How-To Guide

New Credit Card Rules: Who Really Benefits?

Jabulani Leffall — Wed, 24 Feb 2010 15:00:02 +0000

By the time you imbibe these words with your eyes it will be easier to pay your credit card bill, easier to run up your bill, and easier to absolve yourself the responsibility of charging your card to the max.

As a preface, some of the new credit card reform rules that passed earlier this week did eliminate some very annoying and predatory business practices designed to line the pockets of credit card companies, and that’s a good thing.

Practices such as randomly increasing interest rates on outstanding balances, double-cycle billing, or carry-over balance billing are shady at the very least and outright usury at the most.

That said, it's a misnomer to, for lack of a better term, bill this as a victory for the people, to label what is essentially a passive bailout, reform. Yes it’s a misnomer — not quite a farce, but the word reform is not quite accurate either.

Let’s look at some of the fine points of the ruling, which at the end of the day is really meant to encourage you to go back into the store to get the GI Joe with the Kung-Fu grip; or take that vacation that you can’t afford to take; or go ahead and charge that engagement ring because after all, the best things in life are free and diamonds are forever.

Credit card issuers can’t randomly or just up and slap new interest rates on you. This is good because you can pay your bill and budget when you can pay and how much you pay without having cartoon eyes in the next billing cycle.

Credit card companies must give at least a month and a half (45 days) notice of any changes in card terms. This is positive because cardholders who don’t like the new terms should do what they should in most cases do anyway — pay off the balance and cut the card up.

Cardholders cannot be charged over-credit-limit fees unless the cardholder authorizes an over-limit transaction. Unless it’s literally a matter of life or debt, this shouldn’t apply to you. You don’t need those new Jet Skis and it won’t kill you to keep paragraph-paragraph passing that Kindle until the price comes down.

Credit card companies must state their rules clearly and tell customers how long it will take to pay off their balance. This is good in spirit but any cardholder who says they read fully the terms of their card contract — that is unless they’re a lawyer or a scholar in the ancient language of Bureaucratese Latin — is fibbing, maxed out, or both. Nonetheless, the closer to plain English — probably won’t say “do not use this plastic card unless you produce more than you consume” — the better for “victims” who find themselves in the hole.

Card companies can’t push up rates in the first year. This leaves room for 45 days notice on increased rates and room for interest rates to go up in the second and third year to push interest up after you charged that electronic step ladder and later decided to hire a roofer.

Credit card payments that are more than the minimum must now to be charged to senior debt. This has nothing to do with High School, College, or Grand Slam breakfasts at Denny's. What it means is that the older or most pressing consumer debt with the highest interest rate will be where your $30 bucks on your $2700 balance goes, instead of just paying for interest and late fees. Like the “over-limit transaction” rule, if you’re a beneficiary of this you’ve already done way too much.

Credit card companies cannot charge interest if debt is paid on time. This is the most sensible rule of all, and shame on credit card issuers who were doing otherwise.

Issuers must get the signature of a parent or guardian when extending credit to consumers under the age of 21. This is a great idea but probably still won’t stop college kids from going to the ATM with their credit cards or using branded cards.

In the end, the Obama administration will get a pat on the back for fighting for the little guy, but these are new rules encourage you to come back once again and spend what you don’t have. They also don’t apply to what you’ve already spent, which you didn’t have.

Unfortunately, credit as originally intended, used to be a financial tool for the industrious, used for business growth, as a promissory note against gold or something tangible. This credit model is no more. There are credit markets where you can trade debt for debt ,even trade based on the probability that a third-party will be a deadbeat. Face value for face value is no more in this system of credit.

It used to be that credit was used as a deferred payment through promise designed to spur risk and motivate borrowers to produce. Now as our unemployment, savings rates, and consumer debt levels suggest, credit has in more modern times been used by the upper class to hold everybody for ransom. The upper middle and middle class have used credit to pay off other debt and laugh heartily at the neighbor who has the Range Rover 4.0 instead of the Range Rover 4.6. The lower middle class and working poor has used credit to float ourselves as we look for better opportunities or pay our way through college or look for a new job but still want to fell “alive” via our purchases and in some cases, unemployed nights on the town.

To be sure, these new rules may be a good crusade, but what many or perhaps not enough are wondering aloud, is whether the new rules will encourage the same behavior that made them necessary in the first place.

This article is from Jabulani Leffall of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Prevent Identity Theft

Thursday Bram — Fri, 08 Jan 2010 04:33:47 +0000

Identity theft is a growing concern: with surprisingly little information, a thief can do lasting harm to your credit score and bank accounts. However, there are steps that you can take to both protect your personal information, as well as handle a situation of identity theft. It's important to be vigilant about your financial privacy; taking steps to protect your information now can save you hours of repairing damage down the road.

Keep your personal information personal

There are certain types of information that identity thieves specifically target:

Social Security numbers
account numbers
passwords

It's a matter of common sense to be careful who has access to these sorts of information, but it's also worthwhile to take steps to protect them. On the most basic level, that can mean controlling who has access to your personal information.

A mailbox can be a prime target for someone interested in obtaining your account numbers, as well as a trash can. Using a locked mailbox can help reduce the number of people with access to the bills and other sensitive paperwork you receive on a regular basis. Shredding any paperwork you throw away is a good next step. It isn't enough to just shred those documents you consider sensitive, however. Someone with time on their hands can reconstruct shredded papers. If you make a habit of shredding extra papers, like junk mail, you can make it harder to put your pages back together again. It's also important to keep paperwork like your vehicle registration and insurance forms safe. While you may keep such papers in your car, keep your car locked when you are not in it. Keeping your computer secure is equally important: keep antivirus, spyware, and firewall software up to date and only provide information online to sites and individuals you trust.

It has become somewhat common for people to write down passwords and PINs, or store them in their cell phones. This practice can endanger your personal information. If an identity thief was to get your cell phone or any written down passwords, he could breeze through the protections on your accounts meant to limit access only to you. Choose passwords that you can remember — preferably longer passwords with combinations of letters, numbers, and symbols that cannot easily be guessed.

Don't give out financial or personal information

Many identity thieves make a point of trying to get you to give them your personal information.

Phishing scams are among the most common methods: you may receive emails that look like they're from your bank or another company you do business with. These emails ask you to log in or confirm your information and typically take you to a website that looks identical to the one operated by your bank. In fact, though, it's a scam meant to collect login information in order to get access to your account.

There are scammers who also makes phone calls, claiming to be from your bank or other financial institutions, as well as scams run by text messages.

Be absolutely sure that you're connecting with the correct company before you enter personal information. Enter website addresses by hand, rather than clicking on links, and only use listed phone numbers when communicating with banks and other financial institutions.

Your protective efforts should include your medical insurance. A growing number of scams make use of unauthorized access to health insurance information to get procedures done on someone who is not insured or convince insurance companies to pay for procedures that were never performed.

Keeping an eye out for identity theft

While it's important to take steps to protect yourself against identity theft, it's also important to keep an eye out for signs that your personal information may have been compromised. Because of the increasing frequency of leaks of information on the parts of banks and other companies, it's possible for the wrong person to wind up with your information even if you do everything right.

One of the best steps you can take is to go over your credit report and bank statements on a regular basis, checking for any incorrect information. Dispute anything that is incorrect; you may even catch the first sign that someone has stolen your identity this way, which will make the matter a lot easier to clean up.

What to do if your identity is stolen

If you discover that your identity has been stolen, there are steps you need to take immediately in order to repair the damage. The first step you should take is to make a report to the local police in your area. Depending on your state, you may also be able to file a report with your state's attorney general. Because many identity thefts are not actually a local matter, you will need to file a complaint with the Federal Trade Commission, which maintains a page dedicated to identity theft.

