Commissioner De Industries, Unemployment and Brain Drain-4

Commissioner De Industries, Unemployment

Burier continues his adventurous career. He finds financial institutions pressing for repayment of loans given to entrepreneurs. Recovery becomes impossible. Many are unable to repay. Banks initiate legal action for recovery. Legal notices are issued in rapid succession. Many units are closed. The government takes over a few of them. In many cases only a short interval existed between inauguration and closure. The government appoints a special task force to look after the assets of the units taken over. The co-author of the scheme flees the country and lands on a plum job in an inaccessible country. When the Press contacts him just before departure, he gives his assessment of the scheme. He says “the scheme is a grand success but the promoters are colossal failures”

Those units which are completed have no electricity. The express sanction of loans for the projects provided added attraction for the officials. They interpret any decision taken as part of official duty as a favor and cash it at a premium. Real entrepreneurship manifests in sanctioning and executing part of the project requiring finance and not obviously as managerial skill or ability. “Cuts, cuts everywhere”, “Self before service” are the mottos and this finds expansion of the banking industry though temporarily.

The venture leaves disastrous effects on the economy. Several sheds are vacant for want of entrepreneurs. Wandering impoverished cattle replace them. Cattle owners find the sheds an ideal shelter for their uncared animals. Some of them, who stood with the project until disbursal of the loan, disappear leaving the bankers to console themselves by having cattle in the sheds as security. The herds find excellent shelter inside and are protected from sun and rain. In many cases the entrepreneurs acquire the traits of thieves.They display entrepreneurial qualities more in ensuring default of loans than in successfully running the units. They run away and go into hiding for fear of the police or court decree.

In short the program crashes before it takes off. After many attempts and as a last resort the authorities organize a grand festival to write off loans. The borrowers welcome this and want this to be an annual feature so that they can confidently start industries with borrowed funds. This is really venture capital. It means venturing without own capital.

The innovative approach of Burier attracts attention of political heads including deadwoods. They find in him a reservoir of talent and ideas and are eager to tap them. They turn their attention to the problem of unemployment and entrust the task of finding a solution, to Burier. He is given additional charge of the portfolio.

Burier evolves a novel idea of developing women entrepreneurs. He chooses a high profile society lady of large proportions and wide dimensions but with a penetrating intellect as the chair person of the task force. She submits a detailed proposal on making steel castings in a foundry. Any woman who pays $100 is entitled to join as a shareholder and additional bank finance is organized. (To be continued).


How We Taught Our Children the Value of Money

How We Taught Our Children the Value of Money

It used to be when our three children were all under the age of 10 we gave them an allowance based on their age and ability to perform certain household tasks. It was meant as a way for them to understand the value of earning and saving money and paying for things out of their own pocket.

What we soon realized was they needed another way to have a more positive relationship with money. And I do mean relationship. If my husband and I taught them anything it is that money, while inanimate, can have a positive or negative effect on how you live your life.

The first thing we did was stop giving them an allowance from our own pocket. We cut that cold turkey. First of all, what did that teach them? That we were their bosses? That taking out the trash and doing regular household chores has a dollar value? As a mom I don’t get paid for cooking and cleaning, why should they?

So the next thing we did was help them find ways to earn their own money based on their age and level of responsibility.

My 12-year-old was able to find babysitting jobs immediately. Fortunately we live in a neighborhood full of young families. My daughter’s reputation grew and soon she was babysitting for five families. She was making much more than the weekly allowance we used to give her. She was also discovering her earning potential and felt proud that she was doing something her friends we not, creating a little business for herself and watching her bank account go up and to the right.

Our two younger children were always begging me to get a puppy. I always said “No” to that request because I knew I’d become the main caregiver. One day I realized that if I kept saying “No”, they would miss out on a great experience. So it was during this time that we all came up with the idea to create a neighborhood pet sitting service. Not only did we have a neighborhood of young families, but it was also a neighborhood with lots of pets.

At the time my two youngest were seven and 10. That may seem young, so I was very involved at the beginning and supervised most of their jobs for the first few years. We developed marketing tools, balance sheets, client forms and even business cards. We learned through some mistakes what to do better the next time. For instance always carry the house key on a lanyard around your neck so you don’t accidentally leave it in the neighbor’s house and lock the door behind you. That was our most costly mistake because we had to break a back window (and pay for it) to get back in.

