Farnoosh Torabi's Blog, page 45

The Sequester Starts: Should We Worry?

The sequester begins today. It’s the end of federal spending as we know it, and most Americans feel fine - but should you?

Monday we detailed exactly what sequestration is. In short, it’s a package of spending cuts to the federal budget. The cuts will total $1.2 trillion over 10 years and will be split evenly between defense and domestic discretionary spending. In a recent poll, 37% of Americans said that they’d like the sequestration to go forward as scheduled. Coincidentally, nearly as many (38%) reported following the news around the sequester closely – all of this despite the President’s warning that failure to avoid the cuts would be “deeply destructive to national security, domestic investments, and core government functions.”

It seems that when it comes to today’s major budget decision, many Americans don’t know enough about it or just don’t care.

But it’s important. Here are some general implications of the sequester on the economy and our pursestrings.

Not an Overnight Threat, But…

Chuck Jaffe of The Wall Street Journal’s MarketWatch wrote that not everyone is worried because the cuts won’t all take place at once. Instead they’ll happen gradually, hopefully giving the economy time to adjust. “It’s not a flick-the-switch, lights-out deal,” according to Jaffe, but there will be some impact. “Those cuts will hurt the economy at the very time when it needs a stimulus to keep going, and there’s no telling just where the trickle-down impact of a sluggish economy with recessionary drop-offs in gross domestic product would go.”

Impact on Economic Growth

Fed Chairman Ben Bernanke weighed in this week in his testimony before the Senate Banking Committee. Bernanke quoted the Congressional Budget Office, testifying that the cuts would contribute to an estimated 0.6 percentage point drag on economic growth. He said, “Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant. Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run for any given set of fiscal actions.”

Unemployment

Aside from a hit to the economy, a government shutdown federal employees without work. So far, the White House has announces plans for furloughs in most agencies. Fewer federal workers could also mean flight delays, longer wait times at border crossings, limited access to government parks and services and furloughs of civilian employees at several other agencies.

Fewer Government Services/Jobs

Social Security, Medicaid, Pell grants and veteran benefits are exempt from sequestration cuts, but experts agree that they’ll still be catastrophic with many significant government services arbitrarily interrupted. More than$500 billion will be cut from the Defense Department and other national security agencies. The rest would come from domestic services including parks, federal courts, the FBI, food inspections and housing aid. Individual states would also be hard hit. According to the White House, in Virginia sequestration would result in funds for 14,000 fewer public school students for example. Washington D.C. would lose nearly $80,000 in grants that support law enforcement and drug treatment.

Stock Market Still Stable

On the bright side for investors, so far the stock market has been pretty nonchalant about Washington’s warnings of pending doom. “The sequester is very much an important event because it will provide some economic head winds,” said Andres Garcia-Amaya, a global market strategist at JP Morgan Funds to InvestmentNews. “But the markets have shrugged it off because everyone knew for more than a year that it was coming, and it has already been factored in.”

The economic experts and most Americans are still hoping Congress can come to an agreement on the spending cuts however. At 10 A.M., the President and Congressional leadership met to discuss the possibility of a last-minute deal. If one can’t be brokered, by 11:59 p.m., the President will be required to sign an order enacting the sequester.

Photo Courtesy, Glyn Lowe Photoworks.

Beauty Money Wasters

What’s in your makeup bag? Probably more than you need. The billion-dollar cosmetic industry is known to preach the value of fancy foundation, eye cream, wrinkle cream – you name it. And more often than not, we buy into it.

To help with the makeup madness, we tapped Desiree Stordahl, co-author of the book “Don’t Go to the Cosmetics Counter Without Me,” and a beauty editor for CosmeticsCop.com. Stordahl has a list of products that are called “must haves” but are, in fact, money wasters. Read more here.

What are some other beauty money wasters? Connect with me @Farnoosh, and use the #finfit.

KLG & Hoda: Answering Your Money Questions

This morning on the Today Show, answers to how to raise credit to qualify for a mortgage, consolidate student loans and find affordable rent. Check out the clip and remember to send me your money questions!

 

 

Turn a Bad Idea Into a Good One

Brilliance doesn’t come easy (or cheap) – it takes time, and in some cases, lots of work and collaboration.  In fact, experts say only rarely do the best ideas, products and systems come in a “flash”– they almost always come as a slow burn, churning away at the back of your brain for days, weeks, even years. They’ve been rolled around and tested and prodded and poked at, until at last, you and others can no longer find any holes.

So how do you turn a bad idea into a good one?  Sometimes it’s as easy as asking yourself a few key questions—namely, “Why?”

