According to Salary.com, 84% of employers say they expect job applicants to negotiate their salaries. But similar research, this time from CareerBuilder, found that only half of applicants actually do. This is a clear mistake. A new job is a new chance to make more money. I tell you how to negotiate your salary on Bankrate.com.
Don’t let back-to-school shopping blow your budget this year by using some of my tips from this morning’s segment. Tweet me your thoughts and suggestions @JeanChatzky.
FORTUNE — Like many of you, I’ve been reading the doomsday headlines about frequent-flier mile programs. “The Sad Decay of Frequent Flyer Programs,” Wired intoned. “Now May Be A Good Time To Bail Out of Frequent-Flier Mile Programs,” grimaced the New York Times.
Sorry, but I’m not ready to do that yet. I know that compared to many of you, I am not all that frequent a flier, but particularly in the spring and the fall when my speaking business heats up, I’m on the road almost weekly. I can point you to the best salad at O’Hare (the Taqueria with smoky shrimp at Tortas Frontera) and explain why you shouldn’t bother with the cramped food court at Jet Blue’s (JBLU) Terminal 5 at JFK (Balthazar scones down the hall). And I’ve gotten used to the fact my husband and I can take a nice vacation about every 18 months courtesy of our miles, which for years we’ve embellished by putting just about every purchase on Citibank’s American Advantage card.
Over the past few years, however, redemption has gotten harder. Flying to the places we want to fly (Italy and Hawaii, most recently), when we want to fly there (summer and Christmas break, respectively), and sitting where we want to sit (up front, it’s a long flight) has meant forking over double the miles it used to take. Most recently, even having the miles to spend, it was excruciating to get seats.
For more, and to see who helped me with the article (and my future travel), head here.
For those of you who recently attended my Mom Corps webinar — or for anyone looking to save a little extra money on groceries — I share with you my Weekly Meal Plan worksheet. As always, making a plan, and sticking to it, will help you save. Enjoy!
As parents we know there is no greater gift (and expense) than having a child. Don’t get me wrong, parenthood is worth every penny, but as we age, does it become easier financially or more difficult? I ask, because a recent Bloomberg article on how older parents are rewriting their financial plans after having children caught my eye. For example, when 37-year-old Barrow Barre (who by the way is fairly young by the standards you’ll read about in the next paragraph) quit her job to tend to her newborn twins, she asked her husband to increase his retirement contributions. Barre’s husband joked that retirement was irrelevant – he’ll be working until he’s dead. He has a point. If you’re having children in your late thirties, early forties, does retirement get pushed to the backburner? What about life insurance, estate planning, and oh yeah, saving for college?
You can attribute this to modern medicine, actively going against the grain, and probably a number of other factors, but the birth rate for women between ages 40-44 has risen 2% annually since 2000, according to the Centers for Disease Control and Prevention. If you’re among them, there are a few guidelines to follow.
“First, you need your safety net in place,” said Stuart Ritter, a senior financial planner at T. Rowe Price. “All the things that you as a parent want to make available for the rest of your family wouldn’t be able to happen if something happened to you – so you have to get life insurance.”
Chances are you probably need more than you think, but it probably costs a lot less than you feared, Ritter added. Ahem, how much are you spending on cable? This is where prioritization comes in.
Ritter is quick to suggest term insurance over more permanent options like whole life and universal, but as for how much you’ll need – that requires you to do the math…and thankfully calculators do exist. Unlike younger parents (i.e. twenties, earlier thirties), whose families would be missing out on more years of income (if the breadwinner were to die), older parents have fewer years to account for. The logic: Retirement savings should come into play for income replacement. That is, if you’ve been saving adequately for retirement.
Your second priority: retirement savings. And, yes, it trumps college. On an airplane, you’re instructed to put your oxygen mask on first, then your child’s – the same goes for retirement versus college savings. If you don’t have enough to save yourself during retirement, your kids will likely have to bail you out just as they are saving for college for their own children. Yes, it goes against every natural instinct we have as parents to tend to our children first, but as Ritter puts it: “Sacrificing your retirement may feel right in the short term, but it will have a high probability of causing problems in the long term.”
