Farnoosh Torabi's Blog, page 40

6 Smart Ways to Spend Your Tax Refund

While most of us overpaid Uncle Sam in 2012, the good news is we can expect a sizeable tax refund. Best, of course, to be responsible with this windfall and address savings and debt first, but if those financial bases are covered, time for some fun! Here are six, wise ways to spend your refund. Read more here.

What are some other meaningful ways you plan to spend your tax refund? Connect with me on twitter and use the hashtag #FINFIT.

New Federal Budget Targets Students

The Obama administration’s proposed budget for the 2014 fiscal year is full of important changes to government spending, including the education budget.

The Obama administration released its budget for FY2014 Wednesday. In a speech, the President called his plan a “fiscally-responsible blueprint for middle-class jobs and growth.” It includes many signifiant spending cuts. According to analysis by The New York Times, the plan would cut spending by about $1.2 trillion over a decade, including $306 billion from Medicare, $38 billion from farm subsidies and additional cuts to the State Department and homeland security.

One area where the administration plans to invest is education. Aside from $77 billion set aside for early-childhood education, the new budget could have a big effect on student borrowing for higher education. Mark Kantrowitz, publisher of student resources Fastweb.com and FinAid.org, explains how the new budget could impact everything from financial aid awards to loan repayment.

 

Changes To Student Loan Interest Rates

Most noteworthy, says Kantrowitz, is a proposal to introduce hybrid fixed/variable interest rates for new federal education loans starting July 1, 2013. “Each year’s new loans would have a fixed interest rate based on market rates, pegged to the 10-year Treasury rate,” Kantrowitz explains. This will be a change from the way rates have been set in the past – determined by congressional vote.

If approved, the new market-based rates would benefit borrowers in the current low-interest environment, but students could pay more as the market fluctuates, warns Kantrowitz. “The interest rates will eventually increase and may ultimately be more expensive than the current 6.8% and 7.9% fixed rates for Stafford and PLUS loans,” he says. The White House’s proposal comes just in time as interest rates on new federal education loans are set to double starting July 1, 2013.

Pay-As-You-Earn Repayment Plans

There are other changes outlined for those working to pay back existing loans. Previously, the “pay-as-you-earn” income-based repayment option, which limited loan payments to 10% of discretionary income, was only available for borrowers who took out loans after 2007. The administration has moved to open it up to all borrowers.

Student Aid Increases

Finally, the new budget also hopes to increase funding for Pell Grants.  ”The budget proposes to increase the maximum Pell Grant to $5,785 in 2014-15, up from $5,645 in 2013-14, a 2.48% increase,” says Kantrowitz. Pell Grants help more than 8 million Americans afford college every year. Students whose families earn less than $60,000 are eligible, however most awards go to students with family incomes below $30,000. Federal work-study programs would also receive additional funding under the plan, increasing by $150 million to $1.12 billion next year.

Photo Courtesy, Glyn Lowe Photoworks.

Rudechix: Banking on Social Marketing

Thanks to some keen marketing instincts and saavy use of social media, Sherry Mattson has transformed her once-struggling Rudechix line of roller derby and tattoo apparel into a company that knows exactly who it is…and embraces it.

It was not too long ago that success was hard to come by for the niche-y brand.  In 2008, Rudechix catered almost exclusively to the tattoo crowd.  While these days the tattoo industry is thriving, during the economic downturn starting in 2007, the industry took an especially big hit.  Stores closed.  Conventions shrank.  And – by extension – Rudechix’ sales plummeted.   “I’m glad that I didn’t know how hard it would be because…  I probably wouldn’t have done it,” confesses Mattson.

So what did Mattson do to weather the harsh economic storm?  Well, for starters, she worked side jobs – mostly catering gigs – to supplement her income.  She also enrolled in the business school at Cal State LA and, in 2011, earned her MBA.  “It’s amazing to go back in school later in life because you actually want to be there,” she says.  “As an undergrad I didn’t have direction.  Rudechix gave me direction.”