How many ideas can I come up with?  

When folks want to do something important but claim they don’t know where to begin, many use the excuse, “I don’t have any ideas.” But that usually means they don’t have any good ones. Hundreds if not thousands of ideas are probably rolling around in your head right now… but most people lack a system for developing these ideas, and determining what’s worth keeping on the table.

The first step to landing a great idea is to dream up a bunch of terrible ones.  Thinking up “bad” ideas on purpose frees your mind of preconceptions and gets you thinking outside of the box, plus, they’re easier to criticize and pick apart when you don’t have any personal attachment to them.  In fact, the bad ideas themselves can often lead to good ones, or, will at least give you practice in asking the right questions.

So, do a “mind dump” of a brainstorm, where everything is considered and nothing is too far fetched, silly, or “wrong”.   Then, use a process for determining if something is worth re-thinking (you can do this by asking some of the questions below).  Or, if you’re having trouble with your initial brainstorm, perhaps it’s worth coming at your problem or question from a different angle:

What are the core values at play?

Rather than ask yourself “What’s going to work in this situation?” you might start with, “What problem am I trying to solve?”  Is there demand in the marketplace for a new product?  Is there a breakdown of communication at work?  Are you in need of a career change, but not sure where to begin?

For example, “How can we improve communication in our work group?” could be more focused by asking, “Why do we want to improve communication in our work group?” Perhaps the reasons are that it’s difficult to schedule everyone in the same room at the same time, miscommunications over emails have been common, or that it’s been hard to keep up momentum on important directives.  Identifying the reasons behind the problem could lead you to think of new policies or solutions that address the core issues, such as “Email questions for clarifications, but new proposals should always be pitched in person.” An example of this process in a business context could be:

Idea: “We should use Go-To-Meeting.”  Ask, “Why?”  Answer: “Because then we don’t have to be in the same room to meet.” Why? “Because we’d like to reward employees with a more flexible work-life-balance.”  Why?  “Because Happy Employees are often Better Employees.”  Mining the idea for meaning can help you identify what matters most about your solution.

Ask, “Why is this a bad idea?”

Now that you have a good handle on what your core mission is, it’s a good idea to follow a similar system to dig even deeper.

Take, for example, the brainstorms that seem totally wrong – way out in left field.  Address each one and ask yourself why it won’t work. Is it that the scope of the idea is too small?  Is it too big?  Do you not have the resources? This can help focus the brainstorm and uncover even more information about your problem.  In fact, it may even spark solutions.

Even as you uncover the reasons your idea may not work, pretend for a moment that you’re a used car salesman, and your commission is riding on selling your (bad) idea to a potential customer.  By doing so, you’re sure to uncover your idea’s good qualities.  Could your idea work for a different context?  Could it work under different circumstances?

For the earlier question, “How can we improve communication for our work group?” you might have thought of a solution to hold a quarterly corporate retreat and fly members out to meet in person.  When you ask yourself, “Why is this a bad idea?” the reason might be” “The travel budget isn’t big enough.”  But when you ask “Why?” yet again, you might uncover that it’s really about budget allocation and that moving some money around is actually smarter than installing a state-of-the-art, expensive video conferencing system in every office.  Don’t eliminate a bad idea until you’re sure it’s not a good one in disguise.

Now ask, “Why is this a good idea?”

Now that you’ve eliminated the duds, it’s time to attack the ideas that you actually think are feasible.  Ask “why” again – this time, why it might be a GOOD idea. Let’s say you’re bumping up your personal social media efforts and your idea is to start a Twitter presence.  Ask yourself, “Why?” and your answer might be, “Because others in my field use Twitter.”  Again, ask, “Why?”  “Because they want to position themselves as engaged and media-savvy, as do I.”  Again, the question should be, “Why?” “Because potential employers could see my work there and give me jobs.”  Now THAT’S a reason to act on.

Can I simplify?

Can you describe your idea to a small child?  It’s hard to explain tough concepts to a kid but if you can do that effectively, it probably means you know your idea really well, and have boiled it down to its simplest parts.  Grown-ups like to complicate explanations with lots of big words, fancy language and long sentences.  Strip all that away, and you’ll probably have a more effective message for your pitch.

Who knows?  Your terrible idea might just be gift wrapped in the wrong paper — and if you tug at the string a bit, you might just unravel all the right answers.

Photo Courtesy of: wikimedia.org/wikipedia/commons/a/a4/Idea

Laid Off? 5 Ways to Bounce Back

[image error]“Laid Off,” “Fired,” “Let Go.” No matter how you phrase it, it can feel like a setback – but it doesn’t have to be.

