It's never too early to start planning for the future. This is especially true for future homeowners. Even if you have never thought about owning a home or think that you may never want to, it's smart to plan ahead just in case. Trust us--taking care with your finances now has the potential to greatly impact your ability to achieve your goals in the years ahead. Here are some tips we wish we would have known.
Credit Card Utilization
Lenders will want to see that you are not a financial risk when it comes to credit utilization. Generally, they'll want to see that you are not near your maximum credit limits; it is suggested that a healthy credit card utilization is less than 35% of your total credit limit for all of your credit cards.
While it's very important that you establish lines of credit in order to build credit towards purchasing a home, buying a car, etc., it's also imperative that you are able to prove to lenders that you are responsible with your credit and will pay them on time. Keeping your credit utilization low now will help you prove to lenders that you are a worthwhile investment when you apply for a home loan in the future.
Home loan lenders look at what's called your "front" and "back-end" debt-to-income ratios. Your front-end ratio tells you what you can afford in mortgage-related payments each month, which should not exceed 28%. To figure out your front-end ratio, multiply your annual salary by .28, and then divide it by 12. Your back-end ratio is your total debt-to-income ratio, including all of your debt, such as a mortgage, credit card bills, student loans, car loans, child support, etc. The maximum allowable total debt-to-income ratio is 36%.
One way to keep your debt-to-income ratio low and ensure that you won't need to over-utilize your credit is to build savings. Life is going to happen, and accidents and unexpected necessities are a part of life. Electronics die, cars break down, people get sick, pets need to be taken to the vet, and family members show up unexpected. No matter how much you plan ahead, you are inevitably going to need more cash than you have at some point. Building up a good nest egg of savings will ensure that you have it when you need it and don't continue to add to your debt. (For more tips on building savings for purchasing a home, see this ABC News article.)
Credit Scores/Resolving Credit Issues
A low credit score can keep you from acquiring a loan for a home, a car, furniture, and other large items that you will want throughout your life. While you will want to start establishing lines of credit to start building good credit, you also want to be very careful about how you use credit. Credit scores can make or break you. They can also influence the amount of interest you will receive and how large your down payment will be. Also, blemishes on your credit history can negatively influence your score for years, even if you have resolved them. Taking care to clear up any negative marks against you now will help immensely in the future. You can monitor your score for free at creditkarma.com.
Building a professional network is a crucial (yet daunting) factor in developing a career. In a competitive job market, it's important to network efficiently and be memorable to your contacts.
Do your homework, starting with the big picture.
Start by reading up on who's who in the industry you're interested in--who's established, who's on the rise, and who's making news. Then, zero-in to research the people that are running those companies and their recruiting departments. Use LinkedIn and Facebook to discover mutual connections and learn more about your targeted contacts. If you don't have any connections but love the company, try "cold calling" with an email that is tailored to one recipient at a time (resist the urge to send mass emails) or try hand-delivering your resume to the reception desk.
See an opportunity and act on it.
You'd be surprised how often you can connect with seemingly inaccessible people. Your chances for a successful connection swell when you're brave enough to reach out earnestly, respectfully, and with a genuine appreciation for the person's work. Email the industry blogger whose work you read daily, set up a coffee meeting with a VP of a company you admire, and introduce yourself to the higher-ups that make an appearance at company parties. People will (usually) appreciate the bold move so long as you maintain professionalism and have a purpose. That is, make sure that before starting any introductory email or informational meeting, you know what you want out of it (a job, a referral, career guidance, etc.) so that no one feels his or her time is wasted.
Be frank about your weaknesses and build a network to strengthen them.
Networking shouldn't be exclusive to the people and topics you already know. It should also help fill in the gaps. First, list your weaknesses: topics you don't understand, processes you don't know, and pieces of your industry pipeline that you haven't been exposed to. Then find your resources: people, workshops, seminars, and mixers that can educate you. Employers will be impressed that you make the extra effort to be educated and you will expand your network in a completely new direction.