Their experience taking care of pets taught them to be responsible and they learned how much they really wanted a dog of their own. So when they earned enough money they were so proud and excited to get a Golden Retriever puppy. All three of them chipped in with their hard earned money. They even paid for the veterinary bills and the food!

My children are now 13, 16 and 19. They all have a great relationship with money. They have learned that they can create their own small business doing the things they love and make money in the process. They save a lot, spend a little, and we also make sure they donate to a good cause once a year. My eldest has saved up enough money to pay for her first year of college. That would never have happened had we continued giving them an allowance.

Start small. Jot down some hobbies that can be turned into a small business. Consider tutoring, babysitting, petsitting and mowing lawns.

Systems Engineering in the Entrepreneurial Space Industry

Systems Engineering in the Entrepreneurial Space Industry

If any of you have ever worked in a “garage works” type aerospace startup (and I hope you have because it’s an eye-opening experience!) you will have been exposed to a staple of entrepreneurial, rapid engineering development which I like to call “design by email”. Small groups of smart minds generally don’t like being slowed down in expressing their creativity by formal design processes – and neither should they. One of the key reasons that entrepreneurial aerospace has gotten a leg up on the establishment is this ability for nimble, creative, and rapid development. The company culture within these small and highly productive aerospace companies – who have now become the new hope of the Obama space policy initiative – prides itself on getting things done quickly and at lower cost than the establishment ever could. In the entrepreneurial mindset, the term “system engineering” is a dirty word; it describes a way of doing things that is overly burdened by formal processes; dominated by endless meetings with configuration control committees, attended by suits who blabber on about “six sigma this” and “house of quality that” and wouldn’t know lefty-loosy/righty-tighty if you shoved a screwdriver right up their collective you-know-whats.

It’s fun being the underdog, and cultivating this in-your-face attitude of showing the big boys how to do it right makes your work that much more enjoyable. However, as a startup becomes increasingly successful and grows the size of its technology team, this approach will start to show its limitations. Engineers who get 100+ emails a day will read the ones important to them, which aren’t necessarily those important to overall project success. Even worse, as there is no centralized technical interface for your customer to interact with, the technical team gets increasingly bombarded with requests for information by the customer, slowing them down in their important design work and often returning inconsistent messages (“yes, our payload interface can deal with a 5% increase in payload mass” vs. “current vehicle performance projections will allow for a 3% growth in payload”). Once an aerospace organization reaches this point, a critical transition is about to take place. The challenge is to overcome the existing bias against systems engineering (there’s that dirty word again), and introduce an effective yet lightweight set of processes, which will meet the team’s needs without killing that innovative edge and agility that has served them so well to get here in the first place.

The first step in that process is to clearly identify the problems faced by the team on a daily basis, and make it clear how judicially implemented systems engineering could improve the situation. The term “systems engineering” can mean very different things to different people. For a small startup trying to overcome the growing pains of transitioning to the mainstream, systems engineering generally has two dominant functions: (1) aligning the work across all contributors in the technical team, and (2) successfully capturing and communicating customer input. Once you’ve succeeded in bringing an understanding to the team that systems engineering will reduce their overhead burden and let them get back to what they like best (focusing on technical development), the battle is pretty much won. From here on, you just have to deliver on that promise, and focus your implementation of systems engineering tools and practices very precisely on their specific identified needs.

So let’s talk specifics then; implementing some new systems engineering process usually implies introducing a specialized tool – while “systems engineering by spreadsheet” is possible, it won’t get you much further than “design by email”. In a small startup where cost is an issue and technical team members are quickly turned off by “enterprise level” solutions, I look first and foremost to Free Open Source Software (FOSS) solutions. Not only is the cost and time to implementation attractive, but any aerospace engineer agile enough to thrive in an entrepreneurial startup will have enough IT skills to tweak the code until the it works exactly the way you want. The first function your team will ache for is distributed / configuration controlled file access. When you work with a team of eccentric individualists, who put in hours at any time day or night and at any location from private boats to coffee shops, a web based document management system is pretty much your only choice. Rather than going with Microsoft’s behemoth (and expensive) Sharepoint services, consider excellent free offerings like Owl Intranet Knowledgebase ( No VPN needed, but SSL security and unlimited growth with a minimal Linux based server hardware are strong selling points.

