Career

What Do Workers Want? To Leave the Past Behind

Posted on by Anna Helhoski

Employer flexibility is crucial. But workers want full-time jobs, not gigs. They expect their pay to rise. And their mental health is also a priority. Most importantly, career development is top of mind.

Those are just some of the findings of a study released Wednesday by ADP Research Institute, which tracks worker sentiment worldwide. Even with the COVID-19 pandemic lingering, workers all over the world seem less concerned about contending with present challenges and are most focused on what’s next.

“While flexibility and mental health are still recurrent — and I think permanent fixtures in the workplace — what is dominating this year’s report is career progression,” says Nela Richardson, ADP Research Institute’s chief economist.

The study, “People at Work 2023: A Global Workforce View,” found that workers still care most about salary and job security, but they care a little less about both of those than they did last year. Career progression was the standout, with 40% of workers saying it matters most in a job, compared to 23% in the previous year. Training and development also saw an uptick as an important factor in a job, increasing from 18% in the 2022 report to 23% this year. Enjoyment at work was another factor that saw an increase from 32% in 2022 to 37% in 2023.

“Workers now have their eye on the ball, on the ball of the next phase of their career,” says Richardson. “We’ve gotten through that shock of the pandemic when people were just trying to grapple with this new world of work. Things have stabilized quite a bit, and now it looks like the global workforce has turned the corner … and is looking at ‘how do I progress my career?’”

ADP surveyed more than 32,000 workers in 17 countries to find out employees’ attitudes toward work. Here are some of other key trends.

Most workers expect salary increases

Worldwide, the majority of all workers expect their salaries to increase in the next 12 months.

A majority of U.S. workers (75%) say they expect their salary to increase over the next 12 months. The average expected increase over the next year is slightly higher at 6.7% than the average of actual increases in 2022, which was 6.5%.

It’s not surprising for workers to expect a pay increase forthcoming since the majority of workers worldwide (62%) received an increase in pay over the previous year. The rises in 2022 averaged 6.4% — under the International Monetary Fund’s global inflation forecast of 8.8%, which means, in real terms, workers received a slight pay cut.

But Richardson says the wage increase staying below inflation is evidence that a wage-price spiral is not at hand. A wage-price spiral happens when wages and inflation feed each other to the point where inflation rises out of control.

“People reported getting and expecting about the same amount of growth in their paychecks this year, and that is pretty much in line with the inflation amounts that we’re seeing,” says Richardson. “We’re not looking at people thinking 3% or 2% [increases], as was the norm before the pandemic — it’s now 6%.”

Getting paid on time isn’t a given

More than 4 in 10 survey respondents say they’re “always, often or sometimes” underpaid, the survey data shows. And about one-third say they regularly experience other inaccuracies in payment such as a failed payment. Most workers (71%) are able to track the pay information online so they can keep tabs of whether they are being paid correctly.

Receiving incorrect or late payments is a global issue that hits lower-paid workers the most, says Richardson, and it can have damaging effects on their finances.

“It’s really important to get paid on time,” she says. “They may not have the liquidity, the funds to even go a few days without a paycheck.”

Gig work holds little attraction

Workers are less likely to trade their full-time jobs for the flexibility of gig work. That’s because the alternative arrangements born out of the pandemic, such as remote and hybrid office-remote work, have stuck around. Workers who want flexibility can find it.

A third of workers in the U.S. say they have complete flexibility, while 27% say they have some flexibility between the workplace and home, according to the report. About 37% still say they are in the workplace every day.

“One thing that the gig economy doesn’t match as well as is job security, which we know is important,” says Richardson, adding that, as a result of more flexible work arrangements, they are no longer boxed into their immediate area.

“That changes the game,” she says, adding that flexibility has broadened the definition of what traditional employment is.

Looking ahead, nearly one-third of workers say they believe remote work will become the norm in their industry. And 28% say their job will likely transition from a five-day workweek to four-day.

Workers are still stressed, especially in the U.S.

Stress in North America is the highest among any region, and yet workers are least likely to say stress adversely affects their work, the ADP report shows. There was a similar finding in Australia.

Richardson chalks it up to a return to cultural norms. “I think the type of stress that U.S. workers are confronted with might be part of it,” she says. “It’s frequent. North America seems to lead the world in terms of the amount of stress that they’re experiencing.”

A majority of U.S. workers (58%) say they feel comfortable talking about mental health at work. But workplaces in other countries are even more open about mental health such as Brazil (63%); China (65%); and India (71%).

“There has been this shift in openness, in talking about mental health and, really, in employers being more sensitive to mental health, and offering employees over the course of the pandemic more resources,” says Richardson. Now that things are normalizing, we still want to keep the accessibility.”

Overall, workers are optimistic

Despite years of living through a pandemic and a looming global recession, labor markets have remained tight and workers are reporting high optimism about the future. A whopping 90% of workers, globally, say they’re satisfied with their jobs, the ADP report found.

Looking into the next year, workers around the world expect pay raises (62%); promotions (44%); bonuses (41%); increased skills training (40%); and increased responsibility (31%).

With the ravages of the pandemic largely over, it’s time for workers to reposition, says Richardson. “You can see in this survey a lot of ‘look toward the future’ [sentiment] and not just being stuck in the drama and the issues that people were dealing with in the present.”

Anna Helhoski writes for NerdWallet.

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Best Cities for Freelancers and Self-Employed Workers 2023

Posted on by Rosalie Murphy

Though some workers have returned to offices, remote work has been normalized for others over the last three years. And some now have more autonomy to choose where they live.

For freelancers in particular, it’s becoming more common for workers to settle in a city they like and then seek contracts with companies anywhere, says Keith Hall, president and CEO of the National Association for the Self-Employed.

