bonus http://www.wisebread.com/taxonomy/term/200/all en-US Stop! Don't Make These 6 Dumb Mistakes With Your Financial Windfall http://www.wisebread.com/stop-dont-make-these-6-dumb-mistakes-with-your-financial-windfall <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stop-dont-make-these-6-dumb-mistakes-with-your-financial-windfall" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-holding-cash-Dollarphotoclub_43389648_0.jpg" alt="woman holding cash" title="woman holding cash" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Maybe your lottery numbers finally came in. Maybe a favorite aunt remembered you in her will. Heck, maybe one day while you were shootin' at some food, up through the ground came bubblin' crude &mdash; oil that is! Texas tea! (See also: <a href="http://www.wisebread.com/50-smart-things-to-do-with-your-tax-refund?ref=seealso" style="font-size: 13px; line-height: 1.15;">50 Smart Things to Do With Your Tax Refund</a>)</p> <p>Whatever the source, you're the lucky beneficiary of a financial windfall. Revel in it and protect your new-found wealth by avoiding these six dumb moves.</p> <h2>1. Act Impulsively</h2> <p>Receiving money unexpectedly is exciting, and it can send even normally down-to-earth folks straight into the stratosphere. In those dizzying weeks and months following a financial windfall, we're really not ourselves, so making big decisions during that time is usually a terrible idea. Instead of spending or investing immediately, take a time out. Collect yourself. Adjust to your new wealth for six months or a year and just let the cash sit in a money market account or CD. Remember, high emotion and sound decision-making usually don't mix.</p> <h2>2. Buy a New Car</h2> <p>Even if you're paying cash, there are many reasons to avoid buying a new car. Not only is it the most cliché thing you can do with a windfall, but it's also one of the quickest ways to lose roughly 25% on every dollar you spend. The minute you sign the paperwork and drive off the lot, that new car becomes used. Depreciation takes a quick and silent bite out of your new ride. Let someone else absorb that financial hit; buy a pre-owned late-model car that's still under warranty.</p> <h2>3. Loan Money to Friends and Family</h2> <p>Making loans to friends and family is a sure way to take the wind out of your financial windfall. Loans have a curious way of never getting repaid, and once your bank balance dwindles, hard feelings can set in and slowly erode relationships. If a loan is unavoidable, find out how to <a href="http://www.wisebread.com/getting-your-money-back-without-losing-your-friendship">increase your chances of repayment</a> without sacrificing the relationship. Better yet, if someone dear to you truly needs a hand up, simply make a one time cash gift with no repayment expectations.</p> <h2>4. Sink It All in Stocks</h2> <p>Certain stocks can be great investments &mdash; as part of a balanced and well-diversified portfolio. But for newly-minted investors flush from a financial windfall, a measured and balanced investing strategy just doesn't sound sexy. And while investing in the performance of individual companies might sometimes pay off over the long-term, it sets new investors up for a wild ride and turns what should be a well-considered and tactical process into a simple roll of the dice.</p> <h2>5. Pay Off Your Mortgage</h2> <p>Paying off our biggest expense can be immensely satisfying, but in an era of low interest rates, it may not be the most strategic decision. Think of it this way: If you have a 30-year fixed mortgage rate of 3.85%, but could realistically average 8.5% in a good mutual fund, wouldn't every extra dollar devoted to paying off your mortgage lose 4.65%? Of course, everyone's circumstance is different; factors like your age, the number of years remaining on your mortgage, the interest rate, and how long you plan on being in your home are important considerations. The point is this: Don't automatically assume that paying off your mortgage is the way to go.</p> <h2>6. Handle Everything Yourself</h2> <p>As wonderful as it is, money has a way of complicating things. Large financial windfalls often result in more complex tax issues, require much clearer estate planning, and demand a more active and engaged investment strategy in order to protect and grow wealth. It's important to be honest about the limits of your personal expertise and seek counsel from a professional. <a href="http://www.wisebread.com/what-do-i-need-to-know-before-i-hire-a-cfp">Explore hiring a CFP</a> (Certified Financial Planner) for help and advice.</p> <p>There you have it &mdash; six of the dumbest things you can do when life hands you a pile of cash tied with satin ribbon. If you run headlong into each one, chances are you'll outlive your windfall and resort to buying scratch-off lottery tickets to recapture the magic. If you avoid all or most of these mistakes, you can put that windfall to work and turn one good fortune into a lifetime of security and wealth.</p> <p><em>Have you ever been the lucky recipient of a financial windfall? Do you have any regrets about how you managed the money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/stop-dont-make-these-6-dumb-mistakes-with-your-financial-windfall">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-all-your-money">It&#039;s all your money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-earn-over-12000-through-referrals">How to Earn Over $12,000 Through Referrals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-the-aig-bonuses-be-taken-away-or-not">Should The AIG Bonuses Be Taken Away Or Not?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/quick-notes-a-bonus-holiday-bonus">Quick Notes: A Bonus Holiday Bonus?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-turn-down-free-money">I turn down free money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bonus free money jackpot tax return windfall Mon, 02 Feb 2015 14:00:08 +0000 Kentin Waits 1284464 at http://www.wisebread.com How to Earn Over $12,000 Through Referrals http://www.wisebread.com/how-to-earn-over-12000-through-referrals <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-earn-over-12000-through-referrals" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/coworkers-463634621-small.jpg" alt="coworkers talking" title="coworkers talking" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Businesses are scrambling to get new customers. The result is competitive pricing for many of the services we've come to enjoy, and a chance to earn freebies and cash like never before. The art of earning perks by having your friends and family namedrop or use your special &quot;sign up&quot; link is officially called a &quot;referral program,&quot; but I've seen it online named all kinds of things (including &quot;referraling.