Unfortunately, losing a job happens to tens of thousands of Americans every month. In just January, an estimated 134,026 workers were let go, according to the U.S. Bureau of Labor Statistics, contributing to the 7.9% of out-of-work workers nationally. But it’s not all bad news. The economy is still in recovery and for many, being laid off is just the catalyst needed to transition to the next step of their career (just ask Farnoosh who was laid off in 2009 from TheStreet.com).

But a layoff has to be  handled properly, starting with day one. I spoke recently with employment professions to get their best tips for rebounding from being laid off.

 

Here are five of their top tips:

Half Glass Full

 Being let go stinks, but it’s not the end of the world. Most likely, it’ll be the beginning of the next chapter of your career so cheer up! “Whatever you do, don’t act as if you have a chip on your shoulder,” warns human resources expert Steve Kane. “Employers do not want to hire individuals who don’t seem upbeat and enthusiastic, regardless of their skills.” Instead of staying hung up on the job you loss, focus on the opportunities ahead. As Farnoosh says, “sometimes the best decisions in life are the ones made for you.” Rather than dwell on the fact that you’ve lost your job (something you had no control over), focus on your next steps.

Tie Up Loose Ends

That said, it’ll be easier to make that transition if there’s no unfinished business with your employer. You should already be backing up your contacts and files but that’ll be especially important in the last weeks and days with your employer. In accordance with your office’s policies, you want to export email addresses, phone number and other important information for people with whom you’ve worked. For Outlook, Microsoft has an easy-to-follow guide to the process. Plaxo is a free service that will allow you to back up contact with other email services.

Shore Up Your References

Just because they fired you doesn’t mean you should go down in flames. When it comes to your now former employer, you want to maintain some goodwill and leave with a strong reference. “Smart hiring managers will not settle for a standard reference,” says Kane. “They will try to find individuals at a candidate’s last employer to get their take on the candidate.” Frank Lockwood is the co-founder of InBetweenJobs.com, a site dedicated for offering resources for workers in transition. He suggests setting up an exit interview with your employer to get the lowdown on why you were let go. ”It can help uncover areas you should work on,” he says. It’s also a great time to ask for a reference.

Maximize Your Time

Leaving a position, voluntarily or involuntarily, will provide some free time in your schedule, which you should try to maximize. if your employer was kind enough to give you a few pointers on your way out, apply them while in between jobs. Perhaps they were looking to hire someone with a more diverse skill set or specific knowledge in a burgeoning area. Lockwood suggest using your downtime to work on projects that will illustrate your skill in those areas. Consider volunteering your professional services for a local non-profit. Along with being useful networking , the experience will also give you tangible work to discuss with and show to potential employers. Idealist.org is one resource the will help you find volunteer opportunities, perhaps even paid opportunities. Also stay engaged and raise your profile through blogging on issues in your field, attending events, etc. – whatever you do, don’t go into hiding.

Develop Skills

Finally, new skills will make you a more attractive candidate when you begin searching for a new job. Do a little research on your industry with an eye on new technology and skills that are in high-demand. Consult your professional or trade organizations for the latest industry information. Once that’s done, there are some free and low-cost options to receive the training you need. SkillShare is an online hub for anyone interested in teaching or learning pretty much anything. A quick search uncovers tutorials in everything from social media 101 to building mobile apps. Another option is Udemy, which provides users with more than 5,000 free courses taught by leading experts.

Photo Courtesy,  Victor1558.

5 Biggest Pest Threats to your Home

Unwanted creepy-crawly house guests aren’t just pests. They can cost thousands of dollars in damage and even spread illness. Here are a few pointers on how to prevent five of the biggest pests to your home. Read more here.

How have you dealt with pest threats to your home? Connect with me on Twitter @Farnoosh and use the hashtag #finfit.

Koontz Hardware: Lessons From a Neighborhood Fixture

[image error]At the corner of Robertson and Santa Monica Boulevards in West Hollywood, coffee joint Java Detour just became the latest in a barrage of business casualties that predate the Great Recession.  There are three other empty storefronts within a stone’s throw from the now defunct corner coffee shop.

So how is it that the neighboring Koontz Hardware, after three decades under its current management, has achieved a sort of landmark status in this fickle part of town?

The shop has earned a strong reputation (and Yelp! rating of four-and-a-half stars) by helping area residents fix their homes themselves, especially during a time when Do-It-Yourself projects, blogs and TV shows are all the rage.