“I don’t remember a time that I have heard more comments from self-employed people that they are looking to where they live based on their quality of life,” Hall says. “They pick a place to live for their quality of life, and then manage the business around that. I think that is a significant change from 15 years ago,” when the priorities were reversed.

“That’s a fundamental shift that I think, long-term, is positive,” Hall adds.

Here’s the 2023 list of the 10 best U.S. cities for freelancers and self-employed workers. Our analysis used recent metro-area data from the U.S. Census Bureau and state-level data from the Federation of State Tax Administrators. The top cities are those where some combination of the following are true: A large percentage of the workforce is freelancing already, rent is relatively affordable, state income taxes are low, unemployment is low and job mobility is high.

Top 10 metro areas for freelancers

  1. McAllen-Edinburg-Mission, Texas.
  2. Santa Rosa, California.
  3. Austin-Round Rock, Texas.
  4. Portland-South Portland, Maine.
  5. Boise City, Idaho.
  6. San Francisco-Oakland-Hayward, California.
  7. Lancaster, Pennsylvania.
  8. Los Angeles-Long Beach-Anaheim, California.
  9. Bridgeport-Stamford-Norwalk, Connecticut.
  10. Nashville-Davidson-Murfreesboro-Franklin, Tennessee.

Key findings

  • Seven of the 10 best cities for freelancers ranked especially well for the percentage of their workforce that is already freelancing. In McAllen, Texas, more than 11% of workers are self-employed in their own non-incorporated business. In Santa Rosa, it’s 9.6%. And in Boise, Los Angeles and Portland, Maine, it’s above 8%.
  • Though a freelancer’s tax burden will vary depending on their filing status, deductions and credits, it can be useful to learn about state and municipal tax rules before moving your business to a new place. Texas and Tennessee both have no state income tax, for instance. Other costs, like LLC filing fees, may vary by location, too.
  • Remote work may give freelancers the option to choose more affordable cities. For example, in Lancaster, Pennsylvania, just 43% of renter households spend more than 30% of their income on rent. In Boise, it’s 46%. “If you’re self-employed in a large city, obviously there are more people located in your community,” Hall says. “Maybe that’s a positive, but I think that’s becoming less and less important.”
  • On the flip side, large numbers of people still freelance in costlier regions: In Los Angeles and Santa Rosa, California, 58% and 57% of renter households spend more than 30% of their income on rent, respectively. This may speak to the power of other factors, such as existing networks, that keep self-employed workers in those cities. “For most of my clients, they have established themselves in their local area prior to going into business for themselves,” says Chris Russell, a certified financial planner and founder of financial planning firm Tempus Pecunia in San Diego. “The decision around location is primarily network-driven, which then dovetails into success with the business.”
  • Several of this year’s best cities for freelancers saw significant growth in hiring between Q4 2020 and Q4 2021, potentially due to 2021’s strong job market for tech and white-collar workers. In Austin, hiring increased by more than 27% year over year. In San Francisco, it was 25.5%. In last year’s data, on the other hand, Boise — which saw more job growth than any other region between Q4 2019 and Q4 2020, at 12.9% — saw similar growth again the following year at 12.4%. But it was surpassed by numerous other cities as their job markets rebounded from the COVID-19 pandemic.

Relocating is about more than business needs

About 6.1% of the U.S. workforce was self-employed in their own non-incorporated business in 2021, up from 5.8% in 2019, according to Census data.

A key advantage for that growing proportion of the population is that self-employment may give you the freedom to move for reasons other than your work.

“Freelancers typically aren’t tied to a location because of an employer, so they have more freedom to choose where they want to live,” says NerdWallet small-business specialist Kelsey Sheehy. “That might be choosing an area with a lower cost of living, moving to a city or state with a lower tax rate, relocating to be closer to family or settling in a city that matches your desired lifestyle.”

Consider these factors when evaluating your options.

1. Consider your personal and family needs

Taxes and licenses aren’t the only expenses associated with running a business. As a self-employed person, you’ll also need to consider the expenses of everyday life — housing, child care, eldercare and more.

Freelancing may give you the flexibility to move to a place near loved ones, which can help mitigate some of those costs.

“My clients’ decision on where to live has primarily been driven by family matters,” Russell says. “Child care and children become a key component in that overall picture,” with some families choosing to live near relatives who can provide care, he says.

2. Tailor your budget to your location

How much you need to earn may vary depending on your cost of living, Sheehy says.

“Income can be unpredictable when you’re a freelancer. Some months you’re flush, other months are very, very lean,” Sheehy says. “Build your budget based on your lean months and figure out the bare minimum you need to earn to cover housing, bills, food and other essentials.”

And wherever you are, try to save conservatively and make sure to set aside money for federal, state and local tax payments.

“One of the biggest mistakes freelancers make is not saving enough,” Sheehy says. “Ideally, you’ll set aside at least 50% of your income to cover taxes and build a cushion to get you through those lean months. But at a bare minimum, you need to save around 20% of your income for taxes, which need to be paid quarterly to avoid penalties.”

3. Network wherever you are

Few of Russell’s clients relocate their business for tax or cost-of-doing-business reasons, he says. Their professional network may be one factor — or they may be wholly focused on their personal quality of life.

“Geographic location is either important to their network, or is unimportant to their business entirely,” Russell says of his clients.

Wherever you end up, you can seek out other like-minded freelancers.

“When you have self-employed people in a community together, I think they see that as an additional resource,” Hall says. “There are people here doing the same thing I’m doing. They’re looking for their next customer — I might be that next customer, and they can be mine.”

