Invest

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When the economy contracts and enters a recession, it’s often accompanied by rising unemployment and a declining stock market. For that reason, some investors are caught on their heels, unsure of what to do. But some simple strategies may help investors invest during a recession – and there can be some surprising benefits to doing so.

It may be a good idea to try and keep in mind that because your investments may be trending downward, you shouldn’t let fear or your emotions override your strategy. That’s not easy, of course, but may be helpful to keep in mind.

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What You Need to Know About Investing in a Recession

Investors looking to buy and sell stocks or other securities during a time of economic upheaval need to keep many things in mind.

A recession describes a contraction in economic activity, often, though not officially defined as a period of two consecutive quarters of decline in the nation’s real Gross Domestic Product (GDP) — the inflation-adjusted value of all goods and services produced in the United States. However, the National Bureau of Economic Research, which officially declares recessions, takes a broader view — including indicators like wholesale-retail sales, industrial production, employment, and real income.

The point is that the markets tend to price in those indicators, so much so that you may see the prices of stocks start to drop (and bond prices start to rise) even before a recession is officially declared. For example, the S&P 500 Index declined significantly from October 9, 2007, through March 9, 2009, a bear market that started two months before the Great Recession, which lasted from December 2007 through June 2009.

From those lows in March 2009, the S&P 500 delivered a return of 400% through February 2020, surpassing the previous peak in April 2013. Those that stayed in the market despite unprecedented economic declines were still able to experience a positive return.

But that stock volatility can give investors the jitters — and that emotional state that can be contagious.

Behavioral finance experts have dubbed this tendency “herd mentality,” which means you’re more likely to behave similarly to a larger group than you realize. Combine that behavioral bias with another common one — loss aversion — and you can see how emotions can lead some investors to make impulsive choices in a moment of panic or doubt.

However, there is some good news: history shows that most recessions don’t last as long as you might think — about 17 months, according to the National Bureau of Economic Research (NBER). So while an economic downturn can be scary while it lasts, it’s likely that time is on your side.

By staying the course and sticking with your investment strategy (and not yielding to emotion), the market recovery could help you recoup any losses and possibly see some gains — especially if you buy the dip (when prices are low). Though, remember, that nothing is guaranteed.

Investing Strategies for a Recession

The following are a few investment strategies that may help investors weather a recession:

Dollar-Cost Averaging

While it’s critical for investors to stay true to their long-term strategy during a recession, what about investing new money? This is where the concept of dollar-cost averaging is important for investors to keep in mind.

Dollar-cost averaging, simply put, is a systematic way of investing a fixed amount of money regularly. It’s often used to describe the way most people invest, on a paycheck-by-paycheck basis, through workplace 401(k) and 403(b) plans.

This approach spreads the cost basis out over a long period of time and a wide range of prices. By doing so, it provides a degree of insulation against market fluctuations. During times of rapidly rising share prices, the investor will have a higher cost basis than they otherwise would have had. During times of collapsing stock prices, the investor will have a lower cost basis than they otherwise would have had.

Taken together, then, dollar-cost averaging can help you pay less for your investments on average over time and help to improve long-term returns.

Buy and Hold

Because most investors invest with a long-term time horizon, it may be best to employ a buy and hold investment strategy. This strategy can often be paired with a dollar-cost averaging strategy.

In short, a buy and hold strategy is a passive strategy in which investors buy stocks, exchange-traded funds, and other securities and hold on to them for a long time.

By buying and holding, investors believe that they are likely to earn long-term investment returns despite whatever short-term market volatility may come their way. They think an extended time horizon allows them to ride out short-term dips in the market.

This strategy can also help investors avoid emotional investing or trying to time the market.

Rebalancing

Investors try to gauge how close or far they are from their goals because your time horizon determines how you invest. For instance, a younger investor may have a portfolio that’s heavier in growth stocks and lighter when it comes to bonds and cash.

For an investor nearing an important goal, like retirement, the priority may be safety and security or investments like high-quality (but lower-yielding) bonds. Over time, investors need to rebalance their portfolios, shifting the allocation of different asset classes. A younger investor may start with an allocation of 70% stocks and 30% bonds and cash. But as they near retirement, that equity allocation might shift toward 50% stocks or even lower.

Tax-Loss Harvesting

A recession can also be a chance to sell out of a mix of investments, owing to tax considerations. Investors can take advantage of tax-loss harvesting by selling stocks or mutual funds that have appreciated alongside those that have lost value. This strategy allows investors to use investments that have declined in value to offset investment gains and potentially reduce their annual tax bill.

When an investor wants to reduce capital gains taxes they owe on investments they’ve sold, tax-loss harvesting can allow an investor to deduct $3,000 in losses per year. As such, the strategy can be the silver lining on investments that didn’t work out.

Potential Investments During a Recession

It’s worth remembering some investments tend to perform better than others during recessions. Recessions are generally bad news for highly leveraged, cyclical, and speculative companies. These companies may not have the resources to withstand a rocky market.

By contrast, the companies that have traditionally survived and even outperformed during a downturn are companies with very little debt and strong cash flow. If those companies are in traditionally recession-resistant sectors, like essential consumer goods, utilities, defense contractors, and discount retailers, they may deserve closer consideration.

Recommended: What Types of Stocks Do Well During Volatility?

Some investors might also seek out even more defensive positions during a recession by buying real estate, precious metals (e.g., gold), or investing in established, dividend-paying stocks.

