Archives for January 18, 2019

With the new year in full swing, now’s a popular time for businesses to advertise open positions and get serious about meeting their staffing needs. The problem, of course, is that hiring can be a cumbersome, time-consuming affair, and a costly one at that. Here are a few things your company can do to expedite the hiring process and make it less painful for everyone involved.

1. Consider internal candidates first

One of the easiest ways to make the hiring process more efficient is to source talent within your company. When you hire internally, you don’t have to worry about checking references or making sure there’s a good culture fit — those items will already have been tackled. Furthermore, while promoting existing employees won’t necessarily help you avoid having to train them in their new roles, they’ll at least come in with a basic knowledge of how the business works, thereby leading to a smoother transition.

Of course, the downside of hiring internally is that you’ll then need to fill the roles the folks you’re moving around will be abandoning. But if you’re talking about promoting internal people, know that it’s often easier to fill lower-level positions than higher-level ones, so you’ll come out ahead in that regard.

2. Produce clear job descriptions

The more specific you are with the job descriptions you put out, the greater your chances of attracting the right candidates. Therefore, it pays to invest a little extra time in making sure your job listings are detailed and precise. If there are skills or qualifications you’re looking for, state which ones are deal breakers to avoid getting piles of resumes you’re inevitably forced to toss in the trash. At the same time, give candidates a clear sense of what the work entails so they don’t apply only to back out upon realizing they don’t want the job.

3. Conduct phone screens before doing in-person interviews

The interview process can be tricky to coordinate. Rather than go through the motions for every candidate you’re considering for a given role, try weeding some out by conducting phone screens. Phone screens are a quick, easy way to vet applicants and ensure they meet the basic requirements at hand, and they’re something that a human resources team can generally handle, reserving your hiring managers’ time for more important tasks.

4. Schedule interviews strategically

The interview process takes almost 24 days on average in the U.S., which can really bottleneck the hiring process. To avoid having that happen, arrange for all key players involved in that process to commit to being available within the same one- or two-week stretch of time. This way, you won’t have week-long gaps between candidate meetings, and you’ll be better positioned to make decisions sooner.

5. Have your offer letters lined up and ready to go

While some job offers are extended over the phone, there’s generally a formal letter to accompany those discussions. But if it takes your HR department a week or longer to produce those letters, you might lose out on impatient candidates along the way. A better bet? Have your HR team gear up those letters once candidates make it to their second interview round. You can always tweak certain details at the last minute, but this way, you’re mostly prepared to make those offers official.

The longer it takes you to fill open roles at your company, the more your business stands to lose out. Take these key steps to expedite the hiring process, and you’ll save time, money, and loads of aggravation for all of the players involved.

WHEN IT COMES TO HER lifestyle, Chelsea Ricketson finds that practicing minimalism doesn’t just help her mentally or spiritually – it helps her financially.

“When you become an entrepreneur, you get quickly creative about: What do I need to spend money on and what don’t I?” says Ricketson, 30, who runs a CrossFit gym in San Antonio. “Minimalism applied to finance is just good budgeting,” she adds.

For Ricketson, using minimalism to budget involves making tough decisions about what expenses are necessary at home and at her business. It includes thinking twice about new purchases and setting aside enough money to weather a dry spell in membership at her gym.

“It helps to clarify for me what are needed expenses and what aren’t,” Ricketson says.

What Is Minimalism?

For the uninitiated, minimalism is a lifestyle in which participants think carefully about the items that bring value to their lives and eschew those that don’t. It can take many forms. Some people use it as a way to travel the world, owning solely the belongings in their backpacks, while others use it to scale back on unnecessary purchases or lead a more environmentally friendly lifestyle.

While the concept of minimalism has been around for years, it became increasingly popular after the Great Recession. More recently, it has seen a renewed interest with Netflix’s “Tidying Up With Marie Kondo,” in which a well-known Japanese decluttering expert encourages participants to keep items that “spark joy” while donating or trashing unloved belongings.

When it comes to relating minimalism to personal finance, financial experts note that there’s a relationship between the two. But many suggest leading a minimalist lifestyle in conjunction with practicing other good money-management skills to extract the greatest benefit.

“The idea of only focusing on that which brings you value is completely aligned with how you should be spending, saving and investing,” says Erin Lowry, author of “Broke Millennial Takes on Investing,” via email. “It’s important to identify mindless spending behaviors and make sure your financial habits truly align with your values and goals.”

For example, ditching an unneeded extra car as part of a minimalist lifestyle can have powerful financial benefits. Not only do you nix auto loan payments and insurance bills, but you slash maintenance, repair and storage costs.

But don’t forget that you can be a minimalist without being frugal. After all, if you only own one car – but it’s a $200,000 Lamborghini – then you aren’t necessarily saving money.

“It’s very easy to get caught up on what you’re doing and lose sight of why you’re doing it,” says Douglas Boneparth, president of Bone Fide Wealth in New York City and co-author of “The Millennial Money Fix.” “When the means starts to distract you from the ends, it doesn’t matter how justified they are.”

Can Minimalism Improve My Financial Health?

While minimalism and good budgeting overlap in many ways, experts note that minimalism isn’t a replacement for mindful money management. Here’s what to know.

Use it in concert with good budgeting strategies. You can use minimalism – and more mindful shopping habits – to improve your budget. But practicing minimalism doesn’t replace good budgeting techniques. Ask yourself whether you have enough control over spending, Boneparth says. Have you actually mastered your cash flow? Do you know where your money is going each month? These are essential questions to answer when improving your budget.