Once you have filed reports with the appropriate authorities, you'll need to close each account that the thief had access to. Keep track of each conversation you have with the companies that hold those accounts — you'll need to contact them first by phone and then by certified letter in most cases. You should receive written notification once fraudulent charges have been removed from your accounts. If you do not receive verification, you may need to provide further proof to the company in order to have the charges erased.

You should also go through your credit report and dispute any incorrect information or fraudulent accounts opened by a thief. It can take time to do so, but waiting makes them harder to dispute. You can order a copy of your credit report from each of the three major credit reporting agencies, as well as place a freeze on your credit reports. A freeze makes it impossible for anyone to request a copy of your credit report which, in turn, means that no one (including you) can open an account in your name while the freeze is in place.

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

College Financial Aid Options

Staff — Tue, 24 Nov 2009 23:32:48 +0000

College financial aid is money that students can use to pay for their college tuition, books and supplies, and living costs. With millions of parents and college students being financially unable to pay for college — especially in these difficult economic times — financial aid can be the only way to a college education.According to The College Board, more than $140 billion was given to students in financial aid between 2007 and 2008.It’s important for parents and students alike to be familiar with the kinds of financial aid available.

FAFSA

The FAFSA, or Free Application for Federal Student Aid, can be found in the high school guidance counselor’s office or online. This application is the first step toward finding federal financial aid to attend college. The government, as well as the student’s prospective college, will review the application and determine the student’s eligibility.

Borrowing Money for College

There are a lot of resources available for parents who need to borrow money for college. Certain types of loans created specifically for this type of need can be applied for, and are easier to repay than personal loans.

Perkins Loans

The Perkins Loan is available for low-income families and students with no other option for attending college. A 5% fixed interest rate is applied, and students don’t have to start repaying for nine months after completing college. Students who enroll in certain teaching, military, or public service jobs may be able to have their loans canceled completely, thus obtaining their college education for free.

Stafford Loans

The Stafford Loan comes with a fixed interest rate as low as 5.6%. Low-income students can receive subsidized loans that do not accrue interest until six months after graduation, or the student leaves school. Students can also receive unsubsidized Stafford loans, but interest on the loan accrues immediatelyt. As with the Perkins loan, the FAFSA determines eligibility for low-income students.

Parent PLUS Loan

The Parent Loans for Undergraduate Students (PLUS) is available to families who are not considered low-income, but must have good or excellent credit. The loans pack a fixed 8.5% interest and repayment must start within 60 days of receiving the loan. Some parents may be able to defer the loan until after the student completes college.

Scholarships

Many different types of scholarships are available for students who wish to attend college, but it’s important to find the ones you're eligible for. Certain organizations have scholarship money available, such as churches, unions, employers, high school clubs, government organizations and even corporations.

Consider scholarships that require minimal effort to apply for, and provide larger amounts of money. Some scholarships will decrease the amount of financial aid students are available to receive, so it’s important to choose wisely. If certain prestigious scholarships are within reach of a student, it may be more important to apply for these as opposed to any type of scholarship.

Grants

Grants are sometimes available to certain students, such as minorities, Native Americans, women, and exceptionally talented students. Grants may be available through government organizations or private organizations and citizens. Grants.gov is a great place to find available grants and apply for them.

Tax Credits

There are two important tax credits parents and students should know about if their adjusted gross income is less than $58,000 a year for single individuals and $119,000 a year for married individuals.

The Hope Credit

This credit can allow individuals to deduct $1,800 from taxes owed, and the credit can be used against student loans that are being paid on. Individuals must have at least $2,400 in college tuition expenses in order to use this credit.

The Lifetime Learning Credit

This credit allows parents to deduct $2,000 for each student attending college and $4,000 for students in midwestern disaster areas. This credit cannot be used if the Hope Credit is being used for the student already.

Tax credits are different from deductions in that deductions reduce the amount of taxable income one owes the IRS while tax credits reduce the taxes owed — dollar for dollar.

It’s important that parents or students fill out the FAFSA and any financial applications as early as possible. While some deadlines may be in the middle of the year, many types of financial aid are highly competitive and if the applications are not filled out quickly enough, the money can be lost to other students. By understanding the different types of financial aid available to college students, parents and students can determine the best types of aid for their situation.

This article is from Staff of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Can You Buy Your Way Out of the Rat Race?

Philip Brewer — Tue, 03 Nov 2009 14:00:01 +0000

If you're tracking your spending, you know how much money it takes to live on. If you're tracking your investments, you know about how much return you're getting from your capital. With those two numbers, you can get a pretty good estimate of how much money it takes to buy your way out of the rat race.

In its simplest form, the cost to buy your way out is just your annual spending divided by the return on your investments. I used to do that calculation a lot. When I got my first job interest rates were in double digits, so I could imagine getting $30,000 or even $40,000 a year — plenty of money to live on — from an investment as small as $300,000.

A simple theory

Of course, that model is over-simplified. For one thing, you have to account for the possibility that in some years spending will be higher. (What if you need a new car or a new roof or to send the kids to college?) I knew how to handle that one, though: The same way I was already dealing with it when my income came from a regular job — covering major expenses by cutting other spending.

More fundamentally though, the simple model doesn't account for inflation. And, at the time when interest rates were in double digits, inflation was similarly high. It wasn't a problem you could just handwave away.

I spent way more time than it was worth trying to construct a mathematical model for living off capital — a model that accounted for taxes, provided for reinvesting enough after-tax income to keep me even with inflation, and still paid out enough money for me to live on. All this, mind you, while my net worth (after a student loan) was probably negative.

Anyway, that was my first guess at my number: a capital sum of $300,000, properly invested, would yield enough that I wouldn't have to work. That's what it would have cost me to buy my way out of the rat race. Other people have done the same sort of thinking and written whole books about it, and come up with better-researched models for accounting for taxes and inflation. I've written reviews of a couple of good ones: Bob Clyat's Work Less, Live More and Joe Dominguez and Vicki Robin's Your Money or Your Life.

The less simple reality

In practice, though, for most people, buying your way out doesn't work out.

First of all, it's really expensive. Unless you're extraordinarily frugal, it's still going to cost you tens of thousands of dollars a year to support your household. And (as you can't really count on double-digit returns on your investments), it turns out that you need around a quarter million dollars to stand behind each $10,000 of annual income.

More fundamentally though, no amount of capital provides complete security. Your money can be lost any number of ways. The economy could turn down. Even if the economy goes up, your investments could go down. You could lose your money to theft, natural disaster, lawsuits, or government seizure (not to mention simple overspending). You can try to protect against any of those things through a combination of due care and proper insurance, but there's no such thing as perfect protection.

Your real protection against those things is your own productive ability — which is something that can't be stolen, taken in a lawsuit, or seized by the government.

Buying your way out of the rat race is a suboptimal strategy. It can work — people do it all the time, although not very many of them — but it's hard. It also doesn't leave you so very much better off than you were — you may be able to quit worrying about losing your job, but you have to start worrying about low interest rates.

Now, accumulating some capital is a great idea. In fact, I think everyone should have a medium term goal of accumulating enough capital that the income from their investments could cover their bare minimum expenses. Once you get beyond that, though, adding more capital starts yielding diminishing returns.

The real way to escape the rat race: Refuse to race with rats.

So, what do you do instead? Basically, invest in your own skills.

Improving your skill at the job you already have can help you earn more (important if you don't yet have that basic level of capital), but developing skills at entirely new things gives you a whole new layer of protection against economic downturns and incompetent managers.

Broaden the kinds of work you look for. Don't focus only on finding the highest pay — look for work that's interesting and that's useful. It's more fun. It's also more secure — there's only one job that pays the most.

