In most discussions concerning the rising costs of our company’s medical insurance, our agent gives the aging population of our workforce and their ever increasing quantity of prescription maintenance medications as one of the contributing factors. To help our employees manage these costs his assistant gave a presentation on “Ways to reduce the cost of prescription drugs”.
Suggestions given:
Ask the pharmacist how much the prescription would cost without your insurance card. I was utterly shocked to hear if a prescription costs $6.99 and you handed them your drug card, the pharmacist may charge you the $10.00 co-pay instead of the actual lower $6.99 cost. Employees at her firm discovered this was happening when their company switched to an HSA insurance plan and employees began paying the full cost of prescriptions out of their own pocket. (Later many of our employees did check the cost of their prescription drugs only to find the actual cost to be well above their co-pay).
Ask for free samples at your doctors’ office. Drug reps hand out samples to doctors weekly. Most clinics save them for the needy, so you may have to ask for your free samples.
Go Generic. When a drug loses its patent, other companies can sell the drug at deeply discounted rates. If there is no generic, ask your doctor if there is another form or an older form that is less expensive. Pharmaceutical companies continually refine drugs to keep customers on the brand name drugs longer.
Split the pill. Pharmaceutical companies often charge the same amount per pill regardless of its strength. (Example- Lipitor 20mg and 40mg cost exactly the same.) Buying ½ the number of pills and splitting them saves money. Note: not all medications can be split, ask your doctor.
Pharmacies are business – yes, you can negotiate pricing with your pharmacy. Shop around for competitive pricing. (Don’t forget Wal-Mart has $4 prescriptions on certain meds).
Mail Order – If you need your medications on an ongoing basis, check out your mail order drug program, save on co-pay and have them delivered to your front door.
I recently attempted to read the book, “Our Daily Meds: How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs” by Melody Peterson. Unfortunately as much as I wanted to read this book, I wasn’t able to read more than 50 pages because it was just too darned depressing. What I did read helped me formulate a cost saving suggestion of my own:
Do not watch, read or listen to any advertisements for prescription drugs; not only are the pharmaceutical companies buying off our doctors but are using advertisements to convince us we have medical conditions we don’t have and to persuade us to ask our doctor to prescribe the latest most expensive wonder drug when a much cheaper generic version would work just as well.
Enough Said.
Savvy Working Gal
Friday, June 20, 2008
Thursday, June 12, 2008
The Dreaded Medical Insurance Renewal
My company has just completed our medical insurance renewal. Once again, our current carrier has increased our medical insurance premiums for the upcoming plan year. The 12% increase was not astronomical, but accompanied with the current soft sales forecast, an increase in our business insurance that was astronomical (40%), and increases in fixed costs; utilities, shipping etc. our owners felt they had no choice, but to pass the increase in medical insurance cost on to their employees.
They did look at alternatives:
- Switching carriers. Another insurance carrier submitted a quote with a similar plan design for a total cost decrease of 3%. Unfortunately, this new carrier did not offer adequate preferred provider organization (or “PPO”) coverage for all our locations. Also, this same group of employee’s medical expenditures would be subject to usual and customary charges. In the long run, our owners decided this carrier was essentially buying our business for one year. Most likely next year, they too would increase our premiums and we would be in the same situation we are in now.
-Our agent did use this more attractive quote as leverage against our current carrier in an attempt to persuade them to lower their original quote down from the 12% increase, but they refused to budge.
- Offering a dual plan choice; our current plan plus an HSA Health Savings Account. Surprisingly, the premiums for the HSA plan were not that attractive. That, in addition to the additional work involved in rolling out such a plan, they decided against it.
The Final Decision:
After much discussion, our owners decided to stay with our current carrier, tweaking the plan design so that the plan would be more affordable. The deductible was increased along with the maximum total out-of-pocket cost. And of course the % of premium the employee pays out of their own pocket was increased. To soften the increase a flexible spending account, was added to the total benefit package.
How the employees responded:
The employees accepted the announcement of higher medical costs with few complaints. I asked one of our more outspoken employees why he was so complacent this time around. He responded by saying, “This increase comes as no surprise. I read the newspapers. There are articles almost daily about the rising costs of medical insurance. Our company is not alone. I talk with my friends who work at other companies. They are experiencing increased costs and a reduction of benefits as well. I don’t like, it but there is nothing I can do about it."
Enough Said.
They did look at alternatives:
- Switching carriers. Another insurance carrier submitted a quote with a similar plan design for a total cost decrease of 3%. Unfortunately, this new carrier did not offer adequate preferred provider organization (or “PPO”) coverage for all our locations. Also, this same group of employee’s medical expenditures would be subject to usual and customary charges. In the long run, our owners decided this carrier was essentially buying our business for one year. Most likely next year, they too would increase our premiums and we would be in the same situation we are in now.
-Our agent did use this more attractive quote as leverage against our current carrier in an attempt to persuade them to lower their original quote down from the 12% increase, but they refused to budge.
- Offering a dual plan choice; our current plan plus an HSA Health Savings Account. Surprisingly, the premiums for the HSA plan were not that attractive. That, in addition to the additional work involved in rolling out such a plan, they decided against it.
The Final Decision:
After much discussion, our owners decided to stay with our current carrier, tweaking the plan design so that the plan would be more affordable. The deductible was increased along with the maximum total out-of-pocket cost. And of course the % of premium the employee pays out of their own pocket was increased. To soften the increase a flexible spending account, was added to the total benefit package.
How the employees responded:
The employees accepted the announcement of higher medical costs with few complaints. I asked one of our more outspoken employees why he was so complacent this time around. He responded by saying, “This increase comes as no surprise. I read the newspapers. There are articles almost daily about the rising costs of medical insurance. Our company is not alone. I talk with my friends who work at other companies. They are experiencing increased costs and a reduction of benefits as well. I don’t like, it but there is nothing I can do about it."
Enough Said.
Sunday, June 08, 2008
Tina Fey on "The Way Women are Perceived as Leaders"
In the article, “Tina on Top” found in the May 2008 issue of Marie Claire magazine, Amy Poehler asks Tina Fey to tell readers a little bit about a play she wrote while in Chicago in the early ‘90’s about Catherine the Great.
Yes. yes. I used to take playwriting classes, and I wrote a one-act play – I can’t remember the name of it, but it was really about the way women are perceived as leaders. In the play, Catherine the Great would say things like, "You know, John F. Kennedy had extramarital affairs and no one says anything. But I bang one horse and now I'm a horse-banger for all eternity? That's it? That's what I am? I think Hillary Clinton's got to relate to that.
Enough said.
Yes. yes. I used to take playwriting classes, and I wrote a one-act play – I can’t remember the name of it, but it was really about the way women are perceived as leaders. In the play, Catherine the Great would say things like, "You know, John F. Kennedy had extramarital affairs and no one says anything. But I bang one horse and now I'm a horse-banger for all eternity? That's it? That's what I am? I think Hillary Clinton's got to relate to that.
Enough said.
Tuesday, June 03, 2008
Advice for the Accounting Grad
You may not make 65K your first year out of school, but the future job outlook for accountants is good. According to the Bureau of Labor Statistics (BLS) beginning in 2008, 22 million workers who are 45 or older will start leaving the workforce, primarily due to retirement. One of the job categories expected to see higher than average departures in that age group are financial managers as well as bookkeepers and accounting and auditing clerks. I have already begun experiencing this at my organization. As members of my staff retire or move on to better opportunities, I have found it increasingly difficult to fill their positions. Recent accounting grads do not even consider accounting clerk positions. I firmly believe they are holding out for better opportunities and are finding them.
How to be more marketable:
Don't overlook summer intern or seasonal tax preparer positions in hopes of a permanent job. If you perform well you will most likely be hired permanently in the fall or when a permanent position becomes available. If at all possible get experience in public accounting. More employers now require public accounting experience. Join business fraternities and professional organizations, and become an active participant. Recently during a CPE workshop sponsored by my accounting organization, a member practically hired a student attendee as a summer intern on the spot.
Get your Certified Public Accountant CPA or Certified Management Accountant CMA certification:
At this same meeting, an accounting student asked whether or not she should take the CPA exam; her boss had advised her against it saying she didn’t need it to be an accountant. Hello, maybe not to work for him, but a lot can happen over the course of a career. The CPA designation comes with a lot of honor and recognition. He is correct it is not a requirement in order to work as an accountant but it does make a difference. It has certainly opened a few doors for me. Also, don’t rule out the CMA exam. When I was in school, it was all about the CPA exam, now my boss wants to know why I never got a CMA.
Which Offer Should I Take?
One of my college professors advised that if you had the luxury of receiving two like job offers to take the one in which you liked the people the best. You will be spending at least forty hours a week with your new co-workers; if you don't like them, your working life has the potential to be miserable.
In closing, a respected CPA I worked with early in my career found the best accounting professionals to be highly motivated and committed to continuous learning. Remember, now that your classroom time has ended you are responsible for keeping your skills and knowledge current and for managing your own career, not your employer.
How to be more marketable:
Don't overlook summer intern or seasonal tax preparer positions in hopes of a permanent job. If you perform well you will most likely be hired permanently in the fall or when a permanent position becomes available. If at all possible get experience in public accounting. More employers now require public accounting experience. Join business fraternities and professional organizations, and become an active participant. Recently during a CPE workshop sponsored by my accounting organization, a member practically hired a student attendee as a summer intern on the spot.
Get your Certified Public Accountant CPA or Certified Management Accountant CMA certification:
At this same meeting, an accounting student asked whether or not she should take the CPA exam; her boss had advised her against it saying she didn’t need it to be an accountant. Hello, maybe not to work for him, but a lot can happen over the course of a career. The CPA designation comes with a lot of honor and recognition. He is correct it is not a requirement in order to work as an accountant but it does make a difference. It has certainly opened a few doors for me. Also, don’t rule out the CMA exam. When I was in school, it was all about the CPA exam, now my boss wants to know why I never got a CMA.
Which Offer Should I Take?
One of my college professors advised that if you had the luxury of receiving two like job offers to take the one in which you liked the people the best. You will be spending at least forty hours a week with your new co-workers; if you don't like them, your working life has the potential to be miserable.
In closing, a respected CPA I worked with early in my career found the best accounting professionals to be highly motivated and committed to continuous learning. Remember, now that your classroom time has ended you are responsible for keeping your skills and knowledge current and for managing your own career, not your employer.
Sunday, June 01, 2008
Do you type?
This morning, the President of my company popped his head into my office and asked, “Do you type?” When I responded affirmatively, he handed me a confidential form that needed typing. Taking the form, I walked to the empty cubicle that housed our old typewriter, sat down, aligned the form, and began to type. As I was typing, I became overcome with a sensation of deja vu.
When I was in high school I took several secretarial classes; Typing I, Typing II and Shorthand I. I'm not sure why I took these classes, I don't recall anyone telling me that I had to take them, asking me if I wanted to take them or even if I liked them. They were the elective classes girls in my high school enrolled in. I abhorred typing. I don’t recall my typing speed ever reaching much higher than 50 wpm. It was not unusual for me to turn in my assignment with a hole or two in the paper from attempting to correct my mistakes with a typing eraser. I found the entire typing class experience to be unenjoyable and stressful. Shorthand was worse. I dropped that class after one semester. It is hard to believe I was on a career track to do this every day for the rest of my life.
Then came career day; our guidance counselor stood in front of the classroom jotting on the chalkboard the future plans of myself and my classmates. We came up with four items. Here they are listed in order:
1. Get married
2. Get a job
3. Get a vocational degree (secretary or beautician for the girls, welder for the boys)
4. Get a college degree (engineer for the boys, teacher for the girls)
Luckily for me; shortly afterwards, I had a conversation with a kind neighbor concerning my lack of enthusiasm for a future career in typing. She talked me into attending a four year college and getting a B.S. degree. This same neighbor would eventually become the guidance counselor at my old high school.
After I graduated from college, with my new B.S. degree in hand, I went off to the employment agencies to find a job. At each agency, the first question the interviewer would ask me was, “Do you type?” which was followed by a typing test. Amazingly, I passed one of those tests, just squeaking by with 42 wpm. That led to a series of temp jobs, most of which involved typing letters and forms. Eventually, I would type an invoice or two, allowing me to add a new skill; Accounts Receivable, to my resume. Thus my accounting career had begun and the rest is history.
The following quote by James Burke of Fortune Magazine is appropriate: The typewriter also freed women from the drudgery of the kitchen to become involved in the drudgery of office work. And more important, it conferred on women the social power denied them by men and provided the dynamic to push for political emancipation.
When I was in high school I took several secretarial classes; Typing I, Typing II and Shorthand I. I'm not sure why I took these classes, I don't recall anyone telling me that I had to take them, asking me if I wanted to take them or even if I liked them. They were the elective classes girls in my high school enrolled in. I abhorred typing. I don’t recall my typing speed ever reaching much higher than 50 wpm. It was not unusual for me to turn in my assignment with a hole or two in the paper from attempting to correct my mistakes with a typing eraser. I found the entire typing class experience to be unenjoyable and stressful. Shorthand was worse. I dropped that class after one semester. It is hard to believe I was on a career track to do this every day for the rest of my life.
Then came career day; our guidance counselor stood in front of the classroom jotting on the chalkboard the future plans of myself and my classmates. We came up with four items. Here they are listed in order:
1. Get married
2. Get a job
3. Get a vocational degree (secretary or beautician for the girls, welder for the boys)
4. Get a college degree (engineer for the boys, teacher for the girls)
Luckily for me; shortly afterwards, I had a conversation with a kind neighbor concerning my lack of enthusiasm for a future career in typing. She talked me into attending a four year college and getting a B.S. degree. This same neighbor would eventually become the guidance counselor at my old high school.
After I graduated from college, with my new B.S. degree in hand, I went off to the employment agencies to find a job. At each agency, the first question the interviewer would ask me was, “Do you type?” which was followed by a typing test. Amazingly, I passed one of those tests, just squeaking by with 42 wpm. That led to a series of temp jobs, most of which involved typing letters and forms. Eventually, I would type an invoice or two, allowing me to add a new skill; Accounts Receivable, to my resume. Thus my accounting career had begun and the rest is history.
The following quote by James Burke of Fortune Magazine is appropriate: The typewriter also freed women from the drudgery of the kitchen to become involved in the drudgery of office work. And more important, it conferred on women the social power denied them by men and provided the dynamic to push for political emancipation.
Saturday, May 24, 2008
The Alchemist by Paulo Coelho
I picked up this book after reading the following in the Jan/Feb 2008 issue of Pink Magazine:
When asked what book IKEA North American President Pernille Spiers-Lopez would recommend to the 750 woman attending the latest Pink conference, she suggested not a business title but The Alchemist. It is an allegorical novel about a shepherd who leaves the world he knows for the great unknown in search of a promised treasure - and his own personal legend.Giving readers a New Year’s wish, Pink's editor Cynthia Good offers – that 2008 serves up a new opportunity to take chances, to transcend barriers and mistakes, and, as Coelho writes, to “remember that wherever your heart is, there you will find your treasure.”
