The Shame of Debt

Money doesn’t make you happy. That’s how the saying goes, and you can’t deny that there’s some truth to it. However, while having lots of money won’t make you happy, having very little is more likely to make you stressed and depressed. 

The less you have, the more likely you are to stress over the smallest of things, and if debt is forcing that poverty on you, hanging a dark cloud of uncertainty over your head, that stress and that depression will increase.

Psychological Cost of Debt

Debt has a massive psychological cost and a lot of that boils down to shame. Debt stress and debt shame are more common than ever in the United States, as debtors seek to hide their troubles from their families and loved ones. There is an unmistakable link between debt and an increased suicide risk.

A student conducted several years ago looked at the finances of people who had committed suicide and found they were significantly more likely to have massive debts (student loan debt, credit card debt). Similar studies have been conducted on mental health, noting that people are more likely to suffer from debilitating depression, stress, and anxiety when they have problems with debt.

And it’s easy to see why. Not only do many debtors choose to keep their problems to themselves, feeling an immense shame that stops them from telling even their closest friends and family, but debt can also lead to anxieties about debt collectors, foreclosures, repossessions, bankruptcy, and more. 

How to Overcome the Shame of Debt

To improve your mental health, you need to fight debt stress and shame. That’s easier said than done, but there are a few things that you can do:

Understand Where the Shame Comes From

The first step is to understand why you feel the way that you feel. This might not fix your debt shame, but it will help you to understand it more.

There is no single, overriding cause of debt shame. Some debtors feel shame because they see themselves as the breadwinner, the provider, and if they have debt it means they have failed. Others feel shame because they come from frugal backgrounds and have been wasteful or because their debt is the result of a drug, alcohol or gambling problem.

Whatever the reason, you need to find it, address it, and fix it. Get help for that gambling or drug addiction, get advice from that frugal family.

Admit Your Fault

Debt doesn’t mean that you’re a bad or useless person. It doesn’t mean that you don’t care about your family. It’s not a character flaw tied to your personality, it’s a behavioral issue tied to impulsivity and even mental health issues. It’s still your fault, but it’s easily fixed and doesn’t make you a bad person.

Understanding this can help you to get rid of that shame and deal with your stress and mental health issues.

Improve Your Financial Knowledge

Researchers have found a direct correlation between debt and financial knowledge; the more you have of the former, the less likely you are to be competent in the latter.

Fortunately, it has never been easier to educate yourself. Take a look at the many guides here on Pocket your Dollars, spanning everything from pay off strategies for credit card debt to money-making ideas, recommendations for loans and credit cards, and more.

Get Credit Counseling

Credit counseling exists for a reason and can help you in your time of need. They’re not mental health counselors, they can’t prescribe you medication and they can’t help with your insomnia and anxiety. However, they have worked with countless debtors, many of which have anxiety and depression, and they understand what it’s like to be in your shoes.

They can help you to assess and manage your debts before advising on the right course of action. A financial therapist can also provide assistance with any relationship issues, counseling you on who you should tell, how you should tell them, and what sort of reaction to expect.

The problem that many debtors have is that they think they know everything. They won’t speak to a counsellor because they’re convinced they know what the counsellor will say. But let’s be honest, if you’re struggling with debt, there’s a good chance you’re not a financial wizard and even if you are, it always helps to speak with an expert, voicing your concerns out loud and bouncing some ideas around.

Stop Spending

We spend when we’re depressed, get depressed because we’re in debt and are in debt because we spend too much. It’s a cycle that’s keeping your favorite retailer in profit and doing untold damage to your finances. To get out of debt, you need to accept that this cycle exists and that the only way to escape is to stop that spending immediately.

Anything that isn’t an absolute necessity can be left for another day, preferably one when you actually have money to spend. Limit your spending to clothes, food, rent, utility bills, medical bills, and everything else that allows you to continue living comfortably from day to day, but give the alcohol, cigarettes, vacations, and other luxuries a miss.

How to Take Control of Your Debt

The best way to avoid the shame and stress of debt is to get rid of it. Studies on debtors have found that at least 9 out of 10 believe they will be much happier if they didn’t have debt. These beliefs have been confirmed by individuals who successfully pay off debt, claiming = they are much happier than they ever were.

There are many ways you can pay off debt and we’ll look at a few of these options below, but generally speaking, you need to:

  • Assess your financial situation
  • Check your credit report and credit score
  • Get help from a credit counselor or financial therapist
  • If your debt-to-income ratio is low, budget better and pay off more with a debt payoff strategy
  • If your debt-to-income ratio is high, try debt relief
  • Create an emergency fund to prevent future issues

Best Ways to Get out of Debt

There is no debt shame if there is no debt. As discussed above, debt is not something you should be ashamed of, but it’s also not something you should cling onto. It can cause you a great deal of stress, placing strain on your relationships and generally making life very difficult for you.

