Tag Archive for: money

Women and Money: 5 Ways to Stay Financially Strong During a Recession

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recessionIn September 2022, The Federal Reserve announced another interest rate hike in an effort to combat inflation — but in doing so, it seems an economic recession is increasingly inevitable. Yet that doesn’t have to spell out trouble for your personal finances.

Whether you waded through the last recession or are only old enough to have heard the stories, the word “recession” may send a chill up your spine. It may be autumn, but this is not meant to be a scary story — in fact, it’s one of focus and resilience.

Let these five tips help keep you and your wallet afloat even in the face of a recession.

1. Set (and Stick to) a Budget

It’s one of the oldest tricks in the book for a reason. When you have a thorough understanding of the money coming in and going out, you’re able to consistently make financially sound decisions and avoid biting off more than you can chew.

First, take note of your recurring expenses each month like groceries, car payments, utilities, and your child’s school lunches. Then consider different budgeting strategies and find one that makes sense for you. For example, many women swear by the envelope method. The more a strategy resonates with you, the more likely you are to stick to it. Don’t be afraid to experiment, but commit to the one that serves you best.

As you’re monitoring your finances closely, you may even be able to identify ways to save more each month and increase your wealth.

2. Invest Wisely

We talk extensively about the gender pay gap, but did you know about the gender investment gap? Women comprise a criminally underrepresented share of the investment market. (Perhaps that’s why Wall Street’s Charging Bull has been around so much longer than Fearless Girl which made such a splash.)

But just because we haven’t historically taken up much space in this area doesn’t mean we shouldn’t start — in fact, we’d argue that’s more than enough reason to.

If you’re in a place to devote some income to investments, there are countless ways to do so — including high-yield savings accounts, mutual funds, stocks, and government bonds — each with their own risks and advantages. Even starting small can mean big returns later.

3. Solidify Your Retirement Account(s)

Technically, this may be considered an investment as well, but it deserves its own mention: Don’t forget about your retirement account.

Perhaps your employer offers a 401(k) or you’ve been considering a Roth IRA — whatever route you choose, contributing to a retirement account can only help, not hurt. Plus, your employer may even offer “matching” benefits to increase your account.

We statistically live long lives, yet almost half of women are worried about money in old age, so it’s always a good idea to look out for your future self financially and set her up for success later.

4. Advocate for Yourself (and Other Women)

Ladies, keep fighting the good fight. The U.S. passed the Equal Pay Act more than 50 years ago, yet as of 2022, women still make only 84% what men make, on average. When a recession rears its ugly head, it may be easy to focus on merely surviving without much thought on other systemic conditions.

But there’s no better time to ensure you are taken care of. If you feel you aren’t being paid enough for your contributions, chances are, you’re not. Here are three tips to negotiate a higher salary:

  • Consider the market norm for your role, industry, and experience level.
  • Prepare a range you’d like to target, not a specific number.
  • If you’re met with resistance to an increase (or to the conversation at all), ask when you might be able to expect them to reconsider so you buy yourself another chance to ask in the future.

Whether you’re considering salary negotiation for yourself or not, remember to help other ladies up the ladder, too. Empower every friend, family member, and colleague to know her worth and speak up.

5. Trust Yourself!

You can’t control the entire economy, but you can control your own financial situation, your perspective, and your mindset.

Set realistic goals for the short and long term, make wise budgeting, investing, and spending decisions, and don’t lose sight of the most important thing — taking care of yourself. And girl, you got this.

For more insights on women in the economy, check out this handy infographic from our friends at Annuity.org:

The Dollars and Cents of Women and Money

The opinions and views of guest contributions are not necessarily those of theglasshammer.com

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How to Optimize Your Retirement Savings When Changing Jobs

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Guest contributed by Sarah Landrum

You consider many factors when transitioning from one position to the next.

How quickly will you adjust and pick up new duties? Do you fully understand your benefits? How do you take your old accounts with you?

Reconciling new benefit offerings with old accounts from previous employment, such as an existing retirement, gets confusing when you’re taking in too much information all at once.

The good news: That money you worked so hard to save for retirement belongs to you, wherever you go. Here’s what to do with it.

Look at Your Retirement Goal Status First

Before you consider what to do with your money, now is the time to look at where you are with your retirement goals. Are you working toward a secure retirement? Look at your total retirement goal and potential withdrawals every year and play with projections for your current contributions and new employer matching contributions while weighing your circumstances.

For example, say your current retirement savings is $100,000, and you expect an income increase of 2 percent. You can factor this into your retirement plan along with Social Security benefits and other income to stay on track with your goal. Don’t forget to factor in if you’re married, since adding a spouse affects your Social Security benefits.

Options for Your Existing 401(k)

Here’s where it gets tricky. Your old 401(k) account belongs to the prior employer, but the money belongs to you. Here are the four options you have for what to do with your existing 401(k), as well as the advantages and disadvantages of each avenue.

