Girls Just Wanna Have Funds » Recession

Left Behind in a Layoff: Getting Ready for What’s Next

Ginger — Tue, 23 Dec 2008 04:37:29 +0000

This is a guest post by Rebecca Brown via DivineCaroline.com

The pink slips have been handed out, the severance checks cashed, and the farewell drinks consumed. Everyone has offered their condolences to those who were let go, yet you’re still here, reeling in your cubicle, wondering if maybe you’re the one who really deserves the well wishes, sympathetic words, and free rounds of strong drinks.

As a four-time layoff survivor (and two-time victim), I’ve experienced all the panic, depression, fear, and anxiety that comes with staying on the job when others have been let go. There are some things you can do to ease the stress; they’re fairly common sense courses of action, but when you’re in the grips of anxiety and worried that your next paycheck may be your last, sometimes it’s hard to think clearly. But if there’s one thing I’ve learned after surviving a few layoffs, it’s that more are usually not far behind, and being ready when the next ax falls is crucial—just in case.

1. Get Up-to-Date on Your Doctor Appointments
You can elect to continue your healthcare coverage through COBRA, but the sticker shock of COBRA prices alone may kill you long before any health-related issue. Thanks to COBRA’s high cost, many people opt to go with an emergency-only plan when they’re unemployed, which depending on the plan, means that procedures like teeth cleaning and mole removal may be out. Scheduling your annual doctor visits, updating prescriptions, and getting lab work done while you’re still covered gives you roughly a year before you have to make all the rounds again—hopefully plenty of time to find a new job and new healthcare coverage.

If you’re certain that unemployment is looming around the corner, it may be a smart time to drain your flexible spending account. Most plans allow you to use the money for things like contact lenses, braces, and over-the-counter medicines, which includes cold and allergy medicines and aspirin (which you’ll undoubtedly need after a layoff for either stress-related headaches or layoff party hangovers). Take advantage while you can—if you don’t use it, you lose it, and that might cause a queasiness that no flex plan medicine can cure.

2. Retrieve Personal Files and Contacts from Your Work Computer
Layoffs or no layoffs, it never hurts to do a periodic backup of all the unfinished screenplays, random party pics, Shins downloads, tax papers, and other documents that have found their way onto your work hard drive. If you’re fortunate enough to work for a company who will give you limited access to your computer and some time to collect your things after the unsavory notice of your forced termination, good for you. But the time allotted to you may be rushed, or simply not enough to get everything you need. Many employers don’t give employees the luxury of access back onto your computer, and relying on someone else to retrieve your documents once you’re gone can prove challenging. Email yourself important files, burn them onto CD, and make sure to get all your professional and personal contacts out of your work email. It’s also smart to periodically clear your cache—just to avoid the embarrassment of having managers and colleagues learn about your dailypuppy.com or Perez Hilton addiction.

3. Create a Layoff-Ready Budget
There’s nothing like the pending doom of potential unemployment to help you reevaluate your savings plan. Now’s the time to batten down the hatches on your spending to ready yourself for any cutbacks you’ll need to make in the event of another round of company cuts. Take some time to write down every single expense you incur in a given month, being completely honest with yourself about how much you spend. Once it’s all on paper, you’ll probably find some easy places you could spend less money, like bringing your lunch to work a few days a week instead of eating out, or opting for a movie on Friday nights instead of the happy hour that turns into five delirious hours of overpriced drinks and appetizers.

This is also an ideal time to pay a visit to your financial advisor if you have one, and to potentially get an advisor (if you can afford it) if you don’t have one. He or she can help you assess your current financial strategy and whether or not you should make any changes, and can also help put together a plan for accessing more money should a layoff occur.

4. Update Your Resume and Start Networking
A previous manager once told me that she always updated her resume within the first week of starting a new job. Her rule—always be ready for anything. Most of us aren’t that industrious, though, so if you haven’t updated your resume with your latest position—or if you haven’t revisited your resume in a while—now is clearly the time to do it. Once you’re done, give it a test run and send it to friends, family, and perhaps a few trusted business contacts to see if they get a good sense of what you do, what you’re looking for, and what you’ve achieved after reading it.

