It’s not a meritocracy June 28, 2011

In my continuing series of things that are not exactly on topic, let’s talk about career advancement.

Whether you know it or not, you’re in marketing. You have a product to sell, and that product is you. You have to sell yourself to your boss, to his boss, and to your coworkers. Not in a “lady of the night” kind of way, of course, but in a “my work deserves recognition and compensation” kind of way. No one is going to do that for you. Your company is not going to pay you more out of the kindness of its heart. Your boss is not going to give you the best assignments just because you’re there. Your name is not going to get in front of the higher-ups just because you show up on time every day. You have to make these things happen. You have to market yourself.

We seem to have this idea that the workplace is a meritocracy. If we show up on time, stay late once in awhile, meet our deadlines, and periodically bring in cookies for the department meeting, someday, someone will notice and reward us. Most likely, that is just not going to happen. All that will happen is that you will get a nice performance review, you will get your cost of living increase every year (if you’re lucky), and everyone will say thank you for the cookies.

The workplace is not a meritocracy.

If you are the best performer in your company, if you beat your quota by leaps and bounds, if you put in more time than anyone else, if you implement a new procedure that saves 1,000 hours and $1,000,000.00, all your company is going to do is say, “thank you,” unless you actively tell them that you expect more than that. Doing your work well, even if you do it better than everyone else, is not enough to “get you noticed.” Stop trying to “get noticed” and make people notice you instead. There’s a difference. Dressing for the job you want is nice and all, but if you don’t tell anyone what you’re dressing for and why you’d be amazing in that position, all they’re going to do is compliment your shoes.

A couple weeks ago, someone left my department. She had been there a few years, a little longer than I have, and was by all accounts a good worker. She was well-liked and dependable, and did her job well. I am told, although I do not know if this is true or not, that part of the reason she left was that she was upset when I was promoted. Not so much that I was, but that she wasn’t. She had been with the company longer, did good work, and in her mind she had been passed over.

I go to work on time every day, I do my job, I’m well-liked and dependable. Same as her. So why did I get the promotion when she didn’t? Because I asked for it. I interviewed for a management position in my department. The position was eliminated before it was filled, so I didn’t get the job, but I was the only person in the department who interviewed for it. I was the only one who stuck my neck out and sat in a room across the table from all of the other managers in the department and said, “I can do this job, and let me tell you why.” When the end of the year came around, they still didn’t have the authorization for the management position, but they did get authorization to put me into an in-between spot. They actually created the position for me. They didn’t have to do that. So why did they? Because I marketed myself. And when the management position comes around again, I will market myself again, and I will get what I want because I asked for it.

With companies downsizing and looking to cut costs, many of us have taken on additional work, additional hours, additional responsibilities. Have we been compensated for them? Probably not. But, have we asked for that additional compensation? Most people are afraid to. Unless you have a really hostile work environment, though, you’re not going to get fired for asking. Last year I fought both my promotion increase and my merit increase. I lost the battle on both fronts – but I didn’t lose any money. I still had the original increases. I still had the respect of my boss, and hers, and hers, because I handled the situation professionally rather than ranting and raving. And I got a one-on-one meeting with our department VP (not easy to do since he’s based in Europe) in which I got to tell him all that I had accomplished in the past couple years, and all of the things I was working on. Now I’m on his radar, because I asked for what I deserve. If nothing else, I know now that he is watching my work, because he’s told me as much.

You don’t have to wait until review time for this conversation, either. If your company has mid-year reviews that generally don’t include salary increases, that’s a great time to discuss your responsibilities, accomplishments, and compensation with your boss. If not, set up a separate meeting. I know it can be nerve-wracking, but you’re smart enough to come in armed with facts and figures, right? You’ll have the supporting documentation to show your value. Even if you don’t get exactly what you want out of that initial conversation, it can lead to positive results down the line as long as you keep things calm and professional.

If you do nothing but your job, even if you do it really really well, the company will do nothing but assign you work and pay your salary. If you want more than that, you have to speak up. You have to market yourself. You know what you want, now let others know about it as well.