Additionally, some investors may look to move some money out of riskier investments like stocks, bonds, or commodities and into cash and cash equivalents. For some investors, having adequate cash on hand or having money invested in certificates of deposit (CDs) and money market funds may be a good option for a portfolio during a recession.

Bear in mind that every recession impacts different sectors in different ways. During the Great Recession of 2008-09, financial companies suffered — because it was a financial crisis. In 2020, biotech companies tended to thrive, but investments in energy companies have been hit harder owing to fluctuating oil prices.

As an investor, you must do the math on where the risks and opportunities lie during a recession.

What to Avoid In a Recession

During a recession, it’s important to remember two key tenets that will help you stick to your investing strategy. The first is: While markets change, your financial goals don’t. The second is: Paper losses aren’t real until you cash out.

The first tenet refers to the fact that investors go into the market because they want to achieve certain financial goals. Those goals are often years or decades in the future. But as noted above, the typically shorter-term nature of a recession may not ultimately impact those longer-term financial plans. So, most investors want to avoid changing their financial goals and strategies on the fly just because the economy and financial markets are declining.

The second tenet is a caveat for the many investors who watch their investments — even their long-term ones — far too closely. While markets can decline and account balances can fall, those losses aren’t real until an investor sells their investments. If you wait, it’s possible you’ll see some of those paper losses regain their value.

So, investors should generally avoid panicking and making rash decisions to sell their investments in the face of down markets. Panicked and emotional selling may lead you into the trap of “buying high and selling low,” the opposite of what most investors are trying to do.

The Takeaway

Investing during a recession is really what you make of it. While market volatility can spark investor worries, it’s possible to manage your emotions, stay in control of your investment strategy, and possibly come out ahead. Sticking to some broad strategies may be able to help, such as dollar-cost averaging or a buy-and-hold approach. Of course, nothing will guarantee that you generate positive returns during a recession, but certain strategies may help buoy your portfolio during economic upheaval.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.

For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

SOIN-Q324-026

Source: sofi.com

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When it comes to investing, there are certain rules of thumb that investors are often encouraged to follow. One of the most-repeated adages in investing is to try and “buy low, sell high.”

Buying low and selling high simply means purchasing securities at one price, then selling them later at a higher price. This bit of investing wisdom offers a relatively straightforward take on how to realize profits in the market. But figuring out how to buy low and sell high — and make this strategy work — is a bit more complicated. Timing the market is not a perfect science, and understanding that implementing a buy low, sell high strategy is more complicated than it sounds is critical to investor success.

Key Points

•   Buy low, sell high is an investment strategy that involves purchasing securities at a lower price and selling them later at a higher price.

•   Timing the market and implementing this strategy can be challenging, as market movements are unpredictable.

•   Understanding stock market cycles and trends can help determine when to buy low and sell high.

•   Technical indicators and moving averages can assist in identifying pricing trends and points of resistance.

•   Investor biases and herd mentality can impact decision-making, so it’s important to make rational choices based on research and analysis.

What Does It Mean to “Buy Low, Sell High”?

“Buy low, sell high” is an investment philosophy that advocates buying stocks or other securities at one price, and then selling them later when they’ve (hopefully) gained value. This is the opposite of buying high and selling low, which effectively results in investors selling stocks at a loss.

When investors buy low and sell high, they may do so to maximize profits. For example, a day trader may purchase shares of XYZ stock at $10 in the morning, then turn around and sell them for $30 per share in the afternoon if the stock’s price increases. The result is a $20 profit per share, less trading fees or commissions. Of course, a price increase of that magnitude within a single day is highly unlikely.

Likewise, a buy and hold investor may purchase stocks, exchange-traded funds (ETFs), or mutual funds and hold onto them for years or even decades. The payoff comes if they sell those securities later for more than what they paid for them.

Recommended: How to Know When to Sell a Stock

4 Tips on How to Buy Low and Sell High

The following tips may help investors develop a buy low, sell high strategy (or avoid the buy high, sell low trap).

1. Investing with the Business Cycle

Understanding stock market cycles and their correlation to the business cycle can help when determining how to buy low and sell high.

The business cycle is the rise and fall in economic activity that an economy experiences over time. If the business cycle is in an expansion phase and the economy is growing, for instance, then stock prices may be on the upswing as well. On the other hand, if it’s become apparent that economic growth has peaked, that could be a signal for stock price drops to come as an economy slows or enters into a recession.

But like most strategies that aim to buy low and sell high, investing with the business cycle can be challenging.

It’s also important to remember that security prices typically don’t move in a straight line up or down in lockstep with a specific phase of the business cycle. Instead, most securities experience a level of volatility, where prices move up or down (or both) in the short term before reverting to the mean.

2. Look at Stock Pricing Trends

Investors who want to buy low may find it helpful to pay attention to pricing trends or technical indicators. Tracking trends for individual securities, for a particular stock market sector, or the market as a whole can help investors get a sense of what kind of momentum is driving prices.

For instance, an investor wondering how low a stock price can go can look at technical indicator trends to identify significant pricing dips or rises in the stock’s history. This could, potentially, help determine when a stock or security has reached its bottom, opening the door for buying opportunities. Conversely, investors may also use trends to evaluate when a stock has likely reached its high point, indicating that it’s prime time to sell.

