How to do a home energy audit yourself!

The following article has been prepared as a step by step guide on how to conduct a do it yourself home energy audit. It is not my intention to replace the services offered by a professional energy evaluator; instead this article shall serve as a DIY guide for families that (for what ever reason) choose not to hire a professional at this time.

Identify Air Leaks (Drafts) In Your Home
Stopping cold air drafts in your home is essential to maximizing the efficiency of your home’s heating and cooling system. According to the US Department of Energy, the potential energy savings from reducing drafts in your home can range from 5% to 30% per year. It has been estimated that the average home has 10 square feet of cracks and gaps it’s exterior wall construction (the equivalent of having a large window or door open all day long throughout the winter months).

One advantage a professional energy auditor has in determining air leaks in your home is the use of a “blower door”. A blower door is an air tight liner that seals off inside an exterior door frame. Built into this liner is a powerful fan that blows air from inside your home outward. This creates a vacuum on the inside of your home magnifying the ingress of cold air from the outside making it easier for the auditor to identify and draft sources in your home.

You may not have the luxury of a blower door, but you can create a similar condition in your home by simply closing all windows, doors, and hatches in your home and turning on your bathroom and kitchen exhaust fans (if you have them). If your home does not have exhaust fans, another technique is to position a box fan in a window and seal the gaps around the window frame and fan housing with cardboard, blankets, or other material.

Once you have created a “vacuum” in your home be sure to check these areas of your home where air leaks (drafts) are most common:

Electrical Outlets:
Electrical outlets along exterior walls are notorious for allowing cold drafts from the outside in. The reason is there is typically inadequate insulation between the electrical box and the exterior of the building. A quick solution is installing child safety guards over the plugs to eliminate any drafts, and spraying some foaming sealant around the outside of the gain box to improve its insulating properties.

Light Switch Plates:
Switch plates along exterior walls can be just as problematic as the electrical outlets described above and can be dealt with the same way.

Laundry Dryer Vent:
Dryer vents use a sheet-metal flapper to reduce drafts. On windy days, you may hear these flappers banging off its frame. This is very primitive technology and does not provide a positive seal to stop air from leak back into the house. Compounding the problem is that over time, lint clogs the flapper valve causing it to stay open.

Most likely you will feel cold air around your dryer; you can remedy this problem by installing an Energy Saving Clothes Dryer Vent Seal. The vent will remain closed unless the dryer is in use saving energy. When the dryer is in use, a floating shuttle rises to allow warm air, lint and moisture to escape.

Window and Window Frames:
If you have older windows in your home and can’t afford to replace them (or you rent), a great alternative is to seal the windows with plastic film and tape. You can buy kits from most home improvement stores for under $10 that will cover an averaged sized house and reduce heat loss through your windows by 15% or more.

In addition to the plastic film, you may want to caulk around the window trim boards if you feel any drafts around the window frame itself.

Weather Stripping Around Doors:
Check for any air leaks around the edges of your exterior doors. There is a good chance that your doors weather stripping is either out of place or damaged and in need of replacement. Installing new weather stripping on your doors is a simple project that can be complete in a few minutes for less than $10.

Another good test to determine if there are gaps in your door’s weather stripping is to get a flash light and shine it along the cracks from the outside once it gets dark. Have a person on the inside of the door with the inside house lights off as well. Follow along the edge of the door while the person on the inside looks for any light penetration. If any light gets though the edges of the door, you can bet that cold air will find its way in too.

Fireplace Dampers:
Your chimney is an opening that leads directly outdoors. Even if the damper is shut, it is not air-tight. Glass doors don’t stop the drafts either. The fireplace is like a giant straw sucking your expensive heated or air-conditioned air right out of your house!

An easy, low-cost solution to this problem is to install a Fireplace Plug . A Fireplace Plug is an inflatable pillow that seals the fireplace damper, eliminating drafts, odors, and noise. The pillow is removed whenever the fireplace is used, then reinserted after.

Attic Hatches:
When attic stairs are installed, a large hole (approximately 10 square feet) is created in your ceiling. The ceiling and insulation that were there have to be removed, leaving only a thin, unsealed, sheet of plywood.

An easy, low-cost solution to this problem is to add an insulated Attic Stair Cover which are available in various sizes to fit your attic hatch’s dimensions. An attic stair cover seals the stairs, stopping drafts and energy loss. A more cost effective method would be to simply g
lue or stable a rigid piece of insulation to the back side of the hatch and put some weather stripping around the edges.

Wall or Window Mounted Air Conditioners:
Make sure you remove your window mounted air conditions before the cold winter months get into full swing! If you have wall mounted air conditions make sure you block off the ventilation duct and seal it with a Fan Shutter Seal or similar material to keep the cold air drafts out!

Insulation
When your home was built, the builder most likely installed the minimum amount of insulation recommended at the time. If your home is more than 5 years old, there is a good chance that the insulation levels are not ideal especially given today’s high energy prices.

Before you seal your attic hatch as recommended above, there are a couple of things you can do in your attic to imrove your home’s insulation factor. Peak into your attic and check to see whether openings for items such as pipes, duct work, and chimneys are sealed off. Seal any gaps with an expanding foam caulk or some other permanent sealant. If your attic has no floor and exposed trusses, be very careful if you need to move around to get a view of any hard to see areas.

While you are inspecting the attic, check to see if there is a vapor barrier under the attic insulation. Most insulation “batts” have at least one side that is coated with moisture resistant paper. If there does not appear to be a vapor barrier, you might consider painting the interior ceilings with vapor barrier paint. This reduces the amount of water vapor that can pass through the ceiling. Large amounts of moisture can reduce the effectiveness of insulation and promote structural damage.

You should also check that the your attic’s vents are not blocked by insulation, and seal any ceiling fan or light boxes with expandable foam sealant similar to the electrical outlet and light switch project mentioned in the previous section. Finally, cover the entire attic floor with at least the current recommended amount of insulation.

Now it’s time to check the exterior walls of your home for proper insulation. Select an exterior wall and turn off the circuit breaker or unscrew the fuse for any outlets in the wall. Be sure to test the outlets to make certain that they are not “hot” (you may want to get someone to help you if you are not comfortable with this task). Check the outlet by plugging in a functioning lamp or portable radio.

Once you are sure your outlets are not getting any electricity, remove the cover plate from one of the outlets and gently probe into the wall with a thin, long stick or screwdriver. If you encounter a slight resistance, you have some insulation there.

Many professional auditors will make a small hole in a closet, behind a couch, or in some other unobtrusive place to see what, if anything, the wall cavity is filled with. Ideally, the wall cavity should be totally filled with some form of insulation material. Unfortunately, this method cannot tell you if the entire wall is insulated, or if the insulation has settled. A professional may use an infrared camera to determine energy deficiencies in your home’s exterior wall insulation.

If your basement is unheated, determine whether there is insulation under the living area flooring. In most areas of the country, an R-value of 25 is the recommended minimum level of insulation. The insulation at the top of the foundation wall and first floor perimeter should have an R-value of 19 or greater. If the basement is heated, the foundation walls should be insulated to at least R-19. Your water heater, hot water pipes, and furnace ducts should all be insulated. Be sure to check out my guide to maximizing the efficiency of your hot water system.

