How to Balance Your Children’s Expectations and Financial Obligations During the Holidays

Financial Advice By: Carmen Rita Wong

Q: I’m going to be honest, the holidays are a scary time for me, financially.  I am a single mom with three children and I want to be able to give my children the best holiday possible and I definitely don’t want to disappoint them, but I also need to make sure that all of our bills are paid on time, too. I’ve read your post on using credit card rewards, but I have never owned a credit card and they are a little intimidating. Are there other ways that I can get more bang for my buck when it comes to holiday spending?  I know that you’re a mother yourself, so do you have any tips on how to balance the expectations of my children and still meet my financial obligations?

The holidays are a tough time for anyone on a tight budget. But, credit cards are not the way to go if you’re going to use them to spend money you don’t have. Credit card rewards are only worthwhile if you pay your bill in full and on time, before interest kicks in. If you carry a balance, those rewards go ‘poof’ in value!

This year, if you’ve got a small amount to stretch across those all of those kids, give them the best gift of all, the financial security of not going into debt to buy ‘stuff.’ That may seem like a hard concept to relate to your kids, but do not be afraid to let them know that Santa is on a tight budget this year so gifts will be limited– not because they’ve been ‘naughty,’ but because even Santa has a ceiling.

Of course, when shopping, you should max out tools such as price comparison sites and coupons. Some of my traditional favorites are PriceGrabber.com, RetailMeNot.com and FatWallet.com. And an app like RedLaser lets you scan barcodes and comparison shop right in the store.

But–and this is vital–I can tell you from nearly two decades of experience in this field that tools and sales are great, but by far the biggest way to save money over the holidays is to make sure that your limits are just that: limits. Set these amounts first, before you shop. For example, how much do you have for the holidays as a whole and then how much will go toward holiday travel, holiday gifts for non-family members or holiday cards? Then how much will you spend on yourself (we all tend to do this) and how much on each of your children?

Write this all down or do as I do, build a spreadsheet and enter the limits first. Then, as you shop and plan, enter what you’ve bought and how much you’ve spent. Take the list with you when you shop or have it on your cell phone so it’s always in hand and treat it like a contract with yourself– no violating it!

And next year, start saving for the holidays early. I usually start holiday planning when it comes to my budget as soon as school starts in September. You can even start putting aside money into a separate savings account with the start of the New Year.

We all want to make our children happy and give them a wonderful holiday season, but remember to keep yourself in good financial shape. This is one gift more valuable than anything Santa leaves under the tree.

Carmen Rita Wong is the President and Founder of Malecon Productions. She is the former co-creator and host of the only national, daily personal finance television show, On the Money, on CNBC. Carmen was also the co-founder and former President of an all-female financial planning firm and is currently Assistant Industry Professor of Finance and Risk Engineering at NYU Polytech.

Should You Take Out a Second Mortgage on Your Home?

Financial Advice By: Carmen Rita Wong

Q: Sometimes I feel like I’m one of the lucky ones: I found my dream job about a year ago and am so happy with the work that I’m doing!  Unfortunately, I had to take a pay cut for this position and my money seems to be coming up short every month, no matter how I try to readjust my budget.  I’ve heard other people talking about “refinancing their home” or getting a “second mortgage.”  I’m not sure that I fully understand what either of those mean, but I do own my own home, so do you think either of those would be useful options for me to consider?

I’m thrilled that you’ve found your dream job– so few of us do that it’s nearly worth its weight in gold! But of course, dreams don’t pay the bills. It’s also good news that you are a homeowner, but let’s not go there yet.

Allow me to expand your mind first: Your income doesn’t necessarily have to based only on your full-time salary. Dream jobs plus a family (if you have one) tend to take up most of your life, but if there’s any way that you can carve out the time to find ways to bring in other income, I’d rather you head there than pulling money out of your house, which can be a slippery slope, draining your biggest asset. I don’t know what you do for a living, but there are some great, legitimate ways (stay away from those cheesy work-from-home-get-rich ads) to earn on the side, such as TaskRabbit.com or Elance.com.

And if working more is out of the question, then instead of borrowing from your home’s value–which can be costly not only in interest and fees, but in terms of lowering your own net worth–consider which relationship you want long-term: Do you want a long-term relationship with your career or with your home? When budgets can no longer be slashed, I always advise what feels like some tough love. We can’t have it all. That can mean sometimes considering selling your home instead, using some of your proceeds as a down payment on another, less expensive home, then setting aside some earnings into an emergency fund.

