Power Player for you if you just changed some things around?

The answer is in evaluating each revenue stream or product on a micro level.

It’s time to take an honest look at the product or service itself, your process, your costs, and your daily routines to see where you could be slowly leaking resources — time, money, or joy.

In my experience, there are usually three different issues at play when it comes to optimizing a revenue stream on a micro level. You can adjust the product, the promotion or the process.

Your goal at this step them becomes to:

1. Go through each source of revenue in your list from Step 2 and rate them on a scale of 1-5 in terms of each P: product, promotion, and process.

This will help you more clearly narrow down what it is about each individual product or service that’s working or not.

By far the biggest hurdle for me in that bunch has been process, mainly because of the slow improvements I’ve had to make on my relationship with time.

Some thoughts about time

Time is sneaky little thing! If I was a betting woman, I would wager that mismanaged time is responsible for the majority of businesses that aren’t where they’d like to be financially. There are a few different lessons I’ve learned about how to cultivate better habits with time, and it’s improved my business significantly, so I wanted to dive into that one significant detail here.

When I was doing client work and only making $1,000 a month, Jason sat me down and very kindly but honestly asked me if I was using my time effectively. I was defensive, of course, claiming that I was using every hour I could and doing my best, darnit!

Still, he asked me to do a simple math exercise which really highlighted for me the fact that I was losing a LOT of time without even realizing it.

He said:

Think of every hour in your day as one block. How many blocks of actual focused work would you say you can do every day (not answering emails, checking social media, doing admin work… but actually doing focused, project-based design work?)

I answered 5.

5 hours = 5 blocks. 5 blocks a day, at 5 days a week means I essentially had 25 blocks a week or 100 blocks a month of potential “work time.”

At the time I was charging roughly $75/hr, which meant the total possible income I could be making as a designer every month if I booked my schedule was $7,500 (compared to the $1,000 I was making.)

So why wasn’t that happening? Why wasn’t I making $7,500/month?

Well, that exercise made me realize a few things. #1) I wasn’t estimating my projects very well (I’d quote a project at 20 hours and spend 40 completing it.) And #2) I wasn’t booking my projects in an efficient way (without the visual “block” reference, I was only taking on one project a month because I was afraid of not having time to complete it. However, now armed with a way to estimate my time and conduct my time effectively, I felt empowered to get out there and book more business to fill up my “blocks.”

I’ll admit, it felt a little restrictive at first, and honestly, humbling. Am I really not savvy enough as a business woman that I have to map out every single hour of the day to book clients? That’s how it felt. That is until I started seeing the monthly revenue climb. More projects, less wasted time, more confidence, less second-guessing… it turned into a snowball that was actually working.

After I started to notice that, I was more than happy to put up with more structure than I was used to and trade a little bit of flexibility for the peace of mind that my effort was paying off.

Here’s what we creatives need to understand:

Structure is essential to efficiency, and efficiency is essential to profitability.

I know it’s not sexy. I know it sounds cold, and boring, and not the exciting artistic impact that we all want to make on the world, but remember:

It’s much harder to make our mark on the world if we’re scrambling for income.

“It’s much harder to make our mark on the world if we’re scrambling for income.”

Time efficiency can be the (unsexy) ally of beautiful, soulful art.

If we reframe structure through this lens, we have a better shot at building thriving and sustainable businesses.

Aside from the time block method, I also try to use tools like Toggl to keep track of how many hours a single project takes, which allows me to really factor in the time spent as a cost.

It might take some mental effort, but evaluating the nitty gritty details of each project and business line will arm you with the information you need to make smart improvements to your business.


Start by acting on your Big Brick Wall and your Big Cracked Door.

Now that you’ve taken a critical look at your creative business from a macro perspective and a micro perspective, it’s time to make some decisions about how to act on this information.

Prioritization is key here because if you feel like everything has to change at once, it’s likely you’ll start to feel overwhelmed and nothing at all will change.

That’s why I prioritize by looking for one Big Brick Wall and one Big Cracked Door.

These are two terms Jason and I discuss in our Make Money Making course, but they are my way of evaluating how to move forward when I feel I’m at an impasse in my business.

A brick wall = An obstacle you find yourself repeatedly bumping up against.

