Lots of people are buzzing about the recent New York Times Magazine cover story, “What is it About 20-Somethings?” The article focuses on the fact that today’s 20-somethings are “delaying adulthood” by moving back in with their parents, marrying later and hopping from career to career.
The article speculates about whether these shifts are happening because of the current economy, a fundamental change in the definition of adulthood or — as many of the article’s more negative commenters believe — the “entitled” nature of the Generation Y.
Personally, I believe that 20-somethings are simply reflecting the reality of our current times. But I have seen evidence that many Millennials aren’t aware of the way they are perceived, particularly in the workplace. I frequently hear recruiters and employers complain that today’s young people have a sense of entitlement — a belief that they deserve jobs, high salaries and advanced responsibilities even when they don’t have much experience.
Whether you personally feel this way or not, it’s important to understand that this perception of 20-somethings is out there. In many companies, the older generations are still in charge, so when you’re looking for a job or wanting to advance in your career, you’ll have a better chance of success if you avoid the “entitled” label. Here are some tips for overcoming the “e” word…
It’s back to school across the nation and I want to give credit where credit is due. Well intended parents are sending their kids off to college usually with a credit card. I want to help you be sure they steer clear of some common credit card mistakes.
The average consumer has nine credit cards. Don’t let your student get caught in the crosshairs of potential debt. Collecting too many credit cards is absolutely not a good thing. Even if the cards have zero balances, multiple open accounts mean the account holder is ripe for the potential temptation to max out on all the plastic. So school them well before they get to school and are confronted with all those offers of free giveaways if they just sign up for yet another piece of plastic.
The credit card introductory rate isn’t forever. But how many young consumers remember that? If they do their homework, they’ll know that once that (usually) six month teaser, introductory rate is over it’s not unusual for the rate to jump to 18 or 20%. That is an ugly and unexpected surprise for the uninformed.
A big lesson to be learned about credit cards is the importance of reading the fine print. That’s where the (devil and) details of the offer are printed in tiny but all inclusive explanations. Most credit cards have limitations about balance transfer fees, amounts and new purchases. Your student should be well-schooled about the importance of knowing those tiny details.
Be sure to choose a credit card for the right reasons. By this I mean, don’t let your student choose a card just because it has other attractions such as a rebate or rewards program or is offered by a well known icon or celebrity. Remind your student that credit card granters aren’t their friend. It is a business that wants to earn as much money as it can. So make it your student’s business to shop for the card that has the best interest rate rather than the most interesting look.
Regardless the credit card that’s chosen as being the right one for your student – make sure they understand that even with the right credit card comes ongoing responsibilities:
Credit card bills should be paid off at the end of every month. Making a minimum payment only will get them in trouble for a very long time. For example, if your student has a $1000 balance with a 17% APR and pays the minimum $25 monthly amount, it will take them 57 months to pay off that debt and cost $452 in interest charges.
Always pay on time, every month. Be sure your student knows to check their account statement for the due date and pay at least 3-5 business days ahead of time
It’s vital that your student assume responsibility for their own money management. Yes, it is time for them to understand it’s their financial thumbprint from now on. It gives new understanding for them when they’re told: It’s your money so take it personally ™ .
Students are certainly tech savvy these days. They tweet and text and surf with great confidence, secure in their know-how about the joys of connectivity. But how secure is their knowledge about being safely connected when it comes to online money management?
For example, what would your student do if they received an email from their bank asking them to update their account information? Would they confidently click on the attached link and update their records? Wrong decision! They would be giving identify thieves direct access to their money. But if they’d played a new, interactive financial literacy board game called Wi$eMoney – they would know that banks don’t ask customers for account information via e-mail.
Wi$eMoney teaches students about banking, credit, investing, budgeting and identify theft. It was created by The Learning Key, a company that creates games to transform learning into action (www.thelearningkey.com) . It has been tested with students and teachers in nearly two dozen states and complies with school board approved curricula.
The information that’s shared while playing Wi$eMoney is priceless. And, it’s desperately needed because U.S. students are graduating without basic financial education. They’re graduating without the ability to manage their money. In fact, in a recent survey of educators across the country who belong to the Business Professionals of America teachers said:
only a third of students who graduate from high school are financially literate
93% need education on how to manage a budget
But the other disturbing fact that was identified in the survey is that more than half of the teachers (51%) said they are only somewhat qualified to even teach students in financial matters.