&quot;) (See also: <a href="http://www.wisebread.com/ultimate-guide-to-cash-back-shopping?ref=seealso">Ultimate Guide to Cash Back Shopping</a>)</p> <p>Regardless of how you label it, the chance to get something merely for sending a business new customers can be a big money maker for some. Here is a list of some of the best programs, including plenty that pay cold, hard cash!</p> <h2>Business Services</h2> <p>From graphic design to freelance writers, you'll find a referral program for almost every business service you can think of.</p> <h3>99 Designs</h3> <p>This crowdsourcing service that lets you get graphic designs for far less than hiring an agency is giving customers <a href="http://99designs.referralcandy.com/">a $50 refund</a> when they refer a paying friend. Plus the friend gets a $99 bonus on their first campaign!</p> <h3>SmartSheet</h3> <p>A snappier version of the familiar spreadsheet, this project management tool rewards referrers with between <a href="http://www.smartsheet.com/referral-rewards">$15 - $500 in cash paid via Paypal</a> upon referral signup.</p> <h3>iContact</h3> <p>If your friend is looking for a web-based email service, they can get a $50 account credit for signing up through you; <a href="http://www.icontact.com/refer-a-friend">you'll get a $50 gift card</a> for making the connection.</p> <h3>FatCow</h3> <p>This web hosting and management service will <a href="https://www.fatcow.com/referral/">give you $35</a> when your friends sign up! (<a href="http://www.ipage.com/referral/">iPage</a> offers the same compensation plan.)</p> <h3>Shortstack</h3> <p>This service allows you to build social media campaigns, online contests, and more. When a referral signs up through your unique link, <a href="http://referral.shortstacklab.com/">you'll earn a 30% cash commission</a> on services sold, <em>plus</em> 10% commission for each month after. (Minimum payout is $20.)</p> <h3>Digital Ocean</h3> <p>This cloud hosting service designed for developers <a href="https://www.digitalocean.com/referral-program/">will pay $25</a> when your referred friends spend $25.</p> <h3>Eventbrite</h3> <p>If your friend is organizing a ticket-selling event in the future, you can cash in with <a href="http://www.eventbrite.com/referral-program/">25% of their ticket fee sales</a> when they sign up through your link! (This deal is valid for one year after sign up.)</p> <h3>iStockphoto</h3> <p>This stock photography service sells pictures by the credit or as a monthly subscription service. <a href="http://www.istockphoto.com/participate/referral-program/info">Sell either to your friend</a> and get 20% commission, 20 credits (worth $30 at the site), or a flat $20 fee.</p> <h3>SmugMug</h3> <p>Photos are to be shared, and so is photo hosting! Get your friend to sign up, and <a href="http://help.smugmug.com/customer/portal/articles/93326">get 20% off for yourself</a> via an account credit.</p> <h3>Skimlinks</h3> <p>For friends who use this service for their website affiliate links, you'll get a generous <a href="http://skimlinks.com/referral">35% of their earnings</a> when you refer them.</p> <h3>Upwork</h3> <p>This online staffing platform for freelancers <a href="https://www.upwork.com/">pays $10 or 10 free credits</a> to those sending over a &quot;qualified referral.&quot;</p> <h3>Autotask</h3> <p>Automation isn't our thing, but if it fits your referral, <a href="http://www.autotask.com/referral/">you'll get between $250 - $1,000</a>!</p> <h2>Finance</h2> <p>Earn money by helping your friends manage theirs.</p> <h3>You Need a Budget</h3> <p>This finance tool is <a href="http://ynab.referralcandy.com/">currently offering $6</a> to customers who refer their friends (and the new customer gets $6, too!)</p> <h3>Discover</h3> <p>Active cardmembers can <a href="https://www.discover.com/credit-cards/exclusives/sharediscover/">get a $50 Cashback Bonus</a> for every friend who signs up for an account; the friend will get a $50 Cashback Bonus after their first purchase within three months.</p> <h3>Coinbase</h3> <p>This Bitcoin currency platform will <a href="http://support.coinbase.com/customer/portal/articles/683805-how-does-your-referral-program-work-">give a $5 bitcoin bonus</a> for purchases of $100 to both the referrer and the referral.</p> <h3>CapitalOne 360</h3> <p>Formerly ING Direct, this bank will <a href="https://home.capitalone360.com/lp-refer">pay a hefty bonus of $20</a> per friend who signs up for a new online account (and your friend gets $25). Look for a double offer of $50 in fees during certain times of the year.</p> <h2>Food</h2> <p>Your friends feed their faces with delicious food you recommend, and you stuff your wallet with referral cash.</p> <h3>Seamless</h3> <p>Tell a friend about this restaurant delivery hub and you'll each <a href="http://seamless.extole.com/micro/microsite?source=footer">get $7 to spend</a>!</p> <h3>Delivery.com</h3> <p>This similar service <a href="https://www.delivery.com/tell_a_friend.php">gives a $5 bounty</a> to both referrer and referral.</p> <h2>Technology</h2> <p>Most wireless and communications companies offer generous referral bonuses.</p> <h3>Verizon</h3> <p>Get a friend to sign up for service and you'll both get a <a href="http://www.verizonwireless.com/b2c/support/referral-rewards">$25 prepaid debit card</a>.</p> <h3>Republic Wireless</h3> <p>Share this cell service and <a href="https://republicwireless.com/refer-landing">get $19 in statement credits</a> (plus your friend will get one, too!)</p> <h3>AT&amp;T</h3> <p>Both the referrer and the referral will <a href="https://referrals.att.com/home/publicHome.pg">get a $25 prepaid debit card</a> upon a new sign up.</p> <h3>T-Mobile</h3> <p>Your friend will get the termination fee from their current cell provider paid by T-Mobile (up to $650), and <a href="https://referral.t-mobile.com/">you'll get a $25 credit</a>, when a successful contract is signed.</p> <h2>Travel</h2> <p>Word of mouth has always been important in travel marketing &mdash; so it's no wonder referral programs abound here, too.</p> <h3>Airbnb</h3> <p>If your friends and family travel a lot, you can rake in the credit with this generous program that <a href="https://www.airbnb.com/invite">pays you a $25 coupon</a> when they travel with a $25 credit, or $75 when they host!</p> <h3>Uber</h3> <p>This new app-based driver referral service is offering existing customers the chance to earn credits for every new customer they refer. To see the current offer, <a href="https://support.uber.com/hc/en-us/articles/201830716-How-do-I-earn-Uber-credits-for-referring-my-friends-">sign into your account</a> and click &quot;refer friends.&quot;</p> <h2>Entertainment</h2> <p>Free TV for everyone (for a limited time only)!