by Scott | Dec 28, 2016 | Careers
Job Interview Prep
Prepping for an interview is more important than landing the job itself. If you are not prepared, you are not going to land the job. Start by researching the company you are visiting and try to find out some things about the people who work there. Linked-In is a great place to find out who works where in the company, and what kind of backgrounds they have. This will lead you in the direction of their questioning, as well as help you strike up conversation. Don’t go overboard on details – no one wants to hire a stalker.
Know Your Material
If you’re interviewing for a business-level position, know that position very well. Make sure you have extensive knowledge on the material, competition, and challenges facing that industry. When you know your stuff, hiring managers eagerly give you an offer. Be on your game during the job interview and impress your hiring manager.
Dress for the job
It used to be common to see interviewees arriving in a freshly pressed suit and a nice tie. Sure, it would be nice if we lived in the 1920s when it comes to dress code, but we don’t. Dressing for the job shows you understand what the position is like and also presents a more accurate version of yourself. Wear the power suit if you’re going for a high-level consulting job, because you’ll likely wear that suit out on the job. Otherwise, dress business casual if you anticipate the office dresses that way. If you’re going for a development position and everyone is required to wear a suit, it’s probably not the environment you are eager to join.
Body Language & Confidence
Body language is very important during a job interview. Try to avoid bouncing or otherwise displaying nervous energy. Confidence plays a key role in body language. By properly prepping for your interview, you can arrive with confidence that you know the material and have plenty to talk about. When you’re seated with an interviewer, try to present a relaxed but focused disposition.
by Scott | Dec 22, 2016 | College
Student Loans
One of the most controversial topics in finance today is student loans. The ease of getting them, their limitations in bankruptcy, and the stress they cause families is beyond reason. I know people who graduated with 4 years degrees that have over $100k in student debt. These equate to $1000/month payments for 20 years. It’s hard to believe that a young college graduate would be saddled with $1000/month payments until they’re in their 40s. This is just unacceptable, but who is to blame?
Parents, blame the parents – when you’re 18, you probably know a thing or two about money. You know how much it costs to fuel a car, how much it costs to buy a movie ticket and how much a paycheck usually is at that age. What you don’t know is how valuable $100k is to you at that age. It’s critical that parents educate their children on the difficulty of paying off loans that size. It’s also important that parents understand the value of local colleges, community colleges and commuting to school.
Cost of Living on a Loan
The worst part about student loans is they aren’t entirely for tuition. You can take student loans out to cover the cost of living, apartment rent, utilities, books and more. All of these expenses have zero return-on-investment for the student, and saddle them with those costs far into adulthood. Add interest on top of the borrowed money and you’re paying 2x the rent back over the course of the loan.
Start local, then go big – the best way to finance a college education is to start local at the community college. Most tuition rates at community colleges are under $2000/semester, and some are far less than that. But that means you can get the first 2 years of college for under $10,000. That’s a remarkable bargain compared to going away to school, which will run at minimum $20,000/year. You’re saving 75% or more by staying local. Of course, that does not include the cost of a car and commuting expenses, but even if you add those, you’re looking at saving at least 50% and you have a car.
Scholarships
We all wish we were smart enough, talented enough or lucky enough to get free money for college. But free money isn’t just for those people. Actually, there is scholarship money available to almost every college student, you just need to apply for it. Do you research ahead of time, and make sure you apply for all the possible scholarships available. Sometimes, a college will offer a year of tuition or a steep discount. Make sure you count all the expenses before you make a decision. Even free tuition at a school 1000 miles away will cost $10k in living expenses annually. Don’t saddle yourself with unnecessary debt just because a college is giving away tuition.
What Is Too Much Debt?
This is an interesting question, because in my opinion, any debt is too much debt. If you plan carefully, you should be able to get through college with no debt. This would require that you work during your college years, and use that money for tuition, books and other expenses. It helps to have additional funding from parents, grandparents or other family and friends to keep costs low, but if you can avoid loans, by all means do so. If not, try to limit your loans to federal student loans. Sure, you cannot get out of paying them for almost any reason, but they’re usually the lowest rates, and they are the most flexible in terms of paying back. If you do limit your loans to federal only, you’ll be looking at about $125-150/month for every $10,000 you borrow, which is a more manageable figure.
by Scott | Dec 16, 2016 | Paying Down Debt
Debt Traps
There are many debt traps with long-lasting effects, some that could take years to recover. Here are a few often overlooked debt traps that you should always avoid:
Credit Cards
Paying off credit cards is a topic widely covered on the Internet, as well as thousands of self-help books, online courses, credit repair and debt counseling services. Everyone has advice on how to pay off credit cards, and they all start with the same concept – pay off higher rate cards first, then lower cards. However, the issue is not the order in which they should be paid, but the reason they were overused. Before you come up with a plan to pay down your debt, look introspectively into why you got into debt, and how you’ll avoid debt in the future. I’ve seen many people celebrate going debt-free only to find themselves in just as much debt or more 5 years later. It’s often because life events and unexpected expenses took over.