In that way, you maybe can’t have it all, but you can have two very important things: both a dream career and, peace of mind.

 

Carmen Rita Wong is the President and Founder of Malecon Productions. She is the former co-creator and host of the only national, daily personal finance television show, On the Money, on CNBC. Carmen was also the co-founder and former President of an all-female financial planning firm and is currently Assistant Industry Professor of Finance and Risk Engineering at NYU Polytech.

Dear DFS: How Can I Get My Dream Company to Notice Me?

Dear DFS,

I think it is time to move on from my current position and find a new job, but I don’t just want any job!  There is one company in particular that I have wanted to work with for years now.  I hate to sound cheesy, but it’s kind of my dream job! I regularly check their website to see if they have any openings that would be fitting for me, but haven’t seen anything yet.  Is there anything that I can do in the meantime to let them know about me?  I know that good things come to those who wait, so I am prepared to be patient until the right position arises, but I want to be as proactive as possible, as well!

I am determined to achieve my dreams,

Tara

Manchester, UK

Dear Tara,

We are really happy to know that you’re following your dreams and are inspired to develop a great career with the company that you really desire to work in, but you have and can do much more than just checking their website or waiting for the lucky start to reach you!

So what can you do in the interim until you reach your dream position? Well, that gap can be filled in many ways—by continuously collecting information and research on the company, as it seems you have been doing; posting your resume to company’s online job board if they have one; or even attempting to reach out to their human resources team directly to set up an exploratory interview.

Are they hosting an event in the near future?  RSVP for it and make plans to attend, so that you can mingle with those that matter the most in the department that you’re aiming for.

Are there other organizations in your area that are hiring for the same type of position that you’d like to acquire?  Garnering more experience in your preferred area of work is never a bad thing and this might actually make you a more desirable candidate to the company that you really want to work for.

And never underestimate the importance of networking!  If you ask most people, “how did you get your job here?,” I bet that nine out of ten of them will say that some person told them about it. Here in Lisbon, we refer to those people as “bridge people.” They know you, you know them and they know someone else. Most jobs get filled by these “bridge people.

You already identified your dream company, so now it’s time to identify your “bridge people.” LinkedIn can be your best friend here. I´m sure that the company you want to work for has a Company Profile page on LinkedIn, as most employers recognize it as a valuable tool to find valuable employees just like you!

Go to that Company Page and see if you’re connected to anyone that works there.  Is there just one or two degrees of separation between you and a current employee of the company?  Then ask your mutual acquaintance if they will make an introduction for you.  If the degrees of separation are a bit greater, simply send them an invite to connect and see what happens.  Now that you have the names of the current employees that would be most relevant to you, you can also Google them and see if you can find their work email address and try to connect with them directly that way.

Bridge people” or not, never forget that people are crucial to your job-hunt and beyond.

Good luck and count on us.

Regards,

 Fernanda Machado

Founder & President

Dress for Success Lisbon

Dear DFS: How Do I Find a Mentor?

Dear DFS, 

I have only been out of work for a few weeks now, but I don’t know how long this period of unemployment will last and I’m scared that I will lose my way if I stay out of work for too long.  Every now and then, I’ll hear the word “mentor” mentioned and I’m thinking that, right about now, I could really use one of those!  A little extra help in staying focused never hurts, right?  But how do I know who will make a good mentor?  And once I’ve found someone that I think would be a good one, how to I ask them?  I know that everyone is busy with their own schedules, so I don’t want to impose on anyone, but I would like someone who’s my go-to for professional advice! 

Focused and fearless, 

Miranda

Augusta, GA

 

Dear Miranda,

What a great question and way to approach, not just your job search, but your work life as well. A mentor is an important part of your employment toolbox for a number of reasons. First, they can be a great mirror for you to glimpse a reflection of yourself in. It’s helpful to have someone who can challenge your personal self doubt because, let’s face it, we all question our abilities at times. It’s also great to have someone who can be a cheerleader and spokesperson for you when they hear about opportunities.