While in school, Mattson became a fixture at local LA Derby Dolls events where she carved out a new niche for the line and developed strategic partnerships with other all-female roller derby leagues across the country and around the world.  Roller derby was like a new beginning for Rudechix.  And more than anyone, roller derby athletes embody Mattson’s rude chick  ideal:  “a strong, independent woman who embraces herself, whether through body art, sport, or just the way she lives her life.”

“[Roller derby] is not just a craze, it’s a movement,” says Mattson, who calls Roller Con – a sort of Comic Con for the roller derby scene – her busiest time of the year.  “It’s also a sport and these women are great, inspiring athletes.”

Mattson attributes the power of social media for Rudechix 40% year-over-year growth from February 2011 to February 2012, the highest grossing month in the history of the company.  “Social media has blown up my business,” she explains. “In order to be a successful business… to be taken seriously… you have to have a website, a Facebook, and these days, an Instagram.  I just scored two new wholesale accounts via Facebook.”  She reinforces the sense of community created through social media by including a personal note with each Rudechix shipment signed Queen Rude and Crew.  (Queen Rude is Mattson’s roller derby name.)

Mattson’s creative vision for the company has blossomed since she took over as graphic designer.  And, perhaps even more profoundly, she has come to accept that she can’t build her vision alone and has hired a friend from grad school, “Super” Jay O’Balles, to manage her office.  “I have superwoman syndrome.  I think I can do it all myself.  But I can’t,” she says.  “My goal is for the business to run as a system, by itself.  I’m hoping Super Jay can help with that.”

As the economy rebounds, Mattson seeks expansion back into the tattoo community and beyond.  A drop ship agreement with Inked Magazine’s online store, Ink Shop, has generated a lot of new online business.  Myke Chambers, a well-known tattoo artist, designed Sugar Mama, the first in Rudechix’ new line of special edition artist series tanks and tees.  And Mattson now participates in more mainstream trade shows, like Magic Market Week in Las Vegas, and has recently opened a slew of new wholesale accounts .  ”We are going to blow up in stores,” she says.

Credit Card Rewards: Tracking Miles Made Easy

Quick – check your wallet. How many plastic rewards cards do you have stuffed in there? Any idea what they’re worth or what they offer? While many Americans take advantage of reward programs offered by credit card issuers, a recent survey finds that most have no clue about their benefits or status.

Nearly three out of four cardholders with frequent flier miles or other points don’t know how many of these cards they possess, according to a survey by rewards resource ThePointsGuy.com. Close to 60% admit that they don’t even know how the programs work and 27% report having let some or all of their rewards expire. “Failing to keep track of your rewards miles and points is like throwing money away,” says Brian Kelly, founder of ThePointsGuy.com. “There are good rewards programs for every type of consumer. Whether you’re redeeming miles and points for first-class plane tickets, gift cards, cash back or something else, the cardinal rule is that you have to keep track of how many you have.”

Also See: Which Rewards Card Is Right For You?

Brian Kelly knows what he’s talking about. He used to fly more than 150,000 miles each year for his job on Wall Street. Today, he operates ThePointsGuy.com to offer travel news and advice on maximizing rewards. I spoke with Kelly to discuss the survey’s findings and get a few expert tips.

Make Rewards a Priority

“Off the bat, there are so many programs that it gets really confusing for most card users,” says Kelly. “People have so many cards and the programs vary. It can be tricky to keep track day to day.” Kelly says some people become so serious about managing their rewards that they create spreadsheets to keep it all in order. It doesn’t have to be that involved, however. For the average consumer, with around three to four cards, it’s mostly important to make your rewards a priority. In the past, we thought of them as frequent flyer cards. Now they’re frequent spending cards,” says Kelly. “You’re spending the money. Think of miles and points as assets and make sure you get something back.”

Track Rewards Digitally

Now, when it comes to keeping track of your points, miles and other rewards, Kelly suggests card users take advantage of the technology at their fingertips. He reccommends sites like  TripIt Pro and AwardWallet to help. Both sites are free and have handy apps for Android and iPhone platforms. In essence, they use your program information to monitor rewards and notify you as balances change and before your points expire.