That’s why parents and teachers must find ways to make learning about money fundamental and help students understand the importance of the mindset: It’s your money so take it personally ™.
How better to do that than with a game that makes become financially smart fun and mental?
I’m an engineer at a leading tech company, and for the most part I love my job. At 29, I’m one of the younger people in the office. One of the most frustrating things for me is working with much older people who are a lot slower with new technologies — even my superiors who are in technical roles can’t work as quickly as the younger crew can.
And I don’t blame them — I don’t think I’ll be able to keep up in such a rapidly-changing field when I’m in my 60s. Still, it’s hard to watch (or wait for) them to figure something out that I could have done myself in half the time.
How do I show respect to my older, less tech-savvy coworkers without losing my mind?
Who should be the successor of a family owned business when the founders are no longer available, willing or capable of continuing to run it? That’s definitely a mind over money matters choice.
My friend and colleague Dawn Fotopulos, a much sought after small business advocate and coach is the Founder of Best Small Biz Help.com, The Solopreneur’s Lifeline(http://bestsmallbizhelp.com/meet-dawn-fotopulos/). She says usually one or two people are in charge of the business and have been the ultimate decision makers and they must be willing to delegate authority before they’re ready to sell or turn the business over to be run by someone else. Why? Fotopulos says because such a transition requires a three year on-ramp/off-ramp time frame to do it successfully and suggests the following:
Think about succession at least three years before you want to transition
Delegate authority and not just tasks to your key proven people
Seriously consider non-family members as viable leaders of the business
If you’re the founder of a family business, are facing this decision and considering appointing two people to run the company and use an accountant as a referee – Fotopulos says you might want to reconsider. She is a firm believer that you can never have a 50/50 split in ownership.
“It’s a recipe for disaster,” she says. “Designating more than one owner in a succession plan doesn’t work. Someone must ultimately be in charge. That person needs to understand the mission of the business. Although a business should be able to run independent of the founder,” she goes on to explain, “it only can when the owner delegates authority regarding decision making and not just delegate tasks.”
A succession plan takes time. So does identifying the right person. Mentoring a successor requires good, time consuming, on-the-job training, nurturing and giving adequate lead time for a smooth transition. Most family business founders haven’t done that or identified their successor because they’re structured the business around themselves. Even if the owner/leader has identified the person to succeed them, often they can’t let go or they don’t think far enough ahead to implement change and find that it’s a crisis that forces putting a succession plan into play.
Lost time is lost money. Forward thinking about the transition of power is a bottom line issue. Mind over money really matters when it comes to this decision. It should be made from the mind of a good business owner rather than the heart of a hopeful parent/founder.
Fotopulos says the successor boss must be responsible for the business viability year in and year out. The entrepreneurial generation (founders) made the sacrifices but need to be sure that when the second generation (adult children) takes over, their willingness or motivation often isn’t the same. Thus the s suggestion to consider a longtime, loyal employee – a person who is considered your critical second in command – to become your successor.
When choosing the person to succeed you in your successfully run and profitable family business, as you consider who best can do that, remember: It’s your money so take it personally (TM). It applies here more than ever before.
It’s a fact: family owned businesses are a huge part of our country’s economy.
It’s a fact: family owned businesses usually come with built-in problems.
It’s a fact: experts say family owned businesses (generally) fail not because of economic issues but because family life and workplace life can create turmoil.
Family owned businesses account for 60% of the nation’s employment, 78% of all new jobs and 50% of the country’s gross domestic product. But a lot can go wrong in a family owned business so it’s important that we all understand these businesses’ unique struggles and support them because only about a third survives into the second generation.
Family business success depends on forward-thinking and planning. The problem with family owned business succession plans is that the well-intended founder – the parent who made all the sacrifices – remembers the lean years while in most cases, the adult child, would-be successor doesn’t. Instead, the child only recalls seeing over and over that Mom or Dad (or both) took risks, worked the hours, made the sacrifices and got the business to break even and have free cash flow. That’s why many 20-30 year family businesses – viable when the parents hand it over (usually to the son) – are run into the ground in two years.
As my long time friend and colleague Dawn Fotopulos, a small business advocate explains: “The bottom line is – it’s so hard to get a business profitable but takes just an ‘eye blink’ to destroy it and decades of hard work.”
Fotopulos’ business is to improve the viability of small business in the United States. (http://www.smallbusinesshow2.com/dawn-fotopulos.html) She’s committed. She knows what she’s talking about and definitely knows what she’s doing when it comes to educating small business owners for success.