Lowry recommends taking a month to track every penny spent, including writing down how much you spent and the products you bought. After that exercise, do an audit of those regular expenses and nix unnecessary regular expenditures. “You should be looking for any consistent spending habits that you feel are either mindless or not actually providing you value or utility,” she says.

Align minimalism with your long-term goals. Look at the big picture, says Shannah Compton Game, certified financial planner and host of the podcast “Millennial Money.” “You want to make sure you’re also saving money for your goals,” she says. “Make sure that your money is going places (where it’s) helping you grow your wealth or get closer to your particular goals.”

That means that, in addition to tamping down on spending, you should be redirecting cash to savvy savings and investment accounts that are aligned with long- and midterm goals. For example, if all that unspent money is sitting in a no-yield checking account, think about moving it to a high-yield savings account, certificate of deposit or low-fee mutual fund, depending on your financial goals.

Be mindful – but not terrified – of debt. Some minimalists preach absolute aversion to debt, including mortgage debt and student loans. But financial experts caution that there can be room for savvy debt management in your budget.

Yes, you should absolutely pay down high-interest credit card debt and think twice before taking on new debt. But “the concept of leveraging money can be a really smart way to build your wealth,” Game says. “You just have to do it correctly and with the right kind of debt.”

For example, taking on a reasonable amount in student loans – the common rule of thumb is no more than your anticipated first year’s salary – might be an important investment in your future career and earnings. Aggressively paying down a relatively low-interest mortgage may not make sense if you have more pressing financial goals, such as funding your retirement savings account.

So think twice before eschewing all debt. People who can manage it effectively may find it to be a powerful tool.

Practice that same level of mindfulness in your financial life. As you reassess your belongings to determine whether they bring you joy and are worth carrying with you into the future, try the same exercise with your financial accounts.

Do your retirement accounts still carry relevance to your life, or should they be rebalanced in light of economic and personal changes? Does your savings account still meet your needs? Are you happy with your bank and your financial advisor? Take a moment to reconsider and reexamine the financial vehicles on which you rely in order to make your financial future brighter.

Parents who’ve been saving for years know the advantages of putting money into a 529 college savings account. They get big tax breaks on the money. But what happens when it’s finally time to take the money out?  Financial experts at Consumer Reports say there are smart ways to do it.

If you don’t spend the money on a legitimate 529 expense, you’ll pay income tax on the earnings in the 529 and a 10 percent penalty on the amount you saved. Legitimate 529 expenses include obvious things, such as tuition and supplies, like books and computers. But you can also use the money toward room and board if the student is enrolled in school at least half-time. 

As you spend, be sure to keep all your receipts. The IRS may have questions later! And be aware that when you spend the money also matters. You need to spend it in the same year that you make the withdrawal. That means the calendar year, not the school year.

And what if you’re lucky enough to have leftover 529 funds? You can avoid taxes and penalties by saving it for graduate school, transferring the money to another child, a relative or even use it to further your own education.

Consumer Reports says that sometimes you can even use 529 money toward education costs for children in kindergarten through the 12th grade, but only up to  $10,000 per student, per year. Just be sure to check with your plan administrator to find out what’s covered. 

Life has a way of throwing unpleasant financial surprises at us when we least expect it. You could wake up one day and find that your car won’t start, or arrive at work only to be told that you no longer have a job. That’s why we all need money in the bank — to protect ourselves from life’s unknowns. Unfortunately, most Americans are sorely lacking in this regard.

A frightening 60% of Americans don’t have enough money in savings to cover a $1,000 emergency expense, according to new data from Bankrate. That’s consistent with the 37% to 41% of U.S. adults who found themselves in an equally precarious financial situation between 2014 and 2018, when similar surveys about savings were conducted.

The problem, of course, is that when you don’t have money on hand to pay for emergencies, you’re generally forced to resort to debt. And taking on too much of it could not only cost you more money in the long run, but wreck your credit score and damage your finances for months or years to come. A better bet, therefore, is to boost your savings immediately — before an unanticipated expense throws you for a loop.

Start building that safety net now

A solid emergency fund is one with enough money to cover three to six months’ worth of living expenses. If your savings balance is nowhere close, it’s time to do better — especially if you currently don’t have the means to cover a $1,000 bill. In fact, building emergency savings is so important that it should trump all other money matters, including retirement plan contributions.

To begin building cash reserves, create a budget if you don’t have one already so you can see where you have room to cut back on spending. Chances are, there are some expenses you can reduce or eliminate that won’t totally wreck your quality of life, whether it’s ordering in food one day less per week or scaling back your cable package. Of course, the more of your spending you’re able to reduce, the better, but if you consistently cut back on smaller but meaningful expenses until you’ve amassed some cash, it’s a good starting point.

Next, look at getting a side hustle. If you’re willing to spend five to 10 hours a week working a second job, you could wind up taking home several hundred dollars more each month, and since that cash won’t already be earmarked for existing bills, you should have no problem sticking it all in the bank.

Finally, pledge to save any additional money that comes your way, whether it’s added earnings in your paychecks from a recent raise or a tax refund from the IRS. Cash gifts apply here, too — just because it’s your birthday doesn’t mean you shouldn’t put your grandmother’s $100 check into savings when you’re glaringly behind.

Building an emergency fund often boils down to setting priorities and making choices, but if you want to avoid a world of stress and debt, you’ll need to focus on boosting your cash reserves so that you’re able to cover a $1,000 unplanned expense, and then some. After all, you never know what life might have in store for you on the financial front, but you’re always best off being prepared.