Always looking for inspiration to keep me on the path towards living my best life, I couldn't ignore a recommendation like this; I had to read this book. Unfortunately, although I enjoyed the fable, the book did not live up to my expectations. For me the tale was too simplistic to be inspiring, I did not find it to be amazing or life changing. I read this book earlier in the year, but I as did Florinda, I found it to be a difficult book to review. I would rate it 2.5/5.
. It is an allegorical novel about a shepherd who leaves the world he knows for the great unknown in search of a promised treasure - and his own personal legend.Giving readers a New Year’s wish, Pink's editor Cynthia Good offers – that 2008 serves up a new opportunity to take chances, to transcend barriers and mistakes, and, as Coelho writes, to “remember that wherever your heart is, there you will find your treasure.”Always looking for inspiration to keep me on the path towards living my best life, I couldn't ignore a recommendation like this; I had to read this book. Unfortunately, although I enjoyed the fable, the book did not live up to my expectations. For me the tale was too simplistic to be inspiring, I did not find it to be amazing or life changing. I read this book earlier in the year, but I as did Florinda, I found it to be a difficult book to review. I would rate it 2.5/5.
What I did find inspiring, however, was Coelho’s biography written inside the back cover. Paul was born in Brazil in 1947 the son of an engineer and a home worker. He dreamed of an artistic career which was frowned upon by his middle-class household. In the austere surroundings of a strict Jesuit school, Paulo discovered his true vocation to be a writer. Paulo’s parents however had different plans for him. When their attempts to suppress his devotion to literature failed, they took it as a sign of mental illness. When Paulo was 17, his father had him committed to a mental institution twice, where he endured electroconvulsive “therapy.” His parents brought him back there once more after he became involved with a theater group and started to work as a journalist.
Now that is inspiring! Talk about having to face adversity; imagine being committed to a mental institution for following your dreams. And I thought I had it rough when at 17 my father refused to support my decision to go to college.
Sunday, May 18, 2008
Do you review your Social Security Statement?
What is a Social Security Statement?
The Social Security Statement is a tool designed to help you plan for your financial future. It provides an estimate of the social security benefits you will receive under current law at age 62, your full retirement age, and at age 70. It also lists estimated benefits if you were to become disabled, family survivorship benefits and whether or not you are Medicare eligible. The Statement briefly explains what it takes to become eligible for benefits. Basically, you must work for ten years to earn retirement benefits, and you must work at least five of the last ten years to claim disability benefits. The statement is updated each year to reflect your latest report of earnings. When you get your statement, you should verify that your earnings record is correct for previous years.
When will I receive my Social Security Statement?
By law, social security statements are mailed out annually. You should automatically receive a statement if you have a Social Security Number, are age 25 or older, have any job earnings on record and are not already receiving benefits (including Medicare). You should receive your statement a couple of months before your birthday.
Why is it important to review your statement?
This is important because your earnings record is what the government bases your benefits on (for retirement, disability, Medicare, etc.) Verifying your earnings record is also important because if the numbers are off (especially if they are off dramatically) it could be an indicator of identity theft or fraud.
What if you didn’t receive a statement?
You can request a statement at any time; information on how to do so can be found on the SSA website.
What if you find an error?
If you discover an error in any of the earnings Social Security has listed other that last year, call Social Security's helpline at 800-772-1213, Monday through Friday, from 7 a.m. to 7 p.m. Have your W-2's or tax return for the incorrect years available.
Why am I writing about this?
Because the earnings record on my latest SSA statement was incorrect as were the earnings record of every employee at my company who had received their statement this year. My earnings statement had zero earnings recorded for 2006 while my earnings for 2007 were listed correctly. 2006 was the year my company transferred our payroll processing to an outside provider, ADP. This switch, for year-end tax filing purposes, was a hellish nightmare (ADP issued our company's W-2's eleven times before they got them right). Our accounting department is still working through the tax implications of this fiasco.
Upon noticing this error, I called the SSA hotline on my own behalf and discovered not only my 2006 wages, but the 2006 wages for every employee in our company was being held in suspense. I then asked my boss if his statement had been correct; his birthday was earlier this year. He didn't know as he had shoved his unopened statement into a file. This led me to believe our employees are not reviewing their SSA statements. It turned out my boss's 2006 wages were also listed as zero, while his 2007 wages were correct. Come on people you need to review these statements. This is your money.
On a positive note, it looks like this will be an easy fix. I sent a copy of my W-2 for 2006 to our local SSA office. On the company's behalf, per SSA instructions, I had the entire correct 2006 wage file resent to SSA.
The Social Security Statement is a tool designed to help you plan for your financial future. It provides an estimate of the social security benefits you will receive under current law at age 62, your full retirement age, and at age 70. It also lists estimated benefits if you were to become disabled, family survivorship benefits and whether or not you are Medicare eligible. The Statement briefly explains what it takes to become eligible for benefits. Basically, you must work for ten years to earn retirement benefits, and you must work at least five of the last ten years to claim disability benefits. The statement is updated each year to reflect your latest report of earnings. When you get your statement, you should verify that your earnings record is correct for previous years.
When will I receive my Social Security Statement?
By law, social security statements are mailed out annually. You should automatically receive a statement if you have a Social Security Number, are age 25 or older, have any job earnings on record and are not already receiving benefits (including Medicare). You should receive your statement a couple of months before your birthday.
Why is it important to review your statement?
This is important because your earnings record is what the government bases your benefits on (for retirement, disability, Medicare, etc.) Verifying your earnings record is also important because if the numbers are off (especially if they are off dramatically) it could be an indicator of identity theft or fraud.
What if you didn’t receive a statement?
You can request a statement at any time; information on how to do so can be found on the SSA website.
What if you find an error?
If you discover an error in any of the earnings Social Security has listed other that last year, call Social Security's helpline at 800-772-1213, Monday through Friday, from 7 a.m. to 7 p.m. Have your W-2's or tax return for the incorrect years available.
Why am I writing about this?
Because the earnings record on my latest SSA statement was incorrect as were the earnings record of every employee at my company who had received their statement this year. My earnings statement had zero earnings recorded for 2006 while my earnings for 2007 were listed correctly. 2006 was the year my company transferred our payroll processing to an outside provider, ADP. This switch, for year-end tax filing purposes, was a hellish nightmare (ADP issued our company's W-2's eleven times before they got them right). Our accounting department is still working through the tax implications of this fiasco.
Upon noticing this error, I called the SSA hotline on my own behalf and discovered not only my 2006 wages, but the 2006 wages for every employee in our company was being held in suspense. I then asked my boss if his statement had been correct; his birthday was earlier this year. He didn't know as he had shoved his unopened statement into a file. This led me to believe our employees are not reviewing their SSA statements. It turned out my boss's 2006 wages were also listed as zero, while his 2007 wages were correct. Come on people you need to review these statements. This is your money.
On a positive note, it looks like this will be an easy fix. I sent a copy of my W-2 for 2006 to our local SSA office. On the company's behalf, per SSA instructions, I had the entire correct 2006 wage file resent to SSA.
Saturday, May 03, 2008
Managing the Second Half of Your Life
Have you thought about what you are going to do with the second half of your life? One of my co-workers retires in 27 days. When asked what she plans to do with the rest of her life, she didn’t have a clue, other than relax and have fun.
This conversation comes shortly after I had the opportunity to talk to two of our former employees. Both retired at age 62, both are comfortable financially.
Employee A worked as our company’s sales manager for 30 years. Upon retiring, he sold his home and moved to Northern Wisconsin where he and his wife run a seasonal souvenir shop. When asked how he was enjoying retirement, he emphatically stated, “I hate it." He misses the camaraderie of the office; his customers and the thrill of getting the deal. He manages to keep busy, but feels his life has no meaning. He inquired about our business; upon hearing we had just snagged an incredible deal, he was visibly upset. He had not even heard of our current #1 customer.
Employee B worked in our industry 30 years, 15 of them as Operations Manager for our company. He too sold his home and purchased a small fixer upper in Michigan (a lower tax state than Wisconsin). When asked how he is enjoying retirement, he enthusiastically replied “I love it.” He is busy working on his home; is active in his community (he was here as well). He and his wife own a motor home and are planning on traveling south this summer. He also volunteers at our state tech schools where he recruits high school students into the trades. This was an activity he performed while working with our company; enjoying it so much he agreed to continue after retirement. He is also planning on attending a company camping trip Memorial Day weekend.
Many of us long for the day when we can do whatever we want whenever we want. We put a lot of time and effort into calculating how much money we will need when we retire, but don’t put equal preparation into planning what we will actually do; other than travel, visit the grand kids, and maybe do a little volunteer work. Is that enough?
In the Harvard Business Review article, Managing Oneself, Peter R. Drucker discusses the importance of knowing yourself and offers valuable advice for managing the second half of your life: "The one prerequisite for managing the second half of your life: You must begin long before you enter it." Another, noteworthy point; "If one does not begin to volunteer before one is 40 or so, one will not volunteer once past 60."
In the above scenarios, employee B adequately planned for the second half of his life and is happy in his retirement. He continues to perform the aspect of his job he enjoyed the most on a volunteer basis. He is in contact with former co-workers, even attending work social events. Employee A has virtually cut himself off from all contact with former co-workers. He started a new business he does not enjoy. He did not adequately plan for his retirement never realizing how much he would miss sales. If planned appropriately, he could easily have taught sales techniques on a part time basis to entry level salespersons in our industry.
Do yourself a favor begin managing the second half of your life long before you enter it?
This conversation comes shortly after I had the opportunity to talk to two of our former employees. Both retired at age 62, both are comfortable financially.
Employee A worked as our company’s sales manager for 30 years. Upon retiring, he sold his home and moved to Northern Wisconsin where he and his wife run a seasonal souvenir shop. When asked how he was enjoying retirement, he emphatically stated, “I hate it." He misses the camaraderie of the office; his customers and the thrill of getting the deal. He manages to keep busy, but feels his life has no meaning. He inquired about our business; upon hearing we had just snagged an incredible deal, he was visibly upset. He had not even heard of our current #1 customer.
Employee B worked in our industry 30 years, 15 of them as Operations Manager for our company. He too sold his home and purchased a small fixer upper in Michigan (a lower tax state than Wisconsin). When asked how he is enjoying retirement, he enthusiastically replied “I love it.” He is busy working on his home; is active in his community (he was here as well). He and his wife own a motor home and are planning on traveling south this summer. He also volunteers at our state tech schools where he recruits high school students into the trades. This was an activity he performed while working with our company; enjoying it so much he agreed to continue after retirement. He is also planning on attending a company camping trip Memorial Day weekend.
Many of us long for the day when we can do whatever we want whenever we want. We put a lot of time and effort into calculating how much money we will need when we retire, but don’t put equal preparation into planning what we will actually do; other than travel, visit the grand kids, and maybe do a little volunteer work. Is that enough?
In the Harvard Business Review article, Managing Oneself, Peter R. Drucker discusses the importance of knowing yourself and offers valuable advice for managing the second half of your life: "The one prerequisite for managing the second half of your life: You must begin long before you enter it." Another, noteworthy point; "If one does not begin to volunteer before one is 40 or so, one will not volunteer once past 60."
In the above scenarios, employee B adequately planned for the second half of his life and is happy in his retirement. He continues to perform the aspect of his job he enjoyed the most on a volunteer basis. He is in contact with former co-workers, even attending work social events. Employee A has virtually cut himself off from all contact with former co-workers. He started a new business he does not enjoy. He did not adequately plan for his retirement never realizing how much he would miss sales. If planned appropriately, he could easily have taught sales techniques on a part time basis to entry level salespersons in our industry.
Do yourself a favor begin managing the second half of your life long before you enter it?
Wednesday, April 30, 2008
Things that make me "Crabby"
1. Co-workers who habitually arrive late to meetings.
2. The personal banker who neglected to tell me I will be charged a .50 cent fee every time I use my new debit card until after I had signed all the paper work. This fee would be charged on debit purchases only not credit purchases. Just curious, isn't a debit charge the whole purpose of a debit card?
3. The gal in my aerobics class who wears so much cheap perfume I feel nauseated by the end of class.
4. The new schedule of aerobic classes; all my favorites are either cancelled, too early for me to attend or so late I won't get home until after 8:00 p.m.
5. My inability to read the signs at the Amtrak station which say, "Meters do not give change," until after I have submitted my money.
2. The personal banker who neglected to tell me I will be charged a .50 cent fee every time I use my new debit card until after I had signed all the paper work. This fee would be charged on debit purchases only not credit purchases. Just curious, isn't a debit charge the whole purpose of a debit card?
3. The gal in my aerobics class who wears so much cheap perfume I feel nauseated by the end of class.
4. The new schedule of aerobic classes; all my favorites are either cancelled, too early for me to attend or so late I won't get home until after 8:00 p.m.
5. My inability to read the signs at the Amtrak station which say, "Meters do not give change," until after I have submitted my money.
Saturday, April 19, 2008
Communicate, Communicate, Communicate
Communication is the key to successfully implementing change in your company’s policies and procedures. This was the message I took home from a recent seminar, "Implementing Lean in Administration/Office areas." In order to be successful, change must be communicated properly. It is a basic tenant of human nature to process under communicated change in the following manner:
1. Change is Discovered
2. Confusion & Rumors Ensue (Employees speculate; lean accounting sounds like layoffs. They begin wasting time developing lists of who they think should be laid off).
3. Fear Spreads
4. Resistance Generated
5. Resentment Develops
6. Interest Begins
7. Enthusiasm
8. Excitement
According to the presenter, if change is communicated properly, employees will go straight from step one when the change is communicated to step six where interest develops, skipping steps 2 through 5.
I was reminded of the importance of communication when our Human Resource Manager began a project to create job descriptions for all our employees this week. To kick off this project, she emailed a select group of employees requesting that they create a job description for their position. She gave them a two day deadline, and provided a sample format. She did not give them a reason as to why she was undertaking this project. Immediately, they were confused and fearful. Who could blame them, the media has bombarded us with talk of recession and our company’s sales have been lower than normal. With lighter work loads they assumed they were assigned this task because their job was in jeopardy. Every one of them resisted this project. Ms. HR Manager came to me complaining about our employees attitudes. I relayed my seminar's communication recommendation from above and suggested that she hadn’t explained her project clearly. She mulled my suggestion over for a couple seconds, decided that wasn’t the case stating our employees just couldn’t deal with change.
I disagree, ultimately she had to sit down with each employee, explain the purpose of her project; having a job description is a good business practice plus creating them was one of the tasks she was hired to do. She then had to convince them that by creating a job description they would not be putting their job in jeopardy and in many cases they would find the process beneficial. Only then did they enthusiastically complete the task.
1. Change is Discovered
2. Confusion & Rumors Ensue (Employees speculate; lean accounting sounds like layoffs. They begin wasting time developing lists of who they think should be laid off).
3. Fear Spreads
4. Resistance Generated
5. Resentment Develops
6. Interest Begins
7. Enthusiasm
8. Excitement
According to the presenter, if change is communicated properly, employees will go straight from step one when the change is communicated to step six where interest develops, skipping steps 2 through 5.