Do It the Old-Fashioned Way

Finally, Kelly also says there are benefits to monitoring rewards more traditionally. It’s not uncommon that card companies will launch seasonal promotions or other reward programs that don’t always register through apps, or even their own sites. He recommends you put together a list of your cards and their rewards. “Every month or so, check your accounts to make sure your miles and points post. It’s a quick audit to make sure everything is good – same as you might do with your bank accounts,” Kelly says. “One common mistake people make – especially with miles – is to go to the airline’s sites, look for reward tickets…but just stop there. You should always call as a second step. US Airways, for example, has 26 airline global partners with flights that don’t show up under their rewards page. Call in and inquire about flexibility.”

Photo Courtesy, 401(K) 2013.

Home Gardening 101

Last week we learned the reasons why a family might consider growing their own vegetables, and just how financially savvy that decision can be. This week, as April showers usher in more than just flowers, consider a small kitchen garden that you can maintain with minimal effort yourself.

Where Do I Begin?

First, plan ahead. Where will your garden be?  Nearly all vegetables need full sun and well-drained soil. Ideally, your plot should also be located near a water source (as a watering can is really only effective for seedlings).

If you don’t have room for a garden, know that many plants and herbs can thrive in containers as well; these are ideal if you ever want or need to move your potted veggies indoors, like on a frosty night (which can extend your harvest well into November). Or, build a raised bed.  For weight bearing vines like cucumber and other climbing plants, support them with trellises or poles you’ve sunk into the beds prior to filling them with soil.

Finally, if you want gardening to be easy, start small. Nurturing too many varieties can be overwhelming for new gardeners — limit yourself to just a few types of vegetables the first year.

What Should I Grow?

This is simple – you’re not likely to care for or eat things you don’t like, so don’t waste your time or money on them.  Plant fruits and vegetables you absolutely love and buy regularly at the grocery store (especially if the items are expensive, like tomatoes or melons).  Need ideas?  The most popular and successful garden crops in the U.S. are tomatoes, cucumbers, peppers, beans, and carrots.

Although not a prerequisite for starting plot, also consider how well-equipped you are to harvest, store or preserve your yield (as sometimes all the plants fruit  at once, like zucchini). Vegetables like sweet and regular potatoes, onions, and winter squash can keep several months if stored at the right temperatures, and much can be done with canning, pickling and freezing. Overall, experts say the very best return on your investment (based on farmers market prices) are crops like spinach, broccoli, peppers, carrots, cucumbers, lettuce, peas, and swiss chard.

When Do I Start?  

Cool season vegetables (carrots, beets, lettuce, cauliflower) are planted in early spring and harvested by mid-summer. Warm season vegetables (tomatoes, pepper, eggplant, squash) are planted after the last frost and harvested by early fall. Also, know that some plants need to be started and sprouted indoors for a couple weeks (such as peppers and tomatos), while some seeds can be planted directly into the ground in early April. Alternatively, you’ll be able to purchase starter-plants starting around May.

How Do I Keep it Up? 

Most experts agree you should aim to water about every other day. Or, conserve water and your energy by burying a soaker hose amongst your plants.  You can also make use of inexpensive tools like a hose timer, or a simple rain gauge that lets you know how much moisture fell after a rainstorm so you don’t overwater.

To control weeds, use mulch. It suppresses growth in-between your seedlings, eliminating the majority of the weeding (and if you don’t want to bear the cost, mulch can be made from anything from composted leaves, grass clippings, shredded bark, even shredded newspaper).  Weeding Pro tip: wait until after you’ve watered, and the offending roots will pull right out. The good news is that if you stay on top of weeding and watering, it’ll never take you more than a few minutes.

“Spring” into action now, and you’ll be eating your very own, hand-grown veggies in no time!

Photo Courtesy of: Pixabay.com/tomato-61738_640

Financial Skinny: Debt Collection and How to Deal

[image error]At some point, most Americans deal with the problem of debt. Student loans, mortgages, credit cards – it’s almost unavoidable. The average household debt is estimated at $15,204 and credit card debt is almost half of that at $7,093.

For those who fail to handle their payments on time, it’s only a matter of time before they hear from the mighty debt collectors, who work on behalf of creditors and lenders to get you to pay up.