Once you’ve filled your retirement buckets, moving onto college savings makes sense. In this arena, 529 plans are the ultimate allies for both younger and older parents according to Mark Kantrowitz, senior vice president at Edvisors Network and author of “Filing the FAFSA.”
On the topic of FAFSA, don’t fail to fill out the form. CNNMoney recently reported on Kantrowitz’s analysis of government data that shows millions of students missing out on financial aid for college education. To see more from Kantrowitz, head over to the article.
Hi Jean. We bought our home in 1982 for $67,000 and refinanced in 2001 for $85,000. This company sold our mortgage without our knowledge in 2013 for $72,000 @ 8.5% interest. Unfortunately things happened that were beyond our control. For the past ten years I took care of my parents. They both passed away last year. Our whole life we’ve taken one step forward, three backwards. It seems when we get caught up something else happens that takes us back. Our credit is poor. We have never asked anyone for help; that’s why we are in this mess. We don’t know where to turn. Can you please point us in the right direction. Thank you.
Hi Toni. I have to admit, I can’t tell from your letter exactly where you are right now – but I can sense that it’s somewhere very difficult. And having lost one of my parents, I cannot imagine losing both – let alone in the same year. I’m so sorry for all you’re going through. In situations like these, fixing everything quickly is just not an option. The world of money just doesn’t yield results that dramatic that fast (if it did, I’d have a television show like The Biggest Loser). Rather, it’s the smaller, habitual changes that add up to something meaningful over time. Focus on controlling the things that you can control. The top three things I’d do? 1. Look at your spending and see where you can cut back. 2. Take that money and pay down high interest rate debt if you have it, or save it if you don’t. And 3. Pay your bills on time. Even if you’re just playing a little more than the minimum (a number you should try to nudge up) paying on time will help move your credit in the right direction.
Do you have appointments for individual consultations for financial planning? I live at the Jersey Shore and will travel anywhere to get the financial help I need. I am 59, a teacher and divorced with a low credit score and significant debt from a high mortgage and poor choice of loans. Facing major decisions, and I need help!!
I don’t, Sue. But you’re an excellent candidate for Money School. Specifically, you should take The Debt Diet, which is designed to help you do two of the very things you mentioned you’re struggling with: pay off debt, and increase your credit score. By the end of the class, you’ll also be prepared to start building an emergency fund, which can help keep you from falling into debt again the next time money gets tight.
A new schedule of classes can be found here — this semester’s live schedule starts on February 11. I teach these live classes via webinar, and they come with a live Q&A period at the end, as well as a week of chat-based Office Hours, so you can ask me all of your questions and come back for more info if you realize something from the lessons wasn’t clear. It looks like this:
This year, I’m also offering recorded versions of the same classes — including The Debt Diet — through an online education platform called Udemy. This is a great solution if our live course schedule doesn’t mesh with your own schedule.
And as debt is usually tied to other areas of your financial life that aren’t working, you may want to take some of the others (particularlyBudgeting Bootcamp, A Crash Course in Saving More and Spending Less, and Yes, You Can Retire) as well.
I hope that is helpful — and I hope to see you in class! If you decide to attend, I look forward to hearing what you think.
Considering groceries are one of the largest discretionary expenses for the average consumer, and that the couponing craze is still going strong, it comes as no surprise that new grocery and coupon apps regularly launch. In fact, you can choose from over 1,200 varieties in the Apple store right now.
As a single twenty-something with an always-changing schedule, I’m horrible at grocery shopping. With no plan to adhere to, and little motivation to cook for one, I either waste money on groceries that spoil, or spend too much of it on dining out. While I’m keeping myself full each week, I can’t say the same for my wallet. That’s why I decided to take a look at one of the newer grocery savings apps – Favado by Savings.com.
Favado aggregates all of the ongoing sales in your nearby grocery and drug stores. You can either plug in your zip code or manually search for a store, and if it’s in the app’s database, you’ll be presented with a list of the store’s current sales. In addition to the search component, you can create shopping lists derived from what’s on sale, “heart” products as your favorites and even be notified when those flagged favorites are on sale in the future.
