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Optimizing Your Student Debt

4 Mar

Optimizing Your Student Debt(This is a post by Kaitlin Butler of CommonBond. I’ve recently looked for ways to optimize the student loan debt I have and she graciously offered some thoughts. I like the idea of maximizing the return on education investment she mentions below. Please leave your feedback in the comments. ~Mike)

Optimizing Your Student Debt

By Kaitlin Butler, CommonBond

There’s no “one size fits all” repayment strategy for the millions of Americans tackling student debt. Like nearly everything else in personal finance, it’s up to you to identify the best way to optimize your debt based on your financial goals and needs, and we’re here to help. Here’s what you need to know to take control of your student loans and maximize the return on the investment you made in your education, starting today.

The government offers more repayment plans; private lenders offer more savings.

Federal student loans come with a robust set of repayment options. The federal government offers repayment plans that private lenders can’t offer, including Income-Based Repayment and even Public Service Loan Forgiveness. (See the full list of options here.) However, these repayment plans don’t make sense for all borrowers. If you’re not in the public sector or you’re a high earner, you may not be able to take advantage of many of these options. If that’s the case, consider student loan refinancing, which will help you get a lower interest rate that will help you start saving quickly.

Refinancing gives you a second chance at picking your ideal student loan.

When you refinance, you trade out your old student loan for a new loan, giving you a second chance to customize your debt repayment plan. Besides applying for a lower interest rate alone, you can also choose a new loan type – fixed, variable, or hybrid – and loan term, typically from 5 to 20 years. That means that you can choose a loan type tailored to your own risk tolerance and long- and medium-term goals. (This blog post helps you find the right student loan for your personal situation, and there are no fees when you refinance through CommonBond.)

Reamortizing helps you pay off your loans faster and lowers your monthly payment.

If you save up a lump sum payment – like an annual bonus – that you plan to put towards your debt, make it go the extra mile with reamortization. This is when you make a significant extra payment and then reset your monthly loan payment schedule based on that big drop in your balance. To take advantage of this, ask your lender if you can reamortize (and if there’s a limit to how many times you can do so on one loan). When you reamortize you’ll reduce your loan balance and have lower monthly payments each month based on this new balance.

One final tip for anyone with loans? Make sure you’re signed up for autopay, also known as ACH, where your loan payments are made automatically out of your checking account. Lenders will often offer you a 0.25% interest rate discount just for signing up, and you can rest easy, knowing you’ll never miss a payment.

Kaitlin is Content Manager at CommonBond, a student lending platform that provides a better student loan experience through lower rates, exceptional customer service, and technology. Her articles have appeared on Lifehacker, the Huffington Post, Yahoo!Finance, and more. 

We Are All Spammers

13 May

If you send emails to groups of people, you are a spammer. We don’t typically think of ourselves this way, but consider the mindset of anyone with the ability to send an email to many people. When you are the sender, you have to decide what you think is important to people. And of course, you tend to think that if you can just get this message to people, they will think it is important, too.

But will they really think it is important?We Are All Spammers
Many people won’t even open the email (unless you magically always have an open rate of 100%). Instead, some people will it open it, and some people won’t open it. This is just like a spammer. When they send an email, they think some people will find the email important enough to open it. And some people won’t open it.

But that spammer very well could have an open rate close to yours. So what makes you different than a spammer?

……………………………….

You could of course argue that people signed up for your list, indicating that they must have some desire to receive emails from you, but this is likely only partially true.

What Did Your List Members Really Sign Up For?

But you have to ask what they really signed up for.

  • Did they sign up after you lured them with a free download of some kind?
  • Did you promise a discount code?
  • Did you promise they would be notified of some upcoming release?

None of these common practices are bad, they are somewhat misleading. If the initial motivation for joining your list was to get something specific, it is a good idea to ask yourself how far your email topics have strayed from this initial offering.

How Frequently Are You Sending Emails?

How frequently are you sending your members emails? How do you think this compares to what they expected when joining your list? You need to check your practices frequently, monitor your open rates, and monitor how many people leave your list after each email.

Practical Changes to Make to Your EMail Practices

First of all, don’t send email “blasts”. Rid your lexicon of that description. Your email practices should be much more sensitive.

Second, notify your list members of how frequently you plan to send them emails. Do this in the initial email, and include it in each email going forward. If you say once a week, then stick to that routine at all costs.

Third, don’t use holidays as a way to sneak an email message in. Just because you have the ability to send an email on any given holiday doesn’t mean you should. Unless that holiday is so relevant to your mission, and your list members lives’ would be worse off without your email, then don’t send it. And being worse off is not the same as being slightly better. I get the sense that people send the holiday emails because they think they are somehow enriching the receivers’ lives, but I doubt that. Instead, think, “If I don’t send this email, will my list members miss it?”

Let me tell you the answer; it is doubtful that they will miss it.

Conclusion

Be sensitive to the personal nature of email and don’t abuse the power you have to get into someone’s inbox. Otherwise, you are no different than a spammer.

……………………………….