Get creative with how you establish and reinforce relationships.
Shake up the tried-and-true LinkedIn introduction and lunch meeting with something refreshing and memorable. If you're at the assistant/intern level, volunteering to babysit or help on moving day is a great way to earn a busy executive's face time and trust outside the office. Already connected? Suggest meeting for breakfast instead of lunch (they'll appreciate having a free lunch hour). Or, try checking out a gallery opening (the refreshments are free and you'll have something else to discuss if the conversation gets stagnate).
People want to work and affiliate with engaging, passionate, and enjoyable people. At the end of the day, networking is about relationship building, not just having 500+ contacts on LinkedIn.
Nothing is sweeter (or scarier) than realizing you finally have the savings and ability to move out of your parents’ place. But hitting the pavement and scouring the back of the Classifieds is so 1995. Thankfully, the web is packed with search engines, resources, tips, and checklists to get you moving and keep you organized.
PadMapper aggregates the listings from the top rental sites, making it the Google of apartment hunting. What it touts in listings, it lacks in features, making it ideal for the minimalist who's short on time. Apartments.com has an app to help you search while you're already out on the hunt. It's loaded with details, panoramic pictures (no hidden surprises out of frame!), and floor plans. HotPads.com lets you see apartments in relation to points of interest nearby and uses density maps to show demographic data like median age and rent.
Save time when searching for apartments by browsing only the listings with images. Landlords who are hiding something or who aren't professional enough to post several decent photos aren't renting anything you want to lease. Also avoid listings that give an area, but not any address or cross street. The landlord may withhold the address for privacy reasons, but you should be able to see the cross streets to gauge your commute, parking, and safety situations.
Speaking of safety, you can do your folks (and yourself) a favor by picking a safe neighborhood with the help of CrimeMapping.com. The site works directly with local law enforcement to report confirmed crimes. It can email you crime alerts in the neighborhood.
When it's time to move, save money by packing and moving your own stuff with family and friends you can thank with a pizza. Have the friends but not the truck? Rent one at the size you need from U-Haul and rent the gear (dollies, ramps, tie-downs, etc) at The Home Depot. If moving your own stuff isn’t an option, The American Moving and Storage Association can help you find a company within their membership. Definitely check out consumer advocacy site MovingScam.com, which has a blacklist of companies with user complaints that will save you a headache and has an app that can estimate your moving cost.
If you're looking to move out but aren't exactly ready to move in, Public Storage is nationwide, lets your access your own unit when you need to, and typically rents the first month at only a dollar. PODS brings a shipping crate to you, lets you fill it, then takes it away to a storage unit--convenient, but a little more costly and more difficult to access to your stuff.
Get organized and avoid the nagging "what am I forgetting?" feeling with a mover's checklist, ideally one that helps plan your move over time. Apartmentsearch.com has a lengthy, but comprehensive, example and Atlas Van Lines uses your move date to tailor a personalized scheduled checklist.
Become your own boss. Set your own hours. Do what you really want to do. All of those are the perks of starting your own business.
These days, entrepreneurs are realizing that its a technology-driven world. Startups that are technology focused are becoming increasingly popular--so popular, in fact, that The Wall Street Journal ranked the top 50 startups of 2012, 29 of which were technology-based.
Here’s a look at five hot technology startups out there:
1. Smartphone repair: Almost everyone has one, and most of these phones have screens that can easily crack. Why not create a business that repairs those cracked screens for less than stores, such as Verizon and U.S. Cellular, charge? There are even classes out there designed to help teach you to fix those cracked screens. Wolfe Street Academy focuses on teaching people how to repair screens, as well as what it takes to start your own business.
2. Technology maintenance: As with cell phones, most of us own at least one laptop, iPad or e-reader. With 14.8 million iPads sold in the first year after it launched in January 2010, according to MediaBriefing Experts’ blog, those devices are starting to age. As a tech-savvy young adult, you can figure out and fix the problem at a cheaper price than the large maintenance stores. There’s always going to be a demand for it, so you’ll never be short on work.