1. Keep Your Old 401(k)

Look at your existing balance and reread the terms. You may have to move your money since the account belongs to the employer. Otherwise, the old 401(k) usually sits there without contributions from you or the employer. Different rules exist for different employers regarding what’s done with the money, with some automatically cashing out your funds to you or transferring the amount to a new IRA for you. If a check is made out to you, the company automatically cuts out a 20 percent portion to cover taxes. Check with your prior employer and reread the terms.

2. Transfer the Money to the New 401(k)

When your new company offers a 401(k) or other retirement option, consider transferring the money from your old account to the new one. Ask: does the new plan terms accept transfers from prior 401(k) accounts? What fees apply?

Sticking with a 401(k) option over an IRA has its advantages. Money must come out as of age 70.5, but if you’re still working, you can delay distributions with your current employer 401(k) plan until your actual retirement date and maximize your earnings. In the case of bankruptcy, your 401(k) remains protected, but IRA exemption stops after $1,283,025. At age 55, you can also take cash penalty-free from your 401(k) if you leave your position.

3. Move It to an IRA or Roth IRA

Skip thoughts of 401(k) confusion and transfer your balance to an existing IRA if you have one — or open a new IRA. A perk of a traditional IRA is the avoidance of taxes by transferring the money to this type of retirement account, but a Roth 401(k) must be transferred to a Roth IRA. You must look carefully at terms and fees when rolling over to an IRA. Otherwise, you may pay more than transferring to the new employer 401(k). Companies are required to provide reviews of annual investment costs and disclose administrative fees.

Younger baby boomers change jobs about 12 times over the course of their careers, and leaving 401(k) plans behind overlaps multiple funds that may exceed your risk tolerance and age. If you’ve left more than one plan behind, consider rolling retirement accounts into an IRA. Many IRA plans contain lower investment costs and options to invest in exchange-trade funds (ETFs) to reduce costs and risk.

However, mutual funds and ETFs come with expense ratios, which vary whether that’s an IRA or 401(k) — look closely at costs, talk with your broker or ask for the disclosure of fees and ratios yourself. Slowly decreasing your stock investment amounts in your portfolio reduces your risk as you and your portfolio age.

4. Withdraw the Balance

It’s best to wait until you reach age 59.5 to withdrawal your retirement balance, or you face paying on the withdrawal as taxable income. Plus, you experience the joy of the 10 percent penalty due to the withdrawal of your balance and your funds won’t grow.

Most advise against withdrawing retirement balances unless you’re facing an emergency you need to pay a significant amount of money toward quickly. What you consider an emergency may not be worth it in the end, such as buying a house, paying credit card debt or helping your kids offset unplanned college costs. For example, it’s better to take an approved IRA distribution for college costs than to face the 10 percent tax penalty for withdrawal. You can slowly replace the distribution over the years but paying thousands in a tax penalty hurts your take-home income and drastically reduces your retirement earning benefits.

In the end, you selected the retirement strategy that best-suited your long-term goals but changing jobs and emergency life situations arise that prompt you to take another look at your approach. Multiple accounts are difficult to manage and rolling over everything into a single account or Roth IRA outside of your 401k may reduce fees and boost your earnings in the long-term. You’ve come this far and likely know what you want to invest in. Go with the plan that best meets those needs, and if that means transferring funds to the new employer’s 401(k) — do it. If you have or are taking on significant debt, go with a plan that protects your assets and reconsider any emergency needs. Then, update your retirement plan with a strategy that optimizes your savings.

Disclaimer: The views and opinions of guest contributors are not necessarily those of theglasshammer

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Things to Negotiate for….Besides More Money

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Smartly dressed young women shaking hands in a business meeting at office deskYou’re no stranger to the idea of salary negotiation when it comes to career advancement, but that’s just one of the fringe benefits up for discussion at the bargaining table on your road to the C-suite. You can’t go in assuming that certain perks like maternity leave or promotions are a given. Be prepared. One of the most effective tools at your disposal is your bargaining power.

Be Bold

Sheryl Sandberg discusses many of these points in her book, “Lean In: Women, Work and the Will to Lead.” Don’t be afraid to go to the table knowing what you want for the future of your career. Take charge, as Sheryl writes:

“Taking initiative pays off. It is hard to visualize someone as a leader if she is always waiting to be told what to do.”

That doesn’t mean you should storm through the office door and make outrageous demands, expecting them to be met instantly. Approach the situation with the right information and engage in tactful and professional discussion. Not sure exactly what that means or what those negotiations should entail? Here are six topics to keep in mind, and how you should approach them.