Now is also a good time to start networking like crazy. Beef up your LinkedIn profile; change your contact settings to include “career opportunities” and “getting back in touch” as things you’re interested in, and perhaps ask a manager or colleague to write a recommendation for you. Make it a goal to reach out to a certain number of friends, old coworkers, managers, clients, or other business associates each day. Perhaps contact some recruiters and begin perusing job postings online. You ultimately may not want or need to find another job, but it never hurts to get the momentum swinging in your favor sooner rather than later in the event that you do.

5. Be Good to Yourself
The phrase “survival guilt” is often associated with traumatic events like airplane crashes, earthquakes, and twenty-car pileups. But believe it or not, survival guilt is a very real phenomenon for those who remain after a layoff, and the range of emotions people experience isn’t that different from other traumatic events. Remaining employees often feel guilty for not being laid off, sadness for the coworkers and friends they’ll miss, and sometimes even anger for the increased workload they may experience now that their team has been reduced.

Maintaining a healthy work-life balance is one of the best ways to cope with survivor guilt, which sounds counterintuitive to logic given that most people feel compelled to increase their work hours in an effort to secure their jobs in the event of another cut. But arriving and leaving at a decent hour each day allows more time to enjoy the things that really nourish our souls and ultimately help us perform at a higher level and make us better, more productive employees—dinner with family or friends, an invigorating workout, going to a concert, pursuing a hobby or taking a class, or just relaxing with a book and a glass of wine.

Besides, working until midnight every night will eventually cause burnout, and ultimately doesn’t guarantee that you won’t be part of a layoff anyway since most cutbacks are about decreasing expenditure, not about performance. As the Donald says, “It’s not personal, it’s business.” You can bet your last dollar from your last paycheck that your employer will exercise that logic when adding names to the layoff list, so you should keep it in mind too.

Is My Money Safe?

Ginger — Mon, 22 Dec 2008 04:01:21 +0000

This is a guest post by wowOwow, via Divine Caroline.com

The dramatic events on Wall Street are making us on Main Street nervous about the safety of our money. Is my savings account safe? What about my investment accounts? What about my IRA account? Who administers my 401-K? And what about my annuity with AIG? Or my life-insurance plan with one of the other insurance companies?

In other words, “Is my money safe?”

Consumers need to take control and find out if their money is safe. Here are a few tips on what you can do in these tumultuous financial times to educate yourself:

Savings
Check to see whether your bank or savings association is FIDC-insured by calling 877-275-3342 or using the agency’s online Bank Find tool. Small businesses, in particular, which often keep large deposits in banks, should check to see if their deposits are above the insurance limits.

The Federal Deposit Insurance Corporation (FDIC), an independent agency of the U.S. government that protects depositors against the loss of their insured deposits if an FDIC-insured bank or savings association fails, offers information on your insured deposits. You can also read the FDIC insurance basics here.

If your money at one FDIC-insured bank or savings association totals $250,000 or less, your deposits are fully insured. Someone can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements.

If your deposits exceed the insurance limits, spread your money around to a few different banks. You may also want to open accounts in the names of different family members.

You can use the FDIC’s Certificate of Deposit Account Registry Service, or CDARS, which splits deposits into chunks under the $250,000 insurance limit and funnels the money out to 2,000 banks in the network. Only banks considered “well capitalized” by the FDIC are included.

Investments
Both the bankrupt Lehman Brothers and the just-acquired Merrill Lynch are brokerage firms. What happens to your money when your investment house is in trouble? Visit the Web site of the Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms. The SIPC has an Investor’s Guide to Brokerage Firm Liquidations: What You Need to Know … and Do.

Check if your broker is an SIPC member. Nearly all brokerages are but if yours isn’t, consider moving to a more-established firm. Make sure your advisers are working with SIPC members, too.

Lehman Brothers participates in the SIPC. The SIPC’s Web site says it protects “the cash and securities—such as stocks and bonds—held by a customer at a financially troubled brokerage firm.”