</p> <h3>Hulu Plus</h3> <p>Give your friend two weeks free to try, and <a href="http://www.hulu.com/help/articles/29781737">you'll get two weeks free</a> when they buy!</p> <h3>DirecTV</h3> <p>Sign up a friend (using your customer code) and you'll <a href="http://www.directv.com/DTVAPP/referral/referralProgram.jsp">get a $100 credit</a> payable as $10 off your statement for 10 months. Your friend will get the same.</p> <h3>Dish Network</h3> <p>This service <a href="http://www.dish.com/customerservice/referral/friendsandfamily/">offers a $50 statement credit</a> to both the referral and referrer.</p> <h2>Shopping</h2> <p>Help your friends sign up to buy stuff, and you'll earn cash or credits to buy stuff, too.</p> <h3>Amazon Mom</h3> <p>Get a friend to sign up through your link, and they'll get $5 to spend at Amazon (plus the benefits of the program, which includes 15% savings on baby items). <a href="https://www.amazon.com/gp/mom/referral">You'll get a $15 credit</a>.</p> <h3>Amazon Student</h3> <p>Sign up a buddy and <a href="https://www.amazon.com/gp/student/referral/main">get $10 to spend</a> at Amazon.</p> <h3>Groupon</h3> <p>If your friend is new to Groupon, <a href="http://www.groupon.com/referral">you'll get $10 in &quot;Groupon Bucks&quot;</a> when they sign up and buy!</p> <h3>Living Social</h3> <p>If you've already made a purchase on this daily deal site, you can share it with friends to <a href="https://help.livingsocial.com/articles/how-does-the-me-3-promotion-work">earn your purchase amount back</a>. It only takes three to make it free!</p> <h3>ibotta</h3> <p>Skip coupons and save with this smartphone app that <a href="http://blog.ibotta.com/post/74288883300/new-5-friend-referral-program">pays $5 for a qualified referral</a>.</p> <h3>Sierra Trading Post</h3> <p>Have your friend sign up for the deals newsletter and they'll get $10 to spend on their first purchase. When they do this, <a href="http://www.sierratradingpost.com/lp2/coupons/">you'll get a $10 egift card</a>!</p> <h2>Employment</h2> <p>Finally, help a friend land a job and you can get paid, too.</p> <h3>Hubspot</h3> <p>Have a good program developer friend who needs work? Let Hubspot know, and if they get hired, <a href="http://dev.hubspot.com/refer-a-friend">they'll pay you $10,000!</a></p> <p><em>Any referral programs we've missed? Please share in comments!</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <h2 style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-earn-over-12000-through-referrals&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%20to%20Earn%20Over%2012%2C000%20Through%20Referrals.jpg&amp;description=How%20to%20Earn%20Over%2012%2C000%20Through%20Referrals" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a></h2> <h2 style="text-align: center;"> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script><p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Earn%20Over%2012%2C000%20Through%20Referrals.jpg" alt="How to Earn Over $12,000 Through Referrals" width="250" height="374" /></p> </h2> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/how-to-earn-over-12000-through-referrals">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-ways-to-make-money-online-that-arent-scams">13 Ways to Make Money Online That Aren&#039;t Scams</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days">How to Come Up With $1,000 in the Next 30 Days</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-wake-up-richer-tomorrow-than-you-are-today">12 Easy Ways to Wake Up Richer Tomorrow Than You Are Today</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-steps-to-building-a-financial-safety-net-from-the-economy-of-you">3 Steps to Building a Financial Safety Net From “The Economy of You”</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-the-aig-bonuses-be-taken-away-or-not">Should The AIG Bonuses Be Taken Away Or Not?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Extra Income bonus refer-a-friend referral marketing referrals Thu, 21 Aug 2014 13:00:05 +0000 Linsey Knerl 1190040 at http://www.wisebread.com Motivating Yourself and Others http://www.wisebread.com/motivating-yourself-and-others <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/motivating-yourself-and-others" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/carrot-incentive_0.jpg" alt="Boss dangling carrot in front of worker" title="Carrot Bonus" class="imagecache imagecache-250w" width="250" height="344" /></a> </div> </div> </div> <p>What motivates people to work hard and do a good job? Whether you're a worker, a manager, a business owner, or an investor, it's a question where getting the right answer matters a lot.</p> <p>I've written about this before, in a post called <a href="http://www.wisebread.com/incentive-plans-always-go-awry ">Incentive Plans Always Go Awry</a>, making the case that bonuses were a poor way to motivate people and suggesting alternatives. Most of the data for that post came from a book by Alfie Kohn called <a href="http://www.amazon.com/gp/product/0618001816?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0618001816"><em>Punished by Rewards</em></a>. The reaction I got was really instructive: lots of people didn't believe me.</p> <p>It's easy to understand that. Everybody has been offered some sort of reward for good performance, and they know that it made them feel motivated. Besides, it's just common sense. If you read the comment thread in my Incentive Plans Always Go Awry post, you'll see that a lot of people were <em>so sure</em> that a bonus was effective motivation, they couldn't see any point in reading a book laying out the evidence that bonuses do a poor job of motivating people. To them it would be like reading a book explaining that gravity didn't work or that the sun didn't shine. And yet, the evidence is quite compelling: paying more for excellent performance is not only a poor way to motivate people, it is actually counterproductive. When a large bonus depends on doing outstanding work, work quality declines.</p> <p>The problem is, that's such a counterintuitive idea, so at variance with people's sense of their own reaction to being offered an incentive, they tend to dismiss it without even glancing at the evidence.</p> <p>So, I was delighted when I came upon this video by Dan Pink. It does a great job of laying out the evidence on what does and doesn't motivate people, and does it quickly and stylishly:</p> <p style="text-align: center;"> <object width="560" height="340"> <param value="http://www.youtube.com/v/u6XAPnuFjJc&amp;hl=en_US&amp;fs=1&amp;" name="movie" /> <param value="true" name="allowFullScreen" /> <param value="always" name="allowscriptaccess" /><embed width="560" height="340" allowfullscreen="true" allowscriptaccess="always" type="application/x-shockwave-flash" src="http://www.youtube.com/v/u6XAPnuFjJc&amp;hl=en_US&amp;fs=1&amp;"></embed></object></p> <p>I ought to mention that I previously <a href="http://www.wisebread.com/book-review-the-adventures-of-johnny-bunko ">reviewed</a> one Dan Pink's books, <a href="http://www.amazon.com/gp/product/1594482918?