Posts Tagged ‘Finance’

Read this book if you’re:

• lacking credit.
• struggling with your student debt.
• confused about 401(k)s.
• thinking about buying a car or condo but have no idea if that’s even plausible.
• wondering just how in the heck you’re going to find the extra cash to start a savings account.
• getting married and don’t know what to do about finances.
  

For some reason or another people just love to make fun of Suze Orman—I’ll admit, myself included. She’s one of those motivational speakers we all like to roll our eyes at. Like, “if that lady tells me balance my checkbook one more time, I’m gonna scream.” So how did I come to read and ENJOY an entire book of hers?

Last year while perusing the incredibly small selection of business books at Women and Children First up in Andersonville, I came across a book with a title I couldn’t resist. Young (”Hey, I’m young-ish!”), Fabulous (”I’d like to think I’m pretty fabulous”), and Broke (”Yep, most definitely”). Her short, choppy ‘do and those pearly whites stared back at me, and I knew I was fated to fork over my last $16.

Divided into 10 sections about 10 very important aspects of your young, fabulous, and broke life, each chapter provides insight, answers questions, and sums it all up in plain language–nothing fancy, just a conversational tone with facts, facts, and more facts. It’s a great point of reference as well. It isn’t one of those books that you read from cover to cover; instead, choose which sections “speak” to you.

1. Know the Score.
Orman stresses that this is the most important aspect of your financial life–your FICO score. Whether you’re searching for a new apartment or trying to secure a loan for your new car, this score will make or break your interest rates. In this section, she reviews identity theft, how to keep your FICO score strong, and why to avoid bankruptcy at all costs.

2. Career Moves.
And I quote, “You are way too young fabulous to sign up for a life of drudgery.” It’s something a little bit difficult to wrap your brain around, but money should not dictate your life. In other words, don’t stay with a job just because it (almost) pays the bills. We’re young enough (and most of us are mortgage-free and child-free) to be able to switch careers without much consequence. In this section Orman also gives us some pointers on how to make ourselves indispensible, how to get a raise, and why going to back to school should only happen if you’re wanting a career change–not as an excuse to get out of a situation that doesn’t work for you.

3. Give Yourself Credit.
You might think that Orman’s advice to a broke person would be, “Avoid credit cards like the plague!” But it’s not. In fact, she admits that credit is important most especially if you are broke. One piece of advice that really surprised me was that you should use your credit cards as a lifeline when you don’t yet make enough money to live on. As long as you pay the minimum every month and don’t have a huge interest rate, in the end everything will be okay (Suze says!). Do avoid cash advances, though, which are a total rip-off.

4. Making the Grade on Student Debt.
Suze reiterates all of the stuff you should’ve paid attention to and retained from your loan counseling each year throughout college. But seriously, who really retained that stuff? No one. The good news is that student loan corporations are way more forgiving than credit card companies, so if you find yourself unemployed you can always get your loans deferred for up to three years.

5. Save Up.
Turns out you don’t need to make more to save more. Orman swears that you can find extra cash if you really look hard for it. For example, waiting a couple of weeks longer to get your hair cut will reduce the number of haircuts by two every year. That’s at least $100 if you’re a female in Chicago. But wait, there’s more. Don’t start a savings account until you invest in your 401(k)–that is, IF your company matches (that is, for every dollar you invest, your company invests a dollar or a percentage of that dollar).

6. Retirement Rules.
This section deals with the two main retirement funds Suze recommends for us: Roth IRAs and 401(k)s. Now here’s a statistic that blew my mind, and a supreme example of why saving for retirement starting NOW is imperative: If you invest $300 every month and earn an 8 percent average annual return from the ages of 25 to 40 (stay with me here), you’ll have invested $54,000, and the account will be worth DOUBLE THAT. Suppose you never invest another penny. By the time you’re 70, you will have $1.05 million. Now suppose you don’t start saving till 40, and you invest $300 till you’re 70. You’ll only have $450,089 to your name. What a difference starting early makes.

7. Investing Made Easy.
If you’re going to listen to anyone about investing, listen to a stockbroker. And Orman was one for years. Remember: Stocks are only for long-term investments where you don’t need the money for at least five years. If you’re wanting to save an emergency cash fund, do not invest in stocks. Start a savings account instead. A safe bet, if you’re interested in investing and you’re all but broke, is to invest in mutual funds–not stocks.

8. Big-Ticket Purchase: Car.
Buy your car. No leasing! If you lease, you’re just going to be making payment upon payment upon payment. When you do buy, buy something you can afford–like, not a Mercedes. Cars are the worst investment you’ll ever make, according to Suze. They depreciate the moment you drive them off the lot, as you’ve probably heard. Another word of advice: Keep your car for as long as possible. When you finally own your car, you’ll have more cash handy for other investments.

9. Big-Ticket Purchase: Home.
This is the section I paid attention to the most, since I barely have a clue what the word “mortgage” even means. Suze explains mortgages, property taxes, down payments, seller’s and buyer’s markets, home inspections, and home insurance. This section is a crash course in Home-Buying 101.

10. Love & Money.
What to do when you get married? Orman suggests merging accounts and paying for all living expenses from this account, but making sure to keep your own checking account with your own credit card. Other things to consider once you’re married and/or have a family are life insurance, a living revocable trust that includes a durable power of attorney, and a will.