3. Use Moving Averages

Moving averages are a commonly used indicator for technical analysis. A moving average represents the average price of a security over a set time period. So to find a simple moving average, for example, an investor would choose a time period to measure. Then they’d add up the stock’s closing price each day for that time period and divide it by the number of days.

The moving average formula can help compare stock pricing and determine points of resistance. In other words, they can tell investors where stock prices have topped out or bottomed out over time. Moving averages can smooth out occasional pricing blips that temporarily push stock prices up or down.

Comparing one moving average to another, such as the 50-day moving average to the 200-day moving average, can also help investors to spot sustainable up or down pricing trends. All this can help when deciding when to buy low or sell high.

4. Beware of Investor Bias

An investor bias is a pattern of behavior that influences reactions to a changing market. For example, noise trading happens when an investor makes a trade without considering the state of the market or timing. The investor may follow pricing trends but make trades without considering whether the time is right to buy or sell.

Investors who give in to biases may find themselves following a herd mentality when it comes to making trades. If news of a pending interest rate hike sparks fear in the markets, investors may start panic selling in droves. This can, in turn, cause stock prices to drop. On the other hand, irrational exuberance for a specific stock or type of security can push prices up, causing an unsustainable market bubble.

Investors who can refrain from being influenced by the crowd stand a better chance of making rational decisions about when to buy or when to sell to either maximize profits or minimize losses.

Pros and Cons of Buy Low, Sell High

A buy low, sell high strategy can work for investors, but while it’s a worthy goal, the implementation can be difficult. Investors who are too focused on timing the stock market can run into difficulties.

Benefits of Buy Low, Sell High

Buying low and selling high can yield these advantages to investors.

•   Potential bargain-buying opportunities. If investor sentiment is causing fear and panic to take over the market and push stock prices down, that could open a door for buy low, sell high investors as they buy the dip. Individuals who ignore market panic could purchase stocks and other securities at a discount, only to benefit later once the market rebounds and prices begin to rise again.

•   Potential for high returns. An investor skilled at spotting trendings and reading the market cycle could reap sizable profits using a buy low, sell high strategy. The wider the gap between a stock’s purchase and sale price, the higher the profit margin.

•   Beat the market. A buy low, sell high approach could also help investors to beat the market if their portfolio performs better than expected. This might be preferable for active traders who forgo a passive or indexing approach to investing.

Disadvantages of Buy Low, Sell High

Attempting to buy low and sell high also holds some risks for investors.

•   Timing the market is imperfect. There’s no way to time the market and which way stock prices will go at any given moment with 100% accuracy. So there’s still some risk for investors who jump the gun on when to buy or sell if stocks have yet to reach their respective lowest or highest points.

•   Being left out of the market. Investors who want to buy low and sell high would not want to buy securities when the market is up. That practice, however, could lead to substantial time out of the market entirely, especially during bull markets.

•   Biases can influence decision-making. Investment biases and herd mentality can wreak havoc in a portfolio if an investor allows it. Instead of buying low and selling at a profit later, investors may find themselves in a buy high, sell low cycle where they lose money on investments.

•   Pricing doesn’t tell the whole story. While tracking stock pricing trends and moving averages can be useful, they don’t offer a complete picture of what drives pricing changes. For that reason, it’s important for investors also to consider other factors, such as consumer sentiment, the possibility of a merger, or geopolitical events, influencing stock prices.

Alternatives to Buy Low, Sell High

Buying low and selling high is not a foolproof way to match or beat the market’s performance. It’s easy to make mistakes and lose money when attempting to time the market unless, of course, you possess a crystal ball or psychic abilities.

There are, however, other ways to invest without trying to time the market. Take dollar-cost averaging, for example. This strategy involves staying invested in the market continuously through its changing cycles. Instead of trying to time when to buy or sell, investors continue making new investments. Over time, the highs and lows in stock pricing tend to average out.

A dividend reinvestment plan (DRIP) is another option. Investors who own dividend-paying stocks may have the opportunity to enroll in a DRIP. Instead of receiving dividend payouts as cash, they’re reinvesting into additional shares of the same stock. Similar to dollar-cost averaging, this approach could make it easier to ride out the ups and downs of the market over time and eliminate the stress of deciding when to buy or sell.

Investing with SoFi

A buy low, sell high investment strategy is fairly simple, in that it involves buying a security at one price, and selling it after, or if, it appreciates. Obviously, there’s no guarantee that any asset will appreciate, so it’s possible investors could lose money – but they could also see positive returns, too.

Further, the strategy can be challenging to implement. Executing a buy low, sell high plan successfully means researching and doing due diligence to understand how the market works.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Is buying low and selling high a good strategy?

Buying low and selling high can generally be a good strategy as it allows you to take advantage of price movements in the market. However, there is no guarantee that this strategy will always be successful, and you may end up losing money if the market conditions are not favorable.

Is it illegal to buy low and sell high?

There is no law against buying low and selling high. Most investors make money by buying a security at a low price and then selling it later at a higher price.

Why do you sell high and buy low?

Many investors sell high and buy low because they want to take advantage of market conditions to realize a positive return. When the market is high, investors may sell an investment they purchased at a lower price to make a profit.

Photo credit: iStock/katleho Seisa

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.

For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

SOIN-Q324-032

Source: sofi.com

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Do you want to learn how to start a personal finance blog? Starting a personal finance blog changed my life. When I began Making Sense of Cents (the blog that you’re reading right now!), I had no idea that sharing my money tips would lead to financial freedom and the ability to work from anywhere….