Beyond that, learn how to do, make, grow, and find things for yourself. To the extent that you can directly provide the things your family needs, you're not dependent on either your capital or your job.

Each of these things improves your security. Taken together, they can give you as much security and freedom as a human being can achieve.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Save Money for College

Thursday Bram — Wed, 21 Oct 2009 22:49:29 +0000

The cost of attending college continues to rise. In order to handle those costs, you may be considering saving for your child's college education long before he or she is ready to enroll in school. There are several different options for building a college fund that will cover part or all of a student's college expenses. It can be confusing to sort through the different savings and investment options. Deciding between alternatives like a prepaid tuition plan or a savings bond isn't always a clear choice.

In order to make that decision, it's crucial to understand the options you have, as well as how each option affects your finances now and your child's financial aid when he or she is ready to start college. Section 529 plans, Coverdell Education Savings Accounts, UGMA / UTMA custodial accounts and savings bonds can all be good options when it comes to saving for college, but it's important to find the best option for you and your family.

Section 529 Plans

Section 529 plans offer a way to save money for future college expenses with some very significant tax advantages. There are two types of Section 529 plans. You can choose a prepaid plan, which allows you to purchase tuition credits at today's rates, or you can use a savings plan, which allows you to invest your savings in mutual funds. In either case, when your child is ready to withdraw money from the 529 plan, the withdrawal will not be subject to federal income tax, as long as the money is spent on college expenses.

A prepaid plan can be a more useful option if you're taking a long-term approach to saving for college. By saving money through a prepaid Section 529 plan, the biggest benefit comes if the cost of tuition rises significantly. Tuition costs do tend to rise every year, but in the short-term, they may not rise enough to make prepaying tuition the best option. In contrast, a Section 529 savings plan allows you to invest in a mutual fund — your savings earn money as long as the market is doing well. However, many investments can earn more than those chosen for Section 529 plans. Section 529 plans have low risks associated with them, but also have lower earnings.

That low risk comes out of the fact that both types of Section 529 plans are usually run by state governments. Any money you save through a Section 529 plan is generally considered very safe — the state running the plan would have to go bankrupt for your savings to be in danger. The only safer savings option is a U.S. government bond. Many states offer other incentives for choosing a Section 529 plan, as well. Some states go so far as to offer to match your contributions to your child's Section 529 plan, while others offer deductions or credits on your state income tax return.

Coverdell Education Savings Accounts

Another savings account option is a Coverdell Education Savings Account (also known as a Coverdell ESA or an Education IRA). A Coverdell ESA can offer you more flexibility in saving for college than a Section 529 plan, although there are some limitations. With a Coverdell ESA, you are limited to contributing $2,000 each year to the account. However, you can use money saved in a Coverdell ESA for far more education expenses, including tuition while your child is still in elementary school, middle school, or high school. If you have two or more children, you may find a Coverdell ESA ideal: in the event that one of your children does not need the full amount you've saved for his or her college, you can transfer money to the Coverdell account of another family member.

If you plan to save more than $2,000 per year for your child's savings, a Coverdell ESA may not be the best option. However, it does have certain tax advantages that can make it more useful, despite the limits on savings. Any money that you invest grows tax deferred until you're ready to withdraw it — at which time, you can take it out tax free to use on education expenses. You can also choose investments for your child's Coverdell ESA from a much wider list of choices than for a Section 529 plan. Investments can include stocks, bonds, and mutual funds, which may provide an opportunity for a better rate of growth.

UGMA / UTMA Custodial Accounts

In the past, Uniform Transfers to Minors and Uniform Gifts to Minors custodial accounts were a popular method to save for college. In order to create an UGMA or UTMA custodial account, you or another relative can open an account in your child's name. You can save money in your child's name and invest it so that it will continue to grow until he or she is ready to begin college. However, there are now few tax advantages associated with using a custodial account, compared to a Section 529 plan or a Coverdell ESA. Until 2006, accounts in a minor's name were taxed at the minor's rate, rather than his or her parents. Now, however, children cannot take advantage of their lower tax rates until they reach the age of 18. You may also face taxes on any earnings from investments in a custodial account, which is not true of other college savings options.

There is another drawback to using an UGMA or UTMA custodial account. While colleges do not count Section 529 plans or Coverdell ESAs as assets of a student applying for financial aid, custodial accounts are considered assets. That means that your child would receive less financial aid than may be necessary if the bulk of his or her college savings is in a custodial account.

Series I and Series EE Savings Bonds

While savings bonds do not necessarily provide the largest return on an investment if you're looking to increase the amount of money your child has available for college, they are one of the safest savings options out there. Series EE and I bonds, in particular, can be useful in saving for college. When you cash a Series EE or I bond and use the money to pay for college expenses, the money you've earned on the bond is tax exempt, from both federal and state taxation.

Buying bonds is one of the simplest ways to save money for college. You don't need to open any kind of investment account in order to purchase a U.S. savings bond. In fact, you can buy them online through TreasuryDirect.gov. If simplicity is important, Series I and Series EE savings bonds may be a useful option for you.

Making the Decision

According to the College Board, the current average cost of a year at a private college is $25,143. That number is projected to continue to rise — but that doesn't mean that you need to plan to pay all of it. Depending on your child's educational plans, options like attending a public university can bring down the price tag dramatically, as can starting at a two-year school and making the switch to a four-year school later on.

Financial aid is also available for most families. Currently more than $143 billion is available in financial aid. While it's probably not a good idea to assume financial aid can pay for the full costs of college, it is reasonable to save what you can for your son or daughter's college expenses with the expectation that some student loans and other financial aid options will be available for your child.

However, colleges do take any college savings accounts you've used to save money for your child into account when determining how much financial aid to offer him or her. Each school can choose how to handle specific types of accounts. Section 529 plans and Coverdell ESAs are often listed as parental assets, which does allow students to receive more financial aid. UGMA and UTMA custodial accounts are usually considered to be student assets, however, reducing financial aid far beyond what a parental asset might. If you purchase saving bonds in your child's name, those bonds may be considered student assets; however, you can purchase Series I and Series EE savings bonds in your own name and still receive the tax advantages offered by using them for college expenses.

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Wise Bread's How-To Guides

webmaster — Wed, 21 Oct 2009 22:39:53 +0000

Welcome to Wise Bread's How-To Guides Library. Find tips and resources for personal finance and frugal living.

Get all the personal finance and frugal living resources and tips you need.

This article is from webmaster of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Online Tools to Help You Land a Job

Craig Kessler — Wed, 21 Oct 2009 14:00:04 +0000

Growing up, there seems to be a standard progression from year to year that makes up the path of your childhood into the beginnings of your adult world. Sure, some stray and create their own paths, but the majority of us hold on to the security blanket that is the path.

The path I am referring to is from education to job: Elementary school to middle school, then high school, then college, and finally on to job. This path has been embedded in our mindset growing up, but with the recession in form and the unemployment rate tingling just below 10%, the security of this path from education to job has been threatened and has a lot of college aged kids worried.

College graduates of the past year expected to enter the job market in open arms. Instead, many are fishing for any type of corporate job just to start-up and get going, even if they are qualified for better and deserve more money. But despite the times, these students should not be worrying.

In fact, they should be blessed with the opportunities they have to land jobs, and they actually have a better chance of landing a job than those of past generations in this situation.

How can this be, you ask? There are social media tools out there that — when utilized properly — are a great resource to build a personal brand and online portfolio, as well as to network for a job (unlike the traditional practice of submitting a resume to a generic contact form, which will most likely get stacked with the hundreds of others in some big pile somewhere).

