This Week In Your Wallet: Ask For What You Want
“The difference between successful businesspeople and those who just get by is the ability to ask for and receive what you want,” writes Tonya Rapley on her blog, My Fab Finance. It’s a powerful idea — and it’s true. As we turn the corner on summer and head towards back to work/back to school season, it’s also important to keep in mind. Rapley cites a study that found the starting salaries of male MBAs were almost $4,000 more on average than their female counterparts. It’s partly because the men were eight times more likely to ask for more. Only 7 percent of the women attempted to negotiate the initial salary offer. Sometimes we’re afraid of hearing “no” or inconveniencing the other person, or we’re fearful of being perceived as too aggressive. But it’s important to remember that most of your future salaries will be negotiated as a percentage of what you earn now. So take a deep breath, do some power poses and graciously ask: “Can you do better?” For more tips, I wrote a piece on negotiating salary for Bankrate.com
Map Your Journey
Another thing you may want to do (hint, hint) as you head toward your future is try to map it out more than you’re doing now. There’s one thing you can do that will improve A) your retirement preparedness and B) your financial confidence, reports MONEY: putting your retirement plan in writing.
People with a written retirement plan were 60 percent more likely to up their 401(k) contributions and two times as likely to maintain a monthly savings goal, according to a report from Schwab. And they were two times as likely to feel they had enough post-retirement funds to maintain their lifestyle, according to a survey from Wells Fargo and Gallup. The flip side? Just 24 percent of Americans say they actually have a written plan.
If the thought of writing out a plan seems overwhelming, know that it doesn’t need to be any sort of in-depth, jargon-filled document. You really only need three things to flesh it out, reports MONEY:
- A target savings rate per year (15 percent of earnings is ideal, but you can slowly ratchet up contributions every year until you can hit your goal)
- A long-term investing strategy (This isn’t as complicated as it sounds — many investing platforms have investor questionnaires that will determine a good mix of stocks and bonds based on your risk tolerance and when you plan to withdraw the money. Here’s one from Vanguard and one from Charles Schwab.)
- A regular monitoring plan (Keep an eye on your investments — but not too close of an eye. If you’re investing for the long term, you don’t want to be tempted to move things around in the short term due to market hiccups. Once a year generally should be enough.)
So sit down at the kitchen table, write it out and keep your plan somewhere easily accessible. Then, give yourself a little reward.
Millenvesting
While we’re on the topic of investing… Many millennials aren’t doing it, instead opting for savings accounts and cash. And it’s likely going to cost them big-time. For a 25-year-old millennial retiring at age 65, the total cost of avoiding the stock market in lost retirement savings is a whopping estimated $3.3 million, according to a recent NerdWallet analysis. As Wise Bread explains in a piece detailing the cost of putting your money in cash instead of investing it, having a large stash of cash certainly feels good, but it quickly gets costly. In the piece, Annie Mueller writes, “In the battle between interest and inflation, inflation wins when you keep your cash in a typical savings or checking account.” If you’re hesitant to get your feet wet, know that although there’s risk involved in investing, there’s also a cost to putting it off — the longer you wait, the more you’ll likely have to contribute later to catch up. Investing early is as much of a shortcut as you can get in this arena. For more tips on getting over fear of the markets and diving in, take a look at this piece I wrote for The Balance.
Money And Meal Prep
Finally, last week on TODAY, my friend Joy Bauer and I collaborated on a series about cutting calories and saving cash. Food is the big budgetary blunder for many, many people — but if you’re willing to cook instead of eat out or grab and go, you can save a bundle. You can watch our segment on cooking hacks that will save you time and money here.
Have a great week,
Jean