Heating/Cooling Equipment
Ensure that your home’s heating and cooling systems are maintained as recommended by the manufacturer. It is also a good idea to have a HVAC professional inspect your homes equipment on an annual basis.

If your home is heated or cooled by forced air, check your filters and replace them as needed. As a general rule of thumb, air filters should be checked at least once a month and replaced about every three.

If your homes furnace or air conditioning unit is more than 15 years old, you may consider replacing it with a more efficient model. There have been tremendous advancements in HVAC equipment over the last decade and the expense of adding a new system can be recouped in only a few short years in the form of less expensive energy bills.

If fitted, you should inspect your home’s duct work for signs of leaks, especially near seams. A tell tale sign is streaks of dust or lint along the duct work. Any signs of air leakage should be remedied with a good quality duct tape.

It is also important to insulate any ducts or pipes that travel through unheated spaces. An insulation R-Value of 6 is the recommended minimum.

Your Home’s Lighting:
According to the US Department of Energy, lighting accounts for 10% of the average home’s electric bill. The best way to reduce the energy use of your home’s lighting, take a look at the wattage size of the light bulbs in your house. You may have 100-watt (or larger) bulbs where a 15 watt compact fluorescent light bulb will suffice. Get into the habit of turning lights off in rooms that are not in use. I need to do a better job of this myself and set an example for my kids!

Good luck, and don’t forget to leave a comment below with any additional suggestions or techniques!

Related Articles:
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Do It Yourself (DIY) Geothermal Cooling System
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Do It Yourself Home Energy Audits
36 Ways to Reduce Your Home’s Energy Use

As per IRS guidelines, you are allowed to claim tax deductions for donations of clothing items to charitable organizations such as the Salvation Army and Goodwill.

According to IRS rules on non-cash charitable donations (assuming you’ll be itemizing your tax deductions vs. taking the standard deductions), tax filers are allowed to deduct the “fair market value” of clothing items donated to eligible organizations.

The IRS offers no clear guidelines on how to value specific articles of donated clothing for tax write-offs, however, they do loosely define what they mean by “fair market value”:

Used Clothing
Used clothing and other personal items are usually worth far less than the price you paid for them. Valuation of items of clothing does not lend itself to fixed formulas or methods.

The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value.

You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. See Deduction over $500 for certain clothing or household items, later.

For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return.

IRS Website

To help you to determine the value of any clothing items you’ve donated to charity in 2011, I’ve created a free program in Excel. It super easy to use, simply download the form and enter the number of items you’ve donated in the appropriate box and the program will automatically calculate a reasonable fair market value of your clothing items.

In the example screen shot above I have entered 5 “name brand” T-Shirts into the spreadsheet and 2 “designer” T-Shirts. The total value of each category donated is calculated in the right hand column.

Note: This is the total value from all items in the program, not just the value of the "tights" and "handbags"

Also, as you enter new items into the donated clothing value calculator it automatically computes the “grand total” at the bottom of the sheet. This is the total value of your donated clothing!

Don’t limit yourself to the values listed in this program which are based on my own research over the years of observing clothing values in consignment and thrift shops. If you have a particularly expensive item like a fur coat, evening gown or other high dollar item, don’t be afraid to write-off a higher value if you can make a reasonable case as to the item’s worth.

Remember, if the value of your donated items is more than $500, you may have to fill out an additional form for the IRS (be sure to check with a tax professional).

There are two basic principles when it comes to reducing the amount of tax money you owe for the 2011 Tax Year. You can either reduce the amount of money you “earn”, or, you can “increase” the amount of money you’ve paid, donated or lost on tax deductible items.

The following list includes legitimate and legal ways to accomplish these principles, but as always, I strongly advise you to consult a tax professional (which I am not) as each person’s individual circumstances are different.

Defer Your Income:

One way to reduce the amount you owe in taxes for the 2011 is to defer any income you may be receiving until after December 31st. For example, if your company pays a yearend bonus, you could ask the payroll department to “defer” this payment until after the first of the year. This is particularly useful if you expect to earn substantially more this year than next and there is a good chance you’ll be in a lower tax-bracket in 2012.

Donate to Charity:

Do you have a bunch of items laying around your home or in storage that you no longer use? Consider donating these items to an eligible local charity such as the Salvation Army or Goodwill. In most situations, you are eligible to deduct the “fair market value” of these donated items from your taxable income. Be sure to document each individual item on the receipt you receive from the eligible charity you donate to and take pictures of the donated items to help document your claims.

If you donate an item or group of items valued at more than $500, you are also required to fill out Part “A” of form 8283 as part of your tax return, but this is a relatively painless process.

Determining the “fair market value” of your donated clothing, recreational items, tools, furniture and related items doesn’t need to be difficult. Generally speaking, the tax deductible value of a donated item is based on what you could reasonably expect to sell the item for in a resale or consignment shop or through some other second hand marketplace.

Prepay Your Mortgage:

Instead of claiming the interest on 12 months of mortgage payments in 2011, consider prepaying January’s mortgage payment before December 31st. For example, if you paid $600 in mortgage interest as party of January’s mortgage payment, you would have $150 less due in income taxes if you were in the 25% tax range. Of course, this means you’ll have less deductible mortgage interest expenses in 2012 but it is an option available if you expect to earn less money in 2012 and/or expect to be in a lower tax bracket.

Prepay Other Tax Deductible Expenses:

Just like mortgage insurance, there are other tax deductible expenses you may consider paying before the end of the year. Some examples of potentially tax deductible expenses that come to mind are college tuition payments, vehicle excise taxes, property taxes, and/or expenses associated with any side businesses or income producing hobbies you may have.

Max Out Tax Advantaged Retirement Accounts:

It may be too late to max-out your company sponsored 401k plan, but you still have until April 16th to contribute the maximum allowable amount to your 2011 IRA accounts for both you and/or your spouse (if filing jointly).

Sell Off Stock/Securities at a Loss:

I do not recommend anyone messing around with purchasing individual stocks, but if you’ve been sitting on a few securities that have lost valued over the last year or two, you may consider selling them and “deducting” the loss from your taxable income. I got burned in the stock market in 2001, but it was nice being able to deduct some of the losses incurred over this time from my taxable income.

Remember, be sure to speak with a tax professional if you’re not familiar with these particular tax strategies and as always, please feel free to leave your thoughts in the comment form below:

Disclaimer: Like my yuppie car buying guide, this article should be read with an open mind…don’t be a hater!

It looks like it will be another prosperous year for the 1 Percenters! Investment banker year end holiday bonuses are on their way and by all accounts, except one, it is going to be another year of excess for employees of Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley, US Bank, and Wells Fargo!

The one exception being Goldman Sachs where it is expected the average year end “performance” bonuses will decline 13% this year to a “paltry” $362,862 per its 38,900 employees.

You may recall two years ago, amid a flurry of negative publicity over excessive investment bank executive bonuses, Goldman Sachs CEO Lloyd Blankfein asked employees to refrain from high profile, flashy, or excessive purchases.

Apparently he doesn’t want his employees rubbing their manipulation of investment markets in the face of everyday Joes and Janes!

Well, I think this year it is safe to say that “all bets are off” when it comes to spending! Hey, maybe it will help jump-start the economy!

So, what does one consider a “high profile” purchase when some of these individuals’ base salaries already exceed seven figures?  