So, while it’s important to face the truth of the situation and dispel those feelings of shame, it’s just as important to fight your debt and get your head above water. Here are a few debt relief options and debt payoff strategies that can help. For more information, including expensive guides and recommendations on each of these options, take a look at the relevant sections on Pocket Your Dollars.

Snowball and Avalanche Methods

The debt snowball and debt avalanche methods are two of the most popular debt payoff strategies, and ones that we have discussed at great length before (see debt snowball vs debt avalanche). They can make the process more systematic, which, in turn, may provide you with the support and the structure you need to get your debts in order. 

In both cases, you need to make a list of all your debts, covering things such as Balance, Monthly Payment, and Interest Rate. For debt snowball, sort the list by balance and go from the smallest to the largest. For debt avalanche, focus on the debts that have the highest interest rate and get those out of the way first. With both methods, you need to keep meeting your monthly payment obligations, before putting any extra money you have towards your chosen debt.

Debt avalanche provides the most practical benefits as it clears the problematic debts first, thus reducing the total interest. Debt snowball provides more of a psychological boost, giving you motivation as you steadily clear your debts.

Major Sacrifices

The biggest issue with any debt payoff strategy is that it isn’t easy to get the extra money you need to make those additional payments and clear your debts early. However, many debtors are trapped in a cycle of debt not because they can’t scrape the cents together no matter how hard they try, but because they struggle to budget properly and make the necessary sacrifices.

The average American debtor spends thousands of dollars every year on uneaten groceries, lottery tickets, and media subscriptions. They drop hundreds of dollars on luxuries they don’t really need and spend over $3,500 a year eating out. If debt is dragging you down then it’s imperative that you clear it, which means making some sacrifices and getting your priorities in check.

If you genuinely can’t spare a dime and don’t waste money on unnecessary expenses, then look into some of the options below.

Debt Settlement

Debt settlement is tailor-made for unsecured debt and works especially well for clearing credit card debt, as well as private students. Debt settlement companies often request that you stop meeting your monthly payment obligations, which puts the accounts into doubt and means your creditors are more likely to accept a settlement.

This settlement will clear the entirety of the debt for a fraction of the price, often around 50%. This means that a credit card debt of $10,000 would be cleared for $5,000, providing you with some big savings even after the settlement fees have been taken into account.

Debt Consolidation

A consolidation loan is a large loan that pays off all of your debt at a reduced interest rate and for a reduced monthly payment. The loan is often extended by several years, which means you pay more in the long-term, but the reduced monthly payments alleviate some of the burden and make the debt more manageable.

Debt Management

Debt management provides debtors with a debt repayment strategy, with all funds funneled through the debt management plan and then distributed to creditors. This service is often provided by credit counseling agencies and credit unions, who begin the process by negotiating with creditors and then assuming control of all debts.

These companies often ask that the debtors cancel all but one credit card, which can reduce the debtor’s credit score by impacting their credit utilization ratio.

Balance Transfer

A balance transfer credit card lets you move all your credit card balances onto a single card, one that offers a 0% APR for the first 6, 12 or 18 months, allowing you to pay down debt without interest, thus reducing compounded interest and clearing the debt quickly.

This method works with all credit card debt and you can typically move between 1 and 5 balances onto a new credit card, providing that card isn’t offered by the same company.

The Shame of Debt is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Convince Your Spouse You Need To Get Out Of Debt

The post Convince Your Spouse You Need To Get Out Of Debt appeared first on Penny Pinchin' Mom.

Need to convince your spouse you need to get out of debt?  You can’t just tell him or her.  You need to address it in the right way.

How to Convince Your Spouse You Need To Get Out of Debt -- Without Fighting!!

Getting out of debt and taking control of your finances is important to your relationship.  Whether you are just starting out or have been together for 25 or  more years, you have to be in the same page financially, or you will be destined for failure.

So, what happens if your spouse is a spender and you are a saver?  Or, what do you do if you want to create a budget you both contribute to, but your spouse refuses to help?  What happens if you want to get out of debt, but your spouse thinks you are fine?

These are questions I get over and over again from readers just like you.  Get my answers on what you can do if you find yourself in any of the following situations.

CONVINCE YOUR SPOUSE YOU NEED TO GET OUT OF DEBT

I WANT TO GET OUT OF DEBT, BUT MY SPOUSE DOES NOT AGREE

This is a very common scenario.  One person feels that there is too much debt and their spouse or partner thinks that they are doing just fine.  What do you do in this situation?  I’ve got the things you can try to help get your spouse or partner onto the same page as you.