Insurance
Is my insurance money safe? What about my annuity and life-insurance policy if my insurance company gets in trouble? Insurance companies are insured by the individual state where the policy was written, so there are fifty different answers to this question. Every state now offers at least $100,000 in cash for annuities and $300,000 in death benefits. In the event a consumer has a larger policy than the state guarantees, they become a creditor for the difference. The National Conference of Insurance Guaranty Funds has a Web site with information on these rules. You can also search “name of your state insurance guaranty.”

Question: Where’s your money? How safe are your assets?

Jingle Mail Revisted: Possible Bank Recourse And Borrower Consequences

Ginger — Fri, 17 Oct 2008 04:51:35 +0000

There’s been heavy talk recently around “walking away from foreclosures” and the devastating effect it’s having on banks and homeowners. Jingle mail occurs when the borrower drops the keys in the mail and sends them back to the bank as final step in walking away from their home due to a rising mortgage and hard economic times all around. But one thing we bet you hadn’t considered is that depending on the state, the lender may or may not have recourse or legal ability to seek the balance from you upon foreclosure in the form of a deficiency judgment.

Some states are non-recourse, which means they aren’t able to pursue a deficiency judgment against the borrower, most notable, the homes in California are non-recourse for purchase money mortgages.

Before walking away from your home consider ALL of your options:

Short sale: Call your lender to find out whether or not this is an option for you.
Loan modification: A loan modification can reduce your interest rate thereby changing your monthly payments to reflect one inline with your budget
Loan extension This option allows the bank to place your payments on hold for a period of time and the balance that is unpaid is put towards the end of your loan to be paid in a balloon payment at the end of the term. But this may not be available through all lenders.
Principal write down The bank will refinance your loan down to the current market value, giving homeowners some equity back in their homes and more reason to stay put as most homeowners are disenchanted by the negative equity and perception of their largest investment being worth nothing or very little to them.

The above mentioned options can be pursued through your lender or better yet through housing non profit organizations like NACA and ACORN.

If the above options aren’t available to you for one reason or another you may be thinking about walking away from your home altogether. Before you mail the keys, consider the following consequences:

Payment

You may be on the hook for the balance of what is owed after your home goes into foreclosure depending on your state and it’s laws around lender recourse. The lender may seek a deficiency judgment where you either pay it off or let it charge off on your credit report which leads to severe damage to your credit standing.

Taxes

You may also be taxed on the amount forgiven or the balance owed in either situation. The tax rate can range from 10-35% depending on your income. The IRS treats the discharge of the debt as income or it is listed as “discharge of indebtedness income” on your tax bill. So while losing your home is bad enough, just wait until you get the tax bill.

Now that you have more information, let’s take a look at how the situations are treated depending on whether or not you live in a recourse or non-recourse state. Take note of your state’s laws, the bank’s ability to see a deficiency judgment and, if so, then consider your tax liabilities. The IRS is far more tenacious in its collection of taxes owed so please consider the penalties and consequences of walking away from your home.

The following is a list linking to all the states and their respective laws and information around bank recourse:

Alabama	Alaska	Arizona	Arkansas	California
Colorado	Connecticut	Delaware	Florida	Georgia
Hawaii	Idaho	Illinois	Indiana	Iowa
Kansas	Kentucky	Louisiana	Maine	Maryland
Massachusetts	Michigan	Minnesota	Mississippi	Missouri
Montana	Nebraska	Nevada	New Hampshire	New Jersey
New Mexico	New York	North Carolina	North Dakota	Ohio
Oklahoma	Oregon	Pennsylvania	Rhode Island	South Carolina
South Dakota	Tennessee	Texas	Utah	Vermont
Virginia	Washington	Washington, DC	West Virginia	Wisconsin
Wyoming

If you live in a state that permits recourse then you are liable for the balance owed. If the sale did not yield enough proceeds to cover the balance then you, the borrower must pay the difference which includes the interest that accrues during the process of foreclosure.