You and I might consider a neighbor’s purchase of a $40,000 BMW as flashy, while in other neighborhoods, this purchase may be seen as a “frugal” choice.

After some careful thought, I have compiled a list of what I might buy if I won the investment bank executive employment lottery! 

Just promise me that you won’t tell Mr. Blankfein…

The Bar Harbor, ME ”Summer Cottage”

Forget the Hampton’s!  For over a century, some of the World’s wealthiest and affluent families have called Bar Harbor, ME (and surrounding villages) home during the warm summer months.

Know for it’s gorgeous landscapes, mild weather, and over abundance of outdoor recreation (including Acadia National Park), Bar Harbor, ME is home to some of the most beautiful homes (affectionately called “cottages”) in the world. 

Even though the convenience of modern day travel has opened up the entire world to the ultra-rich,  the bourgeoisie continue to visit this little peace of Heaven on Mount Desrt Island, Maine each year. 

Homes prices here can reach well over $10 Million, and most of these “cottages” are occupied less than two months a year making them the perfect investment vehicles to hide some “hard-earned” bonus money.

The Hinckley Sou’wester 70 Sailboat

There may is no better way to announce your success as a master manipulator of financial markets than purchasing one of the most impressive, exclusive, and expensive custom sailing yachts ever conceived. 

You can easily spend $7 million (or more) on one of these sailing vessels depending on how carried away you get customizing it. 

Of course, my lack of sailing ability has been well document in my recent article on buying boat, so naturally I would hire a crew to maintain and sail this vessel for me.  I figure this would add another $200,000 a year to the bill!

From the Hinckly Yacht Website:

Critics applauded the Sou’wester 70, designed by Bruce King, for its welcome return to classic lines and to design features that matter most to serious sailors. Significant overhangs, low freeboard, sweeping sheer lines and a gorgeous counter leading to a traditional transom make this ultimate Hinckley a head-turner in any harbor anywhere in the world.

While undeniably a big boat, the Sou’wester 70 sails easily. Whether seated or standing, the helmsman can follow the inner toerail from bow to stern. Excellent seakeeping abilities and the convenience of a shallow draft of 6′ 6″ allow you to sail her anywhere you wish in comfort, safety and distinction.

The best thing about Hinckley Sailboats and Powerboats is they are manufactured in the next town over from Bar Harbor where you now own your summer cottage!  Talk about convenience!  You could spend $20  million of your investment banker bonus without ever leaving Mount Desert Island!

Related Articles:
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Boat Buying Tips
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Well, the power of the internet was in full force today after a false report of Jon Bon Jovi’s death made the rounds on Facebook, Twitter and other social media sites.

Don’t worry fans! If you’ve been “living on prayer” hoping the news is not true, your prayers have been answered! Jon Bon Jovi’s death is a hoax!

So what does this have to do with personal finance? Well, the fact that news of Jon Bon Jovi’s death spread like wildfire around the globe indicates that most people forwarding on this garbage to their friends believed it was plausible.

They believed it was plausible because they know that sometimes people die unexpectadly.

Still not sure what this has to do with personal finance? We’ll it reinforces the point that you need to be prepared in the event your day comes earlier than expected. This includes ensuring you have a proper will and quality term life insurance to cover your family’s expenses in the event something were to happen to you (and your income).

Experts recommend up to 10 times your annual income in term life insurance if other people count on your income for support. But stay away from whole life insurance if at all possible, in almost every case I’ve seen, whole life insurance is WAY too expensive for the coverage you get.

Earlier this week I announced I was going to be writing more about small businesses and entreprenuership in addition to my regular personal finance articles (hopefully I won’t lose those of you who come here strictly for advice on getting out of debt).

To kick off the inclusion of more small business articles on this blog, I couldn’t think of a better small business book to review than Dave Ramsey’s new Entreleadership: 20 Years of Practical Business Wisdom from the Trenches.

After all, Dave Ramsey’s personal finance advice was intrumental in helping my family and I pay off over $90,000 of consumer debt in two years and I have learned to appreciate his advice.

What is an Enterleader?

In Entreleadership, Dave Ramsey admits he struggled on whether to write a book about entrepruerial spirit and strategies or if should write a book on leadership. Never one to miss a clever marketing opportunity, Dave Ramsey has effectively coined the term Entreleader to encompass these two distinct disciplines he identifies as critical for success when running a small business (or any sized business for that matter).

Overview of Entreleadership:

Overall, I think Ramsey was very methodical and “logical” when it came to the layout and organization of his book.

If you’re a fan of his step by step guide to money management as found in his book The Total Money Makeover, you may be disappointed that there is no such generic formula to success in business. Probably due to the fact that running a business is more dynamic and has more variables than more traditional “personal finance” issues.

Entreleadership is filled with many great principles of running a business. There were certainly a bunch of “ah-ha” moments in the book that left me nodding in agreement, while some other moments chapters in the book (such as those on firing people and dealing with “under performers”, kind of shocked me and seemed to border on illegal or unethical behavior).

Also, it wouldn’t be a Dave Ramsey book if there wasn’t the occassional Proverb or other biblical reference tossed into the mix to back-up a point.

Running a Business Without Debt:

While there is a lot of actionable material in this book that can be utilized by any business (particularly in the areas of employee engagement and aligning compensation with the goals of the company), a lot of the book’s principles revolve around the idea that the business is operated debt free.

Honestly, I expected to see more material in the book about actual strategies and techniques for paying off debt. Instead, there were just general statements like “debt increases the risk of your business”, etc.

Dave Ramsey on Healthcare Benefits:

Another area I felt lacked detail was his philosophy on providing health insurance to his employees. As big of a deal as health care has become in the media, I was surprised that Ramsey devoted only one paragraph to the issue and ended the discussion with the sentence “I know health-care is a touchy subject and you can do whatever you want with your company; this is what I do with mine”.

Is Entreleadership Worth Reading?

Aside from the two “criticisms” I mentioned above, I think Ramsey’s Entreleadership book is indeed worth reading. I particularly like his ideas on developing personal mission statements in addition to those created at the department and organizational level.

The book is inspiring on many levels and gets to the core of what it really means to be a small business owner. Additionally, there is value in this book for anyone who is in a supervisory position within an organization.

Whether you’re an aspiring entrepreneur, mid-level manager, or CEO of a fortune 500 company, I believe you’ll benefit from reading this book and it will help you become a more effective business leader.

Early this morning I noticed one of my Maine Facebook friends had shared a link about a college student’s experience working with welfare recipients as a cashier at one of the local Walmarts near my hometown. I didn’t really think too much about.

Then, around lunch time, I noticed a few more of my friends had shared the link to the same story except now these were friends that lived no where near Maine in states like Texas, Mississippi, and California. Curiosity got the better of me and I decided to see what all the fuss was about.

Holy Smokes! Talk about an eye opening article!

Here’s an excerpt from the article:

The worst thing I ever saw at Wal-Mart Scarborough was two women and their children. These women each had multiple carts full of items, and each began loading them at the same time (this should have been a tip-off to their intelligence levels). The first woman, henceforth known as Welfare Queen #1, paid for about $400 worth of food with food stamps. The majority of her food was void of any nutritional value. She then pulled out an entire month’s worth of WIC (Women, Infants, and Children program) checks. I do not mind people paying with WIC, but the woman had virtually none of the correct items. WIC gives each participating mother a book containing actual images of items for which a person can and cannot redeem the voucher. This woman literally failed at image comprehension.