Payday Loans
While payday loans can be a lifesaver for some families, they come with some of the highest rates. You could end up paying 20% or more per month on the loan, which will add up very fast.
Overbuying House/Car
A brand new shiny black convertible sounds like a car we’d all love to have. That convertible you want might cost $40,000, and even if you put down 20%, you’ll be looking at a $600/month car payment. If you decide to sell or trade it in just a few years, it won’t be worth $20,000, so be careful spending big money on cars. Quality transportation can be found for $10-12k, and brand new quality cars can be bought for under $20,000. Until you can pay cash for that $40,000 convertible, buy a lower priced car and save $300/month on car payments.
The advice my grandparents gave my father was to buy the most house you could afford, because it will be easier to pay it off over time. While that may have been true in the 1970s, today’s housing market is not consistent enough to use as a long-term investment. For example, if you make $60,000 and your affordability is $250,000, don’t spend it all. Buy a home that’s 70-80% of your affordability, about $200k, so that you can afford all that life has to throw your way. The extra $250/month you’ll save will go a long way. If you don’t need it, you can save the extra $3000/year.
Student Loans
Student loans is a topic that cannot be covered in a single paragraph, but the most important rule is: never take out student loans to cover living expenses. You will end up spending twice as much over the loan for things like rent and food, of which have no return on investment. These costs can be avoided by attending schools within commutable range for at least the first two years. As long as you finish your degree at a university, the first couple of years aren’t nearly as important.
Co-signing
Of all the debt traps, this is the worst of them all. Grandma co-signs her grandson’s new car loan and he only makes the first couple of payments. Mom and dad bail out a newly divorced parent with an apartment they cannot afford. These situations arise out of love and empathy but end in fear and frustration. Debt collectors are as friendly as a lion and have heard every story you could imagine. Never, ever co-sign a loan. As long as you live by that rule, you’ll never have to deal with the frustration.
by Scott | Dec 10, 2016 | Paying Down Debt
Debt habits are easy to form, and the bad debt habits are hardest to break. Once you get used to spending money in places where you shouldn’t, you can easily overlook the money you’d save on a monthly basis. Keep yourself focused on the long-term and try to avoid or restrain some of these common debt habits:
Banking Fees
When signing up for a new checking or savings account, always ask for the no-fee option. If there are minimum balance requirements, look elsewhere. Most banks have account options that are fee-free as long as you don’t overdraft or use foreign banks. The strategy is to not have a lot of extra money sitting in checking and savings accounts. While it’s great to have liquid cash, it does very little for your long-term financial stability and you’re more likely to spend it when it’s not making you money. Keep enough money in a checking/savings combo to cover overdrafts, but no more than a few months living expenses.
If the bank doesn’t give you checks, buy them elsewhere. There are many check printing companies that will give you a much better deal. But with today’s online banking features, there is little need to physically write checks anymore.
Dining Out
How often do you eat out per month? How much is your average bill? Going out every Friday night and spending $100 is a $400 monthly habit, and more than $5000/year. That’s just from one night out a week! It’s great to spend time with friends, but if your retirement account is not where you need it to be, these are some of the best places to cut back. Try a different restaurant, order the specials, or cut back on the number of drinks you order. There are many ways to cut down the costs of dining out without cutting back on fun.
House Poor
I hear this term in my social circles far more than I should. There is no reason to make yourself house poor by overspending on your house and cars, or anything else for that matter. When buying a home, make sure you have enough money for a down payment, another 10% to cover moving and renovations, and at least 20% of your net income left over for anything that comes your way. If you spend all of your money buying your house, you’re going to have a hard time enjoying it with no furniture, old carpets, or other things you spend everyday wishing you could change. Don’t put yourself through that frustration just to have your name on a deed.
Impulse Buy
I can’t tell you the number of times I’ve impulsively purchased something and later realized that the pitch was the only reason I did. Sure, the pitch was great, but what was I doing watching that commercial or looking at that end-cap. It’s all about realizing that the end-caps and commercials have one purpose – to sell you whatever is on or in it. It looks like a good deal? Sure does, that’s the point. Stay above the influence and stick to a list while shopping. If you see something in a commercial you think you can’t live without, do some research on it. You might find that after 15 minutes of reading reviews, you didn’t really want it anyway.
Therapeutic Shopping
Unfortunately, therapeutic shopping is a topic I’m also familiar with. I’ve lost people in my life that have made shopping a therapy rather than a purposeful destination. It takes courage to realized that you’re therapeutic shopping, and even more courage to put those feelings aside. As easy as it is to say it, it’s much harder to realize how much more that money will mean to you tomorrow, next week, or a year from now. Whatever it is you are buying, it is not important. Your feelings are important, so I encourage you to write those feelings down. Instead of shopping, visit a park and take a walk, or spend the money on a ticket to a museum. Seeing new things will help you process your feelings. If you continue to feel like you’re outside your comfort zone, reach out to family and friends for help. Never feel ashamed to talk about your feelings – you are just as important as everyone else on this earth.