The advice I give about mentors is to make sure it is someone you both like and respect. Because, simply put, you are more likely to take their advice if you like and respect them. Make sure that others like and respect them, too. If they are going to advocate for you, then you want other people to trust them just as much as you do.

They should be in a higher position than the one you are in or that you want to be in. That way they can provide you with helpful tips along the way. They don’t have to be in your field of work, but it helps if they are. Someone who knows your line of work can offer great tips on trends in the field, opportunities that you might be qualified for and how to frame your cover letter or resume so that you are getting real consideration.

Have you made any connections at your former place of employment? Have you attended conferences and made connections, or do you have friends who you used to work with who have moved on to higher positions? Also, scope out some of the people at activities that you regularly attend like church, your weekly yoga class or PTA meetings.  These are some sources for good mentors. Sometimes what you’ve been looking for as been right there along!

In terms of asking—just do it!  Everyone loves a nice compliment and asking someone to be your mentor is a top-ranking nicety.  By asking someone to be your mentor, you are saying that you trust them with your career and, therefore, your livelihood.  Telling someone you respect their work and would love for them to be your mentor will usually get a positive response, but it is important to consider the time of the person you are asking.

The best way to approach this is to be organized about what you need from them. If you want someone to give you specific feedback about your resume or cover letter, or to conduct a mock interview with you, tell them that. If you want someone to consult with about your job search in general, tell them that when you are asking them to mentor you. Remember that if it is not working for you, there is no rule against you finding another mentor. You need to find the right fit for you. A really good mentor can be an invaluable tool and can help you stay grounded during your job search. You are asking all the right questions, so I know you will find the perfect match!

Best wishes,

Harriet Williams

Executive Director

Dress for Success Burlington

(Photo by Steve Knight Photography)

Make Quick Money on the Smartest Investment of All – Yourself!

Financial Advice By: Carmen Wong Ulrich

Q: I’m down to my last month in savings, and I need to make money fast! I’m having a hard time finding employment, but I heard that you can make money just by investing money. Should I invest my money to try to make a quick profit before next month? If so, where can I find the best investments with the fastest returns?

A: You know that old saying, “Too good to be true”?  Well, imagine if what you said was true.  Imagine if you could just invest some money and then make money, every time, in a short time.  Well, we’d all be rich! 

The truth is that investing means one thing:  No guarantees.  Why?  Because to invest money means to take on risk—the risk of losing money, sometimes, a whole lot or even all of it.  There is no guaranteed quick-money-making investment.  Not one.  Yes, some folks—few folks!—get very, very lucky and make a return on an investment over a couple of months or years.  But, certainly not weeks, which sounds like your time frame.

In your situation, you need the opposite of risk.  You need a guarantee.  You need income, real income, and quickly.  The only way to do that is to earn it.  But, you don’t necessarily need to earn it the usual way.  You can try legitimate sites on the web with hourly work such as TaskRabbit.com, where you can hire yourself out based on your skills such as running errands, putting together furniture, housekeeping or data entry.  Also, try your local message boards.  Yahoo message boards exist for thousands of neighborhoods around the country and AOL has the Patch network.  Sign up and scan listings for local jobs. 

And in the meantime, spend some time on your biggest investment—YOU.  Never stop reading or learning or building your network of friends and contacts.  Ask folks you admire for help with a solid career-growth plan.  Every person you meet and impress builds a framework to ensure your hard times of finding employment end up in your rear view mirror.  Now that’s an investment!

Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.

Marriage: Joint Lives and Joint Bank Accounts

Financial Advice By: Carmen Wong Ulrich

Q: I’m getting married in less than two months, and I have no idea what I’m doing when it comes to joining my finances with my future husband’s! Where do I even start? My fiancé and I have barely talked about money since we got engaged! Help!

A:  I wish you’d asked this question after your third date!  When it comes to money and love, it’s rarely too early to start even some discussion.  But it’s also never too late.

Start by pulling all your financial-facts together:  How much debt do you have and in what form?  What kind of savings do you have as well as any other assets?  What state is your credit record in?  Both of you should make this a starting point—the facts.  By being upfront, especially about debts, you can both avoid surprises down the road, say, when you buy a home together.