3. Create a convenience website: Creating a unique website that finds a way to help people keep their lives organized is a great way to go. For example, 42Floors.com lists office space rentals and commercial real estate for people to search. Be creative; if it’s something that would make your life easier, it’s probably something that will help others out too.
4. Social media consultant: We’ve grown up around social media, and for most of us, using it is second nature. But there are businesses out there that haven’t realized how much social media marketing can help businesses and create opportunities for them. That’s where you come in. As a social media consultant, you can help existing businesses use sites to such as Twitter and Facebook to grow their clientele and improve their companies.
5. Create phone apps: Think of how many people have smartphones. Then, take a look at your own phone and how many apps you have. Creating popular apps has the potential to bring in a steady, continuous income. Take the time to research what users value in their apps, as well as the earning potential that comes along with each of your ideas before diving in. TechCrunch breaks down the most important things to think about when you’re brainstorming app ideas.
Since some of us learn better by hearing bad examples, let’s talk about four critical things to avoid when trying to maintain a positive image for your startup. Luckily for me (because it makes writing this blog so much easier), BP gave us an outstandingly bad example of PR behaviors during its Gulf oil-spill crisis, which I alluded to in my last post. (So did Enron, but its scandal was beyond repair.)
1. If you’re at fault, admit it--quickly
According to the Public Relations Society of America (PRSA), the first rule in any crisis is to get out in front of the story early. For weeks at the beginning of the crisis, BP executives denied fault and tried to push the blame onto contractors. Rather than protecting their company’s image, these execs only made the company look more obnoxious and arrogant than the news had been saying.
2. Think before you speak
Remember, the Gulf oil spill put 205 million gallons of oil into the ocean. Think about all of the communities surrounding the Gulf of Mexico that depend on the fishing industry for their economic stability. The oil spill was a pretty big deal. In fact, it was catastrophic.
So, when BP’s previous CEO, Tony Hayward, said things like "There's no one who wants this thing over more than I do. You know, I'd like my life back," the people in these Gulf communities were understandably offended. Moral of the story? Just think.
3. Understand the community
This step is closely tied to the previous. If Mr. Hayward had understood the citizens of the affected areas, I don’t think he would have made such a ludicrous statement about wanting his life back. (Not many people sympathize with the CEO of a multi-billion-dollar oil company, especially when he made off with over $18 million in severance pay.) Misunderstanding the priorities of members of the community makes any PR tactic at best worthless, and at worst further damaging.
4. Eschew unethical actions
Perhaps the best lesson of all is to just avoid doing anything unethical. Unethical business practices yield equally disparaging attention. Follow Generally Accepted Accounting Principles, use appropriate and truthful advertising, definitely don’t bribe news media professionals, and obey the law to avoid the damaging repercussions of unethical behavior.
Both BP and Enron give us a perfect example of what not to do when managing the image of a startup from a PR point of view. What are some other bad PR practices startups should avoid? Share your thoughts in the comments.
Ahh, the great holiday of romance. Instead of rolling your eyes at the idea of it, curling up with a book or a movie, or crying yourself to sleep, celebrate Singles Awareness Day. Try an athletic activity to get your mind off of whatever gets you down. It’s not nearly as expensive as that fancy dinner and a dozen roses.
Yoga/Pilates: These exercise systems and stress relievers focus on physical, mental, and spiritual health (best for a day like this). It’s also a good way for singles to hang out, talk about the cute instructor, or to hang out with other class members. Class prices vary based on non-membership and different membership packages, but a monthly membership to a program is around $100. Non-membership averages out to a minumum of $20-$30 per class.
Latin Dancing: Many singles meet during Latin dancing, and Salsa is a popular, high-energy activity. Latin dance pricing varies based on clubs, classes and location. If there’s a monthly membership fee, it should be around $50. A trial should be the regular price of going out to a club.
