Getting Fired? Laid Off? What About Your 401 K?

Original Post Here [thejobboard]

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In the past, I’ve written about what you should do first if you get fired or laid off.

Over the weekend, over at the WiseBread blog, I saw a new strategy that had never occurred to me before.

Essentially, it boils down to remembering to ask the HR folks if they’ll give you the unvested portion of your 401 (k).

A lot of companies have 401 (k) matching plans. It’s basically free money: they contribute x dollars to match every y dollars you contribute. The catch is, you have to stay with the company long enough for that to “vest.” If you leave too soon, they don’t have to make good on that money.

But if they fire you before the vesting can happen… well, that’s not your fault!

But a lot of employers are willing to give you the unvested portion of your 401(k) account if/when you’re being let go.

Especially if it’s not performance related and they just need to downsize. It’s not that big of a deal to them and in an effort to make these kinds of moves as painless as possible, there is a good shot you’ll get this money.

The worst thing that can happen? They say no.

Hmmm. I don’t know. If they’re in the saving money downsize mode, I’m not so sure they’ll be so sanguine about handing over the money.

But then again, this is one of those I suppose it can’t hurt to ask situations. I mean, they are going to give you (hopefully) some sort of severance package. So why shouldn’t the “free money” be a part of it?

Most of us, when we’re in the frenzied moment of being handed a pink slip, don’t tend to think clearly. So, make a mental note now. If you’re ever facing the proverbial firing squad, don’t forget to ask if you can take your “free money” with you.

It’s better than leaving money on the table.

And as always, if you find yourself suddenly laid off, it might be time to hire professional help.

How Cash Over Credit Can Save You Money [Saving Money]

from Lifehacker by MainStreet.com

Avoiding pricey credit card fees isn't the only reason to opt for cash over credit (although it's a good one).

Nowadays, using cash over credit has some additional post-recession benefits. After all, with consumer demand low, some businesses, including auto dealers and electronics retailers, are offering better deals for cash-carrying customers. Other service providers may cut you a deal, too.

So why pay cash over credit? Let us count the ways:

Flee the Fee-Fest: With new credit regulations coming down the pike next year, card carriers are rushing to add new fees and charges to card holders before the hammer comes down next February. Some of the new fees, like fees for paying bills over the phone via credit card or higher fees for tardy payments, may drive cardholders over the edge, and have them leave their plastic at home and more cash in their wallet.

Use Cash, Cut a Better Deal: Retailers are beginning to rebel against the automatic fees that come with credit card purchases. Car dealers, hotels, and high-end electronics dealers are increasingly open to offering lower prices if a buyer pays with cash. Take the travel site Tripadvisor.com. The online site offers more hotels and at better prices for customers who give up the greenbacks.

Doctor Dollars: Paying your doctor bill with dollars gives new meaning to the term cold cash. If you need to see the doctor for a virus or other malady, offer to pay your bill in cash. Physician's offices are overrun with paperwork, and could be amenable to lightening the paper trail if you offer a couple sawbucks on a $50 tab. That's a 20% discount – and don't be surprised if your doctor goes along with the deal.

Instant Accountability: People who pay bills with plastic may spend more knowing that bill really doesn't come due until 30 days later, when their credit card bill shows up in the mail or via email. But paying a tab using cash means the money is coming out of your pocket right now. Being more cognizant of how fast your household budget is being depleted should save you more money in the long run.

Credit card holders who have become attached to the perks of plastic, things like card rewards, theft protection and the convenience of avoiding ATMs and waiting at the counter for change from a $50 bill, may balk at using cash.

But stand firm. By weaning yourself away from the plastic with the big bank logo on the bottom, you're saving money, gaining some leverage, and sticking it to the very same people who drove your interest rate up when went over your limit.

As the old saying goes, revenge is a dish best served cold … and paid for with cash.

Hiring Consultant Warns: "No Connection Between Credit History And Job Performance"

Hiring Consultant Warns: "No Connection Between Credit History And Job Performance" [Discrimination]: "

Almost half of all employers use credit reports to judge job applicants, even though credit histories have no relation to job performance. Personal finance goofs are only relevant for jobs that deal directly with money—cashiers, account managers, and the like. For everyone else, negative credit reports keep otherwise capable people from securing a job to help avoid further financial problems. So why do so many companies still ask for credit reports?

Hiring consultant Nancy Schuman explains:

Some companies believe they can deduce how a person will handle their job responsibilities based on how they handle their personal finances. Others use the information to gauge how long a person might stay in a position if their debt load is higher than a position pays. It is also used to verify employment history and a social security number.

There is no clear connection between a credit history and job performance, and many job seekers consider it to be an unfair way of screening candidates, however, no Federal discrimination law specifically prohibits employment discrimination on the basis of a bad credit report. The Fair Credit Reporting Act (FCRA) and state credit laws help to regulate how an employer can obtain and use their findings. An employer must gain your consent in writing to do a credit check and the report they receive is different than one viewed by a credit agency or an individual. Full account numbers are not revealed and they won't see a credit score, but they will be able to see late payments, collections and bankruptcies. If you are actually denied employment because of your credit report, the company must notify you so that you may view the report on which the decision was based.