Debt collection is a massive industry, generating about $13 billion annually, but it’s not without its issues. The Federal Trade Commission deals with hundreds of thousands of complaints about debt collectors every year.

If you currently have a debt in collections and don’t know what to do, here’s some key advice. Bottom line: You have rights and should practice them.

Harassment  is Unacceptable

“By the time the average person receives a call from a debt collector, they’re already under some stress,” says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. “They know they can’t pay their bills and are araid to answer the phone. When they feel they’re being harassed, it really puts them on the edge.” Resolving the problem starts with knowing your rights as a debtor. The FTC enforces the Fair Debt Collection Practices Act (FDCPA) to protect consumers from unfair collection tactics. The law has tons of protections for personal debt, most notable are the following:

○ It limits collection calls to the hours between 8 a.m. and 9 p.m.

○ Collectors must send you written notice of a debt within five days after you’re first contacted about it

○ A debt collector may contact people that know you – except to find out your address, your phone number, and where you work.

○ Collection agencies must honor written requests for no further contact.

○ They also can’t threaten you with garnishment, imprisonment, bodily harm or verbally abuse you with harsh language.

The Calls Can Stop

“If you don’t want to talk to a debt collector over the phone, or think their calls are excessive, they’re obligated to honor written requests that they stop calling,” says Cunningham. “Even if you’re strapped for cash, send the request by certified mail so you have a receipt of it. Once the letter is received, they cannot call you again except for two exceptions: to tell you that you wont’ be called any further and to notify you if they intend to take action against you, like filing a lawsuit.” Cunningham cautions to remember that you’re not absolved of the debt and you’re still responsible for staying on top of it.

Report Misbehavior

Collectors often dance around the FTC’s rules, Cunningham says. Some agencies go rogue, using whatever tactics they can to collect a debt. Still others find ways to skirt around the law without breaking it. “If you think a debt collector has crossed the line, report it to the FTC, the CFPB or your state attorney general,” says Cunningham. The agencies will be investigated and if evidence is found, they’ll be fined. Odds are, once the offending collector is clear that you know your rights and their tactics won’t work, they’ll stop.

Pay What You Can

At the end of the day, debt collectors are most interested in receiving a commission from money collected and are always open to discussing repayment. “Agree to what you owe, explain why you couldn’t pay it and, if you have the resources, explain what you can afford,” says Cunningham. She warns consumer not to over-promise, however. “Once you work out an agreement with a collector, it’s highly unlikely that you can work out another, so be realistic about what you can do with consideration to your finances as a whole. Know upfront that they’re going to press you for more but hold your ground.”

Photo Courtesy, stevendepolo.

How to Get Friends to Pay You Back (and Other Awkward Money Problems)

In a perfect world, borrowers would quickly and readily return personal loans but, as we know, that’s often not the case. Here are tips on how to get your friends and family to pay you back. Read more here.

What are some other sticky money situations you find yourselves in with friends or family? We want to hear from you. Connect with me on Twitter @farnoosh and use the hashtag #finfit.

Prepare For Tornado Season

[image error]April showers bring May flowers and another (unwanted) guest: tornados – and meteorologists expect some of the worst days of the severe weather season are right around the corner.

The typical tornado season goes from mid-April through May. On average, about  286 tornados hit the United States every year, according to the Storm Prediction Center, and there have so far been only 155 reported across the country. All that is set to change this week, however, as experts predict some of the worst days of the season with sever weather in Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Ohio and Tennessee. Of course, tornados are catastrophic events with hefty financial consequences. When a tornado hit the small town Joplin, Mo. in 2011, for example, damage was estimated at $3 billion.

Before this tornado season kicks into gear, here’s how you can prepare in case of the worst.

Review Your Coverage

You may not know this but most renter’s and homeowner insurance policies include coverage for tornadoes. Unlike, earthquakes, floods and hurricanes, it’s all in one. That means, if you’re insured, you should have coverage for any damage inflicted by the storm: wind, rain, debris. Still, in preparation for tornado season, it’s important to check in with your insurer for an overview of your coverage. Grab ahold of your policy and connect with a representative. If you can’t find your policy, the Insurance Information Institute maintains an alphabetical listing of major insurers.You want to confirm how much coverage you have, exactly what’s covered and the first steps you should take in case of an emergency. Aside from your home, it’s also a good idea to check with your auto insurer. Your car’s policy should also protect against wind, hail and flooding associated with the storm.