For example, if you have a home that is worth $600,000 and you have a $675,000 loan, in a recourse state, the bank has legal standing to go after the borrower for the balance and the IRS will send you a tax bill for the taxes owed on the $75,000 as this is treated as income. The lender is required to send you a 1099 detailing the forgiveness of the debt of which a copy is also forwarded to the IRS.

If your loan is non-recourse then it is secured by the loan collateral. If the sale of your home in foreclosure does not cover the balance on the loan then your lender has no legal standing on which to pursue the remaining or outstanding balance. Therefore if you have a home that is worth $600,000 and you have a $675,000 loan, in a non-recourse state, the bank may not pursue the remaining $75,000.

Keep in mind that you could end up owing capital gains taxes if your loan is non-recourse. You are reading correctly: the bank is selling the house, you are not, still the IRS treats this transaction as if you are selling the home.

Straight talk from the IRS:

Publication 544:

“If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. This is true even if you voluntarily return the property to the lender. … You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized.”

There you have it. Straight from the IRS. Please consider all your options before walking away from a home you worked hard to obtain. Foreclosure can have devastating consequences not only financially but psychologically as well. Please be sure to talk to your lender, CPA and Realtor to gain an understanding of the options available to you.

*Whispers* But if you decide to walk away because it’s just a devalued money pit, that’s alright with me, but you didnt read that here.

Question: Would you consider Jingle Mail if you lived in a non-recourse state?

Recessionista Tip: Plan Weekly Menu Around Supermarket Sales

Ginger — Wed, 15 Oct 2008 05:00:04 +0000

photo credit: rick

I don’t have to tell you that food prices have been on the rise right? I’d be preaching to the choir so rather than go into a long diatribe about my grocery bill, I thought it best to discuss how to plan your menu around weekly supermarket sales.

First, when planning your menus around supermarket sale, you should consider menu planning and keeping your pantry stocked with basic kitchen pantry items. Both save you valuable time and money in this area.

Menu Planning

Menu planning allows you to plan your menu for the week, every two weeks, month or for some ambitious gals I know the season and even the year. This enables you to plan ahead for your grocery list and saves you from multiple trips to the supermarket. This way you shop ahead, prepare the meats perhaps the night before and catch certain recipe items on sale before you’re due to make a certain meal.

Here’s what my old menu looks like:

Shopping list of staple ingredients for a well-stocked kitchen.

Baking
All-purpose flour
Baking powder
Brown sugar
Condensed Milk
Corn meal
Corn starch
Evaporated Milk
Vanilla
White Sugar
Yeast

Herbs & Spices
Black pepper
Chicken bouillon cubes
Cilantro
Cinnamon
Crushed garlic
Garlic powder
Green seasoning (found in the international aisle of grocery store)
Nutmeg
Oregano
Onion powder
Sea salt
Seasoned Chicken Breader by House Autry

Oils, Stocks, Condiments

Mayonaise
Beef stock
Chicken broth
Lemon juice
Olive oil
Red wine
Soy sauce

Tomato sauce
Vegetable oil
Vinegar
White wine
Worcestershire sauce

Miscellaneous
Cream of mushroom/celery/chicken soup (canned)
Pasta
Rice/Couscous

Menu Planning Around Supermarket Sales

Tips:

Plan your menu, preferably for a month or so ahead, this way when you see sale items you can buy them before a meal is due or even switch it out to prepare it early if a perishable item is on sale such as bell peppers.
Check for sales online, then check your menu to see which recipes call for a particular sale item. I recommend keeping your menu on your computer and printing them weekly due to changes you may make due to changing weekly sale items.
Consider adding one pot meals to the mix, as this is another time saver. Here are a few from iVillage.com:

Chicken Provencale
• Cuban Chicken and Yellow Rice
• Emerilized Tuna Casserole
• Louisiana Gumbo
• Pot Roast and Winter Vegetables
• Yummy Vegetarian Pot Pie
• Hearty Minestrone with Pesto
• Greek Chicken with Onions, Oregano, Olives and Feta
• Strata with Goat Cheese, Tomatoes and Herbs
•Tuscan White Beans with Sausage and Sage

When planning your menu, consider the basics, meat + starch + vegetables = Balanced meal

Meats: Chicken, beef, turkey, fish and meatkind or tofu for our vegetarian readers.