I was reminded of the importance of communication when our Human Resource Manager began a project to create job descriptions for all our employees this week. To kick off this project, she emailed a select group of employees requesting that they create a job description for their position. She gave them a two day deadline, and provided a sample format. She did not give them a reason as to why she was undertaking this project. Immediately, they were confused and fearful. Who could blame them, the media has bombarded us with talk of recession and our company’s sales have been lower than normal. With lighter work loads they assumed they were assigned this task because their job was in jeopardy. Every one of them resisted this project. Ms. HR Manager came to me complaining about our employees attitudes. I relayed my seminar's communication recommendation from above and suggested that she hadn’t explained her project clearly. She mulled my suggestion over for a couple seconds, decided that wasn’t the case stating our employees just couldn’t deal with change.
I disagree, ultimately she had to sit down with each employee, explain the purpose of her project; having a job description is a good business practice plus creating them was one of the tasks she was hired to do. She then had to convince them that by creating a job description they would not be putting their job in jeopardy and in many cases they would find the process beneficial. Only then did they enthusiastically complete the task.
Saturday, April 05, 2008
Creative College Financing Triggers AMT
With the increasing cost of college tuition, more families are being forced to get creative with their finances in order to pay their children’s college tuition. In doing so, they may be in for a big surprise at tax time. Two years ago, a couple I know, struggling to educate their three daughters, sold a piece of property to help pay tuition costs. They knew at tax time they would owe a capital gain tax, but were shocked when the additional income also triggered an AMT tax. This past year, this same couple began drawing from a pension, in addition to earning their full time salaries, to help subsidize tuition costs. At tax time, they again found themselves subject to the AMT tax. As more middle class Americans are being hit with the Alternative Minimum Tax, I think there needs to be a better understanding of what this tax is and the impact certain financial decisions have on AMT tax liability.
What is AMT?
The Alternative Minimum Tax or AMT was designed in 1969. Its original purpose was to keep wealthy tax payers from using loopholes (many of which have since been closed) to avoid paying their fair share of income tax. Under AMT, once certain levels of income and deductions are reached; taxpayers are required to add back specific deductions, and pay an additional tax. This is to ensure all taxpayers pay at least a minimum tax.
What are some of the deductions that are required to be added back (disallowed)?
-State and local taxes.
-Medical costs are still allowed, but the AMT requires they exceed at least 10 percent of your adjusted gross income, rather than the 7.5 percent threshold of the regular tax system.
-Miscellaneous itemized deductions, although limited under the regular tax system, are disallowed under the AMT. This prevents the taxpayer from deducting large unreimbursed business expenses.
-Home ownership is not quite so desirable under AMT, while you are still allowed to deduct mortgage interest on both your main and second home, home equity loan interest is restricted. It can only be deducted if the money is used solely to pay for home improvements.
- Your home’s property taxes
- Personal exemptions. The more exemptions you claim the more likely it is you will have AMT liability.
- The Standard Deduction.
Why are more people subject to this tax?
Unlike regular income tax, the AMT tax was not indexed for inflation; AMT brackets have remained relatively constant at 26% and 28% while yearly wage increases have moved taxpayer income uncomfortably close or even into the AMT income bracket realm. To put this into context, AMT was originally created to target 155 filers with income of $200,000 who avoided paying any federal taxes, compare this with the nearly 4 million taxpayers subject to AMT in 2007, 80% of which had incomes between $100,000 and $200,000.
At what income levels are taxpayers affected?
Once you add back the AMT disallowances and run the numbers, AMT may be owed if your taxable income in 2007 was more than:
· $66,250 and you are married filing a joint return.
· $44,350 and you are filing as single or head of household.
· $33,125 and you are a married taxpayer filing a separate return
If the above income levels are met, how are you to determine whether you’re subject to the AMT?
IRS Form 1040 instructions includes a worksheet that may help you determine whether you're subject to the AMT, an electronic version of this worksheet is also available on the IRS website found here, but you may need to complete IRS Form 6251 to know for sure. Personally, I found Form 6251 to be confusing and relied on the IRS website results.
What are the more common AMT “triggers”?
Common AMT "triggers" include claiming a high number of personal exemptions, miscellaneous itemized deductions, and state and local tax deductions. In the example I sited above, the couple's increase in income along with their five personal exemptions and high state and property tax deductions (Wisconsin is a high-tax state) triggered AMT.
Bottom Line: As parents strategize to pay their children’s college tuition, it may me wise for them to meet with a good tax accountant or financial planner before making financial decisions that may seriously impact not only their income tax payments but their long term financial goals.
What is AMT?
The Alternative Minimum Tax or AMT was designed in 1969. Its original purpose was to keep wealthy tax payers from using loopholes (many of which have since been closed) to avoid paying their fair share of income tax. Under AMT, once certain levels of income and deductions are reached; taxpayers are required to add back specific deductions, and pay an additional tax. This is to ensure all taxpayers pay at least a minimum tax.
What are some of the deductions that are required to be added back (disallowed)?
-State and local taxes.
-Medical costs are still allowed, but the AMT requires they exceed at least 10 percent of your adjusted gross income, rather than the 7.5 percent threshold of the regular tax system.
-Miscellaneous itemized deductions, although limited under the regular tax system, are disallowed under the AMT. This prevents the taxpayer from deducting large unreimbursed business expenses.
-Home ownership is not quite so desirable under AMT, while you are still allowed to deduct mortgage interest on both your main and second home, home equity loan interest is restricted. It can only be deducted if the money is used solely to pay for home improvements.
- Your home’s property taxes
- Personal exemptions. The more exemptions you claim the more likely it is you will have AMT liability.
- The Standard Deduction.
Why are more people subject to this tax?
Unlike regular income tax, the AMT tax was not indexed for inflation; AMT brackets have remained relatively constant at 26% and 28% while yearly wage increases have moved taxpayer income uncomfortably close or even into the AMT income bracket realm. To put this into context, AMT was originally created to target 155 filers with income of $200,000 who avoided paying any federal taxes, compare this with the nearly 4 million taxpayers subject to AMT in 2007, 80% of which had incomes between $100,000 and $200,000.
At what income levels are taxpayers affected?
Once you add back the AMT disallowances and run the numbers, AMT may be owed if your taxable income in 2007 was more than:
· $66,250 and you are married filing a joint return.
· $44,350 and you are filing as single or head of household.
· $33,125 and you are a married taxpayer filing a separate return
If the above income levels are met, how are you to determine whether you’re subject to the AMT?
IRS Form 1040 instructions includes a worksheet that may help you determine whether you're subject to the AMT, an electronic version of this worksheet is also available on the IRS website found here, but you may need to complete IRS Form 6251 to know for sure. Personally, I found Form 6251 to be confusing and relied on the IRS website results.
What are the more common AMT “triggers”?
Common AMT "triggers" include claiming a high number of personal exemptions, miscellaneous itemized deductions, and state and local tax deductions. In the example I sited above, the couple's increase in income along with their five personal exemptions and high state and property tax deductions (Wisconsin is a high-tax state) triggered AMT.
Bottom Line: As parents strategize to pay their children’s college tuition, it may me wise for them to meet with a good tax accountant or financial planner before making financial decisions that may seriously impact not only their income tax payments but their long term financial goals.
Saturday, March 29, 2008
The costs of maintenance
I am a proponent of preventative maintenance and usually follow recommended guidelines; flossing my teeth daily, scheduling an annual physical, following the manufacturers’ recommended car maintenance, but I'm having a hard time believing the $304.65 I just spent for my car’s 30,000 mile maintenance service was really necessary. All of the money books recommend following manufactures' guidelines, plus the service technician at the dealership made a point of telling me not to miss the 30,000 mile service. He did say it could be a little pricy running somewhere in the range of $100-$200. Maybe if his estimate would have been a little closer to the actual cost of $362.46 (without coupons); I wouldn’t feel quite as ripped off. Sure they inspected everything tires, brakes, fluids, fan belt, you name it, but was it all really necessary. The results were great; everything passed inspection and no further work was needed.
With car maintenance I always feel at the mercy of the dealership or repair shop. I remember taking my previous vehicles to those quick oil change places. There were occasions they were so convincing I felt my car would not make it to the next block unless I spent hundreds of dollars for additional services. It was because of these high pressure sales tactics that I stopped going to those places.
One thing I know for sure:
With my next car (which hopefully will not be for several years), I will forego most of the 30,000 mile maintenance.
With car maintenance I always feel at the mercy of the dealership or repair shop. I remember taking my previous vehicles to those quick oil change places. There were occasions they were so convincing I felt my car would not make it to the next block unless I spent hundreds of dollars for additional services. It was because of these high pressure sales tactics that I stopped going to those places.
One thing I know for sure:
With my next car (which hopefully will not be for several years), I will forego most of the 30,000 mile maintenance.
Saturday, March 15, 2008
New Salesperson Lacks Professionalism
Last fall, our company, which is in a male dominated industry, hired our first female salesperson. She was a recent Marquette graduate with a marketing/communications degree. Our current staff of twenty male salesmen had a lot to say about this, “She will never make it.” “Our customers won't take her seriously.” "She's not going to stay; she just took this job to puff up her resume, after getting a year or two of experience she will leave.” "The company will never recoup their investment in her.” In our industry, it takes approximately two years for a new salesman to build their client base and support themselves on commission alone. To help with the transition the company typically pays them a salary in addition to commissions for the first two years.
This particular salesperson has now been with the company a little over 6 months. So far, she has not sold anything to speak of, but this is not unusual considering her territory and the current state of the economy. She has brought new marketing methods to her position; baking brownies for potential customers and even dropping off a pan or two of her homemade lasagna. For the most part, she’s been moving along status quo and the sales staff if not accepting her have stopped being adverse to her presence. They too, have enjoyed a brownie or two.
This past week all of our salespeople converged at one of our locations for our annual spring sales meetings. They attend three days of presentations given by upper management and vendors discussing everything from current marketing trends to the latest products and services. The salespeople spend evenings with their managers at local restaurants and bars where there is always plenty of food and drink. The first night, our female salesperson got a little tipsy and was too hung-over to attend the second day’s presentations. Now, there is an unwritten rule amongst our salesmen, if you drink on the company dime, you show up the next day even if you have the dry heaves. Her absence at first was overlooked probably because she is young and female. But then, low and behold, after spending the day ill in her room, she recovers just in time for dinner and another night of partying.
Drinking problems aside, this salesperson is no longer in college where she may have been able to get away with this behavior. Unprofessional actions such as this may be just the proof that our salesmen’s initial impressions were correct.
This particular salesperson has now been with the company a little over 6 months. So far, she has not sold anything to speak of, but this is not unusual considering her territory and the current state of the economy. She has brought new marketing methods to her position; baking brownies for potential customers and even dropping off a pan or two of her homemade lasagna. For the most part, she’s been moving along status quo and the sales staff if not accepting her have stopped being adverse to her presence. They too, have enjoyed a brownie or two.
This past week all of our salespeople converged at one of our locations for our annual spring sales meetings. They attend three days of presentations given by upper management and vendors discussing everything from current marketing trends to the latest products and services. The salespeople spend evenings with their managers at local restaurants and bars where there is always plenty of food and drink. The first night, our female salesperson got a little tipsy and was too hung-over to attend the second day’s presentations. Now, there is an unwritten rule amongst our salesmen, if you drink on the company dime, you show up the next day even if you have the dry heaves. Her absence at first was overlooked probably because she is young and female. But then, low and behold, after spending the day ill in her room, she recovers just in time for dinner and another night of partying.
Drinking problems aside, this salesperson is no longer in college where she may have been able to get away with this behavior. Unprofessional actions such as this may be just the proof that our salesmen’s initial impressions were correct.
Saturday, March 08, 2008
Where is the real money made?
I am a regular listener of the Clark Howard radio show. One of his common caller issues is the listener who has recently attended a hotel ballroom seminar pitching strategies to attain great wealth and is concerned that they are about to be "ripped off". These strategies come in different forms; buying manufacturers receivables, purchasing foreclosed real estate, buying over priced investments, and home based-businesses to name a few. The common denominator amongst all of them is the request for further outlays of cash; payments of hundreds and sometimes even thousands of dollars are necessary to receive additional courses, books, tapes, mailing lists and other materials to make this money making endeavor successful. Clark’s response is always the same; if this was such a great money making idea, the presenters would be off making millions, not hawking their techniques in hotel ballrooms.
I couldn’t help but be reminded of Clark’s response as I read Warren Buffett’s biography, “The Making of an American Capitalist,” by Roger Lowenstien. One thing that stood out from the beginning of Buffett's investment career was his aversion to giving stock tips. In the beginning years of Berkshire Hathaway he would not keep his investors informed as to where their money was invested and only provided return updates on an annual basis. Much of the investment purchasing he made for Berkshire Hathaway was accomplished by quiet accumulation.
Think about these questions the next time someone pitches a get rich quick scheme to you. Where is the money really being made? Is it by using the actual techniques being pitched or is it in the pitch itself? Warren Buffett became the richest man on the planet by investing in stock, not pitching subscriptions for stock tip guides in hotel ballrooms for a monthly fee of $19.95.
I couldn’t help but be reminded of Clark’s response as I read Warren Buffett’s biography, “The Making of an American Capitalist,” by Roger Lowenstien. One thing that stood out from the beginning of Buffett's investment career was his aversion to giving stock tips. In the beginning years of Berkshire Hathaway he would not keep his investors informed as to where their money was invested and only provided return updates on an annual basis. Much of the investment purchasing he made for Berkshire Hathaway was accomplished by quiet accumulation.
Think about these questions the next time someone pitches a get rich quick scheme to you. Where is the money really being made? Is it by using the actual techniques being pitched or is it in the pitch itself? Warren Buffett became the richest man on the planet by investing in stock, not pitching subscriptions for stock tip guides in hotel ballrooms for a monthly fee of $19.95.
Tuesday, March 04, 2008
"Enough With the Bottled Water"
I find my co-worker's bottled water in our work refrigerator and freezer; partially filled bottles are abandoned in the copy room and lunch room. Many of the members at my gym arrive toting their bottled water. I'm sure many prefer the taste, enjoy the convenience and feel it’s safer, but I never understood why anyone would buy bottled water if they had perfectly good tap water. I assume most are somewhat aware purchasing bottled water is not good for their budget or the environment. To further deter them, I recommend they read "The Blue Death", by Dr. Robert Morris where he points out the following:
Bottled water is immensely popular with Americans ~
Americans toss nearly 50 million empty water bottles into trash cans every day. More than 7 billion gallons of bottled water are consumed every year.
The bottles have a huge impact on the environment ~
The production of the bottles themselves requires more than two billion pounds of plastic per year, which translates into millions of barrels of oil consumed and a steady release of toxic waste into the environment. The manufacturer of a single bottle requires more water than the bottle will ultimately hold. The transport of these bottles over hundreds or even thousands of miles by ship, train & truck further adds to the disportionate ecological impact of bottled water.
Bottled water is not necessarily safer ~
Despite the fact that it costs almost a thousand times more than tap water, there is no guarantee that bottled water is safer. Bottled water is less closely regulated than tap water and is not required to meet stricter standards for purity. In fact, a major portion of bottled water in the US is nothing more than tap water in an expensive bottle.
To be sure, many brands of bottled water are superior to tap water and can offer a valuable alternative, particularly when traveling or after a local disaster threatens the water supply.