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=1594482918"><em>The Adventures of Johnny Bunko</em></a>, a compact little book filled with great career advice.</p> <p>This video is equally densely packed with well-researched, evidence-backed analysis on what really motivates people &mdash; and what doesn't.</p> <p><em>This post contains affiliate links.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/motivating-yourself-and-others">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/incentive-plans-always-go-awry">Incentive plans always go awry</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-your-dream-career-a-reality-for-less-than-100">Make Your Dream Career a Reality for Less Than $100</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-to-maintain-motivation-when-the-going-gets-tough">9 Ways to Maintain Motivation When the Going Gets Tough</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-work-experience-without-having-a-job">How to Get Work Experience Without Having a Job</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-apps-that-pay-you-to-exercise">5 Apps That Pay You To Exercise</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Personal Development bonus career incentive plans motivation Mon, 17 May 2010 13:00:03 +0000 Philip Brewer 84268 at http://www.wisebread.com Should The AIG Bonuses Be Taken Away Or Not? http://www.wisebread.com/should-the-aig-bonuses-be-taken-away-or-not <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-the-aig-bonuses-be-taken-away-or-not" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cashwad.jpg" alt="" title="wad of cash" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Everyone's making a huge stink about the $165 million in AIG bonuses that were recently paid out. It seems everyone is trying to figure out a way to take that money away from the people that were meant to receive them. The latest idea is to tax the bonuses at a 90% rate, which basically reduces them to nothing. Or for reference&mdash;closer to my bonus (just kidding, day job!).</p> <p>But it doesn't look like it's going to happen. There are <a href="http://news.yahoo.com/s/ap/20090322/ap_on_go_pr_wh/biden_economist_aig">some legalities</a> involved with taxing a specific group of people like this. As in, it's probably not cool. As a Biden economist says:</p> <blockquote><p>I think the president would be concerned that this bill may have some problems in going too far &mdash; the House bill may go too far in terms of some &mdash; some legal issues, constitutional validity, using the tax code to surgically punish a small group.</p> </blockquote> <p>Why is the government looking into such drastic ways to take these people's money away? It's simple: we're all angry when we see a company that's getting bailed out paying out huge bonuses to the very people we believe put them in that mess. And we want payback.</p> <h3>Laying Blame</h3> <p>It's understandable to be upset, but is it right? Should these people have their bonuses taken away when they were <em>contractually obligated to receive them</em>? And if somehow they were taken away, why would these (presumably great) employees stay at the company?&nbsp;Why wouldn't they all take off, leaving AIG&nbsp;devoid of all the good talent that's left?</p> <p>AIG could do several things here. They could encourage the employees to return the bonuses, or a portion of the bonus, like ING <a href="http://news.yahoo.com/s/nm/20090323/bs_nm/us_ing">has done</a>. Or the execs that are getting paid could volunteer to return all or a portion of the money. After all, who wants to be known as the guy who took a fat check when the company was tanking faster than ARod's reputation?</p> <p>Right?</p> <h3>Think About It</h3> <p>Think about this long and hard before you answer because it brings up a very important point.</p> <p><strong>Would you return your bonus if your employer was involved in something that put it in crisis mode?</strong></p> <p>What if you had absolutely nothing to do with it though? Part of AIG's business (insurance) is a great company and does great work. What if you were an outstanding employee that brought millions of dollars of revenue to the company thanks to your hard, honest work? Would you still think about returning your bonus?</p> <p><strong>I wouldn't. </strong></p> <p>I'd keep it. I'd save it, especially these days. Or maybe I'd go to Paris for a month until it all blew over. I earned it.</p> <p>My wife and I were having this conversation the other day and we couldn't agree. She felt that AIG employees shouldn't keep the bonuses&mdash;that it was unconscionable when the company is getting bailed out and tumbling faster than a 14-year-old Chinese gymnast. But when I asked if she would accept responsibility if her own company faced something similar, even if she did nothing wrong, she had to think about it.</p> <p>And that's what I want people to do. Think a little bit harder about it before joining the millions of people calling for the heads of the AIG bonus babies. Not all of these people messed up. These&nbsp; bonuses were in their contract, so if you want to be upset then direct it at the people who wrote the contract (AIG). The law says AIG <em>has to pay them</em>. Taking the money away by taxing them at 90% is probably illegal, especially when it's being done simply to satisfy the angry mobs out there.</p> <p>For a more detailed analysis on the AIG story, check out Michael Lewis' <a href="http://www.bloomberg.com/apps/news?pid=20601039&amp;refer=columnist_lewis&amp;sid=atlHxXH7FweQ">article</a> about it&mdash;he's one of the few people writing about the &quot;other side&quot; of this story (he's also my hero, btw).</p> <p>Now if you don't mind, I&nbsp;have to go submit my resume for a new position over at AIG: fall guy. The pay is OK but I hear the bonuses are pretty sweet.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carlos-portocarrero">Carlos Portocarrero</a> of <a href="http://www.wisebread.com/should-the-aig-bonuses-be-taken-away-or-not">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/laid-off-what-to-do-before-plunging-into-the-job-search">Laid Off? What To Do Before Plunging Into The Job Search</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-recognize-and-answer-illegal-interview-questions">How to recognize and answer illegal interview questions</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-really-live-on-unemployment">How Long Can You Really Live on Unemployment?