This is just a jump-off point.  From there, start talking about assumptions and expectations about household expenses such as who-pays-for-what.  Set up a system that you both can agree on, for example, maintaining one household checking account that you both contribute to in order to pay joint bills such as rent or the mortgage.  And just as importantly, discuss your financial goals:  Do you want to start up a joint annual vacation fund?  Or save up for a home or kids’ college education?

Come to the table with an attitude of partnership, not confrontation.  After all, if you’re partners in life and in love, you should also be partners in money.

Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.

Cashing Out Your 401K

Financial Advice By: Carmen Wong Ulrich

Q: I know that 401-Ks are supposed to be for retirement, but I could REALLY use that money today. Can you please explain the fees/taxes that are associated with liquidating your 401-K and are there any exceptions in the laws that would allow me to use my unemployment status to avoid them?

A:  I realize you may just need access to those funds to, for example, stay in your home.  Of course, I’d rather you not touch that money—it’s your future.  And if you simply cash-out a 401k or other retirement account, you can get hit not only with taxes, but severe penalties that can wipe out 40% or more of your balance.  If you need it that badly, get to it the right way—by applying for a hardship withdrawal.  This kind of formal withdrawal allows you access to the funds in your 401k, but without the penalties, only the taxes.  For more information on hardship withdrawals, you can read all about it on the IRS website!   Good luck!

About the writer: Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.

Is Getting a Loan from a Title Company Right for Me?

Financial Advice By: Carmen Wong Ulrich

Q: I’m thinking about getting a loan from one of those title companies that advertise on TV. The ads say I can use my car title and get automatically approved. Are these legitimate lenders and would you recommend them? I will repay the full amount as soon as I am working again to avoid so much interest.

A:  This one is an easy answer: NO WAY! Why?  Super high interest rates that could be on par with a payday loan.  Borrowing that pricey means keeping you in debt, possibly just to keep up with payments.  Fix what’s really wrong here.  Are you out of work or maybe just over burdened with other loans?  If you’ve got lots of debt, first head over to an NFCC.org office near you, which is run by nonprofit credit counselors.  For a small initial fee (they don’t make money off of you), they can give you a solid assessment of where you’re at credit-wise and what lenders you should avoid.  They can also help you with a debt management plan that not only gets you out of the red for good, but improves your credit, so you don’t have to borrow at such a high interest rate.  If you’re just in a tight spot income-wise and you need cash, look instead to make more money either by taking on a part-time job or being creative such as listing yourself as a “TaskRabbit” by the hour or by the task.  Also, make sure your budget is cut as far as it can go before you borrow.  Buy nothing but essentials.  And don’t forget about your local community banks or credit unions; they’re more likely to have lower rates and loans that won’t keep you on a borrowing spiral.

 

About the writer: Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.

Ask DFS: How do I explain short term employment on my resume?

Dear DFS:

I was only at my previous job for a few months before I was laid off.  Should I list that company on my resume? I want to be honest, but I don’t want the short employment period to make me seem irresponsible. What should I do? 

Counting the days away in Brooklyn,

Andrea

Dear Andrea:

Yes, you should definitely not be shy to list that company on your resume!  With the highs and lows of today’s economy, it’s not uncommon for an employer to encounter a candidate who has been laid off in the recent past.  This isn’t necessarily a reflection of your work ethic or skill level as an employee, but that your previous employer was undergoing certain changes and was forced to make the tough decision of eliminating a portion of their workforce.

Honesty is always the best policy when it comes to your interview with a new potential employer—you can even implement what I like to call the Three E’s!

Explain the lay off in factual terms when asked why your employment ended so abruptly.  Did the company simply downsize?  Was your position was eliminated?  Be as specific as possible to your lay off, but just remember to always talk about your pasta employers in a positive light!

Emphasize that you are eager to move forward with a new career and that you are looking for a company to grow with—and, in fact, to help grow!  Using the word “career” shows them that you are interested in a long term relationship with them and that previous short employment period shouldn’t be a concern.

Elaborate on your strongest qualities and how they can benefit the company that you are currently interviewing with!

Just like any other challenging question you’re asked in a job interview, you have the opportunity to turn this into a positive.  Anticipate that you will be asked about why you were only with your previous employer for such a short period and craft an answer ahead of time, so when the interviewer finally poses this question to you, you can answer with ease and keep the conversation flowing smoothly!

Sincerely,

Glynis W. Bell

Founder & Executive Director

Dress for Success Winston-Salem