What if you could directly contact a specific person in the company? Or even better, what if they came to you? Here are some tools that can help you network and build your online portfolio so you can land your next job.

Blogs

Building and maintaining a blog is like running your own small business. You play many different roles such as editor, designer, maintenance technician, customer support, and PR/marketing all in one. It takes time and commitment, and starting one (especially in college) is a huge resume boost and a great online portfolio of your work and skills. Start a blog revolving around content in your major or start one about a hobby you have a passion for. Either way, you will learn a lot of valuable skills, develop experience, and have so much to talk about during an interview.

LinkedIn is a business professional's network where you can show off your skills in an online resume format. You can also get recommendations from others which could attract companies. More companies are using this network to look for potential job prospects, so having an up-to-date profile that enhances your skills could give you the edge. There are also groups where you can participate and engage with others offering help and showing your expertise. This networking could lead to you receiving a job opportunity or a contact. If you know the company you want to work for, find people who work there and try to connect with them. Send a message and maybe they will respond to you with the correct person to contact or set a time to talk further. By doing this, you are bypassing the generic contact form and are showing initiative.

Twitter

Maybe some people strictly use it to follow what their favorite celebrities do, but Twitter is a great networking tool. Begin to help others within your industry and connect with those you want to try to build relationships with. After being active and engaging, you may be able to learn of a job opportunity from networking through Twitter.

YouTube

Create a short 1-2 minutes elevator pitch on YouTube about who you are, what you are looking for, and why you deserve it. You never know who may find it and pass it along.

Online Resumes

Buy your domain name if you can. Include all the links to the social networks you belong to, video resume, written resume, and any articles, projects, or videos that you have worked on. Developing this centralized online portfolio is an added bonus for job seekers. When prospective employers search your name in Google, they will find you easily and most likely will be very impressed. This can help give you the edge over other people.

Job hunting isn't easy, especially now. It takes time, patience, and a little bit of luck. But with these tools, it puts finding new opportunities or contacts in your court, making it easier to land that next job.

Guest Post Blurb:

This guest post is by Craig Kessler, marketing director at BudgetPulse, a free personal budgeting software.

Links to more articles on BudgetPulse:

This article is from Craig Kessler of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Fatal Assumptions of Job Seekers

Julie Rains — Fri, 11 Sep 2009 19:29:45 +0000

Many people are job hunting these days. I have worked with job seekers for many years and have found that these five common assumptions frequently derail a job search.

1. Being open to anything will increase my chances of landing a job.

The search ought to have a focus: you should be targeting opportunities in a certain discipline or function; or you should have identified the strengths you'd like to leverage and then uncovered positions that match these strengths. The resume should convey that focus; otherwise, you can't differentiate yourself from other candidates because you're not really great at anything but rather average at many things.

Hiring managers don't want to spend training and payroll dollars on a so-so candidate, especially in an environment where money is an extremely limited resource and a more qualified candidate is sure to surface soon.

However, it is true that job seekers need to be flexible when pursuing a new position. Depending on your current situation and long-term goals, you should be open to opportunities in a new industry, a smaller rather than larger company (or vice versa), and even a change of locale.

And, it's also true that job seekers snag jobs that are not perfectly in sync with their original targets. In these cases, here's what the hiring manager is thinking:

tap into skills that the job seeker didn't realize were valuable (for example, a client seeking a sales position was selected by a state agency for a position requiring client advocacy capabilities, which she possessed from years of volunteering in a similar role)
hire "fresh" talent with no preconceived notions of how to approach a new market, reach a different kind of customer, etc.
recruit people with a certain background because past, similar hires have been successful

2. No one could possibly possess all of the qualifications required by the employer.

I've seen job postings that seem to be an impossible-to-get wish list created by an optimistic hiring manager. For example, a sourcing position might list the following requirements (this is a partial list of requirements taken from an online job board posting):

MBA
experience in supply chain management, purchasing, and contract negotiation
working knowledge of SAP
professional designations, such as a CPM (Certified Purchasing Manager)
fluency in Mandarin Chinese

Stay focused on pursuing opportunities that match your qualifications. Build and leverage your professional network. At the same time, consider boosting your skills through classes at the community college or volunteer experience.

So, while it's true that the perfect candidate may not appear for many job postings (or, more likely the company is required to advertise for an opening that is probably going to be filled by an internal candidate who does have these credentials), going for multiple long shots is probably not going to increase your chances at winning a fantastic job.

3. I can elaborate during the interview rather than including valuable information on the resume.

The defense of the extremely brief resume is often that hiring managers won't read a long one. But there needs to be enough information to allow the reader to judge whether the candidate has 1. minimum qualifications and 2. enough talent and proven experience to contribute to the hiring organization. Otherwise, the sought-after interview will never happen.

Even if a resume is two (or even three) pages, a well-designed format that allows quick scanning for critical information can get the document placed in the "maybe" pile for further evaluation. Compelling accomplishments and deeper-than-average descriptions of position duties may actually aid the screening and selection process, ultimately saving time for the hiring manager.

Certain topics though (for example, why you left a job after a couple of months) are best discussed in the interview rather than detailed on the resume.

4. The people who will hire me will understand my resume.

It's true that hiring managers will often have a better, more complete grasp of the industry and discipline-specific lingo that's on your resume than your neighbor or even your best friend.

But the resume will most likely be screened by a recruiter or human resources manager who may not have expertise in your field; and possibly scrutinized by higher-level staff and potential coworkers who may participate in the selection process. So, using understandable language is important to communicating your qualifications to as many people as possible (see my post on online job boards for ways to identify common terms and keywords). To appeal to a broader audience, mention collaborative abilities and team contributions; and emphasize accomplishments that not only helped your department improve but also boosted the company's overall performance.

5. A hiring decision will be made in a reasonable time frame.

One of the most common mistakes is to assume that a hiring decision will be made according to a reasonable timeline and therefore (here's the dangerous part), you should wait before pursuing other opportunities. If you are happily employed and really want a particular position and no other position, then it is reasonable to wait until you learn of the decision. But very often, decisions are delayed for long periods of time for reasons such as:

position hasn't been officially approved by the corporate office
economic conditions and company's needs have changed since recruitment began
no great candidates have emerged with interest in the position
hiring process requires multiple levels of approval and rounds of interviewing
decision makers have been traveling on business for a few months

Even when hiring managers provide a timeline to a candidate, they very often don't adhere to the schedule. And, in some cases, they choose a candidate but are not able to extend an offer.

Some job seekers seem to have a fear of having to make a difficult choice among more than one employer. But the savvy seeker keeps pursuing any and every opportunity, and even leverages salary negotiations by getting multiple offers. (See How to Play the Post-Interview Waiting Game for more insights.)

What do you think? Have you reversed your assumptions since starting a search?

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Weird Things People Sell for Cash

Linsey Knerl — Mon, 20 Jul 2009 20:00:12 +0000

When the recession began to really hit home, there was plenty of chatter about selling your plasma, undergoing paid medical tests, and even cutting off your lovely locks for a profit. Here are some of the more off-the-wall commodities we found, and they are making some people a bit more comfortable these days.

Breast Milk

As a mom who nursed three of her four children, I completely understand the benefits and time commitment of breastfeeding. When situations prevent a mom from being able to do this herself, however, there are some options to keeping the milk flowing, even if it’s not her own. Thanks to the hard work and dedication of mothers nationwide, milk has been made available to those who need it via milk banks and other donation centers. The Human Milk Banking Association of America is a good place to start learning about the guidelines for donation, storage, and transport.