To achieve the functions of “team alignment” and “customer input capture” you’ll need a requirements management tool. When choosing your tool, the most important rule is to select a tool that accommodates how you want to work, not a tool that forces you to accommodate how it works. Aerospace industry mainstays such as IBM’s Rational DOORS software are not only ridiculously expensive, but have evolved over many years to cater to their largest clients – using exactly the kind of overly formal practices you are trying to avoid. Instead, consider web interface driven tools which evolved from the people who know software best (the software development industry). Jama Software’s Contour tool ( is my first choice, exceptionally capable at enabling a team of engineers to stay in synch, while also giving your customer real-time insight into how their input drives your efforts. It acts as the direly needed inbox-filter for teams suffering from “design by email” without placing any extra levels of bureaucracy between the technical team and the result of their labor. In addition, it is highly flexible to your way of doing things, and all but guarantees that no customer input will ever fall through the cracks again.

Having made the transition from “garage-works” to “company” a couple of times myself, I’ve learned that the biggest success factor is acceptance by the technical team. Choosing your tools carefully, and implementing systems engineering practices in a sparse incremental fashion will make all the difference between project success vs. open revolt and subsequent mission failure.

How to Get a Job in Finance

How to Get a Job in Finance

Sure, the financial world is in disarray. Yes, there is a recession. Of course, loads of banks have failed. But…what else can you do with your finance/business degree?

I’m in the same boat as you. I spent the past 5 years of my life studying finance/math, and now I’m faced with the problem of trying to get a job in this field during one of the worst recessions in the past 20 years. It’s incredibly unlucky, but you have to roll with the punches. What I want to get through to you, dear reader, is that it is still possible to get a great job in finance.

Personal motivation aside, you also need incredible perseverance, organization, and confidence. Got all those? Good, let’s get started.

  1. Figure out what kind of job you want.

Finance is a ridiculously wide field. There’s jobs for all types of personalities, people, and career goals. If you don’t like being in the pressure and spotlight too much, look towards a backoffice job. If you like excitement, try trading. Like being a dealmaker? Corporate banking is the place for you. My point is, there’s something for everyone here.

You should determine what kind of role best fits your personality. Do research into what that job involves, and read about other people’s experiences. Incidentally, you can read about my experience in Corporate Investment Banking here. The key is, if it doesn’t fit your personality, chances are you’re going to hate it, and you’ll have wasted all that effort to get the job for nothing.

  1. Find out what companies offer those types of jobs.

In most cases, the bulge bracket banks will have something for you. These include major companies such as Bank of America, UBS, Deutsche Bank, and Citigroup. Look on these companies’ websites in the Careers section to see if they offer any open positions. Don’t be afraid to look at postings that aren’t exactly what you want, because who knows, they might actually interest you.

The key here is to expand your findings as much as possible. Don’t limit yourself to just the well known companies. As you continue your research, you’ll turn up lots of smaller boutique firms that offer the same positions. Add these to your list. Also helpful are job websites. A search on Google for “finance jobs” will turn up a whole retinue of sites advertising jobs. I also like to read the financial newspapers to see what companies get mentioned so I can do more research on them.

Info sessions and career fairs will also be massively helpful. Dress nicely, have plenty of resumes handy, and chat with the people there. Who knows, you might be the one lucky person they call back.

One caveat is that you must also realize your own limitations. If certain jobs require specific and advanced knowledge/experience, you may not have enough time to acquire it. In that case, look towards another avenue, or start a notch “below” that job.

  1. Prepare for applications.

At this point, you should have a very large list of places to apply for. Most of these companies will have websites or email addresses where you can submit your resume, and most likely, you’ll have to register your profile on their websites. I recommend that you start an Excel sheet to keep track of things. Your (very necessary) Excel skills should come in handy here.

On my sheet, I have the following headings:

Company name    Website: hyperlink to the URL for quick access    Account information: for the companies that require a registration. It’s much easier to keep track of your login info and passwords like this    Application deadline    Application submitted: a Yes/No checkbox    Cover Letter: hyperlink to the cover letter I submitted for that specific job    Resume: hyperlink to the resume I submitted for that specific job    Comments: any special notes I have about that job

It may seem like a lot of work, but keeping organized will help you in the long run as applications begin overflowing. Doing this will also allow you to sort by application deadlines, so you always know which ones to prioritize.

