Dear Michelle, I know you don't run an etiquette column, but given your strong personal commitment to charity, have you ever tried to steer the gift-givers in your life to give to you by giving to a charitable organization instead? I don't need another [insert typical gift here] but other people in our society could really use help (this year more than any other year). Is there any way to get the gift-givers to do this without offending them? I end up donating most of the stuff that I get anyway but it feels like a direct donation would be more valuable to the charity.
What a great questions. I know many people do give in other's names and in lieu of getting gifts themselves ask that others give in their name.
I'm not a fan of the latter. I think you should communicate that gifts aren't necessary but I don't like telling people essentially what to give me even if it's for charity. Now if the person insists to know what you what then you can let them know you would rather that give the money to a charity.
Hi Dan, Thanks for all your great books and podcasts. I am in the process of starting a new service-orented business. How would you suggest approaching advertising my service? Thanks, Rob in Virginia
Start a blog and comment on 4-5 other blog sites with related content. If it’s a bricks and mortar business, canvassing the immediate area is still a good plan.
As 48 Days predicts, I receive positive responses by initiating personal followup with hiring executives and Vice Presidents who supervise the jobs I've applied for through their HR departments. The hiring execs and VPs favorably respond and request I send them their own copy of my resume to followup with HR, adding they want me to let them know in the next few days if I don't hear anything back from their HR staffs. I let the hiring execs and VPs know I don't hear a response from their HR staff, as they suggest, but HR still doesn't followup. If HR staffs are overloaded and retaining tight control over job-screening process, what other path to personal followup is successful?
Persistence goes a very long way. We tend to back off too quickly. In this case the squeaky wheel really does get the grease. In our attempts to be “professional” we equate relentless persistence with somehow being less than professional. No, many HR directors purposely wait until the candidate comes back repeatedly, knowing that the persistence translates into desirable work characteristics. Keep contacting every 3-4 days until you are clearly told NO.
My father is in his 90's and is going strong but I know that one of these days I'm going to have to deal with all of the details of his will and probate. He has already done quite a bit of estate planning but I know that it won't be easy. Can you recommend some books that I can read now to prepare myself for handling his estate without wasting more than I need to on attorneys and accountants?
I can't think of any good book right now but I would suggest you go to AARP's web site. The orgnization for seniors has a great section on what you need to know in working with a relative with estate planning. The key is to see if your dad will share some of his plans or at least make sure you know where all his papers are so you can easily find them.
Hi Michelle! I'll be 43 in two weeks and need a bit of financial advice - I was unemployed for the better part of the last 4 years and used most of my savings/retirement to live off of during that time. Thankfully, I'm employed now and hope to remain so through retirement. My question is about saving for retirement - at this late age. Since being employed, I've managed to save about $14,000 in a savings account and have about $7,000 in my 401K - Im waaaay off my retirement target! How can I get on track? I will be paying off my remaining credit card debt tomorrow (yippie!) and will only have my grad school loans as remaining debt (I do not own a house and own my car). Any suggestions? I feel as though Im behind the 8-ball and wont be able to catch up... Thanks!
First, Happy Birthday.
Second, thank goodness you had some savings.
Third, you could have another 20 years before retiring so you've got some time to save, save, save.
However, I would be very, very aggressive in getting rid of the grad loans. I might even pull back a bit on retirement to get those loans paid off. Then go thu your budget and look for any place you can cut to go full force in building up your retirement savings.
So I don't think you are behind the 8-ball. I think you are back on track after an awful time.
Hi Dan-- I read 48 Days. Many of the suggestions are oriented to being self-employed. Do you find that is the direction mosr folks take when following your guidance? Thanks! Theresa
In today’s volatile workplace it’s absolutely essential that we at least understand all the new work models. The lines between being an “employee” and being self-employed have softened as more and more people are telecommuting or working as free-lancers, independent contractors, and electronic immigrants. We will continue to have employees but accepting full responsibility for your career path immediately opens up a whole lot of new possibilities.