So how do you go about making cash from your breast milk? Unfortunately, in the U.S. at least, finding a legal, organized place to sell your breast milk to others is very difficult. That’s not to say that it hasn’t been done, however. Craigslist ads have been notorious for offering milk for sale, and if you head over to this “How to Buy Breast Milk” article at eHow.com, you’ll see people offering their milk for sale in the comments. The going rate for buying milk from a milk bank is $2-3 per ounce, which professionals claim is only a portion of what it costs to collect, screen, and store the milk. (There is also a “How to Make Money By Selling Human Breast Milk” article, as well, but the author acknowledges that the one of the best ways to get a legitimate buyer – Ebay – is also not allowed.)

In addition to the growing number of mothers who find a qualified stranger’s breast milk to be a lifesaving alternative, there are a few other “commercial” uses for breast milk: Certain fetish groups have always paid for milk on the black market, and a few pharma companies pay a small fee for milk that will be turned into supplemental products for premature infants. (And let’s not forget the potential for an increase in demand for milking moms when Ben & Jerry’s was approached with the “opportunity” to incorporate human milk into its production line.) Whether you buy, sell, or just want to learn more, I recommend this enlightening article from breastfeedingsymbol.org.

Dog Hair

For those of us who have been struggling against the constant shedding of our pups, armed with Swiffers and lint rollers, the news that dog hair is a commodity may be too good to be true. Apparently, dog hair spun into yarn (or “chiengora”) is an old art form that dates way, way back. (Before sheep wool was the thing to spin in the U.S., people would use the hair of a dog.)

Fans of the stuff claim that it holds in warmth and repels water better than other fibers. (When found for sale, however, it is usually combined with sheep’s wool.) Believe it or not, fans of spinning dog hair are a very helpful group (just check out Knitting With Dog Hair, a book that shows you how to cut, collect, spin, and use dog hair for everyday knitting projects). There has been some question as to the legality of selling dog hair (big surprise), and states like New Jersey actually have language forbidding the sale of dog or cat fur.

So how do you go about selling (or even buying) dog hair? The verdict on this one is similar to other items on our list. Ask around, place ads in places that don’t specifically prohibit it, and make sure that the state you’re listing it in allows it. If it’s not possible to sell the dog hair straight out, you may be able to spin it first and offer it as a yarn.

Chicken Poop

If there’s one thing I’ve learned by living on a farm most of my life, it’s that people will drive many miles and offer most anything for a pickup truck full of crap. That’s no lie. The amazing benefits that come with the use of natural (or “organic”) fertilizers on anything from rose bushes to potato plants is fairly common sense. What most people don’t realize, however, is where that fertilizer comes from.

Since most commercial products are simply a mixture of aged chicken poop and other organic materials, it’s possible to mix up your own batch with little effort. (See this article on how to use chicken poop effectively.) To sell chicken manure, which can be done via online ad, small local newspaper, or through your local farm or garden supply store, you’ll need a good amount of chicken manure and a way to bag it or haul it effectively (which is what people are really paying for). Pricing will be minimal and may vary by region.

Cardboard Boxes

As someone who deals with daily deliveries from UPS, USPS, and FedEx, I can understand the cumbersome nature of the cardboard box. Generally, I have been pretty good at the art of recycling, using them in everything from moving, composting, reshipping, and even art projects with the kids. While I also strongly support sharing used boxes with the community for free, we all understand that sometimes it’s necessary to try to recoup our costs – especially if we need to cut business or home office expenses.

While many companies offer to buy bulk lots of boxes in the same size and shape, there are a few places that currently buy boxes in good condition with a minimum of 3 or more boxes. BoxCycle, for example, takes the work out of selling your boxes by listing them for you, communicating with the buyer, and handling all payment processing. All you have to do is list your boxes with them, wait for a seller, and cash out when your payment totals $25. (While you won’t get rich from this, it is a great way to get rid of wasted space caused by bulky boxes, and it puts a few bucks back in your pocket.)

False Teeth, Braces, and Prosthetics

So these aren’t exactly in a category together (but they are most certainly in one all their own). As the market clamors for more gold commodities, and places like Cash4Gold keep turning consumers off from the idea of selling their jewelry for extra money, consumers are getting creative with how to make a quick buck via another buyer. Pawn shops, however, have eagerly reported an increase in the amount of business they get for items containing gold – any items – and this includes caps and crowns made from precious metals. What else are they boasting? False teeth (dentures), braces, and prosthetics have all been (sometimes) reluctant purchases by pawn brokers over the years. They won’t get you rich, but if you happen to have them lying around, and don’t feel comfortable putting them in your next yard sale, it doesn’t hurt to ask.

Pig Ears and Bull “Sticks”

This is a niche market that most of us wouldn’t be in a position to tap, however, I felt it was worth mentioning. While most pet stores carry starch-based alternatives to the popular pig ear dog treat, some still offer the old-fashioned variety, made from 100% authentic swine ears. Another interesting item for dogs to chew on? Bull sticks. Touted as a healthy and fun for dogs of all breeds, these treats are made from bull “parts.” The owner of company who makes them doesn’t buy them directly from U.S. suppliers (the hormones and antibiotics are a big no-no) but rather imports them. (Does this mean that the first person to meet the market here in the States could be in the next best “bull market?”)

Do you represent an exclusive niche market that sells unusual wares for profit? Care to share it with the rest of us? We’d love to hear about it!

This article is from Linsey Knerl of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How To Write A Resume: 12 Steps To Your Next Job

Paul Michael — Wed, 01 Jul 2009 20:42:59 +0000

Self-promotion is not easy. Whether you're a high six-figure consultant, or earning $10 an hour in retail, you still have to talk about yourself in the right way. And one of the key ingredients of self-promotion is the resume. Nail it, and you get your foot in the door. Blow it, and you blow your chances at a better job, better career or even a better life.

As a professional advertising copywriter, I've been asked many, many times to help friends and relatives with their resumes. And while I don't claim to be an expert on resumes, I have helped a lot of people get jobs. So, I thought it was long overdue to share some of the things I've learned about writing resumes over the years, especially after writing an article on interview questions.

Now, I'm not promising that this article will guarantee you a new job. Obviously, your own experience and background is, at the end of the day, the deciding factor. But I can give you advice that will at least get you noticed for all the right reasons. Ready? Then let's begin.

1: Use a word processing program
Employ a program like Microsoft Word, WordPerfect, MS Works or even a professional design application (e.g. InDesign or Adobe Illustrator) to layout your resume. In the past, it was OK to use a typewriter or, in some cases, write it by hand, but no-one will take you seriously if you can't demonstrate basic computer skills. However, try and avoid a standard resume template.

Your resume should include:

contact information
an objective
employment history
education
a summary, including any other pertinent information or affiliations
references (it's permissible to say "references available on request")

Lay this out neatly in your own way, and your resume will not look like a carbon copy of everyone else's resume. Remember, you are selling YOU as an individual. Your resume, even the way it looks, is a reflection of who you are.

2: Use good (but not perfect) grammar
You don't need to go out of your way to make your resume read like an English term paper, but use good judgment. A resume is a professional document and should be treated in that way. Just as you wouldn't start a business letter with "Like hey dude, how's it going?" you shouldn't be as lax with your resume.

However, these are modern times and you can use a little conversational verbiage, coupled with a few grammatical rule-breakers. It's OK to end a sentence with a preposition, it's even OK to have a one or two word sentence. If you work in a very creative industry, you can break even more rules (I once saw a great resume that was written as a poem...but that was a huge exception to the rule). In general, make it respectful, polite and something you would be happy for your bank manager to read.