Do you want to learn how to start a personal finance blog?

Starting a personal finance blog changed my life. When I began Making Sense of Cents (the blog that you’re reading right now!), I had no idea that sharing my money tips would lead to financial freedom and the ability to work from anywhere.

What started as a hobby turned into a full-time career, allowing me to help others take control of their finances while earning a great income.

Whether you want to help people save money, get out of debt, or learn how to invest, blogging gives you a platform to make a real impact. Plus, it’s an opportunity to earn some extra income on the side or even turn it into a full-time career.

If you’ve ever thought about sharing your own money journey and helping others improve their financial lives, now is a great time to start. In this How To Start a Finance Blog guide, I’ll walk you through how to create a successful personal finance blog, just like I did.

Quick note: I have a free How To Start A Blog FREE Course you can click here to join. Want to see how I built a $5,000,000 blog? In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.

My background with blogging

Over 10 years ago, I started my blog, Making Sense of Cents, on a whim. I had read an article about personal finance and thought it would be fun to share my own experience. At first, blogging was just a hobby.

I had no idea that people could make money from blogs. But after about six months, a blogger friend introduced me to an advertiser. I made my first $100, and I was hooked.

Since then, the blog has grown beyond my wildest dreams and I have earned over $5,000,000 blogging over the years. Blogging changed my life by giving me financial freedom and the ability to work from anywhere.

Now, I want to help you start your own successful blog.

What is a personal finance blog?

A personal finance blog is a website where you share tips and advice about money. It’s a place where you can help others understand how to save, budget, invest, and spend wisely.

Some examples of topics that a personal finance blog may cover include:

  • Budgeting
  • Saving for big purchases
  • Getting out of debt
  • Investing in stocks or real estate
  • Planning for retirement
  • Side hustles
  • Financial independence and early retirement
  • Student loans
  • Buying a home
  • Money and mental health

And so much more.

You can choose one or more of these topics to focus on.

Recommended reading: What Is A Blog, How Do Blogs Make Money, & More

Why should you start a personal finance blog?

I think that starting a personal finance blog has many benefits.

You can share your money tips and help others improve their financial situation by sharing advice on saving, budgeting, and investing. I have received countless emails over the years from readers thanking me for helping them change their lives, and these emails are always amazing to read.

Writing a blog also encourages you to learn more about personal finance through research, which can improve your own money skills. I have learned a lot about personal finance because I am constantly reading about it and because I am so active in the personal finance community.

Plus, you can earn extra income through affiliate marketing, ads, and sponsored posts, helping you reach your own financial goals. As I mentioned above, I have earned over $5,000,000 blogging over the years, and I really love running this online business – so it’s been a win all around for me!

For me, I love having a personal finance blog and it’s one of the best decisions that I’ve ever made in my life.

How To Start a Personal Finance Blog

Below is how to start a personal finance blog, step by step!

Here are some of the topics I write about on my personal finance blog.

1. Choose your blog topic

Choosing a finance niche is the first step in starting your personal finance blog. A niche is a specific area of focus that will help your blog stand out.

To help you decide, I recommend thinking about what you’re passionate about. Is it budgeting, saving money, or investing? By picking a topic you love, you’ll enjoy writing and sharing your knowledge.

You should also think about your expertise and experience. What do you know a lot about? If you have experience with paying off debt or improving your credit score, that might be your niche.

Narrowing down your niche helps you become an expert in that area. For example, instead of writing about all things finance, you might focus just on household budgeting tips.

Your niche can also help you make money. Advertisers and sponsors usually look for specific topics to advertise on. If your blog is about investing, you might attract ads from financial services.

Don’t worry if it seems too narrow. There are a lot of people interested in specific topics. Being specific can help you connect better with your readers.

I recommend starting a self-hosted WordPress blog through Bluehost.

2. Start a self-hosted WordPress blog

To start your personal finance blog, I always recommend that you sign up for a self-hosted WordPress site. This means you will own your blog and its content, unlike free blogging platforms.

WordPress is where a blogger writes their blog posts. It’s like the home base for your blog. You can log in, create new blog posts, format them (like adding pictures, headings, or links), and then publish them for your readers to see. WordPress makes it easy to manage everything from your writing to how your blog looks. It’s the platform where you do all the behind-the-scenes work to keep your blog running.

WordPress is a tool that helps you build and manage a blog or website without needing to know how to code. It’s super popular because it’s easy to use and has tons of features to customize your site.

WordPress is what I use for this website (Making Sense of Cents), too!

In short, WordPress is the tool to build your blog, and self-hosting gives you the freedom to control and expand it however you like!

Here are the steps to start a self-hosted WordPress blog:

  1. Get a web hosting service. A popular choice for new bloggers is Bluehost.
  2. Install WordPress. Most web hosts have a one-click installation after you sign up, so it’s quick and easy.

You can see my full tutorial for this at How To Start A WordPress Blog On Bluehost. There are step-by-step directions if you want more detail and/or want to see screenshots of the exact things you should click on.

Plus, if you use my tutorial, you can get the lowest pricing as well as a free domain name.

3. Pick a blog name

Choosing a blog name is a big first step and it can seem hard to decide on.