Need help with your non-profit or small business email marketing plan? Get in touch; I’d be happy to help.

Mike

3 Opportunities You Are Missing to Provide Value

17 Feb

Why Are People Trying to Provide “Value” by Asking What Others Want?3 Opportunities You Are Missing to Provide Value

Value-making seems to be a full time profession for many people. Everywhere you go there is somebody insisting that they are trying to provide value for their customers, their clients, their company. But what is the value they are trying to provide? People don’t seem to know. Why do I think they don’t know? Because they’re sending out too many surveys. They are constantly talking about value and constantly asking others about value, but they never define value. They value value, but don’t know what it is!?!

Value Is Generic

Value is really a generic catch-all phrase. It’s non-specific. It doesn’t tell me anything about what you do, what you think you should do, or what you want to do. Instead, you sound like everybody else when you talk about value. Do you really need a survey to tell you that people value great customer service? Or timely delivery? Or competitive prices? No, these things are generally a given, though some people will value one more than the other. These values are also generic. Most organizations have these very same values and make promises based on these values.

Problem 1: Organizations Don’t Really Listen

I don’t think people are really listening to the answers their customers, clients, or partners might be giving them about what they value. They’re not listening because the things being said aren’t direct answers. Instead, the answers exist in other interactions.

3 Opportunities to Listen and Provide Value to Customers

  1. For example, when I call any type of customer service line, I expect to get my question answered quickly and professionally. And everybody, including me, thinks their question is unique. No one believes their question is exactly the same as someone else’s question. So why is it so rare to get a real person on the line when you call customer service? Clearly these organizations don’t care about what I really want. But I bet I’ll get a follow-up survey asking me how the phone call went. Instead of this survey, why not have a real conversation with me when I call? Why not listen?
  2. When I’m checking out in a physical store, why doesn’t the cashier listen to what I have to say about my shopping experience?
  3. When I check out online, why doesn’t someone call me to help me through when I’m having trouble? Imagine that level of service.

Problem 2: Value Doesn’t Easily Scale

But these ideas are somewhat of a pipedream because these things many people value don’t easily scale. Amazon can’t scale that level of service to call any customer having trouble checking out online. They’ve already attempted to solve that problem with one-click shopping. Facebook can’t call you when you encounter a log-in issue. Target isn’t suddenly going to have their cashiers strike up a conversation about my shopping experience. Why? It wouldn’t scale well. The utility company, cable company, and so many others aren’t going to get rid of their artificial intelligence operators (standing by, but no real problem-solving skills). It doesn’t scale well.

4 Ways to Scale Value

First, listen in all the interactions you might have with a customer. Don’t have the interaction and then send a survey as a proxy for listening. If you send the survey after the fact, I don’t think you were ever really listening in the first place. Second, be proactive in problem areas. How can you help a customer solve a problem before he/she calls you? Call them first instead. Third, think of every other way you can listen without surveys and pursue those listening opportunities first. Fourth, give all employees the ability and authority to act immediately on whatever they are hearing from customers. Addressing issues after the fact (discovering them through a survey) is hardly ever as good as responding in the moment.

Conclusion: Value People

People want to be valued. Don’t wait to define your values based on surveys. Start first with valuing your customers as people.Constantly act on expected values by listening during conversations and solving problems proactively. If you do these things, you may find that you can say “You’re welcome” more often as customers thank you for your value-based based interactions.

Management Philosophy: Things I Don’t Believe

6 Jun

My management philosophy?Management Philosophy- Things I DON't Believe
Here are some things I don’t believe:

I don’t believe in productivity, whether it’s demanding it or measuring it.

I don’t believe in yearly evaluations.

I don’t believe in excuses.

I don’t believe that people prepare well enough for most meetings and I don’t believe that most people treat meetings as if they are important.

I don’t believe in treating customers better than employees or providing better customer service to customers than employees.

I don’t believe that every meeting needs to stick to the exact agenda, especially if that becomes an easy way to avoid conflict or tough questions.

I don’t believe in skill sets.

I definitely don’t believe in skill sets.

I don’t believe age is an indicator of ability.

I don’t believe experience is necessary (though often helpful).

I don’t believe in hiding facts.

I don’t believe in ignoring facts.

I don’t believe that one person’s facts are enough to conclude the truth of the matter.

I don’t believe 100% is ever attainable, thus I don’t believe in launching when things are 100% ready.

I don’t believe in striving for less than 100%.

I don’t believe in management philosophies.

What don’t you believe?

Do You Want to Commit? Put Your Money Where You Want Your Time to Go

4 May

Do You Want to Commit-Put Your Money Where You Want Your TIme to GOWe often use money as a way to force ourselves to commit. This is evident in many areas: monthly gym membership fees vs. home exercise equipment or routines; free online college courses (The Truth About MOOCs: Only 10% Of Students Actually Finish Them) vs. paying for a college course; buying a book (we really want to read it) vs. checking it out from the library (maybe I’ll get around to reading it).

Is is that we are bored (The dirty little secret of online learning: Students are bored and dropping out) or is it that people have a hard time committing without putting their money where they want their time to go?