3. Practice the art of concision
Mark Twain once wrote "I didn't have time to write a short letter, so I wrote a long one instead." It's not easy to be concise, but a resume is an essential place to practice restraint. In these tough economic times, employers are inundated with hundreds of applicants for every one job opening. They don't have the time or inclination to read your life story over a five or six page resume. ONE PAGE is ideal, but it is acceptable to go to two pages. Any longer than that and you may as well mail your resume to the nearest paper recycling plant. Some of you may say that I could use a lesson in concision myself, but this blog gives me the luxury of limitless writing space and an audience that is looking to read, and be entertained as well as informed. An employer's time is valuable; the information is paramount.

4. Don't include pointless and obvious information
I have lost track of the number of times I have read about hobbies that include movies, reading, sports, eating out and spending time with family. While you're at it, why not put "breathing, sleeping a minimum of six hours per night, and eating three square meals per day." If you have something stellar as a hobby, and it has some relevance to the job, by all means put it down. But if you have nothing out of the ordinary to say, don't say it. Your collection of antique teapots may mean the world to you, but it won't to your average human resources manager in an accounting firm.

5. Never, ever lie
Don't ever be tempted to lie, or embellish your resume. The problem with lies is that they will catch up with you sooner or later. You will either be discovered before you are hired, or even worse, get found out when you're doing the job. Be honest and give the right dates, places, numbers and facts about previous employment. Don't make up education you don't have, and don't say you're a whiz on Photoshop when you can hardly even open your email.

6. Custom-build your resume
Every job is different; therefore, every resume should be different. When I talk about concision, it also applies to the kind of information you include, or don't, on your resume. If you have some great experience in marketing, you obviously push that on a resume for a marketing or advertising job. If you're applying to be a bartender, you may want to put a focus on something else. Tailor your resume to fit the job you're applying for.

7. Don't be shy about major successes
Be specific about your past and current achievements and accomplishments. Employers love facts that back up your story, so if you increased productivity in your department by 125%, don't by shy about saying so. If you tripled sales, let people know. If you were promoted in record time, make a note of it. This is the perfect time to blow your own trumpet.

8. Don't make assumptions
Although concision is vitally important, make sure you don't cut so much information that the employer becomes confused. For instance, you may know all too well what "Scrambunkle & Son" did as a company, but your future employer may not know them from Adam. And although you know what an acronym stands for, it may not be as famous as N.A.S.A., so spell it out once. Basically, be brief, but clarify important points.

9. Big words won't impress most people
I've seen a few resumes come across my desk that looked like a page from a Dickensian thesaurus. Sure, you may feel proud of yourself for using words like floccinaucinihilipilification (which is, for those of you not in the know, the "estimation of something as valueless"); but your average employer will appreciate it if your resume is not like reading War & Peace. There's no need to hide your intelligence, and again you should tailor it to the job, but use common sense. Write well, write clearly, write concisely, and write without trying to prove you're a smartass.

10. Good spelling is not optional
Speaking of writing well, this one is paramount: please, please double-check the spelling and then ask someone else to double-check it for you (they may catch something you've become blind to). And DO NOT proof it on-screen; print it out, it's much easier to catch errors that way. A typo in your resume is one huge fly in the ointment. It's the equivalent of turning up to an interview wearing a ketchup-stained t-shirt. Your resume is the first impression you will give to your interviewer; what do you think they will do with a resume that has not even been spell-checked? Yep, it's lining the cat's litter box.

11. Consistency is important
This is another exercise in putting your best foot forward. If you start each heading in 12pt Helvetica Bold Italic, do them all that way. If you italicize a heading, italicize them all. If the first section of your resume is indented, all of them should be. The age of email and instant messenger has made many of us lazy, but a resume is no place to be careless. And choose a readable font too, preferably a classic serif font like Times 11pt. With consistency, you make your resume easier to read. Without it, your potential future employer won't know what to make of the various formatting choices.

12. Don't be cheap with paper choices
This is one of the rare occasions that I will advise you to splurge. A beautifully formatted, perfectly spelled, amazingly concise resume is not going to look as impressive on crappy paper. Pop down to the local Kinkos and ask them to print out some copies on a good quality paper, perhaps one with a watermark or slight tint to it. Alternatively, buy some good paper and print it out yourself on your home-printer's highest setting. Either way, you will have something that looks and feels like a quality document worthy of consideration.

Those are my 12 steps to a good resume. I'm sure many professional resume writers can add to the list (and please, use the comments area for additional advice) but I believe this is an excellent list for anyone taking on the task of writing their own resume.

Next time, I'll give some advice on writing a cover letter. I don't see it as being as important as a resume because it's not always required. But when it is, you need to get that just right as well. Good luck.

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Lose Your Job Without Losing Your Identity

Linsey Knerl — Mon, 23 Mar 2009 02:58:32 +0000

[Editor's note: If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

Getting a pink slip can cause more distress than just a shrinking income. It can also give you a sense of insecurity and may make you question your place in this world. Here are three effective schools of thought for keeping your sense of self (long after the paychecks quit coming.)

Keep it “Seasonal”

I’m from a farming community, which means that most people I know are farmers. I bet many of you wonder what farmers do in their downtime, however. (Remember that the growing season doesn’t go all year in Nebraska, and you can only fix your tractor so many times.) Some relax during the winter, but many more will pick up jobs in town. Joe may schlep bags of seed at the farm supply store. Dave may do some mechanic work for the neighbor. If you caught either one doing their “off-season” jobs and asked them what they did for a living, they would both reply with “farm.”

The same situation occurs with teachers and students. Ask a teacher doing a summer job about their profession, and they won’t stray from their insistence that they “teach.” College students can spend up to 6 years taking classes, but if you bumped into them serving coffee at a Starbucks, they would let you know that they were “students.” And so it goes.

If you’ve suddenly (or not so suddenly) found yourself without the job you know and love to identify yourself with, don’t feel that you have to betray your longing with a complete acceptance of the task that pays your bills. If you’re an out-of-work accountant who has decided to tend bar until better job prospects arise, do it with grace and confidence. (In other words, when a patron asks you about your bartending status, tell them you’re an accountant. Then look them in the eye and ask if they want their drink shaken or stirred.)

Search for Meaning

All too many of use wake up one day and find that we hate what we do. We go to work from then on with a bitter taste in our mouths, a scowl on our face, and feet that drag along the carpet of our stale, cubicled offices. We dream of ways we can escape the doldrums (non life-threatening car wrecks, a falsely triggered fire alarm, or possibly corporate bankruptcy). The reality is far worse than the romanticized alternatives we dream of, but we are too fearful of the future to do anything else.

What better opportunity to make a change than to lose your job! Yes, I said it! I’ve been there, my husband has been there, and while the sting may take a while to wear off, eventually you decide to do something different. It may not be better, but it is different, and it can inspire you to move forward with that small business, trade school, or stay-at-home parent dream.

Those who don’t have a dream in the wings can take the opportunity to think carefully about what they want to do. They can form a new identity, in their own time and on their own terms.

Make a Separation

There is a final group of people who have decided to throw all their professional aspirations as far from their “identity” as possible. Either by necessity or desire, they refuse to define themselves as what they do for a living. I have to admire these people, because as hard as I’ve tried, I find this especially difficult.

Before marrying my husband, I’d had opportunities to date gentlemen from various professions: auto mechanic, pilot, military police, and trust-fund brat (among others). I chose instead, to marry my soul mate (a man who had many jobs at once, loved almost everything he did, and did it with compassion and integrity.) Because he (and I) found value in him as a person (and not an employee), we were better prepared for long college semesters, corporate downsizing, and starting our own small business. We took turns with the “stay-at-home” calling, and still share many of the household responsibilities.

