Unemployment is Closing the Bank of Mom and Dad

This article, Bank of Mom and Dad Shuts Amid White-Collar Struggle, explains that unemployment is affecting the upper-middle class as well:

Indeed, the bank of Mom and Dad is closing at a time when young people are having trouble borrowing from traditional lenders. Some 22% of young people between the ages of 18 and 34 said they've been turned down for a mortgage, loan or credit card in the past year, according to a February survey from FindLaw.com, a legal marketing and information site. That's double the percentage of any other age group in its survey.

As a result, many young people are now moving home to save on rent. About 21% of young adults say they've either moved in with a friend or relative, or had a friend or relative move in with them because of the economy, according to a study from the Pew Research Center.

...Many parents who were set to retire are now delaying it to compensate for battered retirement accounts, leaving even fewer openings for younger workers to fill. There are an additional 500,000 workers over the age of 65 in the work force now compared with 2007.

In short, unemployment is forcing parents to cut their kids off and push back their own retirement.  Those kids are having to cut expenses to get by without parental financial support.  Although this seems like an obvious result, it is worth repeating as a reminder. 

As I've said before, if you are planning to help your kids, please make sure to cover your own bases first.  I feel much sorrier for the parents that are pushing back their retirement than the young adults being turned down for mortgages and credit cards.

What do you think?  Should retirement be a higher priority than aiding your kids in college?  Are you having similar problems right now...am I misjudging the situation?

Do You Hate Performance Reviews?

This article at Yahoo Finance provided by The Wall Street Journal, Yes, Everyone Really Does Hate Performance Reviews, seemed pretty one-sided to me.

The author argues that performance reviews are scheduled one-sided ways to place blame on employees and ignore their input.  That kind of performance review does indeed sound useless and mean.  What about performance reviews that actually review performance and open a line of communication?

Well, the author doesn't think that those kind of reviews exist, so I'm going to have to leave the article behind. 

I personally work for a company that pays way below average and doesn't care about their "human resources" at all.  BUT, they do give annual performance reviews.  Depending on which supervisor an employee has, these are actual reviews that allow us to ask questions and give opinions.

My two direct supervisors are great.  I seem to work in the only department within the company that treats their employees as people.  My annual performance reviews are thorough and allow me to make suggestions and ask questions that I would otherwise put aside.  It's also nice to get a pat on the back from the bosses even though their normal operating procedure is that you are doing well unless told otherwise.  I am the only woman in the department and I also seem to be the only one that thrives on praise.

Plus, our raises are given during performance reviews.  Before this two year salary freeze, I could always depend on a little extra.  Stupid economy...it is an employer's market and they know it.

In short, I am a fan of performance reviews.  Do you like your review at all?  Or do you agree with the original article's author?

7 Rules to Succeed in Your Career

An article at Yahoo Finance, 7 New Rules For Getting Ahead, listed the following rules to keep in mind to stay ahead of the game in today's world:

Rule 1. You don't deserve a job.
Rule 2. You don't know enough.
Rule 3. Less stuff equals more freedom.
Rule 4. Prepare for many turns.
Rule 5. Entrepreneurs have an advantage.
Rule 6. Don't get addicted to your paycheck.
Rule 7. Loving what you do pays off.

Here my take on these:

Rule 1 - This hasn't seemed to change.  The best and brightest overachievers always get hired first...who would want to hire the underachievers first?

Rule 2 - Keeping yourself educated is so important since technology is changing things every day.

Rule 3 - The more stuff you own, the more maintenance requirements you take on.  Although I'm not an avid minimalist, it is just common sense that you will bogged down less if you own less stuff.

Rule 4 - Hardly anyone stays in the same job for their whole working life anymore.  Sometimes that is by choice and sometimes it's not.  Being prepared and staying qualified is essential for career survival.

Rule 5 - The article stated that entrepreneurs not only have the classic advantages of being their own boss, but even have the creative advantage of the entrepreneurial mindset when working for someone else.  I think this boils down to saying that creative thinking is appreciated no matter what your situation.

Rule 6 - This is the rule that trips me up.  It's hard not to "settle" for a paycheck.  As the article suggests, living below your means will give you the flexibility to take chances to better your working life.

Rule 7 - Obviously, finding a job you enjoy can be the difference between night and day.  As I've heard a hundred times before, it's not work if you enjoy it.  This is another rule that I break since I have settled into a position that isn't my passion.  Based on the millions of job reviews you can find online, it seems that this rule is the hardest to follow for quite a few people like me.

What rules above do you follow?  Which ones do you disagree with?