After redeeming 10+ WIC checks, Welfare Queen #1 had me adjust the prices of several items she was buying (Wal-Mart’s policy is to just adjust the price of the item without question if it’s within a dollar or two). She then pulled out a vacuum cleaner, and informed me that the cost of the vacuum was $3.48 because, “that’s what it’s labeled as.” The vacuum cleaner was next to a stack of crates that were $3.48. Somehow, every other customer was able to discern that the vacuum cleaner was not $3.48, but Welfare Queen #1 and her friend Welfare Queen #2 were fooled. Welfare Queen #2 informed me that she used to work for Wal-Mart, and that the “laws of Wal-Mart legally said” that I would have to sell her the vacuum for $3.48. After contacting my manager, who went off to find the proper vacuum price, Welfare Queen #1 remarked that it must be tough to stand on a mat all day and be a cashier. I looked at her, smiled, shrugged, and said, “Well, it’s a job.” She was speechless. After they finally admitted defeat, (not before Welfare Queen #2 realizing she didn’t have enough money to buy all of the food she had picked out, resulting in the waste of about $200 worth of products) the two women left about an hour and a half after they arrived at my register. The next man in line said that the two women reminded him of buying steel drums and cement. I said I was reminded why I vote Republican.

Every year, Maine consistently ranks as the number 1 state in terms of overall tax burden. Maine has the distinction of beating out New York and even “Taxachuessetts” (I lived in Mass for a few years and they ain’t got nothin’ on Maine when it comes to taxes).

I proudly pay my taxes each year to the State of Maine because I am naive in thinking that my hard earned tax dollars go to something good! Like taking care of families in need, maintaining infrastructure (roads, bridges, etc.), providing public safety, enforcing/establishing rules for society, etc.

What I cannot stand are the real life stories of people abusing the system, whether it is misuse of “food stamps” (which are now actually debit cards), medical care abuses (people faking pain so they can get prescription drugs) and other silly “entitlements” people abuse.

Yes, people really do fall on hard times and need help, but there needs to be a better mechanism in place to ensure those who actually need help get it! This article by Ms. Rousselle is a perfect example of WHY!

I cannot speak for the validity of the story, but if it turns out Christine Rousselle’s story is authentic, I believe it may be the tipping point for many folks on the fence about whether or not this country needs welfare reform. If nothing more, it is a wake up call to my fellow “Mainers”.

Why does there seem to be an unwritten rule among both Democratic and Republican political figures that you can’t talk about welfare reform.  Welfare abuse exists and it needs to be addressed BIG TIME. 

I’ll be the first to admit that addressing welfare abuse is not an easy task and what we certainly don’t need is another bureaucratic agency to conduct these verifications, there simply has to be a better way.  Oh well, until I’m old enough to run for Governor of the State of Maine I’ll just sit back and continue to proudly (and naively) pay my taxes with the “hope” that they go to somebody or something worthwhile.

Note: In less than 24 hours, this article from the relatively unkown website The College Conservative, has gone on to generate over 1,100 comments. Given that less than 1% of website readers actually take the time to post a comment (at least in my experience), this equates to over 100,000 visitors driven mainly from people sharing the article on Facebook, Twitter and other social media sites.

Four years ago I started my first blog after learning about the FORTUNES other folks were making blogging about various topics. Although I’m by no means ready to quit my day job, I too have experienced first hand the financial rewards blogging can bring.

Since this blog is about helping people turn their financial lives around, I felt it was only natural to share EXACTLY how anyone can get started blogging (with basic computer skills) and how to turn your blog into a money making machine. To this day, I am still blown away every-time I get a check in the mail or direct deposited into my bank account because of one of my websites (more on that later).

I will warn you upfront, not everyone is cut out for the tremendous emotional and time commitment required to be a successful blogger (whether blogging for profit or not).

With this in mind, I have put together this free step-by-step blogging guide to give you the complete picture of blogging so you can decide for yourself if starting a blog to make money is something you want to try.

Can You Really Make Money Blogging?

One of the first questions I am asked when I tell people I have a financial blog is “how much money can you actually make with a blog?“. This question is very difficult to answer. There are some people who make over $1,000 a day blogging about various topics, while others are thrilled if they earn $100 over the course of a year.

How much money you make with your blog typically boils down to two things; the number of visitors you have to your site and what topic(s) you are actually blogging about.

As you’ve probably already guessed, the more visitors you have to your site, the more valuable your website becomes to advertisers who want to get their message out to potential customers.

Regarding your blog’s topic and the amount of money you can earn, some topics make more money (or monetize better) than other topics. For example, a blog about cameras and photography would most likely “monetize” better than a blog about scrap-booking. Why, you might ask? The products being sold by companies who would “normally” advertise on a photography blog are generally more expensive than the products being sold by a company who would “normally” advertise on a scrap booking website. The more expensive the products being advertised, the more likelihood there is competition between companies wishing to advertise on a particular site which leads to higher advertising rates for bloggers like you and I!

Monetize: Monetize is fancy blogging lingo referring to a blog’s potential or ability to make money. For example, blogs related to shopping monetize very well during the Christmas Shopping Season.

Which Blogging Format/Software is Best:

There are many different ways to get your blog up and running and even more opinions about which is best. When I first started blogging, I used a free account set up with Google’s Blogger platform. Not only was Blogger free, but it was extremely easy to set-up and use. I was literally blogging away within 5 minutes of setting up the account.

However, once I had a month or two of blogging behind me and started generating a decent amount of traffic (maybe 50-100 or so visitors a day), I quickly began to recognize the limitations of having a Blogger account.

The biggest limitation with Blogger (and similar sites like Tumblr) was that I was limited in my ability to customize the appearance of my blog. There were a variety of free “templates” or “themes” I could use, but in my opinion they all looked very generic or plain and I wanted a web design that was a little more on par with some of the more established bloggers on the web I was now “competing” with.

Second, Blogger is great for “beginners”, but there is a stigma associated with Blogger. When I started interacting with other bloggers in the personal finance community, they kept asking me why I was using Blogger and not using a self-hosted WordPress account (more on self hosted WordPress Accounts in a minute).

Third, not only was I constrained with the design of my blog while using Blogger, I was also limited in the functionality of my website as well. For example, WordPress (by far the most popular blogging software) has thousands of “plugins” (think of them as iPhone Apps but for blog websites) that easily add almost anything you could ever imagine to your website, from elaborate surveys to amazing dynamic pictorial slide shows.

I kept hearing and reading over and over again that if I wanted to get serious about my blog, I absolutely needed to swap from Blogger over to a self-hosted WordPress account. Unfortunately for me, I waited too long and had to basically start from scratch to swap over to WordPress from Blogger. This process has been made somewhat easier today, but if you’re serious about giving “professional” blogging a try, I strongly recommend you START with a self hosted WordPress account from the very beginning. It will cost you a few extra bucks a month, but you’ll be very happy!

Setting Up WordPress on a Bluehost Server:

Unlike Google’s Blogger, which not only provides the blogging software but “hosts” your website for you on Google’s computer servers, WordPress requires that you host the WordPress blogging software on your own server. In this tutorial, I will show you how to set up your WordPress blog using a Bluehost hosting web-server account. CLICK HERE TO SIGNUP FOR BLUEHOST.COM.