1. Flex Time

In the modern workplace, there are actually more people than you think working outside of the office with more flexible, nontraditional schedules. In a 2013 survey by the research group Catalyst, four out of every five respondents holding graduate-level degrees said they had some kind of work flexibility with their employer – that’s a whopping 81 percent.

In order to secure that type of perk at your next position, you’ve got to go in knowing exactly what you want from the flex time – both the when and the why. Your employer is going to be more keen to accept this stipulation if you have a detailed plan heading into negotiations. Be sure that you’ve cross-referenced any existing flex-time policy with the HR department to cover all your bases.

2. Professional and Personal Development

Make sure your future employer knows about your interest in professional and personal development. Continuing to learn and grow in your chosen profession keeps your skills innovative and creative, which will enrich the working environment for those around you as well. In fact, this type of incentive is among one of the most sought-after additions to an employment package by millennials. Consider asking about family friendly programs that encourage a work/life-balance, one of the most important points for Gen Xers.

3. Promotions

If you find yourself facing your annual review, consider your promotion options. Don’t be afraid to demonstrate how you’ve added value to the company, and why you should be considered for compensation.
Of course this doesn’t just magically happen one day by telling your boss you’re a rock star and should be paid accordingly. You need to work on cultivating a relationship and proving you are a valuable member of the company – these real bosses will give it to you straight.

In fact, a study done by Accenture in 2011 found that 85 percent of employees out of the 3,400 companies it surveyed got something – whether a large increase in salary to some kind of other incentive – simply by asking for a raise.

4. Maternity/Paternity Leave

Unfortunately, this is still an issue. In all the developed nations of the world, the U.S. is currently the only one that does not offer federally mandated parent leave. In OECD’s 2014 family database document, America literally has 0s across the board. You are not guaranteed anything.

Luckily most companies that want to retain talented staff recognize the importance of maternity/paternity leave. You could piggy-back your discussion concerning flex-time as well, and increase your chances of extending time at home with your new addition.

5. Vacation Time

Other than maternity leave, vacation time is also extremely important. Again in the U.S., the average employee has less vacation time than most other advanced economies in the world. Typically, a worker is only entitled to 10 days of paid vacation and six holidays, but even these are not guaranteed – quite different than the 30 days in France or 20 in New Zealand.

As you well know, this is where your bargaining power and value to the company can come in handy to secure more than the 10 days. Use tact, and also offer solutions for the time you are requesting to be away For example, tell your boss “I’ll be out of the office, but regularly checking my emails.

It’s important that you take advantage of complete time away from the office for a recharge. You’ll be more of an asset to your company when you return re-energized and refreshed.

6. Big Project Participation

If you really want to put yourself out there and be bold, ask to swim in the deep water, rub shoulders with the executives and request to work on the interesting projects that are happening in your company. This will help you get noticed, and you can also take the opportunity to cultivate mentoring relationships at the leadership and management level.

By Sarah Landrum

Sarah Landrum is a Penn State graduate, marketing specialist, freelance writer and the career expert behind Punched Clocks.
 
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Apples-to-Apples, the Gender Pay Gap Exists

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money money moneyThis week we hit “Equal Pay Day” on Tuesday, a day which symbolizes the extra days women must work to make the same salary as her male peers did last year.

According to the Demystifying The Gender Pay Gap survey by Glassdoor, the biggest myth about the gender pay gap is that it doesn’t exist at all, as 7 in 10 employees across seven countries assumed men and women received the same pay for the same work. But even when narrowed down to an apples-to-apples comparison within companies, researchers found a significant gender gap exists.

The Apples-to-Oranges Gap

Every time the gender pay gap comes up, it seems we have the apples-to-oranges data and the apples-to-apples data. Apples-to-oranges data compares men’s earnings to women’s earnings without breaking down the factors at play.

The recent Catalyst data summary of Women’s Earnings And Income reports that in the U.S. in 2014, women earned 79% as much as men in annual earnings. Based on Census data of median weekly earnings in 2015, full-time working women earned 81% as much as men, but only 72% as much within full-time management, professional, and related occupations.

Data has shown that female income tends to level off around age 35-40, as gendered workplace penalties reach full swing, while male income doesn’t level until 50-55 years old. The American Association of University Women reports that “women are typically paid about 90 percent of what men are paid until around the age of 35, at which point median earnings for women start to grow much more slowly than median earnings for men. From around age 35 through retirement, women are typically paid 75 to 80 percent of what men are paid.”

This difference has a significant impact on women’s lives, resulting in an average of $10,800 less in annual earnings, or nearly a half million dollars across a career, and a dramatically lower retirement security (44% less median income) for longer-living women, which ultimately spells an economy issue.

The Apples-to-Apples Gap

In their recent survey, Glassdoor created apples-to-apples salary comparisons by factoring in “differences in education, experience, age, location, job title, industry and even company.”