A cracked door = A sliver of opportunity presenting itself to you.

Your BIG Brick Wall is the brick wall that sticks out to you most. It’s the one challenge that you find yourself repeatedly coming back to most often. It could be on a macro level — one revenue stream that just doesn’t seem to be working. Or it could be on a micro level — a product, process or promotion issue — that’s undercutting everything you try to do in your business. There are two ways to act on a Brick Wall, and that’s either to try and improve what’s not working or to simply let it go.

Your BIG Cracked Door is the opportunity that feels like it has the most potential. It could be an existing product that is performing better than you imagined and could benefit from more time and attention, like your Dark Horse from Step 2. It could be a promotion method that is working extremely well but that you haven’t set aside time to crank the volume up on yet.

You can even take the two birds, one stone approach here by simultaneously letting go of your Big Brick Wall in your business to divert your energy and attention to your Big Cracked Door.

That’s what I did when I transitioned away from client work over to products and courses. In doing so, I wasn’t spreading myself thin because I was eliminating one thing while replacing it with something that was a better fit for me, which is really what this entire process is about: figuring the best use of your limited time and attention to make the biggest financial impact on your business.


Strengthen the communication with your audience.

By this point you will probably have an idea of how to better focus your resources, which is a great start. But it won’t matter how efficient your processes are, how amazing your products are or how well-tailored your revenue streams are if you can’t form a meaningful connection with your audience. That’s why I had to include communication as the final step of the process.

In the Better Branding Course, I talk about getting clarity around the 4 Q’s of your business, which will help you form clear and concise messaging on your website, your social media posts, your newsletter — every single touchpoint you have with your intended audience.

Those 4 Q’s are: Why? Who? What? And How? (… and in that order!)

Why?

As Simon Sinek says, “start with why.” Why does your business exist? What is the underlying mission behind your work? Defining this and weaving it throughout your work will help you attract your ideal audience and it will help you stand out in a sea of other similar businesses. Speaking of your ideal audience…

Who?

Who do you want to serve? Who are your trying to connect with through your work? Who will pay for your products or services? Try describing this group of people not in terms of their age or gender, but in terms of what they believe and what they care about. Like two puzzle pieces fitting together, your WHO should be a specific type of person that will resonate with your WHY.

What?

What are you promising people? What benefit do your specific services or products bring to people’s lives? Think of this not in terms of any details about your products but in terms of how your products make people feel and in what ways you make their lives better.

How?

Finally, how do you deliver that benefit to them? Through beautifully designed jewelry or online courses or colorful art? This is where you get specific on the things you sell and offer your audience.

Once you can clearly and easily define these four things, you can weave the answers to these questions across every single aspect of your brand. As long as you are communicating these things clearlyauthentically and consistently (all three are very important!), you’re setting your business up for the best chance it has to achieve your financial goals.


I know there are a TON of moving parts to this puzzle, and a LOT of information I’ve laid out here, but that’s because it is the true reality of running a creative business with soul.

There are people out there that would like to pretend that running an online business is as simple as blogging consistently, delegating a few things, building an email list, selling an online course and watching the money roll in. They paint this picture because it is what helps them sell the course promising to show you how you can do it too in “7 easy steps.”

As for me? My goal has always been to show you guys my personal journey in business — the complex decisions, the emotional hangups, and the messy evolution of it all.

In my experience, running a creative business is damn hard. It’s a constant battle with your own self-doubt, managing the ebbs and flows of the inevitable creative cycle. It’s sticking with projects long enough to see them through, but knowing when to let go of ideas that aren’t getting you where you want to go. It’s constantly holding on to what makes you unique, and it’s being brutally honest about your own strengths and weaknesses so you can carve out a path for yourself that is sustainable and authentic.

But it is also immensely joyful. And freeing. And constantly illuminating. This business has given me the financial fuel I need to live comfortably, yet also the flexibility I want to travel and make space to grow.

I hope the steps I’ve outlined above help you form a game plan if you’ve been stuck, and I hope it serves as a road map for what’s possible with effort and persistence.

Keep shining, keep making, keep working toward whatever vision you have for your life, and I’ll keep being here sharing what I learn along the way!