I’ve experimented with several different hosting companies (including GoDaddy) and in my personal opinion BLUEHOST blows them away as far as price, options and, most importantly, their customer service is amazing (don’t believe me, just call them up at 3am on a Monday morning, you’ll get a real English speaking person on the phone)! I use Bluehost on all of my websites (including this one).

Caution on WordPress: Please note that there are actually two version of WordPress. The first is www.wordpress.com which is very similar to Google’s Blogger in that it is hosted for free on a WordPress server. Like Blogger, it is very easy to use and perfect if you just need to get a quick blog up to share news with family and friends. However, the version of WordPress you’ll want if you really want to make an honest run at making money with a blog is www.wordpress.org. Fortunately, with this tutorial I’ll show you how to get going with WordPress on your own server without ever needing to visit the WordPress site.

So, to get started with your self-hosted WordPress blog (using Bluehost as your hosting provider), you need to register an account with Bluehost first (plans start at under $6.00/month and include a free domain name). Setting up your account is a simple 2 step process:

Step #1: Find a Domain Name for Your Blog
The first step to registering an account with Bluehost is to select a domain name for your site. This might take a few tries because most of the “good” domain names have already been taken. I originally wanted to name my site The Money Tree, but that domain name had already been registered. Finally, I settled on Trees Full of Money.

Remember, the words used in your domain name can greatly improve how your website ranks in various internet search engine (Yahoo!, Google, and Bing for example). Try to include words that relate to the topic of your blog. If you’re a stay-at-home mom blogging about parenting, you might consider something like at-home-mom.com or something (as of this writing, this domain is still available, you can thank me later!!!).

When you go to register your Bluehost account, this is the first page you’ll see (pretty straightforward):

Step #1 is deciding on a domain name for your blog.

Step #2: Providing Your Personal Info and Payment
It may take you a few tries to get a suitable domain name, but once you’ve found one you’ll move on to Step #2 which is simply providing your personal information and payment as seen in the form below:

Step #2 is providing your name, address and payment information.

Once you’ve successfully filled out your personal information and provided a credit/debit card for payment, your halfway there (see, there’s nothing tricky about this stuff so far).

Money Back Guarantee: Another reason why I recommend Bluehost is they offer an “Anytime Money Back Guarantee”. If you decide blogging isn’t for you, you’ll be able to get reimbursed for the hosting you don’t use.

Once you’ve successfully registered you new Bluehost account, you’ll be asked to set up a password for your account so you can access the control panel, once you’ve done this you’re ready to start installing WordPress!

Installing WordPress on Your Bluehost Account:

If you thought setting up your Bluehost account was easy, wait until you see how easy setting up WordPress on Bluehost is (this is another reason I recommend using Bluehost over some of the other web hosting companies).

Installing Wordperss is literally accomplished by clicking a couple buttons. Bluehost has a special partnership with WordPress that allows you to install WordPress directly from Bluehost’s own servers directly into your own account through their “Simple Scripts” function.

Access your Bluehost account's control panel by clicking the blue "login" button at the top of the Bluehost homepage.

To install WordPress, simply log into the control panel of your newly created Bluehost account. The control panel is where you’ll have access to your entire Bluehost account including setting up emails addresses, adding new domains, etc. You can easily access the control panel by clicking the blue login button at the top right of the Bluehost homepage seen here to the right.

Login page to access your Bluehost control panel.

Once you’ve clicked on the “login” button, you’ll be asked for the primary domain (in this case your primary domain is the domain you just registered in the steps above) and your password. If you’ve done this correctly, you’ll find yourself in your account’s control panel screen.

If you’re like most people, the control panel of your new Bluehost account is probably going to be very intimidating! Don’t worry, I’ve got your back hear and will show you exactly what you need to do to keep the insecurity levels as low as possible.

Our first visit on the control panel page is to the domain manager section as seen in the screenshot below.

All we’re doing here is making sure that the domain is “assigned” as a “primary” or “addon” domain to the account (most likely it already is). On the lower left hand side of the domain manager screen, you’ll see your domain name listed along with the the date your domain registration expires. On the right hand side of the expiration date, make sure it says “primary” or “addon” (either one is fine). If not, you’ll need to “assign” the domain by clicking on it and adding it as either a primary or addon domain. (Remember, there is probably a 99% chance you won’t even need to bother with this step, I’m just adding it because I did have an issue once).

Once you’ve verified this, go back to your control panel homepage and find the “SimpleScripts” icon as seen in the screenshot below.

When you click on the SimpleScripts icon, you’ll need to find the WordPress icon (circled in green above). Once you find the WordPress icon, click on it and you’ll be able to start the installation process as seen in the screenshot below.

Page where you officially "install" WordPress on your domain site.

Click the “install” button as seen in the screenshot above and you will be transferred to a new screen where you’ll be able to choose where you want to install WordPress (since you should only have one domain name registered to your Bluehost account this is very easy. In “step 1″ you select the latest “stable” version of WordPress to install. In “step 2″ you select the domain you registered in the earlier steps (leave the second box to the right of the / symbol blank. Don’t worry about “step 3″ this is just an option to include a special small business theme to your WordPress installation (more on themes in a bit). Finally, in “step 4″ you must agree to WordPress’s terms of service before clicking complete.

The next page where you finish installing WordPress on your site.

If all has gone as planned you’ll receive notification that your WordPress installation is complete and you will be given a link to sign into your new website along with a user name and password to start working on your new blog!!!

Now, whenever you want to log into your new WordPress blog, you simply add “/wp-admin” to your blog’s domain name (in the web address bar) and enter your new user name and password. This will take you to the administration panel or “dashboard” of your blog where you can start customizing your blog and start writing blog articles!

An Introduction to WordPress Themes:

Now that you’re up and running with your own Bluehost web hosting account and you’ve successfully installed WordPress on your own server, now it’s time to start having fun with WordPress! As mentioned above, there are a variety of different themes or templates you can use to change the appearance of your blog. The default template is actually pretty decent and one of my friends recently started an interior design blog using this theme (check her site out here). Alternatively, you can choose from literally hundreds of different WordPress themes to get the exact look you want.

If you really want to get a customize look, you can hire WordPress programmers for a few hundred bucks to build a completely custom blog for you exactly the way you want it, unfortunately, custom programming is beyond my own personal abilities and certainly beyond the scope of this tutorial (even though I am attempting to make this “how to get started blogging” tutorial as thorough as possible).

Remember, the best thing about WordPress is that it is a system of organizing your blog articles, user comments and other related data. This content is separate from the actual “style” or visual design of your site. This allows you to continually experiment with the layout and design of your website even if you’ve written a thousand articles until you find the layout and visual design that you like.

Don’t worry about wasting a lot of time designing your website until you’ve written a few articles and gotten a feel if blogging is something that you really want to commit your time to.

Setting Up Your WordPress Blog:

With a basic understanding of how themes work within the WordPress blogging environment, you can begin customizing the basic appearance of your blog to give it an identity.

The first thing I recommend doing once you actually get into your WordPress dashboard (or control screen) is changing your password from the auto-generated one you were given to something you can remember. To do this you need to click on the “Users” tab on the left hand menu and then click on “Your Profile”. Look at the screen shot to the right to see exactly what I’m talking about.