 

SET A DATE

Timing is everything when you are discussing debt with your spouse or partner.  If you casually mention it over dinner, it may not actually resonate that you are serious.

Set up a date with your significant other.  Carving out time to have a real, honest discussion about your finances can make all the difference.

 

USE “WE”  – NOT “YOU”

When you sit down to talk, your money and finances should be discussed as “we” and never as “you.”

For instance, instead of saying “You are spending more than you make” – say “We are just spending a bit too much money lately.”

When you are in a relationship, your money is no longer yours and mine, it is ours.  Addressing your debt should be addressed in the same way.

 

NAGGING NOT ALLOWED

If, after you have this discussion, your spouse is still reluctant to get started, take a break.  Circle back around a few weeks later and have another discussion.

The thing you do not want to do is nag him or her about it.  That will create more resentment and be much less successful in developing a plan you both can follow.

MAKE SURE YOU CAN STILL HAVE FUN

The main reason many people are reluctant to get out of debt is they fear that they will not be able to spend any money on anything at all.  That does not have to be the case.

Talk to your partner about your budget and show him or her how you can still leave money for dinner out or the weekly movie dates you love to have together.

One way that my husband and I do this is that we have a “mad money” fund.  This is money which can be spent on whatever we each want.  We designate an envelope for each of us.  When our money is gone, we are done spending.  We actually have turned this into a challenge to see which of us can actually go the longest without spending any money!  After a few months, we agreed that we both won and then turned around and used that money in planning a Disney vacation.

You are a team and together you will need to work up your budget so it works for both of you.

 

BE WILLING TO COMPROMISE

When you sit down for your meeting, don’t have everything planned out.  As tempting as it might be to have the budget all mapped out and show it, that may actually result in your partner being more resistant.

When you talk, take the time to truly listen to what your partner has to say.  Once he or she voices concerns, you will also have a chance to make your case.

When you show that you really do want to listen and work together on this journey, he or she may be much more willing to join you.  However, if you shut him or her out of the conversation, you will not be successful.

 

CREATE A PLAN TOGETHER

Once you both are on the same page with your debt, it is time to make a debt payoff plan. It should include a list of your debts and a way to track your success.  You will work together to achieve your financial goals.  Go through everything together and make sure you both agree to how much you will pay on the debt, your budget and much more.

Putting it in writing will help you both focus on the big picture and give you accountability to one another.  Before you know it, you will be on the path to financial freedom.

 

 

The post Convince Your Spouse You Need To Get Out Of Debt appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Using Credit Cards During COVID-19

Since we’re in the middle of a pandemic, we’re all trying to figure out the new normal. Whether you’re working from home, have a houseful of kids to keep busy or find yourself facing financial uncertainty, everyone has at least a little adjusting to do. While you’re taking stock of your life and what you need to adjust, it’s probably a good idea to take a look at your finances and credit card use, too.

Wondering how you should use your credit card? We’ve got some ideas for you on how you can use your credit card in the middle of a global emergency. 

How to Use Your Credit Card During a Pandemic

But before we get started, remember to take a hard look at your personal finances before following any financial information. Everyone’s situation is different—so what might work for you might not work for someone else, and vice versa.

1. Keep Online Shopping to a Minimum

If you’re working from home, the temptation to online shop can be all too real. But when you’re in the middle of a pandemic, you might need to put your money towards unexpected expenses. 

David Lord, General Manager of Credit.com, has some advice on preventing frivolous spending. “Try browsing, putting things in your cart and leaving them for the day,” Lord suggests. “If you take a look at your cart the next day, you’ll most likely find that 90% of the time you won’t remember the things you placed in your cart in the first place.”

If the temptation to online shop is too strong, Lord suggests buying something that’ll keep you occupied for a while, like a puzzle, a paint set or a yoga mat. That way, you’ll be too distracted to buy something else.

2. Try to Keep Your Credit in Good Shape

During a global emergency, it feels like everything’s up in the air. Because of that, it’s important to stay as on top of things as you can and prepare for the worst-case scenario. Having good credit is important in the best of times, but it can be even more so in the worst. 

Let’s say you find yourself with a bill that you can’t pay on your hands. If you need to take out a loan, you’d probably want a loan with the best interest rates possible. In order to qualify for those types of loans, you’ll need a good credit score. 

If you’re in a position to do so, try to keep your credit score healthy. Here’s some quick things you can do today:

  • Keep an eye on your credit score and credit report
  • Pay your bills on time—at least the minimum payment
  • Keep your credit utilization ratio at 30%

But if you find yourself in a financial situation where you can’t keep up with everything, you can prioritize. For example, going above 30% of your credit utilization ratio won’t impact your score as much as missing a payment. That’s because credit utilization makes up 30% of your credit score, while your payment history makes up 35% of your score. 