Methodology

To create the list, NerdWallet pulled data for major U.S. metropolitan areas from the United States Census Bureau. We also pulled state tax rates from the Federation of State Tax Administrators. We weighted the impact of each factor depending on how important we felt that factor would be in the potential financial success of a freelancer. We excluded metro areas for which there was negative or no Job-to-Job Flows Census data.

This year, we changed the way the Best Cities for Freelancers index is calculated to more accurately compare metro areas across multiple criteria. We also adjusted the weighting of several data points as the ways in which the COVID-19 pandemic influenced the underlying data became clearer.

NerdWallet’s analysis includes data from the following sources:

  • U.S. Census 2021 American Community Survey data for the unemployment rate, percentage of people in Census-designated metro areas who identified as self-employed in non-incorporated businesses, and percentage of renters in a Census-designated metro area who spend less than 30% of their household income on rent.
  • U.S. Census Q4 2020 and Q4 2021 Job-to-Job Explorer data.
  • State tax rates for 2023 from the Federation of State Tax Administrators.

Rosalie Murphy writes for NerdWallet.

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Should You Become Your Own Boss?

Posted on by Amrita Jayakumar

Maybe you’re cringing at the thought of going back to an office. The seed of a business idea floats around in your head between work videoconference calls, after the kids are asleep or while you tend your pandemic garden. Or perhaps you were laid off during the pandemic and forced to work for yourself, and now you’re wondering if you should continue down this path.

“In 2020, there was an explosion in new business applications, reaching nearly 4.5 million by year’s end,” according to a February report by the Economic Innovation Group, a Washington, D.C., think tank. That’s an increase of 24.3% from 2019 and was the highest on record — 51% higher than the average from 2010 to 2019.

“COVID-19 was a social, cultural and emotional shock the likes of which we have not experienced for generations. Becoming an entrepreneur is a deeply personal decision, and the pandemic may have delivered the push for many to embrace it,” the report said.

Deciding if self-employment is right for you depends on your personality, your financial situation and your ability to adapt. Here are tips from people who became their own bosses.

See if you’re right for the job

Many of us now appreciate the flexibility of working from home. As a freelancer or independent contractor, you would have the power to set your own schedule.

“Being in charge is very, very attractive to many people,” says Keith Hall, president and CEO of the National Association for the Self-Employed, or NASE, a resource and advocacy group. “The other side of that coin is that when you are in charge of your own destiny, you are also responsible for it.”

Evaluate your abilities as a prospective employer.

“Freelancers need to be self-motivated, work well independently, be organized, learn how to market their services well and be comfortable with a certain level of uncertainty,” CEO Sara Sutton said by email. She runs two companies focused on remote and flexible job opportunities:  FlexJobs, a job search site, and Remote.co, which provides resources for companies considering remote work.

Hall suggests asking yourself if you have the motivation to be in charge of your own destiny. “If you wake up Monday morning and decide to stay in bed late, that’s a financial loss. Nobody is going to be standing over you making you get out of your bed.”

Make a plan that fits your finances

Before deciding whether to freelance, become a consultant or turn your side hustle into a business, take a close look at your finances.

Many cobbled together a budget during the pandemic. Revisit that plan to make sure you understand your hard costs, such as food, rent and day care. (The 50/30/20 approach is a quick way to divide your dollars into three buckets: needs, wants and savings.)

Isolate what you can put toward a business. Small costs like purchasing a domain name, buying the premium version of a software or membership fees for a networking group can add up.

Use your budget to set short- and long-term business goals, Hall says. “Know exactly what you need to earn to meet your family goals and translate that into a time schedule.”

Evaluate your timing

You may need to keep your day job for a while, but you can still build your business muscle.

“Being an entrepreneur was never a goal for me,” says Afenya Montgomery, founder and CEO of iCAN Collective, a creative workspace and event venue for women entrepreneurs of color in Chicago. Montgomery, a registered nurse and health care administrator, started health care consulting on the side. Her hunt for resources and support inspired the idea of building a community for women entrepreneurs of color.

Montgomery and her husband were raising three children and had no business experience, so leaving her day job wasn’t an option. She spent four years learning the ropes of entrepreneurship before she felt confident enough to quit.

She hosted networking events, opened a business bank account and finally registered her business as a limited liability company. Taking small steps can make the process less overwhelming, she says.

Seek support

Between strategies, goals and budgets, the thought of working for yourself might seem daunting, but entrepreneurs say you don’t have to do it alone.

Laura Licursi, founder of Elite Virtual Assistants, an agency that connects employers with remote assistants, says the pandemic was surprisingly hard on her online-only business as clients cut back. Licursi, who works from the Cleveland area, navigated through the uncertainty with a mentor from SCORE, a network of volunteer business mentors that partners with the Small Business Administration.

“My mentor helped me work through the inner workings of the business when things were slow, which really helped when business picked up again,” she says.

Entrepreneurs have more resources available than they realize, Hall says:

  • The SBA provides local resources to support aspiring entrepreneurs.
  • The NASE offers a business development grant program for members.
  • SCORE has mentorship resources, webinars and other online resources.
  • The IRS website has information on the tax implications of self-employment.

This column was provided to The Associated Press by the personal finance website NerdWallet.

Amrita Jayakumar writes for NerdWallet. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

The article Should You Become Your Own Boss? originally appeared on NerdWallet.

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College, Interrupted: The Case for Going (Back) to School

Posted on by Anna Helhoski

A cautionary note for the high school classes of 2020 and 2021: Waiting to enroll in college decreases the likelihood you’ll ever attend or complete a degree.

