Free Money Finance

Build Your Network Now!

The following is an excerpt from How Smart People Sabotage Their Job Search: 10 Mistakes Executives Make and How to Fix Them!

Mistake #6: We Don’t Build a Network When We are Working.

“No one—not rock stars, not professional athletes, not software billionaires, and not even geniuses—ever make it alone.” Malcolm Gladwell

This will speak to MANY of you: Did you interact with outside vendors while filling the role in the corner office? Did you delegate the management of corporate relationships, vendors and customer relationships to your direct reports? Considering that vendors, professional service providers, and former customers can be our greatest source of job leads when we are looking, this is a huge mistake. Does this statement trigger an “Oops” for you?

None of us works in a vacuum. If you don’t personally know members of the outside counsel that your firm uses, the presidents of your biggest customers, bankers that your CFO is interacting with, and other important outside resources, you are missing out. These people are connected! Their success depends on their connectivity in the business community at large. If they don’t have a personal relationship with you, let alone actual experience working with you, you won’t get the fullest benefit of their potential resources when you might need them the most.

Oops! How to Fix Mistake #6:

Get out and circulate in the business community at large. Don’t isolate yourself within the walls of your corner office. Make a point of attending some local events for different causes and networking with your peers. Networking is a year-round goal that needs to be achieved by all corporate executives. Select some leadership conferences, luncheons, breakfasts, and trade shows and commit to attending them to shake hands, swap information, and hear industry buzz firsthand.

Seek out the “movers and shakers” within your community and introduce yourself, even if it’s over the telephone. Make a point to be in touch throughout the year.

Now, if you are active within your religious community or favorite charity, this gives you another distinct group of potential contacts to help you build and maintain a network. These organizations give you personal satisfaction, the ability to enjoy your family and friends while engaging in camaraderie, and the opportunities to “give back.”

Mistake #6 Self-Assessment and Improvement Plan

Jump into your community, your vendor relationships, and your industry events. Get involved in charitable events. Enormous value in personal and professional growth awaits you!

1. You know what to do here. Write down the people you need to meet and get to know.

2. Choose some community groups or causes that interest you, and write down upcoming activity dates and times.

3. Chart out an event calendar and “ink” it into your calendar. Which events or activities would you like to include?

You won’t be sorry for the time and effort!

Applying for an MBA: Thoughts from Dartmouth’s Tuck School of Business

The following is an excerpt from Your MBA Game Plan, Third Edition: Proven Strategies for Getting Into the Top Business Schools, © 2012 Omari Bouknight and Scott Shrum. It is reprinted with permission of the publisher, Career Press, Pompton Plains, NJ.  800-227-3371.  All rights reserved.

A Conversation With Dawna Clarke

Dartmouth’s Tuck School of Business is known for innovation in management education, and Tuck’s admissions office is known for innovation in MBA admissions, frequently reaching out to applicants and admissions experts to spread the word about Tuck. Much of the credit for this goes to Dawna Clarke, Tuck’s Director of MBA Admissions. Dawna has worked in the field for more than two decades, also having served in the admissions office at Darden and Kenan-Flagler. We had a chance to talk with Dawna about how the MBA application process is viewed through an admissions director’s eyes.

We hear admissions committee members talk about looking for fit when evaluating applicants. What does that mean to you? What do you look for to determine if an applicant is a good fit with Tuck?

Being a good “fit” is very important at Tuck because we have such a small class size. We look for people who have been involved and who have had an impact on either their company or their community in some way. We look at recommendation letters to see how they work in teams, and we read all the interview comments as well to get an idea of a person’s interpersonal skills. Potential leadership qualities are important here because most of our events are student-led, but we don’t mean by “leadership” that the applicants should have been heading up their company or their division. Leadership occurs in many ways: community service, leading new initiatives at work or in the community, helping others achieve their potential. However, it is impossible to describe the “perfect” Tuck candidate because there are no pigeon holes at Tuck. As a member of this community, each student’s unique qualities are valued in classroom discussions, study group all-nighters, and teamwork negotiations. When we talk about diversity, we use the word in its widest sense: ethnicity, nationality, gender, and also educational and professional background.

What are some of the major mistakes that you see applicants make year after year?

The most common mistake is in choosing a school solely based on rankings. Most applicants, regardless of from where they come, tend to look at the rankings and really don’t consider which school is best for their interests. And most of them really do not understand exactly what the rankings are measuring. We feel it is important for students to do a thorough job of researching the different programs, including talking to current students or alumni. By doing their “due diligence” they will find the school that will be the best option for their career goals.

How important is an applicant’s enthusiasm for the program? Can you tell when an applicant is simply applying to Tuck along with every other top school?

Enthusiasm for Tuck is very important to us. We don’t want people here who will not be able to adjust to the climate or the small-town atmosphere, because they will not be happy. We want everyone to be happy and satisfied with their experience, and I think we’ve done a good job through the years of attracting the sort of student who will thrive here. We realize it is not the right place for everyone and that is fine. Can we tell if they are just applying to a list of top schools? Sometimes yes, but we never ask where they are applying. That’s not important to us. We just want to know why they applied to Tuck and if they don’t know about the program and what we are all about, that tells us something. The best way to get to know more about Tuck is to talk with the people who know it best—our students, our alumni, our faculty, and our staff. We encourage applicants to take every opportunity to connect with us. We have a great campus visit program and the students love to show people around here. Once you have visited, then your essay about “why Tuck?” will be richer and more vibrant because you will have experienced it firsthand.

What advice do you have for less-traditional applicants, such as those coming from nonprofit organizations or more artistic career backgrounds?

We actually like non-traditional applicants. They bring a richness to the classroom because they tend to look at things from a totally different viewpoint. Every year we have students who come from teaching, law, and we are seeing more and more people from the nonprofit world. We have a rich tradition of community service and we work closely with nonprofits in our area through the Allwin Initiative for Corporate Citizenship. Often people who come in with a vague idea of doing something in nonprofit can find a very rewarding internship with one of our partner organizations.

What do you look for in trying to distinguish between applicants with very similar professional backgrounds?

This is probably the hardest part of the job. With two equally qualified candidates, how do you pick one? We rely on a number of things, but specifically on the letters of recommendation and the interview, and also the way the person has crafted the essay answers. I think the best way to differentiate yourself is to look outside of work and talk to us about what really interests you. This is what we are looking for—that spark of passion for something.

What is your take on the GMAT and its importance to an MBA application? For applicants with low GMAT scores, what else can they do to make up for this weakness?

The GMAT is one of those hurdles that everyone has to jump through and it is the one common denominator for every candidate. Based on research done by GMAC, we are convinced that the test is a good predictor of how someone will do in the first year of the program. We do look closely at the scores because our program is very demanding and rigorous in the first year, especially in the quantitative courses. But we do admit people with GMAT scores lower than our average when they have shown us a particular facet of their personality or their professional experience that tips the balance. Sometimes they can prove to us that they can handle the quantitative aspects by the work they do or by their undergraduate grades. I strongly recommend that people take the time to either follow a preparation course or study diligently at least two hours per day using free online or print materials.

What makes a really good essay? What makes a really bad one?

My main advice is to read the question and answer what we are asking. Don’t “cut and paste” your essays written for another school into our application (or into any other schools’ application either!). Each school looks for specific things. For instance, at Tuck, we are looking for leadership potential and we have a specific definition of what we mean by leadership, which does not necessarily mean “ordering other people around.” We also want to know who the applicant is outside of work—do they have special interests that would enrich other students, what will they bring to Tuck? And finally, we look for a clear career path: What have they done? Why? And how will that get them where they want to go? The bad essays are those that skirt the question or that answer the question they wished we had asked but didn’t!

What makes for a successful interview? How do you recommend applicants prepare for their interviews?

The interview is another facet of who the candidate is and an in-person interview is the best opportunity to really shine. We ask about their career choices in the past and their goals for the future, and we also ask random questions to find out more about their personality, how they work with others, what differentiates them from other candidates. We look for their level of comfort, and how they present themselves from a professional standpoint, too. We don’t have a prepared list of questions. Like everything at Tuck, the interview is very personalized, so it is difficult to prepare for it in that sense. Of course, the candidates should be able to talk briefly about their career choices and why they want to come to Tuck, and the rest will follow from what is elicited from these responses.

Anything else you would like to share about Tuck or the MBA admissions process in general?

We realize that the applicants put a lot of time, thought, and energy into their essays and we treat each application with the respect it deserves. We read each application at least two times by two separate readers, and I personally read every single write-up before making a decision. Our decisions are generally by consensus, but, every now and then, we have some hot and heavy discussions! We want the best possible candidates who will leave a positive impact on Tuck, and we want to be sure that our program is the best for them.

The Lack of American Generosity (in Numbers)

Money Magazine shared the average deductions for charitable giving by adjusted gross income in its December issue. Here are the results:

• Adjusted Gross Income: $50,000 - $100,000; Average Charitable Deduction: $2,700


• Adjusted Gross Income: $100,000 - $200,000; Average Charitable Deduction: $3,800


• Adjusted Gross Income: $200,000 - $250,000; Average Charitable Deduction: $5,900

Looked at a different way, here are the percentages each group gave (assuming the mid-point on income):

• Adjusted Gross Income: $75,000; Average Charitable Deduction: 3.6%


• Adjusted Gross Income: $150,000; Average Charitable Deduction: 2.5%


• Adjusted Gross Income: $225,000; Average Charitable Deduction: 2.6%

My take on these numbers:

• Pretty pathetic IMO. Yes, someone will say that the higher incomes also pay higher taxes (that help the poor), but really, if all you can give is $5,900 when you make $225k, that's weak to me.


• Interesting how the lower income level gives more as a percentage. I had always heard that was the case.


• Imagine what could be done for hunger, disease, and so on if everyone gave 10%. Wow.

Ok, I am being a bit harsh. Americans do give away more money than any other nation (there are several ways of looking at this info -- money given by people, money the government gives, etc. but it's fairly clear that the U.S. is at the head of the pack -- or at least near it.) However, I just wish we were a bit more generous.

Are Christians Poor Tippers?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's an uncomfortable piece from Daily Finance that says Christians are poor tippers. It talks about Christians who go to restaurants and then use a fake $10 bill tract to spread their faith, instead of leaving a tip. Some highlights:

"Christians don't tip very well," he wrote for The Lutheran magazine in January 2009. "As a matter of fact, we're pretty cheap. What makes this worse is that we paint 'cheap' with a religious-sounding veneer and call it 'being a good steward.' Nothing like hiding behind the Bible to camouflage your stinginess."

One woman wrote back: "It was almost 100 percent true that the worst tips were on a check with a Bible verse or fish symbol."

This is a particularly uncomfortable phenomenon to face for a community that values generosity, justice and service.

But if you read the piece, it's full of little data supporting the conclusion. There are lots of single-person quotes that they use to support their point-of-view. The only actual data quoted actually says the opposite of what the article concludes:

An empirical study on this topic was conducted recently by Michael Lynn of Cornell University. He found that Christians are not in fact bad tippers; they gave an average of 17.3% for good service, well inside the 15% to 20% norm.

In the end, I don't think Christians are particularly good or particularly bad tippers. I'm guessing they are average. If you look at giving numbers you could easily make this conclusion -- Christians give about the same percentage of their incomes as non-Christians.

I think the main point here is that if you want to leave some information for a server and want them to receive it favorably, don't be cheap with the tip. Kinda common sense, no?

How to Decide Which Tax Preparation Method is Best for You

Here's a comment a reader recently left on my post titled Why I Use a CPA to Do My Taxes. It addresses the topic of how to decide which tax preparation method -- CPA, mass market firm, or do-it-yourself -- is best for you. His thoughts:

If you really want to know which tax preparation mode is best for YOU, do all three ... ONCE.

When it’s tax time, buy TurboTax, and do your return; then go to H&R Block and let them do it; finally, go to a CPA and have it done. Now you have the data to compare: Ease of use, accuracy, timing, sweat equity required, etc. Make your choice and stick with it unless or until you have a major life change. Done.

It would be a long, hard grind (can you imagine doing your taxes THREE times in a year?), but you'd certainly know the pros and cons of each method by the time you were done, huh?

What do you think of this idea? Is it a good one or just overkill?

Attention Financial Bloggers: Free Promotion for Your Top Posts in the FMF March Money Madness Tournament

Yes, it's that time of year again -- Free Money Finance March Money Madness is upon us!

For those of you who don't know what I'm talking about, it's our annual "tournament" of the best personal finance articles of the past year. They face each other in an NCAA-style bracket system, FMF readers vote for the winner, and at the end of it all, the best post is left standing. And like last year, it's all for several good causes. Here are some details from last year:

• My announcement post


• An example of a "round"


• Wrap Up

This year I'm getting a late start on it because I've been on vacation for the past two weeks (more to come on the trip). So we may go beyond the end of the actual March Madness basketball tournament this year, but if so, it won't be by much.

64 posts in total will be allowed in the 2011 competition. Each one will be assigned randomly in a bracket set of "games" similar to the one used for the Men's NCAA basketball tournament. (If you want to see what one looks like, go here to download last year's bracket.) Here are more details:

How to Enter

If you're a blogger and have money-related posts you want to include you can email the following to me:

1. The name of the post you're submitting (must be from the calendar year 2011)

2. The URL of the post you're submitting

3. Two to five sentences on what makes this post so great (I'll be using this wording in the competition, though I reserve the right to edit it, so really "sell" your posts).

NOTE: IF ANY OF THESE ARE MISSING, YOUR ENTRY WILL NOT BE CONSIDERED. AND I WILL NOT GET BACK TO YOU TO REMIND YOU THAT YOU SUBMITTED INCORRECTLY.

Entries are on a first-come, first-served basis and all 64 spots usually fill up in a few days. So if you wait, it's possible you're not going to get a spot.

Submission Details

You can submit one post per site. If you have more than one blog, you can submit posts for each blog, though your second blog's submissions won't be considered until all the first-time submissions have been considered from other blogs.

In the past, there were 64 slots open at the start. This year, there are only 54. As noted earlier in the year, the ten best winning posts for the year (as judged by me) from the Best of Money Carnival will receive automatic bids. These entries will NOT count as a blog's official entry and if a blogger wants to submit an additional post for March Money Madness he can without penalty and with the same consideration (first come, first served) that other entrants receive. I'll be naming these winners as part of the seeding process.

FYI, if you have a Best of Money Carnival winning post and don't know if it will make my 10 and yet you might want to submit it anyway, I suggest you simply send me the top four posts you'd like to have included in March Money Madness (in the order you'd like them to be considered.) This way, if one of your posts gets an auto Best of Money Carnival bid, I'll just move on to the next one on your list for consideration. Some blogs have more than one Best of Money Carnival winner, hence you should submit four posts if you want to be safe and get as many considered as possible.

How Posts Compete

The posts will "play" each other with the winner advancing and the loser being bumped. They'll "play" in this manner:

1. I'll post the competing posts, listing who's playing who

2. Readers can leave comments on which they like better

3. The post with the most votes wins -- I'll break any ties

4. The winner will advance in the bracket to "play" again. Ultimately, there will be only one post left -- the "champion" for this season.

FYI, I reserve the right to disqualify any posts if I feel there's cheating of any kind going on (or really, for any reason -- it is my site after all). It's ok to promote your posts via Facebook, your website, etc., but no multiple voting and the like. I'll detail these rules to you in a separate email once your post is accepted.

Criteria for great articles are as follows:

1. Practicality of the post

2. How interesting/provocative/unique it is

3. The "personal-ness" of it

4. Its impact on net worth.

What the Winners Receive

I eliminated the charity component from past efforts because 1) no one seemed to care about it and 2) I ended up on random lists of all sorts of charities that are now sending tons of mail to my home. So this year all participants will receive is tons of traffic, links to their posts, and bragging rights for the winner.

Why Readers Should Care

As readers, you get the chance to read some great pieces and help decide who wins this year's championship. It should be great fun and full of the best personal finance posts of the past year.

Good stuff all the way around!

Funeral Add-Ons

Even before McDonald's asked, "Would you like fries with that?", American businesses were trying to add on items to the purchase of other items. For instance:

• "Would you like the extended warranty with that new car/TV/computer/almost anything electronic purchase?"


• "Would you like stain coating on that new couch?"


• "Would you like preferred seating on your flight?"


• "Would you like the insurance package with your car rental?"

And on and on they go. Ugh.

But I didn't know that add-on sales had hit funeral homes. Or at least the extent of the add-ons. Sure, I knew they had some "extras" like upgraded casket options and the like, but I wasn't aware of the range of things offered as add-ons these days.

We recently visited a funeral home when a family friend passed away. We stood in line a bit while waiting to give our condolences to the family and while in line walked by a small table. The table had an electronic picture frame that rotated pictures. These pictures were extra services (add-on services really) that the funeral home offered. They included:

• Balloon release -- balloons released at some point as the deceased was buried


• Dove release -- white doves, no less


• Butterfly release -- this would be awkward in January in Michigan


• Military honors burial -- not sure what this entailed (flag? gun salute?)


• Graveside music -- guitar

Really? A dove release?

There weren't prices on the pictures but I imagined that each dove cost something like $50. Ok, I'm exaggerating (probably, who knows?) but simply the fact that all these things (and probably more we didn't know about) were offered really kind of shocked me. Whatever happened to a simple burial?

I'm sure some of you reading this will have more information on funeral home add-on options. If so, please share them with us in the comments below.

As for me, when my time comes my family can feel free to forego the doves, butterflies, balloons, and the like. Simply put me in an acceptable casket and throw me in the ground. Then have a big party with all the money saved. ;-)

Reader Profile: RM

The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.

If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.

Next in the series is FMF reader RM. She answered my questions (in red below) as follows:

Please tell us a bit about yourself.

I am a 38 year old working and married mother of 3.  I received my education both before and again after joining the US Military, and am fortunate to have a solid educational background that makes my skills very marketable.  I’m lucky to believe I’ll be able to stay employed, even in tough economic times.  My husband is in the same industry, and we count ourselves very fortunate.

I grew up in a family where money was never, ever discussed.  I had no idea what my parent’s incomes and expenses were (when asked, was told it was none of my business).  I remember spending most of high school not being allowed to answer the house phone because we were being hounded by bill collectors.  I emulated much of that well into my adult life (I’m very sad to say).

I left home at 17 and have worked my way through college and the military, as well as settling down for rewarding post-military career with my wonderful family in the Southeastern part of the US.
 
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).

My husband and I both work, though that was not always the case.  We met in the military when we were quite young, and because I had more education than he did and had a marketable skill set, we decided he’d stay home with the kids while I worked when we were both honorably discharged in the late 1990’s.  He eventually went back to work, and we are now a dual income family.

Our combined yearly income is approximately $200k.  And to be honest, I’m just now getting a handle on what our expenses are.

We have a total debt of $59,150, which includes my student loans, credit cards, and my car payment, as well as some medical debt from an illness.

Our monthly non-negotiable living expenses total about $6745 (rent, car payments, groceries, etc), which is 60% of our net income.

We’ve started putting 24% into savings and/or retirement accounts.  That percentage really needs to go up in the coming years.

15% of our income is our WANT expenses, things like cable, gym memberships, dining out.

I have two children in high school who will be heading to college, and a third in grade school.

What are the current financial issues you're facing (saving, paying off debt, etc.)?

Well, things have been quite the mess.  My husband and I (both with no good financial role models) have not paid much attention to our finances.  We live paycheck to paycheck, pay the minimum on our bills, end up carrying debt forward, and have destroyed our credit scores.

Thankfully we have come to our senses, but realize it’s going to take us some time to undo all the damage we’ve done.  We have a budget that we’re following, and a plan using the snowball method via an application called Debt End to eliminate our debt.

Our biggest financial issue is the time it will take for our credit scores to improve over time as we’re becoming diligent in bill paying and savings.  Our dream is to own a home, and we know we have a long road ahead of us before we can make that happen.

In addition to this is to save for retirement.  Neither of us has saved adequately, and that is a priority as well.  Most financially well-adjusted people my age have a home and are building a sizeable retirement.  I feel about 15 years behind the game on all of this.  But late is better than never, right?
 
What are your plans for the future. (retire early, build your career, etc.)?

My plans for the future right now center more on short term goals (5 yrs or less).  Pay off my debt, build savings, put my kids through college, and buy a house.

My long term desires of early retirement will be predicated on my ability to increase savings and create another income for myself.  My dream would be to do that via writing.  While I absolutely love my career, I would prefer a way to work from home and maintain my income.
 
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?

I’m probably the last person who should be giving out financial advice right now. :)

I would say:

1 – it’s never too late to wise up and take control of your finances and your future. 

2 – Don’t assume a college education gives you the skills to manage your personal finances.  That’s a totally different skill set that must be learned.

3 – Talk about money.  Talk to your kids and to your parents.  Be transparent, open, and honest. 

And of course 4 – leave beneath your means, be happy with life instead of things, and pay yourself first every payday.

Saving $2,000 a Year by Eating Samples at Costco and Grocery Stores

Three years ago I asked Can You Pay for a Costco Membership by Eating Free Samples? (then followed up that piece with Extreme Saving Tips for Sample Eating at Costco) As you might imagine, the comments were mixed. ;-)

Anyway, a reader recently left this comment on the original post:

My boyfriend and I eat a meal of Costco samples approximately three times a week. We work within walking distance and do purposely use this as a money saving technique. I don't see anything wrong with it. We pay for an executive membership and part of that membership is sample offerings. We are always respectful of other shoppers and only double dip if a new sample lady arrives. It is not the most healthful meal but our financial situation is not very healthy either. You do what you got to do. I monitor our budget closely and I estimate we save $100 to $140 a month using this method at Costco. On the weekends we use the same technique at regular grocery stores, for example Whole Foods, Central Market and HEB, saving an additional $40 to $80 dollars a month. We do not live near a Publix but I hear they have excellent sample offerings.

This comment made me consider the following:

• Is it true that they do this?


• It's an interesting point about paying for a membership and samples are included in the cost. That takes a lot of sting out of the "freeloader" comments on previous posts.


• Being respectful and not double dipping also makes this practice seem more ethical.


• Can you really save $100 to $140 a month? That's $1,200 to $1,680 a year!!! Makes a Costco membership well worth the cost, huh?


• Nice tip to spread out the sampling to grocery stores. And the savings are great too! That bumps the total savings to between $1,680 and $2,640.


• Is this their only source of food? My annual food budget for a family of four is $6,000, so saving $2,640 for a family of two seems like there's probably not much food that they actually pay for.

So, what's your take on this? Think anyone could actually do this? Do you think it's right?

Back from the Caribbean

You may have noticed that I've been quieter than usual on this blog lately. It's because I spent the last 10 days on a Caribbean cruise. Yes, I pre-wrote all the pieces you have enjoyed during this time and set them to come up at designated times so you wouldn't suffer from personal finance withdrawal. ;-)

I will give you all the gory details of the cruise (costs, plans, what went right, what didn't, and maybe even some pictures) over the next few weeks, but for the time being I have a few more days off work to dig out and get things back to normal.

If you made a comment to me and didn't get a response, it's because I was gone. If you sent me an email and didn't get a response, it was because I was gone. I'll try to work my way through them all, but if you really need to get in touch with me, the best bet is to re-send a note.

Anyway, the cruise was AMAZING and I can't wait to share the details with all of you.