Rock Climbing: This is a daring activity you can do with a group of friends, or a nice way to “partner” up with another participant. Pricing can be a little unpredictable, however. Go to your local recreation center for prices, which should be reasonably comparative to other recreational activity pricing.
Boxing/Kickboxing: Are you really mad at your ex? Try boxing or kickboxing! It may not be the best place to meet someone else, but at least you can relieve some stress. Membership prices may be on the higher side, but look for discounts or do a trial run for $30-$50.
Ice Skating: This seasonal activity is fun for the whole family. It’s on the romantic side too. But if you’re looking to relieve stress and you’re young with small children, this may be the place to find another young, single parent with small children. Children prices are always are lower ($6-$8) and adult prices are usually twice as much.
Indoor Swimming: Doing a few laps can clear your mind of relationship troubles. If you meet another single, then maybe there’s a hot tub near where you two can talk. The pricing here should be low--just go to your local recreation center.
Although its practitioners might prefer you not recognize this fact, public relations is everywhere. PR is an industry and profession that controls (or hopes to control) almost everything people see, hear, or feel about anything important, especially in business. Remember the Enron scandal of 2001? How about the more recent British Petroleum crisis? Both of these companies had teams of PR professionals working to manage their crises. (I’d say Enron’s scandal was beyond being saved by a tactful PR campaign, though.)
PR isn’t valuable only to companies in crisis-mode. The purpose of public relations is to build mutually positive relationships between organizations and their key publics (in most cases, customers). In today’s increasingly competitive economy, new business owners and entrepreneurs are faced with the challenge of securing awareness and trust for their new ventures; these four PR tactics are must-have resources for any new startup:
1. Social media--Like it or not, social media is obviously here to stay. Depending on the type of business, Twitter may be more effective than Facebook, or perhaps LinkedIn is the place to start. My advice? Place your business in every feasible social media outlet (Forbes says so, too)--just make sure content is action-oriented and tied to measurable goals.
2. Newsletters--Let’s talk email. When I send out bi-weekly newsletters to email subscribers, my web traffic at least doubles. Newsletters are a great way to share basic, conversational information about upcoming events, new products and services, exciting new findings, and special offers. Be careful not to spam your subscribers, though; no one likes junk mail--print or electronic.
3. Press releases--According to Entrepreneur, a press release is an announcement issued to the news media and other targeted publications for the purpose of letting the public know of company developments. Participating in a charity event for the local community? Changing locations? Expanding service area? Hosting a special event? Strategically using press releases and sharing them with media outlets (services like PRWeb are good at managing the distribution process) can earn coverage in local newspapers, radio stations, and news channels. Since press releases ultimately serve as free content for news media, making sure each one is extraordinarily polished will boost its success rate.
4. Special events--Have I mentioned special events anywhere in the first three tactics? If not, I should have. Grand openings, charities, customer appreciations, and other special events with activities for community members (appropriate for all ages) are wildly successful at gaining the most effective form of marketing: positive word-of-mouth. Make sure events target the startup’s target market to ensure positive word-of-mouth directly creates more cash for your business.
With all of the ways to gain free advertising, little reason exists for a startup to fail at gaining awareness from its key publics. What other ideas might be good ways to build awareness and trust with customers? Share your ideas with us in the comments.
Nowadays, the pursuit of the American dream has dwindled to nothing more than a vain ambition. Luckily, members of Generation Y are blessed (or maybe cursed) with levels of ambition previously unheard of: we are three times as likely to want to save money, compared to our parents and grandparents. Simply caching money in an everyday savings account won’t elicit wealth, though. Here are four immediate steps to achieving solvency--affluence will come shortly thereafter.
1. Prioritize debt and pay it off
Some forms of debt are more cancerous than others. While student loans may not have matured yet, revolving debt on credit cards infects and dissolves checking and savings accounts faster than paychecks can be deposited. Evaluate these factors when prioritizing debt for repayment:
- Interest rate--That exclusive rewards card may feature some exciting perks, but none that aren’t paid for by interest. Save the most money by paying off revolving debt on high-interest credit cards.