It’s a valid concern for both cohorts. Due to the pandemic, undergraduate enrollment was down 2.5% in fall 2020 and down 4.5% for spring 2021, compared with the previous fall and spring, respectively, according to the National Student Clearinghouse Research Center.

There are also warning signs of an enrollment slump to come. The class of 2021 is lagging in completing the Free Application for Federal Student Aid, or FAFSA. The application is the gatekeeper for college financial aid and, as of April 2, 2021, completion is down 7% compared with applications completed by the same time last year. FAFSA completions are an indicator of enrollment for the upcoming academic year, says Bill DeBaun, director of data and evaluation at the National College Attainment Network.

“When you’re talking about the senior class that measures millions of students, you’re talking about many students with their postsecondary trajectory potentially altered,” DeBaun says.

Skipping out on college, delaying enrollment or not finishing a degree has consequences:

  • You’ll earn less if you don’t go.
  • If you don’t go soon, you’re less likely to go back.
  • If you start a degree but don’t finish, you’re more likely to default on any student loans you took out.

A gap year made sense for many high school graduates in 2020 and is appealing for 2021 grads, too, experts say. The pandemic resulted in an uneven college experience that may have included hybrid and virtual learning, regular COVID-19 testing and quarantines. And not every student was well-positioned — or had the broadband access — to learn virtually.

“We’ll probably be having this conversation 10 and 20 years from now, as to how this affected the next generation,” says Nicole Smith, research professor and chief economist at the Georgetown University Center on Education and the Workforce.

If you sat out from college because of the pandemic or are planning to, experts argue that you should reconsider. Here are three key reasons why.

You’ll earn more with a degree

So what if you delay or never go to college? Opportunity costs, mostly.

Getting a degree could mean earning nearly a million dollars more over your lifetime, according to data from the Georgetown University Center on Education and the Workforce.

Delaying enrollment for one year can cost a year’s worth of wages over your lifetime, which you never recoup, according to a July 2020 report from the Federal Reserve Bank of New York.

Earnings, no matter the education level, will vary by occupation, region, gender and race. But bachelor’s degree holders still earn, on average, 31% more in their lifetimes than associate degree holders and 84% more than those with only a high school diploma.

That’s not to say you can’t consider education alternatives — short-term credential and trade programs, apprenticeships and associate degrees are all viable options. Statistically, though, a four-year degree or higher is a stronger insurance for greater earnings over your lifetime.

For low-income students and students of color who statistically have less generational wealth, degrees are also the best vehicle for upward mobility, says Michelle Dimino, education senior policy advisor at Third Way, a public policy think tank. A recent Third Way study found that most bachelor’s degree programs net low-income students high enough wages to justify out-of-pocket costs.

“What we’re seeing is students who would most benefit from the socioeconomic benefits a college degree can provide are the least likely to be enrolling at this point in time,” Dimino says. “The biggest concern that we have for those students delaying enrollment is it might lead to permanently forgoing college.”

The longer the pause, the harder it is to finish a degree

According to federal data, there are millions of adult learners who don’t start college until they’re well into their 20s or older.

But you’re less likely to complete a degree if you delay: Nearly half of those who delayed enrollment left college without earning a degree, compared with 27% of those who didn’t delay, according to a 2005 report from the National Center for Education Statistics.

The further you get from high school, the less academic support and one-on-one encouragement you have to attend college, experts say. It’s also more likely you’ll get a job, start a family and have other income demands.

“There’s something about that window of 18 to 24; if you start out at that point, you’re likely to get to where you need to be,” Smith says.

You’re more likely to default on student loans if you don’t finish

Returning to college is especially important if you have student debt, as most students do. Without a degree, federal data shows, you’re statistically more likely to be late on payments and default. This outcome can lead to a damaged credit score, collection costs and wage garnishment.

Federal data shows that among a cohort of students who started college in 2003-2004 and defaulted on student debt, nearly half didn’t complete their education, while 10% finished a bachelor’s degree.

The situation is the worst for Black student borrowers: The Brookings Institution found that Black first-time college students default at a rate three times higher than their white counterparts.

How to pay for college if your family’s finances have changed

If you’re reconsidering your decision to delay or forgo college, first figure out the best way to pay.

Start by submitting the FAFSA as soon as possible to qualify for federal, state and school financial aid, including Pell Grants, scholarships, work-study and federal student loans.

If your family’s financial situation has changed due to the pandemic, request a professional judgment from your prospective or current school’s financial aid office. You’ll need to request a specific amount and submit documentation of why you need more aid, like confirmation of a parent’s unemployment or medical bills.

If there’s still a gap to fill, consider private loans.

Alternately, you could think about entering community college for a year or two, then transferring. Find out if the community college you’re considering has credit transfer agreements (known as an articulation agreement) with any four-year colleges you’re interested in attending.

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article College, Interrupted: The Case for Going (Back) to School originally appeared on NerdWallet.

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When Life Blows Up Your Well-Laid Plans

Posted on by Liz Weston

Job loss, business failure, involuntary retirement, divorce, disability or the death of a breadwinner — these are just some of the ways our finances can force us to come up with a Plan B. That’s never as simple as downloading a list and ticking off completed assignments, however.

Checklists can be helpful, for instance when you’ve just been laid off. But the biggest task after financial loss may be dealing with your emotions after the future you had envisioned disappears.

Be realistic about your emotions

People who lose a loved one expect to grieve. People who lose their financial security or a standard of living suffer “ambiguous loss,” where many elements of their lives are the same but a major element is now gone, says financial therapist Edward Coambs of Charlotte, North Carolina.

“You know what’s happened, but it’s not like you get a funeral for it,” says Coambs, a certified financial planner and couples therapist. He’s a member of the Financial Therapy Association, a group of advisors who combine financial and psychological counseling.