3. Utilize Cashback Rewards

Do you have a great rewards credit card on your hands? Now’s a great time to use them. While some credit cards might not be handy right now, like travel rewards cards, there are others that could be useful. If your card offers cashback on categories such as groceries, gas and everyday purchases, take advantage. You could use those rewards to help you cover essential purchases. 

4. Use Your Balance Transfer Credit Cards

If you already have significant debt or if you’ve recently taken on new debt, you might want to consider using a balance transfer credit card. A balance transfer credit card allows you to move your debt from one card to your balance transfer card, which typically has a lower promotional interest rate. These promotional interest rates can last from six to 18 months, and sometimes longer.

These are great options if you’re faced with new debt. If you’re struggling to pay the rent, groceries or medical bills, and your stimulus check can’t cover it all, you can use your balance transfer credit card. Just make sure to be careful. You still have to pay off your debt, so make sure to do so before the promotional balance transfer offer ends. If you can, try to make regular payments on your card, so you’re not faced with an overwhelming amount of debt when the promotional offer ends.

Be Mindful of Your Situation

Above all else, be mindful of your situation. What urgent bills do you have to pay? Do you have a loved one in the hospital? Have you or your significant other lost their job? Make goals based off of your situation, and use your credit card accordingly.

Go to Guide

Privacy Policy

If you’re looking for more information on coronavirus and your finances, check out our COVID-19 Financial Resource Guide. We update it frequently, to make the most up-to-date and useful information available to you. 

The post Using Credit Cards During COVID-19 appeared first on Credit.com.

Source: credit.com

Chase Sapphire Preferred® Card vs. American Express® Gold Card

The Chase Sapphire Preferred® Card* and American Express® Gold Card are two of the most lucrative rewards credit cards available. Both cards earn flexible and transferable points – either Chase Ultimate Rewards or American Express Membership Rewards. Both cards also offer solid welcome offers and earning potential, and each card can unlock powerful redemptions.

Deciding between the two comes down to what you’re looking for in a credit card and how much you’re willing to pay for extra services and perks. Let’s take a look at the Amex Gold versus Chase Sapphire Preferred and see which card may be right for you.

Chase Sapphire Preferred vs Amex Gold: At a glance

American Express® Gold Card

American Express® Gold Card

Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

Rewards rate
  • 4 points per dollar at restaurants worldwide and on Uber Eats purchases
  • 4 points per dollar at U.S. supermarkets (on up to $25,000 in purchases annually, then 1 point per dollar)
  • 3 points per dollar on flights booked directly with airlines or amextravel.com
  • 1 point per dollar on all other purchases
  • 2 points per dollar on travel
  • 2 points per dollar on dining
  • 1 point per dollar on all other purchases
Welcome bonus 60,000 Membership Rewards points after you spend $4,000 in the first 3 months 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first 3 months
Annual fee $250 $95
Other benefits  

  • Up to $120 in annual dining credits
  • Transfer Membership Rewards points to 19 airline and 3 hotel partners
  • Up to $100 property credit and upgrade (when available) when booking hotel stays of two nights or longer through the Amex Hotel Collection
  • Up to $120 in Uber Cash annually (up to $10 per month)
  • Terms apply
  • Transfer Ultimate Rewards points to 11 airline and 2 hotel partners
  • 25% bonus when redeeming Ultimate Rewards for travel via the Chase Ultimate Rewards portal (a value of 1.25 cents per point)

Earning points

Both the Amex Gold card and the Chase Sapphire Preferred card offer the ability to earn valuable flexible points. American Express Membership Rewards and Chase Ultimate Rewards points work in similar ways – the one you value most will depend on what other credit cards you have and how you typically travel. It’s fair to say that a Membership Rewards point and an Ultimate Rewards point have a similar, if not equal, value.

See related: American Express Membership Rewards vs. Chase Ultimate Rewards

That being said, the category bonuses of the American Express Gold card are decidedly better than those of the Chase Sapphire Preferred, for most people.

The Sapphire Preferred card only earns 2 points per dollar in the travel and dining categories, while the Gold Card earns 4 points per dollar at restaurants worldwide and 3 points per dollar on flights booked directly with airlines or amextravel.com.

It is true that Chase’s definition of the dining and travel categories is less restrictive (dining and travel versus restaurants and only flights at amextravel.com). Still, once you consider that the Gold Card also gives 4 points per dollar at U.S. supermarkets (on up to $25,000 in purchases annually, then 1 point per dollar), most people will likely earn more from ongoing spending with the Amex Gold card.