- Maturation date--While some debt is immediately payable, other debt accumulated in some types of loans doesn’t become due until a later date. While this debt is important to pay off, focus first on the immediately due amounts (the reasoning should be obvious).
- Debt amount--Minimal debt accumulated on credit cards is much easier to pay off than large amounts of debt tied to assets like a vehicle, house, or college degree. Paying off the larger debts will feel much more financially liberating, though.
2. Save a percentage of regular income
No, simply saving money isn’t the only way (or the best way) to achieve wealth, but it is an important piece of the puzzle. Creating a disciplined savings plan to deduct a portion of every paycheck (let’s say 10 percent) and placing it in a savings account will help accumulate a good amount of savings. Heck, some financial institutions even allow for automated savings deposits from paychecks, making the process even less painful and more convenient.
3. Invest a percentage of regular income
Similar to saving--but more adventurous--is investing. Choosing the most personally beneficial vehicle is important, though. Mutual funds are known to be less risky, while stock options can be incredibly volatile (and just as rewarding). Whichever vehicle they choose, all investors must ensure that they invest money they can afford to lose.
4. Contribute to charities and philanthropic causes
What goes around comes around, right? Maybe. Some are firm believers of this ideology, and fewer of those are exemplars of the effects of karma. Whether in an effort to secure fortuitous financial blessings or to take advantage of the charitable contribution tax write-off (as long as it’s still around), giving when we have little will help us feel happier with our financial gains. Such generosity is also indicative of those who will give when they have much.
Ultimately, the process is simple: pay down, save, invest, and contribute as much as you can to earn long-term riches. What other “get rich” strategies are out there?
When the mercury dips to levels only polar bears can contend with, mere mortals crank the heat. Home heating represents the biggest piece of the expense pie--up to 35-50% annually, especially in chillier states. Homeowners and renters alike can benefit from a few simple tricks and maintenance tips to help heat bills fall like snow.
Don’t touch that dial. Put the heat to bed with the rest of the family. Even minor adjustments are big winners--save 2% on the heating bill for each degree lowered for a minimum of 8 hours a day. On the same thread, turn the heat down to the lowest possible degree (especially if freezing pipes aren’t an issue) when leaving on vacation.
Spick and span. Regularly check and/or replace heating, ventilating, and air conditioning (HVAC) filters. Common sense rules the roost: if the filter is dirty, replace it (or ask your landlord to help), but do so at least every three months. A dirty filter slows airflow, stresses the heating system, and pumps pollutants into the atmosphere. A clean filter, conversely, prevents dust and dirt from building up in the system, reduces maintenance, and increases efficiency.
Out with the old, in with the new. If the heating system works overtime but the home still isn’t cozy, it may be time to supplant. Cut down on utility payments--up to $200 annually--by petitioning landlords to upgrade your heating system, or make the swap yourself.
Duct, duct goose. Unfortunately, ducts commonly leak 15-20% of the air that passes through them. Sealing ducts--focusing on those in the attic, crawlspace, unfinished basement and garage--costs a bit up front, but can reduce heating costs by 20%. Renters or homeowners with a handy touch can secure seams themselves with duct sealant (mastic) or metal-backed (foil) tape. Wrap the newly sealed seams in insulation to keep them cool in summer and hot in winter.
Bundle up. Nothing feels better in winter than a blistering shower. Ensure efficiency in water heating by insulating natural gas or oil hot-water storage tanks. Do not cover the tank’s bottom, top, thermostat or burner compartment. Make sure to check the manufacturer’s directions. Additionally, don’t forget the connective parts: insulate the first six feet of pipes that connect to the tank.
Use it or lose it. Heating systems aside, use creativity and common sense as efficiency tools. Close doors and vents in seldom-used rooms. Open windows daily to capture radiant heat from the sun; close them nightly to retain daytime warmth. Keep heat vents free from furniture, rugs or blankets. A regularly used humidifier will help also, as dry air can often make a house feel cooler.