Acknowledge that your grief is legitimate rather than trying to minimize what you’re going through, Coambs says. Also, don’t expect grief to proceed in predictable stages. Psychological research shows that grief is more dynamic than that, and people may feel shifting emotions that can include sadness, despair, confusion, disorientation, fear, anxiety and even relief.

“A lot of the grief around the financial loss is going to feel kind of unexpected,” Coambs says. “‘Why am I crying now? Why am I angry now? Why am I disappointed or lethargic?’”

This process won’t be quick, Coambs says. Our brains get used to our habits and routines. When those get dramatically disrupted, our brains need to catch up.

“It takes time for the neural pathways to adjust and change, right? My brain is literally needing time to reorganize itself,” Coambs says.

You can help this process by discussing your emotions with someone you trust, says financial therapist Preston D. Cherry, a certified financial planner in Lubbock, Texas. Cherry says writing can help. He writes poetry, but writing in a journal is also effective. Studies have shown that expressive writing — writing nonstop for 15 minutes or so each day without inhibitions about the traumatic event or experience — can help people deal with emotional fallout. Writing can help us organize our thoughts and give meaning to what happened, which can help us break free of ruminating or brooding.

Talk to your kids

Many of Coambs’ clients have problems with money that stem from childhood traumas, often because of a parent’s layoff or the loss of a family business.

“What they often end up seeing is the parent lose their sense of self, fall into depression and despair, and never make it out,” Coambs says.

Processing your emotions can help you avoid that fate, and if you’re raising kids you’ll also want to talk to them in age-appropriate ways about what’s going on, he says. Children need to know this isn’t a problem they created and it’s not their responsibility to fix it.

“Kids will assume inappropriate levels of responsibility for negative outcomes financially,” Coambs says. “Parents can say, ‘Mommy and Daddy are taking responsibility for this. We’re going to try to find the answers. You can come to us with your fears and concerns.’”

Know when to get help

If you’re struggling, keep in mind that this is just one phase of your life and that it, like the current pandemic, will pass, Cherry says. He also recommends regular “self audits” — taking time alone to reflect on what’s happened, work through your feelings and start to consider possible futures.

But when you’re feeling stuck or isolated, you may need to seek professional help. If you’re employed, your company may provide mental health resources. If money is tight, 211.org may be able to point you to free or low-cost treatment.

Depression or anxiety that persists for weeks or months isn’t normal and may need medical treatment. If you don’t have someone to talk to who is empathetic, understanding and nonjudgmental, a therapist could help guide you through your trauma so you can move on with your life.

“That’s probably one of the bigger things that I see, is when people don’t have other people to process the grief with or they feel like they’re becoming a burden,” Coambs says. “That’s when professional help can be a big win.”

This article was written by NerdWallet and was originally published by The Associated Press.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: lweston@nerdwallet.com. Twitter: @lizweston.

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More Grads Are Going Back to School: Should You?

Posted on by Ryan Lane

College enrollment is down overall compared with last year due to the coronavirus. But the economic effects of the pandemic may actually be pushing some students back to school.

“(It’s) probably the worst time to graduate from college in this generation,” says Doug Shapiro, executive director of the National Student Clearinghouse Research Center. “What are you going to do?”

The answer, for many, is getting additional education: As of Sept. 10, graduate program enrollment was up 3.9% and post-baccalaureate certificate program enrollment was up 24.2%, according to the National Student Clearinghouse Research Center.

If you’re thinking about continuing your education — because you can’t get a job or lost yours — here’s what to consider before you enroll.

Know your timeline

It’s not surprising that recent college graduates or those who’ve lost jobs or been furloughed are looking to gain new skills.

Alana Burns, chief marketing officer of Southern New Hampshire University, said via email that the school saw similar behavior due to the 2008 recession.

Burns said enrollment in SNHU’s graduate-level programs is currently up roughly 55% compared with this time last year. That includes master’s-level courses and graduate certificate programs.

Either option could make sense if you want to make yourself more marketable. But make sure whichever you choose addresses your short-term needs or your long-term goals.

“If you are looking for a specific skill or industry-specific certification, a certificate might be best,” Burns said. “If you’re looking to stand out in the job market or change careers, a full graduate degree program might be the best fit.”

Certificate programs take less time and don’t require the entrance exams that graduate degree programs do. Shapiro points to those lower barriers as potential reasons for what he calls the “outrageous” increase in these programs’ enrollment. A degree will require more planning.

“It’s not the kind of thing you can do on the spur of the moment,” he says.

Have a plan to pay for it

Certificate programs also likely cost less, but that doesn’t necessarily mean they’re inexpensive.

For example, Kent State University in Ohio estimates the cost of its nursing administration and health systems leadership graduate certificate at $12,300. Its online master’s degree in nursing costs up to an estimated $22,500.

Bradley Sommer, president and CEO of the National Association of Graduate-Professional Students, says to consider the financial implications when deciding whether to go back to school.

“Is it something you can afford?” Sommer says. “Are there scholarships available to you?”

If you can’t get free money — via a scholarship or research grant, for example — you’ll need a plan to pay for a graduate program.

More than half of graduate students turn to loans, finishing their programs with an average debt of $71,000 in 2015-16, according to the most recent data from the National Center for Education Statistics. That total does not include any existing undergraduate loans.

But you may not be able to take out federal financial aid or private graduate student loans for a certificate. Ask the school’s financial aid office what aid a program is eligible for.

If you need to finance a certificate, you may have to put it on a credit card or take out a personal loan. Both options usually come with higher interest rates than student loans and lack those loans’ protections — like letting you pause payments if you lose your job.