Take Inventory

The aftermath of a natural disaster is obviously a hectic time. In the precious moments between the storm and when you file an insurance claim, odds are you may not be in the best place to take a real measure of the damage. Now is a great time to take an inventory of your personal property – just to be safe. Make it, say, a part of your spring cleaning. The National Association of Insurance Commissioners recommends everyone to make a home inventory, and create a disaster action plan with their family, along with reviewing your policy. In taking inventory, they suggest downloading their checklist and mobile app for iPhone and Android. The app is free and allows users to photograph or videotape household items and jot down a brief description (age, serial numbers, purchase price and current estimated current value.)

In the Aftermath

Finally, after deadly tornados ripped a path through the country in 2011, experts at the Insurance Information Institute put together a list of steps homeowners should take in the aftermath of a storm to facilitate a speedy insurance claim settlement. They are:

1) Take photographs of the damaged property if it’s safe to do so.

2) Prepare a detailed inventory of all damaged or destroyed personal property (hopefully, you’ve already done this.)

3) Collect canceled checks, invoices, receipts or other papers to help the insurer determine the value of the destroyed property.

4) Make whatever temporary repairs you can to protect property from further damage.

5) Secure a detailed estimate for permanent repairs to your home or business from a licensed contractor.

6) Keep a record of all emergency expenses incurred, such as hotel and restaurant receipts.

Photo Courtesy,  Walt Hubis.

Risk, a Recipe for Return, at BierBeisl

A year ago, Chef Bernhard Mairinger opened his Austrian concept BierBeisl (9669 Little Santa Monica Blvd.) in the heart of downtown Beverly Hills, with some reservations, given that risky restaurant market.  “It was crazy,” admits the former Patina chef.   “But then again, you have to be a little crazy to make it in this industry.”

Initially, Beverly Hills was not even on the 28-year-old chef’s radar, and it’s not hard to understand why.  New restaurants are notoriously perilous propositions;  conventional wisdom says that 9 in 10 will fail, while a joint study by Cornell and Michagan State universities puts the number closer to 7.  A Beverly Hills opening raises the stakes even higher;  Mairinger knew he would have to go big or go home.  “Beverly Hills was definitely not my first choice, “ he explains.  “Rents are really pricey, a lot higher than… in Larchmont Village or Downtown, for example.  Maybe double.”

A year later, the restaurant’s uber success is proof that new restaurateurs have to be – if not necessarily crazy –  at least willing to take a risk and be uniquely appealing. BierBeisel is a 2013 James Beard semifinalist for Best New Restaurant, while Mairinger made the list for Rising Star Chef.  “We brought a new flavor to Beverly Hills,” he says.  “People acknowledge what we are doing is different.  We have a lot of regulars and the neighborhood is very supportive.”

At first glance, BierBeisl’s unapologetically Austrian menu may seem heavy and out-of-place in such a health-conscious town, but Mairinger says his food is “traditional with a modern twist.”

“I try to improve on the techniques I learned in Austria to make the food we serve  lighter and  tastier,” he says.  “We take a lot of pride in using high quality products, which makes a difference.  My mom is a nutritionist so I grew up in a very health-conscious household.  Very little butter, very little cream, and substitute sugar wherever possible.”

The higher price points in Beverly Hills also make it possible for Mairinger to import authentic ingredients directly from Austria, which helps BierBeisl give customers the Austrian experience.  From beers, wines, and spirits to oils and vinegars, BierBeisl has formed strategic partnerships with masters of their craft from all over Austria.  “Is it pricey?  Definitely,” he says.  “Does it make a difference in the quality and the experience?  Definitely.”

Although the restaurant is still trying to get a feeling for seasonal fluctuations in sales, the positive word on the street has translated into consistent growth.  “The restaurant is financing itself,” says Mairinger.  “I am working on another Austrian-inspired concept that should open… maybe by the end of the year.”