Here are some tips for brainstorming a personal finance blog name:

  • Your blog name should tell readers what your blog is about right away.
  • Make it unique and easy to remember. A good blog name can help attract more readers. Try to avoid long names, as they might be hard to remember. Short and catchy names work best. Also, I recommend getting a “.com” over any of the others, like “.net”
  • Use tools like a domain name generator to get ideas. Check if the name is available as a domain. It’s important to have the same name for your blog and website address.
  • Don’t be afraid to get creative. Mix and match words until you find something that fits. Keep your blog’s purpose in mind and make sure the name reflects it.
  • Tell friends and family about your ideas for feedback. Sometimes, others can see things you might miss.

P.S. Don’t forget that your domain name (also known as your blog name) is free if you sign up for Bluehost for your blog! You can click here to get your domain name for free.

4. Design your blog layout

The layout of your blog is super important. It helps your readers find what they need and enjoy their visit.

You have three main options when it comes to designing your personal finance blog:

  1. Doing it yourself
  2. Paying a web designer for a custom design
  3. Getting a premade blog layout – this is what I recommend new bloggers do!

Doing it yourself is usually the cheapest, but it can be quite time-consuming. Paying for a custom web design is usually expensive.

I’m a big fan of simply getting a premade design. They are more affordable than a custom design and still look really good. One premade blog design site that I recommend is Restored 316 (my favorite!). If you need to build a website that is custom, professional, and budget-friendly, they have you covered! There is no need to code or stress over graphic design, either. These templates are easy to use. 

Please click here if you’d like to go the easy way and get an affordable premade blog design (this is what I recommend).

5. Create the main pages for your blog

To make your personal finance blog successful, start by setting up key pages.

These pages are important, as they help your readers navigate your site easily and find the information they need.

Your key pages usually include your:

  • Homepage – This is the first impression your blog readers get of your blog. A clear and organized homepage helps readers quickly understand what your blog is about and gets them to click around your blog further. This should be welcoming and easy to navigate – make it clear what your blog is about and include links to your main blog topics.
  • About page – This is where you can tell your story. Share who you are, why you started the blog, and what your readers can expect. When I find a new blog, I like heading to their About page to learn more about them and their story – so don’t skip this page!
  • Contact page – This page makes it easy for readers to reach you. You can add a contact form or your email address (I usually prefer just listing your email address). This allows readers, potential partners, and advertisers to get in touch with you.
  • Privacy Policy page – This is where you explain how you collect and use data on your site. This is important for building trust and complying with legal requirements. Now, don’t worry if you don’t know what to write, there are many templates online that you can use. For legal templates, you can search for these online or buy a premade privacy policy here.
  • Disclosure page – If you earn money through affiliate links or sponsored posts, let your readers know. This keeps your blog transparent and trustworthy.

There are other pages that you may want to add as well, it just depends on what you want and how detailed you want to get. The above is a great starting point.

Other pages that you can add down the line (you don’t want to overwhelm yourself too much, especially in the beginning) may include a Work With Me page (if you offer any freelance services), FAQ page (to answer common questions readers may have), Resources page (to showcase the products that you use), and a Press page (to show your readers where you have been mentioned in the press).

6. Start social media accounts for your blog

Creating social media accounts can help your blog grow because it can make it easier for more people to find your blog.

The social media accounts that you can start include:

  • Facebook
  • Pinterest
  • Instagram
  • Twitter
  • TikTok

Now, you definitely do not need to be active on all of these social media accounts, but I do usually like to claim my blog name on each so that no one else can take it.

Once you have your social media accounts set up, I also recommend that you add the links to your blog’s homepage so that your readers can easily find you on social media.

7. Create a content plan

Your content plan is what you’ll write about on your blog.

First, think about who your audience is. Do they want to save money, get out of debt, or invest wisely? Knowing this helps you create content that speaks to their needs.

Next, brainstorm topics that fit your blog. You can start with basic personal finance tips, budgeting hacks, or ways to save more money each month.

Once you have a list, set up an editorial calendar where you think about how often you’ll publish new posts. It could be once a week, twice a week, or even daily. Consistency is important and I highly recommend writing at least one blog post each week.

Plan ahead by writing down specific ideas for each post. This helps you stay organized and makes sure that you always have something to write about.

Now, your blog content plan doesn’t have to be crazy; it can literally just be a list of blog posts – it all depends on how organized you want to be. For example, you can just make a list of blog posts that you want to write such as:

  • 10 Simple Ways To Save Money Every Month
  • How To Create a Budget That Actually Works
  • Beginner’s Guide To Paying Off Debt Faster
  • How To Build an Emergency Fund on a Tight Budget
  • Smart Ways To Save for a Vacation Without Stress
  • Investing 101: How To Start With Just $100
  • 5 Budgeting Mistakes To Avoid if You Want To Save More
  • How To Meal Plan and Save Money on Groceries
  • Tips for Teaching Kids About Money
  • How To Stop Impulse Buying and Save More
  • Side Hustles That Can Help You Pay Off Debt
  • How To Improve Your Credit Score in 6 Months
  • Saving vs. Investing: What’s Best for Your Goals?
  • Frugal Living Tips That Don’t Feel Like Sacrifice
  • How To Use Cash Envelopes To Control Spending

These ideas could easily fill up your editorial calendar and help you stay organized and consistent with your posts!

8. Start writing blog posts

Once your blog is set up, it’s time to write your first blog post!