I tried that once. My in-laws wanted to know what I wanted for Christmas. I honestly didn't want anything, and have never felt comfortable with the lavish amounts they spend on presents. I said something like a pair of slippers, and then please, donate whatever else you would spend to efforts to rebuild New Orleans. I ended up with slippers, a few pieces of clothing I never wore, and a ton of tchotchkes that I ended up donating to Goodwill. I wish they had just given me the cash so I could have made the donation!
I see your point. But look at it another way. Gift giving isn't meant to be a fund raising event. Your in-laws wanted to bless you!
Yes, you feel the money could have been better spent but from their perspective it was. They used their money to give to you (even if you didn't like the gifts).
So try not to feel it was a waste. If you like you can give more to your charity.
Hi Michelle I love your chats and am wondering what I should be doing. My husband is going to be losing his job at the end of November and up to this point we've been horrible at saving money. We have a lot of debt (about 158) and a heafty mortgage payment. My salary is steady and I can cover the mortgage payment (just over 3k) as well as all utilities myself. I can also make the minimum payments on the consumer debt but no more. We have about 7 months of savings (bills and mortgage). Should I take what we have in savings to lower (almost pay off) our credit card debt? I ended up getting a second job to help with the extra's (bills) but it's only bringing in maybe 300/month which I know is better than nothing. We also should be getting a fairly large refund on taxes (I file married withhold at single w/ additional $50 from each check plus the interest on the home loan). With this suitation what do you suggest? Take money from savings now to pay down the consumer debt or just keep working and only make the minimum payment on the debt?
This is a tough one because my initial feeling is pay down the debt so that's one less bill to worry about. But you have no idea how long it will take your husband to find another job (so sorry for that). So it might be best to reserve your cash to help with expenses if the unemployment goes on for too long.
However, do this. Sit down and really comb thu your budget. If you can get rid of the hefty credit card debt and still have a bit of a cushion you might want to get that monkey off your back since you can cover all the other major things. Then take the money you would have used for the minimum payments and save that cash. You will get rid of debt but still be building up the savings to cover you if you decide the part-time job is too much. The key is you don't want to be left without some savings otherwise if something happens big -- like a major car repair-- you will be force to use debt.
If you find things are very, very tight and you aren't very, very confident about your job, keep the cash and just make the minimum payments on the consumer debt until your husband is working again.
Hope this helps and good luck.
How do I change careers without taking a drastic pay cut? I'm 47 with a mortgage and a 9-year-old, I can't afford to go back to starting pay. That's holding me back more than anything.
At 47 you are a much better and valuable candidate than someone just starting out. Look for “transferable areas of competence” in your history. Any skill where you have shown competence can be applied in new careers. No, you do not have to go back to starting pay. You can build on your expertise even if changing careers.
Dan, When starting new business, do you find getting a small focus group together to get feedback helpful? When you launch a new product, do you ever do this?
Yes, Yes, Yes – I use small groups for feedback on anything. That could be through your local Chamber of Commerce, a Business Network (BNI) group, your local Entrepreneur Center or a Mastermind group of your own choosing. But ask, ask, ask. Don’t launch a new business in secret and then find out whether or not people want what you are offering.
Dear Michelle, I read your article yesterday in response to the President's Student Loan Plans. Unfortunately, the changes won't help me. I took on my loans for my graduate education pre-2008 and a majority of my loans are private loans. IBR doesn't help me b/c it doesn't take into account that a majority of my discretionary income goes to paying off my private student loans. Do I have any other options?
If you haven't read my take on the President's announcement yesterday here it is
But I agree with you that more has to be done to discourage borrowing. The plan yesterday is supposed to help ease what people have to pay. However, it didn't address the long-term problem of the level of debt people are taking on for college. If people couldn't lean on loans I think more would make different and in my opinion better choices about college that dont' involve decades of debt.
I have heard that networking is truly the best way to find a job. The report (on the radio) stated that most resumes "end up in the trash". I am tentatively planning to retire after 30 years early next year, but hope to work another 10 years, elsewhere. Could you comment on the application process, versus networking? It will have been 30 years since I swam in the job search pool.......