But BierBeisl’s success remains Mairinger’s primary focus, and he sees opportunities to host more private events like the headline-grabbing, $160-a-head Eureka pop-up he hosts for 14-year-old chef Flynn McGarry. (Yes, 14.)  “We did the first event.  It sold out immediately.  So we did a second one.  And that sold out immediately.  So we’re doing two more,” says Mairinger.  “Flynn shows up and tells us how he wants everything done and we do it.  His age doesn’t matter.  He’s the chef.”

So what’s the teen chef  himself have to say?  “Bernhard is extremely knowledgable about cooking and running a restaurant, so doing my Eureka pop-up [at BierBeisl] has been amazing,” says McGarry.  “He is so focused and easy-going that even if something on my night isn’t going as planned, you would never know it. He is also really supportive of what I’m doing since he started cooking at my age as well.”

4 Ways Your Resume is Ruining Your Job Search

[image error]Job searches have migrated online for the most part, but to find work you’ll still need a strong resume. Whether in the application process or during an interview, your resume is still the cornerstone of your job search.

In February, unemployment fell to 7.7%- the lowest it’s been since December 2008. Good news but there are still 12 million Americans reportedly out of work. If you’re among the unemployed, or simply doing a little career spring cleaning, here are these four resume killers that can cost you the job.

Boring Descriptors

First, a resume is supposed to be your story as a professional. As a writer, I can attest to the many pitfalls of storytelling, but the biggest one is boring, or confusing, the audience. With all writing, you want a simple, consistant structure the reader can follow. Resume writing is no different. Avoid using jargon and other language that can be hard to follow. Do, however, employ action-oriented language that will make your resume pop. For example, eliminate wording like “was responsible for…” and replace it with action words such as “initiated,” “managed” and “executed.” Aside from catching the reader’s eye, you’ll also seem more like a go-getter.

Also See: How To Say No At Work

Cliches

We wrote before about overused resume terms when, at the end of last year, LinkedIn released its annual 10 most overused profile keywords. In order they included: “problem solving,” “analytical,” “responsible,” “innovative,” “track record,” “extensive experience,” “motivated,” “effective,” “organizational” and “creative.” These terms often find their way onto resumes, as well, and instead of having the desired effect of attracting recruiters, they persuade them that you’re uninventive. Worse yet, you’ll blend in with the other “creative, effective and responsible” jobseekers. Nicole Williams, Linkedin’s career expert, advises instead to replace passages with those cliches with sections that illustrate projects you’ve worked.

Exaggerated Qualifications

It’s one thing to gussy up your resume with impressive language but some exaggerations amount to an outright lie. Studies also find it might not help your case. Eight percent of Americans admit to embellishing their resumes (Seems low…53% percent of recruiters say job applicants straight out lie.) Of those who admit to the exaggerations, more than a quarter say they lost their job when it was uncovered. Bottom line: don’t lie. Matters of fact are easily verifiable in this day and age. Most employers will call your references and you’ll be found out. If you’re not sure of the difference between artful packaging and outright lying on your resume, ask yourself if your former employer would agree with your word choice or characterization. For those exiting a job, it may also be worth it to discuss during your departure achievements you should highlight.

Also See: Layed Off? 5 Ways To Bounce Back

Oversharing

Finally, I understand the temptation of a long resume. When all a recruiter has to go on is your cover letter and resume, you want to be certain that you’re giving him or her as much information as possible – especially when you can’t be certain what will catch their eye and set you up as the ideal candidate. But job recruiters and other hiring professionals are as busy as the rest of us. They have to sift through tons of resumes and the last thing you want to do is turn them off with a two or three page document.

Of course, how long is too long depends on the industry. Professionals who use a curriculum vitae, or CV, have some leeway but the rest of us should stick to the one-page resume to be safe. One page should be just enough to highlight your most recent work experiences, education and applicable skills. Does the thought of that make you nervous? Consider that 93% of recruiters use Linkedin to screen candidates. Between your online professional profile and the interview, there should be plenty of opportunity to share more.

Photo Courtesy,  Victor1558.