While we are very blessed to share our goals of keeping career from defining who we are, many don’t have the full support of their spouse or family when deciding to make the separation. I read of so many stay-at-home Dads who find themselves feeling less-than-valuable. Mothers share in this dilemma, and have for some time. Both feel societal pressure to equate their “dollar per hour” worth with their human value.

Whether you choose to keep it seasonal, try something new, or remove the stigma altogether, losing your job can cause a tremendous disruption in your personal life. Finding a community that shares your beliefs can be vital to your survival (and believe me, they are out there!)

While it only matters to me that our professions are honorable and legal, some may not share in our acceptance. If all else fails, you can always do what we do, and say that you are “a consultant.” (It sure beats telling everyone you’re a social media expert!)

This article is from Linsey Knerl of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Getting by without a job, part 1--losing a job

Philip Brewer — Wed, 26 Nov 2008 16:37:39 +0000

[Editor's note: If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

Losing a job is always tough. During hard economic times--when it may not be possible to find another job as good as the one you've lost--it's even tougher. Here are a few steps you can take right after losing a job to make sure that your financial house is in order, so that you can focus on your job search.

This is part one of a four-part series. This post is on the very first things to do after you lose your job. Parts two through four will be strategies for dealing with the worse-case scenario--what to do if you can't find a job to replace the one you've lost. Look for them here over the next few days.

Having lost several over the years, I know first-hand how hard it is to lose a job. It's insulting--even if you get the little speech on how it's due to economic conditions and not your performance, unless the whole place is getting shut down you have to face the fact that you were let go and other people weren't. It's also frightening--because you're facing a bunch of unknowns.

Many of those unknowns are going to stay unknown for a while longer, but some of them can be figured out pretty quickly. Here's a short list of things I suggest you do right away, to make a few of those unknowns a little more known.

Nail down the cash

I read an article once, by a financial writer who had attended a class taught by a business turn-around specialist. The specialist had asked his students what the first thing to do was after taking over a troubled business. The students had many suggestions--layoff workers, promise workers that they wouldn't be laid off, cut (or boost) spending on R&D or marketing, etc. The specialist, though, dismissed all those suggestions. The first thing to do was to nail down the cash--make sure that nothing gets spent without your approval.

That's also step one if you lose your job. It comes in two phases.

Phase one is making sure everyone in the household knows that spending needs to be taken off automatic. You don't necessarily need to make drastic cuts in spending (although you might), but you definitely need to make sure that every spending decision is a decision, not just an automatic continuation of whatever you were doing before. In particular, make sure you know about any automatic debits that are going to hit your account--and if there are any for things that are non-essential, make sure you know how to get them stopped and what dates you have to take action if you decide that you do want any stopped.

Phase two is to produce a bare-bones budget. You need to know what your household finances will look like if you move to an emergency footing. Your bare-bones budget should include all your unavoidable financial obligations (rent, utilities, groceries, etc.) and should exclude anything that you can avoid or postpone. (I wrote about this a couple of weeks ago in a post called Emergency belt-tightening.)

Just having a bare-bones budget doesn't mean you have to cut your spending to the bone right now (although for some people that might be the wise choice). Depending on your job prospects and the size of your emergency fund, you may be able to phase in cuts to your spending. But you need to make sure that you're in control.

Once you're in control, the next thing to do is to take care of some of those unknowns. There are, of course, a bunch a career unknowns (Will you find another job? Will you have to change careers?), but this post is just about the financial unknowns.

Do a financial projection

You probably came home with a packet of information from your former employer that spells out when you'll get your last paycheck, whether you get any severance pay, and perhaps some info on things like keeping your health insurance in effect. Between that information, the bare-bones budget that you just came up with, and the most recent statements for your checking, savings, and investment accounts, you have most of the information you need to do a financial projection.

First, lay out your expected income. This might include a final paycheck and perhaps a severance payment. If you qualify, it might include unemployment insurance payments (one piece of information that you might not have for several days). If you have substantial savings and investments, you may have some interest or dividends that you can include in your projections. (Don't include any that are in IRAs or 401(k)s that you can't access without paying a penalty.) If you have some sort of side business, include estimated income from that. If your spouse works, include the income you can expect from his or her paycheck.

Against your projected income, lay out your barebones budget. If your income exceeds your expenses--congratulations! You're done. You can skip the rest of this and get on with your job search.

For most people, though, losing a job means that their expenses will exceed their income. If that's the case for you, mark down on your financial projection a series of transfers from savings that fund your bare-bones spending.

Of course, your savings only goes so far. Make a note of the date that you can expect it to run out, if you don't come up with either some additional economizations or some additional cash.

Now that you know how long you've got, the third thing I suggest you do is to make a plan for how you'll use that time.

Set some deadlines

You'll probably begin by looking for a job that's at least as good as the one you've left. With luck, you'll find one quickly. I suggest, though, that you set a date when you'll expand your search to include jobs that are a step down, and perhaps a second date when you need to start looking seriously for any kind of work you can get.

If you have assets that you might be able to sell--in particular, stocks or mutual funds that aren't in a 401(k) or IRA, but also things like a car, a motorcycle, a boat or a house--make a schedule. Figure out when you'd need to get the money from such a sale in order to keep your bare-bones budget funded, then estimate when you'd need to put the item up for sale in order to reasonably expect to have the cash in hand on the date you need it. (That's an easy calculation for stocks--the sale settles in three days and you can probably have the cash transfered to your checking account within two days after that. For something like a boat or a motorcycle, you might have to figure that it'd be impossible to sell it until spring.)

One result of this planning will be an estimated date for when you'll be completely tapped out--no assets, no savings. There are things you can do to address such dire circumstances, and most of them are easier if you do them before you're flat broke. Pick a date some weeks earlier as the date that you'll start taking drastic action (such as not paying the rent or utility bills), in order to conserve cash. That's strictly a short-term move, and an expensive one at that--you'll end up owing even more due to late fees and charges--but being evicted is a little easier to handle if you've got some cash than if you've got zip.

After the planning

It may seem morbid and depressing to look that far down the road as soon as you lose a job. The advantage, though, is that you don't have the uncertainty hanging over your head all through your job search. You've already decided when you'll need to take any drastic measures. Until then, you can focus on your job search.

The rest of this series is what to do in the case that, as sometimes happens during hard times, you don't manage to find a job to replace the one you've lost. Check out:

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Seven Tips for the Newly Unemployed

Xin Lu — Wed, 30 Jul 2008 09:49:41 +0000

[Editor's note: If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

The unemployment rate in California surged to 6.9% , and that is equivalent to the rate in early 2003. Most news reports say that unemployment will probably go up a bit more in the short term as our economy deals with the credit crisis. Personally, I am seeing some friends and family deal with unemployment right now, and here are some tips that could be helpful for those in this situation.

1. Tell everyone you know you are now unemployed - There is no shame in telling people that you are looking for a job. In fact, the more people you tell the better your chances are in getting a referral. Tell people in your network what kind of job you are seeking and what your skills are, and someone may be able to help you get a new job.

2. Apply for unemployment benefits - As long as you were terminated through no fault of your own, you should be eligible to collect some unemployment benefits. It is not a lot of money, but it is something to help you with gas and food bills while you look for a job. In California it is fairly easy to submit a claim through an online form here . If you find employment before your benefits begin you can always cancel the claim.

3. Tighten your belt - When you suddenly become unemployed you may need to adjust your budget a bit and stretch whatever severance you received as much as you can. It could mean that you have to cancel the cable and not go out so much for dinner, but without your former income those small luxuries may prevent you from paying the bigger bills like the rent or the mortgage. If you do not have an adequate emergency fund to tide you through the job search then frugality becomes a necessity.