Below are some tips for writing your first personal finance blog post:

  • Write in a way that is easy to understand. Use short sentences and simple words. Remember, you want to help and not confuse your readers.
  • Add personal stories or experiences. This makes your blog more relatable and interesting. People love reading about real-life situations.
  • Break up your text with headings, bullet points, or images to make your posts easier to read. Don’t forget to proofread your work before you publish it.
  • Ask your readers questions at the end of your posts. This can encourage them to leave comments and interact with your blog.

9. Find ways to make money with your money blog

There are several ways you can earn money with your personal finance blog.

One way is through affiliate marketing. You can partner with companies that have affiliate programs like Amazon. When someone buys an item through your link, you earn a commission. I have a free ebook to learn more – Affiliate Marketing Tips For Bloggers.

Ad revenue (display ads) is another option. You can place ads on your blog using services like Google AdSense, Mediavine, or Raptive Ads. When visitors see or click these ads, you make money.

You might also explore sponsored posts; this is where you partner with a company and they pay you for a review, a mention, or a blog post that talks about their product.

Selling products/services that you create is a good strategy too to make money with a finance blog. You can sell printables, write ebooks, provide consulting services, or teach online courses.

As you can see, there are many ways to make money with a personal finance blog. For me, I like to do a little bit of everything so that I am diversified with my income streams from my blog.

10. Grow your personal finance blog

To get readers to your finance blog, you need to promote it.

Some ways to grow your personal finance blog include:

  • Start by sharing your blog posts on social media platforms like Facebook, Pinterest (I recommend that you create a new Pinterest pin for all of your blog posts), and Instagram.
  • Guest post on other finance blogs. This can introduce you to new readers who might be interested in your content. For example, you could guest post and write about how you paid off your debt.
  • Email marketing is another effective way. I highly recommend that you find ways to get readers to subscribe to your email newsletter so that you can send updates and share new blog posts regularly. If you are looking for a way to send newsletters or emails to your readers, I recommend Convertkit.
  • Engage with your readers by responding to their comments and emails. Building this relationship can encourage them to share your blog with others. I ALWAYS respond to comments, emails, and messages because I think it’s the nice thing to do when your readers are taking time out of their day to write something to you.
  • Use search engine optimization (SEO) techniques and keyword research. This helps your blog show up in search results when people look for topics you’ve written about.

Promoting your blog takes time and effort. It takes time to grow a new personal finance blog, so try not to be too sad in the beginning if it takes time – that is completely normal.

Frequently Asked Questions

If you’re thinking about starting a personal finance blog, you might have some common questions. Here’s what you need to know to get going.

How much money do personal finance bloggers make?

The amount of money that a personal finance blogger can make varies widely. I have made over $5,000,000 blogging over the years, and I know many others who make a full-time income from their personal finance blog as well. Successful bloggers can make thousands of dollars each month through ads, affiliate marketing, sponsored posts, and digital products.

Is it too late to start a personal finance blog?

No, it’s not too late to start a personal finance blog. There’s always room for fresh voices and new perspectives in personal finance.

Do I have to have a degree in finance to start a personal finance blog?

You don’t need a finance degree to start a personal finance blog. Many bloggers share personal experiences, research, and advice.

How can I make my personal finance blog stand out from others?

To make your personal finance blog stand out from others, I recommend that you focus on your unique experience with the topic that you are writing about. For example, you could share personal stories and actionable advice for what you did to pay off your student loans or to start investing.

Is a personal finance blog profitable?

Yes, a personal finance blog can be profitable. I have made over $5,000,000 from my personal finance blog over the years, all by working from home on the internet.

How To Start a Finance Blog – Summary

I hope you enjoyed my article on how to start a finance blog.

I’ve been running this finance blog that you’re reading for quite some time now, and it’s one of the best decisions that I’ve ever made.

Starting a personal finance blog changed my life, and it could do the same for you. Sharing my money-saving tips not only helped others but also led me to financial freedom and a career I love.

There are so many different finance niches that you could write about, whether it be budgeting tips for beginners or financial advice for those who want to retire early. Plus, you don’t need to be an expert to start a personal finance blog – many people want to hear about real people’s real experiences and insights, including their journey with personal finance (so that they can learn real tips!).

Whether you’re looking to earn a little extra or turn blogging into a full-time job, this guide will help you start a successful personal finance blog that makes a real impact.

Reminder: I have a free How To Start A Blog FREE Course you can click here to join. Over 80,000 people have already taken the course. In this free course, I show you how to create a blog from the technical side to earning your first income and attracting readers.

Do you want to learn how to start a personal finance blog?

Recommended reading:

Source: makingsenseofcents.com

Apache is functioning normally

Whether it’s to manage finances, accept payments or reach new customers, more small-business owners are optimizing their business operations with digital tools — leaving them increasingly vulnerable to digital security breaches and cyber attacks.

Exposure to cyber attacks topped the list of the biggest worries small-business owners face, even surpassing concerns about inflation and other economic issues, according to a 2023 report on cybersecurity released by Hiscox, a business insurance company.

The consequences of these breaches can extend beyond the initial threat, as well. Twenty-five percent of business owners surveyed by Hiscox indicated that cyber attacks had an overall negative impact on their business’s brand or reputation, and 20% said they had trouble attracting new customers as a result.

Here‘s what your business needs to know about the vast and evolving landscape of digital security.

Even the smallest businesses are at risk

While it may seem more lucrative for cyber criminals to go after big corporations and larger firms, the Hiscox report indicates that smaller businesses are increasingly under threat. Cyber attacks on firms with fewer than 10 employees have risen 13% since 2020.