Once you click on “Your Profile” scroll down to the bottom of the page and enter your new password in the spaces provided as seen in the screenshot below:

Page where you can change your WordPress account password.

The second thing I recommend doing is giving your blog a title and “tag line” at the very top of each page (also called the “header”). For example, the header of this blog is where it says “Trees Full of Money”. To give your site a new title and tagline, you need to click on the “Settings” tab on the left hand navigation menu and then click on “General”.

Once you’ve done this, you’ll be taken to the “General” settings page where you’ll find the box below:

Edit your blog's title and tagline here.

Your blog title should ideally be very similar to the domain name you registered for your site (but it doesn’t have to be). For example my domain for this site is www.treesfullofmoney.com and my site’s title is Trees Full of Money (pretty straightforward).

You’re not required to, but you can also add a tagline (also know as a slogan) to your site. For instance, if you started a “stay at home mom blog” your tagline could be something like: “parental advice from the frontlines”.

Once you’ve done these two basic things (changed your password and given a title and tagline to your blog) you’re pretty much set to start writing your first blog article! You can worry about fine-tuning your blog after you’ve written a few articles to see if blogging is something you want to continue doing (tons of people get burned out after writing their first 4 or 5 articles).

Writing Your First Blog Post and Page in WordPress:

Ok, so we’ve set up the “default” theme in WordPress just like my friend has done with her interior design website, we’ve changed our password (so we can remember it) and we’ve given our new website a title. The first thing you’re probably going to do is create an “about” page telling readers exactly what your website is all about.

Post vs. Page in WordPress:If you’re new to the idea of blogging, you’re probably wondering what the difference is between a “Page” and a “Post”. Basically, a “post” is what people normally think of when talking about a blog article. Posts are the ones that show up in order (usually the latest published post at top) on the home page of the blog’s website. Pages, on the other hand, are the “static” pages that often appear in the menu or navigation bar of the website.

Click on "add new" under the "Pages" tab to add a new page.

Typical blog “pages” may include and “about page”, “contact page” or “subscription page”. Some blogs (including this one) also include a privacy policy at the bottom of each page of the website (called the “footer”).

Adding Your First Page to WordPress

So, to add an about page to your blog (or any new page for the matter), all you do is click on the “Add New” tab underneath the “Pages” tab.

Once you click on “add new” under the “Page” menu, you’ll be taken to a text editor to start typing your page. If you’ve ever used a word processing program like Microsoft Word or Works, then you’ll have no problem writing your first blog page or post.

The text editor as seen in the picture below, has a place to enter the “title” of your page. Beneath this is a larger box where you write the actual “body” of the page. I have highlighted the four essential steps to help walk you through the process of writing your first WordPress page step-by-step.

Screenshot of WordPress text editor to add a new page to your site.

Step #1: Enter the title for you new WordPress page.

Step #2: Click the “Visual” tab (instead of the HTML tab). The “Visual” tab is a much easier way to write and edit your blog pages and posts because it more closely resembles the features found in MS Word or some of the other more popular word processing programs.

Step #3: This is where you actually write the “body” or “content” of your new blog page. For example, since we are starting off with an “about” page, it would be a good idea to write what your blog is about, who you are (your qualifications, experience, etc.) and how your blog may help potential readers.

Step #4: The final step is simply pushing the “publish” button. Once you push the “publish” button, the blog page that you just wrote is officially “live” on your website.

You can easily edit the appearance of your menu bar in WordPress Theme Twenty Eleve 1.2 by clicking on the "menu" button under the appearance tab on you site's Dashboard.

Depending on which “WordPress” Theme you use, you may need to go back to the WordPress “dashboard” and add the page you just wrote to the navigation menu of your site (so people can find it).

In the case of the default “Twenty Eleven 1.2″ theme we are using in this tutorial, you can click on “menu” under the “Appearance” tab in the left hand menu of the Dashboard. Once you have more than one page on your site, you’ll be able to change the order of the pages in your site’s menu bar.

How to Write Your First Post or “Article” on Your New WordPress Blog

The process of writing your first “post” or blog article on your newly created self-hosted WordPress account is just as easy as adding your first “page” like we did in the section above.

To start, we simply click on the “Add New” button of the “Posts” menu on the left hand side of your blogs homepage or “Dashboard”. Again you’ll come to a strikingly familiar text editor page that looks nearly identical to the page we just used to create our “About Page”.

Text editor screen for creating and editing blog "posts".

Step #1: Enter the title for you new WordPress post.

Step #2: Click the “Visual” tab (instead of the HTML tab). The “Visual” tab is a much easier way to write and edit your blog pages and posts because it more closely resembles the features found in MS Word or some of the other more popular word processing programs.

Step #3: This is where you actually write the “body” or “content” of your new blog post.

Step #4: The final step is simply pushing the “publish” button. Once you push the “publish” button, the blog post that you just wrote is officially “live” on your website.

One other thing you’ll probably want to do even though we’re still in the early stages of getting your blog off the ground, is adding a category to your new blog post. When you associated your posts with a particular category or categories (you can have more than one category associated with each individual blog post), your are essentially “filing” or “indexing” them so that you and your readers can more easily find them in the future. This is particularly helpful after you’ve been blogging for a while and have over 75 or 100 blog articles written.

Adding a category to your blog post is really simple (just like everything else we’ve done so far). All you new to do is find the “Categories” box on the right hand side of the post editing page we just talked about above (where you wrote your actual article). Since your blog is new, you probably won’t have any categories to chose from so you’ll need to create a couple.

Let’s say your first blog post was about making chocolate chip cookies. You might want to categorize this post under “recipes”. To create a “recipes” category to associate with your blog post, just click on “Add New Category” (as show in the box to the right) and type in “Recipes”. Then, make sure the box next to “recipes” is checked and click the “update” or “publish” button like we did in Step #4 above. That’s it! I’ll teach you how to display your categories on your blog’s pages in a little while.

Now you’ve officially written your first WordPress page and posts, I’ll show you how to add a few neat features to your blog’s sidebar to enhance your reader’s experience when they visit your site. Sidebar features are handled by what we call widgets.

Using Widgets in Your WordPress Blog’s Sidebar:

As promised above, now that you’re really moving along with your new blog, I wanted to show you how to add some of the more popular features to the sidebar of your newly created self-hosted WordPress blog. Each of these features is added using what WordPress calls “Widgets”.

In their simplest form, widgets are nothing more than blocks of fancy computer code that display various features on your website. The features may include a list of recent posts, recent reader comments, a list of your blog post categories, or maybe even some ads from various companies wishing to advertise on your site.

To add various widgets to your blog, you first need to click on the “widgets” tab under the “Appearance” menu on the left hand side of your WordPress blog’s “dashboard”.

Once you’ve clicked through to the widget page, you’ll see a similar screen to the one below:

In this tutorial, we’ll add a “widget” for recent posts, recent comments (from readers) and an arbitrary text box which we’ll use in a bit to display Google Adsense Ads.

On the left hand side of the widget page, you’ll see a large box full of available widgets you can use to trick-out your website. To add a particular widget to your blog’s sidebar, all you need to do is click on a widget and drag it over to the upper right of the page in the “Main Sidebar” box.

You’ll see in this example that I have already dragged the “Recent Posts” and “Recent Comments” widgets into the “Main Sidebar” box. The last thing you’ll need to do is drag the “text” widget over into the “Main Sidebar” box as well as I have drawn out in the picture above.