Starches: Rice, Potato, Sweet Potato, Pasta, Yams, Dinner Rolls/Bread etc

Vegetables: Lettuce, Spinach, Broccoli, Bell Peppers, Green Beans, Sweet Peas, Squash, Pumpkin etc

Tonight’s Dinner Menu: Southwest Chicken with Potato Salad, Cranberry Sauce and Salad

Looking at this week’s sale circular, I chose Shoppers as they have the best deals hands down in our area. The main items to shop for are chicken, potatoes, sweet peas, salad and eggs since I already have the Southwest Chipotle Spice from Mrs Dash which is a must have staple in our house. Other items like salt, pepper, mayonnaise, mixed veggies and cranberry sauce are staples as well. This is a meal that get’s recycled at least once a week so I buy what I can to last through 2-3 recipes

Here are this week’s ingredients that happened to be in the Shopper’s sale circular:

+

+

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Voila!

Southwest Chipotle Chicken with Potato Salad with Cranberry Sauce with salad on the side:

This is just an example of one meal planned via the supermarket sale, think of how many more meals and snacks you can plan all while saving money.

Question: Are you using supermarket sales to plan your weekly menu? Do you find it useful? If not, tell us why in the comments. What other food saving tips can you share with us?

It’s a Woman Thing: Men Are in Recession, Women Apparently Not

Ginger — Wed, 14 May 2008 21:05:34 +0000

At first glance, I thought women fairing better than men in the recession is because we are naturally more resourceful and flexible in our careers but I was wrong. It seems that the recession is hitting men harder because male dominated jobs such as construction and manufacturing are on the chopping blocks while women continue to do well in stable industries such as education, and health care.

This Yahoo article points out:

From last November through this April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics (BLS). At the same time, American men lost nearly 700,000 jobs. You might even say American men are in recession, and American women are not.

Manufacturing is over 70% male and construction is about 88% male. Meanwhile the growing education and health services sector is 77% female. The government sector, which has remained strong, is 57% female. The securities business, which is filled with high-paying jobs, is likely to be the next sector to get whacked — and more than 60% of its workers are men.

Interesting.

While I’m happy we’re doing well in the recession, many of us are married, attached or related to the men in these articles so this isn’t by any means good news for us. We’re feeling the pinch in areas such as rising gas prices, clothing, groceries while taking are of the home. But, there’s still some good news for us, women are graduating from college at rates higher than men and we fair better because we tend to be in positions where we use our “sensitivity, intuition, and a willingness to collaborate” which is only to our benefit. Men on the other hand tend do better in “the hierarchies, following orders and relying on positional power,” says Andy Hines, a futurist at the Washington (D.C.) consulting firm Social Technologies.

However, while women continue to make gains in increasing salaries, there is still a gap in this area. So while we are landing more jobs than men, we aren’t necessarily being paid better than men. Before you berate me in the comments, I seek equally for the sexes, not female domination, although that would be nice

The article also points out differences in how men and women handle job loss which make it harder for men to get back on track once given the pink slip. As the article notes, to go from a $20-$30/hour union job to working at Walmart can be a huge blow to the ego. I can certainly understand this as men tend to value themselves based on their salaries and ability to “bring home the bacon”.

Read more:

What say you? Does this ring true for any of you? Women, are you experiencing any fears of job loss? Men, do you find that you or your male counterparts are losing more jobs? How are you faring in these hard economic times?

Beneath the Iceberg: The Psychology of the Recession (and a silver lining)

Ginger — Tue, 08 Apr 2008 10:00:53 +0000

(The psychology majors know where this post is headed, for the rest of you check out this picture for the iceberg reference.)

It’s pretty clear that we are now in a recession, and, without going into the doom and gloom of recent job loss and foreclosure statistics, I’d like to discuss what goes on underneath all the talk of the recession.