In the U.S, they found an apples-to-oranges 24% pay gap, or that women earned 76% as much as men. When they controlled for age, education, and years of experience, the gap was 19%.

When they looked at the same job title at the same employer at the same location, the highly “adjusted”apples-to-apples gap was still 5.4% – women earned 94.6 cents on the dollar of her male peer sitting next to her.

For a full-time working woman at median earnings, that’s a $2,140 loss per year. But for a woman who earns $100,000 a year, the loss is $5,400 annually.

The “adjusted gap”also increased with age – 6.2% at 35-44 years old, 9.5% at 45-54 years old, and 10.5% at 55-64 years old.

Among industries, the “adjusted”pay gap for insurance was among the biggest at 7.2% and finance was 6.4%. Among occupations, C-Suite professionals had one of the largest gender pay gaps (27.7%).

Apples-to-Oranges Is Still a Gender Bias Issue

Gender bias is still a significant driver of an apples and oranges comparison – it’s a big factor of the context that makes the difference exist at all.

According to Robert Hohman, CEO of Glassdoor, “occupational sorting”explains 54% of the overall “unadjusted”pay gap – the sorting of men and women into different industries and different roles in the economy, through non-subtle and subtle societal influences.

Education and experience were minor factors of explanation (14%). In fact, an April Gender Pay Inequality report from the U.S. Congress Joint Economic Committee stated, “The typical woman with a graduate degree earns $5,000 less than the typical man with a bachelor’s degree,”and that “women’s median earnings are lower at every level of education.”

Sincerity Is Transparency

The gender pay gap has been stagnant for the last decade 2006 to 2015 (change was 20 times faster in the preceding decade) and is not except to close until 2059.

Recent executive proposals by President Obama to target the gender pay gap by having the Equal Employment Opportunity Commission collect companies salary data has prompted reactions of government overreach, but the overall intention is to get targeted with a persistent problem.

As long as the persistent gender gap belongs to everyone, it belongs to nobody, and that’s why transparency matters. 70% of employees feel salary transparency is good for employee satisfaction and for business.

Certainly, a pointed finger sparks transparency, especially if it’s being pointed publicly or by shareholders, and especially if there’s nothing to hide. With the recent Glassdoor finding that female computer programmers experience one of the highest “adjusted”occupation pay gaps at 28.3%, the big names in Tech have been coming out to champion their equal pay.

On Monday, both Facebook and Microsoft announced publicly that men and women earn equally at their companies. Amazon and Apple have publicly stated similar findings based on employee pay surveys, prompted by shareholder proposals requesting disclosure of pay equity assessments, filed or co-filed by Pax World. Intel also shared their equal pay findings recently.

Now what if companies began to feel the same external pressure to disclose their C-Suite pay findings around that whopping 27.7% discrepancy?

When it comes to the gender pay gap, it seems the only real language of sincerity is indeed transparency, and companies have the chance now to use it.

By Aimee Hansen

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Its all about the money. Getting that pay rise

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money money moneyLast week we began looking at how to weigh up your options regarding staying and progressing at your firm or making a move to further your career.

Let’s start with the financial factor of feeling or being actually underpaid for the job that you do. First thing to do is to do some research on what your peers get paid online and yes interviewing is a way to do this as well as conversations with trusted peers. Secondly, before leaving, there are ways to explore pay and compensation changes with your boss and your HR team without threatening to leave and never present an ultimatum and especially if you don’t actually have a new job to go to. Do Not Bluff unless you are independently wealthy and can afford some time off.

Go to your boss and say that you would like to take him or her to lunch to chat about the past year. If you did a great job, present your case and ask for a higher base and/or a higher bonus or commission structure. Sometimes base salaries are harder to play with than commissions but ultimately if you are truly under market values ( as women often come in lower than men on base salary) there is a real case to give you the bump that aligns you with peers. If it is just about the money, and you are otherwise pretty happy, then why jump ship to an unknown workplace culture and structure? This conversation is worth having and then you can decide what to do!

By Nicki Gilmour, Executive Coach and Organizational Psychologist
Contact nicki@theglasshammer.com if you would like to hire an executive coach to help you navigate the path to optimal personal success at work

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Bonus season is just around the corner and the big question becomes should I stay or should I go?

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money money moneyChances are, if you work in banking, you are thinking about bonus season. If you are keen to move companies, do your research before you get your bonus and start conversations with the right firms ahead of time. Why? Well, it is sometimes like being in a bad relationship, a small gesture can make you stay for a little while longer when you know you need something different. Money is always a factor, but look at culture, growth opportunities and ultimately the job you want after the next one as you make your decisions to move. Good luck!

By Nicki Gilmour, Executive Coach and Organizational Psychologist

Contact nicki@glasshammer2.wpengine.com if you would like to hire an executive coach to help you navigate the path to optimal personal success at work in technology

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