Redeeming points

Both Membership Rewards points earned with the Amex Gold Card and Ultimate Rewards points earned with the Sapphire Preferred can be redeemed in two major ways (at least for the most value per point). You can either transfer your points to hotel or airline partners or use your points to book travel directly.

Both American Express and Chase have a variety of hotel and airline transfer partners available. American Express has 22 different transfer partners, while Chase has 13 transfer partners. While the two brands share a few partners (Air France/KLM, British Airways and Marriott Bonvoy for instance), for the most part deciding which partnerships are worth more will depend on how you travel.

In most cases, both Ultimate Rewards and Membership Rewards points transfer 1:1 to airline miles and hotel points, and both American Express and Chase offer periodic temporary transfer bonuses to various partners.

When it comes to redeeming points directly for travel, on the other hand, Chase Ultimate Rewards points are distinctly superior. You can book flights through amextravel.com at a rate of 1 cent per Membership Rewards point, but for other types of travel (hotel, car rentals, etc.), you will only get a value of 0.7 cents per point. Ultimate Rewards points redeemed by a Chase Sapphire Preferred cardholder, however, get a value of 1.25 cents per point on airfare, lodging, rental cars and even some travel experiences.

Bonus perks

The Chase Sapphire Preferred does not have very many noteworthy perks, other than its high welcome bonus and redemption options – but one nice benefit is its rental car coverage. The Preferred card offers primary rental car coverage, meaning you don’t have to file with your own insurance carrier first. Rental car coverage on the Amex Gold card is only secondary (after your own primary car insurance.)

The American Express Gold card has two big perks that come with having the card, that can boost its value. First, there is a $120 Uber Cash credit – the most recent addition to the list of Amex Gold benefits. You can use up to $10 per month on Eats or Rides in Uber Cash when you add your Amex Gold as a payment method in your Uber app.

best cards for grocery spending.

On the other hand, the higher welcome offer, increased value in redeeming points and lower annual fee mean that the Sapphire Preferred will likely provide more value for most people, especially during the first year of having the card. Take a look at your spending and travel patterns and decide which card is best for you.

*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. 

Source: creditcards.com

What is a credit card statement credit?

A recent trend in credit card rewards is increased flexibility in how you can redeem your cash back, points or miles. You can book travel, invest, get gift cards and more – but one of the most common ways a credit card company will issue rewards is as a statement credit.

Statement credits may seem simple, but they’re handled a little differently by each rewards program, and there’s a lot to consider when you’re trying to decide if they’re the best way to redeem cash back or other rewards.

See related: What is cash back?

What is a statement credit?

Put simply, a statement credit is money credited to your account. In its most basic form, a statement credit is not much different from a payment. Like a normal monthly payment, a statement credit is deducted from your card balance, reducing the amount of money you owe. But where cardholders are responsible for payments, credits come from either a merchant or card issuer.

rewards cards also allow you to redeem the points or miles you’ve earned as statement credits. While some cards allow you to use a statement credit to reduce your balance with no restrictions, others only apply credits to your account after you meet certain criteria or make purchases in specific spending categories.

Statement credits on cash back cards

Cash back cards usually make it easy to redeem your points as a statement credit. In most cases, all you need to do is meet the card’s minimum redemption criteria, then choose a statement credit as your redemption method. Once a credit is applied to your account, your card balance decreases accordingly.

If, for example, you were to spend $3,000 with a flat rate 1 percent cash back card, you’d earn a $30 credit; and if you were to redeem this entire credit, $30 would be deducted from your account balance.

While many cards give you the option to request your cash back in the form a check, some only allow you to redeem as a statement credit – so be sure to read your issuer’s terms carefully. After all, when you get your cash back as a check or direct deposit, the money is yours to spend or save as you’d like. With a statement credit, however, the funds are “trapped” in your account and only impact your card balance. If you stop using your card or close your account, you could lose any cash back or points you haven’t redeemed.

Capital One Venture Rewards Credit Card, for example, allows you to book travel through the rewards center at a rate of 1 cent per mile. But if you redeem your miles for cash back as a statement credit, their value is cut in half to just 0.5 cents per mile.

If you prefer to redeem your rewards as a statement credit, make sure doing so doesn’t dilute the value of your points or miles, as each rewards program grants and values statement credits a little differently.

Statement credits for an introductory bonus

Statement credits also frequently appear as part of a card introductory or annual bonus, when issuers offer to reward you if you spend a certain amount of money within a given timeframe. The Blue Cash Preferred® Card from American Express, for example, offers a $250 bonus after you spend $1,000 with your new card in the first 3 months. Instead of simply sending you a check for $250, however, American Express credits your account $250 after you’ve met the conditions of the offer. Once received, the credit will cover the next $250 you charge.