He closes with ~
But environmentally, economically, and in many cases even with respect to disease prevention, they fall short as a replacement for piped water.
Need I say more?
Bottled water is immensely popular with Americans ~
Americans toss nearly 50 million empty water bottles into trash cans every day. More than 7 billion gallons of bottled water are consumed every year.
The bottles have a huge impact on the environment ~
The production of the bottles themselves requires more than two billion pounds of plastic per year, which translates into millions of barrels of oil consumed and a steady release of toxic waste into the environment. The manufacturer of a single bottle requires more water than the bottle will ultimately hold. The transport of these bottles over hundreds or even thousands of miles by ship, train & truck further adds to the disportionate ecological impact of bottled water.
Bottled water is not necessarily safer ~
Despite the fact that it costs almost a thousand times more than tap water, there is no guarantee that bottled water is safer. Bottled water is less closely regulated than tap water and is not required to meet stricter standards for purity. In fact, a major portion of bottled water in the US is nothing more than tap water in an expensive bottle.
To be sure, many brands of bottled water are superior to tap water and can offer a valuable alternative, particularly when traveling or after a local disaster threatens the water supply.
He closes with ~
But environmentally, economically, and in many cases even with respect to disease prevention, they fall short as a replacement for piped water.
Need I say more?
Saturday, March 01, 2008
"Open Every Door"
Networking is a continuous process:
I've been an active member of a professional organization for the last ten years. I maintain this membership for many reasons, but my primary goal is networking. What many new members do not understand is that relationships are developed over time. I have seen new recruits join our organization, attend a meeting or two, distribute their business cards to every member present, then quit when that great job offer does not materialize in a month or two.
I received a call this week from a recruiter whose membership I have mentored in this organization for at least three years. She was recruiting for a great position that paid an excellent salary with a company known as one of the best places to work in the Milwaukee area.
Why Me:
She thought of me, after the employer specifically requested someone with a pleasant personality. I was flattered, this was the second time a recruiter from this organization had thought of me for a position because of my personality. I attribute this to working closely with them on committees within the organization. It is not always easy for me to talk up my attributes, but it is easy for them to see my real personality and work ethic after working closely with me.
My Response:
Unfortunately I had to turn her down. This company is located 45 miles from my home; I am not fond of long commutes or in a position to relocate. I did refer her to two other accountants who would also make great candidates for the position. I asked that she keep me in mind for future positions. I followed up by thanking her again for thinking of me, and forwarding her my resume.
What else I learned from her:
While discussing her business, she mentioned one unsettling experience. A candidate she placed with a company nine months ago had recently called requesting she find her another position. Feeling this was unethical she refused.
This reminded me of the recruiter who placed me with my current firm nine years ago. Since then, I have pretty much entrusted her with my job search. We meet a couple times each year to talk about my current company and discuss my career goals. She is instructed to call me if she sees a position that may be of interest to me. In thinking back, her firm (not her) has called me only once in nine years with an open position. I can't help but think my recruiter’s loyalty is really with my employer who has provided her with a paycheck. It is a good thing I have not been overly serious about changing jobs, but by entrusting her almost exclusively with my job search I may have missed out on some great opportunities.
“Not knowing when the dawn will come, I open every door” Emily Dickinson
I've been an active member of a professional organization for the last ten years. I maintain this membership for many reasons, but my primary goal is networking. What many new members do not understand is that relationships are developed over time. I have seen new recruits join our organization, attend a meeting or two, distribute their business cards to every member present, then quit when that great job offer does not materialize in a month or two.
I received a call this week from a recruiter whose membership I have mentored in this organization for at least three years. She was recruiting for a great position that paid an excellent salary with a company known as one of the best places to work in the Milwaukee area.
Why Me:
She thought of me, after the employer specifically requested someone with a pleasant personality. I was flattered, this was the second time a recruiter from this organization had thought of me for a position because of my personality. I attribute this to working closely with them on committees within the organization. It is not always easy for me to talk up my attributes, but it is easy for them to see my real personality and work ethic after working closely with me.
My Response:
Unfortunately I had to turn her down. This company is located 45 miles from my home; I am not fond of long commutes or in a position to relocate. I did refer her to two other accountants who would also make great candidates for the position. I asked that she keep me in mind for future positions. I followed up by thanking her again for thinking of me, and forwarding her my resume.
What else I learned from her:
While discussing her business, she mentioned one unsettling experience. A candidate she placed with a company nine months ago had recently called requesting she find her another position. Feeling this was unethical she refused.
This reminded me of the recruiter who placed me with my current firm nine years ago. Since then, I have pretty much entrusted her with my job search. We meet a couple times each year to talk about my current company and discuss my career goals. She is instructed to call me if she sees a position that may be of interest to me. In thinking back, her firm (not her) has called me only once in nine years with an open position. I can't help but think my recruiter’s loyalty is really with my employer who has provided her with a paycheck. It is a good thing I have not been overly serious about changing jobs, but by entrusting her almost exclusively with my job search I may have missed out on some great opportunities.
“Not knowing when the dawn will come, I open every door” Emily Dickinson
Saturday, February 16, 2008
A Meaningful Valentine's Day
Valentine's Day doesn't have to be about cards, chocolates or flowers to be memorable.
Last week, as Mr. Savvy Working Guy left to purchase a birthday card for his niece, I remarked, "I don't want a Valentine’s Day card this year. What I really want is a “music night”, a night where each of us takes a turn playing one of our favorite love songs." I came up with this idea after reading Florinda’s post where she writes about liking love stories best in a song.
We both had lots of fun with this; trying to guess each others selection, etc. Mr. SWG selected The Beatles "And I Love Her” from his Ipod. I had two selections, first I played Florinda's favorite, Bruce Springsteen's "If I Should Fall Behind” from Lucky Town, which we own. I also played Bob Dylan "Love minus Zero/No Limit which I found here:
We both really enjoyed our Valentine's Day. With a little creativity it can be easy to celebrate a Hallmark Holiday without spending a lot of money.
Last week, as Mr. Savvy Working Guy left to purchase a birthday card for his niece, I remarked, "I don't want a Valentine’s Day card this year. What I really want is a “music night”, a night where each of us takes a turn playing one of our favorite love songs." I came up with this idea after reading Florinda’s post where she writes about liking love stories best in a song.
We both had lots of fun with this; trying to guess each others selection, etc. Mr. SWG selected The Beatles "And I Love Her” from his Ipod. I had two selections, first I played Florinda's favorite, Bruce Springsteen's "If I Should Fall Behind” from Lucky Town, which we own. I also played Bob Dylan "Love minus Zero/No Limit which I found here:
We both really enjoyed our Valentine's Day. With a little creativity it can be easy to celebrate a Hallmark Holiday without spending a lot of money.
Saturday, February 02, 2008
Don't forget to keep your beneficiary forms updated
Along with an annual review of my financial accounts, it was also time to update my IRA account beneficiaries. Two years ago I was blessed with two new nephews that I would hate to leave out. It was very easy to request, fill out and submit a new beneficiary designation form.
Many important assets (pensions, IRAs, and annuities) have beneficiary designations. Those forms mean that after your death, the assets go directly to the people or trusts you've named. You can't determine otherwise in your will. So it is important keep your forms updated.
Many important assets (pensions, IRAs, and annuities) have beneficiary designations. Those forms mean that after your death, the assets go directly to the people or trusts you've named. You can't determine otherwise in your will. So it is important keep your forms updated.
Our Experience with a Financial Advisor
Why a financial advisor?
We decided to seek the services of a financial adviser after our 401(k) accounts, still with our previous employer, had lost 35% of their account value during the last recession. Neither of us had the time or the inclination to do our own research. We wanted someone to advise us on investing these monies, then monitor our accounts and alert us when it is time to buy, sell or rebalance our funds.
How we found him?
We selected an independent agency who had been hosting a money show on a prominent local radio station. We were intrigued by the firm's goal to provide objective, unbiased investment advice. Plus, they offered a free consultation with one of their independent brokers. An independent broker researches the whole market to find the most suitable products for your situation. A non-independent broker sells only the products provided by his/her employer, usually a bank or insurer. Many of these products are sold with big commissions and have high expense ratios.
What we learned?
The broker assigned to us compiled our most recent 401(k) statements into a spreadsheet providing us with an overview of our portfolio. To our surprise, we were not nearly as diversified as we had thought. Even though, we owned many different funds, the majority of our money was not only invested in high growth stocks, but almost entirely invested in the information sector. He recommended that we roll our 401(k)'s into IRA's keeping them with the Putnam family of funds to save money on fees. We could further diversify by rolling money into additional Putnam funds not accessible through our 401(k) plans. He explained his fee structure; we would be charged 1% on the total balance of our portfolio. He also asked several questions to determine our risk tolerance and explained his insistence on at least annual client reviews.
What happened next?
We decided to go with his services, and rolled our money into Putnam IRA accounts through his firm. We could have taken his free advice and rolled our 401(k) money into Putnam accounts on our own, but we still wanted the comfort of knowing someone with more knowledge than us would be keeping an eye on our money. This ended up being a wise decision.
Were there follow up recommendations?
After a year or so he called us; we needed to move all our money out of Putnam where a scandal was brewing. Six of Putnam’s investment professionals were under investigation for illegal trading. The outlook for keeping our money with Putnam was not good. He also suggested perhaps we should think about opening Roth accounts. We took all of his advice. Moved our money out of Putnam, reduced our current 401(k) contributions (investing just enough to still take advantage of the company match), and placed the extra money into Roth IRA accounts.
What about 2008?
I recently called to have our monthly Roth contributions increased to take advantage of the new 2008 maximum contribution limits:
$5000 for those under 50
$6000 for those over
He took this as an opportunity to insist on another client account review. January of 2008 had the worst stock performance start since 1978. As soon as the market stabilizes, possibly by summer, we need to begin rebalancing our funds and scaling down our investment in stocks by 3 to 5 percent each year. He will call us when it is time to do this.
What are our overall thoughts?
We could invest our own money and save the 1% fee; many financial experts recommend doing so using only index funds. There are also plenty of reputable web sights (Clark Howard's for example) that recommend low cost quality funds for your Roth IRA. I still like a little hand holding and feel we receive value from our independent, unbiased adviser. He keeps us on track; preventing panic sales during down times and alerting us when it is time to sell, keeps us diversified and on track to achieve our long term goals.
We decided to seek the services of a financial adviser after our 401(k) accounts, still with our previous employer, had lost 35% of their account value during the last recession. Neither of us had the time or the inclination to do our own research. We wanted someone to advise us on investing these monies, then monitor our accounts and alert us when it is time to buy, sell or rebalance our funds.
How we found him?
We selected an independent agency who had been hosting a money show on a prominent local radio station. We were intrigued by the firm's goal to provide objective, unbiased investment advice. Plus, they offered a free consultation with one of their independent brokers. An independent broker researches the whole market to find the most suitable products for your situation. A non-independent broker sells only the products provided by his/her employer, usually a bank or insurer. Many of these products are sold with big commissions and have high expense ratios.
What we learned?
The broker assigned to us compiled our most recent 401(k) statements into a spreadsheet providing us with an overview of our portfolio. To our surprise, we were not nearly as diversified as we had thought. Even though, we owned many different funds, the majority of our money was not only invested in high growth stocks, but almost entirely invested in the information sector. He recommended that we roll our 401(k)'s into IRA's keeping them with the Putnam family of funds to save money on fees. We could further diversify by rolling money into additional Putnam funds not accessible through our 401(k) plans. He explained his fee structure; we would be charged 1% on the total balance of our portfolio. He also asked several questions to determine our risk tolerance and explained his insistence on at least annual client reviews.
What happened next?
We decided to go with his services, and rolled our money into Putnam IRA accounts through his firm. We could have taken his free advice and rolled our 401(k) money into Putnam accounts on our own, but we still wanted the comfort of knowing someone with more knowledge than us would be keeping an eye on our money. This ended up being a wise decision.
Were there follow up recommendations?
After a year or so he called us; we needed to move all our money out of Putnam where a scandal was brewing. Six of Putnam’s investment professionals were under investigation for illegal trading. The outlook for keeping our money with Putnam was not good. He also suggested perhaps we should think about opening Roth accounts. We took all of his advice. Moved our money out of Putnam, reduced our current 401(k) contributions (investing just enough to still take advantage of the company match), and placed the extra money into Roth IRA accounts.
What about 2008?
I recently called to have our monthly Roth contributions increased to take advantage of the new 2008 maximum contribution limits:
$5000 for those under 50
$6000 for those over
He took this as an opportunity to insist on another client account review. January of 2008 had the worst stock performance start since 1978. As soon as the market stabilizes, possibly by summer, we need to begin rebalancing our funds and scaling down our investment in stocks by 3 to 5 percent each year. He will call us when it is time to do this.
What are our overall thoughts?
We could invest our own money and save the 1% fee; many financial experts recommend doing so using only index funds. There are also plenty of reputable web sights (Clark Howard's for example) that recommend low cost quality funds for your Roth IRA. I still like a little hand holding and feel we receive value from our independent, unbiased adviser. He keeps us on track; preventing panic sales during down times and alerting us when it is time to sell, keeps us diversified and on track to achieve our long term goals.
I hate to admit it; but Time Warner Cable is growing on me
Over the past several years, I have had a love/hate relationship with Time Warner Cable, our local cable company. This is primarily due to the inadequate customer service I have received when we have service issues and their ever increasing prices. A couple of years ago, we did upgrade to one of their combination packages that includes high-speed internet, cable and digital phone service. The total cost of the package is cheaper than buying the services separately. Overall, we’ve been happy with this move, despite initial misgivings about Time Warner Cable in general and our doubts as to whether a landline phone was even needed.
This past week, my husband actually read the advertising fliers included with our monthly Time Warner bill. According to him, we could save $10 a month if we cancelled our free domestic long distance service in all states accept Wisconsin. We would still have access to local domestic calling outside of Wisconsin at 5¢ a minute. We decided to take advantage of this deal. Unfortunately, when he called to make the change, he was told the special was good for digital phone customers only; we were ineligible because our phone service was part of a package.
Here is the part where they start to grow on me:
The customer service rep then offered to give us $10 off anyway since we had been long-term customers. How about that for service; we still save $10 a month and can continue to call anyone in the United States and Canada for free.
Also, they have added a new feature:
Our TV now has an option for caller ID display at no extra charge. For old-fashioned folks like me who don't have a phone with caller id capabilities, we can now screen our calls while watching TV without ever leaving the couch. When the phone rings, the caller’s name and phone number are shown in the top left hand corner of our television screen.
This past week, my husband actually read the advertising fliers included with our monthly Time Warner bill. According to him, we could save $10 a month if we cancelled our free domestic long distance service in all states accept Wisconsin. We would still have access to local domestic calling outside of Wisconsin at 5¢ a minute. We decided to take advantage of this deal. Unfortunately, when he called to make the change, he was told the special was good for digital phone customers only; we were ineligible because our phone service was part of a package.
Here is the part where they start to grow on me:
The customer service rep then offered to give us $10 off anyway since we had been long-term customers. How about that for service; we still save $10 a month and can continue to call anyone in the United States and Canada for free.
Also, they have added a new feature:
Our TV now has an option for caller ID display at no extra charge. For old-fashioned folks like me who don't have a phone with caller id capabilities, we can now screen our calls while watching TV without ever leaving the couch. When the phone rings, the caller’s name and phone number are shown in the top left hand corner of our television screen.
Monday, January 21, 2008
Recession Ramblings
No one can say for certain whether or not we are currently in a recession, but economists are saying that the effect of the economy largely depends on the stability of each individual’s company.
The companies my husband and I work for seem more stable than they did at the beginning of the recession in 2001.
As you may recall, my husband and I both worked for the same company in the late 90’s. This company continuously struggled to make payroll. I used to joke, if they couldn’t make money in the “exuberant 90’s” they certainly weren’t going to do well in an economic downturn. Sure enough, when the economy went into a recession in March 2001 this company was hit hard. My husband ended up being laid off due to lack of work.
I had started a new job in 1999. My new company was well established, having been in business over 50 years. This did not prevent them from coming extremely close to closing its doors for good. In 2001, they were highly leveraged, had a huge build up of inventory, and had recently begun selling specialized tech equipment that was not part of their core business. Unbeknownst to them, the technology for this equipment evolved quickly, leaving company shelves bulging with obsolete inventory. Once the recession hit, sales dwindled and a huge cash shortage ensued. To make matters worse, the cost of both business and health insurance sky rocketed. To save the company, management went into a major cost cutting endeavor like I had never seen before. A new bank was brought in with less stringent collateral requirements which provided a higher line of credit. Debt was refinanced at much lower interest rates. Massive amounts of inventory were returned to vendors for credit (of course this was after huge restocking fees were tacked on). For inventory not returned, management begged manufacturers for deep discounts and lengthy repayment plans. Employees were laid off. Every discretionary service was cancelled; including cleaning services at all company stores. After a two year struggle the company’s finances began turning around culminating in 2005 with the healthiest balance sheet in the company’s history.
What has changed in seven years?
The latest economic news reports that employers are not trimming hours as they usually do when demand for their product falls off. Plus, inventories are not unusually high making it less urgent for manufacturers to scale off production.
On a personal level: My husband has a new job which he loves; just last week he was assigned to a new project that comes with a three year contract. My company has never gotten back to the glut of excess spending of the late 1990’s. Our inventories are lean and manageable. Employee count remains low; few new overhead positions have been added. Are sales down? Yes. Are margins low? Yes. Is the year going to be easy? No. But I am confident both companies are healthy enough to ride the storm.
The companies my husband and I work for seem more stable than they did at the beginning of the recession in 2001.
As you may recall, my husband and I both worked for the same company in the late 90’s. This company continuously struggled to make payroll. I used to joke, if they couldn’t make money in the “exuberant 90’s” they certainly weren’t going to do well in an economic downturn. Sure enough, when the economy went into a recession in March 2001 this company was hit hard. My husband ended up being laid off due to lack of work.
I had started a new job in 1999. My new company was well established, having been in business over 50 years. This did not prevent them from coming extremely close to closing its doors for good. In 2001, they were highly leveraged, had a huge build up of inventory, and had recently begun selling specialized tech equipment that was not part of their core business. Unbeknownst to them, the technology for this equipment evolved quickly, leaving company shelves bulging with obsolete inventory. Once the recession hit, sales dwindled and a huge cash shortage ensued. To make matters worse, the cost of both business and health insurance sky rocketed. To save the company, management went into a major cost cutting endeavor like I had never seen before. A new bank was brought in with less stringent collateral requirements which provided a higher line of credit. Debt was refinanced at much lower interest rates. Massive amounts of inventory were returned to vendors for credit (of course this was after huge restocking fees were tacked on). For inventory not returned, management begged manufacturers for deep discounts and lengthy repayment plans. Employees were laid off. Every discretionary service was cancelled; including cleaning services at all company stores. After a two year struggle the company’s finances began turning around culminating in 2005 with the healthiest balance sheet in the company’s history.
What has changed in seven years?
The latest economic news reports that employers are not trimming hours as they usually do when demand for their product falls off. Plus, inventories are not unusually high making it less urgent for manufacturers to scale off production.
On a personal level: My husband has a new job which he loves; just last week he was assigned to a new project that comes with a three year contract. My company has never gotten back to the glut of excess spending of the late 1990’s. Our inventories are lean and manageable. Employee count remains low; few new overhead positions have been added. Are sales down? Yes. Are margins low? Yes. Is the year going to be easy? No. But I am confident both companies are healthy enough to ride the storm.
Tuesday, January 15, 2008
A little bit of gratitude to shake a bad day
In response to a horrendous day, I am listing five “feel good” entries from my gratitude journal in no particular order. During the past two months have been grateful for:
1. Tyler, my co-worker, for finding an error I had made so that it could be corrected in a timely fashion and a future problem eliminated. Typically, I would have internalized this mistake and spent the rest of the day feeling bad about myself. Once I acknowledged that I was grateful to Tyler, I just fixed it and moved on.
1. A. On a side note, Tyler made a mistake in the same system in early January. He came to me asking for my assistance fixing it, even admitting the system is not as easy as it looks.
2. My dogs, Buck and Teddy and all of the puppies my husband has been training. They keep me grounded and living in the present.
3. The window in my office from which I can watch the season's change, monitor the weather and occasionally catch a glimpse of wild life. In the past I have taken this window for granted, not realizing what a benefit it is. I am reminded of a company I visited a few years back that had virtually no windows. The most popular topic of conversation around the office was whether anyone had been outside, and if so what the weather was like.
4. Plumbing that works and a hot morning shower. Nothing makes you appreciate modern technology more than when it does not work.
5. A phone call from Judy my favorite acquaintance. Judy was a business associate who had recently left her position to go on permanent disability; she has cancer. I loved working with her, missed her terribly and had run out of lame business excuses to call her. She called me out of the blue before the holidays for the simple and perfect reason ~ to wish me a Merry Christmas. In today’s world of hectic schedules acquaintances and business associates are our new friends. It took this phone call for me to realize I don't need a business reason to call her; I can call just to say hi and ask how she is doing.
1. Tyler, my co-worker, for finding an error I had made so that it could be corrected in a timely fashion and a future problem eliminated. Typically, I would have internalized this mistake and spent the rest of the day feeling bad about myself. Once I acknowledged that I was grateful to Tyler, I just fixed it and moved on.
1. A. On a side note, Tyler made a mistake in the same system in early January. He came to me asking for my assistance fixing it, even admitting the system is not as easy as it looks.
2. My dogs, Buck and Teddy and all of the puppies my husband has been training. They keep me grounded and living in the present.
3. The window in my office from which I can watch the season's change, monitor the weather and occasionally catch a glimpse of wild life. In the past I have taken this window for granted, not realizing what a benefit it is. I am reminded of a company I visited a few years back that had virtually no windows. The most popular topic of conversation around the office was whether anyone had been outside, and if so what the weather was like.
4. Plumbing that works and a hot morning shower. Nothing makes you appreciate modern technology more than when it does not work.
5. A phone call from Judy my favorite acquaintance. Judy was a business associate who had recently left her position to go on permanent disability; she has cancer. I loved working with her, missed her terribly and had run out of lame business excuses to call her. She called me out of the blue before the holidays for the simple and perfect reason ~ to wish me a Merry Christmas. In today’s world of hectic schedules acquaintances and business associates are our new friends. It took this phone call for me to realize I don't need a business reason to call her; I can call just to say hi and ask how she is doing.
Saturday, January 12, 2008
Paradox of choice
The price of oil has hit $100 a barrel, grocery costs are up 6% over last year and the out of pocket costs for prescription drugs is ever increasing. What are we the middle class, as we find ourselves continuously strapped for cash, to do?
In order to make ends meet, I am hearing my co-workers making the choice to forego refilling their prescription drug medications. One employee admitted he had stopped taking his asthma medication when his out of pocket cost hit $60 a refill. Only after he received a warning for excessive absenteeism did he indicate that perhaps he would cancel his cable instead. Another employee who complains of leg pain when he cannot afford his blood pressure medication can afford to go out to eat for breakfast and lunch everyday plus spend most of his weekends betting at the dog track. My favorite story is the employee who disgusted with her high out of pocket cost for lipitor began a diet an exercise program that has resulted in a 20 lb. weight loss, lowering her cholesterol and no longer needing her medication.
I understand our company drug plan requires higher out-of-pocket costs every year causing greater financial hardship. We have a formulary drug plan; a plan with a list of preferred drugs. If your doctor prescribes a non-formulary drug (one that is not on the list) your out of pocket cost is higher.
We are all faced with choices every day in our lives, perhaps too many choices; let’s make sure we look at all our options before choosing not to take our meds.
In order to make ends meet, I am hearing my co-workers making the choice to forego refilling their prescription drug medications. One employee admitted he had stopped taking his asthma medication when his out of pocket cost hit $60 a refill. Only after he received a warning for excessive absenteeism did he indicate that perhaps he would cancel his cable instead. Another employee who complains of leg pain when he cannot afford his blood pressure medication can afford to go out to eat for breakfast and lunch everyday plus spend most of his weekends betting at the dog track. My favorite story is the employee who disgusted with her high out of pocket cost for lipitor began a diet an exercise program that has resulted in a 20 lb. weight loss, lowering her cholesterol and no longer needing her medication.
I understand our company drug plan requires higher out-of-pocket costs every year causing greater financial hardship. We have a formulary drug plan; a plan with a list of preferred drugs. If your doctor prescribes a non-formulary drug (one that is not on the list) your out of pocket cost is higher.
We are all faced with choices every day in our lives, perhaps too many choices; let’s make sure we look at all our options before choosing not to take our meds.
Sunday, January 06, 2008
Vacation time is not free
In addition to math essentials, I recommend Penelope Trunk incorporate a few accounting essentials into her career. In her post http://blog.penelopetrunk.com/2005/01/08/math-essentials-for-your-career/ she states:
Extra Vacation time is free to the company
Extra vacation time is not free to the company. When an accountant pays an employee for time not worked an account is charged in the general ledger called vacation expense. Expense accounts are used, in most cases, to record costs. In addition to paying an employee for time not worked, the company may actually incur additional costs due to an employee’s extra vacation. The employee’s work still needs to be completed. He/she may need to work extra hours resulting in overtime pay to get his job done. Also, co-workers may work additional hours to cover for him in his absence. If his work is not completed there is always the potential for lost sales and lower productivity.
I understand the point of Penelope’s post is to get you thinking about benefits other than salary when negotiating your compensation package, but she is wrong about vacation time being free to the company and it isn't always that simple. She states in entirety:
Getting a Raise
Use numbers to negotiate your raise, too. When it comes to compensation, do your own research to present a rational, numbers-based explanation for why your salary is not in line with comparable salaries in your field. If your company won’t budge, figure out which non-financial perks will equal a financial perk. (Finally! A use for high school algebra!) For example, extra vacation time is free to the company and a laptop, after tax deductions, is very cheap for the company.
I am not saying don't ask for additional vacation, I have received additional vacation in lieu of a raise higher raise in past employment. After the 2001 downturn and as more companies switch to PTO plans, I believe extra vacation is not a benefit handed over easily. Other benefits that are more readily given to employees are payment for additional training if job related, especially if asked for during a profitable period. This shows initiative plus the company benefits from your increased knowledge. My company has given laptops, but only to employees that are not in the office on a daily basis or travel a lot. Another benefit I've seen given is to for the company to pay an employee’s high speed internet connection if they do a lot of work from home.
Don't be afraid to negotiate non-financial benefits, but do know your facts up front.
Financial Illiteracy
Once again I am amazed by the lack of financial literacy in this country ~
From “Richistan” by Robert Frank:
At a summer camp for young Richistans (a term coined by Frank to describe the nouveau riche - a group of self-made entrepreneurs with wealth that equals or surpasses old money) - One of the rich kids asks the question, "So is the stock market the same the as a mutual fund?" Most members of the group looked stumped.
From “Richistan” by Robert Frank:
At a summer camp for young Richistans (a term coined by Frank to describe the nouveau riche - a group of self-made entrepreneurs with wealth that equals or surpasses old money) - One of the rich kids asks the question, "So is the stock market the same the as a mutual fund?" Most members of the group looked stumped.
A stock represents a share of partial ownership in a corporation.
A mutual fund offers partial ownership in a professionally-managed group of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
Saturday, January 05, 2008
The New Year's Ham Tradition
Each year for as long as anyone can remember, my company has given employees a New Year’s ham. This is a nice gesture and all; the hams are huge weighing close to fifteen pounds and probably cost at least $25 apiece. My husband and I enjoyed this ham the first couple of years, but found it increasingly difficult to eat fifteen pounds of ham in one year. Once we began finding the previous year’s ham still in our freezer at Christmas time, we decided to give all future New Years ham’s away. Last year, I gave my ham to a friend whose husband had been out of work. This year's ham went to a needy family we found through our local food pantry.
I don’t want to seem ungrateful, but the New Year’s ham tradition is an outdated idea. I am sure for the employee that is single, has a small family, is vegetarian or like me can no longer eat 15 pounds of ham in one year this gesture is wasted. It is time for companies to give up outdated traditions and look for new perks that will appeal to a greater majority of employees.
I don’t want to seem ungrateful, but the New Year’s ham tradition is an outdated idea. I am sure for the employee that is single, has a small family, is vegetarian or like me can no longer eat 15 pounds of ham in one year this gesture is wasted. It is time for companies to give up outdated traditions and look for new perks that will appeal to a greater majority of employees.
Tuesday, January 01, 2008
2008 "The Year of Gratitude"
I am proclaiming 2008 to be the year of gratitude. I came to this conclusion after reading "Happier," by Tal-Ben Shahar which I picked up on a whim last October. Shahar proclaims that those who keep a daily gratitude journal – writing down at least 5 things they were grateful for every day – enjoy higher levels of emotional and physical well-being. This wasn’t the first time I’ve heard of the “grateful living concept,” but it was the first time I took it seriously. In the past, I felt gratitude journals were corny and a waste of time.
I started my own gratitude journal in late October and am proud to say I have not missed a day. It has been an insightful exercise with the greatest insight occurring on truly awful days when I am forced to find something positive, usually the little things, rather than dwell on negative events. It is amazing how easy I have found this exercise to be. Once I got started, I keep finding more and more things to be grateful for; many days my list well surpasses five items.
In going through my old journals, I discovered the following list (unfortunately I did not jot down the author) of the benefits of gratitude: 1. People that don’t fixate on material goods eventually cut back on envy and nagging comparisons. 2. Traumatic memories fade into the background for people who are regularly grateful. 3. Troublesome thoughts appear less frequently and with less intensity, which suggest gratitude may enhance emotional healing. 4. Thankfulness helps the brain fully process events. 5. Grateful people achieve closure by making sense of negative events so that they mesh with a generally positive outlook.
I am looking forward to continuing my gratitude journal in 2008.
I started my own gratitude journal in late October and am proud to say I have not missed a day. It has been an insightful exercise with the greatest insight occurring on truly awful days when I am forced to find something positive, usually the little things, rather than dwell on negative events. It is amazing how easy I have found this exercise to be. Once I got started, I keep finding more and more things to be grateful for; many days my list well surpasses five items.