“The disconnect,” says Dawn, “is that the parents who made all of the sacrifices understand there are going to be lean years and tend to be conservative about how they spend their money. They loathe spending money but want to give their kids everything they didn’t have. They spoil the kids and the kids are of the mindset that the business gave them a nice life and is always going to be there.”
There’s such truth in Dawn’s assessment. When it comes to family owned businesses, the second generation isn’t of the frame of mind to save for a rainy day. “When they take over the business”, Dawn says, “the mindset is often first that they must have the biggest and the best of everything – equipment, furniture, expensive environment – that the business may or may not need!” She says too often she sees them start to run the cash position into the ground. “So if they lose a client or end up in a tough economic environment,” Dawn told me, “they can’t stand economic shocks.”
It’s your money so take it personally ™ absolutely applies here. In the case of a family owned business that’s failing, Dawn says part of the dilemma is pride. Many in this generation wake up and say, “I deserve to have the best” and put themselves first instead of the business. “The family business must be viewed and treated like the third entity it is,” Dawn explains. “The one that provides for them and their family and those they employ.”
Next week: Who should be the successor in a family owned business when the founders are no longer available, willing or capable of continuing to run it? That’s definitely a mind over money matters choice.
For many people, the July 4th weekend marks the beginning of Slacker Season at work: the time to enjoy long lunches outside and cut out early on Fridays. I love the mellowness of summer and encourage you to enjoy the season to its fullest. I also know that you need to keep your job search or career development on track, even when it’s 100 degrees in the shade. Here are some suggestions:
Revisit Your New Year’s Resolutions.
Remember that sense of optimism and new beginnings you felt as you turned your calendar to January? Pretend you’re a company with a July 1st start to your fiscal year and reboot your resolutions right now. If you never set any goals for this year, lie on a beach towel staring at the sky and daydream about what you want to accomplish by the end of 2010. Then, commit to taking some small steps this summer (such as registering for an online course to improve your negotiation skills, going outlet shopping to perk up your professional wardrobe, revising your job description with your boss to prepare for a promotion) to move yourself forward.
Redefine “Beach Reading.”
Instead of reading the latest romance novel, gossip magazine or legal thriller by the pool, pack your tote bag with a book that will advance your career knowledge. Check out the biography of a successful business owner, a productivity guide or a job hunting manual. If you’d rather keep your eyes shut and avoid weird sunglasses tan lines, load some books onto your iPod and listen instead. Consider these 10 great career books for young professionals.
While it’s incredibly important to do the right things in a job search, you also need to make sure you avoid doing the wrong things.
One of my favorite questions to ask recruiters is, “What are your biggest pet peeves about entry-level job candidates?” Below are some of the answers I’ve received. Hopefully this list will save you from committing any major faux pas!
1. “Creative” resumes. I know you want to stand out from the crowd, but a perfumed, purple or paper airplane-shaped resume is not the way to do it.
2. Not doing your homework. We live in the Information Age, so there is no excuse for not learning as much information about a company as possible before meeting a representative of that company at a job fair, information session or other recruiting event. You should already know the organization’s lines of business, competitors, current news and other facts you can easily discover from a website or a quick Google search. Asking a recruiter to tell you about his organization or asking what the company does is a quick way to strike out.
Many thanks to Good Day New York for having me on as a guest a few weeks ago. The segment topic is job hunting tips for recent college grads. Watch the five-minute video here:
As a guest personal money expert for my former employer CNN and HLN – I answer questions on financial issues that come to the network’s Help Desk .
Dave from Pennsylvania, a 30 year old professional who wants to go back to school to get an education degree wanted to know how to make that economically feasible.
My suggestion – start in his own backyard with his current employer. Check to see if his company will pay for his education in part or in full. Many companies offer tuition reimbursement for course work. I also recommend that he consider virtual universities. They’re a way to accomplish his back to school goal without interrupting his day job and income.
For 30-somethings like Dave – this third decade of life is an ideal time to seek the services of a good certified financial planner. In your 30s, life is becoming clearer – and more complicated – as returning to school for an enhanced degree or getting married or starting a family or buying a home – are your reality.
To further help Dave and anyone who’s trying to make a decision that involves managing their money – if you don’t have a budget, it’s important to make one. A budget is just a spending plan that will give you real numbers about your ability to pay for what you need or determine what you want to do.
A budget pie of how much of income should go to various expenses suggests:
