What I’ve Been Up To

This Week In Your Wallet: If You Don’t Ask, You Don’t Get

Breathe.

That’s what I want to remind you this week. Shortly before the end of the year, the Federal Reserve hiked interest rates for the first time in nearly a decade. Then, as the cliche goes, China sneezed and world markets caught a cold. We’ve been through this before (most recently last summer) and we’ll go through it again, so let me remind you of the drill.

Take a look at your asset allocation. Sometimes when markets are running up (as they have been doing since 2009), we forget to take profits out of categories that are outperforming and plow them back into those that are not. This causes our asset allocations to get out of whack. If you’ve got more in stocks than you thought you did — or you believe you should — rebalance. Then put a reminder in your calendar: Same time next year. Next, look at cash you’re going to need in the next three years. Whether it’s for college tuition, a downpayment on a house or living expenses for retirement, this money does not belong in the markets. It never did. Move it to safer havens. (Will you lose a little bit? Maybe. Does that matter? Not a bit.) Finally, check out your savings rate. The start of each year is a good time to try to nudge it up by 1-2%, particularly if it means you’ll grab even more of the matching dollars available in your employer-based retirement plan.

Earn More And Spend Less

Last week, the J Team – that’s me, Joy Bauer, Jill Martin and Jenna Bush-Hager – launched our #StartTODAY series, aimed at inspiring you to start and stick to the changes you’d like to make for yourself in 2016. First up on my agenda: Help you earn more.

When was the last time you asked for a raise? In fact, have you ever asked for one? Research from CareerBuilder.com shows 56% of people have never asked for a raise – and 49% of new employees accept the first salary they’re given without negotiating. If that’s you – and the fear of getting fired is holding you back – you’re not alone. Salary.com research shows about half of all people are scared to ask (about 15% of them because they fear being fired for raising the question). Not gonna happen. The site also asked employers if they’d fire an employee for asking and 0% (yes, zero) said nope.

Now, there are right and wrong ways to go about asking for a raise. The right way? Know your worth before asking. Visit sites like Glassdoor.com to see how much people with your experience are making in your field. Also come to the table with evidence (i.e. things you’ve done for the company, business you’ve brought in or maybe the money you’ve saved your boss) of why you’re deserving of the pay bump. On the other hand, if you like your job and there isn’t the means for the company to give you more money, try negotiating more vacation days or working from home one day. You could also find a side hustle.

See the full segment here, and tune in this Friday for info on how to spend less this year.

Meet These Frugal Footballers

The Washington Redskins couldn’t save the game on Sunday, but as The Wall Street Journal reports, a number of the team’s players are winning the savings game off the field. In fact, with a group of athletes who love to spend as little money as possible, the Redskins may be the most frugal team in the league.

Take starting quarterback, Kirk Cousins, for example, who drives a dented GMC Savana passenger. He says it’s better to buy appreciating assets rather than depreciating, which means no yachts or sports cars for him. Then there’s running back Alfred Morris (making a base salary of $1.5 million this year), who rides his bike to work, unless of course it’s too cold, then he’ll switch to his 1991 Mazda 626. And in addition to driving modest rides, a number of players room together and/or have roommates, like pass rusher Ryan Kerrigan, who still shares an apartment in Virginia with a roommate, despite recently signing a five-year, $57.5 million contract.

Given their eye-popping salaries, why is it that these players choose frugal over lux? As Cousins says in the article: “But you don’t know how long you’re going to play, you’ve got to save every dollar even though you are making a good salary,” he said. “You never know what’s going to happen so I try to put as much money away as I can.”

Unprepared For The Unexpected

How would you deal with an emergency expense of $500? What about $1,000? These are two of the questions Bankrate.com asked in its recent Money Pulse survey, which suggests 63% of Americans don’t have enough in savings to cover either amount in the event of an emergency. Because – when asked the above questions – only 37% of Americans said they’d use their savings to cover them. Twenty-three percent would cut back spending in other categories to make ends meet, 15% would put it on plastic and another 15% would ask for a loan from a family member or friend. If you don’t have the suggested minimum of three to six months saved in a rainy-day fund, then you’re putting your financial security at risk. “An emergency is going to happen, it’s just a matter of when,” says Sheyna Steiner, Bankrate.com’s senior investing analyst.

52-Week Savings Challenge

Before I sign off for the week, I’d like to give a quick shout out to anyone who either attempted, or even better, completed, last year’s 52-week savings challenge for #startTODAY!

We’ve received multiple success stories and I’d love to hear yours! (I’m at Jean@JeanChatzky.com.) One of my favorites comes from Rhoda, who described the challenge as, “so easy and virtually painless…and a fun way to sock away a little bit of money.” What’s even more awesome is that she’s continuing the challenge into 2016, picking up where she left off at the end of 2015. She saved $54 the first week of January (she saved $53 the last week of 2015), and will add $1 every week to her weekly savings until 2017.

Have a great week,

Jean