5 minutes a day to protect yourself April 28, 2011

I log in and check my bank account every day. I take a look at the new transactions, import them to another program…there’s a whole process that is not the point of this post.

Most people do not check their bank accounts every day. Some don’t really check them ever, relying on ATM receipts for their running balance. Other people check weekly, or occasionally, or on days when they get paid. Some don’t use online access at all and just check the paper statements when they come in the mail each month.

People, get online access to your bank accounts and check them regularly. At least weekly, if not more frequently. Here is why:

A couple weeks ago I looked at my bank account and saw a transaction I did not recognize. It was for $0.00, so if I had not logged in to look at the pending transactions, I never would have known about it. It had no impact on my balance. I know that sometimes if you go to a gas station or book a hotel room, you’ll see a $1.00 authorization on your card until the full amount posts, but I’d never seen a $0.00 authorization before, and I didn’t recognize the name of the company.

I called my bank.

They said that the transaction was from a company listed as RBS Netherlandia. I have not been to the Netherlands since 2001, and when I was there I didn’t even have this bank account. I hadn’t purchased anything from a foreign company. I had no idea who these people were. The customer service rep recommended that I cancel both my and my husband’s debit cards and get new ones.

She told me that the bank is seeing things like this more and more. A scammer will post a $0.00 transaction to an account and wait to see if it clears. Most people will not notice it because there’s no impact to their balance. Once the transaction goes through, the scammer knows that the account is valid and they wipe you out. Most banks will refund the money and conduct a fraud investigation, but that’s a headache and no one wants to go through that, plus losing the money from your account even for a couple days can be problematic at best, especially if you have checks or automatic payments pending.

I cancelled both of our cards, and over the next couple days my husband and I went to the bank to get new ones, with new numbers. This was at no cost to us except for the 15 minutes it took to get the cards, and there were no other problems with our accounts.

People, get online access to your bank accounts and check them regularly. The five minutes it takes is well worth the potential headaches you could be preventing.

3 Steps to Simplifying Your Finances March 31, 2011

Money and finances can be pretty overwhelming. There’s a lot of financial advice out there, and a lot of methods and systems that claim they will be able to simplify your financial life, many of which end up being pretty complicated to use. In the interest of keeping my own contribution to the fray as simple as possible, I’ve broken down simplifying your financial life into three basic actions:

Gather
Put all of your financial information in a central location. You can use a program like Quicken or an online service like Mint or Yodlee. Link these services to your bank accounts, credit cards, investments, etc. so that you can log in and get a big picture snapshot of your balances.

Don’t wait until tax time to pull your tax documentation together – do this throughout the year by keeping tax bills, donation receipts, and any other information you were scrambling for last April in a single location. Having this information together not only makes it easier for you to assemble everything when tax time rolls around, but also makes it easier to gather information for a mid-year tax review if you are so inclined.

Consolidate
Do you have more than one savings or checking account at more than one bank? Do you have money sitting in accounts you haven’t used in years? Consolidate your checking and savings into as few accounts as possible, and close the accounts that you no longer use. If you can, keep your accounts at the same bank so that you can easily transfer money between them, and you have one fewer institution to deal with when you need to make a change.

Likewise, consolidate your investments as much as possible. Roll over 401(k)s from prior employers into your current plan, or combine several IRAs into one. As much as possible, keep your investments with a single brokerage.

Look into consolidating your insurance policies. You may be able to take advantage of discounts if you insure your home and car through the same company, for example. If you are making several payments to several companies for your policies, consolidation can allow you to switch to one monthly payment for all (or most) of your insurance needs, and often provide you with a single agent to deal with rather than having to make multiple phone calls.

Consider consolidating other bills as well. If your home and cell phone service are provided by the same carrier, you may be able to switch to receiving only one bill for both services each month (Verizon does this). Many cable companies will offer “bundle” packages for internet or other services that are then billed together. You’d need to evaluate the offer to see if it’s a good value and meets your needs, but if it does then that’s one less bill you have to pay each month, maybe more.