Reward Shopping
One of my favorites as a kid, reward shopping can be both beneficial and challenging. My parents used to reward us with $25 for a report card showing a B average or better. This was used mostly for new video games, remote control cars, baseball cards, and other things that have little value today. The excitement of getting them at the time, however, is priceless. Giving children a reward for good grades is a great way to exercise reward shopping. Sometimes, you want to reward yourself, like when you’re promoted or get a raise. Don’t be afraid to splurge a little on yourself from time to time, it’s just as important as the rewards we got for good grades. It’s just that we get to choose the amount. Be responsible by capping your rewards and you’ll end up happier with your purchase in the long run.
by Scott | Dec 4, 2016 | Reducing Utility Bills
Saving money on utilities is something we’d all like to do. It’s almost like money down the drain every month, well some of it. While the modern comforts are great, there’s no need to waste it. By following a few simple steps, you can cut your utility bills down and put that money in a better place. Here are a few suggestions on how to reduce electricity, water and gas bills:
Using Less Electricity
What if I told you the secret to using less electricity is not having so much stuff that you requires power? That’s part of the secret, the other part being you can create your own electricity using solar panels. There are many ways you can reduce your electrical usage, let’s explore a few ways:
- Solar power – you can add panels to your roof that will provide power to your home during the day, and whatever is left over can be fed back into the grid to reduce your electricity costs overnight. Many people end up with near zero bills or receiving money back.
- Unplug your devices – unplugging adapters, computers, TVs, appliances and other electronics is a great way to save on electricity. They all consume power when they’re not in use, and this is especially true when you’re away from the house for extended periods of time or on vacation. Unplug these items and save.
- Look for efficiency when buying – always check the energy star tag on your TV, appliance or other devices to see how much power they consume. If you’re buying an appliance that uses 2x the power of its competitors, look to find out why. An inefficient refrigerator can be more costly than just power, especially if it cannot keep food properly cold.
Using Less Water
It should seem obvious to us the ways that we can reduce water usage, but so many homes look past this and just leave their usage status quo. I’m always eyeing the rate usage on our utilities year-by-year, month-by-month, so I know when we’re using a lot of water, and when we’re not. We have a pool in our backyard, so we use more water during the summer trying to keep it topped off than we do at any other time. It takes hundreds of gallons during the summer. During the winter, dozes, so it’s far less usage. But how do we really reduce water usage?
- Run sprinklers for less time – if you have a programmable sprinkler system, program it to run for 5 minutes rather than 10. Check your sprinkler nozzles for damage and make sure they’re aimed at foliage and not driveways and sidewalks.
- Take shorter showers – I know this may be the most difficult to actually accomplish, but showers are one of the biggest water hogs in your home. Try timing your shower to see if you’re going over 10 minutes. If you shower daily (which I recommend), even 2 minutes a day is over 1 hour of running water a month. That could equate to hundreds of gallons. Use your water and your time wisely.
- Don’t prewash your dishes – how many of us wash our dishes before we put them in the dishwasher? I remember a friend saying, ‘But I didn’t use soap,’ as if that were the reason they needed to be washed twice. You could easily have used soap as you scrubbed them and skipped the dishwasher altogether. If you’re using a dishwasher, let it do its job. If you hand wash your dishes, finish the job. It’s one of the few things we wash twice. But think about it this way – do you wash your hair and face before you get in the shower, and then wash it again?
Using Less Natural Gas
If you have natural gas in your home, you know how easy it is to run up the bill using the heating system or gas fireplace. Gas fireplaces look great and don’t create a mess, so it seems natural to want to run it all the time. This could add up to one costly gas bill. It’s a good idea to limit your gas fireplace usage to a couple of hours a day at most. Running it for 4+ hours a day will add up quickly and add quite a bit to your monthly utilities bill.
Measuring Electrical Use
If you don’t already have one, I recommend buying a device like the Kill-a-watt to measure current draw. Knowing how much electricity your devices use is the first step in know what to curtail. It’s easy to measure, and they aren’t expensive at all (~$20).
Measuring Water Use
Measuring water can be done with little effort, but it’s not as easy as using a Kill-a-watt. For example, measuring water use in the shower is as easy as timing how long it will take to fill a 2 gallon bucket. If it takes 1 minute to fill, your shower uses 2 gallons/minute. Your toilets will list how much water each flush uses. Your kitchen sink will have to be measured like your shower, but you can figure out exactly how much water is being used while your faucet runs, which will help remind you to shut it off after it’s been running alone for a few seconds.
As you can see, measuring your electrical and water use is an easy task, and will help you understand where your money is going on utilities. Be aware of how you’re using power and save the money that is otherwise wasted every month.
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