I downloaded the free app to my iPhone (it’s also available for Android) and searched for the nearby Favado-friendly stores. My local Walgreens made the list.
When I took Favado for a spin in my Walgreens shopping cart, I was pleased to see consistency between what the app said was on sale, and what was actually on sale in the store. One of my go-to cleaning products, Clorox Wipes (originally $2.99), was on sale for $2.50 (two for $5). For my new bad habit, diet soda, the app had a special of three Pepsi 12-packs for $12 (originally $4.99 each) correctly listed as on sale for $4 each.
For extra savings, the app also has a coupon feature that shows you which coupons are available for your sale items. But as I pulled it up in the cereal aisle, I was disappointed to learn that the coupons are print-only. If you’re a planner when it comes to groceries – unlike me – then perhaps Favado’s coupon feature will be useful for you. But it’s a bust if you’re already out shopping. The more time I spent with Favado, the more I realized I’m not the type of shopper who’s going to get the most out of this app.
“We built it so that there are different kinds of people, there are the super-couponers, who want to do all of the work, find out what’s on sale, match up a coupon to it and only buy what’s on sale…but, not everybody wants to go through all of that,” said Loren Bendel, CEO of Savings.com. “Other people might just want to show up at the store and see what’s on sale right now, and make sure you don’t miss a really great sale.”
While Favado claims its “secret sauce” to be its ability to gather all of the sales in nearby stores, allowing you to compare store prices against each other, I think the app is particularly interesting because of an old-school meets new-school tactic. Behind the app are 80 plus grocery bloggers scouring the circulars and aisles for the best prices and “secret sales.”
“By secret I mean it’s not advertised,” Bendel said. “When you get your circular from a grocery store that shows all of the sales, that’s only about 20 percent of what’s on sale in that store – the rest is not advertised and people don’t know about that unless someone is walking the aisles and finding those sales.”
Knowing that actual people are walking up and down the aisles to get the information – not just robots extracting it from the Internet – is rather comforting.
Overall the app is easy to use, and I can see how it could save a certain kind of shopper both time and money in the aisles. The key phrase here is certain kind of shopper. But though I haven’t mastered the art of planning ahead when it comes to groceries (yet), this app did spark my interest in being a more proactive shopper. If you’re working toward the same goal — or you already have meal planning down to a science — this free app is worth a try.
This week we’re excited to welcome Brian J. O’Connor, the writer of the “Funny Money” column for The Detroit News. His new book, The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese, chronicles his ten-week quest to cut his family’s living expenses by $1,000 a month. If he could do it, so can you — and we asked him to share how in the guest post below.
Chowing down on backyard wildlife never crossed my mind, until the depths of the recession, when a fellow columnist at my newspaper, The Detroit News, found a downtown hunter helping people stretch their budgets with $12 raccoon roasts. His sales pitch: “Tastes like mutton.”
It’s no secret that my hometown was ground zero for the economic collapse and the glacially anemic recovery. But as the personal finance columnist for The News, the idea that people were barbecuing roast raccoon rump got me wondering how I could really help my readers.
So, right there in my column, I vowed to slash $1,000 from my family’s monthly budget by cutting $100 from each of our 10 biggest spending categories. Over the course of 10 columns I even managed to beat my goal — by a whopping $1.40.
All the details are in my new book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.” Here what I learned:
Start with the big stuff: It’s great to find a sale that knocks $40 off a new set of tires, but that only saves you $40. Change your long-distance plan to save $5 a month and you’ll be ahead $60 a year every year. After three years that’s $180, which means those next two radials are free.
Ben Franklin was wrong: He claimed that a penny saved is a penny earned, but that was before the income tax (plus I suspect Ben fried the math part of his brain by flying kites during lightning storms). A penny saved is nearly a penny-and-a-half earned before taxes. Put $100 in your savings and it’s like getting a $142 raise. Even better, your savings can’t fire you and won’t throw lame-o office parties where Tracie from accounts payable makes the DJ play ABBA all night.