Reduce
Reduce the number of credit cards that you have. Close accounts that you are not using and are not planning to use, consider balance transfers, and pay off what you can afford to as soon as you can afford to. The credit score people aren’t really into sharing what will affect your credit score and how, and I’m no financial planner, but I do know that the less credit card debt you have, the fewer cards in your wallet, and the fewer credit card bills you have to deal with each month, the simpler your financial life will be.

If you are tracking your budget, reduce the number of categories you are tracking. Consider grouping your mortgage, utilities, and insurance under “household” rather than in three separate categories. Widen the “entertainment” category to include gifts, books, and magazine subscriptions as well as nights out. Stop tracking categories that don’t matter to you. See if you can get your tracking down to no more than five categories.

Simplifying your finances may save you some money, but more importantly it will save you a little bit of time and a whole lot of sanity.

Organized Finances (or, Why I Hate Budgeting) August 12, 2010

You have to have a budget, right? That’s what everybody says is the first principle of maintaining financial sanity for your household. You write down how much comes in each month, how much you’re obligated to send out, and make reasonable decisions about what to do with the rest. Except, that doesn’t really work. It makes much more sense to look at your household finances like a business and use a cash-flow model instead.

Start by writing down your monthly bills – what they are, the amount, and when they are due. This list should just be recurring, non-changing expenses – your rent/mortgage, car payments, loan payments, day care, etc. This is the money that you are obligated to spend each month, at least to the minimum payments due. There’s no wiggle room here. Then write down the amounts and frequency of paychecks coming in, along with the next few dates you will get paid. If you can, put the information in Excel or use a program like Quicken or Money. If you did this in Excel, re-arrange the information by date (Money or Quicken will do this for you). A budgeting program will give you a running balance; if you are working in Excel you may want to set up formulas to do this. Basically what you end up with is a big checkbook ledger.

You’ll notice a couple things – one, even if you get a regular paycheck, your income may not be constant month to month and may not come in on constant dates. I get paid on the 15th and the last day of the month. My income is constant and predictable. My husband gets paid every two weeks. This means that some months he’s paid on the first few days of the months and some he doesn’t get a check until almost 2 weeks in. Some months he gets three paychecks. Some months that last check doesn’t come until the 25th or so, which doesn’t make it incredibly useful for this month’s budget. Simply having an in/out budget setup takes none of this into account and could potentially allocate this money to bills due before the paycheck actually arrives.

The second thing you’ll probably notice is that some times of the month are just more expensive than others. For example, if your rent and day care bill are both due on the first, you have to take that into account when figuring out how much available money you really have.

Here’s a simple example:

With the budget setup, it looks like you have $3,275 available to spend for the month. That’s a good amount of money. Maybe this is a good month to get the new television you were looking at, or take advantage of a sale at the furniture store. Maybe you should go out and get them right now!

Here’s the same numbers, set up as a cash flow:

Looks pretty different, doesn’t it? Half of the money you have coming in to the house is at the very end of the month. In fact, you only have $500 for discretionary spending until the 13th. Maybe you should hold off on those big purchases until closer to the end of the month.

Maintain your cash flow throughout the month just as you would a checkbook, adding in extra money and subtracting extra expenditures as they occur. This will give you a clear financial picture not only of what is coming in and going out, but when it is all happening.

About halfway through the month, set up your cash flow for the next month. In the cash flow picture above, it looks like you’ll be totally loaded after the last paycheck comes in, but remember that on the first day of the next month you’ll have that day care bill again, and you have to account for that.