After you’ve implemented some of Orman’s suggestions, I hope you’ll find yourself young, fabulous, and on your way to unbroke.

P.S. Turns out Suze’s alright. I stand corrected.

When you’re unemployed and desperately searching for work—and your student loans are already in repayment—it makes you wonder exactly why you’re paying those bills. While some may follow the lead of a woman who sued to get her tuition back, there are other avenues to securing income and making ends meet.

The Job Search

 Searching for a job is a humbling experience. Never have I felt so rejected in my life; however, you must keep plugging along. During my own post-grad-school job search, I applied for over 300 jobs nationwide before I found one… literally. Was this job the “job of my dreams?” No. Not even close. However, it did allow me an opening to work hard, learn a lot, and seek out promotions. As young professionals, we have worked hard getting through school, but we also must remember that we must “pay our dues” to land that dream job—especially in this economy. This struggle oftentimes ranges from finding a job to the first few years at a new company. Just remember that you’re not alone. 

Making Connections

Remember the Career Center at your university? You can always utilize this service as an alum. Additionally, there are always broad alumnae networks that can assist you through your university.

Other than that, network like crazy! Call up those old professors who loved you, asking for letters of recommendation, references, and leads on any potential jobs. Call up an contacts who live in cities where you may wish to work. Network at social and professional events: Let it be known that you’re not only amazing (obviously), but you’re also looking for a job. If all else fails, hit up your well-connected relatives. Have no shame in order to survive.

Making Ends Meet

While it’s tempting to ignore those bills and your problems, you’ve got to “man up” (for lack of a better term) and handle it. First thing’s first—call your student loan companies! Tell them you are unemployed, and after some annoying paperwork, you’ll get an extension on repayment.

Step number two is budgeting. If you’re used to living a certain lifestyle, it can be very, very difficult to change this lifestyle. For some it may be ending those shopping sprees or going out to dinner. For me, it was going from drinking Fat Tire to PBR… cringe…. And when you actually sit down to budget, you realize what you can and cannot afford. Even going to Walgreen’s and buying a few items here and there may be a luxury you can no longer afford. And while budgeting will most likely affect your social life, it doesn’t have to end it. There are many free things to do in the city!

Allison MacMunn moved to Chicago in 2008 after completing an MA in Women’s and Gender Studies from Rutgers University. Currently, Allison serves as the Executive Coordinator at Chicago Foundation for Women. An active member of YPC, Allison serves as the PR Manager on the Marketing Committee.

There is a lot of doom and gloom out there. With all the grim headlines, it’s pretty easy to feel down and out about your job search. If you were laid off, downsized, or euphemized, then it’s hard to stay positive and vigilant about taking a bright, successful next step.

The good news is that there are some recession-proof industries such as education, healthcare, energy, international business, and the environmental sector that are still hiring. There are also a few great tips for any job seeker in any industry to help with a difficult job search:

1. Network, network, network.

You’ve heard it before – networking is the key to getting a job. Recruiting directors want a safe, easy hire. If they met you at a networking event or if your name was passed along to them by a friend or colleague, then you likely will stand out from the sea of candidates and resumes.

For some reason, many people dread this horrible word, “Networking”. Really, networking is just having conversations with your friends, family, colleagues, and peers.  Talk to everyone you know – your friends, your parent’s friends, your friends’ parents, your old college professors, your alumni association, etc.  Reach out, and let them know what you’re seeking. You may be surprised with all of the connections your Uncle Phil has.

2. Join a professional organization.

Even though you are out of a job, you want to stay in the game. By joining a professional organization, you can stay up-to-date with industry news and developments. Of course, you also will meet leaders in your field. You can learn from them and make professional connections at numerous companies.

3. Volunteer your time.

Now that you have a little extra time on your hands, it’s the perfect opportunity to volunteer in your community. Serve on a board, organize a recycling program for your condo, or design marketing pieces for a charity. Helping others gets you off of the couch and thinking positively. You may even expand your skill set and meet someone who can help you get a job.

4. Think differently.

If you’ve been out of work for awhile, it may be time to broaden your view on what your next step could be. Instead of one of the top, five advertising agencies, would you like to work at a regional agency or in the advertising department in-house? Maybe you can relocate or make a career change. You may even take a 10% pay cut, but you can bargain for an extra week of vacation. Think creatively on how you can make a successful next step.

5. Be Persistent.

It’s not going to be easy. Unfortunately, the game has changed a little bit, and companies can afford to be more selective. You’re going to have to network a lot, apply for numerous positions, and receive a few rejections. Hang in there. Follow up with recruiting directors if they don’t get back to you. If you didn’t meet anyone at the last networking event, go to another one. Who knows when you will be in the right place talking to the right person at the right time.

Good Monday morning. Thanks to much weekend conversation with non-financial world types it became abundantly clear to me that the causes of our little financial meltdown are about as clear as mud to many people. I had intended to put together a brief post highlighting some of the main points, but thanks to equal parts laziness and ingenuity I have found someone who can do it far better than I. 

Enjoy, my tribute to Hanlon, with thanks and credit to Jonathen Jarvis (crisisofcredit.com). Never assume malice when stupidity will suffice:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.