An accurate credit report is best defense against a discriminating employer. Every year, consumers find 13 million errors staining their credit reports. Request a copy of your report from each of the three credit reporting agencies at AnnualCreditReport.com (not FreeCreditReport.com!) Challenge anything that looks like an error. If you can't scrape strikes from your report, talk to your potential employer clearly and honestly and help them understand what led to financial transgression, and explain how it is completely unrelated to your future job performance.

Does Bad Credit = A Bad Candidate [Long Island Press via Fair Credit Reporting Act]
PREVIOUSLY: Repair Your Credit By Disputing
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(Photo: ninjapoodles)

Budget on an Irregular Income [Budgeting]

from Lifehacker by Adam Pash

In this economy, many of us are looking for a little extra cash wherever we can get it, which means your income may vary greatly from one month to the next. So how do you budget accordingly?

Personal finance weblog Get Rich Slowly tackles the sometimes complicated subject of budgeting for an irregular income. The post is written from the perspective of a professional blogger, but it applies just as well to most anyone who's self-employed or does freelance work. In a nutshell, the author suggests projecting your cash flow as best you can and then building your budget with a couple of different bank accounts.

• The first is your "business" account (without quotes for those of you who actually own businesses), which is where you deposit all of your income. My business account is a high-yield savings account with ING Direct. (You might use FNBO Direct or some other bank. Just choose something with a high interest rate.)
• The second is your personal account, and it's from this that you'll pay your ongoing expenses. There's no need to open a new account if you already have one that will work. I just use my existing credit union checking account.

From this money, pay yourself as if you were an employee. Your monthly salary is whatever you calculated as your monthly budget, your minimum monthly income from the past twelve months.

Head over to the full post for a thorough rundown and several useful tips on the finer points of budgeting with your irregular income, then let us know how you've handled your budgeting in similar situations in the comments.

How to Budget for an Irregular Income [Get Rich Slowly]

Cook For Good Plans Meals for Less than Two Dollars

from Lifehacker by Kevin Purdy

Cook For Good ostensibly wants to help you use less energy and create less waste in planning your meals. The notable side effect, though, is a meal plan that averages a cost of $1.20 per person, per meal.

That per-meal cost, averaged out across each week, is under the standard version of the "spring menu," which utilizes more fresh produce and seasonal ingredients. Go the "green" route, buying local and organic food, and your cart cost comes to about $1.99 per meal; switch back to the "winter menu," and it gets cheaper. All those prices are, as the site's creator points out, less than the individual food stamp allowance in many states.

The menu, devised by a former IBM engineer, is largely vegetarian, though it contains some surprisingly cheap but appealing items: spring onion and mustard green pizza, green egg scrambles, and noodles in spicy peanut sauce, as examples. Some menu days won't really surprise anyone who's made it through college on the cheap, as it leans on beans, peas, and rice fairly regularly. But the day-by-day planning is so comprehensive, and the options so thorough, that those looking to eat healthier, cheaper, or start out on a flexitarian diet will find Cook for Good's offerings a pretty great free resource.

Head over to the site to check out the winter, spring, and supplemental menus, as well as read more about the project. Update: Looks like Cook For Good's a little overwhelmed this morning; check back later for a better chance at access.

Cook for Good [via Serious Eats]

How to Be a Financial Stud

from The Art of Manliness by Brett & Kate McKay

Editor's note: This is a guest post from Jeff Rose. We last heard from Mr. Rose when he was kind enough to give us a glimpse into the life of a financial planner. Today he fills us in on how to be financially studly.

Jeff Rose is an Illinois Certified Financial Planner and co-founder of Alliance Investment Planning Group. He is also the author of Good Financial Cents, a financial planning and investment blog. You can also learn more about Jeff at his website Jeff Rose Financial.

Throughout a man's life, he is presented with opportunities to leave his mark. The title that all men desire and hope that their name is mentioned in the same breath as is the unmistakable title of "Stud." In grade school, being a stud was making the starting five of the basketball team and being the first to french kiss a girl. In high school, it was cruising around in your slick hot rod, leading the football team to state, and landing the hottest cheerleader on the team. College introduced the beer bong and how much cooler your parties were than the one down the street. After graduation and well into your career, the next studly phase of your life begins. At this point in your life, women don't care how much you "could" bench press, the fact that you did 21 shots in one night (and lived to tell about it), or that you almost won the state championship in 2004. They want a man who has control of their finances and has a plan in place. They want a financial stud.

Have Some Cash

You better have some cash in your wallet and in the bank. I make it a point to always have at least $100-$200 cash in my wallet. For me, that's weird to say because I've always been an ATM guy. I keep cash on hand for times that debit cards just won't work. Whether it's buying the next round, leaving a generous tip, or simplifying the splitting of a dinner bill, having some cash on hand looks impressive.

But don't just keep cash in your wallet. You want to make sure you have a decent amount of cash stashed away in your savings account as an emergency fund as well. Having a decent amount of money in your savings is a sign that you are financially responsible and have the discipline to be able to put some money away. How much is enough? 3 months of your monthly household expenses is a start, but to be a true financial stud you should be somewhere in the 6-8 month range. If you want to feel like Arnold Schwarzenegger is his prime, then 12 months will give you "the pump" you're looking for.

Got Debt? Get Rid Of It

Whether young or old, there's nothing less attractive than having extra baggage. Even worse than having flabby love handles is having a mountain of debt. Just to confirm, I had a fellow female blogger, Mrs. Micah, give me her take on what makes a man a financial stud. Mrs. Micah says, "I think that being debt-free is sexy. It shows you can look after yourself, it frees up your future together, etc." For anybody that has struggled with debt, I know how burdensome it can be. It's even worse when you have to pass that burden on to your significant other. If you have debt, then having an action plan to get out of it will keep your stud credentials.

Forget the Bench Press…Max Out the Roth IRA

For the younger investor, maxing out your Roth IRA each year is the equivalent of being able to bench press 415 for reps. Let's say that by the age of 25 you are able to sock away the maximum Roth IRA limit of $5,000. If you continue to do so for 30 years, averaging 8% return, you'll have a $600,000 tax free nest egg waiting for you at retirement. And when you're finally put out to pasture, you'll be one happy stud.

Become a 401k Expert

Many times I hear of people just picking funds in their 401k because of what their co-workers are doing or because they thought the fund sounded cool. Whatever you do, do not be that guy. I had a friend in his early 20's who was putting most of his money in the "Total Return Fund" because it sounded the most aggressive. Newsflash: it was 100% bond fund. Granted, it helped him prevent major losses in the past year, but for a long term strategy, it's not the way to go. Don't get your 401k advice from chats around the water cooler; head to Google and do some research.

Budgets Are Sexy

A financial stud doesn't spend just to spend. A man needs to know where his money is going month to month. If spreadsheets aren't your thing, try writing down your bills so you can see how much money is really going out each month.

Don't just take my word for it. Check out J. Money's blog, Budgets Are Sexy, to get a grip on your finances. Here's what J. Money says, "Short answer: Budgets = Confidence = Manly. Long answer: Maintaining a budget is key in becoming financially studly. If you know where your money is coming and going, you'll know your strengths & limitations. And if you know your strengths & limitations, you can outwit your opponent at any time! Plus, you'll be able to make quick decisions on the spot which girls love. And you know what else girls love? Confidence. And this, my friend, is what the budget gives you."

Don't Get Superman Syndrome

Life insurance when you're single isn't really that important, but when a family is involved, it should take precedence. Face it, there is a 100% chance you are going to die. Last time I checked, that's better odds than Sea Biscuit at the Kentucky Derby. The last thing you want to do is croak too soon and leave your family in financial distress. Let me give you you an example. I had a married couple as clients where the husband was physically fit. He was not overweight, exercised regularly and didn't smoke. He was a doctor whose financial resume qualified him as a legitimate stud. Unfortunately, an unexpected massive heart attack left the wife and their two kids without a father. Thankfully, the father was wise enough to have enough life insurance for his wife to pay off what little debt they had left, pay the kids' way through college, and give the wife the option not to have to work the rest of her life. Dealing with the loss of a loved one is tough enough, but adding unnecessary financial burden can leave a mourning family in shambles.

Are you a financial stud?  Don't worry it's not too late.  If you are missing some of these studly qualities, make a commitment to make some changes.  You'll go from a "dud" to "stud" in no time.

If you enjoyed Jeff's post, read more of his stuff at Good Financial Cents, and subscribe to his RSS feed.

The Per-Diem System Is a Seriously Easy Budget to Follow [Budgeting]

via Lifehacker by Adam Pash on 4/15/09

If you've ever taken a work-related trip, chances are you're familiar with the concept of the per diem (Latin for "per day")—a daily cash stipend intended to cover your expenses.

Photo by chrisdlugosz.

Weblog Get Rich Slowly details how to apply this concept to your monthly budget, creating a per-diem budget for all your spending cash.

As a guy who just finished paying off $14,000 in credit card debt, I wanted to share one tip that helped me get over the bad debt hump. I allocate my spending money on a per diem system. At the beginning of each cycle of my monthly budget, I set aside funds for:

• Every fixed expense that I have (rent, cable/internet, groceries, power)
• Any unique expenses (a plane ticket, for example)
• And, of course, my savings (about 8 percent of my after-tax, after-401k income)

After allocating this money, I go to the bank, withdraw the remaining funds in cash, and divide it among envelopes for each day of the month. Each day, I open an envelope and add the day's cash to my wallet. For me, the physical parceling of the cash is an important psychological step.

Granted, using this method does mean a lot more cash transactions, which can be difficult to track and don't have any benefits (of the credit card rewards ilk), but since most of the spending you need to track will have been paid before you set aside your per diem cash, it's not a bad method—especially for folks who have a hard time sticking to a budget when there's no physical limit.

In college, I went on a similar (but decidedly more insane) budget in which $1 per day was all I allowed myself. Extreme, yes, but I saved some serious cash over that summer. With a more reasonable approach, I can imagine a per-diem budget could be very effective.

The Per-Diem System: An Easy Way to Budget Your Spending Money [Get Rich Slowly]