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-sufficiency-self-reliance-and-freedom">Self-sufficiency, self-reliance, and freedom</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/meet-meg-favreau-our-senior-editor">Meet Meg Favreau, Our Senior Editor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Career and Income AIG bailout bonus Tue, 24 Mar 2009 19:50:33 +0000 Carlos Portocarrero 2968 at http://www.wisebread.com Incentive plans always go awry http://www.wisebread.com/incentive-plans-always-go-awry <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/incentive-plans-always-go-awry" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/carrot-incentive.jpg" alt="Carrot Incentive" title="Carrot Incentive" class="imagecache imagecache-250w" width="250" height="344" /></a> </div> </div> </div> <p>Ever worked someplace that had an incentive plan (as in, &quot;Hit these targets and you'll get a bonus&quot;)?&nbsp; Ever been a manager whose job it was to administer an incentive plan?&nbsp; Ever tried to create an incentive plan, hoping to get people to do more of what you want them to do?&nbsp; Here's a little tidbit for you:&nbsp; Incentive plans always go awry.</p> <p>I don't mean to say that incentive plans don't work.&nbsp; They just never do what you want them to do.&nbsp; Here's why:&nbsp; They replace intrinsic motivation with extrinsic motivation.</p> <h2>Intrinsic and extrinsic motivation</h2> <p>Ever seen a kid <a href="/how-to-become-an-expert">try to learn</a> how to do something he wants to be able to do?&nbsp; (For example, learn to beat a level on a video game or learn to jump a skateboard up onto a wall?)&nbsp; If so, you've seen intrinsic motivation.&nbsp; I've seen kids spend hours, doing the same thing over and over again, until they get it right.&nbsp; People offering bonuses have seen the same thing too.&nbsp; That kind of concentrated hard work is what they're trying to get, only they want it focused on <strong>their</strong> project.</p> <p>They're never going to succeed, because only intrinsic motivation does that.</p> <p>That's not to say that extrinsic motivation doesn't have an effect.&nbsp; Offer a bonus, and people will try to get the bonus.&nbsp; But observe:&nbsp; Their motivation is not to accomplish your goal--it's to &quot;get the bonus.&quot;</p> <h2>Incentive programs and metrics</h2> <p>Any kind of incentive program has a metric--the thing that you're measuring to decide whether someone gets the bonus.&nbsp; For salesmen, it might be a target number of sales.&nbsp; For the quality-control guy, it might be keeping the number of bad units below some level.&nbsp; For a corporate executive, it might be some level of return on investment.</p> <p>Whatever metric you pick, though, it will be something that can be gamed.&nbsp; A salesman can sell more units a dozen different ways: &nbsp;</p> <ul> <li>He can stop pushing a single right-sized unit and start getting customers to buy two or three smaller units.</li> <li>He can make aggressive use of financing to sell units to people who can't afford them.</li> <li>He can stop providing support for his old customers and spend all his time chasing up sales to new customers.</li> <li>He can make wink-and-nod deals to &quot;sell&quot; units with the understanding that they'll be returned next quarter.</li> <li>He can kick back a fraction of his bonus to purchasing agents who buy what he's selling.</li> </ul> <p>Now, the head office can thwart any of these moves.&nbsp; It can change the bonus metric from number of units to number of dollars in sales or number of dollars of profits.&nbsp; (Then the salesman puts all his effort into selling the most expensive or most profitable units.)&nbsp; It can delay credit for vendor-financed units until the bill gets paid.&nbsp; (Then the salesman stops using vendor financing even for customers where it makes sense.)&nbsp; It can mandate a certain amount of time spent supporting existing customers.&nbsp; (Measured how?&nbsp; Answer:&nbsp; According to some metric that the salesman can game just as easily.)&nbsp; In fact, it can spend all its time fiddling with the incentive plan, to the point where the head-office folks don't have time to do their own jobs--but nothing it can do will keep employees from gaming the metric, and nothing it can do will produce intrinsic motivation.&nbsp;</p> <p>The point is that, under an incentive plan, <strong>everything is worse</strong>.&nbsp; Everybody's focused on the metric, and nobody's focused on doing the work that needs to get done.</p> <p>Notice what the underlying assumption is:&nbsp; that the employees haven't already thought about what's best for the company and what's best for their customers.&nbsp; That their intrinsic motivation is something other than doing a good job.&nbsp; Some employers no doubt have plenty of disgruntled, unmotivated employees just there to pick up a paycheck for the least work they can get away with--but the answer to <strong>that</strong> problem is figuring out what's gone so terribly wrong with the business.</p> <h2>What to do instead</h2> <p>Whenever I point out that incentive plans make things worse, people always say, &quot;But what should we do instead?&quot;</p> <p>Of course, just asking the question shows that you haven't grasped the essential point:&nbsp; <strong>Incentive plans make things worse</strong>.&nbsp; It's like whacking yourself on the foot with a hammer.&nbsp; The first thing to do is to stop.&nbsp; Once you've done that, you can focus on aligning employee's intrinsic motivation with the firm's business needs.</p> <p>First, think for a minute about what people's intrinsic motivations are.&nbsp; My own experience is with software engineers.&nbsp; They're strongly motivated to:</p> <ul> <li>do new, cool stuff with the latest technology</li> <li>do work that's worth doing</li> <li>gain the respect of their peers</li> </ul> <p>Clever managers can use that to get employees to do what needs to get done.&nbsp; (For example, by making sure that every engineer gets to do some new, cool stuff, by not assigning pointless work and making sure that engineers understand why a task that might seem pointless is worth doing, and by making sure that everybody gets to see some of what their coworkers are doing.)</p> <p>Most managers, though, have a different focus.&nbsp; They're too busy &quot;managing&quot; to have time to explain why the pointless work is worth doing--to them, it's worth doing because senior managers assigned it--and the new, cool projects go to key employees, because they're high-visibility, must-succeed projects and putting a junior engineer on it would be too risky.</p> <p>With intrinsic motivations out of the picture, managers have to fill the gap with extrinsic motivations--praise, raises, promotions, and bonuses.