4. Be open to opportunities - Several people I know that were laid off due to company closure found that they could noteasily find a job that paid as well as their old jobs. So they are faced with the choice of continuing to look for that high paying job or take a lower paying job. I do not think that people should necessarily take the first offer they see, but if it is a decent job with reasonable benefits then it does not hurt to take the job and continue looking. Having a lower income than before is still better than having nothing at all. Besides full time employment, there are contract positions or business opportunities you can seek out.

5. Stay healthy - When you lose your job your health insurance usually goes with it. That is why staying healthy is extremely important during this period of unemployment. Sometimes health issues can be beyond our control, but we can all try to sleep and eat well and exercise regularly.

6. Organize the job hunt - You should make finding a new source of income your priority if you need the income to survive. When I was looking for a job I found that keeping a log was very helpful. I would write down the date of my resume submission to certain companies and also dates of interviews and contact information. Organization is very important when you suddenly need to keep appointments in many different places.

7. Do not mope around - Losing your job is horrible, but there is no point in wasting your time feeling bad about it. When you are looking for a new opportunity you need to be confident about your skills and show people that you are awesome. The sooner you can get over the initial disappointment, anger, and bitterness the sooner you will be able to move on to something better.

There are very few companies that hire people for life these days, and involuntary unemployment is something most of us will have to deal with in our lives. Do you have any stories or tips on how you dealt with unemployment? Feel free to share here.

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Laid Off? What To Do Before Plunging Into The Job Search

Julie Rains — Fri, 25 Apr 2008 00:40:49 +0000

[Editor's note: If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

Your company has announced a soon-to-come layoff or you’ve been escorted out of the door. What’s next? What should you do…before updating your résumé, tapping into your professional network, and looking for a job? (Those of you who are considering career changes may also find this guide useful).

Review your financial status, especially now that it is changing.

Calculate how much money you’ll need to meet your obligations and how many months you’ll have before your personal financial situation moves from good to bearable to desperate.

Evaluate your severance package and consider your options, which may involve a lump-sum payment or salary continuation. (See New York Life’s What Do I Need to Know About Severance Packages? and About.com's article on the Severance Package.)

If you are offered consideration (aka extra cash or some other benefit) for signing a non-compete agreement, think about the implications for locating a new job. (For example, I know someone who lost his job following a company downturn but couldn’t leverage his industry expertise because of a non-compete agreement; he didn’t have a college degree and was unable to relocate because of child custody issues, adding to the job-search and financial distress). If you signed a non-compete upon your hire or for consideration after being hired, see if you can get a clear definition of what companies or industries are considered competitors, or if the agreement is enforceable in your state.

Look at your benefits package: your life, health, and disability insurance coverage as well as your retirement plans.

When will your benefits end? Do you need to replace your insurance coverage?

If you are eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act), do you know its monthly cost? (more on COBRA and rights associated with HIPAA). Davis Liu, M.D., author of Stay Healthy, Live Longer, Spend Wisely mentions www.ehealthinsurance.com as a resource for investigating short-term and/or high deductible health insurance. (Disclosure: I received this book in exchange for a book review; more info to follow in a separate post).

Analyze your 401(k) plan options and obligations. Do you have a loan associated with the 401(k) and will you need to pay that off immediately? Should you leave the 401(k) with your employer’s administrator while you decide where to transfer the funds? Do you need to transfer the assets immediately upon your separation from the company? (See 401(k) Help Center)

Learn the rules of unemployment insurance. See if and when you are eligible for benefits (you should be eligible unless you were terminated for cause) and what the requirements are to receive payments. If you have been displaced as a result of increase in imports or offshore business, look into Trade Adjustment Assistance: here are some details about the Trade Act.

Set your professional and personal priorities. Will you live in the same town or will you relocate? Are you looking for a similar job in the same industry? Do you want to take a step forward and advance in responsibility or do you want to move laterally, or take a step back in order to spend more time with your family or developing a business idea?

Investigate a new career (if that’s what you want) and determine the time and resources it might take.

You might decide to become a nurse and you already know, for example, that an RN license may take 2 years to earn. But do you know when you’d actually be able to start classes? Do you know if you’d be accepted immediately into a program or will it take a several months?

Or, you’ve thought you might work as a teacher by getting credentials through an abbreviated training program (less than the traditional 4 years it usually takes to earn an education degree). Do you qualify? (I know someone who found several weeks into his discussions with an administrator that his GPA from his bachelor’s degree—earned over 20 years prior—was too low to enter the program).

Get a handle on the nuances and the time frame for earning credentials and landing a job.

Check salary.com or payscale.com (or do your independent research) to see if your professional goals, personal desires, and financial needs are synchronized with your expected compensation. Decide whether you’ll relocate, sell the house, stay in your industry, or take an interim job while you go back to school.

Why pause before making the job-search plunge? If you take a breath and do some financial assessments, you’ll be more focused and more likely to get what you really want.

Note that many topics I’ve mentioned may be governed by state laws such as the enforceability of non-compete agreements, pre-existing condition exemptions for health insurance, and availability of specialized teacher-training programs so talk to an expert in your area.

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Get Your Own Identity! What to do when Yours is Stolen

Nora Dunn — Wed, 09 Jan 2008 19:56:05 +0000

Identity theft is considered an increasing national epidemic, being the fastest growing crime in the nation according to the Federal Trade Commission. And until you discover that somebody else has stolen your identity and take certain corrective measures, your credit, banking, and even your income taxes can be seriously compromised.

Here's what to do in order to save your identity from further abuse if you discover it is stolen:

File a Police Report

This should be done immediately, and get lots of copies of the report, as you'll need to distribute it to banks, creditors, credit bureaus, social security admin, and possibly a host of other agencies and services you use and want to save.

Contact Social Security

You'll want to discover if your social security number has been used fraudulently. Visit them here.

Bank Accounts

You'll need to inform your bank of the identity theft, and likely will have to close your accounts and open new ones. (Copies of the police report readily available will help to expedite this process. Banks are getting pretty good at it by now). Obviously any new accounts opened should have completely different PIN codes and passwords.

Also review your accounts and statements with a fine tooth comb so you can spot and reverse any fraudulent activity.

Contact Creditors

Anybody you have ever dealt with in regards to money needs to know about your identity theft. Ask to speak with their security or fraud departments, and proceed to close any accounts you didn't open, reverse transactions you didn't make, and (very important), tell them to provide the corrected information to the credit bureaus.

Credit Bureaus

There are three credit agencies: Equifax, Experian, and Transunion. They keep files on your credit situation to which vendors and creditors will report information (some report to one bureau, some to others). By reporting the identity theft to one, the other two will be notified, and all three should send you a free credit report so you can double-check and correct any inaccurate information due to fraud.

The credit agencies also have an alert system that keeps them on their toes and prevents future fraudulent activity:

Initial Alert

If you think you are a victim of ID theft or you just became one, request an Initial Alert from whichever credit agency you contact (they should advise the other agencies, but it is always good to confirm this too).

This will prevent the "other you" from authorizing any additional cards on existing accounts, increase limits, or attain new credit in your name.

Extended Alert

If you are sure that your identity was stolen, an extended alert is recommended. It is much like the initial alert, except it remains in place for seven years. You will also receive two free copies of your credit report over the following year (as opposed to one) to check for an report inaccuracies, and for the next five years it excludes you from lists prepared for creditors to offer you additional credit or insurance.

Active Duty Alert

Similar to the other alerts, this is a special alert system for those on active military duty.

Ask for Confirmation Letters

For all of the above reports, changes, and hoops to be navigated, it is imperative that you ask for confirmation letters that the accounts in question are closed, charges removed, and information on file corrected.

For more information, you can visit the FTC here, or call them on the Identity Theft Hotline at 1-877-438-4338.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: