career

How Student Loan Debt Can Derail Your Future

Carrie Kirby — Wed, 25 Jul 2018 08:00:10 +0000

Mike Meru thought he was making a good investment when he borrowed $600,000 to train as an orthodontist. But at age 37, he now owes $1 million — and despite making regular payments, he owes more every single month. In 25 years, his debt will total $2 million.

While seven-figure student debts are still not something you see every day (in a story about Meru, The Wall Street Journal reported that about 100 people are in this boat nationwide), hefty loans are more and more common. Five percent of student loan borrowers now owe more than $100,000, and 170,000 students nationwide owe more than a quarter million in federal loans alone, according to The Brookings Institution.

Student loan consultant Travis Hornsby, whose average client owes $280,000, says he has worked with several grads with debts around the million-dollar mark — almost exclusively specialist doctors and dentists.

"They make a lot of money, but not enough to cover that level of debt service," Hornsby wrote in an article for Business Insider.

If you are contemplating borrowing heavily for college, keep in mind these cautionary tales of how student loan debt can totally derail your life. (See also: 6 Questions to Ask Before Taking Out Student Loans)

1. You may not have the freedom to follow your passion

After getting her bachelor's degree and spending a year teaching English abroad, Amber Williamson was applying to graduate schools. At 24, she hadn't yet decided on a career, but she knew her $60,000 in student loan debt limited her choices to only fields that could offer adequate income to make the payments.

"I'm doing everything right, but still being penalized for something I've been told to do," she told MarketWatch.

Williamson is not alone. American Student Assistance found that 53 percent of survey respondents named student loan debt as a top factor in their career choices. Borrowers are often left with little choice but to pursue careers they have no real interest in, purely in search of a paycheck that can help offset their student loan payments. (See also: 15 Ways to Pay Back Student Loans Faster)

2. You may have to move back in with your parents

More than one in three millennials live with Mom and Dad, a phenomenon that's increased markedly in recent years. The Federal Reserve found that 30 percent of that increase was due to the changing debt loads of young adults, including student loan debt. (See also: 6 Money Moves to Make When You Move Back Home With Your Parents)

3. If you hate your career, you might not be able to escape

Natalie Bacon and Liz Stapleton don't know each other, but they have one big thing in common: They borrowed buckets of money to get law degrees, only to find out that they hated practicing law. After graduation, Bacon was shocked to realize that interest accruing while she was in school had already ballooned her debt to $200,000.

"I was really irritated and frustrated with the amount of debt I had. I felt like someone should've told me what it really meant, or I should've had a class on it, or something," she wrote on her blog.

Stapleton found herself in a similar boat. According to her blog, Less Debt More Wine, Stapleton currently owes $258,000.

Both women took the bold step of quitting their law careers, managing, perhaps ironically, to build careers instead in financial advising and writing about managing their debt. But many other lawyers and doctors remain trapped by their debt in careers that they hate.

4. You will end up paying much more than what you borrowed

During her undergraduate and graduate studies, Becca of Surviving Student Loans knew she was going to have at least $90,000 in debt — but she didn't think through how the constantly accruing interest would affect that total. For the first three years after graduate school, she made her minimum payments every month. Now, she owes $124,000; about a quarter of that is interest.

"In my head, the debt I took out was going to be my total debt. Boy was I wrong," she wrote on her blog.

Looking back, Becca doesn't regret getting her degrees, but she does regret that she lost paid credits several times when she transferred schools. She also wishes she'd put some of the money she'd earned working part-time in school toward her debt, even though it wasn't required. She's currently budgeting aggressively and trying to earn money on the side so she can put as much of her $50,000 salary toward debt repayment as possible. (See also: This Is How Student Loan Interest Works)

5. You might not be able to buy a home

Federal Reserve researchers noticed that as homeownership in the United States declined during the financial crisis, young people were especially impacted.

"... Increases in student loan debt might be a key factor pushing homeownership rates down in recent years through effects on borrowers' ability to qualify for a mortgage and their desire to take on more debt. Corroborating this claim, recent surveys have found that many young individuals view student loan debt as a major impediment to home buying," the researchers wrote.

They crunched the numbers and found that there is something to this: Every 10 percent increase in student loan debt is correlated with a 1 to 2 percentage point drop in homeownership in the first five years after school.

A joint study by American Student Assistance and the National Association of Realtors found that 83 percent of millennials who don't own homes blame student debt for their inability to buy. These millennials expected their debt to delay their first home purchase by an average of seven years.

6. It could prevent you from getting married or starting a family

One in five former students puts off marriage due to student loan debt, and nearly one in three postpones starting a family for that reason, American Student Assistance reports.

Some who go ahead and marry a person with a huge student debt load later admit regretting it. One respondent to a BuzzFeed query complained that his wife's student loan debt was ruining their lives. (See also: How a New Marriage Can Survive Student Loan Debt)

7. It might delay your retirement

Another American Student Assistance survey found that 62 percent of respondents put off saving for retirement due to student loan debt. Worse, the same report says that the number of people over age 65 who have student debt — some for their children's education, but mostly for their own — increased by a whopping 977 percent between 2005 and 2015.

One scary thing about owing student loan debt in retirement years: It can lead you to lose your Social Security check. According to the ASA report, more than 173,000 Social Security recipients had their Social Security payments garnished in 2015 for this reason. (See also: How to Keep Student Loans From Wrecking Your Retirement)

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

7 Things That Affect Your Car Insurance Rates

Tara Struyk — Thu, 10 May 2018 08:30:16 +0000

If you've ever shopped around for car insurance, there's one thing you may already realize: Calculating rates is not an exact science. This is why you can get relatively different quotes from different insurers. It's also why you should shop around.

That said, your rate is also affected by a variety of factors — some of which you can control, and some of which you can't. You probably already know that factors like your gender, age, and driving record affect your auto insurance rates, so we reached out to a few experts to find out what other, lesser-known factors can affect your premiums. Here are a few.

1. The kind of car you drive

You can probably guess that if you drive a $100,000 sports car, you're going to have very high insurance rates. But there are a lot of other common details about your car that could affect your insurance rates.

According to Mark Nicholson, marketing director at auto marketing company Absolute Results Productions Ltd., these include the safety rating of your vehicle, its size and age, and even the likelihood that it might be stolen.

"Another factor some providers use is how much horsepower your engine has, because by their logic, it suggests that you're more likely to drive fast and are at greater risk of getting into an accident," Nicholson says.

This is why when you're buying a new car, it's a good idea to call for insurance quotes before you actually make your final purchase decision. If the new car you choose is considerably faster or sportier than the one you're driving now, that'll be reflected in a higher insurance rate.

For example, if you're considering a 4x4 SUV, you need to consider that a factor as well.

"Even if 90 percent of 4x4 SUVs will never be driven off-road, the insurance company will assume you'll want to take the occasional trek up a mountainside or fly down that dirt path through the woods. That's a higher risk, and you'll pay more for it," says Chris Burdick of Automoblog.net.

Even if you opt for a super-practical family sedan, you still might get stuck with high insurance premiums.

"You'd think that the more common the car, the less insurance will be, but that's not always the case," Burdick says. "For example, if you own a Honda Accord, it's considered to be one of the most stolen cars in the U.S. Same with the Honda Civic, Nissan Altima, Chevy Impala, and Toyota Camry. If you own a car that's stolen frequently, your insurance company will find that to be a higher risk and your insurance rates will go up accordingly."

Bottom line? Talk to your insurance company before you choose a new car to ensure that insurance rates for the vehicle you're considering are in line with what you're willing or able to pay. (See also: Here's How a Claim Will Impact Your Car Insurance)

2. Poor credit

Yup, they're watching you. In fact, your insurance company probably uses quite a few facts about you — both basic and personal — to calculate your car insurance rate. Some of the most common factors that will count against you and raise your rate include being under 25, being male, and having a poor credit score.

"We can see a difference in rate of 100 percent or more in premium increase for someone with poor credit," says Joe Espenschied, agency principal and owner at Insurance Brokers Group. "When we have a quote for someone with a clean driving history — but a very high insurance premium — it's due to credit."

At least credit (unlike age and gender) is a factor you can control. But there are other interesting details about your life that could impact your premium, too.

3. Homeowner status

Sophia Borghese, a consultant for Superior Honda in Louisiana, says that being a homeowner can impact your insurance rate, much like your credit score.

"Homeowners are lucky. It's thought that they do not have as many financial issues as renters. Because of this, insurance companies trust and reward them by not giving them the burden of high rates," Borghese says.

4. Marital status

Another personal detail many insurers consider is your marital status. Some insurers see married drivers as being more responsible than single ones. In fact, a 2004 study by the National Institutes of Health and reported on by DMV.org found that singles were twice as likely as married people to get into automobile accidents.

"The amount by which your rates drop can vary greatly based on your other circumstances, although men's rates tend to drop more than women's when they get married," says Steve Pritchard, founder of insurance comparison site Cuuver. "However, those who have a driving history free of accidents, and a clean driving record before getting married, could see their rates reduced by almost half of what they were paying before they tied the knot."

5. Your career

There's one more personal wild-card that could have an impact on your premium: your job. According to The Zebra's 2018 State of Auto Insurance Report, drivers with full-time jobs will save about $30 on car insurance over those who are unemployed, while active duty military and veterans will get a discount of about $50 over civilians. If you use your vehicle for work, you can also expect to see your rates go up.

6. How and where you drive

We all know that our driving records affect our insurance rates, but there are lots of other components of how and where you drive that can affect premiums as well.

The distance of your commute to work can affect your premium. After all, if you're on the road longer, you're considered higher risk. (Which is why you should definitely inform your insurance provider whenever your commute changes.)

Where you live and drive is also scored according to cases of vandalism, the number of claims and fraudulent claims in that area, cases of vehicle theft, and the occurrence of damaging weather, such as flooding or hurricanes.

But insurance providers are also moving beyond statistics and data about your past behavior to provide insurance based on how you are actually driving day to day. This involves installing what's called a usage-based insurance device into your car, which tracks your driving behavior.

"If you practice safe driving habits, don't frequently drive between 12:00 and 2 a.m., or use lots of high-traffic routes, you could qualify for up to a 30 percent decrease in insurance rates," says Anna Drake, the insurance producer at Insurance Shop LLC. Of course, if your driving habits are less than stellar, this type of policy could also drive your rates upward.

7. And then there's the "secret sauce"

While most insurance companies use some combination of the same or similar factors to calculate your insurance rate, there's no standard calculation.

"Each company compiles its own factors to find its own 'secret sauce' or 'ideal insured.' When the individual hits a company's sweet spot, it will reflect in pricing and coverage," says Janine Fixmer, an independent insurance agent at Agency Insurance LLC.

This why it's so important to shop around for the best rate and coverage, and to try to keep a handle on the factors insurance companies consider that you can control — such as your driving record, credit score, and the type of vehicle you choose to drive. (See also: 6 Mistakes to Avoid When Shopping for Car Insurance)

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

7 Life Choices That Are Actually Financial Decisions

Tim Lemke — Fri, 04 May 2018 08:00:11 +0000

Life is filled with decisions, some of which can seem very consequential. You will make choices about your career, living situation, relationships, education, and your family. Emotion will be a big driver of your decision making in these cases. But these big life choices should also be viewed with a financial lens.

Whether we realize it or not, some of the key moments of our lives are actually financial decisions in disguise. Let's take a look at the major life choices that can impact your finances.

1. Choosing a college

In an ideal world, we'd pick our college based on the quality of its education, the beauty of its campus, and other factors having nothing to do with money. But most of us also look at the expense. College is costly and is not getting cheaper. It's possible for a family to drop more than a quarter of a million dollars for a four-year degree, potentially saddling a student with loans that will take years to pay off. Thus, the college choice is increasingly one that involves financial considerations.

What is the cost of tuition and housing? Is it better to attend school in-state or out of state? Should I attend a public or private university? Do I qualify for grants or scholarships? Will I be able to get a part-time job and attend school at the same time? These are the questions that often trump all others. (See also: How Much Is Too Much to Pay for College?)

2. Choosing a college major and career

So you've decided to pursue your passion and study to become a marine biologist. This can be a noble and satisfying profession. But have you examined what a marine biologist earns? Are jobs plentiful and stable? Do you know whether you'll need to remain in school for years to get an advanced degree?

It's fine to go after a career that you think will bring you happiness, but it's sensible to also take financial matters into account. There has been renewed talk about the "return on investment" for various college degrees. Like it or not, a business major is more likely to earn a high salary than someone who majored in English Lit. The potential earnings for a college major are especially relevant for those who expect to have heavy student loan debt upon graduation. (See also: 5 Jobs That Pay Over $50K and Don't Require a Bachelor's Degree)

3. Where to live

When I first started out in my career, I had dreams of grabbing my own apartment and living it up in the city. Then I got my first measly paycheck and realized that I had to think differently about my living situation.

When you think about the area of the country or the community you wish to live in, you may consider the weather, the cultural attractions, and the proximity to friends and family. But there's also a good chance that you're examining the job market, the cost of housing, and the educational system. And those are financial considerations. You may like the idea of moving to the mountains of Wyoming, but change your mind when you realize there aren't many jobs in your field of choice. You may be drawn to the lifestyle of the San Francisco Bay Area, but may reconsider when you look at the cost of living. (See also: Here's How Much Life in the Big City Will Cost You)

4. Getting married

Yes, marriage is about love. But it's also about combining each others' assets and debt. It's about setting up a joint bank account. It's about filing taxes jointly and taking advantage of tax breaks. It's about creating wills and buying life insurance. It's about being on the same page in terms of spending and budgeting and deciding whether to lend money (again) to your spouse's deadbeat cousin. It seems unromantic, but getting married is as much a monetary decision as an emotional one. (See also: 9 Surprising Ways Marriage Can Make You Richer)

5. Having children

It costs about $13,000 a year to raise a child, according to the U.S. Department of Agriculture. That means you'll shell out nearly a quarter-million dollars before a son or daughter turns 18. The expenses are seemingly endless. Food. Clothes. Education. Activities. Stuff. Children will add joy to your life, but remove money from your bank account. If you are considering having a child, have you taken the financial realities into account? (See also: 7 Signs You're Financially Ready to Start a Family)

6. Caring for elderly parents

We want what is best for our parents as they age. We want to ensure they get the best quality care and are happy in their environment. If our parents can no longer live on their own, it may be time to examine assisted living centers, in-home nursing, or other options that can vary widely in cost. You may also choose to have a parent move in with you, which can drastically change your own household budget.

Decisions about elder care can also impact your career. What if you have to take time off work to care for an elderly parent? What if you are forced to leave a job because it does not offer the flexibility you need to be there for Mom or Dad? These aren't just emotional decisions, they're huge financial ones. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

7. Retiring

We all want to reach a certain age and simply say, "OK, I'm done working." It'd be great to hit age 63 and simply walk off into a life of travel and leisure. But the ability to do that must come with the knowledge that you can afford it.