</p> <p>It's important to note that there's nothing wrong with any of these things--managers should lavish their employees with all of them.&nbsp; What's wrong is <strong>using them as an incentive</strong>.&nbsp; As soon as you do that, you've got your employees trying to hit the metric, rather than doing what needs to be done.</p> <h2>Minimizing the harm</h2> <p>Even though the harmful effects of incentive plans have been known for a long time, and the harm has been throughly documented--See for example, <a href="http://www.amazon.com/gp/product/0618001816?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0618001816"><cite>Punished By Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes</cite></a> by Alfie Kohn--they haven't gone away.&nbsp; How then can we minimize the harm that they do?</p> <h3>For managers</h3> <p>First, remember that the harm is done by having an incentive tied to some metric.&nbsp; It does no harm to pay people for their work, nor does it do any harm to offer a bonus that isn't tied to an incentive plan.&nbsp; For example, a profit-sharing plan does no harm, and is often a good idea for everyone involved.&nbsp; (It means that the employer can lower payroll costs during bad times without having to lay people off or cut salaries.)</p> <p>Second, if you have to have a metric, make it something that employees have no control over--total profits, for example.&nbsp; This will be de-motivating, of course--employees will be frustrated at having a bonus plan that's essentially a lottery ticket--but not as bad as if all your employees are spending their time trying to hit the metric.</p> <p>Third, if you have a bonus tied to a metric, keep the bonus as small as possible.&nbsp; That way your employees can continue to follow their intrinsic motivations to do a good job without feeling like chumps for not gaming the bonus system.</p> <p>Fourth, don't set your employees up to be competing against one another.&nbsp; You want your employees to be collaborating.&nbsp; Putting them in competition for a bonus is exactly the wrong thing to do.</p> <p>Fifth, don't waste time trying to come up with a metric that your employees can't game.&nbsp; It's impossible.&nbsp; Unless their job is absolutely trivial, it will always be easier to maximize the metric than to do a good job.&nbsp; Any effort you put into creating a perfect metric is wasted effort.</p> <p>To the greatest extent possible, though, avoid incentive plans.&nbsp; If your business has any kind of reasonable structure, your employee's intrinsic incentives are already aligned with the business's interests.&nbsp; (If they aren't--if your employee's natural inclinations to do work that's worth doing and to do it well doesn't lead them to do what you need done--then <strong>that</strong> might be a good place to focus your managerial efforts.)</p> <h3>For employees</h3> <p>I don't actually have much useful advice for employees suffering under an incentive program, except to try to find employers where the incentive programs are small and the target metrics are out of employee's control.</p> <p>Really, your natural inclinations are going to be the right ones.&nbsp; If the bonus is small enough to be ignored, just ignore it and do your job.&nbsp; If the bonus is so large that you can't ignore it, put in whatever effort it takes to get the bonus, and then spend the rest of your time doing whatever you should have been doing.&nbsp; But you knew that already.</p> <p>Everybody should read Alfie Kohn's <a href="http://www.amazon.com/gp/product/0618001816?ie=UTF8&amp;tag=wisbre08-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0618001816"><cite>Punished By Rewards</cite></a>. It will change the way you think about incentive plans--and change it for the better.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/incentive-plans-always-go-awry">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/motivating-yourself-and-others">Motivating Yourself and Others</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-you-need-to-stop-asking-hr-for">6 Things You Need to Stop Asking HR For</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-you-should-always-ask-in-an-exit-interview">8 Questions You Should Always Ask in an Exit Interview</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-succeed-at-work-despite-your-lousy-boss">How to Succeed at Work Despite Your Lousy Boss</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-that-really-annoy-hiring-managers">9 Things That Really Annoy Hiring Managers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income bonus hr human resources incentive plan incentive plans incentive program incentive programs incentives management managers managing Thu, 27 Mar 2008 18:04:00 +0000 Philip Brewer 1952 at http://www.wisebread.com Getting Something for Nothing – My $25 from Revolution MoneyExchange http://www.wisebread.com/getting-something-for-nothing-my-25-from-revolution-moneyexchange <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/getting-something-for-nothing-my-25-from-revolution-moneyexchange" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/facebook.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="195" /></a> </div> </div> </div> <p class="MsoNormal"><strong>(Note:&nbsp; The $25 sign-up bonus offer expired on April 15th, 2008.)&nbsp;</strong></p> <p class="MsoNormal">Just when I thought I couldn&rsquo;t take another online money transfer product, I was introduced to Revolution MoneyExchange.<span> </span>My familiarity and past experience with PayPal had me convinced that the world just didn&rsquo;t need anymore of these services.<span> </span>The $25 sign up bonus kept calling my name, however, so I went for it.<span> </span>Here&rsquo;s the skinny on the new kid on the block.</p> <p class="MsoNormal">When a friend told me about <a href="http://www.revolutionmoney.com/">Revolution MoneyExchange</a>, my mind went back a few years to the PayPal bubble.<span> </span>(Remember, when everyone got $25 for signing up, and they earned additional cash for each referral.)<span> </span>Eager to get in on the next big e-commerce tool, people are once again scrambling to be the top referrers for Revolution&rsquo;s new product.<span> </span>Launched as &ldquo;the&rdquo; application for sending and receiving money on <a href="http://www.facebook.com/">Facebook</a>, I scoffed at how practical it could be for me.<span> </span>I rarely visit Facebook, much less do business on the social network.</p> <p class="MsoNormal">$25 is $25, however, so I looked into it a bit further.<span> </span>Here are the details I was able to get:</p> <p class="MsoNormal"><strong>MoneyExchange</strong> is just one of many products and companies developed by <a href="http://en.wikipedia.org/wiki/Steve_Case">Steve Case</a>&rsquo;s <a href="http://revolution.com/">Revolution</a>.