Customizing Your Recent Posts Widget: To customize the appearance of your recent post widget on your blog, you’ll need to click on the drop down arrow on the “recent post” icon. You’ll notice that the default setting displays has your 10 most recent posts. You can change this to display however many of your most recent posts you wish. Since you’ve probably only got one or two posts written at this point anyway, you won’t need to worry about this too much at first (but at least now you know how to customize your recent post widget once you get comfortable with your first dozen or so blog articles).

Customizing Your Recent Comment Widget: Customizing your recent comment widget is exactly the same as customizing your recent posts widgets we covered above. Remember, you can also change the title of the widget as well. If you want the recent comments title to be something like “What People are Saying” just type “what people are saying” in the box under where it says “Title”.

Customizing Your Text Box: Don’t worry about your text box widget yet. In just a little bit, I’ll show you how we’ll copy some computer code from your Google Adsense Account and paste it into this text widget box to start displaying ads on your site.

Making Progress!!!

Holy smokes! We’ve covered a lot of ground already and if you’ve made it this far you’re doing awesome! You’ve just about got the guts of your site going, and aside from some minor cosmetic changes you’ll be able to do on your own (there are many great resources on the web which will help you with the actual visual customization of your website), you’re ready to start generating traffic and make some money with your ads!

Adding a Visitor Counter/Tracker to Your WordPress Account:

One of the most important tools you may wish to consider is to add a traffic meter or site visitor counter to your blog. This will enable you to see how many people are visiting your website at any given time. My personal favorite is Site Meter. You can sign up for a free version of Site Meter’s traffic counter on their website. Once you follow their very easy registration process, you will be able to get a special computer “code” to insert in the widget text box (that we added in the previous step).

When you enter the Site Meter tracking code on your blog, there will be a little Site Meter icon on your website (in the sidebar) that you can click on to get data on who’s visiting your site, how they are finding your site, how many pages they are visiting on your site, and how much time they spend on your site. To see an example of this, you can click on the white and green Site Meter logo at the bottom right of any page of my Trees Full of Money website. I usually average around 1,000 per day on this site.

As an examply of how neat Site Meter’s features can be, take a look at the traffic levels for my Gift Ideas for Kids website over the last 12 months (in the screen capture below). Notice how in the months leading up to the holiday shopping season my traffic exploded!!! Information like this can rally help you build a profitable website and zero in on your best sources of income.

Screenshot of one of Site Meter's many features.

How to Actually Make Money With Your Blog:

And now the moment you’ve all been waiting for! Exactly what is the best way to make money with a blog you might ask? Based on my own successes and failures, I highly recommend you start with the following two revenue streams.

An Introduction to Google Adsense:

Google Adsense is by far the most popular way that blogger make money with their websites. Google Adsense is also the primary way Google makes money themselves. Basically, companies set up accounts with Google to display their adds throughout the internet. Because Google is an expert in organizing most of the information on the internet, they know exactly which sites will be the best for these companies to advertising on. Many of these websites (like Trees Full of Money) also have accounts with Google where they can cut and paste a special line of computer code (into our newly created text box above) so that these “relevant” advertisement can be displayed on the sites.

As an example, a company advertising tax preparation software would probably love to advertise on a website that focus on personal finance and money management. Google knows this, and they’ll send advertisements related to tax preparation software to my site because readers of personal finance blogs are probably more interested in tax preparation software than readers of a blog that focused on computer games.

Once you register your account with Google Adsense, your primary website will need to be approved before you can actually start displaying ads. The Google Adsense verification process generally takes about a week or so. Once your site is approved you can start creating ads to display on your site. For this tutorial, go ahead and make a 160 X 600 “Wide Skyscraper” ad unit to display on our newly created WordPress blog.

Log into your Adsense account to create your first ad unit.

As you can see in the picture above, once you log back into your Google Adsense account (after your account has been approved) you’ll be able to create your first new Ad Unit. Click the “My Ads” tab and then click on the “+ new ad unit” button (shown above).

Control panel for creating your first Google Adsense Ad.

Next you’ll be taken to the actual page where you’ll create your new ad.

The first thing you’ll need to do is give this Google Ad a name so you can track its performance later. You can name it whatever you’d like.

The second thing you’ll want to do is pick the size of the ad. In this case, we’ll stick with a 160 X 600 “wide skyscraper” ad because it will fit very nicely in the sidebar of our WordPress Twenty Eleven 1.2 WordPress Theme.

The next thing we’ll do is decide which kind of ads you want your new ad unit to display. You have the option of either text ads (ads without pictures) or image ads (ads that are pictures). You can also choose ads units that display both text and image ads. By default, your ad unit wil display both text and image ads (if you don’t change them) and these are what I prefer myself.

Now that you’ve selected the type of ad you want, now you can customize the appearance of the ad. You have the option of several “default” ad colors as seen in the picture below, or you can click on the “use custom settings” button (red arrow in picture below) to really personalize how your add appears.

You can choose whichever colors you wish, but the ones that I’ve found that work the best are the ones that “blend in” with the colors already used in your blog.

Once you’ve got your ad unit sized and styled the way you want it, all you need to do is click on the “Save and Get Code” button at the bottom of the page. When you do this a new window will pop up with the code you’ll need to copy and paste into the Text Widget we created in your blog’s sidebar in the Widget control panel of your WordPress blog (see section above on widgets if you’ve forgotten how to do this).

Once you have successfully cut and pasted your new Adsense ad code into your text widget box, it’s simply only a matter of time before you earn your first few cents by someone clicking on the ads being displayed on your site!!!

CAUTION: Never ever click on your own Adsense Ads, and tell family and friends not to click on your ads either! Google is very good at detecting “click fraud” or other abuses when it comes to their Google Adsense accounts. You will get busted and it is very difficult to get your account reinstated after a terms of service violation.

An Introduction to Affiliate Programs:

What exactly is a website affiliate program? In a nut shell, an affiliate program is a relationship you can enter into with various companies to promote their products or services on your website. In most cases, when someone buys a product or service with one of these companies through your website, you’ll receive a referral fee or commission.

For example, I have had tremendous success with one of my other sites using an affiliate program with Amazon. On my site Gift Ideas for Kids, my wife and I review various children’s games and toys based on how our own children like the toys. If we find a product we like, we’ll provide a link to that toy to be purchased through Amazon. Since we trust Amazon to have excellent prices and great customer service, we feel it is a very honest way to capitalize on an idea while providing a valuable service to parents and other folks looking for Christmas or Birthday gifts for children on the shopping lists.

Commissions on the Amazon products we promote on our website typically range from 4 to 10% of the total purchase price. These commissions can add up very quickly, especially during the holiday shopping season!

Another example of an affiliate program I use is one through Bluehost which is the web hosting company I use and recommend to people I help get started with blogging. Everytime someone signs up for a Bluehost account through this article, I receive a small commission as well.

There are a variety of different types of affiliate programs you can utilize to “monetize” your website or personal blog.

An Introduction to Text Link Advertising:

Text link advertising is probably my least favorite form of advertising. Text link advertising on your blog basically means someone has paid you a certain amount of money to “link” to their product or service. In a nutshell, the more links a particular website has pointing towards it, the higher that website will be ranked in various search engines like Google, Bing and Yahoo!.