Retiring requires long-term planning to accumulate enough wealth so you can stop working. It may also involve a review of Social Security benefits to determine whether it's more financially advantageous to retire later. The key here is to think of retirement as a financial decision from the get-go. Set a target age for retirement and develop a smart and comprehensive financial plan to get there. With proper financial planning, you can retire when your heart and mind tell you to. (See also: 4 False Assumptions That Could Threaten Your Retirement Years)

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

My Kid Got Accepted to an Expensive Private College — Now What?

Dr Penny Pincher — Tue, 24 Apr 2018 08:30:10 +0000

My son recently got accepted into a college program that would cost about $45,000 per year for tuition, room, and board. This is exciting news — but also potentially expensive news. At what point does the cost of college outweigh the likely economic benefits?

Of course, the value of college goes far beyond simply allowing someone to prepare for a higher paying job. College can help you discover your path in life, develop your mind, and open doors to experiences that are not available to most people. But how much is too much to pay for college, from a purely financial perspective?

College's cost in dollars and opportunity

The main costs of college are tuition, room, and board. The average total cost of attending an in-state public university is over $20,000 per year, and the average cost of private college is over $40,000 per year, according to the College Board.

Opportunity cost is another cost of college that is easily overlooked. If you spend four years attending college full-time, you miss out on four years of full-time income that you could have earned instead. You also potentially delay starting to build investments and reaching financial independence.

The most insidious cost of going to college is probably lifestyle inflation. Almost everyone tends to spend more as they make more. Even though college graduates will likely make more money than those who don't go to college, college grads will probably also spend a lot more on a more expensive lifestyle. Just because you make more money doesn't mean you'll end up having more money in your bank account or a higher net worth. (See also: What to Do When You Can't Afford Your Child's College Education)

College will boost future earnings by a lot

Even though the costs of attending college can be prohibitive, the benefits in terms of increased salary can easily add up to millions of dollars over a career. Let's say you are 18 years old and decide to start working full-time at an entry-level job that pays $20,000 per year. Your earnings over your career until age 65, with a 3 percent raise every year, would be $2,007,930.

Now let's say instead of starting to work full-time at age 18, you attend college for four years. You start working full-time at age 22 with a starting salary of $45,000 per year, which is a reasonable expectation for a wide range of college majors. If you work until age 65, assuming a 3 percent raise each year, the earnings over your career would be $3,846,775.

Taking into consideration that you delayed starting your career for five years to attend college, you would still earn over $1.8 million more over the course of your career from the benefit of your college education.

Of course, expected starting salaries vary with college major. According to the National Association of Colleges and Employers, engineering majors are at the top of the pay scale and can expect to start at an average salary of around $65,000. Education majors have average starting salaries of around $35,000, and almost all other majors are somewhere between $35K and $65K. But no matter what you major in, your salary earnings potential over your career will likely get a big boost by going to college. (See also: 5 Jobs That Pay Over $50K and Don't Require a Bachelor's Degree)

How much should you pay to go to college?

The return on investment of going to college can be quite favorable in terms of increased lifetime salary potential. As we saw in the example above, earning over $1.5 million more from a higher salary after going to college is a realistic expectation.

The limit on how much you should pay for college is not constrained by the value of your higher salary with a college degree, since your increased earnings would probably far exceed the cost of going to college. Instead, the limit on college cost for most people is driven by how big of a student loan they can afford to pay back after graduating.

Even though a college degree could boost your income by millions of dollars over your career, you'll need to start making student loan payments shortly after graduating. By estimating how much income you expect to earn after you graduate, you can figure out a ballpark figure for the maximum size student loan you can afford. (See also: 6 Questions to Ask Before Taking Out Student Loans)

Here's how to calculate your maximum affordable student loan balance.

Estimate your starting salary based on your major. For example, $45,000.
Divide your anticipated starting salary by 12 to get monthly pretax income. For example, $45,000 / 12 = $3,750.

As a rule of thumb, use 10 percent of your pretax monthly income as your maximum affordable student loan payment. For example, $3,750 x 0.10 = $375 per month.

Calculate the loan amount that a payment of $375 would support. For example, using the loan balance calculator from CalcXML, $375 per month would support a 10-year loan of $32,586 with 6.8 percent interest.
Divide the loan amount by the number of years of college. For example, $32,586 / 4 = $8,146.50 per year.

The second to last step gives you an idea of the biggest student loan balance that you could afford to make payments on. The very last step gives you the biggest student loan amount that you should take each year.

If you want a quicker way to estimate the maximum affordable student loan balance, take 75 percent of your anticipated starting salary. Using the same salary as in the previous example, $45,000 x 0.75 = $33,750. That would be your maximum affordable student loan balance.

But what if the numbers don't add up?

I started off by saying that my son was accepted into a program that costs $45,000 per year. Over four years, this would add up to $180,000. This greatly exceeds the maximum affordable student loan amount for a new college graduate. For an expected starting salary of $45,000, we calculated that the maximum affordable student loan balance is around $33,000. This wouldn't even cover one year of my son's program.

Fortunately, there are some ways to reduce college expenses and bring the cost into an affordable range. My son was offered a big scholarship, which makes the sticker price a lot lower. Here are some other possibilities your child can pursue to help keep college costs affordable. (See also: How to Pay for College When You Didn't Get a Scholarship)

Choose an in-state public university instead of more expensive private schools.
Consider starting at community college for two years and transferring credits to a four-year institution later.
Work summers or part-time to help pay some college expenses and reduce the burden of student loan debt.
Consider going into a major that pays well to be able to afford a more expensive college program.
Consider financing student loans for a longer repayment period to reduce the monthly payments. (You will be in debt longer, but could still come out ahead in the long run.)
Consider military service before college, or an ROTC program at college. Benefits can cover college expenses.

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

Best Money Tips: How to Make Sure Your Career Doesn't Kill You

Amy Lu — Mon, 26 Mar 2018 09:30:23 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on how to make sure your career doesn’t kill you, tips to change your life, and hobbies for people who love to be alone.

5 Ways Job Hunting Has Gotten Better for New Grads

Rachel Slifka — Wed, 28 Feb 2018 09:31:09 +0000

Job hunting is tough for everyone, but it can be especially tricky for recent college graduates. With a fresh education and less experience, new grads often have a hard time finding that first employer who will give them a chance.

But there is good news on the job front for recent college graduates. Gone are the days of sifting through endless help-wanted ads in the newspaper. Job seekers today have a whole new set of resources at their disposal, giving recent college graduates a boost. Here are several ways job hunting has gotten better for new grads.

1. Social media leads to more opportunities

Social media is second nature to young college grads, and that's a good thing, because social media has completely revolutionized the way we look for work. Websites like LinkedIn give you a way to connect with recruiters and other professionals at the click of a button. In addition to building a professional network and looking for job openings, you can ask for recommendations on LinkedIn, providing easy references for hiring managers. Even Facebook and Twitter can lead to opportunities if you are on the lookout.

Many companies have dedicated career social media pages where they post all of their openings and interact with potential candidates. This offers an easy way for grads to engage with potential employers before even applying. (See also: Jumpstart Your Job Search With Instagram)

2. Side hustles provide extra income

Un- or underemployed? Today, you have the benefit of being able to do side gigs to help bridge the financial gap that many recent graduates face.

No matter what your career goals are, a side hustle can be a fantastic way to supplement your income. Pet sitting, lawn care, driving for Uber or Lyft, or freelance writing are just a few options you can explore that don't require any significant financial investment.

By working a side gig, you can create an additional stream of income while you job hunt for your main career. Even when you do land a job with a comfortable salary, you may find that the extra financial benefit of a side hustle is worth keeping. (See also: 14 Best Side Jobs For Fast Cash)

3. Access to free educational resources is easy

Would mastering a new skill help you in your job search? Or refining your current skill set?

You don't necessarily have to go to graduate school or enroll in expensive classes in order to learn something new. Nowadays, you have access to tons of free educational resources through the internet.

Whether it's watching YouTube videos, listening to a podcast, reading a book, or even taking an online class, there have never been more cost-effective opportunities to learn a new skill.

4. There are more networking opportunities than ever

Landing your dream job depends not only on what you know, but also who you know. Any person you meet could be the one to open the door to your next job opportunity, so networking as a recent grad is imperative.

Most networking groups now have some sort of online presence, making it easy to find one that fits your schedule. You can keep tabs on upcoming events through social media channels, LinkedIn, chat groups, and even websites like Meetup.com. Your school may also have resources for you to find networking events in your area.

Many accomplished career professionals know how difficult the job search can be for a recent college graduate. They have all been where you are, and many are happy to help. Technology has made it easy to interact with these people and form a connection. Take advantage of it. (See also: The 10 Best Networking Tips for People Under 40)

5. Social branding can make or break you

Ten years ago, social branding didn't exist. Making a good impression on a potential employer came down solely to a resume and an interview. Now, the internet is your best resource to make a name for yourself. Social branding is an easy way to establish yourself as an accomplished and optimistic professional before you even have any substantial career experience.

Most hiring managers will do a Google search and look you up on social media before you get a call for an interview, much less a job offer. Make sure what they find will leave a good impression. Keep your public or easily accessible social media feeds professional and clean. (See also: 7 Easy Ways to Clean Up Your Image on Social Media)

Building a website is also a smart way to showcase your skills, back story, and resume all in one place. You don't have to spend a fortune or hire a designer to build a website; many services offer hosting and free or low-cost website templates that are easy to maintain. (See also: 8 Surprising Ways a Personal Website Can Improve Your Life)

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

How to Build Financial Stability After Divorce

Toni Husbands — Tue, 20 Feb 2018 09:30:09 +0000

Financial instability is a reality for nearly three-quarters of this country's 25 million divorcees. A study by TD Ameritrade surveyed 2,000 participants to examine how they're coping financially after a divorce or death of a spouse. As it turns out, people facing the end of a marriage are struggling — 75 percent of divorced Americans feel less than secure financially, and half are worried about running out of money in retirement.

The average cost of a contested divorce — which can range from $15,000 to $30,000 — also throws many divorcees' finances out of whack. And it doesn't end there. Additional costs such as separate household expenses, counseling for children, and taxes or fees to sell marital assets can quickly add to the financial burden. (See also: How to Protect Yourself Financially During a Divorce or Separation)

Healing after a divorce is no small feat, but digging yourself out financially is possible. You just need a strategic plan.

Assess your assets

There is no doubt that your standard of living will change after a divorce. It's important to realistically acknowledge what you can handle financially. It may be necessary to sell a family home and downsize to maintain a workable budget. While challenging, especially if there is an emotional attachment to the home, life after divorce presents a new reality that must be addressed head-on. (See also: 5 Money Moves to Make the Moment You Decide to Get Divorced)

Seek professional advice

This is an essential step for anyone facing an unexpected change in their financial situation. Objective, third-party advice can help you avoid making knee-jerk or emotional decisions that have long-term negative consequences. A financial professional who specializes in assisting divorcees can help you deal with typical questions and decisions that people in your situation face.

Adjust your budget

A divorce will likely decrease the overall income you've been accustomed to enjoying. Once you've established a plan for the essential items like housing, it will be time to take a closer look at the luxuries you enjoyed as a married person.

This also relates to expenses for your children. Often, parents try to maintain the same standard of living for their kids to minimize the impact of a divorce. Moving to a less expensive house, downgrading a luxury car, or making cutbacks to family travel plans can help you recover financially.

Evaluate career options

Depending on your age and/or situation at the time of the divorce, you may have been out of work or planning on retiring soon. In this case, you may need to adjust your career aspirations. Re-entering the job market, investing in additional education or training, or postponing retirement are all reasonable considerations to ensure long-term financial stability after a divorce.

Automate your savings

There are many things to handle during a divorce, and saving money may feel like a bottom-tier priority. But that couldn't be further from the truth. You need savings now more than ever. The TD Ameritrade study found that almost half of divorced couples are not saving or investing anything. That compares to 32 percent of their married peers. If you have a lot on your plate, it's understandable; but give yourself one less thing to worry about by automating your savings. Having money automatically withdrawn from your paycheck and put into a savings account or emergency fund can give you peace of mind without having to think about it. (See also: 5 Ways to Automate Your Finances)

Divorce is tough. It's important to give yourself time to grieve your previous lifestyle and adjust to your new normal. Making these moves can be a smart step to help you springboard into the rest of your life without worrying about money.

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

7 Things to Consider Before Paying for an MBA

Damian Davila — Mon, 22 Jan 2018 09:30:05 +0000

A Master's in Business Administration can add millions of dollars to your lifetime income. According to Financial Times, alumni from the highest-rated MBA programs earned an average $142,000 just three years after completing their degrees — more than double the salary of their pre-MBA careers.

While the potential of earning a better income is surely enticing, there are several factors to consider before committing to a graduate business degree. MBA programs aren't cheap, after all. Let's break down key criteria to decide if an MBA is a worthwhile pursuit.

1. GMAT test

Just like you need an SAT score to be admitted to undergraduate college, you need a Graduate Management Admission Test (GMAT) score to pursue an MBA. According to the Graduate Management Admission Council, nearly nine out of 10 new enrollments at the top 50 U.S. full-time MBA programs were made using a GMAT score.

Depending on your target business schools, you may have to achieve a minimum score on this test. Getting to that minimum score is going to cost you prep time and money. At the very least, you'll need to cover the $250 test fee, but you may also have to pay for test prep services or additional materials that can bring up your total GMAT costs to thousands of dollars. Taking a free diagnostic exam from MBA.com can help you determine how close you are to the required minimum score (if any) and what you need to do to achieve that score.

2. Type of MBA

To better meet the needs of its students, most business schools offer part-time, full-time, and executive versions of a business graduate program. While the full-time program allows you to fully immerse yourself in the MBA experience, a part-time program enables you to keep your current job and minimize student loans. An executive MBA (or EMBA) requires applicants to have several years of work experience, which will vary depending on the school. EMBA students typically have to attend classes on weekends.

However, some schools offer additional types of MBA programs. For example, the Shidler College of Business in Hawaii offers a Global MBA with a China focus in which you complete an eight-month study abroad period at a partner school in China.

3. Work experience

Business schools vary widely in the amount of work experience they require from applicants. Still, 89 percent of full-time MBA students have an average 4.3 years of work experience, according to U.S. News & World Report. For part-time and executive degree students, average work experience is even longer at 6.4 and 13.3 years, respectively.

This doesn't mean that pursuing an MBA fresh off completing your undergraduate degree isn't possible. It just means that you may be limiting your options by applying to a business school too early. Keep in mind that taking the GMAT fresh out of undergrad is often a good idea, while your study habits are still intact, because your score will be valid for the next five years. Adding some years of relevant professional experience to your resume will strengthen your MBA application.

4. Target industry and salary

Let's face it: You are considering an MBA so you can increase your earning potential. Just keep in mind that your target salary goes hand in hand with your target industry. While an MBA can give your salary a boost, the actual pay bump varies per industry.

Using data from over 6,600 MBA alumni working in the U.S., MBA.com reports the average annual salary of a graduate in the technology industry and a graduate in the government/nonprofit industry at $135,000 and $95,000, respectively. The job level of the position also affects the salary of MBA alumni: In the finance/accounting sector, a graduate would earn an average $55,000 per year in an entry-level position and an average $165,000 in a senior-level position. Knowing your earning potential can provide you a better picture of the potential return on investment of an MBA.