Statement credits for card benefits

Many cards also award extra perks in the form of a statement credit. The United Explorer Card and Chase Sapphire Reserve, for example, each offer up to a $100 credit to cover the cost of a Global Entry or TSA PreCheck application.

In these cases, a statement credit is applied to your account only after you make the eligible purchase and cannot be used for anything else.

How statement credits work with the major rewards programs

Here’s how some of the major rewards programs treat statement credits:

Rewards program Can you redeem rewards as a statement credit? Minimum redemption Rewards rate when redeemed as a credit
Discover cards Cashback Bonus Yes None 1:1
Bank of America Cash Rewards Yes None ($25 for automatic redemptions) 1:1
American Express Membership Rewards Yes $25 1:0.6
Chase Ultimate Rewards Yes $20 1:1

Should I redeem my points as a statement credit?

Once you know what a statement credit is and how it’s treated by your rewards program, you’ll probably wonder if it’s smart to redeem your points or miles in this form. While the answer will depend on your spending habits, goals and financial situation, it makes more sense in certain circumstances.

If you’re trying to decide whether you should redeem your points as a credit statement, consider the following:

  • Are you going to carry a balance? If you’re not sure whether you’ll be able to pay off your balance in full by the due date, redeeming your points as a statement credit makes sense. You’ll knock a chunk off your balance and make it easier to pay in full and avoid interest charges. Keep in mind, however, that statement credits are not usually considered payments, so if you can’t help carrying a balance, you’ll still have to make a minimum out-of-pocket payment.
  • Does your card offer an incentive for redeeming points as a statement credit? Some cash back cards offer redemption bonuses when you opt for a statement credit over “true” cash back in the form of a check or direct deposit. If that’s the case, and you plan to continue using the card, go with a statement credit to get more mileage out of your cash back rewards.
  • Are your points worth less when redeemed as a statement credit? If you’re using a card with a more flexible rewards program, redeeming your rewards as a statement credit is likely possible, but not necessarily wise. Check your issuer’s terms to see if your points lose any value when redeemed as a statement credit. If 1 point is worth 1 cent when used for travel purchases, but only 0.5 cents when redeemed as a statement credit, you’re missing out on a lot of the value you’ve earned. If you have no interest in travel, see if you can get full value out of your points in a roundabout way, like redeeming points for gift cards at stores you frequent.

Other ways to redeem your credit card rewards

Many cards offer several other options for redeeming your rewards. In addition to statement credits, you may be able to redeem cash back, points, or miles for:

  • A direct deposit – You can link your bank account so that when you hit “redeem,” that money goes directly to your account. For some, this is more satisfying than receiving a statement credit.
  • A check – If you don’t mind waiting, many credit card issuers will mail a check for the value of your rewards.
  • Gift cards – Some credit cards allow you to exchange your points or cash back for gift cards. Make sure that you’re getting the same or more value before you choose this option – sometimes the dollar value of gift cards is different from what you would get redeeming for a statement credit or direct deposit.
  • Merchandise – Credit card issuers sometimes have shopping portals that give you the option to use your cash back or points to pay for merchandise. This is another option that you should approach with caution. Do the math to make sure you’re getting the same dollar value as you would with a direct deposit or statement credit.
  • Travel – Travel redemption options vary from card to card, but there are two main methods, one of which is receiving a statement credit for travel purchases you’ve already made. The other is using the issuer’s portal to book travel, such as flights or hotels, online.

Final Thoughts

A statement credit is just one way you can receive bonuses and redeem the rewards you’ve earned. If you’re using a cash back card, it could be a smart, low-maintenance way to reduce your balance and build good spending habits. If you’re using a more flexible rewards or travel card, though, make sure redeeming as a statement credit still gets you fair value for your points or miles.

Source: creditcards.com

How to Explain a Gap in Your Résumé

My first job out of college was with a recruiting firm run by three women who had nearly a hundred combined years of experience in the workforce. They taught me everything I needed to know about how to read resumes, including the warning signs to look for. A gap in employment was, according to them, the kiss of death.

Today, a hot minute and three U.S. presidents later, I truly believe that wisdom is as outdated as my prom dress. It was fine in the moment, but the moment has passed.  

Each of us is complex and unique, and our personal stories should reflect that.

The rules of employment history have changed, and the story you craft about your timeline is yours. Whether your employment gap happened because of a layoff, becoming a caregiver, taking a sabbatical, exploring entrepreneurship, or even just a mental health break, let's talk about how you can own that gap in a way that will want a prospective employer wanting more of you!