Networking is a part of the process but you don’t have to wait on having the right connections. Identify 30-40 companies that could potentially use your skills. Send a letter of introduction, then your cover letter and resume, then followup with a phone call. Take the initiative with companies you’d like to work with. If you wait until you see a job posting, you’ve missed the best window of opportunity.
A broad question. Dan, I make a really really good salary. I'm in the top 1/2 percent of all wage earners. I don't hate my job, I'm actually grateful for it. I enjoy the life it allows me to have. But it's not something I can't wait to go to every morning. Am I really a candidate for your book, or should just put on my big boy pants and grow up?
Ha – I never say just put your big boy pants on and grow up. However, a successful life entails more than just a wonderful job. No matter how great the work, that is only one tool for a “successful life.” Be sure to be making deposits of success in the family, social, spiritual, physical and personal development areas of your life as well. 48 Days to the Work You Love addresses these other areas of life and how to be successful there as well. You may discover a broader view of work that you love that may prompt some tweaking in what you do. But for many readers, the book provides confirmation that the work you are already doing is a great fit.
Hi Michelle, We are about to go through a lot of financial changes in a short period of time: salary reduction, benefits changes, possibly changes in daycare. In order to prepare, we decided to move to a less expensive house. Fortunately or unfortunately, that will be the first change we make: how can we project what our expenses will be to decide what we can afford per month when so many things will be different from what our current circumstances are? Your advice is much appreciated, because I want us to increase our financial flexibility, even as our income goes down.
First thing is I would suggest that you make sure your housing costs is not more than about 36 percent of your net monthly pay. And that's net of taxes (if you tithe, it would be net of taxes and tithes).
That will help make sure you aren't straddled with too much housing costs.
So as part of all your changes always stay focused on your net pay and how the costs will eat away at that. If you search on the Post site for "The Power to Prosper" you will find some budget templates to help you see if you are overspending in certain expense areas. The budget templates I've posted include an average percentage you should be spending in certain categories.
The most important thing is to look at the real numbers. Sit down and look at what you will have coming in and then adjust your expenses accordingly. If day care goes up, that means you might have to cut someplace esle. And don't forget to start with setting aside some savings first.
Can you stop your cable bill and/or your internet service for about 3 months without penalty? I did that and saved about $300 and put that all toward my CC. It helped tremendously and knowing that I had a finite hardship and a good library card (with wifi access at the library) got me through that period.
Great tip. Thanks.
Or with the cellphone, for a time scale back to a less expensive plan.
Michelle, my wife and I are thinking about buying a vacation home in Florida that would turn into a retirement home in 15 years or so. We would have to take out a mortgage, and put down 20-30 percent. Right now we live in a small home here in the DC area. I know you've said before that you only favor debt for mortgages for a primary home. What are the risks in a vacation home mortgage that I'm missing? Also, would it be better to sell our current house here, buy a bigger house here, with a bigger mortgage, and then sell it 15 years from now? We can afford the vacation home without renting it out, although it would be better to have a little income.
Personally, I would only buy a vacation home if I had the cash for it. In this market and hard economy, I just wouldn't take on that kind of debt. The risk with a mortgage for the vacation home is that your financial situation changes and you can't afford the mortgage.
So keep your good if small home in DC and save up to buy that vacation home. Or when the times comes to retire, sell your current home, which hopefully you would have paid off if not already. Take that money and buy your place with cash in Fla.
I'm following up on my question and thanks for your answer. The staffs are *not* answering back. And the personal contact with introduction to the hiring execs, as you suggest is an excellent tactic, but it is not resulting in a response. Support groups I've been with have had HR professionals talk to us to say HR people are overwhelmed. I'm questioning whether since your book's 2007 publishing of that suggestion of personal contact with company execs, that with the overwhelming numbers of unemployed seeking jobs now: Is there a better tactic since HR is overloaded and they are not even responding to the company execs that I have followed-up with. Again, I appreciate and agree with your tactic on personal contact beyond the HR job app process, but I sense a work climate within HR staffs that makes the tactic reach a bottleneck that even the company execs cannot get answers.