<span> </span>(In case you care.)<span> </span>The former AOL CEO has tried to market his new online cash service as a necessary social networking tool.<span> </span>At less than 6 months old, MoneyExchange follows in the footsteps of similar tools, such as <a href="https://www.obopay.com/consumer/Welcome.do">OboPay</a> and <a href="http://www.chipin.com/">ChipIn</a>.</p> <p class="MsoNormal"><strong>Signing up</strong> for MoneyExchange was relatively easy.<span> </span>Yes, they did ask for some personal information to be able to issue me an account.<span> </span>If you don&rsquo;t feel comfortable giving out your Social Security number, this process won&rsquo;t fly for you.<span> </span>If you already do a large percentage of your business transactions online, however, you know that this is hardly confidential info these days.<span> </span>A quick form with your name, address, phone, and SS# will get you an account in less than 3 minutes, if you reside in the U.S.</p> <p class="MsoNormal"><strong>Getting your bonus</strong> was automatic.<span> </span>When I confirmed my account via email, I was instantly credited with $25.<span> </span>This was mine to keep, no strings attached.<span> </span>There are no fees for sending or receiving money to other MoneyExchange users &ndash; too bad I have no one to send it to!<span> </span>For a small $2.50 fee, I could cash out my account with a check in the mail.<span> </span>Those who are comfortable linking their accounts to an external checking account can also choose to have it electronically deposited after a standard verification process, and there is no fee for this service.</p> <p class="MsoNormal"><strong>Referrals</strong> can be made, and a $10 bonus is offered for each complete registration.<span> </span>Most of my relatives don&rsquo;t even know what Facebook is, so this was not the selling point I was hoping for.<span> </span>If you are looking to get your friends and family to sign up, your best bet is to mention it as a viable PayPal alternative.<span> </span></p> <p class="MsoNormal"><strong>Privacy</strong> could be seen as an issue for some who want to fully protect their personal and financial info.<span> </span>This <a href="http://www.techcrunch.com/2007/12/14/revolution-money-thinks-it-can-win-friends-on-facebook/">article by TechCrunch</a> seems to suggest that by signing up for your free account, and your $25 bonus, you are making yourself available for credit card solicitation from <a href="http://www.revolutionmoney.com/revcard.aspx?id=revcard">RevolutionCard</a> (who is hoping to get into the business in a big way.)<span> </span>For those who have no interest in future or partner offers, the <a href="https://www.revolutionmoneyexchange.com/WebSite/PrivacyPolicy.aspx">Privacy Policy</a> clearly offers an opt-out form you can mail in.<span> </span>The 41cents for a postage stamp might be worth avoiding future hassles.</p> <p class="MsoNormal">Whether you are looking to ditch <a href="http://www.paypal.com/">PayPal</a> or just wanting to earn a quick $25, Revolution made good on its promises during my trial.<span> </span>Within 3 business days, I was holding a $22 check (after fees) in my hand, with no further obligation.<span> </span>Not one to usually cut and run, I would have loved to test out my $25 credit on some of their services, but with no friends on the MoneyExchange or a need to send funds, I opted for the cash payout.<span> </span>Those interested in earning some referral funds, while the earnings are good, might want to consider spreading the love.</p> <p class="MsoNormal">&nbsp;</p> <p class="MsoNormal"><em>(Note: There are no affiliate or referral links of any kind in this article. It is written purely for your own money-making enjoyment.) </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/getting-something-for-nothing-my-25-from-revolution-moneyexchange">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-savings-by-making-your-money-harder-to-spend">Boost Your Savings by Making Your Money Harder to Spend</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/throw-a-house-party-for-free">Throw a House Party for Free</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-easiest-items-to-flip-for-cash">10 Easiest Items to &quot;Flip&quot; for Cash</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-dirty-is-your-money-really">Do You Know How Dirty Your Money Is?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/forget-saving25-place-to-look-for-spare-change">Forget Saving...25 Places to Look for Spare Change</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Freebies bonus cash moneyexhange revolution Mon, 24 Mar 2008 20:29:49 +0000 Linsey Knerl 1946 at http://www.wisebread.com It's all your money http://www.wisebread.com/its-all-your-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/its-all-your-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/guitar-camera-game-ipod-krishna.jpg" alt="Guitar, camera, game console, iPod, CDs, Krishna sculpture" title="Still life with guitar, camera, game console, iPod, CDs and Krishna" class="imagecache imagecache-250w" width="250" height="305" /></a> </div> </div> </div> <p>Sometimes you get a windfall--a bonus, an award or reward, a gift, a long-forgotten loan unexpectedly repaid. When that happens to you, do you use the money to make a special purchase? Let me suggest an alternate way of thinking about it: It&#39;s all your money.</p> <h2>Spend according to your budget</h2> <p>Whenever I tell people about some money that I&#39;ve received through any means other than a regular job, they always ask, &quot;So, how are you going to spend it?&quot; To me, the question is just weird. <strong>My spending is determined by my budget.</strong> It has almost nothing to do with how I got the money.</p> <p>I say &quot;almost&quot; because although my income doesn&#39;t directly affect my spending, it does affect my budget. If my income goes up (and I think it&#39;ll stay up), I might well decide to raise my standard of living a bit. And if I got a windfall so large that it entirely changed my financial situation--a winning lottery ticket, let&#39;s say, or a major inheritance--then I&#39;m sure I&#39;d adjust my budget based on what my improved circumstances would allow. </p> <p>In general, though, money that I get one way is just like money I get any other way.