“We solve your problems,” says general manager Dean Wilson, who, along with his brother, owner Russ Wilson, has run Koontz Hardware since taking it over 30 years ago.

They’ve weathered recessions, earthquakes and even arson since taking over the store from the Koontz family in the 1970’s.  Yet despite it all, the brothers have managed to keep their staff on payroll – no layoffs.  While the store took a hit during the Great Recession, Koontz kept its staff of 56 employees – including stalwart Herb, who turns 90 this year – in tact.  “We have generations of loyal customers who have come to expect a certain level of service….I’ve seen what happens when you skimp on people,” says Dean.

[image error]In addition to its knowledgeable staff and reliable inventory, Koontz benefits from unique advantages that have helped keep its doors open year after year.  For one, the owners don’t have to worry about rent; they own the building.  Second, there’s additional cash flow from an unused third floor the Wilsons rent to Warner Bros., which helps to offset occasional dips in revenue. It also doesn’t hurt that the nearest Home Depot is five miles away, which, given Los Angeles traffic, could take up to an hour to reach. 

Whether Dean’s decision to keep his staff full will translate into continued customer loyalty remains to be seen.  A steady rise in the number of sales transactions since November seems to be turning into a trend, reinforcing the idea that taking one for the team is not just the right thing to do; it’s good business.

Sequestration 101

With the deadline for the big budget cuts looming, you may have been hearing a lot of debate over “sequestration.” Here’s the skinny:

What is it?

Sequestration is a package of across-the-board spending cuts to the federal budget set to go into effect March 1, 2013 if Congress can’t agree on exactly how to reduce spending. The cuts will total $1.2 trillion over 10 years and would be split evenly between defense and domestic discretionary spending.

The History

It’s been a long time coming. With government leaders battling over how to improve the economy and reign in government spending, lawmakers agreed to sequestration back in 2011. The Budget Control Act of 2011 authorized an increase in the nation’s debt ceiling in exchange for $1.2 trillion in defined spending cuts and another $1.2 trillion in cuts to be determined by a bipartisan group of senators and representatives. In case the committee failed to reach an agreement on the additional $1.2 trillion, lawmakers included a provision in the bill that would automatically implement cuts.

It was a prospect considered so severe, the President said it would be “deeply destructive to national security, domestic investments, and core government functions.” The country is currently five days away from the deadline with no deal in sight.

What Will It Impact?

Social Security, Medicaid, Pell grants and veteran benefits are exempt from sequestration cuts, but experts agree that they’ll still be catastrophic with many significant government services arbitrarily interrupted. More than$500 billion will be cut from the Defense Department and other national security agencies. The rest would come from domestic services including parks, federal courts, the FBI, food inspections and housing aid. Individual states would also be hard hit. According to the White House, in Virginia sequestration would result in funds for 14,000 fewer public school students for example. Washington D.C. would lose nearly $80,000 in grants that support law enforcement and drug treatment.

For a look at how the sequester will affect the budget of your area, the White House has provided state-by-state breakdowns of the impact of the cuts on state funding. Find your state below:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia,

Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,

Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey,

New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,

West Virginia, Wisconsin, Wyoming.

Photo Courtesy, Glyn Lowe Photoworks.

Save 30% at the Movies

The price of movie tickets have soared 30% over the past decade. And those $6 Goobers? No, thank  you.

A family of four can easily spend $80 to $100 at one theatre outing, when you factor in 3D movie tickets, popcorn, beverage and candy. I helped one family save big bucks at the box office and on concessions in Friday night’s World News with Diane Sawyer. 

1.  Buy your movie tickets in bulk, in advance.

You don’t have to stand in line. Buy your tickets online at BulkTix.com or at warehouses like Costco for much less.

2.  Maximize your club memberships.

Many theatres offer membership affiliation discounts that can add up to big savings. For example, one theatre offered 30 percent off with an AAA membership.

3.  Buy unwanted movie gift cards for a steep discount.

Gift cards can be used for tickets and concessions. Markups on candy and popcorn can be upwards of 1,000 percent. To find discounted gift cards, visit Plasticjungle.com or giftcardgranny.com 

 

5 Smart Shopping Tips Via ‘All You’

This spring, I’m one of All You magazine’s judges for their “America’s Smartest Shopper“ contest. (Have you entered the contest yet? You’ll have a chance to win $1,000 and be featured in All You!) As you brainstorm ideas for a video entry for the America’s Smartest Shopper contest, feel free to get some inspiration from these five smart shopping strategies.

Read more here.