1. Lead with transparency

As poet Walt Whitman said, “I am large. I contain multitudes.” Each of us is complex and unique, and our personal stories should reflect that. There are no right or wrong plot points as long as each point is truthful.

When capturing your history (employment and otherwise) on your resume, be honest and transparent. There's no need to flag a gap in employment in bold print, but neither should you try to hide it.

Our journeys are complex and diverse. The trend toward inclusion will only grow in 2021. And beyond diversity in terms of race and gender, I believe companies are ready to lean into a diversity of experiences in the workforce. Companies must look beyond the traditional one-directional career path, and search for talent whose life experience reflects that of their customers.

Beyond diversity in terms of race and gender, I believe companies are ready to lean into a diversity of experiences in the workforce.

So don’t be ashamed of revealing your lived experiences, from caregiving to travel to taking time to pursue a passion. Transparency upfront will help you begin the conversation with a prospective employer on the right foot.

2. Reflect on your gains

Maybe you opted out of the workforce for a year to care for a child or parent or to travel the world. Or perhaps you were laid off in an economic downturn. Whatever your reason and whatever the cause, you were still a person living in the world during this time. Your experience may not have been “work experience,” but this is where life experience gets its time in the sun.

When I spent 2007 at home with my newborn daughter, there were days—many days—that left me feeling like my brain had turned to mush. Baby Beluga had become my theme song and I was spending days calculating ounces of milk digested and … processed. (Yes, I mean poops).

This is where life experience gets its time in the sun.

But as I started gearing up for a job search in 2008, I pushed myself to reflect on the gift of that year. Certainly, it was a privilege just to be with my infant daughter. But it had also given me some new skills and perspective. 

Time management and prioritization become finely tuned when your baby’s naps are suddenly your only windows of productivity. I had become part of a new demographic—parents—which broadened my perspective not only on the world but on any company’s potential customer base.

Oh, and my ability to experience failure but keep on keeping on? That expanded immensely. I screwed up daily with sleep training and sign language and all the mothering things. But I also persisted because I had a new responsibility to manage.

These were some of my reflections. I challenge you to define your own.

Think expansively about how this time has added in any way to the multitudes you contain. It is now a part of your story to shape and own.

Maybe you were laid off during the pandemic. You’re not alone. And remember, you’re leading with transparency. You don’t have to pretend the layoff was some grand gift. You’re allowed to experience disappointment. But shift quickly into considering what you gained during the weeks or months of not being employed.

What have you spent time doing? Being with family? Caring for a loved one? Supporting a working partner? Have you taken any classes? Picked up a new certification? Learned to cook? Think expansively about how this time has added in any way to the multitudes you contain. It is now a part of your story to shape and own.

3. Craft the narrative

So now, armed with insight and reflection, it’s time to craft the story you will proudly tell any prospective employer. This is your chance to package yourself as the most irresistible product on the job market.

I’ve always loved the commencement address Steve Jobs delivered at Stanford back in 2005, during which he said:

You can’t connect the dots looking forward; you can only connect them looking backward.

Steve Jobs

So, as you look back at the totality of your experience—work and life—what is the story you want to tell that makes you the most compelling candidate? How will you choose to connect the dots and help your potential employer see the complete picture?

In 2008, I showed up in interviews not as a new mom hoping desperately for anyone to give me a chance, but as a person with a broad perspective to offer. I still had my pre-baby skills and experiences, but now I could apply a keen ability to prioritize, to think critically about what should command my focus, to learn from failure, and to be successful without having control over a situation.

My conversations with hiring leaders painted this picture of me. I made sure to bring in examples of both work and parenting experience. It made me real and whole. And it ultimately won me a great job.

So, what’s the story you’ll tell? Maybe being laid off taught you that things can change on a dime, which has challenged and enhanced your agility. Maybe you used your time to take classes, brush up on skills, and add a certification. 

Prepare examples of how these insights and added skills will deliver value for your next employer. How lucky they will be to have you!

4. Fake it till you make it

I stand by the logic of everything I’ve said thus far. But there is so much more than logic at play here. There's ego and emotion and anxiety and lots of other messy human things. I’ve lived through, and overcome, all of that. Some days I’m still overcoming it.

Confidence is something that will grow over time. But don’t wait for it; cultivate it.

Are you wondering how I managed to show up with so much confidence after spending a year away from the corporate world? Then let me tell you my secret: It wasn’t confidence at all! It was all my fear and anxiety hidden behind a smile and a firm handshake. (Remember those?)

Confidence is something that will grow over time. But don’t wait for it; cultivate it. For now, if you’re struggling to access confidence, then just play the part. You’ll be amazed at how quickly the real thing will follow.