I can appreciate your concern. But the environment has not changed in that regard. HR people have always felt overwhelmed. I encourage job seekers to bypass HR professionals and go straight to decision makers. Keep in mind HR people are screeners and look for ways to eliminate applicants. Find out who the department heads are in the companies you are contacting and initiate interaction with them. I’ve worked with people thousands of times where we went right past HR and found a welcome reception with a real decision maker. We’ve had those company leaders come back and ask – “How did you know I needed someone just like you?”
Hi, I'm new to this chat, so I apologize if this is an area you've covered extensively in the past. I am extremely frustrated trying to pay off CC debt and get some savings built up, and I'm contemplating withdrawing from my Traditional IRA (401K from a previous employer) to pay off some of the higher interest CC debt (maybe around $2,000). I have already tried to get the interest rates lowered, to no avail. What are your thoughts on this? I've listed some of my details below: Age: 27 Total Retirement Savings: $7,700 vested, an additional $3-4K not fully vested Total CC Debt: $6,000 Student Loan: $10,000 No car or house loan Credit Score: 672
First, welcome to the chat. Hope you are enjoying it and will come back. And I'm always happy to take questions that may cover ground I've talked about in the past.
I would not tap the retirement money. You will have to pay taxes on the money AND you'll get hit with a 10 percent penalty for early withdrawal.
So, you are going to have to be stay the course and slowing get out of debt with the cash you have. And that's a good thing. I like the pain you are going through because it should serve as a reminder not to get into debt again. Suffering can be a good teacher.
You are doing fine. Just be patient. You didn't get into debt overnight, so don't try to rush getting out by compounding one mistake with another.
Relatives always ask what my teens what for their birthdays. Everyone knows that teenagers want . . . cash! I'm not comfortable saying this, though. I also wonder if I should force my kids to put half in the bank when they do receive cash.
Force is such a harsh word.
I would rather say encourage, as in they have not choice (smile).
I would have a conversation with your children about the importance of saving. Get them to understand that they have college costs coming up perhaps or maybe will want a car soon, etc.
If you believe in giving back, get them to allocate some of the money for charity.
It's all about communicating your values to your children so they can start young developing good saving habits even with the money they get as gifts.
Michelle- Thank you for your sage advice over the years. My question is this: My mother's long-term "plan" is to die quickly (though not soon), and she is doing everything she can to make that happen. She won't consider a "Plan B," and in the meantime is giving a great deal of support to my sister. If her plan doesn't work out, though, and she is incapacitated, I will be left holding the bag. Even asking her whether she has a financial plan meets with accusations of wishing misery upon her. She's scared, and I'm sympathetic, but I also will be unable to take care of her myself should that happen, and she's not going to share any financial information with me until she is no longer capable of it (when I inherit power of attorney). So - given no information, what are the options, and how does one pay for them?
I so know what you are going thu. I have an elderly relative who won't listen to me and it's so frustrating because as long as your mother is in her right mind, you can't take control.
I suggest you go to the AARP site and read many of the posts and great articles about helping a relative prepare for long-term care.
The best you can do right now is just arm yourself with the information and resources that will be available to you if your mother finally needs help.
Hi Michelle, (submitting early due to a meeting) I am a 35 year old single woman who is entering a big transitional time in her life. I've long been pretty good with money (live below my means so I do put some money away each month, have an emergency fund of ~6 mos that I am continuing to build, am quickly paying down debt [which I kept to a minimum], and am putting 5% away into TSP). However, now that I am in this transition, I want to do more. I am familiar with a lot of the terms and concepts within investing but am a bit intimidated about deciding just where to put money and would like to learn more about it. Any good books for women that can start me on my way? I do have access to a fin. planner through my job and plan to start working with him, too. but I want to start boning up myself. While I would appreciate him doing some hand-holding in the beginning, I want to eventually move more into the driver's seat with my investments. Thanks!
I love that you want to learn more. Not sure if you know but every month I select a personal financial book to profile. After the chat search the Post site for "The Color of Money Book Club." You will find an archive of books that might help you in your quest to know more.