The major search engines do not like websites who use Text Link Ads because it artificially skews the quality of their search engines (people are basically exploiting one of the flaws of the search engines’ algorithms). Consequently, if the search engines suspect that your website has text link ads there is a good chance they will penalize you with lower rankings in search engines. This is particularly bad for blogs and other websites just getting started who get the majority of their visitor traffic from search engines.

STAY AWAY FROM TEXT LINK ADVERTISERS!!!

How to Build Traffic/Increase Visitors to Your Blog:

There is no magic formula for building traffic to your websites. Naturally, the more traffic you have, the more money you will make through your Google Adsense ads and affiliate programs. Here are some tips that I continue to use build traffic to my site.

Write Quality Content:

First and foremost, you need to write with authority about something interesting if you want to give people a reason to visit your website. Also, as I mentioned above about the value of links, the more interesting your articles, the more likely other bloggers will link to various articles on your sites. More links to your site mean that the major search engines will take you more seriously and give you better ranking in various search results.

For example, my article on my debt snowball spreadsheet is linked to by hundreds of websites and consistently shows up in the top 5 results in Google Search for debt snowball calculator. Writing good quality and interesting blog posts is key!

Get Links Back to Your Website’s Pages:

I’ll say it again, getting links back to your site is very important and helps you tremendously boost your ranking in various search engines.

Link to Other Bloggers:

If you want to increase the chances that your blogged is linked to by other bloggers, it is a good idea to link to them first. When you link to another blogger, they’ll usually get a message on their WordPress “dashboard” showing which sites have recently linked to their blog. They may “return the favor” by linking to one of your better articles in the future.

Blog Carnivals:

Another great way to build links is to submit your various blog post to blog carnivals. Blog carnivals are nothing more than lists of recent articles written by different articles about various topics. For example, there are dozens of personal finance blog carnivals published every month that you can submit your various personal finance articles to. The most popular blog carnival submission site is Blog Carnival.

Commenting on Other Blogs:

Another great way to drive traffic to your site is by commenting on other peoples blogs. Especially on other blogs that are somewhat related to what you blog about. Most blog comment forms allow you to “link” your blog to your name. When you write thoughtful and insightful blog comments on other people’s blogs, there is a good chance that the author and readers of that blog may link over to your website to see what you’re all about.

Promoting Your Website Articles on Social Media Sites:

In addition to all the tips mentioned above, you can also use social media to promote your new blog!

Promoting Your Blog on Facebook:

If you have a Facebook account, you can periodically post links to some of your better blog posts for your friends to see (just don’t over do it our your friends may “un-friend” you). If your friends “like” or “share” your post, your article will get even more exposure!

Using Linkedin to Promote Your Blog:

Although Linkedin probably isn’t a good place to share articles you’ve written about partying or drinking beer, it is another great site for posting “professional” posts you’ve written that you wouldn’t mind your employer reading.

Using Twitter to Promote Your Blog:

If you “tweet” you can also share your latest and greatest blog articles through your Twitter account. I used to do this but I just don’t quite “get” the whole twitter thing yet. Maybe someday if there is a reason that people would actually want to follow me I may reconsider.

Using Reddit, Digg and Stumbleupon to Promote Your Blog:

Reddit, Digg and Stumbleupon are great sites to submit articles to if you think you’ve written something very interesting, insightful of humorous. I’ve had some luck driving traffic to my site by intentionally writing funny or “controversial” articles specifically to promote on these sites, but the success on sites like Reddit, Stumbleupon and Digg is very hit or miss. Once you get a decent amount of visitors to your site, promoting it on these sites may not be worth it anymore.

Phew! 6500 words later and that brings us to the end of this “basic” step-by-step guide on how to start your own self-hosted WordPress blog using Bluehost web hosting to make money! I hope you’ve learned a few things from this article and it has shed some light on what blogging to make money involves!

Feel free to share your comments and questions in the comment section below! Good luck with your new blog if you decide to go down this challenging (but rewarding) path!

Every once in a while I’ll receive an email from a reader asking me “what’s the point of being debt free?“. Some argue that being debt free is dumb because you lose out on special tax deductions, others argue that you just can’t live in these “modern times” without assuming debt, and some folks even justify carrying debt because “everyone else does it“.

In response to the claims, arguments and myths about debt, I have assembled the following list of what I believe are the advantages of paying off ALL of your debt as quickly as possible.

No Interest Expenses: If you have a home mortgage or auto loan, you’re likely paying a significant amount of money each month in interest. In fact, most people pay more in mortgage interest each month than they pay towards the actual principle balance on their loans. If you don’t believe me, just look at your next mortgage statement next month and compare the “interest due” vs. the “principle due” (principle is the actual amount remaining on your loan’s balance).

Tax Deduction Myth: I’ve said it before and I’ll say it again! Never, never, never, never buy a home, boat, second home, vacation property or anything else that involves tax deductible interest payments solely based on the fact that you need a “tax write-off”. Think about it! Let’s say you have $10,000 of tax deductible interest you’ve paid the bank over the course of a year. If you’re in the 25% tax bracket, this means you’ll only save $2,500 in tax payments for the year. Even if you’re tax rate is 50% (current tax rates don’t even go this high) you’ll only “save” $5,000 in taxes (but remember you had to pay $10,000 in interest to save $5,000 in taxes). Tax deductions are a nice “bonus” if you must finance a new home or other interest tax deduction eligible purchase but they should never be your defining motivator for such purchases.

Less Personal/Family Risk: When you have no debt, you and your family’s lifestyle are at less risk in the event you get sick, injured, laid-off from work, fired, downsized, etc. This is especially true if you’ve built up a decent emergency fund of 3-6 months of living expenses.

More Opportunities: When you have no debt, you are in a better position to take advantage of various opportunities that may come your way. These opportunities can take many forms and include assuming a lower paying job that is more aligned with your values, beliefs and/or passions; a business or investment opportunity; allowing a parent to stay home with kids; going back to school for an advanced degree; or maybe an early retirement. Regardless of your interests, being debt free opens a substantial amount of opportunities that otherwise wouldn’t exist if you were in a perpetual state of debt.

Less Stress: When you have no debt, there are a lot less things to worry about. Relationship counselors cite money as the number one cause of fights among couples (beating out how to raise kids, where to live, in-law issues, etc.). Imagine waking up tomorrow and going to work knowing that everything dime you brought home in your paycheck was yours to do whatever you wanted (aside from paying the inevitable utility bills, insurance, taxes, etc.). In contrast, by the time “most” people get their paychecks, a large portion of it is already spoken for in the form of car payments, mortgage payments, student loans and credit card bills.

More Personal Satisfaction: When you have no debt, there is a greater sense of security and personal satisfaction when you actually OWN the material things in your life. Your car rides better, your house feels more “homey”, and when your expensive ski-boat sitting in your backyard during a cold winter, you don’t have the awful feeling of making a payment on something you’re not even able to use (at least until the following spring).

If you’re ready to jump aboard the debt free bandwagon with us but don’t know exactly where to start, check out some of some of my most popular personal finance articles:

How my family paid off $90,000 of debt in 2 years
The Free Debt Snowball Spreadsheet
My Free Excel Based Personal Finance Software
How to Improve Your Credit Report
How to set up a family budget