And there you have it. Yes, whole, complex, messy you. So practice your most confident smile, prepare your firm handshake, brush up your résumé, and get ready to pound the pavement.

Source: quickanddirtytips.com

10 Things to Know About Working in New York

10 Things to Know About Working in New York
Thinking about working in New York? There are some features of work life in the Big Apple that set it apart from the work culture in other cities. Is it true that if you can make it there you can make it anywhere? We’re not making any promises, but we can give you some tips about what working in New York is really like. 

Check out our 401(k) calculator. 

1. Salaries are high – but so is the cost of living.

For many fields, particularly those that require highly skilled workers, salaries in New York are higher than those in other cities. But before you get too excited about the fact that salaries in New York tend to be higher, keep in mind that the cost of living in New York is higher, too.

Luckily, there are plenty of financial experts around to help you figure out how to keep your finances in check. These are the top 10 New York financial advisor firms.

2. New Yorkers put in long hours.

New Yorkers tend to work longer hours than folks in other cities. In part, that’s because the workday itself is longer, but it’s also because New Yorkers tend to have long commutes. If you want to have plenty of free time to pursue side hustles or hobbies, working in New York might not be the best fit for you.

3. Commuting by public transit is the norm.

According to recent Census Bureau figures, 55.6% of New Yorkers take public transportation to work, 0.8% bike to work, 10.3% walk and 3.9% work at home. Hate crowds? Commuting by public transit could take some getting used to.

4. Office happy hour options are plentiful.

Working in New York means having a multitude of options for weekday lunches and office happy hours at your fingertips. Socializing with your coworkers after the end of a workday is easy with so many places to go and easy public transportation options to take you home at the end of the evening.

5. Being a working parent is expensive in New York.

10 Things to Know About Working in New York

New York has some of the highest childcare costs of any city in the nation. Being a working parent in New York is expensive – and it’s not easy, given the long hours New Yorkers put in. New York has a lower rate of working mothers than many other major U.S. cities, in part because the high price of childcare makes it hard for many New Yorkers to earn more than they would have to pay for childcare.

6. New York work culture takes some of its cues from Silicon Valley.

Some New York workplaces are taking their cues from the start-ups of Silicon Valley, implementing casual attire, flexible workdays and other features. In an effort to compete with companies in other cities, some New York companies are expanding the perks they offer their workers, so if you’re lucky enough to get a job in one of those companies, you’ll find that working in New York has its compensations.

7. Lots of New Yorkers have more than one job.

Whether they’re care workers who work double shifts or actors who tend bar on the side, many New Yorkers have more than one job. For some, having a second (or third) job is a matter of necessity, while for others it’s a way of advancing their career or expressing their artistic side. Plus, getting a second job (or a roommate) makes it easier to live the New York dream without going into debt.

8. There are professional support opportunities here.

Because it’s a huge, densely populated city, New York has professional support opportunities for those up and down the career ladder. You can get help finding a job or finishing your GED. You can also attend high-powered networking events and conferences. The important thing is to know what resources are out there and how to take advantage of them.

9. You can outsource a lot of tasks – if you have the money.

If it’s in your budget, you can outsource a lot of tasks that you don’t want to have to tackle during your non-working hours. That includes mailing packages, getting food, dropping off dry cleaning, completing home repairs and more. Of course, these services aren’t within reach of all New Yorkers, and many people like to do these basic “life admin” tasks themselves. But if you’re planning on diving into the workaholic lifestyle in New York and you think you’ll have some money to spare, there are lots of companies looking to make outsourcing chores easier for you.

10. It helps to know someone.

It helps to know someone when you’re looking for work in New York, if only to stand out from the pile of applications that so many New York jobs attract. That’s why it’s a good idea to build and maintain your network and put it to work for you when you’re looking for a new (or just better) job.

Bottom Line

10 Things to Know About Working in New York

Working in New York isn’t for everyone, but many find it to be an exciting challenge unlike what they would face elsewhere. For others, working in New York is more of a means to an end – living in New York. Wherever you stand, working in New York is made easier when you have a strong network and plenty of determination.

Tips for Maximizing Your Money

  • Come up with a budget – and stick to it. Instead of spending $5 a day on a latte, put that money in one of the best savings accounts where you can earn interest.
  • Work with a financial advisor. In addition to helping you craft a financial plan and identify your financial goals, a financial advisor can help you determine the right investments for your financial situation, time horizon and level of risk tolerance. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Photo credit: Â©iStock.com/Tempura, ©iStock.com/NYCstocker, ©iStock.com/Pavlina2510  

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Source: smartasset.com