5. Job placement rate

It's one thing to know your earning potential; it's another thing to actually land the job paying that target salary. Make sure to ask about the average period of unemployment after graduation for graduates of your target MBA programs, the job placement services available during and after the completion of your degree, and the list of companies actively recruiting interns and full-time hires from those schools. While no school can guarantee you 100 percent job placement after you complete your MBA, some schools do a better job than others at setting you up for success. Choose one that best suits the unique characteristics of your desired career path.

6. Alternatives

Some industries have different types of programs or certifications that are comparable — and sometimes more valuable — than an MBA. In the finance sector, a Chartered Financial Analyst (CFA) credential is a recognized investment management designation valued by many employers. Other examples of self-study certifications coveted by employers are the Financial Risk Manager (FRM), General Securities Representative Exam (GSRE), Certified Financial Planner (CFP), and Associate of the Society of Actuaries (ASA).

A professional designation is an alternative pathway to unlock career growth potential that may be similar to an MBA. (See also: 7 Certifications That Add Big $$ to Your Salary)

7. Existing student loans

It takes money to make money, but there's always a limit. A 2016 Poets&Quants study showed that MBA graduates had six-figure student debt from at least 13 prominent business schools, up from only two schools in 2011. Even some public universities offering MBA programs have a high sticker price: Six of the 25 schools with the highest average loans were public.

Assuming a $100,000 student loan balance on a standard 10-year repayment plan with a 6.8 percent interest rate, you would pay an estimated $1,151 every month. If you already have a student loan balance, you should consider waiting until you reduce that financial burden before taking on additional student debt. (See also: These 17 Companies Will Help You Repay Your Student Loan)

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5 Money Conversations Couples Should Have Before Retirement

Dan Rafter — Tue, 05 Sep 2017 09:00:06 +0000

Retirement for you and your spouse is just a few years away. Maybe you're both eagerly awaiting the days when you no longer must commute to work, sit in long meetings, and turn in reports.

But retirement does come with its own challenges, many of them financial. It's important for spouses to have the same expectations of what their retirement years will look like. And it's equally important for each spouse to understand where their income will be coming from and how much money there will be.

Here are five key conversations that couples must have before retirement arrives.

1. What kind of retirement do you both want, and how expensive will it be?

There are many different ways to spend your retirement years. Maybe you want to travel the world. Maybe you'd prefer spending more time with your grandchildren. Your version of a dream retirement might consist of days on the golf course or fishing on the lake.

But what if you have the travel bug, and your spouse would prefer to sit home and catch up on some reading? These are two radically different versions of retirement. And, when it comes to your retirement finances, one is far more expensive than the other.

It's important for you to share your retirement expectations with your spouse before you actually leave the working world. If you both agree that plenty of travel is in your future, you'll need to work hard to make sure you'll have enough retirement dollars to fund these trips. If only one of you wants to spend time traveling or pursuing a more expensive hobby, you'll have to craft a compromise.

2. Where will the money come from, and how much will you have?

As retirement nears, couples must work together on a new household budget tailored to their new life after work. You won't be able to rely on that steady work income after retirement, and Social Security payments probably won't cover all your daily living needs. This makes writing a household budget — and agreeing to stick to it — more important.

Your new budget should list all of your sources of monthly income and all of your expected monthly expenses, including mortgage payments if you still have them, car payments, utility bills, groceries, and entertainment. Once you've listed your income and expenses, including how much of your retirement savings you'll need to dip into each month to cover these expenses, you'll have a clearer picture of how much you can spend each month after leaving the working world. (See also: 6 Ways You Can Cut Costs Right Before You Retire)

3. Where will you live?

Housing expenses can be a challenge after retirement. It's important for couples to discuss where they'll live after leaving the working life behind. Do you want to stay in your current home for as long as possible? The financial ramifications of this will vary depending on whether you've paid off your mortgage or not. It might make more sense to sell your home and move into a smaller condo or apartment. Or maybe you're ready to move into a senior housing facility.

Don't put off conversations about housing. This is one of the most important issues couples face after retirement. (See also: Retire for Half the Cost in These 5 Countries)

4. Will one of you take on a new job or career?

Retirement doesn't always mean that you or your spouse won't continue to work in some way. Some people take on part-time jobs to occupy their time and earn a bit of extra spending money. Others start the new careers that they've always desired. (See also: 6 Great Retirement Jobs)

It's important for couples to discuss their plans for working after retirement. One spouse — or both — holding down a part-time job can make a significant difference in your income and budget after retirement, even if this income isn't essential to covering your daily living needs.

5. How will you handle unplanned expenses?

Unexpected expenses aren't unusual while you're working, with everything from burst water heaters to serious medical problems eating away at your savings. The same unexpected expenses can pop up when you're retired, too. When they do, how will you pay for them?

Talk with your spouse about maintaining an emergency fund that can cover at least six months' worth of your daily living expenses after retirement. If you don't maintain this fund — which you should have had while you were working — one big unexpected expense could wreak havoc on your budget. (See also: 9 Unexpected Expenses for Retirees — And How to Manage Them)

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

Don't Start a Family Before Reaching These 5 Money Goals

Dan Rafter — Tue, 29 Aug 2017 08:00:06 +0000

Raising kids is expensive. The numbers bear this out: The U.S. Department of Agriculture reported that in 2015 a middle-income family spent an average $12,980 each year on each child. To raise a child from birth through age 17, it would cost married parents an average $233,610. And these figures don't include the cost of a college education.

Because raising children — not to mention buying cars and homes to accommodate them — is an expensive task, it makes sense to set certain financial goals for yourself before you start a family. Being financially prepared for children can make raising them, and paying for this process, a far easier task.

Here are a few money goals to set before you start having children.

1. An emergency fund with six months of daily living expenses

Children come with unexpected expenses; everything from $200 for an emergency room visit to a surprise $500 bill from the dentist. You can prepare for these expenses by creating an emergency fund.

As its name suggests, an emergency fund is an account that you only tap to cover unanticipated necessities. With an emergency fund, you won't have to resort to paying for unexpected expenses with a high-interest credit card.

Most financial experts recommend that you have at least six months' worth of daily living expenses saved in your emergency fund. That might seem like a daunting goal, but you can get there by steadily putting away even just $100 every month.

2. A credit score of 740 or higher

Your credit score is an important number. Lenders use it to determine if you qualify for mortgage, auto, personal, and student loans. They also rely on it to set your interest rate, with a high score usually equaling lower interest rates.

Most lenders today consider a credit score of 740 or higher to be very good. Getting your score to this level, then, should be one of your goals before you start having children. Having a strong credit score means you'll pay less for a mortgage or car loan. That can reduce your living expenses significantly, something that can help ease the financial stresses that come with raising children. (See also: 5 Ways to Improve Your Credit Score Fast)

3. A work history

You'll need a steady income to pay for the expenses involved in raising children. The best way to get this income is to build a stable career in your field. Make sure you have several years logged in your field before you begin having children. While there are no guarantees that you'll never lose your job, the odds will be lower if you've already established yourself in your field. And if you do lose your job, you'll have an easier time finding new work.

4. Saving for retirement

Retirement might seem far off, especially when you're thinking of starting a family. But it's never too early to start saving for retirement. The earlier you start, the more dollars you have once you leave the workforce.

Before you have children, start socking away money each month for retirement. The easiest way to do this is to sign up for the 401(k) plan that your employer offers. This way, your retirement funds will be deposited automatically with each paycheck.

If you don't have access to a 401(k) fund, open a traditional or Roth IRA. Deposit as much as you can each year to get into the habit of saving for retirement. If you do this, it'll be easier to continue saving for retirement after your children are born. (See also: Are You Ruining Your Retirement by Spoiling Your Kids?)