Organize Your Debt June 29, 2010

I have been using the most awesome debt repayment tool I have ever seen for the past couple months. It is so awesome that I brought it up in conversation with a friend of mine. She asked me to send it to her – she thought she could make some use of it, and that a couple other people she knew could make use of it, too. I shared it with her, and now I’m sharing it with you:

Trees Full Of Money Debt Repayment Calculator

Here’s how to use it:
First, write down your debts. Don’t guess on the numbers – pull out your most recent bills and statements. Write down the balances and the interest rates. Write down the expiration date of any teaser or intro offers, or any payment deadlines. Write down the minimum payment amounts. This is the information you will need to set up your spreadsheet. You may want to leave off your mortgage or student loan (if it is very substantial) and tackle them later in a separate plan, but don’t pick and choose among your other debts. Everything you owe on credit cards, store lines of credits, your car, loans from family – they should all be included here.

Stop hyperventilating. It can be daunting to see everything you owe written out like that, but you can tackle this, and you can conquer it.

The spreadsheet is based on the idea of “snowballing” your debt. There’s a great explanation here, but in short, it is a method that takes a set amount applied to debt payment each month and systematically pays off your debts one by one until you are finally debt free.

Traditionally, the debt snowball focuses on your smallest debt first. This will give you an early psychological victory, which is nothing to laugh at. Some people argue that you should pay the debt with the highest interest rate first, as this will save you the most money in the long run. While both of these considerations are important, I’ve found it best to look at each debt in terms of importance.

Any debt is bad debt and you want to get rid of it as quickly and efficiently as possible, but some debts may be more important than others. For example, you may have borrowed money from friends or family. They are probably not charging you interest, and they may have told you to pay the money back “when you can,” rather than on a specific plan or by a specific date. To me, these debts are more important than credit card payments, even if those balances carry interest. People first, companies second. I’m guessing that you care about your relationship with your mom/sister/best friend/etc. a lot more than you care about your relationship with your commercial lender. Pay back accordingly.

Also, you may have some debts with time-sensitive repayments. This would include credit cards with teaser rates or store loans that are 0% for a given amount of time. Pay these off before you get smacked with the interest charge. You will save the money you would have spent on interest, and you get the psychological benefit of having “beat the clock.” Also, remember that for many store loans, they will back-charge interest if the loan is not paid off by the end of the intro period. If you have six months to pay off your dishwasher at 0% interest, chances are that come the 7th month, they will tack on all the interest they would have charged in the first six, plus the interest for the seventh month, and then more interest going forward. You don’t want that to happen. The difference can be massive – it could even erase all of the payments you have already made.

Once you have figured out the order in which you want to pay off your debts, enter the information into the spreadsheet in that order. The spreadsheet will do the rest of the work for you. (Note that if you want to run a couple different scenarios, you will need to re-type the information on the first page of the spreadsheet. It doesn’t seem to work right if you cut and paste). Follow the instructions on the spreadsheet for bonus payments or any additional amount you are able to commit to debt repayment on a monthly basis. The output page can look a little overwhelming, but it’s not so bad once you get a handle on the setup (and hide any rows/columns you are not using). Check your results. Make sure that anything with an intro or teaser rate is paid off in time. You may have to work in some extra payments or re-order the debts in your plan in order to accomplish this, but make sure you are still always covering your minimum payments on your other debts.

You will notice as you start making payments that some of your minimums will start to drop. Generally this is not by more than a couple dollars. I’ve found it easier to just continue making the initial minimum payment over the life of the process. It’s easier than trying to manipulate the spreadsheet as the true minimum changes, and if the change is only $5-$10, it won’t matter that much in the long run anyway – probably not even a dollar in saved interest. Keep it simple.

Hopefully you’ve found the end results encouraging. If nothing else, you have all your information in one place, and you have a clear action plan. Pulling this off requires commitment, but having your responsibilities laid out in front of you can help keep you on task. You may also find that you can pay off your debts sooner than you thought. Alternately, it may take longer than you thought it would – but that’s still information that you need to know.

If, after looking at your spreadsheet, you are still hyperventilating, or you realize that you can’t cover your minimum debt payments, or there’s another huge problem that becomes apparent, enlist help. Talk to a trusted friend or family member, check to see if your job offers financial counseling through its benefits program, or look into professional debt counseling. Just be careful – there are a lot of fakes and crooks out there, and you certainly deserve better than that.