Fear. This seems to be a pretty common theme in recent talks about the recession around friends, family members, even the media and internet. Negative reactions and mindsets have developed in an environment where we should remain still and adhere to conventional financial wisdom and save more, spend less. But so many are wired to the news outlets which preach mostly doom and gloom which then fuels more fear and concern.

Job Loss and Unemployment

The truth is, many are afraid they will be the next ones on the chopping block. And, unless they have F-U money, with recent lay offs, everyone is concerned on some level or another. Walking into work everyday has become akin to putting their necks on a chopping block and hoping their bosses ill spare them yet another day. For some, this has become unbearable, often wishing they would be the first to go so they won’t have to endure the uncertainty of an impending lay-off or downsizing.

So, while friends may seem ok, some may be concerned about the recession, perhaps more than they let up on the surface. Now is the time to open up dialogue amongst friends and co workers in efforts to support one another and discuss alternative financial plans. You’d be surprised the comradeship that develops once people begin sharing fears and concerns and then discuss how to move past them.

Rising Costs of Gas

I don’t know about the rest of you but that $4.00 a gallon of gas is looking like a real possibility with the $3.37 per gallon I racked up last night. So many are frustrated with the high cost of fuel and even the truck drivers striking in an effort to call attention to their plight.

Weâ€™re talking about independent truck drivers who say prices are out of control. If you’re a diesel truck driver, it’s closer to 4-something a gallon and now you’re paying anywhere from $700 to $1000 to fill up and independent truckers say that’s too much.

People are frustrated every where you turn. Here in DC, many more are turning to carpooling with neighbors and co-workers in an effort to save money on gas, and even the metro looks more attractive even though I really hate taking it into my internship site. I’d rather drive but the fact remains that it’s becoming really expensive to drive into my site and then to class and back home.

I don’t know that I’ve lived through a time where personal finance more important to me than it is right now. While the psychology of the recession has me focused on the fears of many, this has also been a time of reverting back to solid financial wisdom:

Save more by paying yourself first
Spending less than you earn
Seek out ways to increase your bottom line and/or paycheck
Save for retirement now and not later
Keep abreast as to career news and opportunities. Ears to the ground as I like to call it. Keep a fresh copy of your resume handy and network with others about openings within your field

I think it’s safe to say that we have hit the proverbial iceberg, but this is an opportunity for us to understand and change our patterns of consumption and undesirable financial habits. Fears of unemployment and stocks plummeting abound, but personal finance wisdom remains the same. Try to find alternative methods of coping through downsizing, getting part time job and/or paying down debt.

Silver Lining. Keep in mind that the market is cyclical. We have on average experienced recessions every 9-10 years.

January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)

July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)

March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

(Source)
This time around, it came a bit earlier than even I had anticipated, but with the housing market booming the way it did, this was bound to happen. The upside is that we always get through it and hopefully this has gotten most out of the routine of complacency. Times like these often force people to re-evaluate their career paths, often choosing for change instead of complacency.

Times are hard now but saving money, living below your means is key and keeping your options open are key. That’s it! Even if you lose your job tomorrow, if you’ve been saving wisely then you have a cushion to get you through the next few months or perhaps the rest of the year. If you recently lost your job, look at this as a reason to evaluate your career path, perhaps this is the time time to return to school and complete your degree or catch up on the latest certifications in your field. So while this is a depressing time, know that as with everything, this too shall pass, just be prepared to weather the storm.

Have you been through a recession prior to this? How did you make it through? What advice do you have for younger readers on how to get through these tough economic times?

Girls Just Wanna Have Funds » Recession

Left Behind in a Layoff: Getting Ready for What’s Next

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Is My Money Safe?

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Jingle Mail Revisted: Possible Bank Recourse And Borrower Consequences

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Recessionista Tip: Plan Weekly Menu Around Supermarket Sales

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It’s a Woman Thing: Men Are in Recession, Women Apparently Not

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Beneath the Iceberg: The Psychology of the Recession (and a silver lining)

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