Understand your return on investment

People with advanced degrees earn more money than those with a bachelor’s degree; they also face lower unemployment rates, according to the Bureau of Labor Statistics.

But not all graduate degrees offer equal returns.

For example, Edwin Koc, director of research, public policy and legislative affairs for the National Association of Colleges and Employers, says earnings increase 100% if you go from a bachelor’s degree in biology to a master’s degree. The benefit isn’t nearly as great for those with history degrees, he says.

It’s unclear how much you might gain financially from a certificate.

“It might translate into better prospects for you,” Koc says, “but I don’t have the data to support that.”

You can find data like median earnings for some graduate-level programs in the U.S. Department of Education’s College Scorecard. That can help you estimate if a program is affordable. Ideally, your total monthly loan payments would be no more than 10% of your take-home pay.

Keep in mind that those payments can be paused if you’re enrolled at least half-time, but interest may accrue on all your loans, further increasing the amount you owe.

Sommer also recommends reaching out to professional organizations to understand how a school or certificate is perceived. For example, he says there are plenty of accounting organizations across the country to contact, if you were interested in such a program.

“Or even just find a CPA in your town,” he adds, “and say do you know anything about the program at (a specific) university?”

Ryan Lane is a writer at NerdWallet. Email: rlane@nerdwallet.com.

The article More Grads Are Going Back to School: Should You? originally appeared on NerdWallet.

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4 Expert Tips to Get Hired From Home

Posted on by Lauren Schwahn

Job hunting has always been a little stressful. OK, a lot stressful. A pandemic certainly hasn’t remedied that.

Rather, it’s changing the landscape.

For one, it’s heating up competition. Millions of newly out-of-work Americans are chasing employment simultaneously. Applicant pools are also expanding geographically as remote work becomes widespread.

Plus, navigating the entire hiring process from home presents its own obstacles. If you’re in a community that hasn’t fully reopened or are seeking a permanent work-from-home job, it’s likely the new reality.

Here are four ways to fine-tune your at-home job hunt.

Build your skills

These uncertain times boast at least one advantage for job seekers: Many resources for online learning are now free or more affordable in response to impacts of the COVID-19 outbreak. So make yourself more marketable by learning or developing a skill, or getting a certification (think mastering Excel or dipping a toe into project management). You can find courses for just about any topic on platforms like Coursera and Udemy.

“Then, put that bullet point on your resume. Even if they don’t have a formal certification process, that’s still a big deal to say you invested that amount of time in yourself,” says Julie Kratz, founder of Next Pivot Point, a leadership training organization.

This step can be even more impactful if you’ve had a gap in work experience during the pandemic.

Give yourself credit

Maybe you don’t meet 100 percent of the listed requirements for a position or you’re considering a new career path. Don’t let that stop you from applying.

Be confident and try not to apologize for or otherwise call attention to anything you’re lacking, says Jeannie Kim, vice president of content at career site The Muse.

“What you should do instead is really play up the things that you do have. Play up the skills you have that are in the job description. Play up the background that you have, and make sure that you’re telling the story of how you’re qualified to do the actual responsibilities of the job.”

Highlight your adaptability

Businesses across the country are settling into new normals. That might involve reconfiguring workspaces or learning to operate remotely. You’ll make a good impression by demonstrating you can roll with changes. How do you do that? Showcase personality traits and attitudes like flexibility, empathy and creativity, known as soft skills.

“With people not able to be in the same place as their coworkers, being able to show that you have strong communication and collaboration skills is really important right now,” Kim says.

Resumes and application forms often revolve around hard skills: the technical, measurable skills like proficiency in a particular software or programming language. But your cover letter and interview can be suitable places to insert soft skills.

Transferable skills are also crucial to mention, especially if you’re looking to change roles or industries. Those are skills that apply to a wide variety of roles and can include both soft and hard skills, such as sales, writing or leadership.

Previous telecommuting experience can give you a leg up, too.

“Experience managing a remote team would be huge right now because very few managers have managed like this,” Kratz says. “But even having successfully contributed to a virtual team, especially if you can lead with the accomplishments you achieved on that team, would go really well.”

Prepare for virtual interviews

The interview process could be mostly, or entirely, virtual — even if the job itself isn’t slated to be. Standard interview advice still applies: Dress professionally, ask smart questions and so on. But you should also adopt a few new best practices.

If you’re granted an interview, ask the company what the process will look like. How long will it take? Who will you meet with? Will it be over Zoom, Google, Skype or something else?

Then, do a dry run. Test the audio, video and internet connection on your device. Make sure there’s nothing distracting or inappropriate in the visible background (a ceiling-high stack of dirty dishes isn’t a good look). Get familiar with the software so you’ll know where the controls are located.

“You don’t want to have your first experience with that software or that platform be struggling to log onto it while you know that a recruiter is waiting,” Kim says.

For good measure, set up a mock interview with a friend who can let you know how everything looks and sounds on the other end. Finally, tell the people you live with when you’ll need access to shared equipment and quiet, uninterrupted time.

This article was written by NerdWallet and was originally published by The Associated Press.

Lauren Schwahn is a writer at NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article 4 Expert Tips to Get Hired From Home originally appeared on NerdWallet.

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How to stand out in this tough job market

Posted on by Kelsey Sheehy

Dear Class of 2020: You are graduating into one of the worst economies in history. But this isn’t news to you. Many of you have already felt the impact, with summer internships and full-time job offers pulled out from under you as the depth and duration of the coronavirus pandemic truly sets in.

As a product of the last recession, I’m here to tell you that all is not lost. You will eventually land a job. It might not be in your field, but if you’re scrappy and creative, you will get there.