5. A plan for your children's college education

College might seem far away, too. After all, your children aren't even born yet. You're focused more on paying for preschool than on picking a college.

But you should start planning for your children's college education before you even begin building your family. The average class of 2016 graduate took home $37,172 in student loan debt, a number 6 percent higher than the year before. That amount continues to rise each year. You don't want your children to be burdened with student loan debt as they become young adults.

Consider opening a 529 college savings plan to help you start stowing away money for your soon-to-be-born children's secondary education. You might be surprised at how quickly college costs sneak up on you. (See also: 5 Smart Places to Stash Your Kid's College Savings)

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How to Leave a Positive Impression on Everyone You Meet

Christa Avampato — Tue, 01 Aug 2017 09:00:04 +0000

With the hustle and bustle of life, making a lasting and positive first impression goes a long way. You never know what may come of meeting someone. It can lead to a job, a friendship, or even a romantic relationship. That's why you should always be mindful as to how you're presenting yourself to others and the world. Here's how to show off your best self.

Make eye contact

It feels good to be seen. Let everyone you meet know that you're paying attention and that you're interested in what they have to say. Physically acknowledge them through eye contact. Most people don't know how to make solid eye contact, and it's an incredible habit that will make you memorable to others. (See also: 13 Ways to Make a Good First Impression at Your Next Job Interview)

Listen

Put your phone away and really listen to people when they speak to you. Be there 100 percent. And don't just wait for your turn to talk. Take in what someone else is saying, let it sink in, and respond. Listening is an underrated skill. It's such an effortless way to make someone else feel valued. I've often found that being a good listener has helped me learn and grow in ways I never imagined. And yes, people remember me because I so vividly remember our conversations.

Ask concise, insightful questions

I'm known for my curiosity and questioning nature. I find people fascinating, and I like to learn as much about them as I can. My ability to quickly assimilate information and make conversation that's far beyond cocktail party smalltalk has dramatically improved my life and career. I've made lifelong friends through chance meetings based on creating meaningful conversations with people I have just met, and you can, too.

Don't ask the questions everyone asks. Don't be invasive, but make your questions interesting. And show you're paying attention to their answers by asking follow-up questions. (See also: 6 Terrible Money Moves to Avoid on the First Date)

Be open

The more open you are about your life and experiences, the more comfort you will engender in others. That comfort leads to the kind of openness and honesty that our society needs now more than ever. By putting out positive energy and being open, goodness comes back to us many times over. Vow to make meeting you the best part of someone's day.

Be sure to follow up

Did you have a great conversation with someone? Did you meet someone interesting and you want to learn more about them? Did you promise to follow up with someone or did they ask you to follow up with them?

If you answered yes to any of these questions, make sure to follow through. Send that email. Connect on social media. Make the phone call. If you promise to do something and do it, you show your integrity and genuine interest. People won't forget that.

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

How to Keep Your Job Search a Secret

Mikey Rox — Thu, 01 Jun 2017 08:30:18 +0000

Looking for a job can be tricky when you already have one. You want to take your career to the next level, but you don't want to risk the job you currently have — which can happen if your employer finds out you're trying to jump ship.

Use these tips to keep your search a secret until you're ready to put in your two weeks' notice:

Keep your job search to yourself

There's no need to tell anyone else about your job search, least of all your coworkers. It doesn't matter how close you are, it's still none of their business. Loyalty is a fickle beast when positions are up for grabs, and if your coworkers see a chance to get a leg up, you may find yourself thrown under a proverbial bus. Rumors can spread like wildfire, and they'll eventually hit the boss. You could compromise your current employment if you don't have control of the narrative. Best to say nothing at all.

Stay away from company equipment

Using company equipment to conduct a job search seems like an obvious no-no, but you'd be surprised how many people don't recognize the risk until they get caught. Your activities may be monitored, and it'll be hard to explain yourself when IT has proof that you're wasting company time and resources to further your career elsewhere.

Always use your personal computer and mobile devices to look for jobs and respond to emails, and only provide your personal phone numbers for calls. Don't use the office copier or fax for resume or other job-search materials, either; you could accidentally leave your resume on the machines, thereby ratting on yourself.

Continue giving 100 percent at your current job

Remember when you were a senior in high school? It was so hard to put forth the effort during that last week of class. It's common to adopt a similar attitude when you're planning to leave a job. You might tell yourself that you'll be gone soon anyway, so why bother trying to impress anyone? But this is a dangerous mentality. It's important to remain professional until the day your tenure ends at your current position.

"Don't ease off the gas just because you are thinking about leaving," says Ryan Naylor, CEO and founder of LocalWork.com. "Maybe that new job won't come, or maybe you want a good referral later. If you do leave, you want to leave behind a continued path of goodwill, not burned bridges."

Don't announce your intentions on social media

Even though you think your social media accounts are "private," remain cautious. People are nosy, and it's common practice these days for employers to check in on their employees' social media presence. If you don't say anything, you don't have to explain anything. This is especially true on LinkedIn; use the service to search for open positions and network with contacts, but don't outwardly declare that you're looking for a new job. It's almost guaranteed to get back to your employer.

Nancy Schuman, chief marketing officer at recruitment firm Lloyd Staffing, adds, "Make your activity stream on LinkedIn private and turn off broadcasts. Don't list your current employer by name on your resume. Instead, describe it as a 'large financial institution,' 'a well- known consumer products company,' etc."

Same goes for Facebook, Twitter, and any other platforms you use. You may not be directly connected to your boss, but chances are you're connected to someone you work with, or someone who knows someone you work with. These services may help you make connections faster, but it's best to target individuals in your network directly who may be able to help you. It'll certainly be less dangerous than making a blanket post on Facebook about how you'd like a better job.

Don't send resumes to blind ads

When applying for positions, make sure you know to whom you're sending your resume and information. On platforms like Craigslist, often the job description is listed but the employer remains anonymous. This could spell trouble if you inadvertently respond to an ad your current employer is running.

Certified career coach Cheryl Palmer relays a story of a job seeker who made that mistake.

"A woman once told me that her coworker responded to a blind ad and then was confronted a short while later by someone in the company from Human Resources," she says. "The HR professional asked her if she was looking for another job. The woman lied and said no. The HR professional responded, 'I got your resume.' It turned out that the job that this woman had unwittingly applied for was at her own company."

If you're posting to job boards, do that anonymously as well. You never know who's on there. If HR is searching for candidates for your office and they find you, you'll have some explaining to do.

Keep your interview attire in your car

Try not to take time off work to go on job interviews, if only to avoid raising a red flag on why your attendance is suddenly sporadic. If need be, schedule interviews during your lunch break or possibly after work. If there's no wiggle room, as a last resort, take one day off from your current job and try to schedule multiple interviews on that day.

To expedite the interview process during work hours — like lunchtime, for instance — keep interview attire in your vehicle so you can change in and out of it at a discreet location. A suit and tie will be a dead giveaway if you normally wear jeans and a polo. You can only use the "I have a funeral to attend after work" excuse so many times before your coworkers start to think you're an agent of death.

Use references outside your current company

If you're trying to keep your job search a secret, why would you list your current employer as a reference? Surely you can find other people to vouch for you who don't have the power to fire you for making poor decisions.

To avoid this predicament, Schuman suggests letting a prospective employer know that you will offer a current reference once you have a job offer. "But do have other references lined up who know you and your work well for them to contact in the interim," she adds.

Ask for confidentiality at your interview

You may even go so far as to ask the person with whom you're interviewing not to reach out to your current employer. Just mention that you'd rather keep your current employer out of it; most hiring managers will understand.

