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The Simple Dollar

Annette Loritz of Benediction University speaks with an attendee about job opportunities and continuing education during a career fair in Oak Brook, Ill. last year. Hamm recommends evening classes and online education as two of many ways workers can keep their skills sharp while taking breaks from their careers. (M. Spencer Green/AP/File)

Taking a career break? How to keep your skills sharp.

By Guest blogger / 09.07.13

As many of you know, before The Simple Dollar became successful, I had an enjoyable career as a software developer. I wrote code to analyze, dig deep into, and share scientific data.

I deeply enjoyed the professional work that I did. I also deeply valued the camaraderie and friendship with my coworkers.

In fact, I only walked away from it for two reasons. The biggest one was that I felt a growing distance between myself and my children, as I was missing many of their milestones due to travel. The straw that broke the camel’s back was when I called home on a trip in January 2008 and my son asked me if I would ever come home again. The other reason is that I felt very uncertain about the future of the project I was working on, but that was a much more secondary concern. The Simple Dollar afforded me the option to make a career switch into writing and online content that gave me the flexibility to spend a lot more time with my family, so I took it.

I would like to someday be involved again in those earlier professional areas. Off and on, I’ve dabbled in contributing to open source software projects in my spare time, but at times I can feel that my skills are rusty. I can still understand the ideas well, but I’m spending much more time looking at language references than I used to.

This leads me right into a question that many stay-at-home parents and people that try different career paths eventually ask themselves: how do I maintain my skills and connections throughout my time away so that I’m competitive when I return? ( Continue… )

Residents walk home along Commonwealth Avenue after work in Boston. (Ann Hermes/The Christian Science Monitor/File)

You just got home from work. What's next?

By Guest blogger / 09.06.13

Each weekday, my children arrive home about two hours before my wife does, giving me two hours where it’s just dad and the kids.

Most days, they’re pretty happy to do whatever I suggest, but if I don’t happen to have an idea for them, they’ll go out in the back yard and play or, if the weather is poor, down to the family room and watch a television show.

While I don’t mind playing in the back yard so much, it’s very important to me that they establish good habits for the end of their school day. I want them to be involved in something active and productive, not something passive.

I witnessed the dangers of coming home and being passive in my own life. For my entire educational career and the first few years of my professional career, I would come home from work and just kick back with a book or a television show.  ( Continue… )

Athree-bedroom, two-bathroom house for sale by the city in Lincoln, Neb. Hamm argues that more modest living conditions are a happy trade-off for more financial flexibility. (Gwyneth Roberts/The Journal Star/AP/File)

A nice house, or financial freedom?

By Guest blogger / 09.06.13

Anyone who’s been awake to watch the changes in the economy over the last five years is familiar with the burst of the housing bubble. Too many people were given mortgages that were bigger than their budgets could handle and when those people couldn’t pay, the banks that offered those mortgages were in serious trouble.

Virtually everyone who signed up for these troublesome mortgages was in a situation where it strained their budget to make the payments and when something changed, whether it was the adjustment of a mortgage rate or something else, they were unable to keep paying.

That situation is one that I heard a few times growing up: “house poor.” It referred to people who had a mortgage sitting over their head with monthly payments large enough that it was a monthly struggle to keep the bills paid. So much of their monthly income was sucked up by that mortgage that they had to live in near-poverty in other aspects of their life just to keep the house.

I can fully understand the desire to own a house of your own. I can also fully understand the desire of wanting the best house the bank will possibly allow you to get. I experienced both in 2007 as we shopped for a home of our own.

At the same time, “house poor” is not a place you want to be. Being “house poor” means a lack of freedom.  ( Continue… )

Consumer credit cards are shown in North Andover, Mass. Parents should only give adult children money if they are on a positive professional path, Hamm writes. (Elise Amendola/AP/File)

When to give an adult child money

By Guest blogger / 09.05.13

Mary writes in:

My son recently graduated from college and took a job with a startup. It doesn’t pay well, but he’s building some fantastic experience and connections and if the startup goes well he’ll be in on the ground floor. For now, though, he’s living in a tiny apartment with four other people and lives on free food from work or the cheapest stuff he can find at the store. My husband and I want to give him money to help through this period (we can easily afford it) but we also don’t want him to be dependent on us. What should we do?

Questions like this are difficult because the best answer varies so much on the specifics.

What kind of person is the child? Is that child truly self-reliant? Does that child use their money wisely?

What is the relationship between the parents and the children? Is it a relationship that has shown significant dependence issues in the past? Has it shown significant conflict in the past?  ( Continue… )

A worker counts US dollar bills inside a money changer in Manila, Philippines in April. According to Hamm, it can be helpful to look at your net worth as a number that goes up or down with every financial decision you make. (Romeo Ranoco/Reuters/File)

What does your net worth really mean?

By Guest blogger / 09.05.13

One of the most useful calculations a person can make when it comes to their personal finances is to figure out their net worth.

The actual calculation of net worth is really simple. You just add up the value of all of the things that you own – the value of your home, the value of your cars, the value of your savings accounts and investment accounts and retirement accounts – and subtract from that the value of all of your debts. The resulting number is your net worth.

Theoretically, your net worth is what you would have in cash if you sold every significant possession and paid off all of your debts. If your net worth happens to be negative – which is the reality for many people freshly out of college – your net worth is how much debt you still owe if you sold every major possession you have, emptied out every account, and tossed all of it toward your debt.