Don’t spend to save: Cut your immediate spending so that your cash lasts as long as possible, and never spend money to save money. Don’t sink thousands into a solar water heater in hopes that the gizmo’s savings will pay for itself sometime during, say, Malia Obama’s second term.
Start now: Don’t fuss with tracking every expenditure for an extensive budget. Concentrate on cutting spending and freeing up cash, not creating an beautifully color-coded, spreadsheet that tracks every penny with the ruthlessness of a Kardashian searching for a photo op.
The extra breathing room that cost-cutting put into my family budget was a lifesaver — and not just for me. When a wood-chuck burrowed under the house, we could even afford a “wildlife relocation specialist.” He set his trap, then returned to find it occupied — by a raccoon.
“What do you want me to do with him?” the trapper asked.
I looked over the raccoon’s fat, furry haunches, but figured there’s probably a good reason we don’t see a lot of TV ads touting, “Mutton! It’s what’s for dinner!”
So I let the furry little bandit loose. As I watched him scamper off at least one of us, I knew, felt like the luckiest critter in Detroit.
About Brian: Brian J. O’Connor covers personal finance and the economy for The Detroit News. His “Funny Money” column humorously chronicles the financial implications of everything from potty training and the Pregnancy Industrial Complex to tax avoidance and the shadowy international baking cabal that forces consumers to buy unnecessary hot dog buns. In addition to winning three humor-writing awards from the National Society of Newspaper columnists, he is a two-time Best in Business winner for his column (syndicated by the Tribune Content Agency), as well as an awarded finalist in the Scripps Howard National Journalism Awards and winner of the Christopher J. Welles Memorial Prize from Columbia University. He holds a bachelor’s degree in liberal arts from Sarah Lawrence College and earned a master’s of science in journalism at Columbia University, where he was a 2001 Knight-Bagehot Fellow in Economics and Business.
On a recent show you mentioned that in your family, you have a joint household budget and checking account as well as a separate one for personal spending. If we have two individual incomes and one is higher than the other, how do we determine a fair percentage from each income to place in the joint budget to make things equitable? Also, once fixed expenses are covered in a joint account, how do you address covering the miscellaneous household expenses that frequently come up during the month? Any help you can give me regarding this issue will be great. I love your show and look forward to it weekly.
Thanks for the kind words, Jim! I’m glad you’re enjoying the show.
The way you handle disparate incomes is to contribute an equal percentage — not amount — of your incomes. And to figure out that percentage, you need to back into it a little bit. That means calculating how much you need in that joint household account, which may mean spending a month or two tracking your household spending, because some of these expenses, as you noted, are going to fluctuate.
First, add up all of the fixed monthly expenses — the mortgage or rent, the car payments, insurance, cable. Take an average of the ones that fluctuate each month, like the electric or gas bill. And then track your spending to get a handle on those miscellaneous expenses. To account for those, you’ll want to pad the account by rounding up your contribution percentage a little, then keep in mind how much you have in the account to cover them. That means knowing what you can afford that hasn’t already been accounted for (like a slightly-higher-than-average electric bill) and what might necessitate a dip into the emergency fund (like an emergency visit to the vet). You can also include an amount you’d like to save jointly in your total, perhaps to pump up that emergency fund or prepare for next year’s summer vacation.
Once you’ve done this legwork, you’ll have a total amount that needs to be funneled into that joint account to keep your household ticking. To settle on the percentage you’ll contribute, you’ll need to do a little math. So let’s say your household expenses total $3,000 a month. Your take-home pay — and it’s important you use take-home pay for this, which means the money that lands in your checking account each month after deductions for taxes, retirement contributions, and anything else your employer pulls out automatically — is $3,000 and your partner’s is $3,500. That means the amount needed in your joint account is about 47% of your combined take-home pay of $6,500. You each need to contribute 47% of your monthly after-tax income to make it work. But to pad it a little, maybe you want to round it up to 50%. You’ll contribute $1,500; your partner will kick in $1,750, which gives you a nice buffer of $250.