The basic concept behind these examples is loss aversion.People hate to lose what they have or lose money they’ve invested, whether in the stock market or in a gym membership.

Think about the sales of so many apps. What is the benefit to the user to pay for an app as opposed to using it for free? I think many times we buy an app only after we justify to ourselves that we will actually use it. The small amount of money involved-say $1 to $5-can also be enough to help us keep that commitment, at least initially. Once we feel like we “got our money’s worth”, the chances of dropping the commitment increase.

Think about many purchases you make and how they reflect your commitment.

You buy a new pair of running shoes because you want to strengthen your commitment to start or get back into your training routine

You buy a gardening book because you really want to start that backyard garden.

You purchase a magazine subscription because you really want to keep up on your topic of choice (ex. photography, economics).

You buy a set of 10 yoga lessons to make sure you show up every week.

For many of these ideas there are free or less costly options available. You may really need a good pair of running shoes to protect your feet, but why not check the gardening book out from the library? Or why not read all the articles on your topic of interest that are available for free on the internet? Why not buy that yoga DVD that costs a tenth of the cost of lessons?

I’m not saying one alternative is better than another. Spending money on the rights things is a great investment. It does help us commit and reach our goals. I’m saying that understanding why and how our purchases affect our commitment allows us to make better commitments and spend our money more wisely.

We may also benefit by recognizing that a monetary commitment can lull us into a sense of progression. We think we made progress on a goal because we put up money. But buying running shoes is different that actually running three times a week. Buying a set of yoga classes is different than showing up every week even when things get busy.

It is better to think through all of the things involved in keeping some commitment you want to make. Besides the money involved, do you really have the time? If you don’t have or won’t make the time, that monetary investment probably isn’t worth it. Money cannot substitute for time, although I think at times we would like it to. It is often easier to put up the money than to put up the time.

My suggestion: carve out and commit to the time investment. Then, evaluate and utilize the monetary investment to best reinforce your time commitment.

It can pay (pun intended) to figure out ways to best use our money as commitment strategy.

Tell us in the comments what ways you use money to make commitments stick.

Note: There are other clever examples of using this concept to make commitments stick.

Vision Creation Theory of Leadership

9 Feb
Vision Creation Theory of Leadership

Visions are created through a process of constant decision-making.

Leadership is often made synonymous with vision creation. Strong leaders are assumed to have a strong vision. But I don’t think that is quite right. Leaders may have strong boundaries on their vision, but that doesn’t mean they hold every detail in focus. Instead, strong leaders know they must trust the people carrying out the vision. They must trust these people because only through them is every detail attended to.

Leaders should focus on making the best decisions on questions within the scope of the vision they have broadly defined. This is an essential task of leadership: to determine what questions are within the realm of the vision. This doesn’t mean that leaders will answer every question. No, instead, they will rely on others with more knowledge of the details to make decisions.

How Many Decisions Do We Make Each Day?

How many decisions does a person make in each day? We make at least 200 food decisions alone every day, on top of the thousands of other decisions. These daily decisions create the story of our life, whether we realize it or not.

So what about organizations? How many decisions does an organization make each day? If we assume 1,000 decisions per person per day and assume that maybe 1/3 of those decisions are work related (probably more), then we could take the number of employees times 333. For an organization of 100 people that would be over 33,000 decisions each day! No leader could handle making that many decisions. It is  obviously not realistic, desired, nor would it be productive.

Employees make thousands of decisions each day without the oversight of a leader. So how does vision creation work in this context?

Vision Creation Theory Diagram

This simple illustration gives an idea of how visions are created through leadership and the decision making processes.

Vision Creation Theory of Leadership

Though obviously more complex, decisions are broken into small and large decisions. Small decisions happen all the time and may or may not help better define the vision. Choosing which color pen to use will not affect the vision.

On the other hand, there are many other daily decisions that will affect the vision. Employees will handle many of these questions themselves. But there will be decisions that need more thought and this is where leaders often step in.

Six Key Roles of a Leader in the Vision Creation Process

Here are the roles of the leader in this model of vision creation. Leaders:

  1. Help create and refine the vision.
  2. Keep the scope of the vision in balance.
  3. Determine whether or not a decision is within the scope of the vision.
  4. Make decisions or give space to make decisions on important questions that the define the vision and scope of the vision.
  5. Listen – this topic is so important it warrants its own bullet points.
    1. Leaders listen to bring pieces of the vision into focus. Leaders also listen to help individuals place their contributions into the broader context of the vision.
    2. Leaders listen to better understand why the vision and pieces of the vision matter to people.
    3. Leaders listen to let other know that their participation and work within the vision matters.
  6. Delegate decisions to others so that the vision creation process is participatory and so that they can focus on only the most important decisions defining the vision.

None of this is to say that decisions that aren’t made by leaders are not important. Instead, I am suggesting that a leader’s most important work revolves around the constant vision creation process and the decision-making process used to get there.

What decisions have you made today? What visions are you creating?

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