</p> <p>There is one case where I make an explicit exception: monetary gifts from friends and family. When someone gives me cash or a check, I always spend the money on something in particular and tell them what it was in a thank-you note. I think it&#39;s simply polite to let someone know how their gift made your life better. (Also, doing this well--buying yourself something that shows that you understand and respect the values of the person who gave you the money--makes it quite a bit more likely that you&#39;ll receive additional monetary gifts in the future.) Even in this situation, though, I tend to buy things that were already in my budget; I just accelerate the purchase a bit.</p> <h2>Your cash is your money too</h2> <p>Related to this is spending money differently if you&#39;ve got <a href="/carry-some-cash">cash in your pocket</a>. There are a lot of people who say they spend differently if they&#39;re spending cash than if they&#39;re using a credit or debit card. Oddly, some say they spend <strong>more</strong> if they&#39;re spending cash while others say they spend <strong>less</strong>.</p> <p>Some people say that they&#39;ll just spend whatever cash they have, making purchases that they&#39;d never make if they had to pull out a credit or debit card. Other people say that seeing the amount of cash in their wallet dwindle gives them a very clear sense of how much money they&#39;re spending, whereas whatever they put on their credit or debit card is somehow invisible until they actually get the bill (at which point they&#39;re shocked at what they&#39;d spent).</p> <p>I say: It&#39;s all your money.</p> <h2>Not a matter of discipline</h2> <p>The insight that &quot;it&#39;s all your money&quot; is key to making your <a href="/a-budget-is-not-a-constraint">budget work for you</a>.</p> <p>Note that this has nothing to do with being disciplined about following your budget. Your budget is yours and you&#39;re free to deviate from it anytime you want--but when you do, whatever it is that you&#39;re getting comes at the cost of other items in your budget. If that&#39;s what you want to do, then maybe your budget was wrong in the first place. Or maybe your budget was right and you&#39;ll regret the purchase in the morning. Only you know that, and maybe it&#39;ll be some time before you know for sure.</p> <p>However, when you treat some of your money as different from the rest, you fool yourself into thinking that there&#39;s no trade-off--that you can get some unbudgeted item without affecting your budget. All you really get, though, is a budget that&#39;s less useful.</p> <h2>An example by analogy</h2> <p>So many people seem to think that the question &quot;So, how are you going to spend that money?&quot; is a reasonable question--and it seems so weird to me--that I&#39;ve been driven to coming up with an analogy that might help people understand how I see things:</p> <blockquote><p>You&#39;re at a restaurant. The waiter is coming by regularly and refilling your water glass, but you&#39;re thirsty and the waiter isn&#39;t quite keeping up. Then the restaurant manager comes over and tops off your glass--you&#39;ve just had a water windfall. Now a guy at the next table nods at your glass and says, &quot;So, how are you going to drink that extra water?&quot;</p> </blockquote> <p>If you&#39;d have trouble answering that question, then maybe you understand how I feel when people ask how I&#39;m going to spend my windfall--I&#39;m going to spend it just like I spend my other money, because <strong>it&#39;s all my money</strong>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/its-all-your-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-52-money-mistakes-you-need-to-stop-making">Flashback Friday: 52 Money Mistakes You Need to Stop Making</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead">Rich People Spend $350K+ to Park Their Cars — Here&#039;s How We&#039;d Spend it Instead</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-dont-make-these-6-dumb-mistakes-with-your-financial-windfall">Stop! Don&#039;t Make These 6 Dumb Mistakes With Your Financial Windfall</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ten-tenets-for-arranging-your-rich-part-1-rich-is-relative">Ten Tenets for &quot;Arranging Your Rich&quot; - Part 1: Rich is Relative</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-same-actions-will-produce-the-same-results-ten-tenets-for-arranging-your-rich-part-2">The Same Actions Will Produce The Same Results (Ten Tenets for Arranging Your Rich: Part 2)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting award bonus money reward windfall Wed, 26 Sep 2007 23:02:24 +0000 Philip Brewer 1216 at http://www.wisebread.com Quick Notes: A Bonus Holiday Bonus? http://www.wisebread.com/quick-notes-a-bonus-holiday-bonus <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/quick-notes-a-bonus-holiday-bonus" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000028981102_Double.jpg" alt="holiday piggy bank" title="holiday piggy bank" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>This is for all of you who just so happen to A) get paid every two weeks and B) got paid at the end of the first week of December. Congratulations, my lucky friends! You get an extra paycheck this month.&nbsp;</p> <p>So what can you do with this extra cash in your pocket? We here at Wise Bread have a few great ideas for you. After finishing up your holiday shopping, why not finally start that <a href="http://www.wisebread.com/11-ways-life-is-amazing-with-an-emergency-fund">emergency fund</a>? Or, plan for the future and set a chunk aside to help you <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement">supercharge your retirement</a>. If you're one of the millions of Americans in debt this holiday season, a little extra money could be the helpful step foward you need to start <a href="http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good">paying it off for good</a>. You could also help out those less fortunate and consider&nbsp;<a href="http://www.wisebread.com/15-ways-to-give-to-charity-that-fit-a-holiday-budget">giving back</a>.&nbsp;</p> <p>How will you spend your extra paycheck?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/quick-notes-a-bonus-holiday-bonus">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-sure-you-get-paid-and-4-other-great-tips-from-famous-commencement-speakers">Make Sure You Get Paid and 4 Other Great Tips From Famous Commencement Speakers</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-save-during-an-inflation">Why save during an inflation?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/lose-your-job-without-losing-your-identity">Lose Your Job Without Losing Your Identity</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-earn-over-12000-through-referrals">How to Earn Over $12,000 Through Referrals</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Career Building bonus Christmas holiday bonus save Fri, 22 Dec 2006 16:59:42 +0000 Sarah Winfrey 101 at http://www.wisebread.com