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This Week In Your Wallet: The Truth About Multitasking

I spent the past weekend on a series of college campuses (my own, for my — gulp — 30th reunion, and then my son’s (where Mother’s Day was postponed so that the students could spend the prior weekend at the Kentucky Derby). I’ll be back at Northwestern again to celebrate his graduation in about a month. It’s dawning on him that it’s all coming to an end. “Let’s walk through campus,” he said as we were heading from lunch to watch the NCAA Tennis Tournament. “I just realized how beautiful it is.”

Perhaps you can relate. But even if you can’t, take a few minutes and read the beautiful commencement address Sheryl Sandberg gave this past weekend at UC Berkeley. She spoke of resilience and the lessons she learned after losing her husband Dave Goldberg just a short year ago. The three Ps she encouraged the new grads to understand and learn to tame — personalization, pervasiveness and permanence — will serve not just 21-year-olds well as they enter the working world, but anyone facing a challenge in day-to-day life and work.

And I imagine they’ll come in especially handy for entrepreneurs. The freedom and ability to have more control over work-life balance are both reasons why the idea of starting their own business is especially appealing to millennials, reports Reuters. The publication cites a survey by Fidelity Investments that showed nearly half of millennial respondents were actively looking for new opportunities even when content in their current jobs. Other research cited by Reuters found 66% of millennials eventually want to work for themselves.

One way to go about that — while keeping the money coming in — is to start that new business on the side. That way you can test it while you still have a day job to see if you have the passion and wherewithal to keep it going. (That’s what the creators of hit podcast Criminal did — for their tips on how to turn a passion into a business, check out my podcast, HerMoney with Jean Chatzky). Another key? Build a financial cushion — and if you do end up deciding to go full-time with your side gig, aim to have six months’ to a year’s worth of living expenses socked away beforehand.

The Truth About Multitasking

Of course, there’s a dark side to all this activity. While multiple ventures (read: a day job and side hustle) might be productive, research has shown multitasking is far from efficient. I explored why in a new piece for Forbes, and it turns out that multitasking very often means doing multiple things badly. The brain switches back and forth between attention-demanding tasks, and the time it takes to constantly change focus could instead be used to complete just one task. Experts say multitasking also encourages overconfidence (so you might think you’re great at it even if the opposite’s true), and it can hinder creativity.

Ready to stop? Remove the temptation by dedicating time to a single task (it helps to schedule it in your calendar.) Then put away the phone, tablet and other distractions. Checking items off your to-do list one by one could also help with motivation.

On-Demand Everything

While we’re on the subject of time — do you feel like you have less free time than you did five years ago? Almost two-thirds (65%) of investors and entrepreneurs might agree with you, according to a recent poll by Seedrs, an equity crowdfunding platform in the UK. The main reason people felt they lost time was being required to work more hours (32%), and the percentage of women who felt they’d lost more than 10 hours a week in the last five years was higher than that for men (26% vs. 15%).

Seedrs believes this is what’s driving the popularity of new on-demand apps, which are constantly popping up all around us. Cleaners, couriers, drivers, grocery delivery… You name it, there’s an app for that, or at least that’s how it seems these days. But how do you know what’s worth paying for? You need to know what an hour of your own time is worth, and then you can compare that to the cost of hiring out. A rough way to do the calculation it is to remove the last three zeroes from your annual salary and divide what remains by two. (So if you make $40,000 a year, the rate is $20 an hour). The other factor in the hire-or-don’t equation? Enjoyment. I hate gardening (and am equally lousy at it — although perhaps the fact that I hate it is why I’m lousy at it or vice versa). Anyway, it’s worth more to me to pay someone to make my flower beds weed-free and beautiful than it is to run my errands which, for some strange reason, I actually enjoy.

No Ark? No Problem

Spring is often called home-buying season, but it’s also flood season — meaning potential homeowners can weigh the option of adding flood insurance to the list of fees they encounter when buying a home. The first thing to understand is that no one is necessarily not at risk for flooding — besides living by a river, other causes could include overdevelopment, backed-up storm drains and packs of snow.

Even if you’re not required to purchase flood insurance based on your area, it’s important to consider your options, explains John Dickson, president of NFS Edge Insurance Agency. “If you’re two feet away from a mandatory purchase area, do you think you’re any better off than the guy who’s two feet to your left?” he asks. When you are making the decision, understand you can’t buy flood insurance from the government. Instead, you buy it from an agent affiliated with the National Flood Insurance Program (NFIP). You can get more information and a referral to said agent at FloodSmart.gov. Then, ask about your options, what tools you can use to fully understand your risk of flooding and — this is key — what the plans don’t cover. You can make an informed decision after getting all the answers.

Have a great week,

Jean

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