July 15th, 2008, 12 Comments »
At some point in my adult life, I learned this rule of thumb:
The monthly cost of housing (that is, rent or mortgage) should comprise less than 30% of your income.
It’s a kind of personal finance benchmark: if you’re spending too much on housing, you’re probably not living an economically-sustainable lifestyle. For example, I recently read that, on average, Montrealers “spent 18.6 per cent of its income on housing and shelter costs in 2006″. On an unrelated note, the median cost of housing in the Montreal area seems shockingly low at $683 a month.
However, I’ve never been clear as to whether they meant 30% of your gross or your net income. I decided to finally figure it out, and write up the answer.
First off, various sources indicate that the correct metric is 30% of your ‘household’ (or sometimes ‘family’) income. So what’s ‘household income’? According to Wikipedia:
Household income is a measure of current private income commonly used by the United States government and private institutions. To measure the income of a household, the pre-tax money receipts of all residents over the age of 15 over a single year are combined. Most of these receipts are in the form of wages and salaries (before withholding and other taxes), but many other forms of income, such as unemployment insurance, disability, child support, etc., are included as well.
So the key phrase there is ‘pre-tax money’. Apparently, then, the rule of thumb applies to your gross income. Does that jibe with what you thought?
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February 8th, 2008, 6 Comments »
Disclaimer: Regular readers know that I have some issues with financial institutions. The Royal Bank is no exception.
James pointed me at the Royal Bank’s newest social media nugget: RBC p2p. Here’s the blurb:
RBC p2p is a Royal Bank of Canada site for students and by students. This is where you’ll learn about budgeting for books and maybe a reading week vacation. This is where you can ask how to save money when your next paycheque will be 3 digits (it can be done). This is where you can read about people diving for change in the couch, without shame.
Before discussing where they went wrong, I do want to first applaud the sentiment. They appear to be seriously trying this conversational marketing stuff, and getting student bloggers to write first-hand about personal finance is a smart approach.
It’s just that the implementation, by Delvenia Interactive, needs some help:
- Though they recently picked six student bloggers–actual humans–most of the site’s photos are of ethnically diverse, attractive young models. The bloggers themselves are less representative–five dudes and a dudette, sans visible minorities.
- The site design is a bit too Degrassi Junior High for my liking.
- Where is the integration with other social media channels? Why aren’t there videos on YouTube and embedded in the site? How about photos from Flickr? Or updates from Twitter? They have a sizable Facebook general RBC student group (are a bunch of images broken for you too on that group, or is it just my dodgy connection?), but nothing specific to RBCp2p. Plus, there are no links to Facebook or badges on the site. They’re blogging like all those services don’t exist–like it’s 2003 (the name doesn’t help in that respect). Lots of companies have already made this mistake–why repeat it?
- It’s about students blogging, but the blog isn’t on the front page. Maybe that’ll change once they officially launch on March 1.
- The design is a bit b0rked on Firefox on my Mac. Good thing no students are using that browser-OS combination, eh?
- No RSS on the front page, and the blog RSS feed is excerpts only. Boo.
- Does anybody else find this a little creepy: “The bloggers are now in blogging boot camp, being trained by the RBC p2p host, Michel Savoie.” That reads to me like “The bloggers are now being indoctrinated by Royal Bank staff to ensure they remain on message at all times.”
Surmountable Problems
Fortunately, none of those issues are insurmountable. You could correct them without too much pain or effort.
Unfortunately, it sounds like their blogger search campaign was wanting. From a recent article which discusses various Royal Bank marketing efforts:
RBCp2p.com, also developed with Delvinia, went live in time for the back-to-school season, with former college student Michel Savoie as host. The bank is offering a laptop, digital cameras and part-time wages for six postsecondary student bloggers who will represent their peers on RBCp2p.com, with winners announced in January. Users uploaded videos to the site until the end of October, while Savoie hit the road to capture on-the-spot video submissions at various campuses. By mid-November, the site was hosting pages and pages of user-generated videos by students pitching themselves for the job, while RBC encouraged visitors to rate submissions - many of which racked up hundreds of views.
‘Hundreds of views’? Any marketer knows about the usual numerical amplification that goes on with this sort of thing. I’m guessing by ‘hundreds’ that they mean, at most, 200. And that’s being generous. Either they made a mistake in disclosing those numbers, or in running a campaign which displayed the meagre number of views the videos were receiving.
Seriously. This is the Royal Bank. They had a record year for earnings in 2007 (a mere $5.5 billion). They surely have enough money or marketing savvy to, you know, push those views into the ‘thousands’?
I hope I’m wrong, and that after they launch, they demonstrate more savvy than I’m seeing. And I hope they’re successful with their target demographic. University students (or, you know, recent graduates) out there, what do you think?
UPDATE: Todd points out two other peculiarities. The Royal Bank has a trademark symbol beside ‘p2p’ (though they don’t list it on their trademarks page). Todd also remarks (I can’t find this, specifically, but I suspect I’m just missing it): “one terms of service for the blogs and another for the RSS”.
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