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It all started with a status update by Danny Brown about people who announce their weekly or monthly income on their blogs. It got me thinking about the many people who boast about their Adsense, Kontera, and other online earnings.

Let’s think about making money online as a business. When businesses run a report of their income, they also have to look at the flip side – their expenses. Most bloggers who do a “monthly income report” fail to share how much they have spent to make their earnings. Sure there are free ways to make money online, but I doubt that everyone making money online are going that route.

Why Sharing Income Without Expenses = False Advertising

Imagine you’re someone who is thinking about making money online, and you come across blog after blog saying that they make X amount of dollars each month. Makes it seem super easy, right? Those people might be lured into starting up blogs with the expectation that they will start earning money right away, and then get easily discouraged to find that they are spending more than they are making.

Your Expense Report

So what expenses should you consider to see if you are actually making a net profit online, barely breaking even, or possibly spending more than you are earning? Most blogs looking to make money online incur some of the following costs.

• Domain registration & web hosting

• Mailing list services – sure, there are free options, such as Mail Chimp for up to 1,000 subscribers, but if you go with other services such as Aweber, then you’re looking at a minimum of $19 a month.

• PO Box – if you have a mailing list, chances are you are going to have a PO Box, unless you have a business address or don’t mind sharing your home address with virtual strangers.

• Education – have you bought an eBook or signed up for a course to help you become a better blogger or to learn to make money online? This counts in your expenses.

• Products to review – unless you’re one of the naughty affiliates that recommends products they haven’t tried, chances are you have or will need to purchase some products to review for affiliate marketing income.

• Selling your own products – if you want to sell your own products through affiliates, then you will have to pay services like EJunkie or ClickBank monthly fees for maintaining your products and commissions.

• Plugins – while there are a lot of great free plugins and extensions, advanced functionality to help you grow your mailing list or manage your affiliate links with ease will come at a premium.

• Website themes and templates – again, you can also get these for free, but the functionality and design of premium or custom made themes and templates are much better.

• Networking – finally, if you want to grow your reputation online, it helps to make some connections offline at conferences, seminars, and other major events your audience and customer base attend. Conferences especially can become expensive, especially if you have to travel.

The above is only the beginning of the expenses that come with running one or more blogs or websites.

Layout All of Your Income

Ok, the expense report can be kind of scary, so now I want you to think about all of your income. Not just Adsense or affiliate marketing products, but also the odds and ends things you do. For example, do you get paid to write blog posts, charge for services, or enter blogging contests? Those count as income as well from your website, as you probably would not have had those opportunities without having an established online reputation.

Is Your Making Money Online Strategy Profitable?

Now, I’d like to challenge you to take your expenses in consideration, and put them against your income. Break the expenses up monthly to match with your monthly income, or take your average monthly income and multiply it out to what you should have made by the end of the year and compare in a spreadsheet. If you don’t have Microsoft Excel, try Open Office or even Google Docs.

Sorry for anyone disappointed about my not sharing numbers. I can tell you that I definitely go above breaking even, but I would rather not go into specifics.

What’s Next?

At this point, you’re either excited or deflated – hopefully the former and not the latter.

Something to consider is that most people, myself included, will spend more in the first few years than they make. Your first stretch online will essentially be building a positive online reputation and community more so than making money. But once you have laid that foundation, you will be on the right path to having a trusting fan base that will be receptive to the monetizing opportunities that you begin exploring, whether it is recommending affiliate products or creating one of your own.

Projecting Future Earnings

One thing you can do, especially if you have multiple money making ideas or projects, is to project what each could earn in the future. I am terrible at this kind of thing, but fortunately I have a business-savvy husband who sat me down for a few hours and discussed the possible outcomes of several of my ideas.

The above are just random numbers I threw in to illustrate a point, but if you plot out your current projects and ideas, you can create an easy reference to see how much work it will take plus the associated costs of a project in relationship to how much you can earn from that specific monetization strategy.

Your Thoughts on Making Money Online

Are you on the path to making money online? What monetization strategies are you implementing, how do you keep your expenses vs. income ratio in check, and do you look plan for the future?

About Kristi Hines

Kristi is a content marketing specialist, social media enthusiast, and blogger at Kikolani which offers blog marketing tips and strategies. Follow her on Twitter @kikolani.

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