In reality, it’s not quite that practical. You aren’t going to sell off your house or your car at the drop of a hat. For many people, at least some of their assets are in retirement accounts or education accounts that have restrictions on immediate withdrawals.

In other words, your net worth isn’t really a true number of how much cash you could have if you tried to balance everything.

So, what good is it? What does your net worth really mean?

For me, a net worth is mostly useful as a way to gauge many different kinds of personal finance progress all at once.

Why? Virtually every good financial move you make raises your net worth. At the same time, most poor financial decisions you make drops your net worth.

( Continue… )

A retired couple take a stroll in Enghien-les-Bains, north of Paris. (Christian Hartmann/Reuters/File)

What exactly is a Roth IRA?

By Guest blogger / 09.04.13

Megan writes in:

What exactly is a Roth IRA? I understand that it’s a way to save for retirement but the Wikipedia entry is basically gobbledygook to me. I basically understand what my 401(k) is so how does it compare?

A Roth IRA is a valuable tool for retirement savings, so it’s well worth spelling out in the clearest terms possible so that everyone understands what it is.

A Roth IRA is a type of Individual Retirement Account (that’s the IRA abbreviation, of course) that allows most individuals to save for retirement on their own with or without a 401(k) plan at their workplace. Someone working at Home Depot could start a Roth IRA, as could a janitor or a computer programmer working for the government.

The best way to think of a Roth IRA is like a special savings account. Just like a savings account, you open a Roth IRA at a financial institution. Just like a savings account, you add money to it, ideally on a regular basis. Just like a savings account, it builds up money over time.  ( Continue… )

A job seeker meets with a prospective employer at a career fair in New York City, in this file photo. (Mike Segar/Reuters/File)

Want to get hired? Three ways to ace a job interview.

By Guest blogger / 09.03.13

Over the course of my life, I’ve been involved with quite a few interviews and hiring decisions.

At my previous job, I was involved with many interviews of professional coworkers and even on interview committees to hire people who would eventually be above me in rank.

Since leaving there, I’ve interviewed several people for potential assistant positions, particularly when management aspects of The Simple Dollar became overwhelming in 2010 and 2011.

In my personal life, I’ve interviewed several financial advisors and a few general contractors.  ( Continue… )

Terra Motors employees, Koshi Kuwahara, right, and Shimpei Kato work at its headquarters at Tokyo's Shibuya district. (Shizuo Kambayashi/AP/File)

How to get work done? Avoid unnecessary tasks.

By Guest blogger / 09.02.13

Having a checklist of things to do each day really keeps me organized and focused on my goals, but it doesn’t solve all my problems. Constantly throughout the day, little things come up that take me away from those important tasks.

I’ll get a phone call or an email about something that seems urgent, so I end up having to pull up notes on something I didn’t expect and dig into a conversation about it.

I’ll feel absolutely out of focus and perhaps even a bit tired, so I’ll spend some time playing a game of League of Legends or something similar.

I’ll go down to the family room with my wife in the evening and get distracted by a television show instead of working on whatever I had planned to finish up.

I’ll go out to lunch with a friend and then convince myself to run a relatively unimportant errand after lunch, even though it eats up that narrow band of child-free time I have to get other things done.  ( Continue… )

A bird used by a Chinese man, unseen, to perform, holds a yuan collected from a tourist as it prepares to drop it into a piggy bank, in Houhai district, in Beijing, China. Hamm writes that a financial balance is more than just a number. (Muhammed Muheisen/AP/FIle)

Your finances are more than dollars and cents

By Guest blogger / 08.31.13

When I look at our financial accounts, I don’t just see dollars and cents.

Whenever I look at our checking account, I see Sarah sleeping peacefully without a financial worry in the world. She’s not worried about paying the bills or making the property taxes. She’s dreaming without anything like that weighing on her shoulders.

Whenever I look at our savings account, I see myself being pretty calm after the transmission goes out of a vehicle we own. I recall the time I got extremely upset circa 2005 when a tire blew out on my old pickup truck and I know I don’t have to freak out like that any more.

Whenever I look at our investment accounts, I see Sarah and I sketching out the floor plan of the house we’ve always wanted to live in. I see a house rising up out of the ground and the two of us walking in the front door, hand in hand. ( Continue… )

An package is prepared for shipment by a United Parcel Service (UPS) driver in Palo Alto, Calif. In terms of shipping speed, always ask for all options and choose the cheapest one, Hamm writes. (Paul Sakuma/AP/File)

How to ship a package and save money

By Guest blogger / 08.29.13

As many of you know, I actively trade (and sometimes sell) quite a few things thanks to the internet, which means over the course of the past several years, I’ve become intimately familiar with how the different package shipment services work. In the past few years, I’ve used the postal service, FedExand UPS to ship packages and I’ve learned a few things about how to maximize your buck.

All three organizations have disgruntled/bad employees who may damage your package.
I’ve read countless times on countless forums about how either UPS, the postal service, or FedEx damages everything they send or receive from them. Different people will swear by different services and completely avoid other services.

From what I’ve seen, it mostly comes down to individual people. The vast majority of people working for each of these organizations will treat your package well (or well enough, at least). There are a few people that work for each of these organizations who don’t respect your package at all.

You might be unfortunate enough to live in an area where your delivery person is disgruntled and abuses your packages, leaving a bad taste in your mouth. Trust me – given the number of packages I’ve shipped and received over the last decade, all of the services tend to mostly do good work with a few bad apples in each.  ( Continue… )

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