In going through my old journals, I discovered the following list (unfortunately I did not jot down the author) of the benefits of gratitude: 1. People that don’t fixate on material goods eventually cut back on envy and nagging comparisons. 2. Traumatic memories fade into the background for people who are regularly grateful. 3. Troublesome thoughts appear less frequently and with less intensity, which suggest gratitude may enhance emotional healing. 4. Thankfulness helps the brain fully process events. 5. Grateful people achieve closure by making sense of negative events so that they mesh with a generally positive outlook.
I am looking forward to continuing my gratitude journal in 2008.
Monday, December 24, 2007
Do Snow Days Reveal Your Bad Attitude?
Do you make the effort to drive into work during a snow storm? Recently, the Milwaukee area experienced a snow/ice storm. Most of the schools were closed and there was an ice storm advisory for those living to the south. In my area, we received only snow; the radio announcers advised that the roads were not treacherous, to take it slow and give yourself plenty of time. My husband who left for work before me called to report the roads were fine; all of his co-workers had made it in safely coming from every area of South Eastern Wisconsin.
My department was a different story; five out of twelve did not make it in. Yet, all the employees in the other departments at our location had made it. This statistic reminded me of a recent article I had read indicating that employees with bad attitudes do not bother going into work during inclement weather. Our company’s owner did walk around making a mental note of who came in and who did not. His only comment was, “I can understand why Jim's not here he has that long commute.”
These same workers grumbled amongst themselves when they returned the next day seeming to have forgotten our company policy, "In fairness to those employees who do not come in to work under adverse weather conditions when we are not closed will not be paid for hours not worked." Understandably, there are family situations employees must attend to; two of the five had to stay home with their children due to school closings. If you truly can't make it in, you can try to handle the situation in a positive manner. Plan ahead, if weather reports are predicting bad weather take work home, call your managers and co-workers to make sure important tasks are completed in your absence, keep up with your work by checking voice mail and email from home, our company is set up so that everyone can do so. Lastly do your career a favor, if the roads are not that bad make the effort and go in.
My department was a different story; five out of twelve did not make it in. Yet, all the employees in the other departments at our location had made it. This statistic reminded me of a recent article I had read indicating that employees with bad attitudes do not bother going into work during inclement weather. Our company’s owner did walk around making a mental note of who came in and who did not. His only comment was, “I can understand why Jim's not here he has that long commute.”
These same workers grumbled amongst themselves when they returned the next day seeming to have forgotten our company policy, "In fairness to those employees who do not come in to work under adverse weather conditions when we are not closed will not be paid for hours not worked." Understandably, there are family situations employees must attend to; two of the five had to stay home with their children due to school closings. If you truly can't make it in, you can try to handle the situation in a positive manner. Plan ahead, if weather reports are predicting bad weather take work home, call your managers and co-workers to make sure important tasks are completed in your absence, keep up with your work by checking voice mail and email from home, our company is set up so that everyone can do so. Lastly do your career a favor, if the roads are not that bad make the effort and go in.
Sunday, December 16, 2007
Wal-Mart $4 Generic Drug List
I thought this was an excellent resource for you or family members who may take some type of prescription drug. Wal-Mart has provided a list of drugs which are $4 Prescriptions up to a 30-day supply fill and refill. I have attached the link for your reference. I hope some of you could benefit from this cost savings program. Prescription drugs is one of the highest cost benefits for a employers health care plan. Wherever we as consumers can save money, we should take advantage of that benefit.
Wal-Mart $4 Generic Drug List - 10/07 Ever wonder what drugs were covered at Wal-Mart for $4?
http://i.walmart.com/i/if/hmp/fusion/four_dollar_drug_list.pdf
Wal-Mart $4 Generic Drug List - 10/07 Ever wonder what drugs were covered at Wal-Mart for $4?
http://i.walmart.com/i/if/hmp/fusion/four_dollar_drug_list.pdf
"Ode to Joy"
This year my husband's holiday party was at the Milwaukee Performing Arts Center and included a performance by the Milwaukee Symphony. Each year his company provides new and unique ideas for their summer parties and holiday events. Past events have included outings to the State Fair, the zoo, a casino night, and Hawaiian entertainment. By providing a variety of events, they ultimately should find something everyone will enjoy. For my husband and me this one was a winner. We both love music; and are always looking to attend cultural events. Others felt differently. Unable to appreciate the two hour concert, they would have preferred a party with an open bar and continuous social interaction. From the owner’s perspective, the President probably preferred an event such as this over one where the entertainment’s focus was alcohol for potential liability reasons.
As more and more companies are doing away with the "Holiday Party", I think we need to appreciate the efforts of company’s such as this who continue to provide a unique “Holiday Party”.
As more and more companies are doing away with the "Holiday Party", I think we need to appreciate the efforts of company’s such as this who continue to provide a unique “Holiday Party”.
Monday, December 10, 2007
Workplace-Hookups
Penelope Trunk's resent blog posting: What to Consider when Considering a Workplace Hook-up hits close to home. My husband and I were a workplace-hookup.
I'm glad we met and all; we have now been married ten years, but looking back on the situation I see it was a stressful time. Also, I am sure our relationship interfered with my work performance at least initially. I spent an awful lot of time wondering if my new boyfriend was in the office, what he was doing, and who he was talking to. I went out of my way to find reasons to visit his department sometimes carrying around a stack of project files pretending I had questions. From the beginning, we both agreed to be discreet and keep our relationship a secret even if it meant attending the holiday party separately. I worked in accounting and was privy to confidential information including the company’s financial position, payroll and human resources. Even though I took the confidentiality aspect of my position seriously, I am sure senior management would have been more cautious sharing information with me if they had known about our relationship and may even have thought twice about promoting me to manager.
My future husband was a consultant with sales goals he needed to meet and projects he had to manage under budget. After we had been dating a couple of years, I was promoted to Controller. I then had to sit through uncomfortable meetings and had a few awkward moments as my future husband’s performance was reviewed and critiqued in front of me. I left the company a month before we married. After our marriage was made public, my former female co-workers claimed they had been on to us for quite some time; whereas senior management, all of whom were male, had been completely taken by surprise. My husband left the company three years later.
In retrospect I believe we were fortunate our workplace-hookup worked out as well as it did. We had been good friends for a year and a half before we started dating which I am sure made a difference. Also, I have never regretted our decision to be discreet and to keep our relationship a secret.
I'm glad we met and all; we have now been married ten years, but looking back on the situation I see it was a stressful time. Also, I am sure our relationship interfered with my work performance at least initially. I spent an awful lot of time wondering if my new boyfriend was in the office, what he was doing, and who he was talking to. I went out of my way to find reasons to visit his department sometimes carrying around a stack of project files pretending I had questions. From the beginning, we both agreed to be discreet and keep our relationship a secret even if it meant attending the holiday party separately. I worked in accounting and was privy to confidential information including the company’s financial position, payroll and human resources. Even though I took the confidentiality aspect of my position seriously, I am sure senior management would have been more cautious sharing information with me if they had known about our relationship and may even have thought twice about promoting me to manager.
My future husband was a consultant with sales goals he needed to meet and projects he had to manage under budget. After we had been dating a couple of years, I was promoted to Controller. I then had to sit through uncomfortable meetings and had a few awkward moments as my future husband’s performance was reviewed and critiqued in front of me. I left the company a month before we married. After our marriage was made public, my former female co-workers claimed they had been on to us for quite some time; whereas senior management, all of whom were male, had been completely taken by surprise. My husband left the company three years later.
In retrospect I believe we were fortunate our workplace-hookup worked out as well as it did. We had been good friends for a year and a half before we started dating which I am sure made a difference. Also, I have never regretted our decision to be discreet and to keep our relationship a secret.
Friday, December 07, 2007
We've never done it that way before!
Snow and freezing rain caused havoc this week at my place of employment. Two employees slipped and fell in our company parking lots. Luckily, neither of them was seriously hurt. In the past, some of our company's largest workman's compensation claims have resulted from employees falling on ice. After the first incident, I instructed the employee who is responsible for salting our parking lot to please salt the entire lot. After the second spill, which occurred at a different location, I realized our entire lot still had not been salted. When I confronted our employee he replied, “We’ve never done it that way before.” He has always salted the entryway only and besides we were almost out of salt. To which a co-worker overhearing our conversation responded, "That is not true we have always salted the entire lot, weigh your options $4 bag of salt vs. 1,400,000 liability suit. Hmm what sounds better?" I couldn’t have said it better myself.
Today in our litigious society companies need to constantly manage risks. Slippery parking lots are a hazard to the company not to mention the loss of productivity, pain and suffering for the employee.
Today in our litigious society companies need to constantly manage risks. Slippery parking lots are a hazard to the company not to mention the loss of productivity, pain and suffering for the employee.
Sunday, November 18, 2007
Does your Company Offer a Flexible Spending Plan?
A co-worker recently inquired as to why our company does not offer a flexible spending plan. Both he and his spouse incur high out-of-pocket medical expenses each year; almost always paying out their entire deductible. If they were able to set some of these monies, let’s say $1,000, aside each year in a flexible spending account they would be able to save about $300.00 a year.
What is a Flexible Spending Plan?
The Flexible Benefit Plan is a program that was enacted by Congress in 1978. The plan allows employees to pay for certain expenses using pre-tax dollars. Employees deduct monies from their paycheck before federal, state, social security and medicare taxes are calculated. The monies are withheld from each paycheck in equal installments and reimbursed once an employee shows proof that the service was rendered. By using the plan, you save approximately 30% in taxes on the qualifying expenses. Employers also save money. They do not have to pay their portion of social security and medicare taxes on your pre-tax deduction.
What types of expenses qualify for reimbursement?
Medical Reimbursement: Expenses paid out-of pocket for medical deductibles, vision care including eye exams, contacts, and glasses, and dental work. Over the counter drugs such as allergy, cold and flu, pain relievers, cough suppressants, anti-inflammatory drugs and smoking cessation items. Walgreen's Pharmacy codes items eligible for reimbursement with an "F" on their receipts. I have noticed purchases of prescription drugs, sunscreen, lip balm and saline solution all coded in this manner.
Dependent care Reimbursement: Expenses paid for care of a qualified dependent can be paid on a pre-tax basis. You may be able to claim dependent care expenses for children under the age of 13, certain preschool tuition and certain adult care expenses.
Independent Premium Feature: If you do not have insurance coverage through your employer and have purchased an independent policy for either health or dental insurance, you may be allowed to set aside funds pre-tax for those premiums.
Why does our company not institute a plan?
First, we were told that we can not offer a (FSA) Flexible Savings Account in conjunction with an (HSA) Health Savings Account. Our company was contemplating instituting an HSA instead of our current health plan. Despite changing our views on HSA’s, all discussions concerning flexible spending accounts are on hold.
Adding a FSA account would increase the administrative work for our already over burdened payroll department. Initially, instituting a FSA would entail more work, but typically companies contract this service out to a third party, so after the initial set up additional work should be minimal.
Adding an FSA plan will be costly. After the initial set-up costs, the account should pay for itself with the social security and medicare tax savings I previously mentioned.
Honestly, the real reason our company does not institute a FSA is that if an employee leaves the company early in the plan year, after they have been paid out all or the majority of their FSA medical deduction, but before an equal amount has been deducted from their paycheck, our company would be out the difference. In discussions with Human Resource Managers from other companies, I have learned this is usually not the case. The more prevalent scenario is that an employee leaves the company or completes the plan year without using their entire FSA deduction and forfeits their money. One way to minimize losses on both sides is for the employer to cap the amount of monies employees can place in their accounts each year. Also, the employee should use conservative estimates when determining their deduction amounts and only set aside monies for known expenses.
My Perception: The employee benefits of a flexible benefit account outweigh the employer costs of this benefit. I recommend that management consider adding this benefit.
What is a Flexible Spending Plan?
The Flexible Benefit Plan is a program that was enacted by Congress in 1978. The plan allows employees to pay for certain expenses using pre-tax dollars. Employees deduct monies from their paycheck before federal, state, social security and medicare taxes are calculated. The monies are withheld from each paycheck in equal installments and reimbursed once an employee shows proof that the service was rendered. By using the plan, you save approximately 30% in taxes on the qualifying expenses. Employers also save money. They do not have to pay their portion of social security and medicare taxes on your pre-tax deduction.
What types of expenses qualify for reimbursement?
Medical Reimbursement: Expenses paid out-of pocket for medical deductibles, vision care including eye exams, contacts, and glasses, and dental work. Over the counter drugs such as allergy, cold and flu, pain relievers, cough suppressants, anti-inflammatory drugs and smoking cessation items. Walgreen's Pharmacy codes items eligible for reimbursement with an "F" on their receipts. I have noticed purchases of prescription drugs, sunscreen, lip balm and saline solution all coded in this manner.
Dependent care Reimbursement: Expenses paid for care of a qualified dependent can be paid on a pre-tax basis. You may be able to claim dependent care expenses for children under the age of 13, certain preschool tuition and certain adult care expenses.
Independent Premium Feature: If you do not have insurance coverage through your employer and have purchased an independent policy for either health or dental insurance, you may be allowed to set aside funds pre-tax for those premiums.
Why does our company not institute a plan?
First, we were told that we can not offer a (FSA) Flexible Savings Account in conjunction with an (HSA) Health Savings Account. Our company was contemplating instituting an HSA instead of our current health plan. Despite changing our views on HSA’s, all discussions concerning flexible spending accounts are on hold.
Adding a FSA account would increase the administrative work for our already over burdened payroll department. Initially, instituting a FSA would entail more work, but typically companies contract this service out to a third party, so after the initial set up additional work should be minimal.
Adding an FSA plan will be costly. After the initial set-up costs, the account should pay for itself with the social security and medicare tax savings I previously mentioned.
Honestly, the real reason our company does not institute a FSA is that if an employee leaves the company early in the plan year, after they have been paid out all or the majority of their FSA medical deduction, but before an equal amount has been deducted from their paycheck, our company would be out the difference. In discussions with Human Resource Managers from other companies, I have learned this is usually not the case. The more prevalent scenario is that an employee leaves the company or completes the plan year without using their entire FSA deduction and forfeits their money. One way to minimize losses on both sides is for the employer to cap the amount of monies employees can place in their accounts each year. Also, the employee should use conservative estimates when determining their deduction amounts and only set aside monies for known expenses.
My Perception: The employee benefits of a flexible benefit account outweigh the employer costs of this benefit. I recommend that management consider adding this benefit.
Wednesday, October 31, 2007
Business Lessons from Paula Deen
Paula Deen is not your typical entrepreneur. Or is she? I just finished her memoir Paula Deen: It Ain't All About the Cookin'
in which she tells us her success story. One thing is very clear, it wasn’t easy. She began her business in 1989 at the age of 42, a recent divorcee who had suffered from agoraphobia for twenty years. Starting small, with only a $200 investment she began “The Bag Lady”. She made sandwiches out of her home and sold them to her co-workers and neighboring businesses at lunch. This led to private catering and ultimately to a restaurant of her own.She shares the lessons she learned along the way. You need to be legal; she licensed her business thru her friend's pool hall. Entrepreneurship is hard work; while working 16 to 24 hour days she let her own home literally become a roach invested pig sty. You can’t be afraid to take a risk or work under a little stress. When she decided to open a restaurant in downtown Savannah she entered into a long term lease that needed renovations with just a handshake. The day her new restaurant was to open her checking accounts were overdrawn. She surrounded herself with the best people she could find and strived to bring out the best in them.