Schuman suggests, "If you are working with a recruiter, tell them your confidentiality must be maintained; ask to be made aware of all prospective opportunities before your resume is referred."

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11 Ways College Grads Can Get Ahead in the Job Hunt

Mikey Rox — Mon, 24 Apr 2017 08:30:13 +0000

It's a dog-eat-dog post-college world out there for new grads. It was when I graduated in 2003, and I hear the same grumblings today from next-gens looking for work.

While I can't promise that any of my advice will get you hired, I can ensure that it'll at least help you get your professional endeavors off on the right foot. As such, consider these ways to get ahead in the job hunt.

1. Explore entrepreneurship while you're still in school

Entrepreneurship isn't for everyone, but I do recommend it to everyone. I started my first business while I was still in college, which eventually evolved into a successful media business. That has, in turn, provided me with the financial and recreational freedom to pursue other interests and revenue streams.

More than that, though, trying to become your own boss at a young(ish) age, even if you don't quite know what you're doing yet, will never be considered a failure. At the very least, you'll gain skills than can help you in future prospects, learn how to interact with customers, and make connections networking with other professionals. This will give you a major edge over your contemporaries.

2. Volunteer to enhance work ethic and build references

Volunteering, especially right after college, looks great on a resume because it lets an employer know that you're committed to a cause. It's not just about listing the noble charities to which you've given your time, but rather how you turned these opportunities into in-the-field, ethic-building ventures. The experience will undoubtedly help you make contacts and build references who will sing your praises when called upon. Of course, seeing the world, meeting and helping people, and gaining a sense of purpose and self are pretty cool, too.

3. Pursue internships to gain industry experience

I held two internships at a time in college because I knew I wanted to work in media, specifically journalism. Unfortunately for me, I fell in love with a college that didn't offer a journalism major, and that meant I had to make up the difference — big time.

One of my internships was writing news for an ABC-affiliated AM news-radio station, while the other was writing about music for a local magazine. Each of these internships provided me with vastly different skills, but they both prepared me for applying to my first paid writing positions. I went into those jobs better prepared, perhaps, than other candidates.

Alexis Chateau, founder and managing partner of her own eponymous public relations firm, credits internship for her success. In addition to the internship, she suggests taking on spec assignments for free to show potential employers what you've got.

"College students should take on pro-bono work, to build their portfolio, if they work in an area that requires it," she says. "An impressive portfolio can open up almost any door in business."

I can personally vouch for this tactic. When I started my journalism career, I wrote many articles for free just to get published. When I had enough clips that showed that I was a capable and cognizant writer, editors responded in kind by hiring me for work.

4. Connect with prospective companies online

If there are particular companies at which you're interested in working, follow them online so you can get a better idea of what they're all about. When you go into an interview with something smart and relevant to say about the company, you won't go unnoticed by the interviewer.

"These days, smart companies are using their social media to have a dialogue with the public, and this dialogue is a great way for people to figure out a company's core values, their mission, and the language they use in order to connect with them, and present yourself as an ideal candidate," explains Carlota Zimmerman, a New York-based career coach and success strategist.

Zimmerman suggests also liking the company's Facebook page, as someone through the grapevine may notice and reach out. It may not be that easy, but any potential connection is a valuable connection.

5. Clean up your social media

This is the digital age, when everyone and their mother has a social media presence. Chances are, if you're fresh out of college, you've got a few things floating around your Facebook or Instagram account that may not paint the prettiest picture of you to an employer. And believe me, your prospective employers will be looking.

Before you even send out your resume, do a deep clean of all of your social media accounts. Scrub embarrassing posts, delete or untag yourself from unflattering photos, and double check your privacy settings. Then, view your profile publicly to see what information is still accessible. A tedious process? Yes, but so is unemployment. (See also: 7 Easy Ways to Clean Up Your Image on Social Media)

6. Tap into your personal network for professional tips

Nearly every single adult you know is a professional with years of experience in their field. Some of them have had the same jobs forever, and some of them have changed careers frequently. No matter the case, these folks can be helpful not only in the advice they can provide, but they may also be able to point you in the right direction of employment.

Kristine Thorndyke, who landed a full-time gig in Los Angeles before she graduated, offers advice on how to apply this principle within your own college community.

"Join a club or school committee based around a particular skill or interest you intend on pursuing in the future," she says. "For example, if you are a business major, see if there are any groups or committees that meet up or, oftentimes, a designated business fraternity. These kinds of groups usually have access to professionals in the field you intend on pursuing and can help coordinate meet and greets with these professionals or alumni."

7. Take advantage of your school's career services resources

When I was looking for a job in Manhattan, I was willing to take all the help I could get. Enter Career Services at my alma mater. These centers provides free resources that not only help students write proper resumes, but also facilitate conversations between alumni and new grads based on field of interest, skill level, and more. My own Career Services connected me with the right people so I could start putting out feelers and getting a handle on what my options were.

"Reach out to alumni from your school and ask them out for a coffee to 'pick their brain,'" Thorndyke suggests. "Oftentimes, this alumni has connections or ties to companies that are hiring and will be impressed that you were driven enough to meet and learn more about the kind of work they do and their insight and/or suggestions for you."

8. Practice how to give a good interview from start to finish

Interviewing for a job is an art form. There are a million things that go into giving a great one, from how you dress to your follow-up thank-yous. As with everything else, of course, practice makes perfect — and you have ample time to hone your skills since, ya know, you're currently unemployed. (See also: How to Answer 23 of the Most Common Interview Questions)

Thorndyke advises, "Interview with a professional career counselor. It's the best way to figure out how to most effectively convey your thoughts and accomplishments before the big interview. Oftentimes, it's difficult to get any honest feedback from HR or interviewers about notes on your qualifications or interviewing ability from a gig you were declined an offer from."

An interview counselor can point out where you need to improve before the rejections become a trend.

9. Learn how to write a resume that will get you noticed

First, let's start with the number one thing you shouldn't do with your resume: Do not send the same one to every job prospect, regardless of industry or field. Your resume should be specifically tailored to the job you're seeking. If that means changing it 57 times a week to make sure it's relevant to each prospect, that's what you need to do. Secondly, it needs to stand out. There are lots of ways you can do that, but the highest on the list is providing details about past accomplishments opposed to generic lines like, "Provided marketing assistance to the director of sales." (See also: 10 Resume Mistakes That Will Hurt Your Job Search)

You know what HR people do when they read resumes full of bland descriptors? They slam dunk it into the circular file and move on to the next one.

10. Put your GPA on your resume

Maybe I've been out of college for too long, but I don't remember including my GPA on my resume — or anybody ever suggesting I do so. But Chris Kolmar, co-founder of Zappia.com, makes a good point about adopting the practice, at least for the first couple years after graduation.

His logic?

"Any good hiring manager will ask for it because it's a decent predictor of success right of out college," he says.

Not gospel, but it certainly won't hurt.

11. Start your job hunt months before graduation

Looking for a job well before you graduate doesn't always work, but getting a head start never hurts.

"I secured a job in public relations three days before graduation because of this," explains Alyssa Pallotti, an account supervisor at Montner Tech PR in Connecticut. "I began applying, participating in phone interviews, and meeting potential employers in person as early as the beginning of my final semester. This allowed me to tweak my resume, cover letters, and interview style based on feedback from those companies. Therefore, my overall presentation and nerves were refined by the time I was actually eligible to take on a position."

Yes, job hunting takes work — and that can be an overwhelming prospect when you're still dealing with school — but don't put this off. It could potentially save you months of job-hunt headaches.

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

7 Things You Should Never Include in Your Cover Letter

Sarah Winfrey — Tue, 18 Apr 2017 08:30:11 +0000

Writing the perfect cover letter is a job skill unto itself. In just a few paragraphs, you need to capture the reader's attention and expertly sell your skills and experience, all while striking the right professional tone.