My path looked like this: A call center job (to pay the bills), plus a freelance writing gig (to build my resume), then graduate school (to expand my network) followed by a temporary job with a textbook company (again, to pay the bills). Then, finally, a reporting internship that turned into my first full-time journalism job.

Your path may not look like mine or your parents’ or your classmates’, and it will likely look different from what you planned. These tips from career coaches can help you stand out from the other newly minted associate’s, bachelor’s and master’s degree holders — not to mention the over 40 million newly unemployed workers.

Beef up your LinkedIn profile

“You don’t have as much face-to-face opportunity, so it’s important to optimize online visibility,” says Debra Rodenbaugh-Schaub, a career services consultant at the Alumni Association of Kansas State University.

The place to do that: LinkedIn.

The professional networking platform is heavily trafficked by recruiters and hiring managers, making it crucial to put your best foot forward.

Amp up your profile with links to websites you’ve created, articles you’ve written or presentations you’ve given. You can even upload recordings to highlight public-speaking skills.

Look at profiles of people who are leaders in the industry you’re targeting to get inspiration for what to highlight and how to present yourself in your own profile.

Network virtually

Social distancing hasn’t killed networking; it’s just made it virtual.

The usual players — trade organizations, alumni groups and professional organizations — are all still meeting via webinars and video conferencing.

Moving online can make networking less intimidating for newbies. You can ease into building connections, absorbing information and building the confidence to eventually become a more active participant.

You can, and should, also make meaningful one-on-one connections. Not doing so will put you at a distinct disadvantage, since jobs are often filled via an employee referral.

Lisa Kastor, director of career planning at the College of Wooster in Ohio, recommends building a “mentor map” with at least three mentors who can help guide you and make introductions.

“I coach students to identify a person who has at least 10 years of experience, one that knows them well academically and one who knows them well professionally,” Kastor says. “Start with who [you] know, articulate what [you] want and always ask for the recommendation of two more people to reach out to.”

Tailor your resume

Understand what a company is looking for in a candidate. Then, customize your resume and cover letter to that specific job posting. This is an important step under normal circumstances but it is critical now, as the economic upheaval of the pandemic has increased competition for available jobs.

“Don’t be self-defeating and copy and paste the same thing into 100 job applications. That is not the right approach.” Rodenbaugh-Schaub says.

Avoid simply listing skills or tasks. Instead, give them context. Highlight how your experience and actions delivered measurable outcomes.

Tailoring your resume also means including keywords or phrases from the job posting, since companies use software to sift through the initial barrage of applicants.

Consider alternative career paths

“COVID-19 is unlike anything we have seen, so you have to be flexible,” says Glenn Hellenga, director of career and employability resources at Tri-County Technical College in South Carolina.

That might mean working in a short-term contract role in your field or accepting a job that is completely outside your career path. After all, you’ve got bills to pay.

Taking a detour doesn’t mean abandoning your goals entirely. Instead, find opportunities to develop the tools you’ll need for your dream job. Pick up freelancing gigs, find volunteer opportunities and proactively seek out projects wherever you land.

“You can show that you’ve been actively pursuing, enhancing and honing your skills,” Rodenbaugh-Schaub says. “Employers love that.”

This article was written by NerdWallet and was originally published by The Associated Press.

Kelsey Sheehy is a writer at NerdWallet. Email: ksheehy@nerdwallet.com.

The article How to stand out in this tough job market originally appeared on NerdWallet.

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3 Ways Millennials Are Getting Money Right

Posted on by Kelsey Sheehy

Read almost any article about millennials and you’ll come away with the distinct impression that this generation is royally screwing up.

That they’re suffocated by student debt. That they spend frivolously. And that they’re behind on everything from owning a home to starting a family.

Don’t buy into all the gloom and doom. Millennials are killing it in some areas, thanks in part to the turbulent financial times in which they came of age.

“Millennials were given a front-row seat to the financial crisis,” says Hallie Kraus, a financial advisor with the Humphreys Group, a financial planning firm in San Francisco.

“Many of us witnessed our parents struggle to pay the bills after getting laid off or suddenly finding their home underwater,” Kraus says. “Through these experiences, we were taught a unique set of lessons about money that are actually serving us well.”

Here are just a few ways millennials — a group that today reaches from their mid-20s to nearly 40 — are getting it right when it comes to their finances.

They know their worth

Millennials are making money moves. A 2018 report from Bank of America found that millennials were far more likely to ask for a raise than those in other generations. And when millennials made the ask, they got paid.

A whopping 46% of millennials had asked for a raise in the past two years, and 80% of those who asked for a raise got one, according to the report.

Those in other generations were far less likely to say they had asked for a raise:

  • Generation Z: 19%
  • Generation X: 36%
  • Baby boomers: 39%

Advocating for better pay is an important habit to build early in your career. Not only will you increase your immediate income, but you also could boost your lifetime earning potential exponentially.

They’re saving for retirement, early

While saving for retirement is a win on its own, millennials are going a few steps further by starting early and setting aside a larger portion of their paychecks.

Among millennials who are saving (73%), 3 of 4 are putting money away for retirement, according to a 2020 report from Bank of America. Those who are saving for retirement started at age 24, on average — earlier than boomers and Gen Xers, who started at ages 33 and 30, respectively, on average — giving them a much-needed head start on their future.

“Despite common stereotypes about this generation, significantly more millennials are saving for the future,” says Andrew Plepler, global head of environmental, social and governance at Bank of America. “These habits are encouraging and build on positive trends we’ve seen in recent years.”

Millennial parents are particularly diligent about saving for retirement, contributing a median of 10% of their annual income, according to a 2017 survey conducted online by The Harris Poll on behalf of NerdWallet.

The survey found that millennial parents who were saving for retirement contributed a median of 10% of their annual income to that goal, compared with 8% for Gen X parents and just 5% for boomer parents (all respondents to this question were employed). That seemingly small difference in savings rates can have a significant impact over time.

All that good news is soured by the fact that less than half (46.5%) of millennial households have access to a 401(k) or other work-based retirement plan, according to the most recent data from the Federal Reserve.

They’re focused on credit

Tracking expenses and keeping their eyes on financial goals is helping millennials gain ground in the credit game.

Nearly 40% of millennials improved their credit score in the past year, according to Bank of America’s 2020 survey. Other generations were less likely to claim a credit boost, Plepler says, noting the figures were 29% for Gen Z, 36% for Gen X and 31% for baby boomers.

“Millennials are practicing positive money habits day-to-day, and they’re moving closer to their goals because of it,” Plepler says. “[They] are also being practical and reserved when it comes to their financial choices. They’re willing to make lifestyle sacrifices and trade-offs in the present to achieve future goals.”

These gains are important, as the average millennial’s FICO score still falls in the “good” range at 668, according to credit reporting agency Experian; that’s on par with Gen Z and X, but far behind the older boomer generation (which boasts an average score of 731).

This article was written by NerdWallet and was originally published by The Associated Press.

Kelsey Sheehy is a writer at NerdWallet. Email: ksheehy@nerdwallet.com.

The article 3 Ways Millennials Are Getting Money Right originally appeared on NerdWallet.

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3 Things to Do When You Get a Salary Increase

Posted on by Laura McMullen

Bravo! Everyone wants to make more money, and you’ve managed to do just that. Whether you received a raise or took a higher-paying job, a salary increase is something to celebrate.

It’s also something to evaluate within your larger financial picture. That way, you know what to do with your additional cash.

Here’s what to do when you get a salary bump.

1. Determine your new take-home pay

It’s too easy to fall into the “earn more, spend more” trap known as lifestyle creep. Extra spending could easily surpass your additional income — and that’s before you even see most of it.

“People will say, ‘Well, annually, I’m going to make this much more,’” says Autumn K. Campbell, certified financial planner at The Planning Center in Tulsa, Oklahoma. “Well, that’s from one year after the time you got the raise,” she says. In that time, she adds, “we can learn habits that are tricky to get out of.”

Before building such habits, get a reality check by calculating how much more you’ll make in the shorter term. “We need to talk to ourselves in real numbers,” says Lynn Ballou, CFP and senior vice president and partner with EP Wealth Advisors in Lafayette, California.

Say you were making $50,000 and received a 4% increase, or $2,000 over a full year. Divide that $2,000 by 12 for about $167 per month. If you’re paid every other week, divide $2,000 by the 27 pay periods expected for 2020, and you’re looking at $74 per paycheck.

This math doesn’t account for tax withholdings and deductions that chip away at your take-home pay. (Scrutinize your paychecks to calculate that amount.) But having a rough figure for this extra income does help you figure out what to do with it.

2. Check your financial picture

To identify opportunities for your extra income, first take stock of your cash flow (incoming and outgoing money), as well as savings, investments and debts. Depending on your situation, these questions may help you think about next steps:

Are you meeting basic needs?

Consider food and shelter. If you’re facing overdue bills and shut-off notices for utilities, those payments should be a priority, says Campbell, who is also the president of FPA NexGen, a professional group for young financial planners.

Could you cover an emergency?

Emergency funds help prevent you from taking on debt if — actually, when — you face unexpected expenses. This is a smart time to start the fund if you don’t have one, Ballou says.

Ideally, the fund could cover a few months’ worth of living expenses, but it’s OK if you can’t swing that. Just build a buffer. For example, perhaps you set up automatic monthly transfers of $50 from your checking account to a high-yield savings account.

Do you have high-interest debts?

These are debts with interest rates around 20% or higher and could be from credit cards, personal loans or payday loans. They can hinder both your current and future finances. “It’s very hard to plan long-term if our short-term needs are in flux or being stretched,” Campbell says.

Sound familiar? Identify your debt strategy and consider using some of your additional income to pay it down.

Could you put more toward goals?

Use this opportunity to check on your financial goals, Ballou says. (Or identify a few, if you don’t have any.)

Say you’re aiming to retire with a certain amount saved. Consider contributing more to your 401(k), a tax-favored retirement savings account offered by some employers.

Other goals may lead you to put more earnings toward a down payment or vacation fund, or toward your student loans. Or perhaps this is the time to buy life insurance or contribute to a 529 plan for your kids’ college savings.

3. Reward yourself

Celebrate your raise “in a way that honors your hard work and also moves you forward in life without the stress of spending it and never really getting ahead,” says Lazetta Rainey Braxton, CEO and founder of Financial Fountains, a financial planning firm in Baltimore, and president of the AAAA Foundation, which helps cultivate the next generation of African American financial planners.

To pull this off, give yourself the “gift of time” rather than something that costs money, Ballou says. Spend an afternoon hiking or digging into a book, for example.

If you do spend money, Braxton suggests setting boundaries, such as a spending limit equal to the increase you’ll see in one or two paychecks.

Before spending, try to wait a few weeks or even months. By that time, you’ll have paychecks that show exactly how much more you’re taking home — and hopefully you’ll have cooled on any impulse-purchase ideas. After all, “there’s no rush,” Campbell says. “It’s not like the money is going to disappear.”—

The article 3 Things to Do When You Get a Salary Increase originally appeared on NerdWallet.

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