Paula’s lessons aren’t necessarily new, yet her story has a realistic spin. If you have always wanted to sell your famous egg rolls, salad dressing, caramel nut torte or whatever to the public I would recommend reading this book first.
Sunday, September 30, 2007
Yogurt is really pudding
"Yogurt with high fructose corn syrup is more like pudding (a treat) than a healthy food," stated Eliz Greene of Embracing Your Heart, whose seminar "Women's Heart Health" I attended last week. After hearing this, I had what Oprah would call an Aha! Moment. If yogurt is considered a treat, the majority of the food I eat is really a treat. I decided it's time I got serious about losing weight; to do this I need to change what I eat.
Background:
I have wanted to lose ten pounds for as long as I can remember. For the past ten years I have gained a couple of pounds each year; resulting in many of the classic clothes I purchased to wear year after year no longer fitting. I have never tried dieting; I didn't think I had to. I exercise religiously three times a week; pack what I considered to be a healthy lunch; a granola bar, yogurt, and a piece of fruit. For dinner I limited my red meat and usually ate sensibly. Following these steps I thought eventually the weight would just come off.
What am I doing wrong?
I don't eat enough for lunch. To compensate each afternoon around 3:00 I hit the snack machine or raid the candy bowl at work. In addition, in order to have enough energy to workout I almost always grab several handfuls of chips or a couple of cookies as I head out the door on my way to the gym. During summers I entertain frequently; consuming fattening appetizers, desserts and high calorie drinks.
What changes am I going to make?
After hearing that yogurt is a treat, I finally realized I need to be honest with myself about my food choices. First and foremost, I need to eat a more substantial lunch. Since I am not fond of sandwiches, I am going to add a large salad or soup to my lunch. I will substitute plain yogurt with real fruit instead of the yogurt pudding I've been eating and raisins mixed with nuts for the granola bars (which is really a glorified candy bar). A piece of fruit will be my mid-afternoon snack. Sweets and chips will be eliminated from my diet. When entertaining, I will attempt to include healthy appetizers and low calorie drinks.
What is my time frame?
I plan on immediately making these small food adjustments permanent lifestyle changes. I will keep you informed of my results.
Background:
I have wanted to lose ten pounds for as long as I can remember. For the past ten years I have gained a couple of pounds each year; resulting in many of the classic clothes I purchased to wear year after year no longer fitting. I have never tried dieting; I didn't think I had to. I exercise religiously three times a week; pack what I considered to be a healthy lunch; a granola bar, yogurt, and a piece of fruit. For dinner I limited my red meat and usually ate sensibly. Following these steps I thought eventually the weight would just come off.
What am I doing wrong?
I don't eat enough for lunch. To compensate each afternoon around 3:00 I hit the snack machine or raid the candy bowl at work. In addition, in order to have enough energy to workout I almost always grab several handfuls of chips or a couple of cookies as I head out the door on my way to the gym. During summers I entertain frequently; consuming fattening appetizers, desserts and high calorie drinks.
What changes am I going to make?
After hearing that yogurt is a treat, I finally realized I need to be honest with myself about my food choices. First and foremost, I need to eat a more substantial lunch. Since I am not fond of sandwiches, I am going to add a large salad or soup to my lunch. I will substitute plain yogurt with real fruit instead of the yogurt pudding I've been eating and raisins mixed with nuts for the granola bars (which is really a glorified candy bar). A piece of fruit will be my mid-afternoon snack. Sweets and chips will be eliminated from my diet. When entertaining, I will attempt to include healthy appetizers and low calorie drinks.
What is my time frame?
I plan on immediately making these small food adjustments permanent lifestyle changes. I will keep you informed of my results.
Saturday, September 15, 2007
Could it be Jack Welch's 20-70-10 model?
My company is hiring a new in-house HR Consultant. She is a personal friend of the owners and rumored to be good. In the past, our company's HR duties were split amongst the employees in my department. None of us are degreed in HR and most feel these activities to be time consuming and a burden to our department. So why does the anticipation of this new hire bother us.
Could it be Jack Welch's 20-70-10 model? In case you didn't know, Jack Welch used to be the Chairman and CEO of General Electric. During his tenure he developed a model which determined that 10% of his workforce was slackers, 70% were average, and 20% were top performers. Each year he would fire the bottom 10%, leave the 20% alone to do their thing and groom the middle 70% to become the next top performers. Over time his employees would shift into new categories. After the bottom workers were let go and the top performers left the company, a new group would move into the bottom 10% and the top 20%.
So that explains it, as this new hire with a stellar reputation joins our company she may just knock some of us out of the top 20% or worse yet push some of us into the bottom 10%.
Could it be Jack Welch's 20-70-10 model? In case you didn't know, Jack Welch used to be the Chairman and CEO of General Electric. During his tenure he developed a model which determined that 10% of his workforce was slackers, 70% were average, and 20% were top performers. Each year he would fire the bottom 10%, leave the 20% alone to do their thing and groom the middle 70% to become the next top performers. Over time his employees would shift into new categories. After the bottom workers were let go and the top performers left the company, a new group would move into the bottom 10% and the top 20%.
So that explains it, as this new hire with a stellar reputation joins our company she may just knock some of us out of the top 20% or worse yet push some of us into the bottom 10%.
Tuesday, April 17, 2007
A Basic Understanding of the Income Tax Code Needed
Since I work as an accountant, I am frequently asked income tax questions by friends and family. Here is the latest from a college student:
"Ms. Colere, could you please review my 2006 federal income tax return, my tax preparer calculated that I owe money this year. I don't understand how this could possibly be correct. Last year, I got a refund. I didn’t work any more hours this year or change my tax withholdings." Upon further review, I discovered this particular college student owned a taxable mutual fund account in her name that had incurred a large capital gain distribution in 2006. The tax-withholdings withheld from her part-time job earnings did not cover her tax bill once she included the capital gain distribution into the tax calculation resulting in money owed.
This scenario led to my conclusion that as part of a financial literacy program everyone should be able to complete a 1040EZ tax return and have a basic understanding of the Federal Income Tax code. This is important even if you hire an accountant to do your taxes. It could save money on taxes; not to mention interest and penalties for unreported income or unallowable deductions, lead to better investment decisions and save money on tax preparation fees.
“The hardest thing in the world to understand is the income tax.” — Albert Einstein, physicist
"Ms. Colere, could you please review my 2006 federal income tax return, my tax preparer calculated that I owe money this year. I don't understand how this could possibly be correct. Last year, I got a refund. I didn’t work any more hours this year or change my tax withholdings." Upon further review, I discovered this particular college student owned a taxable mutual fund account in her name that had incurred a large capital gain distribution in 2006. The tax-withholdings withheld from her part-time job earnings did not cover her tax bill once she included the capital gain distribution into the tax calculation resulting in money owed.
This scenario led to my conclusion that as part of a financial literacy program everyone should be able to complete a 1040EZ tax return and have a basic understanding of the Federal Income Tax code. This is important even if you hire an accountant to do your taxes. It could save money on taxes; not to mention interest and penalties for unreported income or unallowable deductions, lead to better investment decisions and save money on tax preparation fees.
“The hardest thing in the world to understand is the income tax.” — Albert Einstein, physicist
Thursday, April 12, 2007
"I don't think you want to do that!"
My ultimate dream has always been to someday teach financial literacy in my community. I would keep my options open to whom my students would be: children, young adults, single moms, widows, senior citizens or even non- financial savvy entrepreneurs.
Occasionally when the opportunity arises, I will share this dream with someone I meet. I had just such an occasion this week. I met a woman who is very active volunteering in Milwaukee's inner city. The program she is involved with provides hot showers and meals for families in need. Seeing this as a perfect opportunity to discuss my dream; I asked if her volunteer organization taught financial literacy and expressed my desire to some day do so. To this she stated that the people she works with have much more pressing needs than financial planning and are not ready for a financial literacy program. I continued pressing my issue to which she replied, “I don't think you'd want to do that.” She expounded by saying these people have a different value system. She has been in homes where families will have two big screen televisions but no food to feed their children. They are not ready to hear my message and my time would be wasted.
How timely that last night I read the following in "Black Enterprise" magazine: In 2004, black buying power rose to $723 billion, up from $585 billion in 2000, according to The Multicultural Economy of 2004, a report by The Selig Center for Economic Growth. The report defines buying power as the total personal income available to individuals after taxes for spending on goods and services. The report also found that blacks spend more money on telephone services, shoes, personal care products, and children's apparel and less on healthcare, reading materials entertainment, and household textiles, compared to other groups. Although buying power is increasing in the African American community, experts say consumers should not mistake that statistic for a sign that the community is becoming wealthier. In fact, to the extent that African Americans spend more of their increased income rather than save and invest it, in many cases their wealth might even decline in light of the increase in their income.
I have never responded well to someone telling me, “You don’t want to, can’t or shouldn’t do something I have already set my mind on doing. Obviously, there is a great need for my services and I will not be deterred.
Occasionally when the opportunity arises, I will share this dream with someone I meet. I had just such an occasion this week. I met a woman who is very active volunteering in Milwaukee's inner city. The program she is involved with provides hot showers and meals for families in need. Seeing this as a perfect opportunity to discuss my dream; I asked if her volunteer organization taught financial literacy and expressed my desire to some day do so. To this she stated that the people she works with have much more pressing needs than financial planning and are not ready for a financial literacy program. I continued pressing my issue to which she replied, “I don't think you'd want to do that.” She expounded by saying these people have a different value system. She has been in homes where families will have two big screen televisions but no food to feed their children. They are not ready to hear my message and my time would be wasted.
How timely that last night I read the following in "Black Enterprise" magazine: In 2004, black buying power rose to $723 billion, up from $585 billion in 2000, according to The Multicultural Economy of 2004, a report by The Selig Center for Economic Growth. The report defines buying power as the total personal income available to individuals after taxes for spending on goods and services. The report also found that blacks spend more money on telephone services, shoes, personal care products, and children's apparel and less on healthcare, reading materials entertainment, and household textiles, compared to other groups. Although buying power is increasing in the African American community, experts say consumers should not mistake that statistic for a sign that the community is becoming wealthier. In fact, to the extent that African Americans spend more of their increased income rather than save and invest it, in many cases their wealth might even decline in light of the increase in their income.
I have never responded well to someone telling me, “You don’t want to, can’t or shouldn’t do something I have already set my mind on doing. Obviously, there is a great need for my services and I will not be deterred.
Monday, April 09, 2007
One more thing to do before it is too late
Having recently experienced a death in my husband’s family, we have spent several hours over the past few days looking through boxes of old photographs. How saddened we were to discover that many of the very old photographs were thrown haphazardly into a box and were not labeled. How unfortunate. There are far too many pictures that we will never be certain who they are of or what the occasion was.
Take the time now to sort through your family photos; you never know when it will be too late.
Take the time now to sort through your family photos; you never know when it will be too late.
Sunday, March 18, 2007
Tips for an infrequent baker
I am an infrequent baker. This is not because I don't like baking. I happen to love baking. It's because baking is time consuming and one thing I don't have a lot of is time. But more importantly and perhaps more truthfully, it is because I like to eat baked goods. If I come home from work and am faced with the option of making myself salad or eating a plate of cookies I will more often than not eat the cookies. So, I don’t give myself this option and do not bake.
When I do have to make the occasional dish to pass I am usually faced with a few ingredient obstacles. Here are some tips for an infrequent baker like myself:
How to soften hardened brown sugar: If you notice signs of hardening but the sugar is still somewhat pliable, place an apple slice in the bag and leave it for a couple of days. If it has already reached the concrete state place the brown sugar in a glass dish, cover with a small piece of waxed paper, then top with a slice of bread to provide a bit of moisture, then loosely cover the plate or bowl with plastic wrap and microwave until softened about 30 seconds.
How to test baking powder for freshness: Baking powder loses its ability to leaven with time; if it's older than 6 months to a year you will need to test it for freshness: Mix 2 teaspoons of baking powder with 1 cup hot water, if there is an immediate reaction of fizziness and foaming the baking powder can be used. If the reaction is at all delayed or weak throw it away and buy a new can.
Substitutions I have used in a pinch:
Cream: For one cup use 1/3 cup butter, plus ¾ cup milk.
Sour Cream: Substitute an equal amount of plain yogurt.
What to do with unused evaporated milk: Instead of leaving the unused portion of evaporated milk sit in the refrigerator for weeks eventually to be tossed, freeze the unused portion in an old ice cube tray, thaw and use the cubes as needed.
When I do have to make the occasional dish to pass I am usually faced with a few ingredient obstacles. Here are some tips for an infrequent baker like myself:
How to soften hardened brown sugar: If you notice signs of hardening but the sugar is still somewhat pliable, place an apple slice in the bag and leave it for a couple of days. If it has already reached the concrete state place the brown sugar in a glass dish, cover with a small piece of waxed paper, then top with a slice of bread to provide a bit of moisture, then loosely cover the plate or bowl with plastic wrap and microwave until softened about 30 seconds.
How to test baking powder for freshness: Baking powder loses its ability to leaven with time; if it's older than 6 months to a year you will need to test it for freshness: Mix 2 teaspoons of baking powder with 1 cup hot water, if there is an immediate reaction of fizziness and foaming the baking powder can be used. If the reaction is at all delayed or weak throw it away and buy a new can.
Substitutions I have used in a pinch:
Cream: For one cup use 1/3 cup butter, plus ¾ cup milk.
Sour Cream: Substitute an equal amount of plain yogurt.
What to do with unused evaporated milk: Instead of leaving the unused portion of evaporated milk sit in the refrigerator for weeks eventually to be tossed, freeze the unused portion in an old ice cube tray, thaw and use the cubes as needed.
Friday, March 09, 2007
What's wrong with this picture?
One of my co-workers firmly believes that it is his job as a parent to do whatever he can to give his son a good head start on life. To achieve this he has paid his son's college tuition, paid his rent when he moved out to be closer to campus, bought him furniture and a car. He made sure that he had health insurance and paid his car insurance. He achieved all of this despite both he and his wife were laid off from their jobs. He did whatever he had to do, including not rolling over his 401(k), so that he could pay all the bills. Even now, almost two years after his son has graduated and has a full time job, he continues to pay his car insurance.
On a recent visit home this man's son said, "Gee Dad, why don’t you buy yourself some new furniture yours is really looking shabby and by the way next week I'm going on vacation to Florida with my girlfriend.”
I firmly believe that you should not jeopardize your own retirement and financial future to subsidize your children’s college education. There are many resources available to assist your children with their college expenses, but relatively few to assist you with expenses if you run short each month after retirement. How will these same children respond when they hear their elderly parents are experiencing financial difficulties? I imagine they will say, “Gee Mom and Dad you should have saved more.”
On a recent visit home this man's son said, "Gee Dad, why don’t you buy yourself some new furniture yours is really looking shabby and by the way next week I'm going on vacation to Florida with my girlfriend.”