Spending Less Than You Earn

I hit on the main ways of diagnosing your financial health in this past post.  I'm going to use Wednesdays to go further in depth on each point since I truly believe that financial health leads to less stress and happier lives.

The first point was to spend less than you earn.  This means that the money you have going out needs to be less (hopefully a lot less) than the money you have coming in.  Constant, overwhelming debt is not healthy for you or your future.

List Your Income and Expenses
In order to spend less than you earn, you need to know how much you earn and how much you spend.  I'd suggest writing down your known monthly income and expenses first.  Then spend a whole month adding anything you missed to that list.  Not only will this be a definitive picture of your spending and salary, but it will give you a great start on beginning a budget as well.

Ways to Widen the Gap
If you are not where you want to be once you've seen this list, you do have options:

1)  Decrease your spending.
2)  Get a better paying job.
3)  Find other income sources.

Decrease Spending
To decrease your spending, I'd suggest first cancelling or discontinuing any expenses that you really don't want or need.  Don't go crazy or be regretful...simply cut the fat.  I was surprised at some expenses I forgot about when we started tracking our spending.  It was easy to cut out an $8 monthly online game membership fee and a $25 a month gym membership since we had stopped using both of those.

If that doesn't solve your problems, then look to cut expenses that you might want, but don't really need.  Luxury expenses can wait until your income increases.  I'd consider internet and a cell phone as almost-necessities, but cable isn't.  I'm sorry since I love cable, but if you aren't making more than you spend, it has got to go.

Income Ideas
If you still aren't there yet after getting back to the basics, then you need to look at increasing your income. 

Obviously, only you know you well enough to get a better-paying job.  Other income sources are also a personal matter.  I worked for a book store for $7 an hour for 3 months in order to make a little part-time cash.  I've also babysat and taken care of pets.  I've most recently started a blog, although I wouldn't consider this a great way to make fast money (I've made about $10 in 2 months).  My husband is a contract sports official for middle school and high school football and basketball.  He can also tutor.  What sounds good to you?

In short, you need to spend less than you earn to stay fiscally sane.  I prefer to spend much less than we earn since we have an early retirement goal.  Look at your situation and access your options to make this happen.  Good luck.

Are you spending less than you earn?  If so, are you happy with your position?  If not, did this article help?  Does anybody else have any suggestions on this point?

Personal Income is Still Low but Consumer Spending is Rising Again

According to this article, personal income fell in 42 states in 2009. Yet, according to this article, consumer spending is back on the rise and looks to be sustainable.  We have record unemployment but the consumer market is getting better…huh.

This tells me that some people have not taken their new situation into account or the lucky ones aren’t preparing for the worst.

My husband and I are the “lucky ones” since our income didn’t fall. Neither one of us got raises, but we also didn’t get cuts. We have a solid emergency fund and several savings accounts in case the worst happens, but so far, we’re okay. But we haven’t increased our spending in the last 2 years either.

So, we are obviously not contributing to the stats of either article.

Since we know friends that have had pay cuts or gone through job losses, it’s easy for me to understand that personal incomes as a whole have fallen. I just don’t understand how consumer spending is rising…

Do you know anyone who’s started spending more than they were over the last 2 years?

Oh well, at least the economy will be puttering along pretty well by the end of 2010. Maybe some jobs will open up and personal income levels will rise as well.

Want a Raise? Got These Traits?

I recently came across this Hot Jobs article about How to Get a Raise. They stressed the importance of these impressive personality traits (I’ve summarized their explanations):

1. An Owner’s Mentality – Show what you did for the company instead of listing reasons you want a raise.
2. Forward-Thinking – Work on the key goals your company has set for the future.
3. Visibility – Wall-flowers will be overlooked.
4. Charisma – You need to be able to persuade others to follow through on your plans.
5. Tough Skin – Be open for criticism so your boss knows he/she can be open with you during your reviews.
6. Empathy for the Boss – Make your boss’s job easier and getting a raise will be easier…this also means not whining when salaries are truly frozen. Simply ask to be remembered when raises are a possibility again.

I think this list is spot on. In my company, #1 (Owner’s Mentality) is the most important.  If you improve my company's product in some way, save them major money, or make them major money, you will get a raise. 
The owner of my company barely knows who I am, but everybody I work for directly seems to convince him to approve my raise every time (except during this oh-so-wonderful salary freeze).

MikeS also brought up the point that his manager looks to promote employees that consistently do more than their job requires. By doing that, an employee shows that they can perform at the next level.  Makes sense, doesn’t it?

What do you think? What can help get a raise at your job?