It's tempting to slap something together and tell yourself that your resume is more important. Truth be told, though, your cover letter is a key part of the package. Avoiding these seven cover letter gaffes will get you through the interview door faster.

1. Wrong information

Make sure that you have all the details right. Double check that you have the correct company name and spelling, the correct job title, the right address, and, where necessary, the correct name of the hiring manager.

If you don't have the name of the hiring manager, you can often find it by calling the company's human resources department. Let HR know which position you're applying for and ask, "To whom should I address my cover letter?" They won't always tell you, but sometimes they will.

Also double check your own personal information, including your name, address, email, and phone number. It may sound like common sense, but you'd be surprised how often these tiny typos cost people a job opportunity. (See also: Almost Half of Job Applicants Make This Same Foolish Mistake)

2. Poor writing

Use complete sentences. Spell words correctly. Check (and have someone else check) your grammar and punctuation. You want this letter to be the best possible reflection of who you are and how you work, and making silly mistakes won't put your best self forward.

3. What you're lacking

Don't mention any skills or qualifications that you don't have. The cover letter is not the place to bring up any shortcomings.

Instead, use this as an opportunity to sell yourself. Tell the potential employer why your skills and experiences are a perfect fit for the position. Remember, your cover letter isn't actually about you. It's about the company you'd like to work for and why you would be a good fit for them. Wow them with what you're offering, and maybe they won't even notice the experience you don't have.

4. Generic, cliché language

Show that you care and that you spent time on your cover letter by eliminating any generic, cliché phrases that could be part of any cover letter, for any job. Don't say that you're a "team player" with "leadership experience" who is also a "hard worker." Nothing about that is unique, and it'll do nothing to differentiate you from other applicants.

Instead, fill your letter with facts that demonstrate your unique skills. Emphasize results whenever possible. Talk about how you led a diverse team to solve a particular problem, or increased revenue by X percent. Then, explain how you would bring those skills to your new job.

5. Lies

Most people who lie on a cover letter don't do so intentionally. They panic — maybe feel inadequate — and then they either make something up or, more often, stretch the truth so it looks like they have more experience or qualifications than they actually do.

The problem is, these things are easy to check, and besides — why would you want a job requiring skills you don't actually have? Instead, focus on qualifications you do have. If you feel tempted to stretch the truth often, maybe you need to look at different jobs or take some online courses so you actually have the skills you need for the work you want to do.

6. Personal information

This is not the time to talk about your dog, or your divorce, or about how you need this job because you have to support your three kids all on your own. Yes, those are important things to you, but they don't belong in your cover letter.

Like I mentioned above, the cover letter isn't actually about you. It's about the company where you're applying, and how you can make it better. Even if your need for work is desperate, or if there are some personal things you think the company should know about you before they make a decision, the cover letter isn't the place to list them. Wait for an interview.

7. Long paragraphs

No one wants to read a wall of text, especially when they are scanning cover letters for keywords. So, keep your paragraphs short and limit your letter to a single page.

This means that you have to be pithy in what you say. Straightforward is usually best. Describe your experience and qualifications, highlight how they satisfy key requirements of the job you're applying for, and then wrap it up. More words aren't necessarily better.

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

Freelance Your Way to More Income and Flexibility

Amanda Gokee — Wed, 01 Feb 2017 10:00:09 +0000

Freelancing is nothing new, but digital technology has made it easier than ever to work as an independent contractor from home — or the road. A 2016 survey by UpWork, a website matching freelancers with companies looking to hire, found that more people are freelancing than ever before, with 35% of the U.S. workforce now made up of freelancers.

Why the growth? Employers like to hire freelancers, especially for temporary or project work, because the arrangement is more flexible, and they save on employee benefits and extra office space. Freelance workers gain by getting to choose the projects they want and working flexible hours. It's a work model that offers greater choice for both parties.

Challenges to Being a Freelancer

While freelancing offers concrete advantages, many people worry about giving up the stability and benefits of a traditional job. Losing company-sponsored health insurance, paid vacations and retirement contributions are indeed valid concerns, especially since it takes time to attract new clients and develop relationships with them.

For this reason, some people do a combination of both types of work, retaining stability with a part- or full-time traditional job, while also following their passions and earning more money through additional freelance projects.

For others, according to the UpWork survey, full-time freelance work actually feels more secure because they have several different clients, rather than relying on one employer for their income.

Another major concern that freelancers share is receiving fair compensation for the work being done, as well as losing out on a reliable pay schedule. Freelancers often have to balance a "feast or famine" phenomenon, when they may either have too much work or not enough.

Still, the UpWork survey showed 79% of freelancers viewed freelance work as better than working in a traditional setting, and half of them even said they wouldn't take back a traditional job, regardless of the compensation that was offered to them.

That's not to say that freelancing is for everyone or for every type of job, but many of those who have decided to pursue this path have found it extremely rewarding.

Greater Freedom and Flexibility

Freedom and flexibility are two of the biggest draws that attract people to work as freelancers, according to UpWork's survey findings. They feel they have more control over their work schedule by being their own boss. Long weekends are no longer reserved for holidays and special occasions.

Many also enjoy the freedom to choose what type of work they want to do and, in many cases, where they do that work. Especially for people who have been commuting long distances or in heavy traffic to get to their workplace, working in a home office can be truly liberating.

Plus, if you're just freelancing on the side, the extra cash may help alleviate stress about saving for retirement, travel or education.

Getting Started as a Freelancer

If you think the freelance lifestyle might be right for you, the first step is to identify a marketable skill you have that you can use to attract potential clients. Some examples include writing, editing, computer programming, business or financial consulting, and photography, just to name a few. Picking a clearly defined skill and, even better, a niche that you want to focus on will help you to cater to your potential clients and make you an attractive candidate. (See also: 11 Freelance Jobs That Pay Surprisingly Well.)

Make a Portfolio

Gather a portfolio to showcase related projects you've worked on. These may be projects from your current full-time job, or from classes you've taken, or pro bono work you've done to gain experience in the field you want to pursue. A portfolio allows potential clients to see examples of your work to decide if they want to work with you. The better portfolio you're able to put together, the easier it will be to find clients.

Depending on what type of freelance work you are going to do, you may want to make a website to showcase your portfolio online. You can also create a portfolio on UpWork, LinkedIn, or specialist websites like Contently and ClearVoice, which focus on content marketing.

Create a Network

Like any job, networking is a very important part of finding freelance gigs. You can do this using social media, but you should also focus on real-life networking opportunities through conferences, professional organizations and Meetup groups. There is nothing that can replace the value of meeting people face-to-face.

Even social gatherings in your everyday life could lead to valuable contacts. Bring up the work that you do in casual conversations and you'll be surprised how many doors may open for you.

Pitch Your Best Ideas

If you have a great idea for a project, now is the time to reach out to potential clients and, in a professional manner, pitch your idea to them. There's an art to writing a great pitch. Especially if you're contacting an editor or CEO you don't know personally, you will need to make as good of an impression as possible over email.

This is the equivalent of cold calling, so you need to have your pitch polished and well thought out. For writing gigs, it's often recommended to provide a specific outline and an article title. Think about the company's needs, and then send them your best ideas, not run-of-the- mill ideas that anyone could have thought of.

Remember, You're Running a Business

Once you've made the leap to freelancing, whether it's full time or as a side gig, remember you are running a business. You'll need to track your business spending (a dedicated business credit card can help with this), as well as organize your billing, taxes and retirement savings. This all takes time that you'll need to work into your schedule. (See also: The 5 Biggest Mistakes Freelancers Make.)

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

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