  1. Start applying for jobs.

Obviously, this is the hardest step. I say it’s harder than the interviews and all of the prep, because there’s just so much of it, and most of it leads nowhere. Don’t let this get you down. Prepare for the worst, you may get no responses. Understand that there are thousands of others competing for the same jobs, and no matter how much of a superstar you were in college, there are hundreds of other superstars out there too. However, you have to want this more badly. You have to persevere. You have to wade through the crap, and come out clean on the other side!

Hopefully, you’re now adequately gung-ho. Good.

I won’t get into the specifics of resume writing. There’s thousands of websites outside for that. I will make a few points about finance resumes though:

Do not make your resume longer than 2 pages. 1 page is preferable.    Write things in finance language, try to use keywords you know are applicable in that field. However, don’t overdo it to the point where it’s obvious you’re just keywording    Don’t add in jobs that are irrelevant. A lot of resume websites I’ve been to say to add in any experience you have, but I don’t agree with this. I feel that if you add “Waitress” to your resume for a trading job, it will detract from your chances    If you have no work experience, play up your school knowledge. Talk about financial techniques you know and have applied in classes, talk about personal experience in your trading account, talk about how you frequently analyze companies in your spare time.    Tailor your resume to each job!

  1. Going to an interview.

Wow, great job! You’ve got a response! At this stage, you’ve got your foot in the door, and all you need now is to nudge it open. Again, plenty of specific finance interview advice is out there. For example, for banking interviews, you need to brush up your accounting and valuation knowledge. Google is your friend.

All I can say now is that it’s entirely up to you. How much you prepare, your actual knowledge, and your confidence will be what gets you the job. In finance interviews, your interviewers will have pretty much decided whether they want to give you the job within the first 10 minutes. If you make a bad first impression, it is incredibly difficult to overcome.

Some general tips:

Dress the part: Very neat, professional    Prepare extensively. Study up on your resume, memorize that thing! Study the company (I recommend reading their most recent annual report – doing so will put you above 95% of the applicants), study the industry, read the news (you should have been doing this all along). Also prepare some stock answers for stock questions, like “Tell us about yourself” or “Why have you chosen this field?” I personally think there’s no point going too creative in these answers. Sure it might be sort of interesting, but your time is better spent impressing them with your knowledge.    Be confident. You want to be enthusiastic, but keep cool at the same time. Act as if you belong there already. Be like one of them, match the level of your interviewers but watch out. If they’re serious and subdued, don’t go overboard with the laughing. If they’re laughing a lot, laugh too, but not too much. All in all, you want them to feel comfortable and feel like they’d want to work with you. These interviews are all about “fit”.    Send a short thank you note after the interview. Chances are they’ll have talked about it already and have chosen or rejected you, but being polite never hurts.    Do not hound the people afterwards, nobody likes a stalker.

And that’s it. The steps are simple, but can become incredibly grueling. The process is hard, but can be extremely rewarding. Whatever motivates you, whether it be the fame, respect, or money, keep it in mind and let it drive you to keep going. With enough perseverance, you too can find a job in finance!

Housing Finance Explained

Housing Finance Explained

Don’t we all know that there are costs that come with owning a house! Especially, ongoing costs, that have paramount safety implications as well being able to ensure a reasonable level of comfort.

Let’s start with utilities. Most people in developed countries have never had to to walk miles to fetch buckets of water to bring back home (or should that be buy massive bottles of water, from retail stores like Lidl?). As wonderful a thing as water on tap is, it can only come at a price. When you move home, the first thing you need to do is ascertain the contact of an approved plumber as well as the water company (who are, of course, responsible, for keeping that water uncontaminated etc.!).

In this article’s country of origin, it seems to me that people prefer radiators over open fires with chimneys. Of course, in the modern day and age we are always comforted by the idea that there are alternatives to open combustion indoors; dangerous! Know whether your heating comes from gas or from electricity, keep your gas man or electrician on standby. The only real ones worth considering are registered ones (CIPHE / CORGI / APHC in the UK) who don’t try to fob you off with hidden costs and who do not always disappoint by not having the right equipment.

As far as electricity goes, there are usually additional charges involved if you intend to have a PC with Internet access – but this should be discussed with the individual retailer.

Everyone goes on about mobile phones these days but that does not mean that they have ceased to take their land lines and answering machines for granted. Always allow consideration for calls costs – but would you know whom to turn to if you got a bad reception or something like that? Who’s your phone engineer?

Other than that, homes tend to be the best source of work for DIY contractors – painters / decorators, plasterers, aerial engineers etc. etc.

Another aspect of the broad topic of housing finance is the housing market. Your real estate agent should help to provide you with good suggestions when you are seeking to avail yourself of a new domicile (but consider mortgages issues). Of course, banks are always willing to discuss the housing deals that they have on offer (but you should always read everything – including the small print – before you sign anything).

Should You Refinance Your Mortgage?

You Refinance Your Mortgage?

If you own a home, you have probably been inundated by ads offering you a lower interest rate on your mortgage. Sometimes, these new rates are so low as to be unbelievable. However, before you start negotiating with the lender, keep the following facts in mind:

Closing Costs. Even if you save a bundle on your mortgage interest rate, you’ll never feel as if you did because there are always closing costs associated with a refinance. Various fees are added at closing, such as for recording, title, processing, and underwriting. You will need to have your house appraised, and that also costs money. In summary, you will end up paying at least $1,000-$2,000 for closing costs. If your house is worth at least $200,000, don’t expect your closing costs to be less than $2,000.

Points. Points are defined as a certain percentage of the principal that you pay immediately to the loan agency in order to secure a lower interest loan. Usually, 1 point is equal to 1% of the loaned principal- in other words, one point on a house appraised at $185,000 will be $1,850. Oftentimes, loan agencies advertise mortgages with very low interest rates because there are points involved.

Whether you pay for points is up to you. However, if you do, consider whether the payment will be worth it for the time that you plan to own your home. For example, if you refinance a home assessed at $185,000 and pay 2 points for a 4.5% instead of a 5.5% interest rate mortgage, you will have spent an upfront $3,700 in order to save $113/month. This is a good deal only if you spend the next 2 years and 9 months owning your refinanced home. Otherwise, you will lose money upon the sale or future refinance of your home. Incidentally, LendingTree provides the following refinance points calculator, which is quite useful for calculating points and the time needed to recoup their costs.

Time of home ownership. According to the U.S. Department of Housing and Urban Development, Americans own their homes for an average of 6 years. You may own your home for a much longer (or shorter) period of time. However, it is imperative that you think about how long you plan to stay where you are. If you foresee a future job change, a move across the country, etc., then it may be best to not refinance your mortgage.

Bargaining is OK. Finally, don’t forget that, when playing the refinancing game, you are allowed to haggle for and find the best price on your refinance. After all, you’ve already proven that you can pay off a loan. The loan agency that takes on your current mortgage is not doing you any favors, since it will be gaining thousands of dollars in interest from you over the next 10, 15, or 30 years. If time is on your side, negotiate for a no points or even a no closing costs refinance plan. While some loan agencies will balk at this idea, many others will meet your demands, especially if your credit history is good to excellent. It never hurts to try.


$11.5 Million Budget Plan Proposed

Million Budget Plan Proposed

CHESTER – About twenty residents attended a public hearing where Board of Finance and Board of Education officials discussed details of a proposed $11.5 million budget.

Town government expenditures made up $3.61 million or 31.39 percent while capital expenditures cost $118,500, or 1.03 percent.

Town expenditures are $125,557, or 3.36 percent, less than last year while capital expenditures are $30,688, or 20.57 percent, less than last year.

Over half of the 2007/08 budget is allocated for education with Chester Elementary School receiving $3.91 million or 34 percent of the budget while the town’s share of the Region 4 budget is $3.86 million, which is 33.58 percent of the budget.

Chester Elementary School spending increased by $185,930, or 4.99 percent, over last year while Region 4 spending increased by $350,460, or 9.98 percent, over last year.

“The increase in participation in Region 4 hit us 10 percent even though Region 4 spending only increased by five percent. We expected the increase,” Chester First Selectman Tom Marsh said.

Expenses of the Region 4 budget is divided among the three participating towns, which include Chester, Deep River, and Essex, based on average daily enrollment.

Kim Caron, Superintendent of Region 4 Schools, said the biggest increases that occurred in the Region 4 budget came as the result of a new sixth grade teacher, teacher and administration salaries, and a new union contract.

Despite increased spending in education, Board of Finance member Kim Just said Chester benefited from a 1.9 percent increase in the grand list over the past year which generated $215,000 of revenue.

The board allocated $253,837 from the unallocated fund balance; Just said, meaning the mill rate would only need to be increased by 0.75 mills.

Currently, Chester’s mill rate is 22.37 mills and the increase of 0.75 mills would mean a total of 23.12 mills, or $23.12 in taxes for each $1,000 of assessed property value.

For a resident who has a home assessed at $100,000, the mill rate increase would mean an additional $75 in annual taxes.

This would still allow the fund balance to have $1.33 million on June 30, 2008, which is the last day of the 2007-08 fiscal year.

Borrowing money from that fund to offset tax increases is a “practice we are trying to move away from,” Just said.

One year that the town relied heavily on using savings to offset tax increases was the 2004/05 fiscal year when approximately $875,000 was allocated.

Marsh warned residents that proposed state budgets from both Governor Rell and the Connecticut State Legislature call for less state aid to towns like Chester.

The reduction in state aid comes at a time when the state expects to receive additional revenue if specific proposals are approved such as creating a sales tax on all clothing items and items bought by Connecticut residents over the Internet, Marsh said.


See What Your Neighbor is Trading with Social Finance

Trading with Social Finance

Not too long ago, the Internet observed the emergence of a new generation of websites – social networking. Those like UK-based Bebo, US home-grown FaceBook and MySpace (acquired by News Corporation for more than US$580 million) have been the pioneers to lead this genre on the Internet. It’s been a hot topic, and it’s hardly impossible to read about news on social networking here and social networking there. More recently, a new league of niche social networking websites have cropped up, tapping into all fields from sports to politics to the world of stocks and finance.

With the robust US economy combined with the strong market performance, many entrepreneurs saw the space of financial social networking untapped. According to, as early as March 2006 financial networking sites like, and were born. This has not gone unnoticed. On the Wall Street Journal, Mike Gross, a 24-year-old Toronto resident discovered in 2006, and says he started actively using the site to get investment ideas about stocks and sectors — such as Asian stocks — from other members.

These websites help like-minded investors interact with each other and share investment ideas, from writing personal blogs to opening up a transparent portfolio. Users are then ranked by other community members based largely on their contributed content and accuracy of stock picks and forecasts.

It’s a large space that has been attracting a lot of media attention in recent months. With an average of a US$1.14 million investment portfolio, and over 70% of a 78 million baby booming market browsing the internet for personal finance and investing sites (according to Kiplinger’s Personal Finance Retirement Report 2005), its no wonder that many major media companies and brokerages are getting interested in entering this space., a US-based online brokerage launched in October 2006 offers commission-free trading, saying that it leverages its social community to generate advertising revenue to support its free services. Elsewhere, Reuters announced that it too is also planning to launch its own version of MySpace this year, as published on the Guardian Unlimited. But critics like Charlene Li, an analyst at Forrester Research Inc., say that risk of fraud is high from discussing your financial affairs with online strangers. What’s more is that the usefulness of the sites depends in large part on the size of the communities. And so, while having a large audience, the sheer size and diversity of services of companies like and Reuters might make it difficult to manage the focused communities they want to create. On the other hand, startups like and may be nimble enough to stay in touch with their communities, and avoid the risks that larger companies encounter. The question of who will take over this rapidly expanding market is still up in the air. Will the small companies, which lack experience, funding, and exposure, be able to stand up to the media and financial juggernauts? Perhaps a successful middle ground lies in the combination of their strengths: the focus and creative flexibility of the startups with the resources and expertise of the corporations.

The web has been changing the way we exchange information in revolutionary ways, and challenged the traditional mindsets of the media and the way we use it. Who would have thought that the most comprehensive encyclopedia is managed by anybody and everybody who wants to write something? Yet Wikipedia has proven that a self managed community can be successful in administering such a complex information source. Can the same apply for social finance? Is it truly dangerous as some analysts portend?

Finance has always been a conventional field. Perhaps it’s time it explored this new territory. I’ve enjoyed trading actively on my virtual portfolio, so I’ve tried it, and I’ve liked it.

Discussing Finances with Grown Kids Who Live at Home

Discussing Finances

With the economy as it is, it is more and more common for young people to stay at home with the parents longer or to return home after being out on their own for a while. In addition to the negotiations that need to take place over privacy, responsibility, chores, etc. discussing finances can be a huge challenge. Here are some tips for talking about finances and discussing money and work with adult children who are living at home:

Your personal values will dictate whether you want to charge grown children rent, or ask them to contribute to the groceries, utilities or other household expenses while they are living at home. Some parents feel it is important for kids living at home to contribute while others see their role as supporter and do not make any requests. Once you decide how you feel and what your belief system is, it is important to also consider what is best for the grown children. Is it better for them to contribute? Could they be asked to pay for any additional expenses above and beyond the normal household expenses? Whatever you decide, the first step is to become clear in your thinking before sitting down with your child.

Prepare an adjusted budget that you can share as part of the discussion. Many parents would rather just pay for things than to discuss finances with their children (even if they are adults.) If you are going to have the discussion, however, be prepared and have the figures written out so you can stay focused on the finances and not speak in vagaries.

Try to keep the emotions and past out of the discussion. Just because a grown child was financially irresponsible as a youth does not mean that they will be that way forever. In fact, this might be a “second chance” for you to help an adult child develop financial management and responsibility. Stay in the present and try to talk about finances as two adults-not as parent and child. Stay focused on keeping your relationship separate from discussions about money.

Set goals and limits on the financial changes. If the ultimate goal is for the adult child to move back out on his or her own, design your financial arrangement to facilitate that and discuss the steps it is going to take. If the young person needs to save for a housing deposit or pay off debts-make this a priority and develop a plan together for how it can be accomplished. Again, keep emotions out of it and focus on the financial realities. Decide how flexible you can be and set deadlines for when payments will be made and stick to them. If you can be clear and concise from the beginning, it may make the living together run smoothly.


Six Radical Ways to Save Money

Six Radical Ways to Save Money

Let’s start with a confession: I have never been cool. I don’t ever think back on my glory days in the club scene. Photos of me from nearly any period of my life reveal me to be hopelessly out-of-touch with all things fashionable. It’s not because I’m not in my twenties anymore. It’s not because I’m a mom. It’s because I’m me.

But every once in a very long while something spectacular happens: fashion comes to me. I stumble upon a style that is, apparently, very “with it.” Such is the case with my radical frugality. I came to it out of necessity, years before this economic downturn. I got looks of pity from friends and family for several years, but now I get more people asking me for advice as they too are forced to find more ways to cut back.

If you’ve experienced a “budget reduction” and are looking for ways to cut back, here are my best ideas. I’ve lived or am currently living every one of them.

  1. Take stock of what’s important to you. Do not skip this step! Take the time to set goals for yourself and imagine what you would like your life to look like. Most of us say that money can’t buy happiness, but we don’t live that way. Looking to fill a void is the fastest way to flush money down the drain. Think of Michael Jackson or Britney Spears – no amount of money can make you a happy person. Find fulfillment in your life outside of status and vacations.
  2. Sell big things. Cars, furniture, boats, ATV’s, whatever you have. Most people can picture doing this when “things get really bad,” but the problem is that their alarm goes off too late. Instead of getting worried when they dip into their emergency fund (or being worried that they don’t have an emergency fund!), they start to worry when their lines of credit dry up. At that point there’s not nearly as much you can do. So get desperate sooner. Do you really need two cars?
  3. Kill your TV. My husband and I stopped all television service to our apartment three years ago and we really haven’t missed it. It’s a huge, ongoing expense, but the worst part is the advertising. We are blissfully ignorant of the latest tech gadgets, the best-looking kitchens in America, and the places people are taking exotic vacations. Lead yourself not into temptation.
  4. Eat in and cook from scratch. It’s insane how much money a person can spend on eating out and/or buying expensive prepared foods. I was not a big cook, but I discovered that making my own food is not as hard and doesn’t take as long as I thought. Meal planning is a crucial component to making this one work. Another great idea in this category would be to make your own cleaning supplies. A simple internet search will yield countless recipes for all kinds of great, nontoxic cleaners and detergents.
  5. Keep track. Of everything. Write down your financial goals. Make a written budget every month and stick to it, make a poster, whatever it takes.
  6. Use cash. Cash helps us all stay out of denial. When we use plastic, in the form of credit or debit cards, we lose touch with the most basic rule of money: money is finite. We only have so much of it. Cash is also the easiest way to stick with your budget — put it in envelopes according to category and when it’s gone, it’s gone. Very simple.

Above all, I’ve learned that saving money is a mindset. There are a thousand methods but all of them start with a genuine desire to change your situation. If you’re still looking for ways to save a lot of money without making a dent in your lifestyle, you won’t get far. But if you stop looking to your finances to find fulfillment, you’re on the right track.