“Hackers don’t care how small your business is or what you do,” Shawn Waldman, CEO and founder of Secure Cyber Defense, a cybersecurity consulting company said in an email. “They want your money and your data. Often, they have no idea who you are in the first place.”

Although cyber attacks can happen to any business, certain industries may be more likely to be targeted — particularly those that access or store a lot of sensitive client or customer data or information. Shavon J. Smith, a Washington, D.C.-based business attorney and founder of SJS Law Firm, works with small management and IT consulting firms that contract with big businesses and are therefore given access to their information, but are viewed as less secure because of their size.

According to Smith, medical offices may also be a target due to their small staff sizes and access to a lot of personally identifiable client information.

It’s easier to prevent a digital security breach than fix one

Businesses should prioritize proactive measures they can take to prevent an event from happening in the first place. It’s uncommon to find your attacker or recover stolen money or data once it’s gone, according to Smith. Once a cyber attacker has what they want, they are “lost in the wind.”

Studies indicate, however, that 95% of breaches in digital security can be traced to human error, which means they are preventable through internal and employee policies. This starts with policies that promote ongoing system maintenance and security. Smith recommends an initial review to pinpoint your overall vulnerabilities.

“The first thing you want to do is just kind of assess, ‘Where are our open ports? Where are our opportunities for things to go wrong, for people to hack into our system, for employees to lose data?’” she says.

If your employees have company-issued devices, for example, then your employee policy should lay out parameters on how they are to handle those devices, Smith says. That might mean forbidding employees to vacation with their laptops or prohibiting them from taking their computers home entirely.

An employee policy should also dictate who has access to confidential company or client information, which Smith says can help to decrease the chances of a security breach.

Cheap solutions can cost you down the road

Building digital security into your business budget can be expensive, and there’s certainly no one-size-fits-all solution, but failing to invest in proper systems can also be costly. In 2023, the median cost of a cyber attack for businesses with 10 to 49 employees was $9,500, according to the Hiscox report.

A common mistake both Waldman and Smith see small businesses make is relying on free or disreputable antivirus software and failing to update that software regularly. On top of that, Waldman warns against transitioning to cloud email providers without enabling security controls or multi-factor authentication. Email was the single weakest point of entry for cyber attackers, ahead of cloud or corporate servers, according to the Hiscox report.

A response plan can determine how quickly you recover

Any actions you take in the event of an actual cyber attack or digital security breach are typically about trying to cover your losses. According to Smith, your business’s response plan should cover some key steps:

  1. Contact a cyber security specialist or legal counsel. Better yet, consult with specialists or lawyers when you first create your plan, so you already have a point of contact if an event occurs. 

  2. Notify your insurance company of a possible claim. When you purchase cybersecurity insurance, it’s important for your broker to understand your business and what it does, according to Smith. That can help them understand the scope of a breach and what it means for your clients or customers. 

  3. Contact law enforcement. Although it’s unlikely they’ll be able to do much right away, law enforcement may have investigations open, and any information of new attacks could be helpful to them. 

  4. Reach out to clients. In many cases, you may be contractually obligated to notify the businesses your company works with of a data breach, Smith says. 

  5. Alert your customer base. If you are a consumer-facing business, you should plan to alert your customers as soon as you have the full scope of the breach, and be prepared to offer compensation or free credit monitoring.

Source: nerdwallet.com

Apache is functioning normally

Salt Lake City is a unique place to call home. Surrounded by stunning mountain ranges, the area actually experiences four distinct seasons. Its mix of outdoor activities, a thriving economy, and a relatively affordable cost of living makes it an attractive option for many.

All that said, there are a few drawbacks to keep in mind when considering moving to Salt Lake City. Let’s explore the pros and cons of living in Salt Lake City a bit further so you have all the information you need to find the perfect place.

Salt Lake City at a glance

Walk Score: 59 | Bike Score: 74 | Transit Score: 44
Median Sale Price: $535,000 | Average Rent for 1-Bedroom Apartment: $1,520
Salt Lake City neighborhoods | Houses for rent in Salt Lake City | Apartments for rent in Salt Lake City | Homes for sale in Salt Lake City

1. Pro: Access to the great outdoors 

Salt Lake City is a haven for outdoorsy folks. Conveniently located near the Wasatch Mountains, locals enjoy skiing, hiking, and mountain biking just minutes from home. The city is also close to five national parks, offering plenty of opportunities for camping and exploration. Needless to say, there are more than a few beautiful places in Salt Lake City.

2. Con: Air quality issues 

While the natural scenery is breathtaking, Salt Lake City struggles with poor air quality, particularly during the winter. The city’s geography causes an inversion effect, trapping pollutants and leading to significant smog.

3. Pro: Thriving job market 

Salt Lake City’s economy is growing rapidly, with low unemployment and tons of opportunities in tech, healthcare, and finance. Companies like Adobe and Goldman Sachs have sizable regional offices here, creating a range of employment options.

4. Con: Limited nightlife 

With one of the largest LDS communities in the world, Salt Lake City’s nightlife is quieter compared to other cities of its size. While there are bars and restaurants, local laws surrounding alcohol can dampen the experience for some, and options tend to close earlier. That said, there is still a lot to do in Salt Lake City before and after the sun goes down.

5. Pro: Affordable housing 

Housing costs for those in Salt Lake City are more affordable compared to people living in San Francisco or Denver. Though prices have risen in recent years, it’s still possible to find reasonable rental rates and home prices, especially in suburban areas.

6. Con: Rapid population growth 

Salt Lake City is experiencing rapid population growth, which has increased traffic congestion and put a strain on infrastructure. This growth has also contributed to higher housing prices over time, making it harder for some to find affordable options.

7. Pro: Family-friendly 

With its well-maintained parks, excellent schools, and community-focused neighborhoods, Salt Lake City is an ideal place for families. The city offers plenty of family-friendly events and attractions, including the Hogle Zoo and the Natural History Museum.

8. Con: High altitude 

The city’s elevation of over 4,200 feet can be an adjustment for newcomers. The high altitude can lead to symptoms like headaches and shortness of breath until your body acclimates. That said, if you’re an athlete, the altitude is a major plus for those who take their training seriously.

9. Pro: Public transportation 

Salt Lake City’s public transportation system is efficient, with a light rail system (TRAX) connecting the city and suburbs. It makes commuting easier for those without cars and offers a viable alternative for getting around town.

10. Con: Dry climate 

The desert climate in Salt Lake City is extremely dry, which can be uncomfortable for some people. You may need to invest in a humidifier during the winter months and stay diligent about staying hydrated year-round.

11. Pro: Active community 

Salt Lake City’s residents are generally active and health-conscious. From biking and running trails to yoga studios, the city provides plenty of ways to stay fit and healthy. Local farmers’ markets and health food stores further support this lifestyle.

A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.

Source: rent.com

Apache is functioning normally

If you’re considering living in McAllen, there are a lot of factors to consider. Located in the Rio Grande Valley, McAllen is full of charm and natural beauty. That said, like any city, it has its own set of cons to go along with the pros.

Below, I’ll walk you through 13 specific pros and cons of moving to McAllen. Give this short guide a quick read before you decide if living in Texas and calling McAllen home is right for you.

McAllen at a glance

Walk Score: 41 | Bike Score: 46
Median Sale Price: $245,000 | Average Rent for 1-Bedroom Apartment: $844
Houses for rent in McAllen | Apartments for rent in McAllen | Homes for sale in McAllen

1. Pro: Affordable cost of living

Living in McAllen comes with a lower cost of living compared to larger Texas cities. Housing is especially affordable, with home prices and rents well below the national median sale price. Groceries, utilities, and healthcare costs are also lower, making day-to-day expenses manageable.

2. Con: Hot, humid climate

The weather in McAllen can be challenging, especially if you’re not used to extreme heat. Summers regularly reach over 100°F and stay there. The high humidity can make it feel even hotter. Winters are mild, but the intense summer heat lasts for months, placing McAllen among the hottest cities in the U.S.

3. Pro: Access to quality healthcare

McAllen has a strong healthcare system with several respected hospitals and medical centers in the area. The city is known for offering a wide range of medical services, which is a major benefit for retirees and families looking for quality healthcare options nearby.

4. Con: Limited public transportation

McAllen’s public transportation system is not as developed as in larger cities. The Metro McAllen bus service is available, but its limited routes can make getting around without a car difficult. Most residents rely on personal vehicles for daily transportation.

5. Pro: Proximity to nature and wildlife

McAllen’s location near natural reserves like the Santa Ana National Wildlife Refuge is a major plus. Residents enjoy legendary bird-watching, hiking, and outdoor activities just a short drive from the city. 

6. Con: Minimal entertainment options

While McAllen has some entertainment, it lacks major attractions like theme parks or large concert venues. For those who enjoy big-city entertainment, you’ll need to visit friends living in San Antonio or Houston for more options.

7. Pro: Family-friendly atmosphere

McAllen is known for being a family-friendly city, with solid schools and plenty of parks. Families appreciate the low cost of living and friendly community. The city also hosts family-oriented events and activities throughout the year.

8. Con: Traffic congestion during rush hour

Despite being a smaller city, McAllen experiences traffic congestion during peak hours. The city’s growth has led to more cars on the road, particularly along the major highways. Rush-hour commutes can be frustrating, especially during the hot summer months.

9. Pro: Convenient border location

McAllen is just a short drive from the U.S.-Mexico border, making it easy to visit Mexico for a weekend trip. This proximity offers unique experiences and easy access to affordable shopping and dining options across the border.

10. Con: Lackluster education system

While McAllen has some strong schools, the overall education system has room for improvement. Test scores in the area are often below the national average, which may be a concern for parents considering moving to the city with school-age children. The city is home to South Texas College but this alone can’t land it a spot among the top Texas college towns.

11. Pro: Cultural diversity and local events

McAllen is known for its diverse population, with a mix of influences from Mexico and the local community. The city hosts a handful of local festivals, including the annual Fiesta De Palmas and McAllen Holiday Parade, which bring people together for food, music, and fun.

12. Con: High property taxes

Property taxes in McAllen can be higher than expected. Although home prices are affordable by Texas standards, the property tax rates in the area can offset some of the savings. Homeowners should be prepared for this additional cost when budgeting.

13. Pro: Growing economy and infrastructure

McAllen’s economy has been steadily growing, and the city continues to invest in improving infrastructure. New businesses and residential developments are popping up, which boosts the local economy and provides more opportunities for locals to live and work in McAllen.

A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.

Source: rent.com