I firmly believe that you should not jeopardize your own retirement and financial future to subsidize your children’s college education. There are many resources available to assist your children with their college expenses, but relatively few to assist you with expenses if you run short each month after retirement. How will these same children respond when they hear their elderly parents are experiencing financial difficulties? I imagine they will say, “Gee Mom and Dad you should have saved more.”
Sunday, January 07, 2007
Take advantage of 401(k) match
The lifetime pension (a retired employee receives a set amount of money every month for the rest of his or her life) is no longer a benefit for the majority of American workers. Of the five organizations I have worked for since 1985, not one of them offered a company lifetime pension plan. Four out of the five did offer a company sponsored 401(k) plan. Most of the plans included a 401(k) match in which the company matched a portion of my contribution.
It continues to amaze me how many employees do not contribute at all or enough to take full advantage of the 401(k) match. People, this is leaving free money on the table.
Last week, I asked a co-worker, who was complaining about his lack of retirement savings, if he contributed to our 401(k) plan. He did not; our company matches half of our contributions up to a measly 2 percent. He is so angry about such a small match he refuses to contribute to the plan. He learned years ago that he had to take care of himself, nobody else, especially his employer, was going to do it for him. I agree a 1% match isn’t much, but it’s something and it’s free. I suggested in 2007, he take care of himself by taking advantage of our company match.
401(k) contributions are deducted with pretax dollars. This means your contribution reduces taxable income, cuts your tax deduction which makes saving a little easier. For example, let’s say your weekly gross pay is 1,000 and you pay 30% in federal and state taxes. If you put 2% of your pay in a 401(k), you'd contribute $20 a week. But, your net paycheck would be reduced by only $14 a week.
Bottom line: Start taking care of yourself in 2007; make a contribution to your company's 401(k) plan that takes full advantage of your company match.
It continues to amaze me how many employees do not contribute at all or enough to take full advantage of the 401(k) match. People, this is leaving free money on the table.
Last week, I asked a co-worker, who was complaining about his lack of retirement savings, if he contributed to our 401(k) plan. He did not; our company matches half of our contributions up to a measly 2 percent. He is so angry about such a small match he refuses to contribute to the plan. He learned years ago that he had to take care of himself, nobody else, especially his employer, was going to do it for him. I agree a 1% match isn’t much, but it’s something and it’s free. I suggested in 2007, he take care of himself by taking advantage of our company match.
401(k) contributions are deducted with pretax dollars. This means your contribution reduces taxable income, cuts your tax deduction which makes saving a little easier. For example, let’s say your weekly gross pay is 1,000 and you pay 30% in federal and state taxes. If you put 2% of your pay in a 401(k), you'd contribute $20 a week. But, your net paycheck would be reduced by only $14 a week.
Bottom line: Start taking care of yourself in 2007; make a contribution to your company's 401(k) plan that takes full advantage of your company match.
Wednesday, January 03, 2007
Recent Loss
I recently lost a friend and colleague to breast cancer. I clearly remember the last time I saw Jeanie. She had recently finished her first bout with chemo and looked radiant in her bright red suit. Her attitude was optimistic and determined. She had been such a courageous fighter; I was sure she had beaten her cancer and was destined to be a survivor for many years to come. That was two years ago.
Experts claim that breast cancer treatment is most effective when detected early. To do this we must perform self examinations, schedule annual clinical breast exams and receive mammograms one to two years after the age of 40.
As we start 2007, I would like to encourage everyone to call their doctor’s office and schedule their annual breast cancer screening. And while you’re at it, if you are over 50, schedule your colonoscopy. I know these procedures are unpleasant, taking time off from work is a hassle, etc, etc. But don’t schedule your appointments because I told you to; schedule them because Jeannie would have wanted you to.
Experts claim that breast cancer treatment is most effective when detected early. To do this we must perform self examinations, schedule annual clinical breast exams and receive mammograms one to two years after the age of 40.
As we start 2007, I would like to encourage everyone to call their doctor’s office and schedule their annual breast cancer screening. And while you’re at it, if you are over 50, schedule your colonoscopy. I know these procedures are unpleasant, taking time off from work is a hassle, etc, etc. But don’t schedule your appointments because I told you to; schedule them because Jeannie would have wanted you to.
Sunday, December 10, 2006
A Fashion Faux Pas
A few years back I bought a smashing black pantsuit to wear to Mr. Colere's Holiday Party. I liked it so much that I wore it to this event three years in a row. As this year’s party approached, I felt I couldn't wear the same outfit once again. I dreaded shopping for myself during the holiday season. I foresaw going into store after store trying on overprized sequined sweaters that didn’t fit quite right. Fortunately, the problem was solved by Mr. Colere. Without my prodding, he decided we were not attending his party this year. A decision that was fine with me.
Many of the women I know would never be caught wearing the same dress to two events that included the same circle of guests. I think it may be prudent to take a lesson from the French, the connoisseurs of fashion; buy one outfit in which you look fabulous and wear it everywhere.
Many of the women I know would never be caught wearing the same dress to two events that included the same circle of guests. I think it may be prudent to take a lesson from the French, the connoisseurs of fashion; buy one outfit in which you look fabulous and wear it everywhere.
Sunday, December 03, 2006
Books on saving money: Are they a waste of time?
I used to be a voracious reader of books and articles providing tips on saving money. I recently came to the conclusion that once I had the basics down; avoiding the daily latte, packing a bag lunch, increasing my deductibles, etc. I just wasn’t reading anything new that was practical. Mr. Colere was beginning to find weird packages of strange substances such as herbs packed in frozen chicken broth covered in freezer burn in our freezer and tossed them out. I was reading articles with bizarre advice such as: take a giant popcorn tub out of the trash when you are at a movie theater and request a free refill, take a shower while wearing your dirty socks to save on laundry or how about flush your toilet every 5th time to reduce your water bill. I have since gone on money saving book hiatus.
My conclusions have been confirmed recently by one of my favorite blog writers “The Nonfiction Readers Anonymous”. Check out her posting on Saving Money with the Tightwad Twins at http://nonanon.com/blog/page/2/. I also enjoyed her post "Would someone please right a decent simplicity book?” Please? at http://nonanon.com/blog/2006/09/01/would-someone-please-write-a-decent-simplicity-book-please/.
Unfortunately when it comes to saving money the best advice, similar to dieting, involves restraint; the only way to really save money is to live beneath our means. How do we do that? I love the old Depression era quote:
My conclusions have been confirmed recently by one of my favorite blog writers “The Nonfiction Readers Anonymous”. Check out her posting on Saving Money with the Tightwad Twins at http://nonanon.com/blog/page/2/. I also enjoyed her post "Would someone please right a decent simplicity book?” Please? at http://nonanon.com/blog/2006/09/01/would-someone-please-write-a-decent-simplicity-book-please/.
Unfortunately when it comes to saving money the best advice, similar to dieting, involves restraint; the only way to really save money is to live beneath our means. How do we do that? I love the old Depression era quote:
Use it up,
Wear it out,
Make it do,
Or do without.
I remember a few years back a co-worker upon returning from an after Christmas shopping sale relayed how much money she saved on her new purchases. Another co-worker exclaimed, "That’s great, but I went to the same sale and saved more money than you. I didn’t buy anything." Enough said.
Thursday, November 23, 2006
Medical Identity Theft
Have you heard the latest? According to the article, “Your Medical Records, Stolen!” by Max Alexander in the November 2006 issue of Readers Digest our medical identities are now at risk.
Thieves are stealing our name and insurance information to obtain drugs and expensive medical treatments. But as the article points out, the money isn’t the half of it. When someone steals your name to receive health care, his medical history becomes part of the record – and setting the record straight can be extremely difficult. In a medical emergency having someone else’s medical history commingled with your own could be disastrous.
The best advice for prevention is to never ever give your social security number out to anyone, including a doctor, at a doctor’s office or medical center. It only takes one dishonest person. It used to be a common practice for insurance companies to use your social security number as your insurance ID which was printed on your insurance card. Most insurance companies have eliminated this practice. If your insurance company has not, call and request a new ID number. In the mean time only carry your insurance card with you when visiting a doctor for the first time. Also, read the explanation of benefits forms (EOB's) you receive from your insurance companies. I know from personal experience administering my company's medical insurance, many recipients file or throw their statements away without looking at them. They are a detailed statement listing the medical services your insurance company is or is not paying on your behalf. A couple of phone calls concerning a questionable EOB early in the fraud chain may eliminate a huge problem down the road.
Thieves are stealing our name and insurance information to obtain drugs and expensive medical treatments. But as the article points out, the money isn’t the half of it. When someone steals your name to receive health care, his medical history becomes part of the record – and setting the record straight can be extremely difficult. In a medical emergency having someone else’s medical history commingled with your own could be disastrous.
The best advice for prevention is to never ever give your social security number out to anyone, including a doctor, at a doctor’s office or medical center. It only takes one dishonest person. It used to be a common practice for insurance companies to use your social security number as your insurance ID which was printed on your insurance card. Most insurance companies have eliminated this practice. If your insurance company has not, call and request a new ID number. In the mean time only carry your insurance card with you when visiting a doctor for the first time. Also, read the explanation of benefits forms (EOB's) you receive from your insurance companies. I know from personal experience administering my company's medical insurance, many recipients file or throw their statements away without looking at them. They are a detailed statement listing the medical services your insurance company is or is not paying on your behalf. A couple of phone calls concerning a questionable EOB early in the fraud chain may eliminate a huge problem down the road.
Monday, November 13, 2006
Identify theft precautions
Experts have indicated that 2,000 identity thefts occur in the U.S each week. With statistics like isn't it time to take precautions? Here are a couple of prevention tips:
-Don't print your entire name on your checks. For example, instead of Claire C. Colere, print C. Colere. List your business address rather than your home address.
-When paying bills by check; print only the last four digits of your account number on the check. Better yet don’t carry a checkbook use cash or credit card. Pay your credit card statement online.
- Make photo copies of all your credit cards front and back. Call the 800# immediately if you have a problem.
-If your purse is stolen; report it to the police in the jurisdiction where the purse was lost.
-Don't print your entire name on your checks. For example, instead of Claire C. Colere, print C. Colere. List your business address rather than your home address.
-When paying bills by check; print only the last four digits of your account number on the check. Better yet don’t carry a checkbook use cash or credit card. Pay your credit card statement online.
- Make photo copies of all your credit cards front and back. Call the 800# immediately if you have a problem.
-If your purse is stolen; report it to the police in the jurisdiction where the purse was lost.
Sunday, November 12, 2006
Tips for Getting Motivated
Getting and staying motivated at work is a constant struggle for me. My desk is overflowing with piles of work. When co-workers don't know what to do with something it's usually strategically placed in my in-box. I spend many days not knowing where to begin or working on several different projects simultaneously not finishing any of them. Recently, I stumbled across the following motivational tips taken from the "Get Motivated Workbook" by a colleague who attended a Get Motivated Workshop:
Visualize a clutter-free environment; focus on the desired outcome, not the effort.
Get started, what's bothering you the most? Start somewhere.
Try to remove the small irritants that hinder your achievement. Write it down -- identify your main time wasters, and create an ideal time schedule.
Do daily planning. Take the time each night to manage one of your most precious resources: the next 24 hours.
Avoid distractions - work on only one item at a time.
Clear the clutter-we simply have too much stuff.
Reward yourself-do something nice for yourself after you have completed a specific task. Hang a carrot out there.
Maintain Balance - Our lives consist of Seven Vital Areas: Health, Family, Financial, Intellectual, Social, Professional, and Spiritual. Commit to spend a sufficient quantity and quality of time in each area and then your life will be balanced.
By recapturing a wasted hour here and there, you can make great increases in your daily productivity. Some top time wasters are: Shifting priorities, the telephone, losing things, lack of direction/objectives, attempting too much, ineffective delegating, and procrastination/lack of self-discipline. Does any of this sound familiar?
I am guilty of almost all of the time wasters. I have taken time management seminars in the past and usually come away thinking ~ organization and time management blah blah blah... it's not going to work for me. I think it's time I make an effort to really try. I can't afford not to. Can you?
Visualize a clutter-free environment; focus on the desired outcome, not the effort.
Get started, what's bothering you the most? Start somewhere.
Try to remove the small irritants that hinder your achievement. Write it down -- identify your main time wasters, and create an ideal time schedule.
Do daily planning. Take the time each night to manage one of your most precious resources: the next 24 hours.
Avoid distractions - work on only one item at a time.
Clear the clutter-we simply have too much stuff.
Reward yourself-do something nice for yourself after you have completed a specific task. Hang a carrot out there.
Maintain Balance - Our lives consist of Seven Vital Areas: Health, Family, Financial, Intellectual, Social, Professional, and Spiritual. Commit to spend a sufficient quantity and quality of time in each area and then your life will be balanced.
By recapturing a wasted hour here and there, you can make great increases in your daily productivity. Some top time wasters are: Shifting priorities, the telephone, losing things, lack of direction/objectives, attempting too much, ineffective delegating, and procrastination/lack of self-discipline. Does any of this sound familiar?
I am guilty of almost all of the time wasters. I have taken time management seminars in the past and usually come away thinking ~ organization and time management blah blah blah... it's not going to work for me. I think it's time I make an effort to really try. I can't afford not to. Can you?
Tuesday, November 07, 2006
Dental Insurance: Is it really a benefit?
Five years ago my employer began offering employees a company sponsored dental plan. The plan was instituted due to high demand from employees whose children would soon be in orthodontia.
The plan requires the employee to pay the entire premium using pre-tax dollars. Benefits kick in on a sliding scale. The plan pays benefits at a higher percentage each year, hitting maximum percentages the third year. This prevents members from enrolling, immediately having all their dental work completed, and canceling.
About half of my co-workers are enrolled in the plan. Lately, many of the single and married employees without dependants are doing the math; comparing actual cash output to benefits received. They are finding that even with high usage years (cavities and a crown) the costs are outweighing the benefits over the long haul. Instead they are opting out of the dental plan and setting money aside in a flexible spending account to cover dental expenses. The plan is cost effective if the employee has a couple of dependents, especially if they need braces.
The same could probably be said for some employer sponsored vision plans; the costs outweigh the benefits if you are paying the entire premium.
Bottom line: Not all benefit plans are cost effective. Do the math and consider your options before automatically enrolling in benefit plans
The plan requires the employee to pay the entire premium using pre-tax dollars. Benefits kick in on a sliding scale. The plan pays benefits at a higher percentage each year, hitting maximum percentages the third year. This prevents members from enrolling, immediately having all their dental work completed, and canceling.
About half of my co-workers are enrolled in the plan. Lately, many of the single and married employees without dependants are doing the math; comparing actual cash output to benefits received. They are finding that even with high usage years (cavities and a crown) the costs are outweighing the benefits over the long haul. Instead they are opting out of the dental plan and setting money aside in a flexible spending account to cover dental expenses. The plan is cost effective if the employee has a couple of dependents, especially if they need braces.
The same could probably be said for some employer sponsored vision plans; the costs outweigh the benefits if you are paying the entire premium.
Bottom line: Not all benefit plans are cost effective. Do the math and consider your options before automatically enrolling in benefit plans
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